MITI and the Japanese miracle
Page 34
28
During the period that Ichimada and Ikeda were erecting this two-tiered financial structure, MITI was busy putting its own house in order and preparing to lead the operational side of the developmental effort. When MITI came into being in May 1949, it still faced three more years of occupation and five more years of hostility from Prime Minister Yoshida. The most important organ of the ministry in these
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TABLE
15
Sources of Industrial Capital, 19531961
(Hundred million yen)
1953
1954
1955
1956
1957
1958
1959
1960
1961
Private financial organs:
Banks only
1,945
1,592
1,767
3,387
3,559
4,125
4,808
6,427
7,053
(49%)
(42%)
(40%)
(49%)
(44%)
(44%)
(42%)
(42%)
(39%)
All other organs
511
969
1,289
1,913
2,351
3,029
4,132
5,849
7,286
(13)
(25)
(29)
(28)
(29)
(32)
(36)
(39)
(40)
SUBTOTAL
2,456
2,531
3,056
5,300
5,910
7,154
8,940
12,276
14,339
(62)
(66)
(69)
(77)
(74)
(76)
(77)
(81)
(80)
Public financial organs:
Japan Development Bank
871
575
464
448
632
589
681
650
862
(22)
(15)
(11)
(7)
(8)
(6)
(6)
(4)
(5)
All other government banks
415
455
559
716
930
1,009
1,338
1,555
1,850
(11)
(12)
(13)
(10)
(12)
(11)
(12)
(10)
(10)
Special accounts
195
274
341
431
569
716
587
651
986
(5)
(7)
(8)
(6)
(7)
(8)
(5)
(4)
(6)
SUBTOTAL
1,481
1,303
1,364
1,595
2,131
2,314
2,606
2,856
3,697
(38)
(34)
(31)
(23)
(27)
(24)
(23)
(19)
(20)
TOTAL
3,937
3,835
4,420
6,896
8,040
9,468
11,547
15,132
18,036
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
SOURCE
: Endo * Shokichi*,
Zaisei
toyushi
* (Fiscal investment and loan funds), Tokyo, 1966, p. 149.
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early years was the International Trade Bureau, the successor to the old Board of Trade. But the fact that the bureau's chief and most of its senior officials were diplomats marking time until foreign relations were restored inevitably meant that the bureau was known as a ''branch store of the Foreign Office" (
Gaimu-sho
*
no demise
)and was deeply resented as such by the veterans of the Kishi-Shiina era. This was also MITI's "dark age," when the position of chief secretary was occupied by Nagayama Tokio, who had been placed in office by Yoshida's personal adviser, Shirasu Jiro*.
29
The first order of business for the new vice-minister, Yamamoto Takayuki, was to try to restore the morale of the industrial policy bureaucrats and to deal with the factional problems created by Nagayama's presence. Two situations aided him in these endeavors: Dodge's balanced budget policy had dictated a major reduction in the numbers of government officials, and SCAP after the outbreak of the Korean War had turned its purge directives against communists, who as a practical matter were primarily trade union leaders. MITI possessed a very vigorous unionZenshoko* (All Commerce and Industry Workers' Union), an affiliate of the radical Kankoro* (Federation of Government and Public Workers' Unions)that regularly took actions that provided suitable pretexts for letting people go. For example, in April 1950 Zenshoko blocked the car and later barricaded the office of Takase Sotaro* (the former president and great "senior" of the Tokyo University of Commerce, renamed Hitotsubashi University in May 1949), who had just come to MITI as minister while serving concurrently as minister of education.
30
On the basis of direct orders from the cabinet to cut the size of the bureaucracy, Yamamoto used incidents such as this to fire about 10,000 officials between 1949 and 1951. The staff of MITI's internal bureaus fell from 13,822 in 1949 to 3,257 in 1952.
31
This was surely one of the most salutary consequences of Dodge's deflation; MITI became a much leaner and more cohesive organization than the postwar MCI had ever been.
On the factional front Yamamoto appointed Ishihara Takeo as chief of the Enterprises Bureau, Tokunaga Hisatsugu as chief of the Mining Bureau, Hirai Tomisaburo* as chief of the Trade Promotion Bureau, and Tamaki Keizo* as chief of the Machinery Bureau. All were experienced cadres from the Kishi-Shiina era and all became vice-ministers during the 1950's. When Yamamoto resigned in March 1952, he passed on the vice-ministership to Tamaki. Nagayama, meanwhile, named most of the other bureau and section chiefs; and one of his notable successes was to remove Sahashi Shigeru, a rising young "control bureaucrat" and later vice-minister, from the critically impor-
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tant post of chief of the Cotton Textiles Section in the Textiles Bureau (which he held from December 1948 to August 1951) to a mere outpost as chief of the General Affairs Department of the Sendai regional bureau (August 1951 to August 1952).
During the period of rapid unionization in the early years of the occupation, Sahashi had been elected the first chairman of Zenshoko *, and although he was not a communist, this put him in an exposed position when the "red purge" began. In the course of the Dodge Line reduction in force, members of Zenshoko one day seized Chief Secretary Nagayama and subjected him to a kangaroo court. Although he was no longer a union leader, Section Chief Sahashi was summoned to mediate the dispute. In his typically outspoken manner (of which we shall have several examples in the next chapter), Sahashi ended the incident by loudly haranguing the workers that they would not save their jobs by pressuring a fool such as Nagayama. Shortly thereafter Sahashi found himself on
a train heading northeast.
