"National Economy" is a term and has a meaning. Depending on what you think that meaning is, the usage of the term "National Economy" may in fact be nonsense in any usage.

This is beginning to sound Alice in Wonderlandish.

national borders are arbitrary geographical limits to the application of a set of laws Lets take this one step further and ask the question - What is an economic unit?

Traditionally, it has been defined as an arbitrary geographical limit. The economic EU shows this well by arbitrarily grouping a set of previous countries with their own currency together into one big country.

An economic unit does not have to be arbitrary. A kilogram exists, why not an economic unit? That it should conveniently be exactly what we want it to be - an arbitrary geographical limit would be surprising.

Consider - when Mexican wetbacks cross the Rio where do they go? One might be tempted to say the United States, but that is incorrect. They have particular destinations in mind - not the "economic unit" of the US. There is a reason that the beware of illegal alien crossing signs exist on the freeways up to LA, and not outside of Detroit.

If "ecotopia": were to exist tomorrow, LA would still need the beware of illegal aliens crossing signs on its freeways.

The brief statements above are provocative, and can not really be explained in a comment, or even a diary. They are pulled from the ideas of Jane Jacobs - author of several books. In particular, the book Cities and the Wealth of Nations.

The final point is about discarding the "Japan" mindset. Generally speaking, national borders are not defined naturally, except for in the case of an island country like Japan. The complementary concept to the idea of globalization is regionalism, in which a "nation" is a confrontational concept. If the natural economic unit is the city, as economist [Jane Jacobs is not an economist] Jane Jacobs claims, a metropolitan economy self-generates itself and, thus, economic policies within the framework of a nation - a unit defined by artificial boundaries - have little effect. Some floated ideas of dividing Japan into several regional blocs would not be an answer as boundaries would still be artificial. Rather, in recognizing a regional economy as a base for a natural economic unit, policies should be devised in a way to support the natural evolution of such economic zones across administrative boundaries by, for instance, facilitating local autonomy and cross border cooperation. There has been much criticism about the current excessive concentration in Tokyo, but it is necessary to more closely examine specifically what is wrong with such concentration. A more positive approach should be taken such as redesigning the urban structure to ensure the safety of the some 40 million people living in the Tokyo metropolitan area.

http://www.rieti.go.jp/en/special/yokoyama-yosinori/systemdesign/index.html

A couple of links about Cities and the Wealth of Nations

http://www.portifex.com/BSPages/Cities&Wealth.htm
http://webseitz.fluxent.com/wiki/CitiesAndTheWealthOfNations

_{aspiring to genteel poverty}