MITI and the Japanese miracle

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enlargement of consumer goods enterprises, (2) robot-operated factories for the processing of raw materials, (3) the pyramidization of enterprises serving the high-technology assembly industries, (4) a technological revolution in the medical and educational sectors, and (5) many other developments associated with "knowledge-intensive industries." He candidly acknowledged that the ministry should lead the campaign toward internationalization, the fight against pollution, and efforts to raise the levels of product safety and consumer protection. He also accepted the "private-sector industrial guidance model," although he did not spell out what this implied.

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The second Amaya thesis contains the nucleus of what would eventually emerge as MITI's policies governing the shift of the industrial structure during the 1970's. The first in-house reactions to it, however, were mixed. The "private-sector industrial guidance model" seemed to imply the abandonment of the vertical industrial bureaus oriented to micro policy in favor of horizontal functional bureaus oriented to macro policy. This many officials were unwilling to concede. Vice-Minister Kumagai held that industrial policy itself meant governmental intervention at the micro level; anything else was mere economic policy.

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His view ultimately prevailed, although the vertical bureaus were much better camouflaged after the reform of 1973 than they had been during high-speed growth.

Other officials preferred their own euphemisms for what Amaya had spelled out. For example, Morozumi insisted that economic growth should continue but that what should now be stressed was not speed but the "utilization of growth" for the good of the whole society. He was concerned that the new MITI policy not become so oriented to social issues that it neglect the nurturing of new industries. He also recognized that too great a social welfare commitment by MITI would raise unmanageable jurisdictional disputes with other ministries. He also explicitly rejected any European or American notion of a static international division of labor; Japan, he said, would have to compete in the computer, aviation, and space industries, and he was not willing to concede these to any other country.

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In light of all the comment on the "private-sector industrial guidance model," the ministry asked the Industrial Structure Council to recommend a new industrial policy for the 1970's. Not surprisingly, since he was in charge of the research efforts, the council confirmed and expanded many of Amaya's ideas. The new policy was published in May 1971. It acknowledged that high-speed growth had caused such problems as pollution, inadequate investment in public facilities, rural depopulation, urban overcrowding, and so forth. It proposed