MITI and the Japanese miracle

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Obori's * appointment to the EPA. The path ahead now seemed clear for Sahashi, but the involvement of powerful politicians in the internal affairs of the ministry would, like the

Sakura Maru

affair, come at a price for both the ministry and Sahashi. Sato's* motives were to try to secure MITI as a base of operations for his own political drive to succeed Ikeda as prime ministermuch as Ikeda himself had done with Finance and Kono* Ichiro* with Agriculture. Moreover, rumors had circulated that Sahashi was thinking of running for the Diet after his own retirement, and Sato* wanted to make sure that if elected he would join the Sato factiona point not lost on two other faction leaders, Ikeda and Ono* Bamboku.

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Meanwhile, Sahashi's great achievement as chief of the Enterprises Bureau was the conception and advocacy of the Special Measures Law for the Promotion of Designated Industries (Tokutei Sangyo* Rinji Shinko* Sochi Hoan*, cabinet submission number 151 of 1963). This bill ultimately died in the Diet because it became simply too controversial for any politician to touch, but the debate over it crystalized all the key issues that had surfaced in the Japanese economy after postwar reconstruction, and it paved the way for the informal implementation of the bill's provisions during the late 1960's through administrative guidance. The Special Measures Law was without question the single most important piece of proposed economic legislation since the early years of the occupation.

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Its genesis, the furor surrounding it, and its final demise involved liberalization policy, jurisdictional disputes between MITI and the Ministry of Finance, the Antimonopoly Law, a debate over "excess competition" in the Japanese economy, factional politics in the LDP, and a battle inside MITI over the vice-ministershipin short, the whole range of issues that go to make up Japanese industrial policy.

The basic problem addressed by the Special Measures Law was not liberalization itself, although the foreign demands for liberalization provided an excellent cover to avoid saying too publicly what the problem really was. Sahashi was less enthusiastic about liberalization than Imai, but he too recognized that it was an inevitableeven a desirabledevelopment if Japan was to continue to expand its overseas markets and economic growth. The basic problem was virtually the same as that confronted by Yoshino Shinji during the late 1920's and early 1930'stoo many protected enterprises in too many small factories engaged in too vigorous and economically unproductive competition. Liberalization was going to expose this situation to international commercial pressure, which would thoroughly disrupt