Japan in the 1960s
conservative politics
economic growth
The Occupation
• August 1945 - April 1952
• Supreme Commander of the Allied Powers
(SCAP) - General Douglas MacArthur
• Two main tasks:
– demilitarization
– democratization
Korean War (1950-3)
• Economic turning point for Japan:
– war supplies to Korea
– industrial resurgence
– foreign currency
– economic reconstruction
• 1945 - 1950 growth rate: 9.4%
• 1950 - 1955 growth rate: 10.9%
• 1952: Japan’s GDP matched prewar high
High Growth of 1955-62
• Large investment in heavy industry
• Imports of energy and raw materials
• Government’s economic goals:
– achieve economic self-sufficiency
– achieve full employment
– improve export competitiveness
– keep domestic demand high
High Growth of 1963-73
• Government’s plan to “double the national
income in ten years”
• scheduled 9% annual growth rate
• large-scale infrastructure construction
– Shinkansen (bullet train)
– Olympic Games
– port, road, and rails
– human infrastructure
High Growth of 1963-73
• labor-intensive in decline
– agricultural subsidies
– textile bankruptcies and
“excess capacity”
– coal industry in serious decline
• capital-intensive on the rise
– large firms had 10- and 20-fold
growth
• electronics and automobile
Government response
• government responded to some sectors’
decline with reorganization and
subsidization
• technological improvement and facility
modernization under government
protection
– Ministry of International Trade and Industry
• constant and critical role in developing the
computer industry
The Iron Triangle
bureaucrats
LDP politicians
big business
executives
High Growth of 1963-73
• Aggressive export strategy
– businesses compete with foreign counterparts
under government protection
• domestic market sealed off from
competition
• Strict limitations on governmt expenditures
• 1965 Japanese exports exceeded imports
for the first time in two decades
Government policies
• Macroeconomic success through
internationally competitive firms
– reduce the reliance on agriculture and small
industry
– capital-intensive industries
– technically sophisticated products
– improve national economic infrastructure
– improve human infrastructure
Protection of domestic market
• U.S. products and capital dominated world
markets to an unprecedented extent in
1950s and 1960s
• Japan remained virtually unpenetrated by
– foreign firms
– foreign products
– or foreign capital
• Bretton Woods system (1949 - 1971)
Japan’s Economic Growth
GDP (constant 1995 US$)
1E+13
9E+12
8E+12
7E+12
6E+12
5E+12
4E+12
3E+12
2E+12
1E+12
Germany
France
Japan
UK
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
19
70
19
68
19
66
19
64
19
62
19
60
0
USA
GDP per capita (constant 1995 US$)
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
Germany
France
Japan
UK
USA
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
19
70
19
68
19
66
19
64
19
62
19
60
0
Political & economic institutions
• Japan compared with other industrialized
democracies
– economic institutions dramatically different
– economic performance was superior
– longest dominance by one political party
– far greater egalitarianism in political economy
– foreign and security policy tied to that of US
Golden age of LDP Politics
• Liberal Democratic Party
• 1963, LDP won 55% of vote and 60% of
seats in lower house elections
• LDP benefited from
– the economy’s stellar performance
– internal leadership coherence
– fragmentation of political opponents
– compensation of economically disadvantaged
Evolution of party system
• Combination of multiparty system with
sustained dominance of one majority party
• Chaotic political party system 1946-55
– 2 conservative parties, 2 socialist parties,
communist party, and micro-parties
• Party merges in 1955
• “One-and-a-Half Party System”
Major Political Parties
• Liberal Democratic Party (LDP)
– conservative catch-all party
– single largest party
• Japan Socialist Party (JSP)
– “Japan Peace Party”
• Japan Communist Party (JCP)
– anti-emperor, anti-capitalism, anti-military
– only party untainted by money politics
National Vote Share
Suggested Readings
• http://www.kantei.go.jp/foreign/indexe.html
• Journals in the UM library:
– Japan Echo
– Japan Quarterly
• New books in the UM library:
– Japan in Transformation, 1952-2000
– Japan's Emergence As A Global Power