POL 205
Japan
Geography
Four main islands: Hokkaido; Honshu; Kyushu; Shikoku
Smaller islands: Kuril in north; Ryuuku in south
Inland sea
Tsushima Straits
Montreal to Tallahassee
124 million people; rapidly aging population; low birth rates, immigration issues
Weather: north - south; east - west ; compare Tokyo and Seoul
Mountains - pictures
Soil - low fertility
Resources: small amounts of coal, oil, gas, minerals
Japan has had but one dynasty; compare to China; What are the consequences? Emperor as symbol without substantial power
Nara era: 710-784 - consolidate bureaucratic government; create communication and transportation system; emergence of Buddhism as force in society.
The main source of these changes came from outside Japan: the emergence of an interstate system based on Chinese hegemony and including Korea.
A central capital was needed to concentrate decisions and forces in order to establish protection. The need to move beyond a mere association of clans was reflected in a more centralized and bureaucratic state.
Heian Period: 784-1185
Emergence of a warrior class
Samurai
Warrior code of courage, loyalty to lords, semi-vassalage (bushido)
Growth of wealth and rivalry between clans spurs need for samurai
Compare the samurai to the knights of feudal Europe:
Kamakura Period: 1185-1333
Begins with clan rivalry and warfare: victory of the Minamoto over the Taira
Achievement of political power based on military strength
Military victory solidifies the samurai values of the warrior code and loyalty
Beginnings of Shogunate and bureaucratic government
Muromachi/Warring States period: 1336-1590
Three years of intrigue and conflict lead to deposing the emperor and establishing the strongest military figure as shogun in 1336
constant warfare increases the power and wealth of local warlords: shugo-daimyo
warrior government separate from Emperor; frequent breakdown of central authority
Tokugawa Era: 1603 - 1868
State Building by the Tokugawa
Full fledged feudalism
more central authority
large local powers - daimyo
samurai did not have land
Shogunate was a large bureaucratic system. Tokugawa order was more complex politically than western feudalism.
Over time power shifts to bureaucratic authorities
separated from land, receive a stipend
permanent military force
become a civil official of their daimyo
lived in towns and governed villages in name of daimyo
economic growth comes from a rise in land under cultivation
sankin-kotai helped create a national economy;
wealth concentration in Edo;
Edo grows from a small fishing village in 1590 to the largest city in the world in 1700;
distribution system to and from Edo;
more production for market; increase in urbanization - large cities;
policy of isolation
Population growth
1600 1700 1800
12 million 28 million 31 million
War and the Meiji Restoration 1853-1868
1853 Black Ships
Creates a crisis in Japan leading to a civil war
Modernizers win power in 1868 – legitimacy through reestablishing the emperor Meiji
Transformation of Japan, 1868-1945
Modernizers make changes in land control, tax policy, samurai
Work to build modern infrastructure – gain knowledge from abroad
Develop Japanese firms – SOEs later turned over to special private firms – zaibatsu
Conscript army
Constitution
National education system
Nationalism as ideology
Military buildup – create modern military based on technology and modern production
1894-95 defeat China
1904-05 defeat Russia
WWI – expand markets into China and Asia
Depression leads to development of fascist-imperialist political coalition
China 1931-1945
US resistance 1937-1941
Attack at Pearl Harbor leads to Hiroshima
Meiji emperor – from 1867-1912
Emperor Hirohito – emperor from 1926-1989
US Occupation 1945-1952
Democratization of Japan shifts to rebuilding Japan in 1947
Japanese Constitution
Popularly elected legislature
US-Japan Peace Treaty
Procurement boom from Korea war
Postwar and Post-occupation Japan
The Japan of 1955-1990 was the China of 1978-2015
But in 1990 the Japanese economy collapsed in an asset bubble that burst.
