Come on, I think everyone here can agree that refusing to accept the broken window fallacy is not a sustainable economic model.

I don't believe the broken window fallacy has anything to do with this. Their system, since the massive mid-eighties crash, has deliberately focused more on maintaining employment than on growth. They have been demonstrably successful by that measurement. It's not the system I would design, but still.

Much like the faxes you were making fun of, it's a question of differing priorities.

> They have been demonstrably successful by that measurement.

That's debatable. They were able to coast on their post-war success for a while, but things certainly aren't looking up in Japan. High levels of youth unemployment and dissatisfaction has led to astonishing levels of apathy. South Korea is expected to surpass Japan in terms of GDP PPP per capita within the next year, and Taiwan already has.

Japanese advantages in consumer electronics have been largely eroded by more nimble South Korean and Taiwanese rivals, and there are no signs of the Japanese fighting back in an effective manner. A great example of this is the smartphone - a quintessential consumer electronics product market in which the Japanese are nowhere to be found. Sony is flailing around a little with its Xperia phones, but they don't even register on the global level. Samsung and HTC have all the attention, and mainland Chinese competitors, like Huawei and ZTE, are starting to enter the market as well. There were some signs of success in the HDTV industry, but again, rivals like Vizio and Samsung have taken over a large portion of the market.

One of Japan's last remaining strengths in consumer electronics is the camera - companies like Canon and Nikon still reign supreme. But how long will that last? Samsung is continuing its relentless march into the future with the Galaxy Camera, a point-and-shoot which runs a full copy of Jelly Bean with wifi and 3G capabilities. Unless the Japanese firms start changing their ways, they're going to become also-rans (if they haven't already).

Give it time, and I bet Korean car makers like Hyundai and Kia will displace Toyota/Honda as well. The so-called "monozukuri" culture of Japan has turned out to be nothing more than a farce.

I'm not as skeptical, but there's no doubt the South Koreans and Taiwanese are ridiculously fierce competitors. On the other hand, however alarmed you are at the inefficiencies the Japanese take on because of their cultural priorities and quirks or their demographic crunch, there's no denying that SK and Taiwan have some big potential and actual issues.

I feel like I'd be going beyond my expertise to comment heavily on this but I'm pretty certain all three countries are going to look rather different twenty years from now. Makes predictions hard.