MITI and the Japanese miracle

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trade and industry bureaucrats from 1930 to at least the 1960's, and perhaps beyond. Sahashi Shigeru often made stronger statements when he was vice-minister about the evils of "excessive competition." One scholar of industrial policy concludes that around 1931 the term industrial rationalization in Japan became synonymous with the spirit of control as a substitute for the spirit of competition, which many people believed had caused the disasters of the 1920's and 1930's.

⁴⁴

At the time of the TIRB's founding, the main question for policy-makers thus became Control by whom?

The first modern Japanese answer to this question was the Important Industries Control Law (Juyo* Sangyo* Tosei* Ho*, law no. 40, introduced in the Diet on February 25, 1931, passed April 1, 1931, and in effect from August 16, 1931). It was the most important product of the TIRB and the single most important piece of industrial legislation until the National General Mobilization Law of 1938 and the Important Industries Association Ordinance of 1941, which was based on the mobilization law. According to the 1931 law, control was to be exercised within an industry by the enterprises themselvesthat is, the law legalized so-called self-control (

jishu

tosei

*) in the form of treaty-like cartel agreements among enterprises to fix levels of production, establish prices, limit new entrants into an industry, and control marketing for a particular industry. The 1931 law took as its model the unions of medium and smaller enterprises of 1925; however, it strengthened government approval powers over such unions and extended them to big business.

⁴⁵

The result, as Eleanor Hadley puts it, was a "cordial oligopoly" in the large-scale advanced sectorsas contrasted with the "cutthroat oligopoly" of the post-World War II period.

⁴⁶

The law was drafted in the Control Committee of the TIRB, where civilian and zaibatsu representation was strong, and the committee itself constitutes an early instance of the government's providing the auspices for private enterprises to help themselves, something it did often in the 1950's and 1960's. Within the committee, the term "control" (

tosei

) generated a good deal of discussion. In retrospect one can see that the use of the term in the title of the law was probably unfortunate. Yoshino has often said that by "control" he and his colleagues meant the attempt to create "industrial order" and not bureaucratic supervision of industry. Although the MCI bureaucrats were aware that the army used the term in many different contexts, they specifically deny that their law had military implications or was influenced by the military in any way. Yoshino also argues that although the law authorized cartels, the purpose of the cartels was ''order," not indus-