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Thread: How to explain Japan's economic boom from the 1950's ?

  1. #1
    Twirling dragon Maciamo's Avatar
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    Post How to explain Japan's economic boom from the 1950's ?

    When Japan surrender to the United States in August 1945, the Americans started occupying the country with main purpose to demilitarize and democratize.

    In order to obtain the support of the population and assure a smooth transition, the US decided to retain the Imperial institution, although the emperor would lose his divine status. Women were immidiately given universal suffrage, which also proved very popular.

    The Communist party became legal for the first time in Japan. The occupational forces thought of dismantling zaibatsu (financial combines), which they saw as the money-bags behind the military. They also wanted to decentralize education systems and the police, so as to weaken the power and influence of the central government. Nevertheless, the Americans did not care very much about Japan's economic recovery, and let it up to the Japanese to care about it.

    When the Cold War began and China's Communists routed the Nationalists, the US government feared that the movement would spread to Japan and set on a "reverse course" in 1947. They sharply scaled back their plans to dissolve subsidiaries of the zaibatsu, relinquished their claims to war reparartions, then initiated a crackdown on Japanese Communists and pushed for the creation of a national police. Instead of having to pay war reparations to Britain and most Asian countries, the US arranged commercial treaties for Japan with countries such as the Philippines.

    While the postwar inflation resulted in a total augmentation of of 15.000% from 1945 to 1949, the United States were now committed to solve Japan's economic problems. Japan's economy was to be cured by imposing three harsh measures : a balanced budget, the suspending of all state loans to industry, and the abolition of all state subsidies. The yen was set to a favourable rate of 360 for 1 US$ to stimulate exports.

    But as these new regulations put tremendous stress on the Japanese economy, nearly drawing it into depression, the Korean War commenced. This misfortune for the ones, became a great fortune for the others. Americans military procurements surged. Orders from Japan amounted to two billion US$ between 1951-53, approximately 60% of all its exports. Large companies amassed profits for the first time since the end of the war and Japan's GDP soared like never before. Japan's economic recovery was launched.

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  2. #2
    Cat lover Apollo's Avatar
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    Quote Originally Posted by Maciamo

    the Americans did not care very much about Japan's economic recovery, and let it up to the Japanese to care about it.

    When the Cold War began and China's Communists routed the Nationalists, the US government feared that the movement would spread to Japan and set on a "reverse course" in 1947. They sharply scaled back their plans to dissolve subsidiaries of the zaibatsu, relinquished their claims to war reparartions, then initiated a crackdown on Japanese Communists and pushed for the creation of a national police. Instead of having to pay war reparations to Britain and most Asian countries, the US arranged commercial treaties for Japan with countries such as the Philippines.
    Just some comments and I would like to just elaborate on one point:

    In the first phase of the occupation, the Americans did not do much about the economic recovery in Japan due to their priorities in Europe, but also because it was already decided on according to plans for Japan and directives to MacArthur in Japan.
    In the economic section of the Initial Post-Surrender Policy for Japan, it reads: "The plight of Japan is the direct outcome of its own behaviour, and the Allies will not undertake the burden of repairing the damage."

    It is very interesting that in 1947, the American objectives for Japan had changed; suddenly, an economic recovery programme was something they wanted, and this punitive stance toward the Japanese people changed...

    This became possible not only because of the Cold War and the Chinese situation, (Which is already covered in Maciamo's post) but also because many American corporations had invested in Japanese zaibatsu before the war, and with the plan to break up the zaibatsu, American investments would suffer...
    Before the war, there had been some close business relations between Japanese and American firms, such as General Electric with Tokyo Shibaura and Toshiba, Tidewater invested in Mitsubishi (which was one of the biggest zaibatsu).
    Hence, to quicken up economic recovery, and to 'save' American investments and saving in Japan, only a few of the 325 designated companies were broken up by the law.

  3. #3
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    The economic boom wasn't caused by the Japanese, it was caused by a foreign entity.

    But it's not from the U.S.A., it's much more correct to say that the ones who are responsible for controlling the U.S.A. government, the U.K. government, the Nazi Germany government, and so on are responsible for the economic boom.

    Come on people, those who have experienced first hand with Japanese people, do you really think that the Japanese are capable of doing that? I know that they are good people, but do you think that they are capable of doing that?


    If you noticed, Japan had been reformed big time drastically for at least two times, not counting smaller reformations.

    Anyway. Japan was reformed once in the Meiji restoration, and once also in the post Pacific war era.

    It's also possible that one of the reasons on why the Japanese government was ordered to attack the U.S.A. (attacking Pearl Harbour seems to offer no great tactical benefit) is so that later on there's a reason for an entity to come to Japan under the name of the U.S.A. and the allied force, and then this entity start reforming Japan according to its image. Of course, the stealthiest way of doing it is to fooled people that the Japanese shinka/evolve by themself.

