MITI and the Japanese miracle

Page 165

corporation, and virtually unlimited financial powersto convert one industrial sector after another to war production. Toyoda later recalled that he traveled around the country to explain the new policies and was surprised to find he was none too popular.

¹¹

The industry hardest hit was textiles. Following Enterprises Bureau directives, the Textiles and Machinery bureaus forced the reduction of installed spindles from 12,165,000 in 1937 to only 2,150,000 in February 1946, a decline of 82 percent.

¹²

Some of this reduction was caused by war damage, but by far the largest proportion came from the conversion of textile mills to airplane and airplane parts production. In 1937 Japan had some 271 textile mills, but only 44 still existed in February 1946. Prior to the war there had been 23 cotton-spinning companies in operation, but forced amalgamations had reduced this number to 10 by the end of the war.

The full force of the movement hit in 1943. On June 1 the cabinet adopted its "Basic Policy for Enterprise Readjustment to Enlarge Fighting Strength" (Senryoku Zokyo* Kigyo* Seibi Kihon Yoko*).

¹³

This directive divided all enterprises into three categories: the so-called peace industries (textiles, metals, chemicals), munitions industries (aircraft, steel, coal, light metals, and shipbuilding), and daily necessity industries. It ordered that the first category be converted into the second category, and that the third category be abolished. The policy also sought to strengthen the munitions industries by designating all war-related medium and smaller enterprises as belonging to two groupings: "cooperating factories," most of which became subsidiaries (

kogaisha

, literally, "child companies"), that is, permanent subcontractors of large enterprises; and "group-use factories.'' The effect was greatly to increase the industrial concentration in zaibatsu hands (the aspect of the program that is most often noticed), but it also produced a significant shift of the industrial structure toward heavy and chemical industries.

The Japanese public paid a heavy price for this shift in industrial structure. Jerome B. Cohen argues that "the Japanese consumer was hit harder by war than civilians in any other major belligerent country for which data is available."

¹⁴

Tanaka Shin'ichi, who was in charge of drafting the materials mobilization plans in the CPB, acknowledges that during 1943 consumer goods virtually disappeared from the economy; and Maeda Yasuyuki notes ruefully that Japan's "peace industries" were destroyed by their own government before a single American bomb had fallen.

¹⁵

Still, the effort was not enough. Japan had taken eighteen months after the outbreak of war to try to forge the economic institutions necessary to wage the war. By the time the