Japan: The Modernization of an Ancient Culture
by Lawrence C. Wolken
When World War II came to an end in 1945, Japan was in ruin. The extent of the devastation is difficult for most Americans to comprehend. All of Japan’s major cities, with the sole exception of Kyoto, had been bombed extensively during the last few months of the war. Everyone is familiar with the fate of Hiroshima and Nagasaki; few, however, realize that Tokyo, Nagoya, Osaka, Kobe and many other Japanese cities were equally devastated. The only difference is that their destruction occurred over a period of months rather than in one instant of time. In either case, the result was the same-smoldering rubble.
The physical scars of the war reflected only a small portion of the despair which gripped Japan in late 1945. Edwin Reischauer, a former U.S. Ambassador to Japan, describes the scene:
“Some 2 million of her people had died in the war, a third of them civilians; 40 per cent of the aggregate area of the cities had been destroyed, and the urban population had declined by half; industry was at a standstill . . . [The Japanese] were physically and spiritually exhausted. Many were in rags and half starved, and all were bewildered and mentally numbed.” (See End Note #2)
Japan’s current success is truly impressive when one fully realizes how far the Japanese people have come in such a short period of time.
Rebuilding A Nation
Many Japanese felt the key factor in losing the war had not been a difference between the capabilities of the individual Japanese and American soldiers, but rather the superior ability of the American economy to rapidly produce large quantities of war materials. It seemed only natural, then, to use America’s free enterprise system as the model for rebuilding Japan. As it had done twice before in its history, Japan sent some of her finest young people to a foreign country to study its economic, political, social, and educational systems. The knowledge gained from their studies in the United States was then used to restructure Japan’s major institutions while maintaining the essence of the Japanese culture. This desire to assimilate the best that America had to offer resulted in an amazingly high degree of cooperation between General MacArthur’s occupation forces and the Japanese people.
The success of Japan’s efforts to rebuild itself has far exceeded anyone’s expectations. Today, the Japanese enjoy one of the highest standards of living in the world. This amazing economic improvement occurred at a time when many nations around the world were struggling to raise themselves from the depths of poverty. Can developing nations learn something from Japan’s experience? Yes, provided the reason for Japan’s success is clearly understood.
Two popular theories are often cited to explain why developing nations remain poor. Some blame their poverty on a lack of natural resources; for others, a high population density is supposedly the cause. Consider Japan. It has very few natural resources of its own and must therefore import the vast majority of the resources it uses. For instance, over ninety percent of the crude oil it consumes is imported. In addition to raw materials, Japan’s population density is 311 people per square kilometer-three times as dense as China, over one and a half times as dense as India, and more than twelve times as dense as the United States. To be comparable to Japan, half of the U.S. population would have to live in the state of California. If a lack of domestic resources and a high population density are crucial in determining a nation’s economic condition, then Japan should be one of the poorest nations on earth instead of one of the most prosperous.
It took the Japanese people less than forty years to transform their country from nearly complete devastation into one of the world’s leading economic powers. The economic, social, political, and educational institutions it adopted were key factors in Japan’s success. Its accomplishments, however, have not come easily. The world is well aware of Japan’s success in such areas as the steel and automobile industries. But little is said of the economic and social problems the Japanese face today. A closer look at Japan’s experiences since the war are informative for developing and industrialized nations alike.
In spite of some minor misunderstandings and mistakes on both sides, America’s postwar occupation of Japan was marked by a surprisingly high degree of friendly cooperation. This success was due in large part to General MacArthur’s decision to govern through the already existing bureaucracy of the Japanese government rather than try to rule the country directly. One important decision was to allow the Emperor to remain on the throne as a symbol of Japanese unity but with little real political power.
Under the new constitution which went into effect in May, 1947, the Japanese government was restructured to resemble the British parliamentary system. The Diet is the legislative branch of the government and is the most powerful of the three branches. It consists of the House of Representatives with 511 seats and the House of Councilors with 252 seats. When the voting districts were first formed, the agricultural areas of the country were given a disproportionately large representation in the Diet because the American occupation forces preferred their conservative nature to the more liberal views prevailing in the large cities. Consequently, the agricultural sector has had considerable influence on the government’s economic policies over the years. Some of the major budgetary problems Japan faces today stem from the wide variety of agricultural programs which have been instituted since the end of the war.
The Prime Minister heads the executive branch of government and is chosen by the Diet from among its members. He then appoints the 12 ministers of state, most of whom are also members of the Diet. The Cabinet, as it is called, controls the administrative power of the government, manages foreign affairs, and prepares the budget. The judiciary branch consists of a Supreme Court and a variety of lesser courts. Together the three branches of government have provided Japan with the stable political system necessary for economic development to take place.
As a condition of surrender, all of Japan’s military forces were demobilized, leaving the United States responsible for the defense of Japan. The new Japanese Constitution renounced the use of war as a means of settling international disputes while retaining Japan’s right to defend itself. In 1950 the National Police Reserve was established to maintain domestic peace. It was reorganized in 1952 and again in 1954 when Japan’s Self Defense Force was established. The anti-military sentiments stemming from the memories of the military’s role in getting Japan involved in World War II have remained strong and have been a key factor in limiting the size of the Self Defense Forces. In recent years, this has created considerable friction between the United States and Japan because many Americans want the Japanese to increase their military spending so they can take a more active role in defending their country.
