Japanese economic miracle

482:, Japan was able to recover from the trauma of WWII, and managed to become the third-largest economic entity of the world (after the United States and the Soviet Union) by the 1960s. However, after three decades, Japan had experienced the so-called "recession in growth", as the value of the Japanese yen was raised. In an attempt to prevent further slowing of growth, Japan greatly improved its technological advances and raised the value of the yen, since devaluing the yen would have brought further risk and a possible depressing effect on trade. The appreciation of the yen led to a significant economic recession in the 1980s. To alleviate the influence of the recession, Japan imposed a series of economical and financial policies to stimulate domestic demand. Nevertheless, 496:

caused a further loss of 20 percent of spinning and 14 percent of weaving capacity". Moreover, by 1946, Japan was on the verge of a nationwide famine that was averted only by American shipments of food. The virtual destruction of the Japanese standard of living, combined with the military threat presented by the Soviet Union, compelled the United States to support a wide-reaching economic recovery. Every country experienced some industrial growth in the post-war period, but those countries that achieved a heavy drop in industrial output due to war damage such as Japan, West Germany and Italy, achieved the most rapid recovery. In the case of Japan, industrial production decreased in 1946 to 27.6% of the pre-war level, but recovered in 1951 and reached 350% in 1960.

943:(MITI) was instrumental in Japan's post-war economic recovery. According to some scholars, no other governmental regulation or organization had more economic impact than MITI. "The particular speed, form, and consequences of Japanese economic growth," Chalmers Johnson writes, "are not intelligible without reference to the contributions of MITI" (Johnson, vii). Established in 1949, MITI's role began with the "Policy Concerning Industrial Rationalization" (1950) that coordinated efforts by industries to counteract the effects of SCAP's deflationary regulations. In this way, MITI formalized cooperation between the Japanese government and private industry. The extent of the policy was such that if MITI wished to "double steel production, the neo- 728:, Japan managed to complete its industrialization process, gaining significant improvement in living standards and witnessing a significant increase in consumption. The average monthly consumption of urban family households doubled from 1955 to 1970. Moreover, the proportions of consumption in Japan was also changing. The consumption in daily necessities, such as food and clothing and footwear, was decreasing. Contrastingly, the consumption in recreational, entertainment activities and goods increased, including furniture, transportation, communications, and reading. The great increase in consumption stimulated the growth in GDP as it incentivized production. 529:. The "Inclined Production Mode" refers to the inclined production that primarily focuses on the production of raw materials including steel, coal and cotton. Textile production occupied more than 23.9% of the total industrial production. Moreover, to further stimulate growth, the Japanese government encouraged women to enter the labor market. The legislation on recruitment contains three components: the restriction placed on regional recruitment and relocation of workers, the banning of the direct recruitment of new school leavers, and the direct recruitment of non-school leavers under explicitly detailed regulations issued by the Ministry of Labour. 553:

from 1967 to 1971 witnessed a significant increase. In 1967, the yearbook said: the Japanese economy in 1966 thus made an advance more rapidly than previously expected. In 1968, the yearbook said that the Japanese economy continued to make a sound growth after it had a bottom in the autumn of 1965. The words "increase", "growth" and "upswing" filled the summaries of the yearbooks from 1967 to 1971. The reasons for Japan to complete industrialization are also complicated, and the major characteristic of this time is the influence of governmental policies of the

2039: 540:(朝鮮) that the Empire of Japan had annexed. As the United States was participating in the conflict on the Korean Peninsula, it turned to the Japanese economy for procurement of equipment and supplies because the logistics of shipping from the United States soon became a significant problem for the military. Japan's industry was soon providing the required munitions and logistics to the American forces fighting in Korea. The demand stimulated the Japanese economy enabling it to recover quickly from the 758:. The plan called for doubling the size of Japan's economy in ten years through a combination of tax breaks, targeted investment, an expanded social safety net, and incentives to increase exports and industrial development. To achieve the goal of doubling of the economy in ten years, the plan called for an average annual economic growth rate of 7.2%. In fact, Japan's annual growth averaged more than 10% over the course of the Plan, and the economy doubled in size in less than seven years. 819:. By April 1960, trade imports had been 41 percent liberalized (compared to 22 percent in 1956). Ikeda planned to liberalize trade to 80 percent within three years. However, his liberalization goals met with severe opposition from both industries who had thrived on over-loaning and the nationalist public who feared foreign enterprise takeovers. The Japanese press likened liberalization to "the second coming of the 273: 1066:" by raising complaints about unfair and illegal Japanese trade practices, which the administration believed contributed to the bilateral trade deficit with Japan. In 1980s, the United States portrayed Japan as an economic threat, and accused Japan of intellectual property theft, currency manipulation, state-sponsored industrial policy, and weakening of US manufacturing. At the conclusion of the 879: 241: 77: 2699: 2689: 36: 823:," in reference to the black ships Commodore Matthew C. Perry had sailed into Tokyo Bay in 1853 to open Japan to international trade via a show of military force. Accordingly, Ikeda moved toward liberalization of trade only after securing a protected market through internal regulations that favored Japanese products and firms, and never achieved his ambitious 80 percent goal. 257: 865:

