When Interests Are Not Preferences: The Cautionary Tale of Japanese Consumers

Abstract

Much work in political science today in some way or another involves the analysis of competition between interest groups, whether they are landlords and peasants, employers and workers, creditors and debtors, or producers and consumers. But how do we know what these groups want? Should we derive their interests from theory or discover their preferences through field research?1 These basic questions strike at the heart of current debates in comparative politics.2 In practice, many analysts derive group interests by logical assumption, often building on standard economic theory. In doing so, they implicitly or explicitly adopt a thick view of rationality. That is, they give rationality a specific substance: the maximization of economic welfare.3 Not surprisingly, those who work in political economy are particularly drawn to this approach.4 Proponents contend that by making certain assumptions about preferences they allow themselves to devise more parsimonious, powerful, replicable, and testable models. In any case, the interests of many groups, particularly those defined by their place within the economy, are virtually self-evident.5 After all, how many employers do not want lower wages, and how many workers do not want higher wages? How many producers do not want higher prices, and how many consumers do not want lower prices? Curiously, Japanese consumer groups have repeatedly advocated policy positions at odds with their basic material interest in lower prices, higher financial returns, greater choice, and a more efficient economic system. Japan offers a cautionary tale for those who assume that they know what interest groups want or that economistic assumptions about interest group preferences apply equally well in different national contexts.6 While I do not suggest that political scientists should never make simplifying assumptions about interest group preferences, I contend that even the safest assumptions may turn out to be false and that false assumptions tend to produce faulty political analysis in practice. In the case of Japanese consumers, seemingly innocuous assumptions about consumer preferences have not only led political analysts to mischaracterize Japanese consumers' role in politics, but also to misinterpret Japan's postwar political economy more generally. Economists, political scientists, U.S. negotiators, and Japanese consumer groups overwhelmingly agree that Japan's postwar economic system has favored producers over consumers.7 The financial system shifted resources from consumers to produc-