Having failed the free‐market, laissez‐faire, capitalist‐economic‐development interpretation, Japan's economic success is currently accorded a “revisionist” approach: it is treated as a “special case” on the grounds that Japan operates along a different set of cultural, economic, and political imperatives. This paper offers an alternative systematic economic interpretation of the “Japanese Miracle” which has transference to other countries. It is based on the Ricardo Principle, and uses purchasing‐power‐parity data to analyze Japanese development policies that led to successfully “leapfrogging” the process of economic development. The state of underdevelopment, with initial conditions that led to specialization in labor‐intensive, low‐value‐added exports, and resulted in low wages and low living standards was ended “prematurely” in the 1960s, lest the country be trapped in its static comparative advantage. The state of development was then launched, with specialization in capital‐ and technology‐intensive exports that had dynamic comparative advantage down‐the‐road. The process is characterized as “State‐led capitalism,” with the government using its strong arm to the pu