The issue of industrial pollution and environmental damage had numerous facets. At its worst it referred to the appearance of the Minamata and
itai-itai
"diseases," caused respectively by mercury poisoning of the waters around Minamata village in Kumamoto prefecture by the Chisso Fertilizer Company and cadmium poisoning in Toyama prefecture and other locations. (In September 1969 the chief of the Tokyo Mine Safety Office, a division of MITI, committed suicide when cadmium contamination was confirmed in Gunma prefecture.)
13
Only slightly less serious was the so-called Yokkaichi asthma
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that seemed to afflict everyone in the big petrochemical complexes at Yokkaichi and Tokuyama. As the press revealed, many of these conditions had actually been diagnosed as early as 1955 but had elicited no governmental corrective measures. The blame was laid squarely at MITI's door.
More politically significant because they affected so many people were air pollution in all the major cities (it was predicted that a chic, well-designed gas mask would soon become as indispensable an item of personal daily use as the umbrella), and automobile and truck accidents (because of inadequate expenditures on highways and alleged insensitivity to safety in automobile design). Noise, crowding, and the shortage of land for housing in the big cities also led many to question the value of high-speed growth. Organizations of local residents and consumers were created to protect such things as ''sunshine rights," that is, the right of a resident not to have all sunshine blocked by an intervening high-rise. The word
kogai
* ("pollution," or more literally, "public wound") appeared in the newspapers every day.
During 1967 the Diet enacted the Pollution Countermeasures Basic Law (Kogai* Taisaku Kihon Ho, number 132 of August 3), which set standards for seven kinds of pollution: air, water, soil (added in 1970), noise, vibration, subsidence, and offensive odors. However, on MITI's insistence the Diet modified article 1 of the Ministry of Welfare's draft law to add that antipollution measures must be "in harmony with the healthy development of the economy."
14
This effectively gutted the law. But as pollution problems intensified, the politicians ultimately had no choice but to overrule the ministry. The result was the famous "pollution Diet" (
kogai kokkai
, the 64th session, November 24 to December 18, 1970), which passed some fourteen antipollution laws and removed the phrase "in harmony with the economy" from the basic law. MITI had finally gotten the point; on July 1, 1970, it renamed its Mine Safety Bureau the Environmental Protection and Safety Bureau (Kogai Hoan Kyoku) and increased its budget for dealing with industrial pollution problems from ¥274 million (1970) to ¥638 million (1971). A decade later MITI was to be credited with carrying out one of the most effective industrial cleanup campaigns in history, and in the process it also developed a thriving new industry in antipollution devices.
15
But in 1970 no one was thanking it, nor did many think that it could do the job.
In addition to being held responsible for the pollution problem, MITI was also blamed for damaging relations with the United States.
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The Nixon administration, elected in 1968, was publicly committed to obtaining limitations on Japanese exports of synthetic textiles to America, just as the Kennedy administration had earlier negotiated an "orderly marketing agreement" covering cotton textiles. Both administrations were responding to political demands from the American Textile Manufacturers Institute, who used the potent argument that imports were putting many of the blacks among their employees out of work. (It should be noted that Japan has consistently and successfully prohibited imports of leather goods on the grounds that these would compete with the domestic industries of the
burakumin
, a dispossessed minority in Japanese society.)
Nixon thought he could arrange a quid pro quo since Prime Minister Sato * had made a major political issue out of the return of Okinawa. At the Sato-Nixon* summit conference in Washington (November 1920, 1969) Nixon agreed to the precise terms Sato wanted for the return of Okinawa (without nuclear weapons), in return for which he thought he had received a promise from Sato to bring synthetic textile exports under control. The Japanese press also thought so, since it invented the slogan
ito o utte, nawa o katta
("selling thread to buy rope," meaning "trading textiles for Oki
nawa
") to characterize Sato's* diplomacy toward the United States.
16
Sato, as it turned out, could not deliver on his promise because of obstruction by both the textile industry and MITI. From September 15 to 19, 1969, a MITI on-site inspection team had toured the United States to determine the extent, if any, of damage to domestic spinners and weavers from Japanese imports. Led by Takahashi Shukuro*, the chief of MITI's Textiles Bureau, and composed of the chiefs of the First Market Section, the Fibers and Spinning Section, the Textiles Export Section, and other officials, this mission concluded that the American textile industry was thriving and that the damage caused by imports was nil. For all practical purposes this remained the Japanese position for the next two yearsthrough what was to become one of the most unproductive interactions between two allies in the postwar world, what Maeda Yasuyuki would later characterize as the "quagmire negotiations."
17
The textile dispute between Japan and the United States was only the most public and the noisiest of several economic clashes. Many of the other disputes, like that concerning textiles, also seemed to focus on MITI as the culprit. For example, following capital liberalization, MITI received a proposal from the Texas Instruments Company, which wanted to open a wholly owned subsidiary in Japan to man-
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ufacture integrated circuits. MITI sat on the proposal for some 30 months, claiming that it was giving the request "careful consideration." It then decided that the U.S. company would be permitted no more than a 50 percent ownership in conjunction with Japanese interests, that it would have to license its technology to Japanese competitors, and that it would have to limit its output until Japanese companies were better able to compete.
