Reconciling Economic Theory and Economic History: The Rise of Japan

Abstract

Why did the Western industrialized countries and Japan develop rapidly in the nineteenth century, and why did the other Asian countries not also move along a similar developmental path? A first attempt to answer may rely on a pure historical-descriptive account. If, as an economist, one is not inclined to follow this explanatory line, one must turn to a developed theory. It seems useful to distinguish clearly between a historical and a theoretical analysis from the very beginning. A historical analysis attempts to construct, describe, and comprehend the total complexity of a real-life phenomenon. A theoretical analysis-or a nomothetic approach-attempts to abstract the essence from the totality of a real-life phenomenon, to reduce it to its typical features, and to propound generally valid laws. Depending on what sort of phenomenon it is and how long a period is being investigated, either a historical or a theoretical analysis may provide relevant scientific insights. It is one of the regrettable developments in the social sciences that between the two epistemological courses there is hardly any fruitful connection. Not only do these opposing approaches split one discipline into unrelated subdisciplines, but each also claims its own superiority, while in fact its opposite may also help explain a social phenomenon. As an example of similar myopia,