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Inflationary periods in the United States bring with them calls for economic controls. Four times in the past fifty years, the result has been format programs to restrain wages and prices: during World War II, the Korean War, the "guidelines" years of Presidents John F. Kennedy and Lyndon Baines Johnson, and President Richard Milhous Nixon's wage freeze and stabilization rounds. Another alternative, however, involves changing the structure of collective bargaining in order to generate less inflationary settlements. Despite a large number of books and articles on incomes policy, there has been. little formal discussion of the structure of a desirable incomes policy. Japan's macro wage-setting practices, which contain many of the desirable elements listed here, can provide a useful model for the United States. Japan's experience following the first oil shock suggests that inflationary pressures were not perpetrated there through the operation of labor markets: between 1976 and 1982 the average yearly wage increase at large Japanese employers was 7.2 percent, while consumer prices rose at an annual rate of only 5.6 percent.

Presents outlook for the Japanese labor economy. Factors contributing to the lack of success in trade-union organization; Basis upon which the Japanese industrial system has developed; Concept of the country's industrial relations.