The desirability of democratizing the Japanese political system in order to make it less military may have been obvious enough, but it is more surprising that the Americans realized that Japan needed a thoroughgoing economic and social transformation in order to strengthen the foundation for these democratic reforms. The American record at home and abroad does not usually make one associate the United States with economic and social revolution. The wartime planners, however, had come to realize that a more equitable division of wealth, power, and opportunity would help create a more stable and peaceful society in Japan. The usual justification for the somewhat uncharacteristic American revolutionary zeal in Japan was that Japanese society was so thoroughly evil that only drastic measures could correct it. This justification was in part the result of ignorance and in part the product of Marxist interpretations, which prevailed at this time in the United States with regard to Japan and lasted until swept away by the Cold War then developing between the United States and the Soviet Union. But however wrong the diagnosis, the medicine proved efficacious. MacArthur turned out to be the most radical, one might even say unconsciously socialistic, leader the United States ever produced, and also one of the most successful. But of course revolutionary change is easier to effect through arbitrary military power in someone else’s country than through democratic means at home.
One of the few specific reforms called for in the Initial Post Surrender Policy for Japan was the dissolution of the zaibatsu combines, which were singled out on the questionable Marxist reasoning that great concentrations of commercial and industrial wealth were the root source of Japanese militarism and imperialist expansion. The central holding companies of the zaibatsu were dissolved, the zaibatsu families and their high executives were purged, the bulk of their assets were taken over by the government for future disposal, and the wealth of the individual members of the zaibatsu families was all but eliminated, first by wartime destruction and then by a capital levy that ran up to 90 percent. Steeply graduated income and inheritance taxes were also imposed, making the future accumulation of great wealth much more difficult than in the past. As a consequence, the Mitsui and other zaibatsu families were reduced to modest affluence and political irrelevance, and Japan today has one of the most even distributions of wealth of any country in the world.
The zaibatsu combines were dissolved into their various component companies, and at first it was planned to further break up more than 300 of these in an operation reminiscent of “trust-busting” efforts in the United States. This program, however, proved both difficult and inadvisable in the face of continuing economic stagnation in Japan and by 1949 was scaled down to affect less than a score of companies. Because of the failure to break up most of the component corporations in the zaibatsu combines, it is frequently asserted that the zaibatsu system has been restored in Japan. This is quite incorrect. Old names, such as Mitsui, Mitsubishi, and Sumitomo, were retained or later revived, and the former corporate members of old combines have established informal, somewhat clublike relations with one another. Natural growth and mergers have made many of the giant corporations comparable to those of the United States. But the integration of Japan’s postwar business and industry is quite different from the prewar system, with the old zaibatsu groupings playing only a peripheral role and the zaibatsu families none at all. Former member companies of zaibatsu combines may have a closer relationship with one another than with other companies, but far more important are the associations of firms in certain lines of enterprise, such as steel, electric power, or banking, and the overarching Federation of Economic Organizations, or Keidanren, which was founded in 1946 and grew to be a major guiding force in the development of big business and the whole Japanese economy.
Paralleling zaibatsu deconcentration was the effort to develop the political consciousness and power of industrial labor and the peasantry. Labor legislation was revised to conform to the most advanced concepts of Europe and the United States, and veteran Japanese labor leaders from the twenties, with the active encouragement of the occupation, built up a rapidly burgeoning and often violently assertive labor movement. By 1949 more than 6.5 million workers had joined labor unions. From the start, the movement differed from that of the United States in that the communists controlled a large share of the unions for a while and a high percentage of the organized workers were government employees—teachers, white collar workers in government offices, or laborers in the national railways or in other nationalized industries. As a result, the occupation authorities soon discovered, to their distress, that organized labor often showed less interest in bargaining with management than in political agitation, which seemed to them a more direct way to affect government wage scales or achieve communist goals.
The most sweeping and successful of all the occupation reforms was aimed at improving the lot of tenant farmers and awakening their political consciousness. This was the land reform program, which appears to have been one of the few major reforms MacArthur sponsored primarily on his own authority, though with considerable assistance from Japanese specialists. Started late, it was largely carried out between 1947 and 1949. Tenant-operated land, which had remained at about 45 percent since early in the century, was reduced to less than 10 percent by banning all absentee landowners and permitting the ownership of only a small amount of agricultural land beyond the area cultivated by a farm family itself. Generous credit terms and a runaway inflation made it easy for the tenant cultivators to acquire the land and reduced the recompense to the former owners to only a penny on the dollar in real terms. However socially salutary the results may have been, this was the kind of reform that could never have been carried out through democratic procedures; external power was necessary. It left the average Japanese farm a mere 2.5 acres in size, which in later, more prosperous times was a serious handicap, but it established a stable, egalitarian, and satisfied farming population, determined to retain its rights in the new democratic age.
