Suehiro Izutaro and John R. Commons: Path Divergence in Japanese and U.S. Industrial Relations

This is a comparative history study at the interface of industrial / employment relations and stakeholder theory. The focus concerns decades of post-World War II Japanese and U.S. path dependent national divergence from common labor legislation enactments separated by only 15 years: 1933-38 and 1945- 49. The extent of contemporary divergence is first captured by recent statistics on key employment factors. The steps of institutionalization for what is now recognized as Japan’s “lifetime employment” system, presented in terms of the legal jurisprudence of Suehiro Izutaro (Suehiro jurisprudence or Suehiro hōgaku) document a dramatic, fascinating historical parting of two nations due to Japanese deep appreciation of the labor law and institutional economics research legacy of John R. Commons, the father of U.S. industrial relations. Understanding this common, shared source opens industrial relations and stakeholder theory to a potentially rich, nearly quasi-experimental design inquiry into a discourse of judicial justness in labor law. Implications include testable hypotheses concerning the root cause of U.S. executive compensation excesses and remediation steps for the stakeholder theory ‘gap’ between theorists in the U.S. and the more institutionally comprehensive approach of E.U.-sourced political economy research.