MITI and the Japanese miracle

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ing which the bureau was engaged in constant conflict with Sahashi over the Special Measures Law), as chairman of the Fair Trade Commission. Takahashi simply believed that it was his job to defend the Antimonopoly Law, even though it had been widely ignored in recent years. He was also convinced that the economic events of 1972 and 1973 were related to this flouting of the Antimonopoly Law.

Takahashi could have chosen any of several industries to make his point (steel, for example), but because of the oil crisis he chose the petroleum refining and distribution industry. On November 27, 1973, officials of the Fair Trade Commission raided the offices and demanded to see the books of the Petroleum Association of Japan and of twelve petroleum companies. According to the FTC, ''The on-the-spot inspection was made to investigate a report that the oil companies raised the prices of their products and restricted supplies under the initiative of the association."

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On February 19, 1974, based on the documents his inspectors had collected, Takahashi charged the association and the companies with operating an illegal price cartel and turned the case over to the Tokyo High Public Prosecutor's Office. This was a sensational developmentTakahashi's picture was on the cover of most national magazines that weekand it became even more sensational when the petroleum companies replied that anything they had done in concert had been in accordance with MITI's administrative guidance.

The prosecutors called in numerous MITI officials, including Iizuka Shiro*, then director of the Basic Industries Bureau and formerly in charge of administrative guidance over the petroleum industry, and questioned them closely about their intentions in administrative guidance, what role the Petroleum Association played in it, and numerous other questions MITI was not pleased to have aired in the newspapers. Vice-Minister Yamashita met the press and angrily denied that MITI condoned illegal acts; he argued that the oil companies' prices would have gone up twice as much if the ministry's administrative guidance had not prevented it. But MITI was definitely on the defensive, and its defense was not helped when, on April 16, 1974, the

Asahi

printed the names of 50 former MITI officials, including 5 former vice-ministers, who were employed as amakudari executives throughout the oil industry.

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On May 28, 1974, the prosecutors indicted the Petroleum Association, the twelve companies, and seventeen of their executives, charging that they had criminally violated articles 3 and 8 of the Antimonopoly Lawto wit, that between December 1972 and November 1973 the executives had met some five times and concluded illegal