 |
|
JAPAN, from 1946 into the 1990s
The outbreak of the Korean War boosted Japan's economy as Japan became the supplier of goods needed for war. Payments from the U.S. government bolstered the Japanese economy, amounting to 27 percent of Japan’s total export trade. But a more permanent boost to Japan’s postwar industrialization was a government ministry: the Ministry of International Trade and Industry (MITI). In 1951, MITI established the Japan Development Bank, which supplied private industry with low-cost capital for long-term growth. MITI stimulated cooperation between government and private industry. Here was government involvement in the economy that U.S. conservatives had no taste for. MITI coordinated various industries to national production goals, and MITI had the power to promote industries it believed promising. A writer to Wikipedia commented that, “The low cost of imported technology allowed for rapid industrial growth. Productivity was greatly improved through new equipment, management, and standardization.”
By the mid-1950s, Japan's economy reached prewar levels. In 1951, Japan's Gross National Product was half that of West Germany's, one-third of Britain's, and 4.2 percent that of the U.S. GDP. In the late 1950s, Japan's rice crop set new records, a result of advances in fertilizers, insecticides and seed strains. Japan expanded its fruit growing, vegetable, meat and dairy industries, and with the Japanese consuming more bread and meat, the nation became self-sufficient in rice. The greater productivity in agriculture made more people available for the workforce needed in Japan's industrial development. And after the war, production in textiles, small electronic appliances, photographic equipment and automobiles rose in competition with the less advanced methods and practices of U.S. industrial leaders.
In 1962, Japan's agricultural work force was 29 percent of the overall work force, down from 41 percent in 1955. Its Gross National Product in 1962 was $44.8 billion measured in 1951 dollars, up from $15.1 billion, and in 1963 its Gross National Product increased 13 percent. Japan had been saving a good percentage of its earnings and a higher percentage of the nation's wealth went into investment rather than into the consumerism pursued in the United States. With economic recovery, Japan's government was able to increase its investment in research and development, which, in turn, helped Japan's economic development. In 1967, Japan was investing 1.6 percent of its Gross Domestic Product on both civil and military research and development -- compared to 3.1 percent for the United States and 3.2 percent for the Soviet Union.
By 1970, Japan had overtaken all European economies. It had become the second largest economy in the world and it was a world leader in education. In 1975, Japan's GNP was double Britain's and 40 percent of that of the United States.
Japan's industrial work force was benefiting from the economic growth. The work force was paid relatively well -- nothing like the subsistence wages in the Soviet Union during the economic growth years of Stalin's five-year plans. And the Japanese continued to save at a higher rate than people in the United States.
The country's continuing birth to death welfare was benefitting from the country's economic success. According to Niall Ferguson (The Ascent of Money, p. 209), "In 1975 just 9 percent of national income went on social security, compared with 31 per cent for Sweden."
In 1983, in non-military research and development Japan pulled ahead: 2.7 percent of GDP against 2.0 percent for the United States and 1.0 for the Soviet Union. [note]
By supplying the country complete social insurance and partnering with private enterprise to advance the country economically, Japan's peace and business-oriented government was doing more for the country than the super-patriotic militarists of the 1930s and early 40's had dreamed of.
With the new affluence, the older generation started complaining about a new generation of young people too concerned with material possessions. Also there were complaints about crowding. On Tokyo's subways people were squeezed tightly together. With an area roughly similar to California, Japan had a population close to that of the whole of the United States -- and growing, not so fast as the population in the U.S. but about twice that of Sweden or Germany. But with Japan's booming economy and lack of immigration there was a shortage of workers, and some industrialists complained that Japan needed a higher birth rate.
Japan remained a nation with one of the lowest crime rates. During the 19th century they had not had a vast frontier to expand into as had Americans or the Russians. They had not had a lot of space to develop a wild individualism. They were an island nation with a homogeneous population, and they remained more respectful and responsible toward others than did people in some other countries.
Economically, Japan still had major concerns. It was dependent on various imports -- feed for its livestock, wheat and other cereals and iron ore for its steel and iron industries. It had to import all of the oil that it consumed. Japan imported more fish than it exported. Its farms were small and inefficient compared to those in the United States, and Japan needed to protect its farmers from competition with farmers in the United States in order to maintain a healthy independence in food production -- something not always appreciated in the United States. Japan was always on the edge of belt tightening, to hold back from an unfavorable balance of trade. But Japan was also investing heavily abroad, creating and diversifying wealth for Japan and tying itself more closely with other peoples -- the opposite of what it was doing in the 1930s.
Japan's economy was more closely tied to the economies of the United States, Europe and elsewhere in Asia. The demand for goods within Japan declined. People had already bought a lot, and people accustomed to frugality were not inclined to such extravagances as buying a new car every year. And a common weakness became evident: bankers over-estimating growth and making loans that could not be repaid when those growth expectations fell short. Japan's economy was an engine of growth for the economies of all East Asia, and when financial crises came elsewhere in the Far East, rising from diminished values of currencies and unstable financial markets, Japan's economy spiraled downward.
The 1990s was a decade of economic decline for Japan. A bubble burst in property values, following what has been described as "over-investment" in the 1980s. There was a banking crisis -- the result of bad loans. The government suffered from the worst indebtedness of any of the major powers. To encourage spending, the government lowered interest rates to zero, while the population continued to be more interested in saving money for their security than in stimulating the economy by buying more goods. To stimulate its economy, Japan's government financed public works programs and created large budget deficits, but Japan's economy remained stagnant.
Japan ended the century as a democracy and a highly homogeneous nation. Belief in Marxism's class warfare, which had appeared among students in the 1960s, had declined without government oppression. Most Japanese described themselves as middle class, and income distribution was more equitable than it was in the United States.
to navigation links at the top
Copyright © 2002 by Frank E. Smitha. All rights reserved.