18
Similarly, at the time of the reversion of Okinawa, the Gulf Oil Company proposed building a refinery in Okinawa as a way of gaining access to the Japanese retail market. MITI said Gulf could not do so unless it had a Japanese partner, and when it looked as if Gulf might link up with Idemitsu Petroleum, MITI warned Idemitsu off.
19
Other issues included television exports (on June 9, 1970, Zenith charged that the Japanese were dumping TV sets in the United States, and MITI Minister Miyazawa Kiichi all but conceded the point by acknowledging that Japanese television receivers cost more in Japan than outside the country), grapefruit imports (during December 1968, the United States asked for liberalization of imports of grapefruit, tomatoes, ham, sausage, beef, and other agricultural products, but the Agriculture Ministry took a page out of MITI's book and refused), and above all joint ventures in the automobile industry.
20
With the hindsight of a decade the automobile controversy of the late 1960's seems almost laughable (during 1979 Japan sent 2.1 million cars to the United States, while the United States sent 16,224 to Japan).
21
Realistically, the issue was never one of imports of American automobiles: American manufacturers made no effort to develop models that would appeal to the Japanese market, the Japanese tariffs were too high, and American cars were too big and too expensive to operate in Japan. The issue was the desire of the American Big Three auto firms to buy into Japanese automotive companies as part of their global manufacturing and marketing strategies. Throughout late 1967 and 1968, following the first round of capital liberalization, executives of Ford, General Motors, and Chrysler were in Japan seeing whether they could find partners for joint ventures. Meanwhile, MITI was doing its best to
merge the smaller auto firms into keiretsu built around either Nissan or Toyota. As we saw in the last chapter, Sahashi had already succeeded in merging Nissan and Prince, and MITI was now extracting promises from all the other producers not to contemplate joint ventures with the Americans unless they first talked it over with the ministry. Just to make sure that nothing went wrong, MITI also mobilized its amakudari network in the auto industry: Yamamoto
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Shigenobu at Toyota, Yamazaki Ryuzo * (a former chief of the International Trade Bureau) at Nissan, Suganami Shoji* (a former chief of the Commercial Affairs Bureau of MCI) at Hino, and several others.
Unfortunately for MITI, however, it had no "old boy" contact at Mitsubishi Motors (Mitsubishi Heavy Industries before June 1, 1970) for the simple reason that Mitsubishi, of all the old zaibatsu, was the most rigorous in excluding former bureaucrats from its ranks (with one or two exceptions in Mitsubishi Trading). Moreover, as the largest and most distinguished keiretsu in the country, Mitsubishi was definitely displeased by MITI's policy of building only two auto empires, Toyota and Nissan, which left it out of this business. Mitsubishi was also less fearful of foreigners than were the trade and industry bureaucrats: Mitsubishi Petroleum had long been associated with Getty Oil; the keiretsu had entered into numerous joint ventures (Caterpillar Mitsubishi, Mitsubishi-York, Mitsubishi-TRW, Mitsubishi-Mallory, Mitsubishi-Monsanto, and so forth); and, given Mitsubishi's huge financial resources, the Japanese side in any auto deal was more likely to buy out its foreign partner than the other way around.
The stage was thus set for the biggest shock MITI ever received in its history, the announcement of May 12, 1969, that Vice-President Makita Yoichiro* of Mitsubishi Heavy Industries had returned from Detroit with an agreement with Chrysler to create a new automobile company (Mitsubishi would contribute an initial capital of ¥46 billion, or 65 percent, and Chrysler ¥16.1 billion, or 35 percent). Yoshimitsu Hisashi, the incumbent chief of the Heavy Industries Bureau, said that the announcement hit him like water poured into his ear while he was sleeping (
nemimi ni mizu da
, that is, like a "bolt from the blue"), and Vice-Minister Kumagai declared himself appalled.
22
The fallout from the Mitsubishi-Chrysler agreement was enormous. The politicians and the businessmen immediately read it as a declaration of independence by some big businessmen from MITI. On October 14, 1969, the cabinet decided to speed up the liberalization of automotive capital, now scheduling it for October 1971. The government would not approve the Mitsubishi-Chrysler deal until that time, but when the time arrived it could stall no longer. During the autumn of 1969 Mitsubishi opened assembly lines for a car called the "Colt Gallant Hardtop," which it proudly showed off to Chrysler distributors who visited Japan as a delegation during EXPO 70, the big international exposition sponsored by MITI. As soon as the date for liberalization had passed, the joint venture was put into effect and Chrysler began to sell the Mitsubishi car in the United States as the
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"Dodge Colt." As a result Mitsubishi promptly moved ahead of Toyo * Kogyo* to become Japan's number three automaker (and, as it turned out a decade later, when the U.S. number three auto manufacturer had to seek governmental assistance to stay in business, the most profitable division of Chrysler).
