A History of Japan: From Stone Age to Superpower (71 page)

A further major consequence of the Korean War was that it hastened the need for a peace treaty to be signed with Japan and the Occupation to be formally ended. Among other things this would free the United States from the continued burden of formal responsibility for Japan. Vague discussions regarding a peace treaty had been continuing for a number of years, at least since early 1947, but it was not till the Korean War that matters were really set in motion. It was complex and took time. Eventually, a Peace Conference was held in San Francisco early in September 1951, at which Japan and 48 nations signed a peace treaty (8 September).
⁷⁹
MacArthur had worked on the treaty with Secretary of State John Foster Dulles, but was not invited to attend.
⁸⁰

The San Francisco Treaty confirmed Japan’s loss of its former colonies, including Taiwan and Korea. Southern Sakhalin and the nearby Kurile Islands were given to the Soviet Union, though there was to be a fierce dispute – which still continues today – as to what islands exactly constitute the Kuriles. At the other end of the country, the Ry
ky
Islands were placed in an indefinite American trusteeship, eventually being formally returned to Japan in 1972, but continuing even today to be the major location for American troop bases in Japan, despite opposition. So too were the Bonin (Ogasawara) Islands a thousand kilometres out in the Pacific from T
ky
(returned in 1968). Under the terms of the treaty Japan agreed to pay reparations after all, but this was softened by a rider that this was to depend on its economy. In the end it paid very little, despite its subsequent massive economic growth. In general, the treaty was very favourable to Japan. It came into effect on 28 April 1952, thereby bringing an end to the Occupation.

However, it did not bring about an end to the presence of American troops. The United States may well have wanted to shelve full and formal responsibility for Japan, but it was certainly not willing to leave it vulnerable to the communists. Neither were many Japanese leaders themselves. Just hours after the peace treaty was signed, Japan and the United States signed a joint security treaty that indefinitely guaranteed the maintaining of American military bases in Japan, mostly in Okinawa. This not only helped Japan in terms of military security, it also brought major economic benefits, in particular through the fact that Japan did not have to spend anywhere near as much on its own defence as did most nations. From this point on, right through to the present, it was to spend annually no more than 1 per cent of its Gross National Product (GNP) on defence, whereas 6–7 per cent is the approximate peacetime norm for most nations.

The general public were less enthusiastic about the continued American presence, and it was later to lead to a number of political and social problems.
⁸¹
However, its economic benefit was beyond question. This was a major – if incidental – factor in setting Japan on the road to becoming an economic superpower.

The Occupation was of literally epoch-making significance. It had from the outset been faced with a number of difficulties. It had to be authoritative without being too authoritarian. It had to be both deconstructive and constructive. It had to maintain Japanese morale by preserving some Japanese ways but removing others. It had to nurture democracy without being felt to be ‘undemocratically’ imposing it. It even had to change course midway. And it had to do all this from a basis of very limited knowledge. To occupy an alien nation in order to build it anew, especially with all these difficulties, was no small task. Yet on the whole it seems to have been largely successful. In no small part this was due to Japanese willingness to learn and to rebuild the nation once again into a respected power. It was also helped by the fact that American government policy underlying the Occupation meant it was not primarily a punitive affair that left Japan crippled and whimpering on its knees. It was an important constructive phase in the nation’s modern history that left it in a healthy position to continue along the road to recovery of its position as a major world power.

6.3 Becoming Number One

Japan did not waste the economic opportunity it had been given by the United States. The government had played a guiding role in the economy since the Meiji period, and it continued to do so. Economic growth was far too important to leave to market forces and private interests.

The Ministry of International Trade and Industry, which was created in 1949 out of the former Ministry of Commerce and Industry, played a particularly important part. One of its key functions was ‘administrative
guidance’ (
kanri gy
sei
). MITI officials met regularly with the captains of industry to work out broad policies agreeable to the triad of government, the bureaucracy, and big business. These policies covered investment and development in targeted sectors of expected future growth, the protection of key industries, and rationalisation of industries in sectors no longer considered worth pursuing.

Though the actual technical effectiveness of MITI’s role has been exaggerated,
⁸²
it was nonetheless symbolically important. It indicated an ongoing close relationship between government and industry, and a willingness by industry leaders to listen to government opinion and to consider national interests. This was not unlike the situation in the Meiji period. Though most governments to some extent plan their economy and hope to guide it, in terms of degree Japan’s economy was particularly strongly characterised by the predominance of planning over pure market forces. In economists’ terms it was plan-rational rather than market-rational, controlled rather than laissez-faire.

During the 1950s the agreed priority was the development of heavy industry, particularly iron and steel and including products such as ships and heavy machinery. The catchphrase was ‘
j
-k
-ch
-dai
’ (‘heavy, thick, long, big’). It was to be followed in the 1960s by a new focus on lighter, more knowledge- and technology-intensive industries such as electrical goods and cameras. The catchphrase now was ‘
kei-haku-tan-sh
’ (‘light, thin, short, small’). This does not mean, of course, that heavy industry disappeared overnight. Far from it, shipbuilding in particular continued to grow. Vehicle production, combining steel and technology, also accelerated during the 1960s.