Supply Chain on Arda Akgül

Japan Inc.: Why State-Directed Capitalism Worked, Stalled, and Still Matters

Wed, 03 Dec 2025 00:00:00 +0000

When I think about capitalism from Ankara, my mind usually goes first to Wall Street, Silicon Valley, and the Anglo-American obsession with quarterly results. But Japan always interrupts that picture. For decades, Japan looked like a country where ministries, banks, manufacturers, and suppliers moved like parts of one disciplined machine. That machine got the nickname “Japan Inc.,” and I think it is one of the most important models to study.

Why did Japan Inc. work so well?

Japan found a way to make state coordination, corporate ambition, and industrial discipline reinforce each other instead of cancel each other out. The Ministry of International Trade and Industry , later reorganized into today’s METI, became the nerve center of postwar industrial policy. It did not run Japan like a Soviet planning board. It did something more effective: it coordinated technology imports, protected strategic sectors, nudged credit, and helped firms scale in industries where Japan wanted to dominate.

The results were huge. Japan’s Ministry of Foreign Affairs notes that the economy grew at nearly 10 percent per year in the 1950s and 1960s. World Bank growth data show how extreme that period could get: real GDP growth hit 12.9 percent in 1968. METI’s own history also points out that Japan became the world’s largest automobile producer in 1980. That does not happen because of culture alone. It happens when the state, banks, trading companies, and manufacturers are all pulling in roughly the same direction.

Keiretsu made long-termism practical

For me, the most interesting part of Japan Inc. is not MITI by itself. It is the corporate structure around it. Keiretsu groups made long-termism practical. Cross-shareholding, main-bank relationships, and dense supplier networks meant firms could think in product cycles, not just earnings calls. Mitsubishi, Mitsui, Sumitomo, and other groups were not simply old boys’ clubs. They were mechanisms for trust, financing, and production stability.

This matters more than people admit. A supplier will invest differently if it thinks the buyer will still be there in ten years. A bank lends differently if it sees itself as part of a long industrial relationship instead of a short trading opportunity. That is how Japan turned reliability into a competitive asset. Toyota did not only sell cars. Sony did not only sell electronics. They sold consistency, quality control, and the sense that the company behind the product was built to last.

Japan Inc. treated time itself as a competitive advantage.

So why did it stall?

Because the same structure that works brilliantly in a catch-up phase can become heavy in a mature one.

When a country is trying to build steel, ships, semiconductors, and automobiles, coordination is powerful. When that same country needs to reward creative destruction and reallocate capital faster, coordination can start looking like inertia. A RIETI review of MITI’s legacy argues that industrial policy often helped smooth structural adjustment, especially in declining industries. That was useful for social stability, but it also meant weaker pressure to let bad bets die quickly.

Then came the bubble. An NBER paper by Takatoshi Ito and Tokuo Iwaisako argued that Japanese land and stock prices after the mid-1987 surge could not be fully justified by fundamentals alone. Once that bubble burst, Japan entered the long aftermath that people now call the Lost Decades. World Bank series show growth dropping below 1 percent in 1992 and turning negative again later in the decade. Banks became cautious. Firms became defensive.

Demographics made the problem worse. OECD work on ageing in Japan noted that the country already had more than 50 people aged 65 and over for every 100 working-age adults in 2017, and projected that ratio to climb toward 79 by 2050. Even a very efficient industrial system struggles when the labor force shrinks, domestic demand softens, and the welfare burden rises.

So I do not think Japan Inc. failed because it was too statist or because it was not capitalist enough. I think it stalled because its old strengths, patient capital, protected relationships, incremental improvement, became less suited to an economy that needed faster reallocation and more risk-taking.

What does Japan still teach?

The lesson is not that every country should recreate keiretsu or empower a super-ministry and hope for the best. Even Japan itself has been pruning the old model. The Corporate Governance Code introduced in 2015 pushed listed firms to justify cross-shareholdings instead of treating them as untouchable. That tells me something important: Japan still values coordination, but it also knows coordination can harden into complacency.

For Turkey, this matters. Our debates often swing between romantic statism and blind faith in markets. Japan offers a harder and more serious middle position. Build competent institutions. Align finance with industrial capacity. Give firms a long horizon. But also force discipline, demand export performance, and do not confuse national strategy with permanent protection.

If Ankara wants deeper capabilities in batteries, rail systems, defense electronics, or advanced manufacturing, Japan is still worth studying. Not because it offers a template we can copy line by line, but because it proved that capitalism does not have to look purely Anglo-American to be world-class. It can be coordinated, relational, industrial, and still brutally effective.

That is why I keep coming back to Japan Inc. It was one of the most successful growth machines of the modern era, but it also became a warning. A model that helps a country rise can later slow it down if it starts preserving itself more than it preserves dynamism. For me, that tension is the real lesson.

What Makes McDonald's Awesome?

