Postwar Japan, 1952-1989

Postwar Japan, 1952-1989

Editor's Note: This article was originally written for Japan Society's previous site for educators, "Journey through Japan," in 2003.

Postwar Japan – here defined as the period between the end of the Allied Occupation of Japan in 1952 and the death of the Showa Emperor (Hirohito) in 1989 – was a period of extraordinary change in Japan. As it moved from a badly defeated and economically depressed nation to the world’s second biggest economy, historians debated about the quality of life in Japan. Admirers of Japan (popularly known as “Chrysanthemum Clubbers”) focused on that nation’s long life expectancy, high literacy rate, relatively even distribution of wealth and low crime statistics to suggest that Japan’s “economic miracle” might provide lessons for other developing countries. Detractors (popularly known as “Japan Bashers” or “Revisionists”) countered this rosy view by noting that Japan’s high growth had been built through the hard work of its citizens, and pointed to such problems as environmental pollution, relatively long working hours, political corruption and pressures to conform. Complicating the issue was the question of whether the quality of life in Japan should be compared to others countries, or held to a more perfect, and perhaps unattainable, standard.

1. The “Economic Miracle”

Postwar Japan’s first task was to settle the political system. In the immediate post-Occupation period, progressives bitterly denounced attempts by conservatives to turn back the reforms passed during the Allied Occupation of Japan (1945-1952); in several stormy sessions in the 1950’s, the police had to be called into the National Diet to restore order. Debates were complicated by the fact that both left and right wing politicians were divided into factions that often argued bitterly among themselves. In October 1955, the Japan Socialist Party (JSP) united many of the progressive factions, at least superficially, while a month later the Liberal Democratic Party (LDP), despite its progressive sounding name, brought together many of the conservative factions. The Liberal Democratic Party won all of the elections in this period, but got into serious trouble in 1960 when Prime Minister Kishi Nobusuke (Prime Minister 1957-1960) rammed a renewal of the 1952 US- Japan Mutual Security Treaty through the Diet over the fierce objections of the Socialists. Kishi was unpopular with progressives because he had served in General Tojo Hideki’s wartime cabinet (1941-1944) and, indeed, had been accused but not tried, by the Allied Occupation forces for alleged war crimes. His opponents objected not only to the idea that Japan should ally with the United States in the Cold War, but also to the way in which Kishi got the police to drag opposition members out of the room in order to get the Mutual Security Treaty passed in the Diet. Major street demonstrations quickly broke out, and became even more intense after a student protester was accidentally killed. The riots did not stop the treaty from being renewed, but they did force Kishi’s resignation, and thus, perhaps ironically, showed that Japanese citizens were prepared to take to the streets to defend their new found parliamentary democracy.

Kishi was succeeded after 1960 by several LDP (Liberal Democratic Party) Prime Ministers who cleverly turned the debates away from more controversial political issues to a plan to double Japan’s economy within a decade. While this plan had to be adjusted as time went on, the LDP from now on was associated with high growth and the American alliance; the JSP (Japan Socialist Party), the Japan Communist Party and other Marxist groups, by contrast, seemed too tied to radical unions and unpopular positions for many Japanese voters to accept. Helped by its ability to provide generous grants to favored groups and electoral laws that gave relatively conservative rural districts more voting power than urban ones, the LDP regularly won about twice as many seats in the Diet as the progressive parties. The LDP Prime Ministers tended not to very dynamic or to stay in power long. Factional fighting and periodic scandals also marred their rule, but overall, the conservatives kept Japan relatively stable politically.

This stability in turn encouraged what has often been called Japan’s “Economic Miracle.” In simplest terms, this referred to the fact that Japan’s Gross Domestic Product (GDP) increased by a rather amazingly large average of 9.2% between 1956 and 1973, and even after the world recession caused by the rise in oil prices in the 1970’s, still grew by an average 4.1% up through 1989. Helped by record outputs of such manufactured goods as ships, electronic equipment and cars, the “economic miracle” quickly transformed this small island nation into one of the world’s top economic giants. Exchange rates may have made the figure somewhat misleading, but by 1987, Japan had a higher per capita GDP than the United States. Certainly a poor country was now statistically rich.