consumption. The biggest factor that invited industrial changes after the oil crises was the increase in energy prices including crude oil. As a result, Japan converted to a technology-concentrating program, ensuring the steady increase of its economy, and standing out beyond other capitalist countries that had been significantly wounded during the oil crises.

179: 249: 592:. Since there was a shortage of capital in Japan at the time, industrial conglomerates borrowed beyond their capacity to repay, often beyond their net worth, causing city banks in turn to over-borrow from the Bank of Japan. This gave the national Bank of Japan complete control over dependent local banks. 1000:

In 1978, Japan's Ministry of International Trade and Industry provided subsidies, which was illegal under international law, to help Japanese semiconductor companies sell their chips at artificially low prices in the United States while keeping prices high in Japan, a trade practice known as dumping.

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The Income Doubling Plan was widely viewed as a success in achieving both its political and economic objectives. According to historian Nick Kapur, the plan "enshrined 'economic growthism' as a sort of secular religion of both the Japanese people and their government, bringing about a circumstance in

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also instituted the Foreign Exchange Allocation Policy, a system of import controls designed to prevent the flooding of Japan's markets by foreign goods. MITI used the foreign exchange allocation to stimulate the economy by promoting exports, managing investment and monitoring production capacity. In

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After gaining support from the United States and achieving domestic economic reform, Japan's economy was able to soar from the 1950s to the 1970s. Furthermore, Japan also completed its process toward industrialization and became the first developed nation in East Asia. The Japanese Economic Yearbooks

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The Japanese economy was in ruins following the end of World War II. For example, "the Japanese cotton industry was brought to its knees by the end of the Second World War. Two-thirds of its prewar cotton spindles were scrapped by wartime administrators, and bombing and destruction of urban areas had

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However, some scholars argue that Japan's postwar growth spurt would not have been possible without Japan's alliance with the United States, since the United States absorbed Japanese exports, tolerated controversial Japanese trade practices, subsidized the Japanese economy, and transferred technology

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also provided the private sector with low-cost capital for long-term growth. The Japan Development Bank introduced access to the Fiscal Investment and Loan Plan, a massive pooling of individual and national savings. At the time FILP controlled four times the savings of the world's largest commercial

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Ikeda also set up numerous allied foreign aid distribution agencies to demonstrate Japan's willingness to participate in the international order and to promote exports. The creation of these agencies not only acted as a small concession to international organizations, but also dissipated some public

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The period of rapid economic growth between 1955 and 1961 paved the way for the Golden Sixties, the second decade that is generally associated with the Japanese economic miracle. In 1965, Japan's nominal GDP was estimated at just over $ 91 billion. Fifteen years later, in 1980, the nominal GDP had

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increased from 3 dollars per barrel to over 13 dollars per barrel. During this time, Japan's industrial production decreased by 20%, as the supply capacity could not respond effectively to the rapid expansion of demand, and increased investments in equipment often invited unwanted results—tighter

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abated. The Japanese economy survived from the deep recession caused by a loss of the U.S. payments for military procurement and continued to make gains. By the late 1960s, Japan had risen from the ashes of World War II to achieve an astoundingly rapid and complete economic recovery. According to

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and transport those documents to Japan. In 1983, Hitachi and IBM announced that a settlement had been reached between the two parties. The terms of the agreement states that "Hitachi has not used the stolen secrets, that any secrets it has will be returned to IBM, and that the names, address and

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from the imports of other goods. MITI's Foreign Capital Law granted the ministry power to negotiate the price and conditions of technology imports. This element of technological control allowed it to promote industries it deemed promising. The low cost of imported technology allowed for rapid

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The transformation was, in fact, a product of the oil crises and United States intervention. Since the oil price rose tenfold, the cost of production also soared. After the oil crises, to save costs, Japan had to produce products in a more environmentally friendly manner, and with less oil

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between the end of World War II and the beginning of the 1990s. The economical miracle can be divided into four stages: the recovery (1946–1954), the high increase (1955–1972), the steady increase (1972–1992), and the low increase (1992–2017).