    Note, if this is the U.S.A.'s actions, this seems to be unlikely, why go all the trouble of rebuilding the Japanese government and Japan itself? Especially in a stealthy way? Just make Japan as the U.S.A.'s 49th state, you don't go through all of the trouble of making an orphan become the head of his own family, instead the easiest and the painless way is to adopt him, and let him grow as part of your family. So its seems that the rebuilding of Japan seems isn't based on the U.S.A.'s self interest motive, nor any real desire of rebuilding Japan into a fine true independant country.

    Anyway. I remember one joke about one country that was in a broke situation. One of the people in charge commented on how they should proclaim war on the U.S.A., then surrendered to the U.S.A. a few seconds (minutes?) later, so that they could get aids, supports, and so on from the U.S.A.

    While it's a joke, there's indeed a truth in it. However, it's already been said on the unlikely fact that the U.S.A. do this on the base of self interest, and it's also unlikely that people on the Japanese did this on their own, it's probable that the whole thing was coordinated with the people from outside Japan (which comes from different places), considering that the ones who proclaim the war were the ones who get away, and probably given cushy jobs at the rebuilding process. What about some of their ignorant subordinates? Well.. If they weren't already dead, they probably would have been brought to the court and tried as war criminals.

    Interestingly, the same thing that happened to Japan around half a century ago is currently happening Iraq, and of course the other recently 'liberated' countries.

    If that's so, that would explain on why the Japanese 'Self Defense' Force was stationed in Iraq. 'They' made up the Japanese law, why should 'they' care about abiding to the law?

    It's probable that the J.S.D.F. wasn't there because of request nor voluntary, it's more like that the J.S.D.F. was ordered to be there. Refuse? Well... 'they' are capable making the land of the rising sun into the land of the setting sun.


    If many of the things in Japan in the post Pacific war wasn't really Japanese related. This beg the question, are some of the things that are often be associated with Japan are really Japanese, or they were just 'made in Japan'?

    For example, many Japanese refused to be associated with such J-Pop culture like 'anime', feeling that it's not like the actual representation of themself.

    (of course in Japanese, "anime" is a general term that covered EVERY kind of animation/'anime'eshon)

    Interestingly, many U.S.A. citizens also refused themself to be associated with most or what ever Hollywood produces, with interestingly for the same reason.

    It seems that these two type of entertainment industries are really belong to their host country at all, but if they don't belong to their host country, to whom do they belong?

  4. #4
    I jump to conclusions mad pierrot's Avatar
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    My old prof woud have much to say about this subject

    He gave a good lecture on it, too. The question is, how much of it can I remember?



    Anyways, if I recall correctly, he was infuriated by people who refer to it as an economic "miracle." His main points? Hmmm...... Man, it's foggy....



    I believe the essence of his argument revolved around Japan's post-war status. That is, cities might have been flattened, but there was a still a large infastructure of educated people. Highly literate society, a hulking bureaucracy, etc. If I recall correctly, many people involved in the Japanese government before the war remained involved after. There is one man in particular (whose name I can't remember...) who later went on to be a prime minister. (Anyone remember?)

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    Sorry now I don't have enough time to translate these 2 remarks into English, but I recommend you who can read Japanese to read them.
    The point is; Japanese bureaucrats abandoned capitalism in favor of controlled economy during 1937-1956. The policy stagnated Japan's economic development, while before and after that period Japanese economy grew at a phenomenal rate.

    remark no.1:
    date 2004/7/3(土)09:14
    uname betsumiya

    subject re(2):絶対安全後背地区

    日本の軍需産業は、大失敗ははっきりしています。それに加え、昭和11年から昭和31年まで一人当たりGN Pが全く伸びていないという事実があります。誰でも気づきますが、この間に発行された本の紙質は悪いわけで す。ですが、これが始まった昭和11年というのは日華事変勃発の前年です。企画院に巣食った「革新官僚」が ドイツの「代用品経済」をやりたくて、古紙混入やワラ混入を命令した結果です。

    革新官僚は「国家総動員」の名前を借りて実は、「社会主義経済」を実行したんです。昭和27年ごろまで、必 要もないのに配給・統制・物動をやっていたんですね。そして、忘れられていますが日本の戦後復興というのは 歴史に残るワーストです。日米英独仏伊の第一次大戦、第二次大戦からの立ち直りとして、日本の昭和20年か ら11年を要したというのは、最悪の記録です。ところが、大正8年の第一次大戦終了から昭和11年の大恐慌 発生期間を含む、経済成長率をみると日本はトップなんです。当時のアメリカの新聞では、アメリカを抜くのは 日本しかないと書かれていたんです。

    はっきりしていることは、経済とは軍需も含めて、統制・社会主義・役人干渉・財政出動をやると、とめどもな く悪化することです。軍需もGNPの一部なんです。

    http://ww1.m78.com/past/log28-7.html


    remark no.2:
    次世代型シンクタンクの条件

    ■インタビュー■
    満鉄から。(1)

    佐伯喜一■Kiichi Saeki
    ●聞き手 桂木行人(本誌)■Yukuto Katsuragi

    http://www.makuhari.or.jp/urbanist/1994/94_081.html
    Last edited by kara; Jul 19, 2004 at 23:22.

