MITI and the Japanese miracle

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separate bureaus (see Appendix B). The result was not yet the internal structure of MITIstill needed were the Enterprises Bureau (created in 1942), the functions of the CPB, and absolute control over tradebut MCI after 1939 was much closer in form and orientation to the industrial policy apparatus of the high-speed growth era than was MCI from 1925 to 1939.

The thanks that Murase received for these efforts from his political superiors was to be fired. During the autumn of 1939 a series of issues came to a head that caused a major realignment of MCI personnel. First, it was becoming apparent that materials mobilization planning alone was not going to overcome Japan's industrial weaknesses, which were being exposed daily in the China war. On January 17, 1939, in recognition of this fact, the new cabinet adopted a "General Outline Plan for the Expansion of Productive Capacity" (Seisanryoku kakuju * keikaku yoko*), which had been prepared in the CPB on the basis of ideas first advanced by the Manchurian planners in 1936. The result was a detailed four-year proposal for the promotion of some fifteen industries in Japan, Manchuria, and China. They were steel, coal, light metals, nonferrous metals, petroleum and petroleum substitutes, soda and industrial salts, ammonium sulfate, pulp, gold mining (to earn foreign exchange), machine tools, rolling stock, ships, automobiles, wool, and electric power. The problem with the plan was how to implement it: was it to be through industrial self-control, public-private cooperation, or state control? These issues were debated throughout 1939 and ultimately led in 1940 to the Economic New Structurepart of the Japanese version of Hitler's New Order.

Second, the outbreak of war in Europe vastly complicated Japan's import arrangements. In order to force imports from the still unconquered territories in East Asia, Japan began to advance the idea of the Greater East Asian Coprosperity Sphere; to attain their goal they undertook direct negotiations with, for example, the Dutch in the Netherlands East Indies for petroleum shipments. The development of the so-called yen trading bloc also put pressure on the rest of the nation's trade relations, because Japanese exports to Manchuria and China no longer earned foreign exchange. The government demanded that exports to hard currency areas be expanded, and prices began to explode as shortages worsened. On October 18, 1939, the government issued its famous Price Control Ordinance, based on article 19 of the mobilization law, which fixed all prices, wages, rents, and similar economic indices at the level that had existed a month earlierhence the nickname "September 18 stop ordinance." However, all this did was