MITI and the Japanese miracle

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minister of finance and proceeded to execute Ishibashi's ideas with a vengeance. Through his famous ¥100 billion cut in the income tax of December 1956, Ikeda put money back in the hands of consumers and industrialists as it had never been done before and began the positive stimulation of a domestic market fully half the size of that of the United States. As one contemporary Japanese analyst has put it, "the only industries in which we have seen export increases induce a production incrementinstead of the other way roundare transistor radios and perhaps cameras. We do not regard these industries as very soundly based because demand for them, especially transistors, may be saturated too soon. Export increases of all our other products have been induced mainly by expansion for the domestic market."

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Thus it was thanks to Ishibashi and Ikeda that the high-growth system, fed by both a domestic "consumer revolution" and a new apparatus for export promotion, was finally underway.

MITI's policy statement of September 1954 led to several new institutions on the export promotion front. One was the Supreme Export Council (Saiko* Yushutsu Kaigi), composed of the prime minister; the ministers of MITI, finance, and agriculture; the governor of the Bank of Japan; the president of the Export-Import Bank; and several business leaders. Its highly public function was to set export targets for the coming year and to publicize at the highest level of government the need to promote exports by all possible means. This cabinet-level council did not, of course, make its own calculations of targets. Instead, it assigned this task to the new Economic Planning Agency (a renamed and reorganized Economic Deliberation Agency). The chief task of the EPA was the writing of "plans" that would indicate to government and business alike the goals that the nation should be striving to achieve during a given term. Needless to say, the new EPA remained as bound to MITI as its predecessors had been, although during the 1960's it attempted (unsuccessfully) to assert some independence from its powerful patron. Table 17 summarizes the EPA's first three long-range plans for the economy as a whole.

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Another new institution was the Japan External Trade Organization (JETRO), an international commercial intelligence service set up to overcome the problem of what Hirai called "blind trade." By "blind trade" he and others meant that during the mid-1950's Japanese manufacturers were operating without detailed information on what they should be producing for various foreign markets. They also lacked agents abroad to help them keep close tabs on changes in tariff rates and specifications for products, as well as to assist in publicizing and marketing new Japanese products. JETRO was set up to do these