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illegally sold propeller-milling equipment to the Soviet Union, which was used to make it easier for Soviet submarines to avoid American surveillance. The sale prompted a threat to ban Toshiba imports into the US, and a rebuke from both former Prime Minister

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1953, MITIs revised the Foreign Exchange Allocation Policy to promote domestic industries and increase the incentive for exports by revising the export-link system. A later revision-based production capacity on foreign exchange allocation to prevent foreign

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from 13 dollars per barrel to 39.5 dollars per barrel. Despite being seriously impacted by the two oil crises, Japan was able to withstand the impact and managed to transfer from a product-concentrating to a technology-concentrating production form.

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that took place in the late 1980s and early 1990s and the subsequent deflationary policy destroyed the Japanese economy. After the deflationary policy, the Japanese economy has been through a time of low increase period which has lasted until today.

769:, as part of an effort to shift Japan's national dialogue away from contentious political struggles toward building a consensus around pursuit of rapid economic growth. However, Ikeda and his brain trust, which most notably included the economist 364:

influence in the Pacific. The U.S. was also concerned with the growth of the economy of Japan because there was a risk that an unhappy and poor Japanese population would turn to communism and by doing so, ensure Soviet control over the Pacific.

766: 804:. Ikeda's government also expanded government investment in the previously neglected communications sector of the Japanese economy. Each of these acts continued the Japanese trend towards a managed economy that epitomized the 949:

already has the capital, the construction assets, the makers of production machinery, and most of the other necessary factors already available in-house". The Ministry coordinated various industries, including the emerging

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had close relations with MITI and each other through the cross-placement of shares, providing protection from foreign take-overs. For example, 83% of Japan's Development Bank's finances went toward strategic industries:

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bank. With this financial power, FILP was able to maintain an abnormally high number of Japanese construction firms (more than twice the number of construction firms of any other nation with a similar GDP).

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in 1952, the United States had successfully reintegrated Japan into the global economy and rebuilt the economic infrastructure that would later form the launching pad for the Japanese economic miracle.

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imports with the abolition of the Economic Stabilization Board and the Foreign Exchange Control Board in August 1952. Although the Economic Stabilization Board was already dominated by MITI, the

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One reason for Japan's quick recovery from war trauma was the successful economic reform by the government. The government body principally concerned with industrial policy in Japan was the

356:, making political, economic and civic changes. It occurred chiefly due to the economic interventionism of the Japanese government and partly due to the aid and assistance of the U.S. 2605: 2585: 1941: 828: 2383: 2119: 2914: 2295: 2733: 1434: 1405: 3217: 997:

and patent infringements. Many cases resulted in Japanese companies paying large settlements and court-ordered payments to American companies and individuals.

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and Soviet Union). By the 1970s, Japan was no longer expanding as quickly as it had in the previous decades despite per-worker productivity remaining high.

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which both the effectiveness of the government and the worth of the populace came to be measured above all by the annual percentage change in GDP."

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growth, first by instituting regulations and protectionism that effectively managed economic crises and later by concentrating on trade expansion.

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said, "When governments permit counterfeiting or copying of American products, it is stealing our future, and it is no longer free trade."

2413: 977:," in effect giving MITI full control over all Japanese imports. Power over the foreign exchange budget was also handed directly to MITI. 2728: 2692: 2439: 141: 3212: 3207: 3167: 3162: 3157: 3152: 3147: 3142: 3096: 2723: 2388: 2203: 2131: 113: 2868: 2580: 2303: 2281: 2167: 2074: 1738: 1707: 1676: 1645: 1586: 1538: 1198: 926: 225: 160: 63: 827:

fears about liberalization of trade. Ikeda furthered Japan's global economic integration by negotiating for Japan's entry into the

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conglomerates' success lay city banks, which lent generously, formalizing cross-share holdings in diverse industries. The

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Japanese coal- and metal-related industry experienced an annual growth rate of 25% in the 1960s, with the steel plant of

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Under the Income Doubling Plan, Ikeda lowered interest rates and rapidly expanded government investment in Japan's

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Although the United States’ so-called trade problem was attributed to the country's own economic policies, the

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industrial growth. Productivity was greatly improved through new equipment, management, and standardization.