In broader terms, the term “economic miracle,” however simplistic, also reflected the fact that enormous social changes took place with relatively little disruption. During this period, the population of Japan grew from 85.8 million people to over 123 million. The percentage of Japanese living in rural areas dropped from roughly 50% of the population to perhaps (depending on how “rural” is defined) 15%; the percentage of full time farmers dropped even more. The number of traditional ie or multigenerational, patriarchic families remained, but their percentage also dropped significantly in relation to the total number of Japanese families. As Japan’s admirers (Chrysanthemum Clubbers) were quick to point out, these changes were accompanied by an increase in real incomes, a relatively narrow gap between rich in poor, a decrease in crime, high literacy and low divorce. All this, they claimed, deserved to be called a “miracle.”

Emblematic picture of a shinkansen ("bullet train") passing in front of a Buddhist temple in 1966.
Credit: Donated by Corbis-Bettmann

2. Explaining the Miracle

Was growth really that miraculous? To answer this question, we need first to recognize that the rise in population noted above greatly increased the absolute numbers of the work force. Furthermore, because Japan had few old people at the time and a relatively low birth rate, the percentage of the population that was working also dramatically increased. Many of these workers were moving from relative low productivity rural jobs to more high-tech urban ones. Helped by a favorable geographic location in the middle of the rich raw materials and consumer markets of the Pacific rim countries, the availability of technology that could be purchased cheaply, low defense expenditures, cheap raw materials (at least until the 1970’s), a favorable exchange rate deliberately set by the United States at Y360 to $1, and open export markets, Japan was bound, “miracle” or not, to overcome the two decades of lean years caused by militarism and war. To this must be added such human factors as a legal system that encouraged big business, an education system geared to producing highly skilled workers and a high rate of personal savings (up to 25% of family income or four times that of the average US family in this period) that helped Japan find capital to invest in export oriented industries.
These basic factors were reflected in a government-business alliance that Chalmers Johnson has called a “Plan Rational” or “Developmental State” system. Unlike a purely capitalist system that tries to limit government interference in the economy or a more devoutly socialist model that urges the government to regulate business for social justice, Johnson argues, the Japanese government in this period sought to increase GDP growth by encouraging business but limiting “excessive competition.” Central to this process was the role of such key government offices as the Ministry of Finance, the Bank of Japan and the Ministry of International Trade and Industry (MITI). These highly trained and capable bureaucrats helped regulate Japan’s banks and trading companies, which provided long term loans to various companies, who were in turn closely linked (in a so-called horizontal keiretsu) to other powerful businesses and/or (in a vertical keiretsu) to their suppliers and dealers. Put simply, the public’s desire for high growth, LDP dominance, an expanding pool of able workers and an effective bureaucracy combined to help the government encourage certain key export oriented economic alliances.

Central to all this was a business practice known as the “permanent employment system”. The notion that firms would rarely let workers be fired, it should be emphasized, was almost exclusively limited to males in the more prosperous large companies or hence to no more than 30% of the work force; it was necessarily balanced by temporary workers, many of them “OL” or “office ladies” who worked for a few years before retiring to marry and raise a family. In return for job security, these Japanese men joined enterprise unions rather than, as in the US, craft unions. They tended to work hard, be flexible in their job assignments, strike less and socialize more with their workmates than with their families. Though their wages and bonuses did not always keep up with their productivity improvements, their real wages did increase each year, and their lives got better. Conscious that they were helping to rebuild a Japan that could complete in an often hostile world, the “salary-man,” as they were known in Japanese, worked hard and were generally proud of their contribution to the country.

Beyond these privileged firms, to be sure, were large numbers of less favored small industries, retail stores, and “Mom and Pop” shops. Though less protected – bankruptcies were frequent – these groups were helped by various pieces of legislation that, for example, required large scale businesses to seek approval from possible competitors before moving their stores into a new area. Farmers in turn received tax breaks and protection from cheaper US and Asian rice imports. Fully aware that unemployment and rural distress in the 1930’s had encouraged militarism, Japan’s “Plan Rational” system supplemented its aid to key industries by policies aimed at keeping full employment. Partly as a result of that policy, the economy grew throughout this period, wealth in Japan was fairly evenly distributed, and life seemed to be getting steadily better.

