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Japan Since 1945: The Rise of an Economic Superpower.

By the late 1980s, Japan has emerged on the word scene as a great power, not perhaps in military and political terms but certainly in economic sense. As the homology of the Soviet empire fell apart and the prima donna imprint of the American know-how and productivity began losing its luster, the economy of Japan became indisputably the second largest in the world with a capita income that, by 1987, has overtaken over the U.S.A. and any country of the OECD. Despite the international oil shocks of 1973 and 1979-80 and some other political and financial flickering convulsions, Japan continues to enjoy a very high economic growth rate to the present day: the five largest banks in the world belong to Japan; the Tokyo Stock Exchange had grown into one of the major world's financial markets; the three largest security houses in the world are Japanese; iron, steel and automobile productions surpassing that of the U.S.A. is something unheard of in the postwar era; and no nation is ever owed so much from abroad.

Although Japan today is not a military and political power in the circle of great nations, it certainly becomes a major player in the current world's strategic equation, especially with regard to the Pacific arena. Japan since 1945 is an historical overview of the various processes by which postwar Japan was transformed into an economic power which impinges upon almost all of us. This is the work of an historian from the University of Ulster, who directs his focus toward the political, economic, and financial developments in Japan, although not to the exclusion of the other social and cultural dimensions of the enormous change which has taken place since the Japan's surrender of August 15, 1945.

Structurally all the six chapters of this small volume can be grouped into three basic parts. The author uses the first part, (chapters 1-2), to retrace the present spectacular economic rise of Japan to its vital past some centuries ago. In other words, Japan's today economic success and power is merely a natural extension of a long, continuous trend of Japan's history from its feudal times to present days. Thus an analysis of Japan's history would reveal the vital lines of continuity running across three principal historical fissures: (a) the victory of the Tokugawa family in 1600 ending a prolonged period of civil war and setting up an unprecedented era of peace and openness to the outside world; (b) the Meiji Restoration in 1868 bringing down the shogunate proved to be the beginning of a thorough reform of Japanese life and the establishment of a solid foundation for the successful modernization of Japan; (c) the "guided revolution" brought about by the American occupation of 1945-52, which resulted in the dissolution of the zaibatsu (industrial monopolistic conglomerates), and the land and labor reforms. In the second part, (chapters 3-5), the reader will find a detailed and lively discussion of Japan's quest for political stability and economic growth during the postwar recovery stage of 1952-60. Professor Dennis Smith reserves the third and last part of the book, (chapters 6-7), to explain the sensational high-speed economic growth of the 1960-1973 period and the series of subtle, and not so subtle, changes in Japanese society that propel Japan into economic prominence after 1980. As Japan's position in the international elite circle of progressive, industrialized, rich nations grew, so did criticism from others. Yet, there are dark clouds in the economic sky of Japan. "Japan bashing" has become a popular activity in the U.S.A. - a prime example of various possible forms of international tension between friendly partners.

The most impressive aspects of this small volume are the concise and up-to-date treatments of postwar Japan to stimulate critical thought about the conceptual historical apparatus underlying the interpretation of Japan's postwar recovery and its emergence as an economic super-power. The book contains much worthy information. The author's main point is that Japan's spectacular economic recovery and powerful economic growth and development are not a phenomenon of "economic miracle". Japan's overall success as an economic super-power can be only attributed to some definite factors. First, it is the unique character of the American Occupation, 1945-52, which didn't threaten the Japanese national unity with divided zones such as it did occur in Germany and Korea. Under this occupation, a radical land reform, a remodeled education system, and a new constitution not only ended previously chronic conflicts in rural Japan but also created a new class of small-scale landowners and a quality-improved, better educated labor force in the aftermath of the August 1945 surrender. Second, the 1950 Korean war provides Japan the first serious postwar stimulus to its industrial activity which remained at a virtual standstill by the summer of 1945. Third, the open international business and financial climate that existed for several decades following World War II is certainly a tremendous benefit to Japan's postwar industrialization and trade. This liberal international environment in an age of worldwide trade expansion did help greatly Japan to import the latest technology from abroad without having to pay for the full costs of research and development. High levels of investment enabled a number of Japanese industries to reach and remain at the cutting edge of technology. Fourth, the keiretsu system or huge conglomerates with extraordinarily effective methods of management provides relationships between financial institutions and manufacturing industries, resulting in higher levels of investment. Fifth, an important ingredient to the sustained economic success of Japan is its long-term political stability. Between 1955 and 1993, the same conservative Liberal Democratic Party (LDP) practically monopolized government leadership and control in Japan. Sixth, the framework of cooperation and industrial relations between state government bureaucracy and private business enterprises is perhaps a factor in high-speed economic growth of Japan. In the 1950s, the Ministry of International Trade (MITI) and the Ministry of Finance had available means to influence business decisions significantly. However, this "administrative guidance" delivered to the private sector could never be all-powerful, and in many instances, was completely ignored. Nevertheless, relations between large-scale businesses and government bureaucracy remained usually close. On balance, no significant conflict between "government guidance" and the interests of private companies and industries existed.

On a purely technical level, the author has, for me at any rate, done a wondrous thing. His book provides a vital key to the understanding of the momentous transformation and rise of Japan to international political and economic prominence by giving the readers a clear historical account of the process of Japan's economic, political, and social change since August 1945.

The problem with this book is its great emphasis on historical continuity to explain Japan's postwar economic prominence. No opportunity is lost for the author, a professor of history, to point up the influence of Japan's past upon the present. The author's main points could have been even more cogently presented with the addition of professional graphics and revealing data tables to accentuate the political or economic evolution of Japan during the post World War II era. For a professional economist searching for deep insights in the manner in which the tools of his or her trade can be applied to Japan's postwar economic transformation and high-speed growth will find little help in this book. And certainly those of us who hope and believe that economic development theory and industrial management theory coupled with an analysis of the global market competition might suggest deep-rooted causes for the Japanese postwar economic miracle are doomed to disappointment. Indeed, the book suffers from a lack of any clear line of analysis from any serious economic source.

On the whole, however, this is a thoughtful historical analysis of postwar Japan. The author seeks to assist those who are either embarking on the study of postwar Japan, or who are anxious to add to their knowledge of that country. This book should bring some of Japan's central themes and problems confronting students and teachers of recent politics and international affairs into sharper focus than the regular textbook writer alone could provide. This special blend requires the author to write contemporary history of Japan that is both readable and easily understood but also accurate and scholarly. Thus, this book proves worthwhile for students, teachers, and business leaders interested in today Japan's market and society.

Dominique N. Khactu University of North Dakota
COPYRIGHT 1997 Southern Economic Association
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Copyright 1997, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Khactu, Dominique N.
Publication:Southern Economic Journal
Article Type:Book Review
Date:Jan 1, 1997
Words:1393
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