Chalmers Johnson - MITI and the Japanese miracle

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The TMCB did not work well. Among its many problems were conflicts of jurisdiction within MCI itselfparticularly among the TMCB, the Trade Bureau, and the Fuel Bureauand externally with the Ministry of Finance over the licensing of imports and the use of foreign exchange. The conflict with the Finance Ministry led in December

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1941 to MCI's surrendering its long-standing control over the insurance business and over the stock and commodity exchanges in return for control over import and export licensesa change that made MCI even more exclusively an industrial policy agency, and that established the link, seen again later in MITI, between industrial policy and trade. Conflicts also occurred between MCI officials and the military and between MCI officials and the Cabinet Planning Board. As a line organization, the ministry tried repeatedly to convince the staff of the CPB that drafting and executing a plan were two different things: zaibatsu firms were in competition with each other, skilled manpower was in short supply, capital availability was a problem, black markets were appearing, and the military regularly made direct deals on its own.

During the second half of 1938, the quality of life in Japan went rapidly downhill, and this, too, contributed to the TMCB's troubles. The revised materials mobilization plan halved imports for the civilian sector and drove innumerable medium and smaller enterprises out of business. By one estimate some 390,000 bankruptcies occurred during August 1938 alone.

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During the same month the Home Ministry deployed what the public called the "economic police." This involved the stationing in all police offices of twelve or thirteen procurators and investigators who specialized in "economic crimes" and tried to control the black markets and maintain official prices. The TMCB thus became distinctly unpopular with the citizenry.

Perhaps the main reason the bureau did not work well was the persistent difference in political outlook that existed between MCI under Murase and the reform bureaucrats. Shiina says bluntly that both Murase and Takeuchi Kakichi, the TMCB's only deputy directors during its short existence, did not get along well with the military and sought to create their own factions as counters to those of the reform bureaucrats. Equally important, the zaibatsu and the party politicians in the Diet did not like the way they had been treated during the debate over the mobilization law, or the trend of events generally. They fixed their irritation particularly on the presence in the cabinet of two former bureaucrats in key economic positions, minister of finance and minister of commerce and industry. Their way of dealing with this problem was to ignore both Kaya and Yoshino and subtly to sabotage the controlled economy. Much of the control structure existed only on paper; the reality was that the bureaucracy had to negotiate every contract in order to get industry's cooperation.

In May 1938 Prime Minister Konoe sought to placate business inter-

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ests by dropping Kaya and Yoshino from the cabinet and replacing them both with one manIkeda Seihin, a former Mitsui executive and an "elder" of the business world. Ikeda had retired from business following the military coup d'etat, and in 1938 he was serving as governor of the Bank of Japan. He was acceptable to the business community because of his background, and he was acceptable to the military because he was tolerant of economic controls as long as the business community dominated them. Konoe and his military advisers also hoped that a single leader serving concurrently as minister of both finance and MCI might mitigate the increasingly serious bureaucratic jurisdictional disputes between the two ministries.

Yoshino was infuriated by Ikeda's appointment. He realized why Ikeda might be politically preferable to an ex-bureaucrat, but he also believed that Ikeda would not carry out industrial policy faithfully, and that it was an insult to MCI to be put under a zaibatsu minister. Concerning his own future, Yoshino sought the advice of his sempai and long-time friend from MAC days, Ito * Bunkichi, the illegitimate son of the genro* Ito Hirobumi and the son-in-law of former Prime Minister Katsura Taro*. Ito had left MAC in the early 1920's and taken a position in Ayukawa's Nissan zaibatsu. He now urged Yoshino to join his colleague Kishi in Manchuria and invited him to become an executive of the Ayukawa group. The Konoe cabinet recommended Yoshino as president of the new North China Development Company (while still minister Yoshino had drafted the law establishing the company, although the army sponsored it in the Diet), but the army vetoed him as insufficiently nationalistic to head an organization governing territory won by army blood.

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Yoshino was probably lucky he did not get this job, as it very likely would have led to his arrest after the war as a war criminalassuming, of course, that he would have survived the war. Forced to act on his own, Yoshino visited Hsinking, where Ayukawa instead appointed him as one of two vice-presidents (the other was a Manchurian) of Mangyo*. Yoshino was frustrated in Manchuria by excessive army control and Ayukawa's lack of capital for big projects. While working there, he received an Imperial appointment to the House of Peers, and on November 10, 1940, he returned to Tokyo to take it up. He remained an adviser to Mangyo but was replaced as vice-president by Takasaki Tatsunosuke, then president of the Mangyo-affiliated Manchurian Airplane Company. Takasaki was later MITI minister in the second Kishi cabinet (195859), and he was the Japanese sponsor of the famous Liao-Takasaki agreement for unofficial Sino-Japanese trade during the 1960's.

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During the Pacific War the Home Ministry appointed Yoshino governor of Aichi prefecture, and throughout 1944 he worked hard trying to cope with the bombing of Nagoya and with the death in his city of the chief Chinese puppet, Wang Ching-wei, who had been hospitalized there after an assassination attempt in China. Yoshino was purged but not tried during the occupation.

On April 24, 1953, Yoshino was elected to the House of Councillors from his native Miyagi prefecture. He had run on a platform of "economic independence" (from U.S. aid) and "rebuild Japan's economy." In the Diet he served as chairman of the upper house's Commerce and Industry Committee (where he was more of a problem for MITI than the ministry anticipated), and then as minister of transportation in the third Hatoyama cabinet (195556).

Yoshino never seemed to have any qualms about tapping the connections he had made during his bureaucratic service. Back in June 1934, while he was still vice-minister, he had helped Zen Keinosuke (18871951), Fujihara Ginjiro * (18691960), and other business leaders to establish the Japan Mutual Life Insurance Company (Nihon Dantai Seimei Hoken Kai), a company promoted by the prewar predecessor of the Japan Federation of Employers' Associations (Nikkeiren) to provide life insurance at reasonable rates for industrial workers. (Zen was a school classmate of Yoshino's and a fellow MAC official from 1914 to 1926. He resigned to become the secretary and a director of the Japan Industrial Club. After the war he became the first director-general of the Economic Stabilization Board. Fujihara was the founder of the Mitsui-connected Oji* Paper Company and became MCI minister during the first half of 1940.)

In January 1952, following the death of Zen Keinosuke the previous November, Yoshino succeeded him as chairman of the Japan Mutual Life Insurance Company, a post he retained for the next thirteen years. Yoshino retired as a member of the Diet in May 1959 and devoted himself to service as president of Musashi College, a position he held concurrently with his other commitments from 1956 to 1965. He died May 9, 1971, at the age of 84. Kishi Nobusuke delivered the eulogy at his funeral.