C H A P T E R 2
Japan
I
n 1945 Japan was prostrate, its military power annihilated and its national symbol, the emperor, nullified. Many of its cities had been devastated, some 10 –15 million were unemployed, and it was occupied and ruled by the United States.Within a generation Japan regained the status of a great power, not by replacing its armouries but by rebuilding its industries, regaining its foreign trade and reconstitut-ing its reserves of cash and currencies; it was the one power in the world that could be referred to as a great power but had no nuclear capacity and it was evidently more powerful than some powers – Britain, France, India – which had made nuclear explosions.
Furthermore, Japan in this period lacked not only the military trappings with which states are wont to make their mark in the world; it was also conspicuously short of primary resources. It had no – or virtually no – oil, uranium, aluminium or nickel; very little coal, iron ore, copper or natural gas; only half its requirements of lead and zinc.
These shortages were made all the more acute by the great expansion of industry, an expansion which was both essential to Japan’s recovery and exacerbated its dependence on foreign materials. This need to secure primary products, whether by participating in exploration or by establishing commercial-political control in the places where they lay, became a major imperative of Japanese foreign policy.
The American share in the defeat of Japan had been so overwhelming that the United States could reduce postwar allied co-operation in the occupation to a not very polite figment. Two bodies were created: the Allied Council for Japan, located in Tokyo and consisting of the United States, the USSR, China and a representative of Britain and the Pacific members of the Commonwealth; and the Far Eastern Commission, located in Washington, with 11 members. But in fact Japan was ruled by the supreme commander, who was General MacArthur and whose ways of treating associates, subjects and problems were akin to those of the shoguns. Retribution took the form of dis-armament, demilitarization and trials of war criminals. Then came a new constitution, administrative and social reforms, and attempts to alter the industrial and cultural patterns of the country on the basis, however, of the retention of imperial rule and the emperor himself (who lived on until 1989). The MacArthur regime was a strict pater-nal autocracy but also radical. The Japanese were commanded to become democratic.
The emperor was cut down to human size, over 200,000 (mostly military) persons were barred from public life, the prime minister and all his colleagues were to be civilians, the great financial conglomerates or zaibatsus were to be broken up, land reform was imposed on paper and carried out in practice.
None of this stood in the way of revival when the opportunity came, and much of it was helpful. The purge eliminated a number of able men but it cleared the way to the 2.1 Japan and its neighbours
top for many more who, without it, would not have got there so quickly: some European bureaucracies and businesses would have benefited from such a purge. The elimina-tion of big, often absentee, landowners facilitated the modernizaelimina-tion and re-equipment of agriculture, established a rich rural sector alongside the reviving industrial and commercial sectors, and gave Japan the efficient food production which was vital for so densely populated a country. A new abortion law halved the birthrate over a period of five years and stabilized the population. As in Germany, the Americans were quickly converted from exacting reparations to repairing the Japanese economy, first in the general Cold War context of anti-communism and then more specifically and vigorously by the Korean War: in the course of 1948–51 the United States dispensed to Japan post-war relief equal to twice the post-war reparations exacted from it. War in Asia – the Korean War and later the wars in Vietnam – gave Japan the boost which transformed its fortunes in an astonishingly short time. Like the United States in the Second World War, Japan became an arsenal of war and a war-fuelled economy with the advantage of not being itself a belligerent. It constructed a powerful economy on the basis of low-interest loans for industry, subsidies for public services, high levels of saving, the revival of the prewar zaibatsu and a form of guided capitalism in which the state regulated priorities and the allocation of resources without seeking managerial control of operations. At the outset MacArthur’s autocratic rule permitted no interference by strikes or unions to the process of making goods and money and, together with the discipline and deter-mination of the Japanese people, shaped a harsh capitalist culture which sent the weak to the wall but encouraged that adventurousness and vision which had characterized the nineteenth-century English merchant and industrialist before he was turned into a conservative twentieth-century financier. Finally, it was a condition of Japan’s success that its new leaders should co-operate closely with the Americans who ruled in Tokyo and Washington. When MacArthur left Tokyo in 1951, dismissed by Truman, he did so as a friend and hero and after a personal farewell visit by the emperor.