MITI was humiliated. Vice-Minister Kumagai was forced to call on business leaders and say that if private enterprise wanted to enter into tie-ins with foreigners, MITI would offer no objections. MITI had thought that it had a merger between Mitsubishi and Isuzu all wrapped up as a result of an agreement initialed on June 19, 1968. That naturally fell through given the new developments, and Isuzu promptly accepted another 65:35 joint venture with General Motors. MITI had more leverage over Isuzu than it did over the financially and politically powerful Mitsubishi, and it therefore rewrote the Isuzu-GM agreement in order to ensure that GM did not obtain control of the company. But MITI's plans for reorganizing the automobile industry were clearly in a shambles.
23
From a broader perspective MITI was probably lucky that these developments took place when they did. Toyota and Nissan, MITI's chosen leaders of the industry, were never in any danger of losing their positions; the joint ventures eased some of the American pressure on Japan to liberalize; and the capital that flowed to Mitsubishi and Isuzu energized them both, providing more jobs for auto workers, suppliers, and trading companies alike (C. Itoh is Isuzu's trading company, while Mitsubishi Shoji* serves Mitsubishi Motors). But regardless of how one judges the outcome of this famous incident, credit for liberalizing the automobile industry in Japan must go to Mitsubishi and not to MITI or any other element of the Japanese government.
The Mitsubishi coup led to a period of genuine confusion and turmoil within the ministry. On May 26, 1969, in an interview with the
Nihon keizai
newspaper, MITI Minister Ohira* Masayoshi said that the ministry would not interfere with what it perceived to be a new "private-sector industrial guidance model" (
minkan
shudo-kata
*), as distinct from the old "governmental industrial guidance model" (
seifu shudo-kata
).
24
This comment set off a debate within MITI and the industrial world that lasted until the oil shock in the autumn of 1973. Officials within MITI were divided on the proposed new formula for industrial policy; retired "seniors'' expressed their dismay; business leaders said that it was high time; and commentators of every hue and description contributed their opinions. Some argued that MITI had been "bitten in the hand by its pet dog," that "the grown son [industry] tends to
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forget to thank his parents [MITI] for their loving care" (this comment from Sahashi), and that the ministry was in danger of being reduced to the status of the U.S. Department of Commerce (in a word, a mere handmaiden of big business; this according to MITI, which has always claimed to represent the national interest and not the interests of industry).
On the other hand, numerous critics arose to reply that MITI had become "neurotic," that it was acting like industry's "overprotective mama," that it had become nothing more than a bureaucratic
sokaiya
* (a bully or claque hired by some managements to prevent stockholders from asking annoying questions at annual meetings), that it had shown appalling bureaucratic apathy toward the pollution problem, and that it was time for enterprises to stop "weeping in front of MITI's gate."
25
Within the ministry Amaya Naohiro, the head of the Planning Office in the Secretariat (October 1968 to June 1971), published an important treatise answering many of the ministry's critics but also calling for a "new MITI" and a "new approach to industrial policy." Amaya is MITI's best-known "house theorist." In January 1962, while serving as assistant chief of the General Affairs Section in the Secretariat, he became famous for a paper entitled "What Do the Times Require of Us?'' This was a forcefully argued defense of Sahashi's "public-private cooperation formula" and of the ministry's new emphasis on reform of the "industrial structure" as its basic policy line. Because he was then a young official, the "first Amaya thesis" struck some senior officials as a little too strong for their tastessome called him a "cheeky squirt" (
kozo
*)and he was quietly transferred to the Japanese consulate in Sydney until 1966. By 1980 he was vice-minister for international affairs, a new post created in 1976 directly under the MITI vice-minister.
The "second Amaya thesis"formally entitled "Basic Direction of the New International Trade and Industry Policy" (Shin Tsusan* Seisaku no Kihon Hoko* of June 1969)argued that the ministry must respond to changes in the public's values concerning further high-speed growth. In Amaya's view this change had occurred because Japan was beginning the transition from an advanced industrial society to a postindustrial society, and the country therefore required a change of industrial structure every bit as profound an
d as difficult to achieve as the heavy and chemical industrialization of the 1950's and 1960's.
Some of the characteristics of this new industrial structure would be (1) the growth of the tertiary sector (services) and the systematic
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enlargement of consumer goods enterprises, (2) robot-operated factories for the processing of raw materials, (3) the pyramidization of enterprises serving the high-technology assembly industries, (4) a technological revolution in the medical and educational sectors, and (5) many other developments associated with "knowledge-intensive industries." He candidly acknowledged that the ministry should lead the campaign toward internationalization, the fight against pollution, and efforts to raise the levels of product safety and consumer protection. He also accepted the "private-sector industrial guidance model," although he did not spell out what this implied.
26
The second Amaya thesis contains the nucleus of what would eventually emerge as MITI's policies governing the shift of the industrial structure during the 1970's. The first in-house reactions to it, however, were mixed. The "private-sector industrial guidance model" seemed to imply the abandonment of the vertical industrial bureaus oriented to micro policy in favor of horizontal functional bureaus oriented to macro policy. This many officials were unwilling to concede. Vice-Minister Kumagai held that industrial policy itself meant governmental intervention at the micro level; anything else was mere economic policy.
MITI and the Japanese miracle Page 45