The occupation authorities also carried out a wide range of social and educational reforms in order to strengthen respect for the individual and the equality of all citizens, as called for in the constitution. The peerage was abolished and, with the exception of the emperor and his immediate family, all titles were dropped. Women, who had already been pushed into more independent economic roles during the war years, were now given full legal equality with men in every way and began to gain greater social equality. The authority of the family head over other adult members and over branch families, a survival from the feudal past, was eliminated.
From the start elementary education had been egalitarian, but now an effort was made to reduce the elitist flavor of the higher levels of schooling and to shift the emphasis throughout from rote memory work and indoctrination to thinking for oneself as a member of a democratic society. Textbooks were entirely revised to eliminate militaristic and nationalistic propaganda, and the old courses on ethics, which were thought to have inculcated these doctrines, were banned in favor of new courses in the social sciences. There was no great difficulty in extending compulsory education from six to nine years, because even before the war most children had sought some education beyond the required six years. The standing of schools at each level was equalized, at least in theory, so that the next level of education would be open to all those who had completed the preceding one. In addition, the levels beyond the initial six years of primary school were made to conform to those then customary in America: the three-year junior high school, three-year senior high school, and four-year college, or university as it is always called in Japan. In the process, most of the old five-year middle schools added another year to include both junior and senior high schools, while the various types of three-year higher schools, by dropping their lowest year, adding two higher years, and then combining with other higher schools, became multi-faculty universities, equaling the old prewar universities in name if not in reality or prestige.
Tremendous confusion
was caused by the shift from what the Japanese called the 6–5–3–3 school system, referring to the number of years at each level, to the American 6–3–3–4 system. The sudden jump in the number of universities and the great increase in students attending the higher levels of education, together with the elimination of one year at the top of the system, also resulted in a substantial lowering of university standards. All this was deeply resented by many Japanese. On the other hand, the new system did widen educational opportunities beyond the elementary level, and the new emphases, particularly in the lower grades, produced in time what almost seemed a new breed of young Japanese—more direct, casual, and undisciplined than their prewar predecessors, but at the same time more independent, spontaneous, and lively.
Japanese intellectuals have always drawn a sharp distinction between the early reforming years of the occupation, of which they in general approved, and the occupation’s later years, when a 180-degree turn to conservative and even reactionary policies was thought to have occurred. It is true that during 1947 and 1948 there was a general shift in the spirit and emphasis of the occupation. By that time most major reforms had been completed or else were well under way. The focus of interest began to shift from reform to economic recovery, as the success of the reforms now seemed less doubtful than the economic viability of Japan itself. In 1946 industrial production had dropped to a seventh of what it had been in 1941, and even agricultural production was down to three-fifths. Meanwhile the population, under the impact of the return of 6 million Japanese from abroad and the postwar baby boom resulting from the reunion of long-separated families, had soared to around 80 million. It seemed doubtful that adequate sustenance for that many people could ever be found on so narrow a geographic base. The sweeping reform programs had forced the government to live beyond its means, contributing to a rampant inflation of more than a hundredfold, while the possibility of further reforms made it difficult to stabilize the economy and start its reconstruction.
Japan had suffered considerably more from the war than any of the other major combatants and had recovered appreciably less. The Japanese were living at a bare subsistence level, and at that on American largess—a dole of close to half a billion dollars a year. In the long run, democracy or political stability of any sort would be impossible without economic stability. Political and social reforms, however desirable in themselves, had little chance for eventual success without a sound economic foundation.
Outside of Japan, the world situation also contributed to the change in the spirit of the occupation. At the end of the war Japan had been a defeated, isolated nation facing a united, triumphant world. There seemed ample time for reform, and its economic progress seemed to be a matter of concern for the Japanese alone. But the unity of the outside world had withered in the chill winds of the Cold War. By the autumn of 1948 it was clear that the Communists were winning the civil war in China. Much of the rest of Asia was in chaos. There was obviously no united world, but a growing division into what seemed at the time to be two hostile camps, with Japan standing on the border between them both geographically and politically. MacArthur and his staff still concentrated on reforming Japan, but in Washington Japan was seen as a potential battlefield in the Cold War and, because of its once considerable industrial power, possibly an important factor in the worldwide contest.
Economic recovery thus became a major objective in itself, and reforms that seemed to conflict with it were modified or dropped. It was at this time that the effort to break up the larger industrial firms was scaled down and the attempt to distribute Japan’s supposed excess industrial facilities as reparations was abandoned. On the basis of the recommendations made in April 1949 by the Dodge Mission, which was headed by a Detroit banker of that name, the Japanese government embarked on a program of severe fiscal austerity. It managed to stabilize the yen at 360 to one American dollar, as opposed to the prewar ratio of about 3 to 1. Labor union activities that might endanger production were restricted. As early as February 1, 1947, the occupation had stopped a proposed general strike, and in July 1948 it prohibited strikes by civil servants and government employees—a policy that became a major source of political controversy for a long time. Japanese industrialists took advantage of the retrenchment enforced by the recommendations of the Dodge Mission to carry out a so-called Red purge of troublesome leftist activists from their payrolls.