Japan’s first postwar prime minister, Shigeru Yoshida, was already 70 when he was installed in 1948 in the office which he held for six years. He understood the con-straints and had no inhibitions about tackling Japan’s alarming postwar inflation by the most familiar deflationary devices, killing off weak businesses and adding to the unemployed. His overall purpose was to restore Japan’s power in the world but not the power of the military in Japan. He struck lucky. With the Korean War prosperity bloomed and the United States was happy to turn Japan from defeated enemy to prin-cipal ally. It organized a peace treaty which was signed in 1952 by the two countries and 40 others – the USSR, China, India and Burma being among the absentees. By the Treaty of Portsmouth Japan renounced Korea, which it had ruled since 1910; Taiwan and the Pescadores, which had been Japanese for over half a century; the islands in the Pacific which had been administered under mandate since the end of the First World War, after being seized from Germany; all its rights and claims in China and Antarctica;
and southern Sakhalin and the Kuriles. The status of these last territories remained
ambiguous because the USSR, which had occupied them in 1945, was not a party to the treaty. They were formed in 1947 into a district or oblast of the Russian Soviet Federal Socialist Republic: the island of Sakhalin, stretching northward from Japan’s northern tip, runs offshore of the RSFSR for nearly 970 km; the Kurile archipelago, comprising 30 comparatively large volcanic islands and as many smaller ones, runs north-east from Japan to the Kamchatka peninsula. The Ryuku islands (including Okinawa) and the Bonins, which had been annexed by Japan at the end of the nine-teenth century and were occupied by the United States during and after the Second World War, were gradually recovered by Japan in 1968 –72, subject to the continuing presence of American troops and military installations.
Japan’s territorial losses were considerable but it was not required to pay any war reparations and it suffered nothing like the bisection of Germany. On the same day as the signing of the peace treaty Japan and the United States signed a security treaty followed by an administrative agreement which gave the latter the right to station forces throughout Japan for purposes defined as the maintenance of international peace and security in the Far East, the defence of Japan against external aggression and the suppression of rebellion or disorders instigated by an outside power. No such rights were to be accorded to any other state except with American consent. The American occupation came formally to an end in April 1952. What had begun as a crusade to make Japan safe for democracy in the western style was superseded by the recruitment of Japan to the anti-communist side in the Cold War and, less obviously but not with-out considerable popular discontent, fettered Japan’s renewed sovereignty.
Although Japan’s constitution forbade the creation of armed forces this ban had been circumvented in 1950 by the creation of a National Police Reserve and Self Defence Forces which looked and lived very like an army. These forces gradually expanded to the comparatively modest figure of 250,000. Defence expenditure was kept below 1 per cent of GNP (which was, however, rising steeply) and around 6 –7 per cent of govern-ment expenditure, again a modest figure. By the 1970s there were the beginnings of a debate about whether Japan should go nuclear: its weight in the world pointed in that direction but there were political as well as constitutional obstacles. Japan signed the Partial Test Ban Treaty – an act of supererogation if the constitution were to be taken at its face value – and public opinion in the land of Hiroshima and Nagasaki was ultra-sensitive to the exercise of the nuclear option. An incident in 1954 dramatized these feelings. A Japanese fishing vessel, the Fukuryu Maru or Fortunate Dragon, a few miles outside an area closed to fishing on account of American nuclear tests on the island of Bikini, was caught in the fall-out of an H-bomb. Before this terrifying fact was realized the Fukuryu Maru had returned to port and sold part of its catch. Panic followed. One member of the crew died. Later the United States paid $2 million by way of damages or conscience money for this terrible accident. It also had to pay a political price as Japanese opinion gathered hostility to the United States and to Yoshida as the symbol of the Japanese–American alliance.
