The Era Of High-speed Growth: Notes On The Postwar Japanese Economy

The Era of High-Speed Growth Notes on the Postwar Japanese Economy Yutaka Kosai translated by Jacqueline Kaminski UNIVERSITY OF TOKYO PRESS Translation and publication of this volume were assisted by grants from the Min­ istry of Education, Science and Culture, Japan, and The Japan Foundation. Translated from the original Japanese edition: Kodo seicho no jidai: Gendai Nihon keizai shi noto (Tokyo: Nihon Hyoronsha, 1981). Copyright by University of Tokyo Press, 1986 ISBN 0-86008-341-1 Japan ISBN 4-13-047027-2 (UTP 47274) All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, re­ cording, or any information storage and retrieval system, without permission in writing from the publisher. Printed in Japan Contents List of Tables vii List of Figures x Preface xi Preface to the English Edition xiii Prologue: The Course of Rapid Growth Part I. Reconstruction 1. Occupation and Reform: The Beginnings of Postwar Democracy 2. Recovery and Inflation 3. The Dodge Plan and the Korean War 4. The Special Procurement Boom: Economic Outcome of the Korean War 5. The Bases for Economic Growth 3 15 33 53 69 79 Part II. Growth 6. The Beginning of Rapid Growth 7. The Technological Revolution and Its Impact 8. Income Doubling and Trade Liberalization 9. An Interlude in Rapid Growth 10. The Economic Superpower 95 111 127 143 157 Part III. The Changeover 11. From Yen Revaluation to Oil Crisis 12. Reaching for Steady Growth 173 189 Epilogue: Looking Back on the Rapid-Growth Era 201 Bibliography Index 217 213 v List of Tables P -l. P-2. Summary of Reconstruction and Growth Growth Rates, Investment Rates, and Capital Coefficients for Each Five-Year Period P-3. Labor Productivity P-4. Analysis of the Primary Growth Factors P-5. Annual Increase in Gross Expenditure, by Demand Item P-6. Income Distribution and Savings 1-1. Results of the Land Reform 1-2. The Relative Decline in Farm Rents 1-3. Number of Farm Households by Amount of Land under Cultivation 1-4. Prewar Labor and Farm Tenancy Disputes 1-5. Major Applications of the 1947 Measures for the Elimination of Excessive Concentration of Economic Power 1-6. The Decline in Industry Concentration Ratios 1- 7. Labor Union Growth, 1945-49 2 - 1. Shifts in Key Economic Indicators, 1945-49 2-2. A Rendering of Accounts for the National Economy 2-3. Damage to the National Wealth Due to the Pacific War 2-4. Productive Capacity at the Time of the Defeat 2-5. Population and the Number Employed, by Industry 2-6. Trends in Imports of Key Products 2-7. The Stagnation of Production during the Latter Half of 1946 2-8. Postwar Activities of the Reconstruction Finance Bank vii 4 5 7 8 9 10 21 21 22 22 25 26 28 34 35 38 39 40 40 42 45 viii LIST OF TABLES 2-9. Changes in the System of Controlled Prices 2-10. The Status of Price-Differential Subsidies 2 - 11. Price Changes, 1946-49 3 - 1. The Revival of Production and the Blunting of Inflation 3-2. Economic Recovery Plan, First Draft 3-3. The Dodge Super-Balanced Budget (FY 1949) 3-4. Progress under the Dodge Plan 3 - 5. Influence of the Dodge Plan and the Korean War 4 - 1. Price Increases during the Korean War (1949 as base year) 4-2. Fluctuation in the Balance of Payments 4-3. Principal Export Items 4—4. Changes in Economic Indexes, 1946-53 4 - 5. Wage Differentials in Manufacturing Industries, by Scale of Operation 5 - 1. Results of Plant and Equipment Investment under the First Iron and Steel Rationalization Plan 5-2. Plant and Equipment Investment by the 18 Major Firms in the Coal Mining Industry 5-3. The Electric Power Development Plan 5-4. Effects of Rationalization