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calls "the single most important individual architect of the Japanese economic miracle," pursued a policy of

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Besides Ikeda's adherence to government intervention and regulation of the economy, his government pushed

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managers to plan for the long-term and maximize market shares instead of focusing on short-term profits.

419:, the period leading up to the late 1960s saw "the greatest years of prosperity Japan had seen since the 3114: 2641: 2636: 2449: 1464: 134: 2682: 2532: 2393: 2212:

Okazaki, Tetsuji and Takafumi Korenaga. "The Foreign Exchange Allocation Policy in Postwar Japan" in

1109: 1021: 745: 643: 360:. After World War II, the U.S. established a significant presence in Japan to slow the expansion of 584:. This policy led to the emergence of 'over-loaning' (a practice that continues today) in which the 3121: 3091: 3081: 3076: 3056: 2621: 2600: 2142: 2101: 1946: 1084: 678: 500: 449: 353: 1168: 2801: 2267: 2088: 1816: 1781: 1428: 1399: 1340:

Women, work and the Japanese economic miracle: the case of the cotton textile industry, 1945–1975

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business affiliations of all individuals who offered to sell secrets to Hitachi be disclosed."

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Aldous, Chris (2010). "Contesting Famine: Hunger and Nutrition in Occupied Japan, 1945-1952".

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The second reason that accounts for Japan's rapid recovery from WWII was the outbreak of the

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laws (a remnant of SCAP control) also led to the re-emergence of conglomerate groups called

577: 265: 1272: 3000: 2985: 2786: 2677: 1828: 1793: 1129: 970: 844: 725: 459: 321: 313: 697:. Approximately only two-thirds of the shares of a given company were traded, cushioning 17: 1218:(book). Translated by Jacqueline Kaninski. Tokyo: University of Tokyo Press. p. 56. 384:; good relations with government bureaucrats, and the guarantee of lifetime employment ( 3010: 2527: 2328: 1134: 1028:, and ordered the Japanese company to stop manufacturing and selling a certain type of 785: 777: 656: 581: 428: 341: 3136: 2934: 2899: 2470: 2250: 2155: 2114: 1571: 1523: 1450:

Industrial dualism in Japan : a problem of economic growth and structural change

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Japan's economic miracle ended in 1973, when the first oil-price shock struck Japan (

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and Japan's Minister of Internal Trade and Industry on Toshiba's business behavior.

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Planning for Change: Industrial Policy and Japanese Economic Development, 1945–1990

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to Japanese firms; thereby magnifying the effectiveness of Japanese trade policy.

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patents to make autofocus cameras. The jury awarded Honeywell with $ 96 million.

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proved crucial to protectionist measures that shielded Japan's sapling economy.

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Hane, Mikiso. Eastern Phoenix: Japan Since 1945. Boulder: Westview Press, 1996.

511:. One of the major economic reforms was to adopt the "Inclined Production Mode" 3104: 2522: 2480: 1963: 1089: 974: 958: 816: 595:

The system of over-loaning, combined with the government's relaxation of anti-

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also fostered an attitude shift among Japanese managers that tolerated low

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MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975

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MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975

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MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975

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Winning the Peace: An American Strategy for Post-Conflict Reconstruction

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efficiently allocated resources and became competitive internationally.

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had cultivated from 1949 to 1953 came into full effect. Prime Minister

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The distinguishing characteristics of the Japanese economy during the "

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Ikeda introduced the Income Doubling Plan in response to the massive

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MITI also boosted the industrial security by untying the imports of

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and provide the basis for the rapid expansion that was to follow.

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The United States' role in the postwar economic recovery of Japan

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issues loans to city banks who in turn issue loans to industrial

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Period of rapid economic growth in Japan from the 1950s to 1990s

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Organisation for Economic Co-operation and Development (1972).

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You can help by providing page numbers for existing citations.

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transformed it into the Economic Deliberation Agency, a mere "

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Zaibatsu Dissolution, Reparations and Administrative Guidance

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Michael Beckley; Yusaku Horiuchi; Jennifer M. Miller (2018).

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Influence of governmental policies: Ikeda administration and

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