MITI and the Japanese miracle

Page 226

cartels compulsory for all small exporters and to strengthen the general trading companies. During that same year it also abolished the occupation-era Law Prohibiting Excess Concentrations of Economic Power. During 1956 the ministry began its sponsorship of a long series of "industry laws" that provided for exceptions to the AMLincluding, for example, the Textile Industry Equipment Special Measures Law (number 130 of June 5, 1956), the Machinery Industry Promotion Special Measures Law (number 154 of June 15, 1956), and the Electronics Industry Promotion Special Measures Law (number 171 of June 11, 1957). And in June 1958 MITI caused the FTC to approve its plan for a "public sales system" (

kokai

*

hambai seido

) for the steel industryan ingenious system of price rigging invented by the old MCI cadre Inayama Yoshihiro, then a director of Yawata Steel, and Sahashi Shigeru, then the deputy director of the Heavy Industries Bureau.

⁵⁷

It seemed to some that the FTC would approve anything short of piracy if MITI said it was necessary for Japan's rapid economic growth.

In fact, MITI judged the time was ripe to get rid of the AML altogether. From October 1957 to February 1958 the Enterprises Bureau sponsored a cabinet-level deliberation council on the future status of the AML. Professor Nakayama Ichiro* chaired it. The council stated in its final report that "the stipulations of the AML do not necessarily conform to the proper operation of our country's economy," and that "the public interest is not best served by the legal maintenance of a free competitive order." The council recommended a new law that would allow for the "coordination of investment" and that would encourage mergers to overcome ''excessive competition" among the banking keiretsu.

The new law was introduced in the Diet in October 1958, but it "got lost" in the turmoil surrounding the Kishi government's attempts to revise the police duties law. The following year, according to MITI, interest in abandoning the AML "fell asleep under the pleasant clouds of the Iwato boom."

⁵⁸

After that the situation began to change subtly. The FTC did not regain its earlier powers, but it stopped losing what powers it had left. Until about 1958 the country was united in its belief that MITI's measures were necessary to regain national economic independence. After that time divisions over the issue began to appear. Most of MITI's subsequent innovations were based on administrative guidancefor example, the coordination of investment that was implemented after the failure of Sahashi's Special Measures Law for the Promotion of Designated Industries (discussed in the next chapter). The FTC continued in existence and finally, during February 1974, it