The forces of the Left in Japanese society, which had at first enthusiastically welcomed the occupation reforms as helping to achieve their own objectives, now felt betrayed by the Americans. More conservative Japanese, while disapproving of many of the reforms, began to look upon the Americans as allies in stemming leftist pressures within Japan. Both sides, however, were becoming tired of the occupation. The despair and confusion of the early postwar years were wearing off, and most Japanese had come to realize that not all that was distinctively Japanese was bad and not all that the Americans were attempting was wise. They became increasingly irritated with the arrogant self-assurance of the Americans and resentful of the privileges and luxuries the Americans had provided for themselves, often at the expense and inconvenience of the impoverished Japanese. Resentment of this sort was inevitable in such a situation, and though it was surprisingly slow to develop, it became an increasingly important factor.
The occupation, too, had lost much of its earlier élan. The youthful and somewhat undisciplined draftees who had taken the place of the original war veterans in the army of occupation could not command the respect of the Japanese public. The civilian employees and professional military officers on routine assignments who succeeded to the posts of many of the original staff officers, while conscientious and devoted workers for the most part, could not recapture the full enthusiasm of those they replaced. Also, the military organization of the occupation was increasingly getting in the way of the reforms it was trying to achieve. There was, after all, a basic contradiction between the absolute authority of an external military force and the development of democratic institutions, and this became clearer with each passing year. The time to end the occupation had obviously come. Its very nature and the opposition it was starting to stir up against itself were beginning to militate against the success of the reforms it had initiated. There was a definite limit to what could be accomplished by foreign dictate.
In 1947 Washington had begun efforts to end the occupation through a peace treaty, but in a divided world this was not easy to do. The Soviet Union blocked all attempts to hold a peace conference by insisting that the peace settlement should be decided solely by the great powers and that the Soviet Union must have a veto in such decisions. The resulting impasse prolonged the occupation for several years. Eventually the United States decided to proceed without Soviet participation if the Soviet Union would not change its stand. In April 1950 John Foster Dulles, later secretary of state, was put in charge of preparing a peace treaty, and in September the United States announced its intention. Dulles started bilateral negotiations with the various countries involved and in this way worked out the text of the peace treaty in advance of the peace conference.
The occupation was obviously entering a new and final phase. The terms of its liquidation were already being drafted, and Japanese and Americans alike looked forward to the imminent restoration of Japanese sovereignty. Earlier plans for the peace treaty had envisaged certain formal Allied controls over Japan lasting for many years. The long delay in the treaty, however, had made such controls undesirable. Japan was to be restored to full sovereignty and would soon be in a position to revise the postwar reforms as it saw fit. The remaining days of the occupation provided a transition period in which the Japanese could resume responsibility for their own affairs and start the inevitable process of adapting and revising the work of the occupation.
This transfer of authority was accelerated by two external developments. One was the invasion of South Korea by the Communist regime of North Korea on June 25, 1950, and the hea
vy involvement of the United States in the war that resulted. The attention of the American authorities in Japan and of the government in Washington became focused primarily on military developments in Korea rather than on reforms in Japan. At the same time, the Korean war brought a sharp increase in American purchases of goods and services in Japan, markedly improving the economic situation there. Thus Japanese self-confidence and economic strength both grew just when American interest in domestic Japanese affairs declined.
Then, as a by-product of the Korean war, MacArthur was dismissed on April 11, 1951. At first the Japanese were shocked and apprehensive lest this meant a sudden change in American policy toward Japan. When they saw this was not the case, they were not only greatly relieved, but they also began to look upon the dismissal as a valuable object lesson in democracy. For all the American preaching about democracy during the earlier occupation years, the Japanese were still deeply impressed to see that a single message from the American civil government could in actuality end the authority of a great military pro-consul, who to them had seemed all-powerful. MacArthur’s unintentional last lesson in democracy for the Japanese was by no means his least.
Since MacArthur’s role had been unique, his successor as SCAP and as military commander in the area could not really take his place in Japan. Wisely, he made no attempt to do so but instead encouraged the Japanese to assume leadership with only a minimum of direction from the occupation authorities. The transition from occupation to independence was now fully under way. Already the Japanese were being allowed to resume normal relations with the outside world. The process of revision had started and was most clearly seen in the growing numbers of persons and groups removed from the purge classification. When the peace treaty was signed in San Francisco on September 8, 1951, it was only one incident in the process of transition—a clarification of the rules for the formal transfer of authority, which finally took place when the treaty went into effect on April 28, 1952.
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