MITI and the Japanese miracle

Page 184

TABLE

12

Government Payments of Price Subsidies and Indemnities, 19401952

(Million yen)

Year

Total general account budget expenditures

Price subsidies (

kakaku

chosei

*

hi

)

Indemnities for losses (

sonshitsu

hosho

*

hi

)

1940

5,856

(100%)

17

(0.3%)

60

(1.0%)

1941

7,929

(100)

95

(1.2)

55

(0.7)

1942

8,271

(100)

305

(3.7)

240

(2.9)

1943

12,491

(100)

510

(4.1)

265

(2.1)

1944

19,872

(100)

1,266

(6.4)

567

(2.8)

1946

115,207

(100)

3,731

(3.2)

22,661

(20.0)

1947

205,841

(100)

28,178

(13.7)

8,566

(4.2)

1948

461,974

(100)

93,118

(20.2)

16,632

(3.6)

1949

699,448

(100)

179,284

(25.6)

31,838

(4.6)

1950

633,259

(100)

60,162

(9.5)

7,830

(1.2)

1951

749,836

(100)

26,975

(3.6)

9,560

(1.3)

1952

873,942

(100)

40,308

(4.6)

8,183

(0.9)

SOURCE

: Nakamura Takafusa, "Sengo no sangyo* seisaku" (Postwar industrial policy), in Niida Hiroshi and Ono Akira, eds.,

Nihon no

sangyo

soshiki

(Japan's industrial organization), Tokyo, 1969, p. 309.

the RFB dominated the lives of all Japanese. The strong grip of the government over the economy also led to a "black mist" (

kuroi kiri

) of corruption charges that culminated in the Showa* Denko* case of 1948alleged corrupt appropriations of RFB funds for the Showa Denko Companyand the arrest of ESB Director Kurusu Takeo and others. Thus the irony that SCAP's transfer of all economic powers to the government (instead of leaving some of them in the hands of civilians as was done during the war) heightened public mistrust of the government.

In economic affairs the Katayama cabinet is known above all for two initiatives, both failures, that through their negative influence moved the discussion of economic policy to a new plane a year later. The first was the attempt to end inflation through wage and price controls. The priority production scheme was proving to be very hard on ordinary citizens since it subsidized producers but ruined households through inflation, rigged prices, and shortages.

It was the incoming director of the ESB in the Katayama cabinet, Wada Hiroo, who announced a new price system that was supposed to overcome these problems and guarantee a subsistence livelihood. He set prices at 65 times the 193436 level and wages at 27.8 times the same level, calculated on the basis of his theory that a worker's productivity had fallen to a half or a third of what it had been before the war. He also set up a guaranteed minimum wage oriented to the offi-