70% - 80% decline in asset values
Economic stagnation has lasted for 25 years with very little political turmoil
Japanese political economy of rigged and protected capitalism
Leading edge of powerful and globally competitive firms with a large number of protected firms and frozen labor markets in the domestic economy
we argue that an economic growth strategy based on industry protection contained the seeds of later failure from the very beginning. Japan’s rapid economic development in the postwar years and its later decline were both products of a postwar political deal to protect big investors in war industries after World War II. Industry grew quickly in a pro-business climate, to be sure, but protectionist policies accommodated increasingly large amounts of deadwood into the Japanese economy, especially in the nontraded sectors that were most sheltered from competition.
Japan’s industrial policy was supported by well-known economic institutions— the main bank, cross-shareholding, and lifetime employment, to name just three. The minimalist nature of the Japanese welfare state, and the unequal opportunities for women in the workforce, are also well documented. A political logic undergirded the entire system of “convoy capitalism,” 3 propping up firms and whole industries that would have failed in a less- regulated economy, and foisting on Japanese taxpayers high prices and taxes, limited choice in the marketplace, and rigid career paths.
blame Japan’s rules of electoral competition that pitted LDP politicians against each other in multimember districts. As we described in the previous chapter, LDP politicians were unable to campaign on the basis of a party platform, however public spirited they may have been, and therefore had to “sell” protective regulation in exchange for campaign contributions. Any notion of the “public good” was swamped by the flood of patronage doled out to specific private interests. Moreover, the multimember-district system lent itself to creating new protected groups, and before long big business in Japan had to share policy favors with farmers and small business proprietors in sectors of the economy not engaging in international trade and who were therefore under less market pressure to innovate.
Companies with large investments in steel, cement, shipbuilding, and machinery lobbied for a development strategy favoring heavy industry, and received favorable regulations from politicians of the ruling Liberal Party in exchange for campaign contributions. Once the Liberal and Democratic Parties merged to form the LDP in 1955, they developed an even greater appetite for campaign contributions. 9 With two sets of incumbents seeking seats under a common party label, LDP politicians pumped large sums of money into personal support networks to be electorally competitive against each other in multi-member districts, putting a premium on campaign finance.
Japanese businesses were willing to bankroll the LDP in exchange for a favorable business climate.
Kent Calder once called Japan’s political economy a Banker’s Kingdom because of the centrality of banks to the investment decisions of Japanese corporations and, indeed, to the direction of the entire economy. 21 Banks are one piece of an interlocking set of economic institutions that characterized the postwar Japanese system of corporate governance: banks loans and stable shareholding arrangements released management from short-term thinking, and lifetime labor contracts motivated workers to invest in productivity-enhancing skills and routines.
The Occupation authorities had broken up the zaibatsu holding companies with the U.S. antitrust model in mind, and for a time stock market shares were widely held by individuals. But when the Occupation ended, many companies regrouped into families of firms referred to as kigyo shudan or keiretsu. 23 Keiretsu firms bought each other’s shares to maintain internal control over shareholding, and beginning in the 1960s when the terms of Japan’s accession to the articles of the IMF included acceptance of inward foreign direct investment, keiretsu firms bought even more shares to defend against the possibility of hostile foreign takeovers.
Free trade for you; rigged trade for me
Convoy capitalism leads to relatively egalitarian income distribution
Lifetime employment for men; exclusion of women
Women care for children and elderly parents
Careers (low pay and poor advancement) or motherhood, not both
only when the economy finally collapsed under the weight of massive resource misallocation that the hidden costs of convoy capitalism became clear. Reformers within the LDP demanded an end to money politics, splitting the party and destroying its parliamentary majority. Within a year, the politicians agreed to change the electoral system to one that would foster party-based competition. We describe the process and the political effects of that reform in chapter 6, and the economic policy effects in chapter 7. In the remainder of this chapter, we lay out the logic of Japanese convoy capitalism, and explain how global economic integration in the 1980s and early 1990s pulled the rug out from under the LDP’s money politics.
Growing conflict between globally-oriented export businesses and the nontraded low productive sectors