Thu, 07 Aug 2025 00:00:00 +0000

There must be something universally comforting about the Golden Arches of McDonald’s. For lots of people, it’s a taste of home, a reliable friend on a road trip, or a quick, satisfying meal after a long day. But what is it about McDonald’s that makes it special to so many people, including myself? Let’s see the reasons why I and almost 70 million people keep choosing McDonald’s.

Why do I eat from McDonald’s?

For me, eating at McDonald’s is something chill. For some people, it is warm childhood memories and the feeling of a familiar treat. This isn’t just a personal feeling; “nostalgic marketing” is a known strategy that McDonald’s has mastered. The brand promotes these shared memories to build strong emotional connections with its customers. Beyond the nostalgia, there’s the predictability. The consistent menu at McDonald’s offers a welcome relief from decision fatigue. Generally, Big Mac is preferred. It’s a place where you know exactly what you’re going to get, and sometimes, that’s exactly what you need.

“But it is really unhealthy!”

I get it. The “unhealthy” label is often about McDonald’s. And while it’s true that some menu items are high in calories and fat, it’s all about making informed choices. I often choose water instead of a coke, and enjoying a burger and fries in moderation is not something to worry about. McDonald’s has also made significant changes in menu diversification and transparency. They offer salads, fruit, and have reduced sodium in many items. With comprehensive nutritional information available, the power is in the hands of the consumer to build a meal that fits their dietary needs.

Big Mac Standard

The Big Mac is more than just a burger; it’s a global icon of standardization. The fact that a Big Mac tastes almost the same whether you’re in New York, London or Ankara is a testament to McDonald’s incredible global supply chain and quality control. This consistency is so reliable that The Economist magazine even uses the burger’s price in different countries as an economic indicator called the Big Mac Index. It’s a way to compare currency values and purchasing power across the globe, and it tells about the brand’s reach and uniformity.

The Big Mac Index was invented in 1986 by The Economist as a lighthearted way to measure purchasing power parity between currencies.

A standard Big Mac Meal. 7/08/2025, Ankara.

McDonald’s is a Data-Driven Company

In today’s world, McDonald’s is also a tech company as it is a restaurant chain. They use data and artificial intelligence to enhance the customer experience. A good example is their acquisition of Dynamic Yield, a personalization platform. This allows them to customize the drive-thru menu boards based on factors like the time of day, weather, and traffic. Their mobile app and self-service kiosks collect valuable data on customer preferences, which helps them to predict demand, manage inventory, and even suggest new menu items you might enjoy.

McDonald’s is Efficient

The secret to McDonald’s speed and efficiency dates back to the “Speedee Service System” developed by the McDonald brothers in the 1940s (At this point, I recommend watching The Founder film). This assembly line approach to food preparation has been refined over the years and still underscores the importance of their kitchen operations. Every task is standardized, from grilling potatoes to assembling burgers, which minimizes errors and maximizes speed. This efficiency extends to their supply chain, which generally often relies on local suppliers to ensure fresh ingredients and support local economies.

Why do Donald Trump, Warren Buffett, and Bill Gates prefer McDonald’s?

It might seem surprising that some of the world’s wealthiest people and most powerful individuals eat McDonald’s, but it makes perfect sense when you think about it. For busy people like Donald Trump, Warren Buffett, and Bill Gates, time is their most valuable asset. McDonald’s offers a quick, consistent, and reliable meal, which eliminates the need to spend time and mental energy on deciding what and where to eat. It is proof that value and efficiency matter for everyone, regardless of their net worth.

Warren Buffett enjoys a McDonald’s meal.

McDonald’s Türkiye Suppliers

In Türkiye, McDonald’s is a great example of their “glocal” strategy, which means they think globally but act locally. Around 98% of the products used in McDonald’s restaurants in Türkiye are sourced from local suppliers (McDonald’s Türkiye, 2024). This not only ensures that the menu is adapted to local tastes and preferences but also makes a significant contribution to the Turkish economy by supporting manufacturers and farmers. All products are also 100% halal certified so it ensures they meet the dietary needs of the local population.

McDonald’s Standards of Service

No matter where you are in the world, you can expect a certain standard of service at McDonald’s. This includes free Wi-Fi, clean toilets, and a familiar restaurant design. Recently, they’ve been using self-service kiosks, which have been a game-changer for me. They make the ordering process easier, waiting times reduced, and even help you discover new menu items. Also, the internet speed might not always be the fastest, it’s a reliable free Wi-Fi that keeps you connected.

Kiosks in a McDonald’s in Ankara.

Internet speed would be better, but still works.

Conclusion

McDonald’s is more than just a fast food restaurant. It’s a global phenomenon that has achieved its status through a combination of smart marketing, operational efficiency, and a deep understanding of its customers. From its nostalgic appeal to embracing technology, McDonald’s would continue to evolve while staying true to its core values of quality, service, cleanliness, and value (QSC&V).