This episode coincided with the conclusion in 1954 of new defence, financial and commercial agreements between the United States and Japan, which included a Mutual Defence Agreement providing for mutual assistance against communism and reorgan-ization of Japan’s pseudo-military forces. Yoshida, however, was weakened by scandals, charges of undue subservience to Washington and rifts in his own party and was replaced at the end of the year by an old rival Ichiro Hatoyama, whose foreign minister Mamoru Shigemitsu expressed the intention to restore normal relations with the USSR and China. But Hatoyama did not last long and was succeeded by Nobusuke Kishi, another of the Liberal Democratic Party’s numerous but not harmonious chiefs. Kishi preferred to pursue the policy of restoring relations with Japan’s former enemies in South-east Asia rather than the Hatoyama–Shigemitsu approach to the USSR and China which, in view of Japan’s continuing attachment to the United States, was still too hot a potato.
Kishi also negotiated in 1960 a revised version of the Security Treaty of 1951, but the new treaty – and especially a clause making it last for ten years – was unpopular. The government was accused of involving Japan in the Cold War by allowing American nuclear weapons to be held on Japanese territory. There were disorderly scenes in the Japanese parliament and outside it, and although the new treaty was ratified a projected visit by Eisenhower had to be cancelled and Kishi resigned before the end of the year.
The 1960s were the years when Japan impressed itself on the rest of the world by annual growth rates of 10 per cent or more; when the alternation of boom and slump which had characterized the 1950s seemed to have gone for good; when the new shape of Japanese industry with its emphasis on heavy goods and chemicals in place of textiles became apparent; when Japan’s investment and performance in the most advanced technology captivated the world; and when its admission to the ranks of the OECD publicly designated it as one of the world’s economic heavyweights. In 1962 Japan con-cluded with China a five-year commercial agreement on a barter basis. The vastness of China and its population mesmerized some Japanese industrialists but the government remained inhibited by Washington’s hostility to China, the present gains in trade with China were small and Japan’s trade with Taiwan was substantially larger: the 1962 agreement was no more than a gesture towards a vague future. More concretely, Japan embarked on a policy of economic co-operation in South-east Asia and the Pacific rimlands. Already in the 1950s Japan had paved the way with agreements for the pay-ment of reparations to Burma (1956), the Philippines (1956) and Indonesia (1958), and in 1967 the prime minister Eisaku Sato undertook a tour of South-east Asian cap-itals, preceded and followed by visits to South Korea, Australia and New Zealand. He was the first Japanese prime minister to visit these last two countries. Japan’s course was not easy. Besides being a former imperialist aggressor with an unforgotten reputa-tion for peculiar cruelty, Japan was a rapidly developing country in a largely under-developed region. Sato lavished loans for development and, in the case of Vietnam, for postwar reconstruction, while by supporting ventures such as the Asian Development Bank and the Agricultural Fund for South-east Asia he hoped to stress Japan’s pacific
amiability in contrast not only to its past but also to the militaristic policies of the United States evinced by the SEATO alliance and the war in Vietnam. Japan was at pains to supply its poorer neighbours with high-grade capital and consumer goods rather than drain them of their natural resources in the classical colonial mode. Further afield, in Australia, Japan became the leading purveyor of investment funds, exceeding the sum of British, American and German funds; Australia was by the mid-1960s importing more goods from Japan than from Britain and selling more of its mineral and agricul-tural products (including wool) to Japan than to any other country. In its smaller way New Zealand was turning in the same direction. Even Canada, another Pacific state, although more firmly fixed in the North American economy, considerably increased its trade with Japan and its loans to and investment in the South-east Asian sector of what was becoming a vast Asian–Pacific economic zone dominated by Japan. The achieve-ments of the 1960s were crowned by the spectacular Expo 70 in Tokyo.
