The collapse last week of the Sogo chain with £14 billion in debts is the latest reminder that all is not well with the Japanese economic empire.

Can Japan Compete? dates back to research on Japan in the late 1980s when it was seen as creating a form of capitalism that would supplant the Western version. But the authors discovered a Japan nobody was talking about. Alongside competitive industries there were industries that were very uncompetitive. There were two Japans.

So who cares? "Because of the influence of Japan's success on economic thinking and practice worldwide, it is vital to set the record straight on exactly what did and did not happen in Japan."

The authors believe their theory on Japan's post-war trajectory can be applied elsewhere and will be especially useful for markets seeking to emulate the "Japanese miracle". They point out that the Japanese are only beginning to admit there is a structural problem, faced with huge losses and failures. The trouble is there is a tendency to indulge in premature optimism.

Japan is a country that reveres its traditions and prizes stability. It has also demonstrated an ability to transform itself - after the devastation of the second World War - by employing its unique strengths and using the best ideas available. But the authors believe Japan lacks vision and direction. Wary of "Anglo-Saxon capitalism with its instability and excesses" many Japanese leaders have drawn the wrong lessons from past successes.

Can Japan Compete? is not for the faint hearted. But it is well written and presented, with a foundation of solid academic research. What happened to the original Asian Tiger economy is relevant as we look at our inflation figures and ask ourselves, could it all go wrong . . .?

jmulqueen@irish-times.ie