MITI and the Japanese miracle

Page 196

the postwar MCI led to the government-business relationship of the high-growth erathat is, to genuine public-private cooperation.

True state control did not last long after 1949. Its primary contribution to the later high-growth system was the irreversible establishment of the economic general staff at the heart of all Japanese economic policy-making and administration. In the years after the occupation the economic bureaucracy began by degrees to share its powers with big business, consulting it on all important issues, providing state incentives for industrial rationalization, and blurring the distinctions between the state and the private sector by insinuating numerous ex-bureaucrats into the board rooms of the economically strategic industries.

This trend toward genuine public-private cooperation grew out of a combination of the effects of war destruction and the reforms of the occupation. The old zaibatsu were weakened vis-à-vis the state-control bureaucrats by the physical depletion of their capital assets and by the occupation's goal of deconcentrating the economy. At the same time the new constitution and other reforms such as the fostering of the labor movement made state control politically impossible except as a short-term expedient. The economic bureaucrats might rule on the basis of their intrinsic talents, but they could never reign openly under Japan's new democratic system. Thus, both government and industry recognized the need for a political division of laborone that would both advance the positive development program and forestall disruptions of it by the newly enfranchised groups in the society.

The resulting Japanese political system of the 1950's and 1960's bore some resemblance to the ''corporatism" that Charles Maier believes emerged in interwar continental Europe. He writes:

The key to consensus or mere civic peace was either forcible suppression or constant brokerage. Any major organized interest could disrupt a modern economy or imperil social order, hence had to be silenced by duress or granted a minimum of demands. The need for brokerage switched the fulcrum of decision making from the legislature as such to the ministries or new bureaucracies. During the war, ministries of munitions had developed into economic planning agencies. . . . They coopted private business in this task, sharing public powers to increase the scope of regulation. Although wartime controls were not retained, the 1920s did not simply revert to the degree of market freedom prevailing before 1914. . . . A defining characteristic of the corporatist system . . . was the blurring of the distinction between political and economic power. Clout in the market placeespecially the potential to paralyze an industrial economymade for political influence. Consequently, economic bargaining became too crucial to be left to the private market, and state agencies stepped in as active mediators.

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