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2. For a survey, see Inoguchi, “Four Japanese Scenarios for the Future.”

3. See M. Schmiegelow, “Puissance et interdépendance.” For the most recent restatement of the tension between the two paradigms, see Keohane, Robert and Nye, Joseph S. Jr, “Power and Interdependence Revisited,” International Organization 41 (Autumn 1987), pp. 725–53CrossRefGoogle Scholar; and Nye, Joseph, “Neorealism and Neoliberalism,” World Politics 40 (01 1988), pp. 235–51CrossRefGoogle Scholar.

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9. See Gilpin, Robert, War and Change in World Politics (Cambridge: Cambridge University Press, 1981)CrossRefGoogle Scholar. For a contribution to this line of thought from an historian, see Kennedy, Paul, The Rise and Fall of Great Powers: Economic Change and Military Conflict from 1500 to 2000 (New York: Random House, 1987)Google Scholar.

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11. For the most recent survey focusing on the neoliberal paradigm in contrast to the neorealist paradigm, see Nye, “Neorealism and Neoliberalism.” Regarding interdependence theory, see Cooper, Richard N., “Macroeconomic Policy Adjustment in Interdependent Economies,” Quarterly Journal of Economics 83 (02 1969), pp. 1–24CrossRefGoogle Scholar; and Bergsten, C. Fred, Keohane, Robert O., and Nye, Joseph S., “International Economics and International Politics: A Framework for Analysis,” International Organization 29 (Winter 1975), pp. 20–26CrossRefGoogle Scholar. Regarding the transnational paradigm, see Morse, Edward L., “Transnational Economic Processes,” in Keohane, Robert O. and Nye, Joseph S.. eds., Transnational Relations and World Politics, special issue of International Organization 25 (Summer 1971), pp. 373–97Google Scholar.

12. M. Schmiegelow, “Cutting Across Doctrines.”

13. Waltz, Theory of International Politics.

14. Calder, , “Japanese Foreign Economic Policy Formation,” p. 517Google Scholar.

15. Nye, “Neorealism and Neoliberalism.”

16. For a discussion of the problem of theoretical disjunctives affecting the understanding of the Japanese case, see M. Schmiegelow, “Cutting Across Doctrines.”

17. Waltz, , Theory of International Politics, p. 161Google Scholar.

18. See Nye, Joseph, Bound to Lead: The Changing Nature of American Power (New York: Basic Books, 1989)Google Scholar.

19. For surveys of the various contending interpretations, see Schmiegelow, M., “Cutting Across Doctrines”; and Schmiegelow, Michèle and Schmiegeiow, Henrik, Strategic Pragmatism: Japanese Lessons in the Use of Economic Theory (New York: Praeger, 1989), pp. 3 and 29Google Scholar. The quote is from one of the most popular revisionist writers, van Wolferen, Karel, in “Japan: Different, Unprecedented and Dangerous,” International Herald Tribune, 7 11 1989, p. 6Google Scholar.

20. See Schmiegelow, H., “Global Dimensions in US-Japan Relations,” pp. 224 and 227Google Scholar; and Calder, , “Japanese Foreign Economic Policy Formation.” p. 535Google Scholar.

21. The estimates of Japan's external assets in 1990 and 2000 are those of NEEDS, the databank of Japan's leading economic journal, Nihon Keizai, and were reported on 24 January 1987.

22. For a discussion of the increasing dependence of U.S. industry on high-technology components from Japan, see National Research Council, Toward a New Era in US Manufacturing: The Need for a National Vision (Washington, D.C.: National Academy Press, 1986)Google Scholar; Schrage, Michael, “US Dependence on Japan for Parts Worries Pentagon,” Washington Post, 11 03 1986Google Scholar; Kenney, George, “Dependence and Patterns of Interdependency,” paper presented at the Second Symposium on US-Japan Science and Technology Exchange, 17–18 11 1986, Washington, D.C., pp. 17–21Google Scholar; and Iwama, M. and Magee, F. R., “Computers and Communications: Technology Interdependency Between the US and Japan,” paper presented at the Second Symposium on US-Japan Science and Technology Exchange, 17–18 11 1986, Washington, D.C., pp. 9–11Google Scholar. The perception of growing U.S. dependence on Japanese semiconductors spurred the debate in the United States about the merits of emulating Japan's industrial policy in general and precompetitive research cooperation in particular. See National Advisory Committee on Semiconductors, Report to the President and the Congress, advance edition (Washington, D.C.: Government Printing Office, 11 1989)Google Scholar.

