The book sounds interesting, but foreign companies do manufacture in Japan -- often under Japanese brand names -- with varying degrees of success. For instance, Coca Cola has a big presence in Japan, with its Aquarius brand, among others, and Ford manufactures cars under the Mazda brand, while Daimler controls Mitsubishi Trucks (they have problems there, but not caused by the factors mentioned in your book review), and so on. So the book is slightly wrong on that point.
On the matter of education, I realize it is fashionable to complain about the rote learning that goes on in Japanese schools, but it would be a mistake to think that such learning does not yield good results. Japan and other countries, like South Korea and India, that have an "old-style", not-much-fun, facts-based approach to education produce high quality professionals and a lot of creative people, both in the sciences and in the arts.
As to Japan's being undemocratic compared to Western countries, I have my doubts. Certainly it is less democratic than Switzerland, but what country isn't? Its system is similar to that of several European countries, and probably has better checks and balances than some. Incidentally, I don't think the US is very democratic at all (at the national level - parts of the US have strong local democracy), even compared to Japan, partly because of the excessive power of rich lobbies, and partly because of the electoral system, which is quite primitive.
As for group harmony, well, its all a matter of degree, isn't it? I don't know if any developed country has wiped out class differences yet. If we compare with the US, is Japan more or less "harmonious"? I'm tempted to say "more", given how much poverty there is in parts of the US.
Finally, politics quite possibly does follow the economy in Japan, as the author says, but it is not obvious to me that that is necessarily a bad thing.
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