MITI and the Japanese miracle

Page 154

Japan fought first the China War and then the Pacific War, provided no overall coordination, but rather left the prosecution of these conflicts scattered among various and competing agencies. At the same time, Japan's economy, subjected to conflicting pressures from business and military leadership, remained partly free and partly controlled. Such a system could hardly be called totalitarian and in any event was ultimately disastrous for Japan's war effort."

⁶²

There were two major ironies in this situation. First, despite Tojo's* and Kishi's best efforts to achieve state economic control while they were in office, state control was actually realized in Japan only under the Allied occupation, when SCAP in effect transferred the powers of the control associations to the government. Second, although the prewar and wartime system of divided control

was

disastrous for Japan's war effort, when a similar pattern reemerged after the occupation, it proved optimal for Japan's peaceful industrial expansion. The 1930's and the war had demonstrated to all who were involved with postwar industrial policy that neither state control nor self-control alone was adequate to achieve cooperation and coordination. What was needed was an amalgam of the two.

As we have noted earlier, the most striking structural characteristic of the capitalist developmental state is an implicit political division of labor between the tasks of ruling and the tasks of reigning. The politicians reign and the bureaucrats rule. This should not be thought of as a cynical comment on modern government or a counsel of despair concerning the realities of democracy. Both sides have important functions to perform. The politicians provide the space for bureaucrats to rule by holding off special interest claimants who might deflect the state from its main developmental priorities, and they legitimate and ratify the decisions taken by bureaucrats. The bureaucrats in turn formulate developmental policies, draft and administer the laws needed to implement the policies, and make midcourse adjustments as problems arise. This general pattern of the democratic developmental state, which we shall consider further in Chapter 9, did not really appear in Japan until after the creation of the Liberal Democratic Party in 1955. But the 1930's were important to its creation both in fostering the rise of the economic bureaucracyor the "economic general staff" to name its true functionand in revealing that although it could and did rule, it could not reign.

The disarray that developed during the 1930's in the system of government inherited from the Meiji era provided the opportunity for the rise of the economic bureaucracy, and the political problems of the