Chapter 27 The Era of Decolonization

While Mao and the Chinese Communist Party were transforming China along socialist lines, a short distance off the coast of Asia Japan was being reconstructed and transformed along democratic capitalist lines that provided a stark contrast to the Maoist model. World War II had left Japan a smoking, demoralized ruin and an outcast among nations. Its future appeared bleak. But to the astonishment of most foreigners and many Japanese alike, the decades after 1945 became the brightest and most successful era in Japanese history. A confluence of developments within Japan and in the world at large fostered the re-emergence of Japan as a great power, and made its economy one of the marvels of the modern age.

The American occupation

In 1945, the emperor of Japan announced the end of World War II to his people. 

“Despite the best that has been done by everyone . . . the war situation has developed not necessarily to Japan’s advantage. . . . [Japan must] endure the unendurable and suffer what is insufferable.”[15] 

The statistics of Japan’s defeat were grim: 3 million dead, a third of them civilians; 40 percent of the urban areas destroyed and half the urban population killed or scattered; industry paralyzed; agricultural production stagnant.[16]

            After the surrender, Allied troops, mostly American, occupied the country. Although nominally under the authority of the United Nations, in fact the real authority in Japan was General Douglas MacArthur, the Supreme Commander for the Allied Powers, or SCAP, as his whole administration became known. Under MacArthur’s lead, SCAP set out to rebuild and reshape Japanese society. As with the denazification of Germany, a first order of business was a purge of people who had held influential positions in Japan's war machine. Several top war leaders were executed; another 200,000 former military officers, civilian officials, and prominent private individuals were barred from holding influential posts in government or business.[17]

            Under American direction, Japan implemented a new constitution in May 1947. This constitution wrought three fundamental changes in Japan's government. First, it established a system of parliamentary democracy with a bill of rights. Second, it codified the position of the emperor, making clear that he was neither divine nor politically powerful but merely “the symbol of the State . . . deriving his position from the will of the people with whom resides the soveriegn power.”[18] Third, it included a clause in which “the Japanese people forever renounce war as a sovereign right of the nation.”[19]  In addition, women received rights to vote, to own property, and to divorce.

            In addition to these political reforms, the occupation regime determined to break the powerful alliance between industry and the military that had characterized pre-war Japan. Between 1945 and 1948, the zaibatsu, industrial conglomerates controlled by powerful families that had dominated Japanese industry and economy since the Meiji Restoration, were broken up into their constituent companies. The most important zaibatsu families were stripped of most of their wealth. Some of the zaibatsu names—Mitsui and Mitsubishi, among others—survived the break-up but their postwar power was a shadow of what it had been. Agrarian reforms also eventually brought some 90 per cent of Japan’s land into the hands of small farmers who owned and worked their own small farms themselves.[20]

            As the Cold War began to develop, however, American officials saw Japan less as the enemy of the last war than as an ally in the next. The outbreak of the Korean War in 1950 reinforced this view as Japan served as a staging area for U.S. operations in Korea. The fighting in Korea, and the demands it placed on American military forces, encouraged Washington to end the occupation of Japan. Under a peace treaty signed in San Francisco in September 1951, which took effect in April 1952, the occupation forces returned control of Japan to the Japanese. 

Economic revival. Reviving the Japanese economy after the war took longer than restructuring it or refashioning the government. In addition to widespread food shortages, inflation eroded the value of the Japanese currency, and undermined people's incentive to save and invest.[21] During the next few years, however, conditions gradually improved. The currency was reformed and stabilized in 1949, lessening problems of inflation. American aid similar to the Marshall Plan in Europe stimulated business activity.

            Most important, the Japanese people applied themselves with dedication and intelligence to the task of rebuilding their economy. They did so in a manner that was characteristically Japanese. Rather than embrace the laissez-faire capitalism that was typical of the United States and, to a lesser extent, other Western industrial countries, the Japanese adopted an approach that emphasized cooperation between government and business. The powerful Ministry for International Trade and Industry (MITI) selected promising export industries and provided preferential treatment in terms of taxes, interest rates, and exemption from antitrust regulations.

            Japanese workers put in long and hard hours at relatively low rates of pay, and Japanese households saved a large part of their incomes. The latter provided Japanese industry with a large pool of capital to invest in new technologies and facilities, while the former kept costs of production down. Japanese exporters took advantage of their low costs of production by accepting small profit margins overseas and thereby undercutting foreign rivals. The results were astounding. Japanese exports defeated the competition in one field after another, from textiles and kitchenware to cameras, automobiles and consumer electronics. Japan's national income soared: between 1950 and 1973, the country's gross national product grew at an average rate of more than 10 percent per year, far faster than any other industrialized nation. By the mid-1970s Japan was wealthier than Britain and France combined and in the 1980s the Japanese economy surpassed that of the Soviet Union to become the second largest economy in the world.[22] 

The search for stability. Japanese political life in the postwar period was characterized by a search for stability. By discrediting Japan's former leaders, the war opened the government up to new people and new influences. For a time, a wave of radicalism threatened to overturn what the war had left of the status quo. Communists won positions of influence in labor unions and among students, while the Socialist Party made gains in the Diet. At various moments during the late 1940s and 1950s, leftists staged demonstrations that disrupted Japanese life. On the whole, however, conservative elements succeeded in reestablishing their grip on the government. To a considerable extent this was due to the leadership of the post-war Prime Minister Yoshida Shigeru.

            BIO Born in 1878, Yoshida Shigeru had grown up in Japan under the modernizing effects of the Meiji Restoration. After attending law school and receiving a law degree at Tokyo Imperial University in 1906, he had entered the diplomatic service and began a long career as a diplomat. In 1928 Yoshida became Japan’s ambassador to Sweden, Norway, and Denmark. Between 1930 and 1932 he was ambassador to Italy. Although he generally opposed the rise of militarism, in 1936 he was appointed ambassador to Great Britain, a post he held until the outbreak of war in Europe in 1939.

            As defeat drew nearer for Japan in 1945, Yoshida made peace overtures to the Allies, but was imprisoned. Freed when the war ended, he became Japan’s foreign minister. In 1946, as the Allies tried to reconstruct a system of multi-party democracy in Japan, Yoshida became the head of the Liberal Party. In May he was appointed Prime Minister. For the next nine years, Yoshida generally dominated Japanese politics. A contemporary observer described him as “like a veteran bonsai [miniature tree], of some antiquity, on whose gnarled branches white blossoms flower year by year.”[23] 

            In 1953, however, Yoshida was challenged for the leadership of the Liberal Party. The party split as the more conservative elements joined other right wing groups in the Japanese Diet to establish the Democratic Party. In 1954 Yoshida resigned as prime minister. After his resignation, the Democratic Party and the Liberal Party eventually reunited as the Liberal Democratic Party (LDP), which became the most powerful political party in Japan. By the time he died in 1964, Yoshida had lived to see Japan achieve a miraculous recovery from the defeat of World War II. Meanwhile, under Shigeru’s successors, the LDP kept the Communists, Socialists, and other challengers at bay. With the lives of ordinary Japanese getting better by the month, few voters wished to tamper with an obviously winning formula. Year after year, Japanese voters returned the LDP to power.