But shortly after Expo 70 Japan suffered two serious setbacks. Its industrial recovery and commercial expansion had depended on a strong dollar (which made Japanese exports to its largest market exceptionally profitable) and cheap oil. In 1971 Nixon devalued the dollar and in 1973 war in the Middle East created an economic crisis in Japan. Japan relied entirely on imported oil, 85 per cent of which came from the Middle East. The war so reduced supply that Japanese stocks fell to a few days’ consumption and when the flow was resumed as a result of urgent, even grovelling, diplomacy the price had quadrupled. Ruthless economies cut consumption by half but many busi-nesses went under, unemployment rose sharply and the employed had to accept strict wage restraint. A second oil shock occurred with the fall of the shah in Iran in 1979 but in the interval Japan, uniquely among industrialized countries, had regained its eco-nomic health by abandoning old and moribund industries without compunction, by experimenting in automation and robots, by massive investment of government money at cheap rates, and by extensive retraining of the workforce, again with gov-ernment funds. In the next decade the same combination of industrialists, experts and government seized for Japan the world’s leading place in electronics. In the same period the United States was applying its knowledge and its funds in going to the moon and creating huge, but largely useless, armaments.
Japan’s prosperity made it a voracious consumer of the world’s products: one esti-mate in the 1970s had it that by 1981 Japan would need one-tenth of the world’s total exports and in oil more than one-tenth of the world’s total production. But Japan had no sure way of securing its needs. Britain in the nineteenth century and then the United States had had a similar problem and had solved it by a variety of means which go under the name of imperialism. The essence of imperialism from this viewpoint was not the domination of an area for glory’s sake but domination in order to secure materials, whether by taking them, or by ensuring that the producers go on producing them and not something else, or by encouraging a bigger output. The means included investment and so partial or total ownership of minerals, crops or manufacturing
enterprises. Japan had plenty of money to invest but there were difficulties about investing it. Apart from its especially delicate standing in the region, the very idea of foreign investment had become suspect. However welcome investment funds might be in purely financial terms, there was a nervous awareness of conflicts of interest between investor and recipient and a legacy of hostility to the foreign investor, who was pre-sumed to be distorting and retarding a developing economy and indeed to be intent on doing so. In the special case of oil Japan’s problem was aggravated by the fact that most known investment opportunities had been pre-empted by the United States or western Europeans. Nevertheless, Japan, accelerating in the 1970s a trend begun in the 1960s, placed considerable sums abroad, particularly in Malaysia, Indonesia, Thailand and the Philippines. Anxious to reduce its dependence on Middle Eastern oil, it engaged in exploration or investment in Indonesia, New Guinea, Australia and Nigeria. Japan’s vulnerability in terms of oil was compounded by the fact that Middle Eastern oil bound for Japan passed through the narrow Malacca Strait and so was at the mercy of any unfriendly power in Malaya or Sumatra. The oil hunger of those years focused attention on certain small islands in the South China Sea: the Paracels, seized by China in 1974 by evicting a small South Vietnamese force, and the Spratlys further south, which were claimed by China, Vietnam, the Philippines, the Netherlands and France and some of which were occupied by China in 1988.
Besides his devaluations of the dollar in 1971 Nixon shocked Japan when, without warning to Tokyo, he announced that he had accepted an invitation to visit China.
The Japanese government, whose policies had been moulded and constricted by the American alliance and by American policies which, in Asia, were based on hostility to China, was seized with equal astonishment and resentment. What seemed to the rest of the world a sensible move to take some heat out of an overheated quarrel betokened in Japan a reversal of alliances not unconnected with commercial and economic rivalry. Japan feared not only a political volte-face by Washington but also the closing
The Japanese government, whose policies had been moulded and constricted by the American alliance and by American policies which, in Asia, were based on hostility to China, was seized with equal astonishment and resentment. What seemed to the rest of the world a sensible move to take some heat out of an overheated quarrel betokened in Japan a reversal of alliances not unconnected with commercial and economic rivalry. Japan feared not only a political volte-face by Washington but also the closing