1. conservative politics economic growth
Japan in the 1960s
conservative politics
economic growth

4. The Occupation August 1945 - April 1952
Supreme Commander of the Allied Powers (SCAP) - General Douglas MacArthur
Two main tasks:
demilitarization
democratization

5. Korean War (1950-3) Economic turning point for Japan:
war supplies to Korea
industrial resurgence
foreign currency
economic reconstruction
growth rate: 9.4%
growth rate: 10.9%
1952: Japan’s GDP matched prewar high

6. High Growth of 1955-62 Large investment in heavy industry
Imports of energy and raw materials
Government’s economic goals:
achieve economic self-sufficiency
achieve full employment
improve export competitiveness
keep domestic demand high

7. High Growth of
Government’s plan to “double the national income in ten years”
scheduled 9% annual growth rate
large-scale infrastructure construction
Shinkansen (bullet train)
Olympic Games
port, road, and rails
human infrastructure

8. High Growth of 1963-73 labor-intensive in decline
agricultural subsidies
textile bankruptcies and “excess capacity”
coal industry in serious decline
capital-intensive on the rise
large firms had 10- and 20-fold growth
electronics and automobile

9. Government response
government responded to some sectors’ decline with reorganization and subsidization
technological improvement and facility modernization under government protection
Ministry of International Trade and Industry
constant and critical role in developing the computer industry

10. The Iron Triangle
bureaucrats
big business
executives
LDP politicians

11. High Growth of 1963-73 Aggressive export strategy
businesses compete with foreign counterparts under government protection
domestic market sealed off from competition
Strict limitations on governmt expenditures
1965 Japanese exports exceeded imports for the first time in two decades

12. Government policies
Macroeconomic success through internationally competitive firms
reduce the reliance on agriculture and small industry
capital-intensive industries
technically sophisticated products
improve national economic infrastructure
improve human infrastructure

13. Protection of domestic market
U.S. products and capital dominated world markets to an unprecedented extent in 1950s and 1960s
Japan remained virtually unpenetrated by
foreign firms
foreign products
or foreign capital
Bretton Woods system ( )

14. Japan’s Economic Growth

16. In 1995, Japan’s GDP per capita (in current US$) was
1.5 times that of the U.S.
3.5 times that of S Korea
71 times that of China

17. Political & economic institutions
Japan compared with other industrialized democracies
economic institutions dramatically different
economic performance was superior
longest dominance by one political party
far greater egalitarianism in political economy
foreign and security policy tied to that of US

18. Golden age of LDP Politics
Liberal Democratic Party
1963, LDP won 55% of vote and 60% of seats in lower house elections
LDP benefited from
the economy’s stellar performance
internal leadership coherence
fragmentation of political opponents
compensation of economically disadvantaged

20. Evolution of party system
Combination of multiparty system with sustained dominance of one majority party
Chaotic political party system
2 conservative parties, 2 socialist parties, communist party, and micro-parties
Party merges in 1955
“One-and-a-Half Party System”

21. Major Political Parties
Liberal Democratic Party (LDP)
conservative catch-all party
single largest party
Japan Socialist Party (JSP)
“Japan Peace Party”
Japan Communist Party (JCP)
anti-emperor, anti-capitalism, anti-military
only party untainted by money politics

22. National Vote Share