Chalmers Johnson - MITI and the Japanese miracle

Before the second Konoe cabinet was established in 1940, the mainstream factions in most ministries tried quietly to check the influence of the reform bureaucrats, whom they regarded as excessively ambitious. The promilitary bureaucrats therefore often sought transfers to Manchuria or to the cabinet-level bureaus of the economic general staff, where military influence was strong. In May 1935, when the Cabinet Research Bureau was set up, Minister Machida of MCI suggested that Yoshino take the post as first director of the bureau, but he did not insist when Yoshino refused.

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Instead, the prime minister chose Yoshida Shigeru (18851954), who must be carefully distinguished from the Foreign Ministry bureaucrat of exactly the same name who became prime minister after the war. This Yoshida was a Home Ministry bureaucrat, a member of the ultranationalist Society for the Maintenance of the National Prestige (Kokuikai), and minister of munitions in the Koiso cabinet of 1944.

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At the time of its establishment, Yoshida's Research Bureau brought together officials from the Army, Navy, Home, Finance, Commerce, Agriculture, and Communications ministries, plus two cabinet officials serving concurrently in the Resources Bureau.

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MCI sent two officials, Hashii Makoto and Fujita Kuninosuke (from January 1934 to May 1935 chief of Department One of the TIRB and after the war first a member of the American-sponsored Securities and Exchange Commission and then a professor at Chuo* University). Yoshida asked Kishi to join, but he had bigger fish to fry in MCI and in Manchuria and therefore declined. One of the two Agriculture Ministry officials at the Research Bureau was Wada Hiroo, a prominent leader of the left socialists in postwar politics.

The pronounced "new bureaucrat" coloration of both the deliberation council and the Research Bureau in the Okada cabinet produced strong denunciations by some political party and business leaders. The deliberation council soon became a dead letter and was quietly abolished when the government changed. The Research Bureau, however, persisted and became embroiled in one of the historic controversies of the early controlled-economy era. A plan like the Petroleum Industry Law of 1934 was sponsored by the Cabinet Research Bureau for the reorganization and state control of the electric power generating and distributing industry. In this instance, however, the owners of the companies resisted fiercely, and business leaders denounced the bureau for its advocacy of "bureaucratic fascism" and ''state socialism."

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After two years of bitter debate in and out of the Diet, the bureaucrats finally achieved control over electricity through the Electric Power Control Law of 1938. They had wanted to nationalize the electric power industry, but they had to settle for public management and private ownership in order to get any law at all. Several revisions were needed, but when the law was fully implemented in September 1941, it forcibly merged 33 generating companies and 70 distributing companies into 9 public utilities under the control and supervision of the Electric Power Bureau of the Ministry of Communications. It was one of the most impressive reforms of "industrial structure" of the prewar period. The Electric Power Control Law is important to the history of MITI because the creation of the Ministry of Munitions in 1943 moved the Electric Power Bureau from the Ministry of Communications into MITI's line of descent. All nine companies created by the 1938 law exist today, except that they are now private utilities (Tokyo Electric Power is the world's largest privately owned utility), and all are still under the supervision and guidance of MITI.

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If the Teijin case of 1934 marked the beginnings of the reform bureaucrats, the abortive military coup d'etat of 1936 transformed the political system and brought them into prominence. It also initiated the struggle between bureaucrats who favored state control of the economy and private industrialists who favored self-imposed control, a struggle that would last until the end of the Pacific War. Within MCI the military uprising alarmed many otherwise complacent bureaucrats; Yoshino acknowledges that in the wake of the incident he lost control of the ministry. Before the year was out he and Kishi would be fired. The military was riding high in the cabinet, but within the ministries some passive resistance to the militarists and their friends was developing. Business leaders also began to turn cautiously against the Yoshino-Kishi line, but they could not speak out openly because of the fear of assassination. However, in order to obtain the cooperation of industry, the military found that it had to compromise on whom it recommended for MCI minister and to tolerate ministers who came from or were acceptable to business.

One such compromise choice as minister of MCI was Ogawa Gotaro * (18761945), a former Kyoto University professor of economics and an elected member of the House of Representatives since 1917.

*

Ogawa made it known that he intended "to eliminate the control faction in MCI," and he had several reasons for wanting to do so. First, he was from Kansai and reflected the Osaka business world's hostility to the controlled economy. Second, he was worried about working with a vice-minister who had been in office for five years and who might try to upstage him. Third, as a leader of the Minseito*, he did not like Yoshino's Seiyukai* leanings or Kishi's ties with Choshu* political and industrial figures (for example, with Matsuoka Yosuke*, then president of the South Manchurian Railroad, foreign minister at the time of the Axis alliance, and the uncle of Sato* Hiroko, the wife of Kishi's brother Eisaku). Finally, Ogawa evidently distrusted both Yo-

*

Ogawa became MCI minister in the Hirota cabinet following the death after only a few weeks in office of Kawasaki Takukichi. Kawasaki had originally been selected as home minister, but the army vetoed him because he was one of Machida Chuji's* lieutenants, and he went instead to MCI.

Interestingly enough, Ogawa died on April 1, 1945, in the torpedoing of the

Awa Maru

in the Taiwan Straits by a U.S. submarine. The

Awa Maru

was supposed to be carrying noncombatants and relief supplies for Allied prisoners of war, but some Americans believed that the Japanese were using the passage of the

Awa Maru

to return gold and important people to the home islands. About 2,045 passengers were killed. In April 1949 the

Awa

incident became a political issue when the Yoshida government abandoned efforts to obtain an indemnity from the United States because of U.S. aid to Japan's postwar reconstruction. Ogawa was, in fact, returning to Japan after serving as supreme adviser to the Burmese government.

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shino and Kishi, but particularly Kishi because of his involvement in the protests against pay cuts a few years earlier.

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Ogawa offered Yoshino the presidency of the newly established Tohoku* (Northeast) Industrial Development Company, a Japanese version of the Tennessee Valley Authority for the development of a backward region. And Ogawa said to Kishi that the Kwantung Army had strongly requested Kishi's services in the Manchurian government (which was true). Yoshino contemplated refusing to resign on grounds that as an Imperial official he could not be dismissed, but he thought better of it. He realized that he had remained as vice-minister too long and was aware that junior officials in the ministry were holding meetings about the political situation from which he was excluded.