MITI and the Japanese miracle

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immensely popular with the public and received extravagant praise in the press, both for himself and for his ministry.

Still, Kishi had problems. The control associations for each industry were not working well. The theory behind thema compromise forced on the state-control bureaucrats because of the resistance of the business communitywas the integration of the public and private sectors (

kanmin ittai

).

⁷

The reality, however, was the perpetuation of the privately controlled cartels of the 1931 Important Industries Control Law, which the zaibatsu dominated. Hadley characterizes the control associations as "cartels with a bit of government thrown in."

⁸

The government's power over them was more or less limited to the issuing of licenses. The control associations themselves were busy making good profits, distributing market shares in ways that favored the zaibatsu leaders, and making side deals with the military, regardless of what MCI or the CPB said or did. Moreover, the military often undercut bureaucratic efforts at control by keeping critical materials out of channels and in its own arsenals because of interservice rivalries and military distrust of the cartels' civilian leadership.

Most analysts have blamed the zaibatsu for the "spinelessness" of the control associations, but blame should be shared by the ministries. All of the economic ministries fought endless battles of jurisdiction over the designation of an industry as "important" and over influence in its control associations. The first control association, and the model for all the others, came under MCI jurisdiction; this was the Steel Control Association, created April 26, 1941, with President Hirao Hachisaburo* of Japan Steel as the association's presidentor Führer, as the reform bureaucrats liked to call him. However, the steel control association was not so much an MCI invention as an MCI discovery; it had been formed by the steelmakers themselves following the American embargo on selling scrap iron to Japan, and it was little more than a renamed Japan Steel Federation (Nihon Tekko* Rengokai*), the trade association of the industry. Between April 1941 and January 1942 MCI and the Communications Ministry fought over the setting up of a control association for the machine sector, and MCI and the Agriculture Ministry fought over the fertilizer sector. Both of these disputes had to go to the cabinet for settlement. It was only in August 1942 that some 21 control associations covering production and distribution for 15 industries finally came into operation.

The ministries also fought a rearguard action against giving the control associations real authority. Kishi finally broke bureaucratic resistance over this issue by demanding that in return for governmental enforcement powers the control associations appoint full-time presi-