MITI and the Japanese miracle

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ily domination. The reforms also increased the number of enterprises, promoted the development of the labor movement, and rectified the grievances of the farmers under the old order, but the system remained plan rational: given the need for economic recovery from the war and independence from foreign aid, it could not very well have been otherwise. Most of the ideas for economic growth came from the bureaucracy, and the business community reacted with an attitude of what one scholar has called "responsive dependence."

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The government did not normally give direct orders to businesses, but those businesses that listened to the signals coming from the government and then responded were favored with easy access to capital, tax breaks, and approval of their plans to import foreign technology or establish joint ventures. But a firm did not have to respond to the government. The business literature of Japan is filled with descriptions of the very interesting cases of big firms that succeeded without strong governmental ties (for example, Sony and Honda), but there are not many to describe.

Observers coming from market-rational systems often misunderstand the plan-rational system because they fail to appreciate that it has a political and not an economic basis. During the 1960's, for example, when it became fashionable to call the Japanese "economic animals," the most knowledgeable foreign analysts avoided the term because, in Henderson's words, there was "no doubt that Japan's center of gravity is in the polity not the economya source of puzzlement for Japan's numerous economic determinists of various Marxist stripe in academia and opposition politics."

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One did not have to be an economic determinist or a Marxist to make this error; it was ubiquitous in English-language writing on Japan.

J. P. Nettl's comment on Marx is relevant to this point: "The notion that 'the modern state power is merely a committee which manages the common business of the bourgeoisie' is one of the historically least adequate generalizations that Marx ever made."

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It is not merely historically inadequate; it obscures the fact that in the developmental state economic interests are explicitly subordinated to political objectives. The very idea of the developmental state originated in the situational nationalism of the late industrializers, and the goals of the developmental state were invariably derived from comparisons with external reference economies. The political motives of the developmental state are highlighted by Daniel Bell's observationbased on Adam Smiththat there would be little stimulus to increase production above necessities or needs if people were ruled by economic motives alone.

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"The need for economic growth in a developing country