Chalmers Johnson - MITI and the Japanese miracle

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Attending to agriculture was certainly the most important activity of the new ministry. As Horie notes, Japan had one "God-sent" product in the form of raw silk, without which it might never have brought its trade deficit under control.

7

In addition to the supervision and promotion of agriculture, the new ministry was charged with the administration of all laws and orders relating to commerce, industry, technology, fishing, hunting, merchant shipping, inventions, trademarks, weights and measures, land reclamation, animal husbandry and veterinary affairs, forests, and the postal service. It combined functions that had been divided since the Restoration among the ministries of Finance, Civil Affairs, Industrial Affairs, and Home Affairs.

In 1885, with the success of the Matsukata reforms and the reorganization of the government into a cabinet system, MAC gave up its powers over shipping and the postal service to the new Ministry of Communications (Teishin-sho*). However, with the abolition at the same time of the old Ministry of Industrial Affairs (Kobu-sho*), it assumed control over mining. Between 1885 and the end of the century MAC's internal structure underwent several changes that finally resulted in the configuration that would last with minor variations until its dissolution: a ministerial Secretariat, six internal bureausAgricultural Affairs (Nomu* Kyoku), Commercial Affairs (Shomu* Kyoku), Industrial Affairs (Komu* Kyoku), Forestry (Sanrin Kyoku), Fisheries (Suisan Kyoku), and Mining (Kozan* Kyoku)and one semidetached bureau, the Patent Bureau (Tokkyo Kyoku), with its own secretariat.

At the end of the century MAC acquired one more very important function, management of the government-owned-and-operated Yawata steel works. In 1896, during the ninth Imperial Diet, Prime Minister Ito Hirobumi and Minister Enomoto Takeaki of MAC successfully proposed a bill for the expenditure of about ¥4 million to build an iron and steel plant. First priority for its products was to go to armaments, but any surplus could be offered for general sale. It was built in Fukuoka prefecture at Yawata village, and thus was located both in the northern Kyushu coal fields and on the Japan Sea for easy access to iron ore from China. As a result of Japan's victory in the first Sino-Japanese War of 189495, iron ore from China was readily available, and it was of higher quality than that mined domestically. Pro-

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duction at Yawata began in the autumn of 1901 and immediately accounted for 53 percent of the nation's production of pig iron and 82 percent of its rolled steel. It had no serious domestic rivals until 1911 and 1912, when the privately owned Kobe Steel Company and Nippon Kokan * Company (Japan Steel Pipe) were founded.

MAC's sponsorship and operation of the Yawata works produced an identification between the ministry and big steel that has lasted to the present day. Long after the post-World War II Allied occupation had denationalized the steel industry, the Japanese public continued to believe that MITI officials had a soft spot in their hearts for the newly created "private" Yawata Steel Company. The press regularly suggested that Yawata officials had an unfair influence over the government, and went as far as to nickname MITI the "Tokyo Office of the Yawata Steel Company."

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Certainly in 1970, at the time of the merger of the Yawata and Fuji steel companies into New Japan Steelmaking it the world's largest steel producer and recalling the old nationalized company of 1934no one in Japan thought MITI was either neutral or anything but pleased by the development. The trade and industry bureaucrats throughout this century have had a strong influence over Japan's steel industry, a relationship made all the more explicit by the Tokyo sales office of the Yawata works being located in the Ministry of Commerce and Industry building until 1934.

The creation of Yawata was the single most important achievement of MAC, but the inspiration came from the oligarchs and the military. The daily life of the ministry was always dominated by agricultural affairs. This was only natural since Japan was still predominantly an agricultural country. As late as 1914 agriculture accounted for 45.1 percent of the total national product and fishing for another 5.1 percent, while mining contributed 5.1 percent and manufacturing 44.5 percent. Manufacturing was still concentrated overwhelmingly in such light industries as textiles and foodstuffs; heavy industrymetals, machines, chemicals, and fuelsdid not comprise more than half of all manufacturing until the 193337 period.

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The ministry's internal organization reflected these proportions. From before World War I newcomers to the ministry had informally divided themselves into an agricultural career path (

nomu

*

keito

*) and a commercial and industrial career path (

shoko

*

keito

), although they often switched back and forth between each other's bureaus. The arrival after the turn of the century of the first graduates of Tokyo University Law School strengthened this separation. Technical agronomists had dominated the agricultural wing of the ministry from its

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early days, and law graduates felt at a disadvantage in competing with them in the agricultural career path. They therefore clustered in commercial and industrial administration.

There was not much work for them to do there, however. Before World War I commercial affairs and industrial affairs were always subordinate to the Agricultural Affairs Bureau, and they were regularly combined into one Commercial and Industrial Bureau (Shoko * Kyoku) as an economy measure. They were finally separated into two bureaus only in May 1919. The chief commercial function of MAC was supervising the insurance companies, the stock and commodity exchanges, and the warehousing businessall sectors of the economy that the commercial wing of the ministry would lose to other agencies by the time of the Pacific War. Industrial administration was almost nonexistent. Since the Matsukata reforms, and particularly after the creation of the Diet and the end of the 189495 war with China, the government's overall policy toward industry and foreign trade had become a more or less orthodox version of laissez faire. Even when MAC tried to take some initiative in the industrial arena, its ties with industrial leaders were weak, except for the personal relations between the oligarchs and the zaibatsu, and industrialists commonly ignored what government bureaucrats had to say.

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In any case the biggest industries were the cotton textile firms of Osaka, and they were fiercely independent and suspicious of Tokyo.

When Yamamoto Tatsuo of the Mitsubishi zaibatsu became minister of MAC in 1913, he undertook to strengthen the commercial and industrial side of the administration. With a few notable exceptions, most of its officials still represented the lingering influence of Satsuma and Choshu* retainers in the state bureaucracy. The first vice-ministers from among government service examinees did not reach the top in any ministry until 1912. In retrospect Yamamoto's most important accomplishment was the recruiting of Yoshino Shinji. Yamamoto personally went to Todai* and explained to the law faculty that he wanted some bright young law graduates for the Ministry of Agriculture and Commerce. As a result, the school's advisers steered Yoshino to MAC rather than to the more prestigious Home Affairs or Finance ministries, which he had expected to join. Yoshino recalled that when he entered the ministry in 1913 there were only three or four officials in commercial administration who had law degrees.

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Yamamoto was proud of Yoshino and took good care of him. Ten months after Yoshino had joined the ministry, Yamamoto delegated him as the resident Japanese representative to the San Francisco International Exposition of 1915. It was a superb opportunity for a young