This book, originally published in Japanese in 1983, is still a masterpiece on the Japanese economy. It is based on Okumura's original survey and interpretation and provides insight not only into the Japanese economic system but also into Japanese society. The author makes a case for the uniqueness of the Japanese shareholding system and seeks to develop a new view of Japanese capitalism.

The book consists of four parts. In Part 1, “What Is Corporate Capitalism?,” Okumura portrays Japanese society as highly company oriented. In this context, the status of the human being is judged by the status of the company to which he belongs. To understand this economic system, the author insists, one must examine a firm's relations with its shareholders, its managers, and other firms in addition to its employees. He then introduces the concept of “juridical person.” Following the 1950 recommendations of the Shoup Mission, which advised the Allied Occupation on tax reform, a Japanese corporation has been treated under the law as a “juridical person.” A corporation is regarded as “an assemblage of individuals got together to pursue a given undertaking,” and “it is appropriate to levy taxes on the profits that accrue to the company at the stage when they are received by the shareholders in the form of dividends” (p. 28). This means that dividends received by companies are nontaxable.

In Part 2, “The Japanese Company,” Okumura explains the Japanese shareholding system. In the mid-1960s the proportion of all shares owned by private individuals in Japan fell from more than 60 percent to around 20 percent while the proportion owned by corporations surged. The form in which corporations own stocks, which is called the “mutual share ownership” (sôgô mochiai) system, is peculiar to Japan. Under this system, companies within a group hold each other's stocks. The purpose of the system is not to acquire dividends or increase share prices, and the length of time companies hold shares is much longer than in the United States.

Part 3, “Managers,” is the core of the book. Okumura discusses the zaikai, the businessmen's group that controls the entire Japanese economy and coordinates conflicts of interest among companies. In 1982, 2,195 profit-making corporations—only 0.13 percent of all Japanese companies, excluding those in finance and insurance—shared 41.4 percent by value of the total assets of all Japanese companies. They were the leading representatives of Japanese industry and had 29,609 officers. The character of postwar Japanese big business has changed from private capitalism to corporate capitalism. Compared with their U.S. counterparts, Japanese managers are not eager to achieve short-term gains in their companies' share prices; rather they seek long-term profit for investment purposes.

Okumura also mentions the inflexibility of Japanese corporations. Japanese companies promote managers from within, not from the outside. Japanese unions are “companistic” and function as sections of their corporations. The corporation's status as a fictitious legal person aggravates the situation. The view that all employees represent the company means that no employee takes responsibility because no single person represents the company. As a result, no one accuses the company of mistakes.

In Part 4, “Relations Between Firms,” Okumura illustrates the mechanism of the Japanese interfirm relationship or keiretsu. Generally, heavy and chemical industrialization intensifies the tendency towards transactions between firms, and in the case of Japan the lack of diversity in business accelerates this propensity. As a result, Japanese companies form horizontal integrations with a number of subcontractors. At the same time, firms integrated vertically specialize in one area. Therefore Japanese company groups are caught in the web of keiretsu and trade within it. This characteristic is strengthened by mutual shareholding and by the sending of officials to other companies as directors or the appointment of one person to the office of director of two or more companies.

Although this book splendidly uncovers one aspect of the Japanese economic system, it is rather hazardous to evaluate the relationship between that system and Japanese society only from this point of view. The aspect that Okumura discusses in the book explains well Japan's urban economic situation. But its rural areas, which survive on public construction works, might operate according to a different logic. Another question is whether the comparison the author makes with the U.S. and British shareholding systems is suitable. Just as the Japanese system has a number of problems, so does the American system, in which actors pursue short-term profits and have caused a series of stock market scandals and sharp fluctuations of stock prices.

Despite such questions, this book sheds light on the Japanese shareholding system and its influence on the Japanese economy, though one wonders how Okumura would explain recent economic changes in Japan based on his theory. Preceding Okumura's analysis is a lengthy introduction on “Banking and Industry in Japan” by Michio Morishima.