MM
Ministry of Munitions
MSEA
Medium and Smaller Enterprises Agency
Page xvi
NREA
Natural Resources and Energy Agency
OECD
Organization for Economic Cooperation and Development
RFB
Reconstruction Finance Bank
SCAP
Supreme Commander for the Allied Powers
SMRR
South Manchurian Railroad
TIRB
Temporary Industrial Rationality Bureau
TMCB
Temporary Materials Coordination Bureau
Page 3
One
The Japanese "Miracle"
By common agreement among the Japanese, the "miracle" first appeared to them during 1962. In its issues of September 1 and 8, 1962, the
Economist
of London published a long two-part essay entitled "Consider Japan," which it later brought out as a book that was promptly translated and published in Tokyo as
Odorokubeki Nihon
(Amazing Japan). Up to this time most Japanese simply did not believe the rate of economic growth they were achievinga rate unprecedented in Japanese historyand their pundits and economists were writing cautionary articles about how the boom would fail, about the crises to come, and about the irrationality of government policy.
1
Yet where the Japanese had been seeing irresponsible budgets, ''over-loans," and tremendous domestic needs, the
Economist
saw expansion of demand, high productivity, comparatively serene labor relations, and a very high rate of savings. Thus began the praise, domestic and foreign, of the postwar Japanese economyand the search for the cause of the "miracle."
First, some details on the miracle itself. Table 1 presents indices of industrial production for the entire period of this study, 1925 to 1975, with 1975 as 100. It reveals several interesting things. The miracle was actually only beginning in 1962, when production was just a third of what it would be by 1975. Fully half of Japan's amazing economic strength was to be manifested after 1966. The table also shows clearly the "recessions" of 1954, 1965, and 1974 that spurred the government to new and even more creative economic initiatives; and it demonstrates the ability of the Japanese economy to come back even more strongly from these periods of adversity. Intersectoral shifts are also recorded: the decline of mining as coal gave way to oil and the move-
Page 4
TABLE 1
Indices of Japanese Mining and Manufacturing Production, 19261978
(1975 = 100)
Manufacturing industries
Year
All industry
Public utilities
Mining and manu- facturing
Mining
All manu- facturing
Iron and steel
Non- ferrous metals
Metal finished goods
Ma- chinery
Ceramics and cement
Chem- icals
Petro- leum
and coal products
Pulp and paper
Textiles
Wood and wood products
Food
1926
2.5
54.5
1.5
4.0
1.5
0.7
4.9
17.4
1927
2.8
59.7
1.7
4.1
1.7
0.8
5.3
18.8
1928
3.3
62.0
2.0
4.6
1.8
1.0
5.8
18.1
1929
3.6
63.2
2.2
4.6
2.2
1.0
6.4
18.9
1930
5.5
3.9
5.8
62.0
5.3
2.1
4.8
1.4
8.4
2.5
1.0
5.5
21.8
15.8
21.0
1931
5.0
4.0
5.2
58.8
4.7
1.8
4.4
1.1
8.5
2.6
1.1
5.3
23.0
15.2
19.0
1932
5.3
4.3
5.5
60.0
5.0
2.3
4.9
1.0
9.2
3.2
1.2
5.3
24.9
16.0
20.8
1933
6.4
4.9
6.7
68.6
6.1
3.1
5.7
1.4
10.3
3.7
1.4
5.8
28.6
18.8
22.3
1934
6.9
5.3
7.2
75.1
6.5
3.7
5.6
1.4
10.0
4.3
1.7
5.4
31.5
24.0
22.5
1935
7.3
6.0
7.6
81.0
6.9
4.4
6.7
1.4
11.6
5.2
1.8
5.9
33.4
26.4
22.5
1936
8.2
6.5
8.6
89.6
7.8
4.9
7.4
1.7
12.0
6.2
2.1
7.0
35.8
27.6
23.0
1937
9.6
7.1
10.0
97.5
9.2
5.7
8.7
2.3
12.7
7.1
2.5
8.0
40.8
27.9
25.2
1938
9.9
7.7
10.3
103.8
9.4
6.5
9.1
2.5
13.5
8.1
2.7
7.2
33.6
27.5
25.5
1939
10.9
8.1
11.4
108.8
10.5
7.2
10.3
3.1
14.2
8.6
3.2
8.3
33.6
32.2
26.1
1940
11.4
8.3
12.0
116.7
11.0
7.3
10.1
3.8
14.7
8.5
3.4
8.3
30.4
26.8
22.7
1941
11.8
9.1
12.4
117.1
11.3
7.5
9.6
4.4
13.1
8.5
4.0
8.5
24.6
33.5
19.7
1942
11.5
9.1
12.0
114.4
11.0
7.9
10.9
4.5
10.8
7.1
4.0
6.7
19.5
31.7
17.5
1943
11.7
9.2
12.1
115.5
11.1
8.9
13.3
5.0
9.6
6.1
4.0
5.7
12.7
28.0
14.5
1944
11.9
9.0
12.4
105.1
11.4
8.3
14.7
5.8
7.5
5.7
3.2
3.3
6.8
24.8
11.9
1945
5.2
5.4
5.3
55.5
4.8
2.9
5.5
2.5
2.9
2.3
0.9
1.6
2.6
14.8
7.9
1946
2.3
6.9
2.2
40.9
1.8
1.0
2.9
0.8
3.1
1.4
0.4
1.7
4.3
22.7
7.0
1947
2.9
7.8
2.7
54.0
2.3
1.3
4.0
0.9
3.8
1.9
0.5
2.4
5.8
29.9
6.3
1948
3.8
8.5
3.6
66.2
3.0
2.1
5.5
1.4
5.8
2.5
0.8
3.5
6.6
34.7
7.7
(table continued on next page)
Document
Page 5
(table continued from previous page)
Manufacturing industries
Year
All industry
Public utilities
Mining and manu- facturing
Mining
All manu- facturing
Iron and steel
Non- ferrous metals
Metal finished goods
Ma- chinery
Ceramics and cement
Chem- icals
Petro- leum