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    Home»Economy»Trade War Fears – Econlib
    Economy

    Trade War Fears – Econlib

    Press RoomBy Press RoomMarch 12, 2025No Comments4 Mins Read
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    One of my all-time favorite movies is the 1982 cyberpunk-noir classic Blade Runner.  Not only did the film single-handedly create the cyberpunk genre, but it inspired significant change in the sci-fi genre as a whole, led to classics such as Akira, and inspired great directors such as Guillermo del Toro, Christopher Nolan, and Denis Villeneuve.  Its themes of humanity, hyper-technology, hyper-capitalism, femininity, and ecology remain hotly debated to this day.  Not bad for a film considered a flop on its initial release.

    Set in the distant future of 2019 Los Angeles, the politically and economically dominant Tyrell Corporation has created synthetic humans known as replicants to do dangerous jobs in outer space.  For obvious reasons, some of these replicants aren’t thrilled with this arrangement and go rogue.  Blade runners are those dispatched to hunt down these rogue replicants.  The movie follows one such blade runner, Rick Deckard (played by Harrison Ford), as he hunts down four especially dangerous replicants.  

    I’ve seen the movie about a billion times.  One of the nice things about watching movies you can practically quote by heart is that you can observe the background.  Brainpower can be diverted from the plot into observing the setting and how it reflects the mindset of the author/filmmaker/society.  In my most recent rewatch, something about the setting jumped out at me.  The team that built the setting imagined 2019 Los Angeles as heavily Japanese.  Japanese food dominates the culture.  The Japanese language is written on signs.  Japanese corporations dominate the skyline.  Even the Tyrell Corporation was originally imagined as a Japanese conglomerate in early drafts of the film.

    Why Japan?  Simple: Japan was a rising economic influence and a supposed threat to American economic power in the 1980s.  For example, the economist Lester Thurow wrote several books in the 80s and 90s on how the Japanese style of state-guided economic management was destined to overtake America and make them the economic powerhouse of the world.  American corporations were afraid of Japanese competition.  Peter Drucker praised the Japanese style of management and pressed for it to be established in America.  Japan was an existential threat to American economic power, so much so that there were strong lobbies for Congress to impose tariffs and quotas on Japanese imports, lest the dystopia of Blade Runner come about.

    Of course, these fears were overblown.  Even as Thurow was writing his books, the Japanese economy was stagnating.  The 1990s and 2000s were characterized by economic stagnation in Japan, while American economic growth exploded.  Over the 30-year period from 1994 to 2004, Japanese real GDP rose just 24.9% (source) while American real GDP rose 115.1% over the same time period (source).  Over the same time period, Japanese industrial production (excluding construction) averaged just 0.1% growth (source) while US industrial production averaged 1.2% (source).  The widely feared economic dominance of Japan never came about.  

    Since about 2010, the same fears have arisen with China.  The above story doesn’t change, however.  Just replace “China” with “Japan” and “Peter Navarro” with “Lester Thurow.”  It’s the same claims of coming economic dominance by state-run conglomerates and the superiority of industrial policy.  America must be afraid, must capitulate to these supposedly superior foreign powers, must adopt their systems, lest we be overrun.  And just like with Japan, these fears are obsolete even as they are made.  The Chinese economy is stagnating.  They’re wasting resources left and right, something that is unsustainable.  Short of substantial market reforms, China will end up on the ash heap of economic history, just like Japan.  All those fears will soon be lost like tears in the rain.

    Fiction provides us useful insights into the past.  And one of the big lessons is this: the more things change, the more they stay the same.  The hand just rearranges the players in the game.

     

     

    P.S. It is also interesting to me how sticky culture can be.  Even though the fears of Japanese dominance have faded, cyberpunk media still portrays Japan as a dominant influence in their worlds.  For example, in the video game Cyberpunk 2077, set in the distant future of 2077, Japanese culture is dominant in the fictional California city of Night City.  Ridley Scott’s arbitrary choice in the 1980s still appears in 2025.

    P.P.S. I gave Midjourney a picture of me and told it to put me in a cyberpunk setting.  Here is my favorite result:

     



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