During the occupation a major change in Japanese society occurred when Japan’s educational system was completely restructured. Although a system of compulsory elementary education had been established in 1867, as late as 1935 less than 20 percent of Japan’s youth went on to secondary school and less than three percent received a college education. The School Education Law of 1947 established an educational system patterned after America’s 6334 system. All Japanese children 6 to 14 years of age were required to attend school. This typically took a student through six years of elementary school and 3 years of lower secondary school. By 1955 just over half of these students continued on to upper secondary school; in recent years this percentage has climbed to 94 percent. To continue their education at a university, students must compete with each other on the nationwide entrance examinations given each year during January. Between 1955 and 1980 the percentage of students going on to universities and junior colleges increased from 10 percent to 37 percent. Over the years, Japan’s educational system has provided the well educated populace needed in a highly industrialized and technological society. (Pictures of Japanese schools)
With mining and manufacturing at less than 15 percent of their prewar production levels combined with severe food shortages and rampant inflation, Japan took several steps to revitalize its economy using the American economic system as its model. In an effort to decentralize the business sector, the zaibatsu were dissolved and the “Law for the Elimination of Excessive Concentration of Economic Power” was passed. The zaibatsu had developed during the Meiji Restoration as groups of closely knit subsidiary companies which cooperated to expand their economic power. The Mitsubishi Honsha zaibatsu, for example, was a single holding company which owned the shares of all of its affiliated firms. This type of zaibatsu was commonly controlled by a single family and run by the head of the family. The effort to prohibit private monopolies from restraining trade or practicing unfair methods of competition shortly after the war reflected more the antitrust sentiments of the American occupation forces than the true feelings of the Japanese.
During the early 50s America’s attitude toward Japan began to change and so did its policies. Shortly after the peace treaty was signed in 1951, Japan’s antitrust laws were revised to make it easier for companies to merge and once again allowed interlocking directorates. The result was the gradual reappearance of the zaibatsu but in a slightly different form. Instead of being under the control of a single family, many of the new zaibatsu were industrial and bank centered groups. Cooperation between members of a group ranged from sharing information concerning technological developments and pricing strategies to interdependent financial transactions and the joint development of new business lines. The resurgence of the zaibatsu occurred at a time when Japan was beginning to expand its markets overseas. Many Japanese felt close cooperation was necessary to make Japanese products competitive in international trade. Today, these industrial groups dominate much of Japan’s economic activities. Many American companies have come to view the economic and political power of these groups as a major factor contributing to the barriers American goods face in entering Japan.
Land reform was another major change which took place. Before the war, much of the agricultural land was owned by absentee landlords. During the American occupation, the land was sold at very low prices to the tenant farmers who had been working the land. The result was the creation of a large number of small farms. Even today the average size is only 1 hectare (or 2.5 acres). Land reform coupled with the structure of the Diet contributed to the political power Japanese farmers have enjoyed since the end of the war.
The establishment of a democratic government, the creation of an educational system to serve the vast majority of the populace, and the economic reforms which were instituted during the American occupation combined to form the strong base the Japanese needed to rebuilt their country. The recovery began rather slowly at first but advanced rapidly once a large number of Japan’s factories had been rebuilt.
Economic Growth (mid-fifties through the sixties)
In 1955 Japan’s Gross National Product (GNP) amounted to $22.7 billion. This was less than 6 percent of America’s GNP and about half that of Germany, France, or England. During the next fifteen years, the Japanese government promoted economic growth by developing the infrastructure needed for industrialization and by providing incentives for the development of the industries it felt were best suited to compete on world markets. Initially, economic growth was keyed to private investment in new plants and equipment. Japan’s prewar economy had been based on light industries like textiles and industries closely associated with the military. In the late 50s the Ministry of International Trade and Industry (MITI) supported the development of heavy industries like steel and ship building. The government also encouraged the decentralization of the nation’s industrial complexes. As a result, companies began shifting their operations from major cities like Tokyo, Osaka, Kobe, and Yokohama to new places like Chiba, Shizuoka, Hokkaido, and the Seto Inland Sea area. This dispersal of industries all across Japan did not occur without controversy. Many opposition groups felt this new development damaged the local environment. This concern for nature dates back to the early influences of Shintoism on the Japanese culture and resulted in the development of a wide variety of environmental programs during the 70s.
The early years of this period of economic growth were also marked by a shift in Japan’s primary industrial energy source from coal to the then less expensive form-oil. This was accompanied by the development of a strong petrochemical industry. As strange as it may seem today, Japan benefited initially from this shift to oil as its primary energy source. At the time, no one could foresee the OPEC oil embargoes of the 70s and the resulting economic problems Japan would have to face.
Much of the early economic growth of the late 50s was spurred by the production of consumer goods for consumption by the Japanese people. While the production of these goods resulted in an ever rising standard of living, it also required the constantly increasing importation of raw materials. Once the harsh reality of this situation sank in, Japan realized it must export or die. As a result, Japanese industry’s only alternative was to turn its eye toward the world market.
Even though heavy industry accounted for roughly 70 percent of Japan’s exports during the 60s, the production of transistor radios, television sets, tape recorders, and household electrical appliances continued to increase. As Japan’s markets around the world expanded, a yearly real rate of growth in GNP which exceeded 10 percent was maintained for most of the 1960s. By 1970, Japan’s GNP had surpassed the $200 billion mark. In fifteen years the Japanese economy had increased from less than 6 percent to 20 percent of America’s GNP and had exceeded the GNP of Germany, France, and England. Japan’s spectacular economic growth made it the envy of industrialized nations around the world. This also made it very easy for other nations to feel that their economic problems were caused by Japan’s economic prosperity.