If anybody's curious about the real history of Toyota, and how it came to dominate the auto market, read this instead:<p>>Let me start my talk with a little story. In 1958, Japan tried to export this first passenger car to the US market. The company was Toyota, the car was called Toyopet. And, as you can guess from the name, it was a very cheap, small subcompact car, more of a four-wheels-and-an-ashtray kind of thing, which Toyota hoped rich American consumers could pick up as an afterthought, after finishing their grocery shopping with the changes left. Unfortunately, it was a total flop, so much so that Toyota actually had to withdraw the product. In the realm of failures, this is, like, the biggest thing. It's not just not selling well -- it had to be withdrawn from the market.<p>>This provoked a very heated debate in Japan. The free trade economists centered around the Bank of Japan, the central bank, said, "Look, this is what happens when you go against the theory of comparative advantage. In a country like Japan, which in relative terms has lots of labor and little capital, we shouldn't be producing things like motor cars, which are very capital-intensive in production." Of course, at that time, Japan's biggest export item was silk. So, case proven, already. And they said, "Don't tell us that you couldn't succeed because you didn't have help. You had 25 years of very high tariff protection. We kicked out all the foreign car makers 20 years ago and didn't let any of them in since then. And back in 1949 this central bank even injected public money into Toyota to save it from bankruptcy. So, please don't tell us that you couldn't succeed because you didn't have help, because you had all the help you can ask for."<p><a href="http://mrzine.monthlyreview.org/2008/chang030808.html" rel="nofollow">http://mrzine.monthlyreview.org/2008/chang030808.html</a><p>Toyota benefited for at least 40 years from the intentional suppression of the Japanese currency as well as subsidies and tariffs on foreign car imports.<p>This long-term mercantile policy corroded the US car industry to the point where it simply couldn't compete. The general use of the US dollar as the world's reserve currency didn't help either.<p>If Japan <i>hadn't</i> followed a mercantile policy, we'd probably be having a similar discussion today about why American business culture and attention to quality is superior to Japanese.