MITI and the Japanese miracle

Page 265

establishing them for other industries suffering from excess capacity. These measures, he said, would be taken through the ministry's residual powers of "administrative guidance"a term that had first appeared in a MITI annual report only during fiscal 1962and not on the basis of any particular law.

³²

On July 18, 1964, a month after Fukuda made this speech, Ikeda reshuffled his cabinet and replaced Fukuda with Sakurauchi Yoshio, the son of a prewar MCI minister (1931) and a leader of the Kono* faction (Nakasone faction after Kono's* death in July 1965). Sakurauchi continued as MITI minister in the Sato* cabinet but was replaced by Miki Takeo in June 1965. It was thus Sakurauchi, Miki, and Sahashi who had to combat the recession by implementing the ideas of the Special Measures Law through administrative guidance.

The institution of administrative guidance has done more than any other Japanese practice to spread the belief around the world that the Japanese government-business relationship is based upon some underlying, possibly culturally derived, national mores that have no parallels in other countries. The London

Economist

defines administrative guidance as "Japanese for unwritten orders"; and Prof. Uchida Tadao of Todai* writes that "the Diet is almost powerless in . . . determining economic programs in this country as such authority actually has been transferred to the administrative sector, particularly government offices."

³³

Many foreigners have protested. "What bothers our manufacturers," says Ernst Hermann Stahr of the Union of German Textile Manufacturers, ''is that it's not really a matter of Japanese competitiveness, but a maze of impenetrable government supports and subsidies. Our people feel that whatever they do, the Japanese will just lower their prices."

³⁴

It was administrative guidance that gave MITI the reputation during the 1960's of being the "Ministry of One-Way Trade."

³⁵

On the other hand, a Japanese analyst writes, administrative guidance "is what makes Japan's business tick. It is what made this country the world's third industrial nation. It is one of the pillars that support Japan Incorporated."

³⁶

There is nothing very mysterious about administrative guidance. It refers to the authority of the government, contained in the laws establishing the various ministries, to issue directives (

shiji

), requests (

yobo

*), warnings (

keikoku

), suggestions (

kankoku

), and encouragements (

kansho

*) to the enterprises or clients within a particular ministry's jurisdiction.

³⁷

Administrative guidance is constrained only by the requirement that the "guidees" must come under a given governmental organ's jurisdiction, and although it is not based on any explicit law, it cannot violate the law (for example, it is not supposed to violate