Postwar economy and politics

    1. New party politics: the Liberal Democratic Party

 In 1955, the merger of the Liberal Party and the Democratic Party into the Liberal Democratic Party (Jiyu Minshuto) continued the prewar practice of two party rule (Seiyukai and Minseito).  

    Characteristics of the LDP:

Although the LDP did try to address issues (e.g. economic growth in the 1960s and anti-pollution in the 1960s-70s, McClain, 567), its connection with the grassroots level has largely been sustained through informal and personal ties between the Diet members and the prefectures (568-69).  The high price tabs associated with it has led to numerous financial scandals which is the most important reason why Diet members or prime ministers (who are members of the Diet) resign.

Q: Compare the corruption scandals of the LDP with big companies and other interest groups' lobbying of presidential and congressional candidates.  What are the similarities and differences in between? 

2. Government involvement in economic planning:

    The chronic corruption problems plaguing the Japanese cabinet and Diet are linked at a deeper level with the style of government behavior, including extensive economic planning by the government bureaucracies (see chart of Japanese bureaucracies below).  

1. High involvement of government agencies in economic planning: the Economic Planning Agency (EPA) and Ministry of International Trade and Industry (MITI).(574-75)

2. The enormous government bureaucracy (see chart below), and the close working out of the various laws concerning every aspect of Japanese economy and society.

3. the kairetsu and business development: 

The Kairetsu: a  conglomeration of businesses (578), with companies buying one another's stocks, often prevent stocks from going public, which shielded companies from the upheavals of the stock market and even immediate profit, so that companies could focus more on R & D and long term goals.

    Q: How do the kairetsu differ from the prewar zaibatsu?

4. The government's financial plan: the Bank of Japan and MITI:

both organizations, especially the Bank of Japan, encouraged liberal loans to companies with little demand for payment, leading to fierce competition among many companies, which drove R & D.

5. Workers' job security in medium and small size companies was given a degree of protection through the often cartels formed by the state, to distribute production or sale quota among different companies so that there would not be excessive competition among them, e.g. small drug stores and sunset industries.

 

3. Postwar economic take-off:

    The postwar economic takeoff was due to the above five factors plus the following:

1. The money freed from social services became generous loans to small and large size companies: Japanese state is notorious for providing very few social services.  For a long time it has been considered to be a welfare society, and not a welfare state, because it shifted the responsibility of pension, healthcare, etc., to the companies, and most important of all, to the big companies' promise of lifetime employment after 1960, therefore eliminating the need for unemployment benefits for many.

2. Because of the Cold War, the U.S. allowed Japan almost unlimited export to the U.S. while Japan restricted import of U.S. goods until 1985, when the Japanese market was asked to be opened.

3. The absence of need to have a large standing army also contributed to financial wealth.

4. Style of Japanese economic development: from top down or bottom up?

The factors leading to the Japanese economic takeoff lead us back to an old question of whether reform in post WWII Japan was from the top down or bottom up.  In some ways, this question was also related to the issue of the emperor, and Japan's war guilt.

Q: Which aspects of Japanese economy conform to market economy, and which aspects may conform less to our definition of a market economy?

The style of Japanese economic development is also a reflection of its politics.  In comparison with the grassroots politics in the U.S., the Japanese state's emphasis on the homogeneity of Japan and a national identity have discouraged many from advancing their rights.  A high degree of government planning of economy corresponded with the state's emphasis on the advancement of Japanese national interests under state planning.  The emperor and tradition have been part of the package the state used to convince the Japanese of the pursuit of a unique Japanese identity.

 Q: How would denial of war guilt in both public announcements and school textbooks help advance the authority of the Japanese state?

Q: What are the changes and continuities in Japanese politics and economy before and after World War II?

 

 

The Diet building in Tokyo.

Diet in session.

Major Ministerial Agencies Agency for Cultural Affiars (Ministry of Education) Agency for National Resources and Energy (Ministry of International Trade and Industry) Food Agency (Ministry of Agriculture, Forestry, and Fisheries) Forestry Agency (Ministry of Agriculture, Forestry, and Fisheries) Maritime Safety Agency (Ministry of Transport) National Tax Administration Agency (Ministry of Finance) Social Insurance Agency (Ministry of Health and Welfare)              Link to Japanese government offices.