MITI and the Japanese miracle

Page 126

At the time of its establishment, Yoshida's Research Bureau brought together officials from the Army, Navy, Home, Finance, Commerce, Agriculture, and Communications ministries, plus two cabinet officials serving concurrently in the Resources Bureau.

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MCI sent two officials, Hashii Makoto and Fujita Kuninosuke (from January 1934 to May 1935 chief of Department One of the TIRB and after the war first a member of the American-sponsored Securities and Exchange Commission and then a professor at Chuo* University). Yoshida asked Kishi to join, but he had bigger fish to fry in MCI and in Manchuria and therefore declined. One of the two Agriculture Ministry officials at the Research Bureau was Wada Hiroo, a prominent leader of the left socialists in postwar politics.

The pronounced "new bureaucrat" coloration of both the deliberation council and the Research Bureau in the Okada cabinet produced strong denunciations by some political party and business leaders. The deliberation council soon became a dead letter and was quietly abolished when the government changed. The Research Bureau, however, persisted and became embroiled in one of the historic controversies of the early controlled-economy era. A plan like the Petroleum Industry Law of 1934 was sponsored by the Cabinet Research Bureau for the reorganization and state control of the electric power generating and distributing industry. In this instance, however, the owners of the companies resisted fiercely, and business leaders denounced the bureau for its advocacy of "bureaucratic fascism" and ''state socialism."

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After two years of bitter debate in and out of the Diet, the bureaucrats finally achieved control over electricity through the Electric Power Control Law of 1938. They had wanted to nationalize the electric power industry, but they had to settle for public management and private ownership in order to get any law at all. Several revisions were needed, but when the law was fully implemented in September 1941, it forcibly merged 33 generating companies and 70 distributing companies into 9 public utilities under the control and supervision of the Electric Power Bureau of the Ministry of Communications. It was one of the most impressive reforms of "industrial structure" of the prewar period. The Electric Power Control Law is important to the history of MITI because the creation of the Ministry of Munitions in 1943 moved the Electric Power Bureau from the Ministry of Communications into MITI's line of descent. All nine companies created by the 1938 law exist today, except that they are now private utilities (Tokyo Electric Power is the world's largest privately owned utility), and all are still under the supervision and guidance of MITI.