MITI and the Japanese miracle

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its loans declined relative to the expansion of city-bank funding, the bank retained its power to "guide" capital through the indicative effect of its decisions to support or not support a new industry. A JDB loan, regardless of its size, became MITI's seal of approval on an enterprise, and the company that had received a JDB loan could easily raise whatever else it needed from private resources.

²⁵

Much more important than the figures for all industry during the period 195355 are the figures on the JDB's contributions to MITI's designated strategic industrieselectric power, ships, coal, and steel. Some 83 percent of JDB financing in this period went to these four industries, accounting for 23.1 percent of all investment in electric power, 33.6 percent in shipbuilding, 29.8 percent in coal mining, and 10.6 percent in new steel plants.

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The enormous weight of government investment is the inspiration behind the most common expression employed by Japanese academics to characterize their own economynamely, "state monopoly capitalism" (

kokka dokusen shihon-shugi

)even though the Marxist flavor of this concept is more of a tribute to academic fashion in Japan than it is to any genuine Marxist idea. Professor Endo* explains that he means by the term the activities of the state to supply capital or other funds to industry on terms not available from the private sector and for specific, state-determined policy objectives. In his view FILP is the most typical institution of state monopoly capitalism, a configuration that he believes originated in Japan during the great depression, and that has continued uninterruptedly to the present time.

²⁷

Although they would be unlikely to employ so ideologically loaded a concept and would certainly reject the Marxist implication that as state officials they worked for some propertied "class," the officials of MITI's Enterprises Bureau would have to admit that Endo has accurately described the functions of FILP. From 1953 on FILP has always been from a third to a half the size of the general account budget and has ranged from a low of 3.3 percent (1956) to a high of 6.3 percent (1972) of GNP. Until 1973 it was totally controlled by the economic bureaucrats and was not subject to the scrutiny or approval of the Diet. As Boltho says, it was "the main means of circumventing the rigid balanced-budget principles laid down after the war."

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During the period that Ichimada and Ikeda were erecting this two-tiered financial structure, MITI was busy putting its own house in order and preparing to lead the operational side of the developmental effort. When MITI came into being in May 1949, it still faced three more years of occupation and five more years of hostility from Prime Minister Yoshida. The most important organ of the ministry in these