MITI and the Japanese miracle

Page 150

In July 1940 Japan was a troubled place. The China war was dragging on with no end in sight, the allies had begun to boycott Japanese goods, and Germany and Italy were offering an alliance (the Axis pact was signed September 27,1940). To deal with this situation the throne turned once again to Prince Konoe, as it had earlier when others had been unable to restore stability in the wake of the army mutiny. Konoe's most important action in the realm of industrial policy was to sponsor the Economic New Structure. This was a sweeping proposal for the nationalization of industries, the operation of factories by bureaucrats, and the rapid expansion of production. Ryu * Shintaro* (190067), a member of Prince Konoe's brain trust, the Showa* Research Association, provided the first outline of this quintessentially reform bureaucratic scheme. His book.

The Reorganization of the Japanese Economy

(

Nihon keizai no saihensei

), was published in 1939 by

Chuo

*

koron

* and very widely read. Its anticapitalist and even Marxist orientation was hardly disguised at all, and Ryu only avoided intimidation by the police because of his elite connections.

⁵²

Among Ryu's* friends and readers were some of the officials of the CPB, and they gave his ideas concrete form in a CPB report of September 13, 1940, entitled "General Plan for the Establishment of the Economic New Structure." Its immediate authors were the "star" reform bureaucrats of the Cabinet Planning Board, Colonel Akinaga Tsukizo*, Minobe Yoji* (who had recently returned from Manchuria to the CPB rather than to MCI), and Sakomizu Hisatsune. They called for the seminationalization (

kokyoka

*, literally "to make public") of private enterprises, the creation of industrial control organs that incorporated the then popular Nazi "leadership principle'' (

hyura

*

genri

, or

Führerprinzip

), the "reform of the Commercial Code in order to separate ownership of capital in enterprises from management functions and to establish the public character of industrial management," and strict limitations on profits.

⁵³

The whole report was infused with a sense of outrage that the capitalists were still making a profit while one war was going on and a bigger one was clearly coming.

The business community did not take this lying down but responded with a business leaders' offensive. The businessmen charged, on the one hand, that Ryu Shintaro was a communistthe preferred term at the time was "red" (

aka

)and that the Konoe brain trust and the Cabinet Planning Board were also infiltrated with redswhich came close to saying that the army itself was promoting Bolshevik policies. The business spokesmen also argued that the separation of management and ownership and the reduction of interest and profits would only worsen the already critical shortage of capital. Some