3. The Costs of Growth

As even Japan’s staunchest defenders would have to admit, however, this “economic miracle” was not without social costs. By the early 1960’s, for example, it became apparent that a number of Japanese were suffering horrible illnesses because certain big companies dumped pollutants into the air and waters near their residences. As Frank Upham has shown, the victims were often embarrassed by their painful illnesses and reluctant to sue, not least because both the government and the courts were slow to act. By the late 1960’s, on the other hand, pollution had become so bad that citizen’s movements felt justified in speaking out. Characteristically, the same courts that had once tried to enforce social harmony by siding with the companies now retreated from their strict standards of proof and chastised the polluters. Similarly, the LDP, though still advocating high GDP growth, now pushed new anti-pollution laws through the Diet in 1967. While the pollution cases have often been cited as a good example of how Japanese authorities will react to social issues, changes occurred only when a minor problem had become a major one. Overall, some pollution was perhaps inevitable in such a highly crowded and rapidly industrializing small country.

Picture of Tokyo on mid-afternoon of December 24, 1964, when smog caused darkness at mid-day.
Credit: Donated by Corbis-Bettmann

Education also became a matter of concern. Thanks to increasing prosperity and Allied Occupation (1945-1952) reforms that created a standardized curriculum throughout the country, the percentage of Japanese children graduating from high school gradually increased to about 95% of the age cohort, the highest percentage in the world. The number going on to higher education shot up to roughly 40%, this time tied with the US for the highest. While this was obviously all to the good, both the high schools and the colleges were highly stratified, with the best universities (such as Tokyo University and Kyoto University) being simultaneously the oldest, the best endowed, the most highly connected to powerful alumni and the cheapest.

Japan thus had a college entrance problem. Because getting into a good university made such a difference in future life choices, competition was keen; because competition was keen, individual college entrance examinations stressing rather dull objective (multiple choice) questions were normally considered the fairest (or most objective) way of judging student abilities, and hence were characteristically the sole key to admissions. Special tutoring schools offering after school or postgraduate cram courses geared to these examinations quickly became a crucial part of student lives. Critics protested that excessive studying for these tests in the high school years led to the accumulation of useless factual knowledge, poor social skills and (as a reaction to long hours of study in high school) wasted years in college. They also noted that while the examinations were defended as a completely objective test of who worked the hardest, children of wealthier families able to provide a cultured home life and finance after school tutoring inevitably did better. Supporters still insisted that the exams were fair.

“Examination Hell,” as this system was called, was linked in the minds of many to women’s issues in Japan. During this period, women admittedly became better educated, wealthier and more urban. On average, they married later, had fewer children and lived longer, thereby increasing the time that they had available for other pursuits. Unfortunately career opportunities did not keep pace with these changes. Barriers to more executive positions included that fact that the expensive and physically demanding studying required to pass “Examination Hell” and get into an elite university was regarded as something only boys should do. Most women thus skipped cram schools and the examinations, and went instead to less demanding junior colleges.

Other barriers to full equality also existed. Tax laws, for example, penalized couples where the spouse made more than a certain amount of money. A lack of proper day care for both children and old people also hurt married couples seeking dual careers. Adding to the problem was the fact that for many women, not having to work as hard as their farm ancestors or put in the long hours of the salary-man seemed highly desirable. Many women in this period thus became “OL” or temporary “office ladies” (workers) performing useful but not highly paid tasks until marriage age. Then a role as a stay home mother, cynically defined as “three meals and a nap”, seemed a natural role to play.
Meanwhile, the rise of so-called “New Religions” marked a surprising new era in Japan’s rich religious history. The Soka Gakkai (Value Creation Society), for example, was actually started prior to World War Two, but merits the “New Religion” designation because it only really became popular during this period of high growth. Technically a lay organization supporting the highly nationalistic 13th century priest Nichiren, its theology was a bit obscure, but basically provided close neighborhood associations, spectacular pageantry and ethical justification to those who left farm and family to seek their fortune in the city. Soka Gakkai also created the Clean Government Party (Komeito) that played an important role in politics. Other New Religions similarly provided what some have called a “bridge’ between the traditional and the modern. Their rise testified to spiritual needs that the traditional mix of Shinto, Confucian and Buddhist rituals was not meeting.

