Essays On The Japanese Miracle

May 15 will mark the 45th anniversary of the reversion of Okinawa to Japanese control, again reminding us of how drastically the U.S.-Japan relationship has changed over the years.

MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975, by Chalmers Johnson.
409 pages

The basic postwar framework has held, but despite surface-level consensus, deep problems like Okinawan oppression, trade imbalances and defense reciprocity remain unresolved between the former rivals. Recently, the Liberal Democratic Party’s push for constitutional revision and the potentially destabilizing policies of the administration of U.S. President Donald Trump have opened the door for change, making it a perfect time to revisit the work of the late Chalmers Johnson, a leading Japanologist and critic of American foreign policy who died in 2010.

Johnson first arrived in Japan en route to the Korean War, and he quickly developed a passion for East Asian affairs. His intensive language study and field work jump-started his academic career, leading him to chair the political science department at the University of California at Berkeley and cofound the Japan Policy Research Institute.

“MITI and the Japanese Miracle,” Johnson’s exhaustive profile of Japan’s Ministry of International Trade and Industry (now METI, the Ministry of Economy, Trade and Industry), helped to demystify the country’s bureaucracy and explain its explosive economic growth.

In it, Johnson argued that, while the war was “the most important watershed in modern Japanese history since the Meiji restoration,” in the “history of industrial policy, I believe that the 1940s are one continuous era.”

MITI itself was a holdover from before the war, when it was known as the Ministry of Commerce and Industry and then as the Ministry of Munitions. The power of the ministries increased as postwar reconstruction “propelled the economic bureaucrats into the vacuums” created by the weakening of the military and zaibatsu corporate conglomerates.

Johnson followed his work on MITI with “Japan: Who Governs?,” a study of the entire postwar system of governance. Johnson claims that powerful, independent, and extremely competitive ministries in effect “rule” Japan. Politicians, by contrast, merely “reign,” functioning primarily as a “safety valve” in the case of bureaucratic overreach. Johnson holds that the difference in governance structures between Japan and the U.S. accounts for the difficulty of their trade negotiations.

U.S. politicians in the 1980s and ’90s often accused the Japanese state of unfair collusion with major corporations. More recently, President Trump has surprised Americans and Japanese alike by reviving many of these 1980s-era criticisms. He has derided the supposed protection of the Japanese auto industry in particular, a complaint that Johnson called “almost laughable” in the 1990s, given that U.S. manufacturers “made no effort to develop cars that would appeal to the Japanese market.” Little has changed in this regard.

Johnson was a leading proponent of “revisionism,” a school of thought which argued that Japan’s economic dominance in the 1980s was evidence of a superior economic system. He believed that America should free itself of its irrational devotion to free-market ideology and reform its economy to better compete.

Though sharply critical of U.S. economic diplomacy, Johnson was a patriot and a self-described “cold warrior,” and during the late 1960s and early ’70s he was a consultant to the U.S. Central Intelligence Agency on East Asia policy. But after the Soviet Union collapsed, Johnson started to question not just the exercise of American foreign policy, but also the intentions behind it. He believed that the U.S. decision to maintain significant troop levels in East Asia in the 1990s was an attempt to “freeze the Pacific in a Cold War framework.”

Okinawa was, and still is, a particularly glaring example of U.S. hegemonic ambitions. Johnson examined the issue in “Okinawa: Cold War Island,” a volume of academic essays which he contributed to, edited and published through the Japan Policy Research Institute. It is an essential overview of the island’s oppression and resistance from the Battle of Okinawa through the 1990s.

Despite sustained protests, Okinawa continues to host more U.S. bases than the rest of Japan combined. According to Johnson, the Japanese state intentionally privileges mainlanders by offloading the cost of the alliance onto Okinawans. He states, “Neither the Japanese nor American government has shown the slightest interest in justice for Okinawa, only in dividing and deceiving its people in order to make their protests ineffective.”

It seems unlikely that the Trump administration will make justice for Okinawans a priority — but its policies might inadvertently lead to victories for anti-base protesters. If the U.S. demands large payments from Japan in exchange for continued defense support, Prime Minister Shinzo Abe and other revanchists in the LDP may accept a reduced U.S. military presence as a pretext for strengthening Japan’s Self-Defense Forces.

Johnson believed that the growth of the U.S. military industrial complex would also stymie economic diplomacy. If the dated rhetoric of the Trump administration is any indication, bilateral economic talks may be headed nowhere. In 2001, Johnson wrote that the leadership needed to rebalance the U.S.-Japan relationship was “in short supply on both sides of the Pacific.” With a new base under construction on Okinawa and the Trans Pacific Partnership free-trade pact in ruins, it seems that none has appeared.

The decline of Japan’s economic stature since the 1990s has weakened some of Johnson’s arguments, but strengthened others. His books are as worth reading now as ever, not only for his opinions, but for his assiduous research. Johnson’s work remains one of the best English-language resources for reviewing the empirical record of the postwar U.S.-Japan relationship, in both its military and economic dimensions.

The Japanese economy has attracted attention after the Second World War, when it has gained the rapid growth. The radical economical and political reforms have given a real impetus to the revival of the economy and the country as a whole. Then, this phenomenon was called Japanese Economic Miracle.

After 300 years of self-isolation Japan has made enormous efforts in order to modernize its economy, society and industrialization on its path to the modern economic development. The country owes its success to a high rate of capital investments, as well as low wages, forced export of its products and a lack of large military expenditures. In addition, the close relationship between manufacturers, suppliers and distributors, and also the guarantee of the lifetime employment for a significant portion of the urban population have made a positive contribution.

Today Japan’s economy is one of the most developed economies in the world. It ranks the third place among the countries of the world (after the US and China) in terms of GDP and the volume of industrial production. The country is famous for its high technology (electronics and robotics), transport machinery, including the vehicle manufacturing, shipbuilding, machine tools.

Private consumption leads to the increase of GDP. Economic growth of the country is explained by the low unemployment, zero interest rates and the promotion of investment by the government. The New Economic Policy includes measures of mitigating of monetary and fiscal policy. It is possible to make the assumption that this will lead to the acceleration of economic growth and the positive inflation over the coming years (in the previous years, the country experienced deflation). However, the high level of public debt is still a serious risk factor.

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