MITI and the Japanese miracle

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the economic bureaucracy, it got off to a slow start. SCAP purged its first two directors, one a former president of the South Manchurian Railroad and the other a representative of the Yasukawa zaibatsu, and tried to purge its deputy director, Okamatsu Seitaro *, who escaped only because his superiors pleaded that he was indispensable to economic recovery (he went on to become MCI vice-minister during 1947 and 1948). The Coal Agency's immediate task was to transfer Japanese miners from metal mines to coal mines and to arrange through the Agriculture Ministry and SCAP to have them supplied with larger food rations than had been given to the Korean and Chinese miners during the war or to the public at large after the war. "Food for coal" thus became Japan's first postwar industrial policy.

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The new system did not work well. After their governmental subsidies were cut off, the mine operators had difficulty in meeting payrolls. Insufficient coal was being produced to meet both industrial and civilian needs, and the costs of production skyrocketednot least because of the virulence of the new labor movement among the miners. The Planning Office of the MCI Secretariat worked throughout 1946 on policies to overcome these conditions. The chief of the Planning Office was Tokunaga Hisatsugu (a future MITI vice-minister), and assisting him were Takashima Setsuo (a chief of the Heavy Industries Bureau during the 1960's), Morozumi Yoshihiko, and others. They drafted the Temporary Materials Supply and Demand Control Law of September 1946 and proposed the revival of the materials mobilization plansrenamed "materials supply and demand plans"to guarantee shipments of coal to the industrial and transportation sectors rather than to civilians for consumption.

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What they really needed, however, was an institution comparable to the old Cabinet Planning Board or MM's General Mobilization Bureau, an organ that could not only draft further plans but also administer the new control law.

As early as February 15, 1946, the cabinet had called for an "emergency economic policy headquarters" to deal with the coal and food shortages, inflation, the conversion of old yen into new yen, the freezing of credit funds, and new taxes. SCAP also recognized the need for something like this, but before it would give its approval, it insisted that the new agency be ranked above the existing ministries in order to try to end the frequent jurisdictional struggles. SCAP also wanted it to recruit its leadership from civilian rather than bureaucratic sources. SCAP's conditions naturally prevailed, but they insured that the new organization would start life rather anemically,