32
The objections to Nagayama were not just that he was serving as an agent of Yoshida and Shirasu but also that as chief secretary he had jumped over several other officials in the seniority hierarchy. It was during this period of poverty and firings that seniority became entrenched in all Japanese organizations as a vital source of job security. Nagayama's use of his political connections was thus seen as a potential threat to everyone. He was not, however, easy to dislodge. Tamaki, as vice-minister, worked on the problem, and he gained the support of his minister, Ikeda. When Ikeda had to resign after his "slip of the tongue" in the Diet about his not caring if a few small businessmen were driven to suicide, he advised his successor, Ogasawara Sankuro*, that Nagayama must go. At this same time Nagayama's position was weakened because his mentor, Shirasu, publicly criticized Prime Minister Yoshida and promptly lost his own influence.
In January 1953 Ogasawara and Tamaki succeeded in moving Nagayama out of the secretaryship and made him chief of the Tokyo regional bureau (they replaced him as secretary with Ishihara Takeo, who became vice-minister two years later). Nagayama remained in his new post until July of the following year, when he returned to headquarters as chief of the Textiles Bureau. He finally resigned as a bureaucrat in December 1955, and sought to use his contacts developed in the Tokyo and Textiles positionsamong the best places to build political supportto run for the upper house of the Diet. However, he was unsuccessful at the polls and therefore made a normal amakudari to the presidency of the Showa* Oil Company (a Shell affiliate) and a directorship at Mitsubishi Yuka (petrochemicals).
33
Over
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the years since his retirement Nagayama has become a respected "senior" in the oil-refining business, but the age of "Emperor Nagayama" is still remembered within ministry circles as one of the three most divisive periods in the ministry's history (the other two were Kishi's appointment as minister in 1941 and Sahashi's rejection as vice-minister in 1963).
In addition to these personnel and factional problems, the early years of the ministry saw the first steps taken toward the formulation of the high-growth policy. The International Trade Bureau was the busiest place in MITI, but it spent most of its time processing import and export applications and consulting with SCAP instead of thinking about where the Japanese economy should be going. Within a few years it had been completely outclassed by the Enterprises Bureau as the center of planning and policy-making. During 1949 the Enterprises Bureau worked quietlyits name is scarcely mentioned in the SCAP archivesbut with great effectiveness. On September 13, 1949, the cabinet adopted the Enterprises Bureau's "Policy Concerning Industrial Rationalization" (Sangyo * Gorika* ni kan suru Ken), which must be regarded as one of the most crucial, if least acknowledged, milestones of the Dodge Line and of postwar Japanese industrial policy.
34
This document contains the seeds of the Japan Development Bank, the Foreign Capital Law of 1950, the attacks on the Antimonopoly Law, the reform of the tax system to favor industrial growth, and the creation in December 1949 of the Industrial Rationalization Council (Sangyo Gorika Shingikai). One of the most concrete results of the cabinet's policy decision was the passage two years later of the Enterprises Rationalization Promotion Law (Kigyo* Gorika Sokushin Ho*, number 5 of March 14, 1952), the first of at least 58 separate industrial policy statutes enacted between 1952 and 1965 under MITI's sponsorship.
35
During the 1950's the work of the Enterprises Bureau and its Rationalization Council became as important for the country's economy as Yoshino's Temporary Industrial Rationality Bureau and Commerce and Industry Deliberation Council had been twenty years earlier. The paternity of the 1949 ideas also clearly goes back to the MCI initiatives formulated at the beginning of the great depression.
The leaders of the Enterprises Bureau during the waning years of the occupation were its bureau chief, Ishihara Takeo; its deputy chiefs, Tanaka Shin'ichi (who was in charge of the materials mobilization plans in the old Cabinet Planning Board) and Iwatake Teruhiko (who after retirement was on the board of Kobe Steel); and its section chiefs, Imai Hiroshi (who was subsequently on the board of the JDB)
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and Hizume Nobuaki (who was later executive director of Daimaru Department Stores). Their chief policy-making organization was the Industrial Rationalization Council. Composed originally of 45 committees and 81 subcommittees covering every industry in the country and bringing together several hundred business executives and academic specialists centered around Ishikawa Ichiro * of Keidanren and Arisawa Hiromi of Todai*, it was the main means of liaison between the government and the business community. Its committees went over and modified government proposals ranging from the rationalization of the steel industry to the possibilities of earning foreign exchange through the export of Japanese motion pictures.
36
Perhaps the council's least known but later most applauded activities were in the areas of the reform of management, the institutionalization of the lifetime employment system, and the raising of the productivity of the Japanese industrial worker. Noda Nobuo, a former Mitsubishi executive and chairman of the council's Management Committee, has always contended that the committee got its ideas for quality control and the measurement of productivity from the United Stateseven though, ironically, during the 1970's the Japanese began to export some of these same ideas back to the United States.
37
The Management Committee borrowed speakers on industrial management from SCAP and the U.S. Air Force, many of whom it sent around the country to lecture to managers and newspaper reporters; and it was so impressed by the ideas concerning statistics and industrial engineering of the American professor W. E. Deming that it named a prize after him. The "Deming Prize" for quality control, established by the Union of Japanese Scientists and Engineers and the newspaper
Nihon keizai
, was first awarded in 1951 to the Showa* Denko* Company, Yawata Steel, and Tanabe Pharmaceuticals. Deming became a popular lecturer for his close friend Ishikawa Ichiro, who was then president of Keidanren, head of the Industrial Rationalization Council, chairman of the Showa Denko Company, and a champion of industrial standards and the certification of products by independent testing institutions.
38
Excited by the American concept of "scientific management," the Industrial Rationalization Council churned out publications and sponsored speakers, leading during the mid-1950's to what was called the "business administration boom" (
keiei
bumu
*) and to making bestsellers of books such as Peter F. Drucker's
The Practice of Management
(published in 1954 and translated into Japanese in 1956). Equally significant (particularly for those who contend that the contemporary
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