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Once Japan entered into its recession, characterized by a liquidity trap, the government had no choice but to increase its involvement in the economy, through both intensive fiscal and monetary policy. The Japanese government was also compelled to begin to break up the keiretsu system in order to stimulate more innovation in the economy. The monstrous hybrid needed to be broken down somewhat, and the process was difficult. In particular, the Japanese people had become accustomed to this system and it took a long time for the society to think in terms outside of the monstrous hybrid system. Japan's monstrous hybrid may have been relatively banal in terms of its outcomes -- economic stagnation was not met with police state, removal of freedoms or other such negative consequences -- but nor can it be argued that Japan avoided the monstrous hybrid. It simply avoided the worst outcomes associated with monstrous hybrids.

Japan's situation, especially during its long recession, bears some hallmarks of the zombie capitalism concept. Japan's economic growth was built on export booms, its firms actively and aggressively supported by a paternalistic government. Ultimately, Japan's rapid growth had a ceiling. With a static population, the domestic market was not a source of growth. With costs being high, competing globally as a low cost producer was not an option. The only thing left was innovation to maintain its strong export share, and the monstrous hybrid had effectively stifled that. Japan was naturally going to struggle. In some ways, Japan has become the front line for zombie capitalism, in part because of its demographic situation. Even in Western Europe, access to Eastern European markets has allowed those nations to largely avoid Japan's economic fate by virtue of opening up new markets.

While one of the reasons it took Japan so long to break out of its recession was that it needed to dismantle the guardian components of its economy, another reason is that it hit upon the upper growth bound predicted in zombie capitalism. Capitalism works through economic expansion -- when opportunities for such expansion become limited, the capitalist economic system struggles. Japan's struggles were by no means devastating, in part because the guardian elements of its economy were relatively benevolent, but there are lessons to be learned for other nations facing constraints on their growth. Japan's paralysis was inevitable, based on the design of the Japanese economy at the time. Since 2005, Japan has broken out of the paralysis of zombie capitalism at least temporarily, in part by spurring new innovation in the economy (increasing the emphasis on commercial orientation) and in part by taking advantage of new markets. Over time, however, the risk remains that Japan will fall back into paralysis as the vibrancy of those new markets -- especially China -- will run into the same geographical and demographic constraints that paralyzed Japan the first time.