  6. #6
    Twirling dragon Maciamo's Avatar
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    Quote Originally Posted by mad pierrot
    If I recall correctly, many people involved in the Japanese government before the war remained involved after. There is one man in particular (whose name I can't remember...) who later went on to be a prime minister. (Anyone remember?)
    You could be referring to Yoshida Shigeru, who was already ambassador to Italy and the Uk before the war and served as Prime Minister from May 1946 to May 1947, then again from October 1948 to December 1954 (see list of prime ministers.

    Or it could also be Hatoyama Ichiro who was a Diet member since 1915, education minister between 1931-34 (heavy brainwashing period) and leader of the prewar Seiyukai party and postwar Liberal party, then Prime Minister from 1954 to 1956. He was banned from becoming PM during the American occupation because of his prewar and war-time activities, but was elected PM just 2 years after the Americans left !

    But the worst connection I can see with the pre-1945 militarist government is Kishi Nobusuke, who worked for the Ministry of Commerce and Industry from 1920 to 1935, then was appointed by general (and PM) Tojo Hidek in person as Minister of Commerce and Industry in 1941 (till the surrender of Japan in 1945). Actually, Kishi was imprisoned as a Class A war criminal till 1948, but found not guilty (despite his fierce nationalistic views). He served as Prime Minister from 1957 to 1960. Note that his brother, Sato Eisaku, was also PM from 1964 to 1972.

  7. #7
    I jump to conclusions mad pierrot's Avatar
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    Maciamo,

    Are you a history teacher?


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    There is a common idea among Koreans that the reason for the success of the Japanese economy during the 50s and 60s is due to their sales of leftover weapons to both sides of the Korean War. I don't know how much of this is true (perhaps it is true, but exaggerated by many Koreans). We have to remember that Japanese people are very industrious and education-oriented. I think many of us need to move away from the positivistic concept of economics (that all socio-economic successes or failures are due to economic systems). Many other factors come into play, like cultural mindset, temperaments of people, land conditions, etc. Just because a country is capitalistic and democratic does not mean everything is going to turn all right.

  9. #9
    Regular Member bossel's Avatar
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    Quote Originally Posted by digicross
    Come on people, those who have experienced first hand with Japanese people, do you really think that the Japanese are capable of doing that? I know that they are good people, but do you think that they are capable of doing that?
    Yes, I think so. Esp. with the help that they got from the US.



    Anyway. I remember one joke about one country that was in a broke situation. One of the people in charge commented on how they should proclaim war on the U.S.A., then surrendered to the U.S.A. a few seconds (minutes?) later, so that they could get aids, supports, and so on from the U.S.A.
    I think, that was a movie.



    'They' made up the Japanese law, why should 'they' care about abiding to the law?
    In your posts you keep referring to "them". Who are they? Freemasons, aliens or what? Enlighten us!

  10. #10
    Cat lover Apollo's Avatar
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    Regarding the economic boom of the 1950s...no one seems to mention the Dodge Plan in this forum... Someone, any words on this?

    I believe that the Detroit banker Joseph Dodge played a big part in the economic recovery of Japan, when he was headhunted personally by Truman to go to Japan in the beginning of 1949 to implement his well-known "Dodge Plan", a strict austerity policy in Japan.
    Dodge was an experienced man regarding this, as he assisted with the same subject in Germany immediately after the Second World War.

  11. #11
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    Ministry of International Trade and Industry and the Korean War are in my perspective a reason...

  12. #12
    Cyrus
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    I think these factors may be the main reasons for the rapid economic growth in postwar Japan.
    First, the Korean War that began in 1950 jump-started the Japanese economy as the U.S. dramatically increased orders for military and civilian products from Japan. (This is known as the procurement boom) In 1950, for example, U.S. procurements comprised 1/4 of total Japanese overseas earnings.
    And, politicians such as Yoshida Shigeru (see this weeks reading assignment) established Japans postwar mission of regaining economic strength while avoiding involvement in international political/strategic affairs.
    A strong centralized bureaucracy, remnant from the prewar period, directed economic recovery.
    Moreover, the U.S. government helped Japan to learn from U.S. business successes (Japanese studied U.S. technology and management methods such as quality control and rational management)
    In addition, the Ministry of Trade and Industry (MITI 通産省) orchestrated change of production base from steel production and ship building to petrochemicals, autos and electronics.
    Furthermore, the Dodge Plan. It stoped inflation by tightening the fiscal budget. And the exchange rate was set at $1 = 360 yen.
    Then , High Saving Rate is also the main reasons during 1950 to 1973. It provided sufficient funds to support a high investment rate.
    A sustained period during which the prices of the raw materials and agricultural commodities which Japan had no choice but to import were relatively low. And, Sound policy decisions by Japan's monetary and fiscal authorities through the 1950s and the 1960s.

  13. #13
    AmericaFlorida TuskCracker's Avatar
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    How to explain Japan's economic

    .
    Smart, discplined people, working hard !
    - > Smart, discplined people, working hard !
    - - >Smart, discplined people, working hard !
    - - -> Smart, discplined people, working hard !
    - - - -> Smart, discplined people ,working hard !



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