23. See Schmiegelow, H., “Global Dimensions in US-Japan Relations,” p. 224Google Scholar. The most compelling demonstration of U.S.-Japan macroeconomic integration is offered by the “Feldstein doctrine,” which takes the U.S. budget deficit as a given structural pattern, encourages U.S. dependence on capital inflows from Japan (inflows that prevent crowding out of private capital demand by the U.S. treasury's finance requirements), and recognizes the upward pressure of these capital inflows on the dollar as an acceptable price. See Council of Economic Advisors, Economic Report to the President (Washington, D.C.: Government Printing Office, 02 1983 and February 1984)Google Scholar; and Feldstein, Martin, “The Dollar Exchange Rate,” remarks presented to the World Affairs Council in Philadelphia on 29 02 1984Google Scholar.

The pattern of macroeconomic integration has become one of the most salient features of the U.S.-Japan relationship, with Japan alone having financed one-third of the U.S. budget deficit ever since 1984. There are two conceivable interpretations of the political economy of this pattern, one in terms of the mercantilist paradigm and one in terms of the theory of economic integration. From the point of view of the mercantilist paradigm, the two countries may be seen as simultaneously involved in two grandiose zero-sum games for different stakes: Japan exporting unemployment to the United States through undervaluation of the yen and the United States importing wealth through overvaluation of the dollar. (For a categorization of the instruments of various mercantilist strategies, see Schmiegelow, Henrik, “Japan's Exchange Rate Policy: Policy Targets, Non-Policy Variables and Discretionary Adjustment,” in Schmiegelow, Michèle, ed., Japan's Response to Crisis and Change in the World Economy [Artnonk, N.Y.: M. E. Sharpe, 1986], pp. 28–43.)Google Scholar However, autonomous variables have gained too much influence on capital flows since the 1980 liberalization of Japan's foreign exchange control regime to make mercantilist policy control possible even if it were attempted. Thus, whatever the policy calculations on both sides, we are left with a two-country macroeconomic equilibrium based on complementary fiscal policies, interest rate levels, capital flows, and exchange rates. If global recession is to be avoided, neither Japan nor the United States, nor the rest of the world for that matter, can afford to break out of this pattern. (See Schmiegelow, Michèle and Schmiegelow, Henrik, “The Revisionists Aren't Looking Beneath the Surface,” International Herald Tribune, 31 01 1990, p. 6.)Google Scholar Nothing similar to the U.S.-Japan macroeconomic integration exists anywhere else in the world. Members of the EC, having pursued a strategy of precarious policy harmonization by adopting a common exchange rate regime before liberalizing intra-EC capital flows, are still a considerable number of steps behind the type of macroeconomic integration evident in U.S.-Japan relations.

While Japanese portfolio investments in the United States became the principal carrier of economic integration between the two countries, direct investments on which the transnational paradigm of international relations has always focused have long failed to contribute significantly to integration in either the EC or the U.S.-Japan relationship. In the course of the 1980s, however, direct investments became at least a factor of public debate in both areas. U.S. firms in Japan had become a source of U.S. imports of a magnitude sufficient to account alone for the U.S. trade deficit with Japan. (See Pempel, T. J., “The Trade Imbalance Isn't the Problem,” Cornell International Law Journal, vol. 22, no. 3, 1989, pp. 442–44.)Google Scholar On the other hand, spectacular direct investments did have dysfunctional political side effects in European host countries as well as in the United States. When Italy's maverick tycoon de Benedetti attempted to take over Belgium's treasured Société Générale, the public outcry provoked resentments of a nature similar to U.S. reactions against Sony's acquisition of Columbia Pictures and Mitsubishi Estate's purchase of the Rockefeller Center.

The question of whether intrasectoral trade or complementary trade structures are better measures of integration through trade is still unsettled in the theory of economic integration. While trade integration in the EC is marked by intrasectoral trade, the classical pattern of complementary supply structures and thus much higher degrees of division of labor continues to distinguish the U.S.-Japan relationship. The reliability of any measure of technological interdependence is as uncertain as the epistemology of science and technology itself. But as the sources quoted in footnote 22 (above) make plain, if there is any interdependence on the higher end of marketable high-technology products, it is interdependence between the United States and Japan, with EC members risking dependence on either or both of these two if they do not manage to join their forces more effectively in the 1990s than in the previous two decades. See M. and Schmiegelow, H., Strategic Pragmatism, pp. 62–69Google Scholar.

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