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 politiciansbig businessexecutives

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$)

0

1E+12

2E+12

3E+12

4E+12

5E+12

6E+12

7E+12

8E+12

9E+12

1E+13

Germany France Japan UK USA

GDP per capita (constant 1995 US$)

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Germany France Japan UK USA

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/index-e.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