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No.6 WW1 and 1920s Economic Development of Japan.

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1 No.6 WW1 and 1920s Economic Development of Japan

2 Society, Economy, Diplomacy: 1910s-20s WW1 brought a huge export-led boom to Japan. This solved fiscal and BOP problems (for the moment). The bubble burst in 1920 and a recession period began. FDI and import substitution in heavy industries proceeded, and new zaibatsu emerged. Taisho Democracy and the rise of social movements (labor, farmers, women, outcasts, socialism) Shidehara Diplomacyuse non-military means (diplomacy) to secure trade benefits, Japan-US friendship and Chinese interests.

3 1920s WW1 Bubble burst and recessionary period begins Machinery, chemical, heavy industries expands Electrification (hydraulic power generation) rises WW1 Real GNE Growth (5-year moving average) Estimate by Ohkawa, Takamatsu, Yamamoto

4 World War I and Export-led Boom Export-led demand pushed up prices, profits and productionartificial acceleration of import substitution, esp. in machinery and chemicals. BoP crisis (gold reserve loss) was solved. Narikin emerged (Suzuki, Ship Narikins). They spent money on big villas, parties, women. Production Trade (bil yen) Ship Narikin Industrial production Domestic Supply Ratio PP

5 New Zaibatsu (Konzern) Heavy & chemical industries (not banks, textiles, trade) Backed by political connection and support Active investment in Korea and Manchuria (NE China) PP NameFeaturesCurrent firms Nissan Japan Industry Cars, chemicals, machinery, fishery, mining; Raising fund in stock market; Invest in Manchuria Hitachi, Nissui, Nissan Motors, Sompo Japan, Japan Energy Riken Chemical, medical research Riken Res. Inst.) Nicchitsu Fertilizer, medicine, metalsChisso Nisso Sodium hydroxide (NaOH)Nihon Soda Mori Aluminum, ammonia, iodineShowa Denko

6 Source: S.J.Bytheway (2005), pp Major FDI Firms in 1910s-30s

7 Source: S.J.Bytheway (2005), pp Major FDI Firms in 1910s-30s (contd.) Compared with Meiji Period, The number of US FDI increases. FDI in automobile, electrical, machinery. Zaibatsu plays key role in FDI partnership or subsequent take- over. At the same time, Japans outward FDI begins: FDI to China: textiles (Shanghai, Qingdao), steel (Anshan) FDI to Korea: heavy chemical industries

8 Pure dictatorship Full democracy Democratic institution (Form) Political competition Constitution Laws Parliament Election Court Reform vs conservatism, big vs small government, other policy debates Edo Meiji Taisho Fascism Constitution Parliament Democracy movement, Party cabinet Democratization New constitution Showa2 War LDP dominance Lack of policy debate Male suffrage 1960 Now US rule Defeat Showa Military rises (Content) Political fights

9 Early Meiji /90 WW1/Taisho External military campaign Top-down industrial- ization Top-down democrat- ization Bottom-up democrat- ization Okubo Kuroda Okuma Saigo Former samurais X 1877 Kido Inoue Itagaki Itagaki Ueki (Liberty Party) Nakae Okuma Fukuzawa Expelled Ito Fiscal activism & war Constitution Parliament Fiscal crisis Opposition Government Taisho Democracy Ito Yamagata Seiyukai Party Export-led boom solves fiscal crisis Spending! Conservatives Military Japan- China War Japan- Russia War Colonize Korea 1910 Big spenders Hoshi Tax cuts!

10 Taisho Democracy – Political Development Anti-party conservatists genro, military, bureaucrats Seiyukai Party Big spending for securing rural votes Cooperation & fights Alternating governments Yamagata, Katsura Saionji, Hara Popular demonstration surrounding Parliament to protect constitution Armys misuse of power, 1913 Navys bribery scandal, 1914 Opposed to universal suffrage Rice Riots, 1918 Kenseikai (Minsei Party) Belt-tightening, workers rights Pro-Constitution 3-Party Cabinet Rikken Seiyukai Party X Reform Club Universal suffrage, Army budget cuts -Shidehara Diplomacy

11 Meiji Constitution Article 4 The Emperor is the head of the Empire, combining in Himself the rights of sovereignty, and exercises them, according to the provisions of the present Constitution. Article 55 (1) The respective Ministers of State shall give their advice to the Emperor, and be responsible for it. (2) All Laws, Imperial Ordinances, and Imperial Rescripts of whatever kind, that relate to the affairs of the state, require the countersignature of a Minister of State. PP Emperor ArmyNavy Emperor decides Individual ministers Individual advice Emperor Cabinet PM Cabinet decides Collective advice & responsibility -Appointed by Genro? -Party with largest parliament seats? (1) Can Emperor really make decisions or just follow advice? (2) Is party cabinet (parliamentary system) possible?

12 Prof. Tatsukichi Minobe ( ), Tokyo Univ. -The state, as a legal entity, has the sovereignty. -The emperor is the highest organ of the state, and operates under Constitution (not unlimited power) (Article 55) -Cabinet must take collective responsibility Same political party -Imperial orders must have Ministers signature Cabinets power Prof. Sakuzo Yoshino ( ), Tokyo Univ. Democracy develops in 3 steps to achieve results: (1) Party cabinet where the largest party forms government (2) Universal suffrage, to expand voter base (3) Social policies, to directly improve peoples lives Yoshino proposed minpon shugi to promote democracy under Meiji Constitution where Emperor had sovereignty.

13 Other Social Movements in Taisho Emergence of new middle mass (professionals, salaried workers) Universal (male) election (1925) Labor movement and May Day (1920) Landless farmers riots and formation of farmers union (1922) Womens movement--Seitosha (Blue Stockings Society, 1912), New Womens Society (1920) Zenkoku Suiheisha (National Level Society, 1922) to fight discrimination against outcast people Rise of socialism and Marxism Universal suffrage movement Voters/Population

14 Shidehara Diplomacy His policy was more moderate than before or after him Maintain good relations with US and UK Respect Washington Naval Disarmament Treaty ( ) Hamaguchi Cabinet signs London Naval Disarmament Treaty despite objection from military (1930) No military intervention in China; secure Japans economic interest through diplomacy and negotiation When China protests and resists, his diplomacy breaks down Domestically, criticized as Coward Diplomacy Failed to stop Manchurian Incident (1931) started by Kantogun (Japanese Army stationed in China) PP Kijuro Shidehara, Foreign Minister, , Prime Minister

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16 Japan-US Relationship Largest trading partner: US share in Japans trade export 44%, import 26% (in 1925) In China--Japan asserts its special interests in China, US wants open door policy (esp. for bank loans) Immigration Problem 1890s Japanese economic immigrants to US West Coast; Anti-Japanese movement begins 1907 Gentlemens Agreement to curb Japanese immigration 1913 Anti-Japanese legislations in California 1924 Ban on Japanese immigration 1942 Japanese Americans are sent to concentration camps Manzanar Camp, California


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