Trade issues presented a different sort of problem. As noted above, the United States had initially been worried about Japan’s economy, and so had encouraged a very favorable exchange rate of Y360 to $1. The relatively cheap sale of technology, Japan’s relatively low defense expenditures (limited by custom to about 1% of the gross domestic product versus 6-9% for the US) and quite open US and Western markets also helped encourage the growth of export industries. Perhaps the greatest American gift was to become complacent about the manufactured goods that they were producing. By the 1970’s, hardworking Japanese firms had improved on such American inventions as the car, the transistor and the VCR to make extremely high quality goods that easily appealed to US buyers. Soon the United States bi-lateral trade deficit was as high as $60 billion dollars a year.

In an effort to solve the problem, negotiators in the so-called Plaza Accord of 1985 (negotiated at New York’s Plaza Hotel) agreed to intervene in world money markets to increase the value of the yen. Designed to make Japanese exports more expensive, but imports to Japan cheaper and hence more attractive, the negotiators overlooked both the fact that the Japanese could now keep their export prices down by importing raw materials more cheaply, and that the powerful Ministry of Finance would counter pressures to raise the value of the yen by putting more money into circulation. The increase in the money supply led to speculative boom or “bubble” in which Japanese firms began buying such American icons as Columbia pictures and the Rockefeller Center. This led to openly hostile demonstrations against an alleged Japanese takeover of the US economy. Meanwhile “Japan Basher” critics of Japan such as Chalmers Johnson (quoted above) argue that Japan had a totally different economic system that American free trade notions could not cope with. The “trade war” in this period was intense.
Other problems lurked just beneath the surface. Many people thought that Japan had yet to solve such war related problems as a need to apologize for its colonialism and its enslavement of “comfort women” (prostitutes). Critics pointed to relatively poor housing and public park space and spoke of “rich Japan, poor Japanese.” Others sneered that Japan was an “economic giant but a political pigmy,” or noted that Japanese claims of a homogenous nation was contradicted by bigotry towards the Ainu in the north and resident Koreans, guest workers and Burakumin (people of the buraku, or ghetto; “untouchables”) elsewhere. A society that claimed that “the nail that sticks out gets hammered,” Japan Bashers noted, was not inclined to respect individuality.

4. Constructing a Balance Sheet

In January, 1989, the Showa Emperor died, ending Japan’s longest imperial reign. His time on the throne had taken him through economic depression, war and foreign occupation to an era in which Japan still played only a minor role on the diplomatic stage, but had now became a world economic power. What sort of country was created?

In accessing Japan in this period, much depends on the standard of judgment being used. Japanese democracy was hardly perfect, for example, and yet it looked reasonably law abiding and reliable when compared with most of the other political systems in the world. Similarly, environmental problems existed and yet much progress was made. Education might appear to Americans to have too much stress and rote learning of useless trivia, and yet the majority of Japanese children clearly enjoyed both school and the opportunities that the newly opened educational system provided them. Again, American negotiations might well complain about Japan’s relatively closed markets, and yet defenders of Japan (Chrysanthemum Clubbers) also had a point when they retorted that Americans needed to lower the US deficit (as this was making the dollar expensive), provide better training for their workers, adapt their products to the Japanese market and realize that since the US population was roughly twice that of Japan, large trade deficits were inevitable. Finally, critics could easily find evidence of sexism and racism in Japan, and yet the United States in this era was itself hardly free of guilt.

In broadest terms, then, both admirers of Japan (Chrysanthemum Clubbers) and detractors (Japan Bashers) could each construct good arguments about the quality of life in Japan in this period; much would depend on the standards by which each side attempted to judge Japan. The Japanese themselves were surely not of one mind about the issues. Yet most ordinary Japanese seemed to agree that by the end of this era, Japan had radically changed – and for the better. Critical of continuing problems yet conscious of how far they had come since the grim days of World War Two, the generation that rebuilt Japan looked with pride on all that had been accomplished.


Type,Article; Topic,Government; Theme,History; Topic,History-Modern; Topic,Politics; Topic,Popular Culture; Theme,Postwar Japan;
modern Japan, economics, industry