The anatomy of Japan's postwar economic development.

152 Pages·2.8 MB·en_US

by  Tsao, Hsiung Yuan.

NPS ARCHIVE
1997. Q^
TSAO, H.
NAVAL POSTGRADUATE SCHOOL
Monterey, California
THESIS
THE ANATOMY OF JAPAN'S POSTWAR
ECONOMIC DEVELOPMENT
by
Hsiung Yuan Tsao
September, 1997
Thesis Advisor: Edward A. 01sen
Approved for public release; distribution is unlimited.
Thesis
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September 1997 Master's Thesis
4. TITLEANDSUBTITLETheAnatomyofJapan'sPostwarEconomicDevelopment 5. FUNDINGNUMBERS
6. AUTHOR(S)HsiungYuanTsao
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13. ABSTRACT(maximum 200words) ThisthesisexaminestheanatomyofpostwarJapaneseeconomicdevelopment. Itisillustrated
bythereform andreconstruction era(1945-52)andthosefactorswhichcausedtheJapaneseeconomytogrowduringthe 1953-73
period. Furthermore, on thebasis ofJapaneseeconomicsuccesses,theroleoftheJapaneseinworldaffairsagainbecameimportant
However,dueto theworld experiencingeconomicinflationand anoil shockafter 1974,theJapaneseeconomyalsoexperienced
slowergrowth. Discussed indetail are thosefactorsthatmadetheJapaneseeconomyslowdowninthisperiod. Thisthesisstresses
thethreedecades ofJapaneseeconomicdevelopmentafterWorldWarII. EvaluationoftheJapaneseeconomyisnecessarytoanalyze
itsweaknessesand strengths which will shapeits futuredevelopmentandcompetitiveness. Inparticular, theendofColdWar
broughtnewkindsofthinkingand concernaboutwhattypeofproblemsJapanmight faceinthenextcentury. Ofcoursethoseissues
includeregionalism, economicstrategyshiftsaftertheendofColdWar,andintricatemajorpowerrelationsamongJapan,Chinaand
theUnitedStates. In reality thepost-ColdWarchallengesarealsoaturningpointforJapan,compellingitto deal withnew
problemsandtodecidewhat kind ofrolesitisgoingtoplay.
14. SUBJECTTERMS Anatomythe JapanesePostwarEconomicDevelopment 15. NUMBEROFPAGES
148
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Approved for public release; distribution is unlimited.
THE ANATOMY OF JAPAN'S POSTWAR ECONOMIC DEVELOPMENT
Hsiung Yuan Tsao
ROC.
Lt. Col., Military Police
B.A., Chinese Military Academy, 1983
Submitted in partial fulfillment
ofthe requirements for the degree of
MASTER OF SCIENCE IN MANAGEMENT
from the
NAVAL POSTGRADUATE SCHOOL
September, 1997
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GRADUATFSCHOOL
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NAVAL POSTGRADUATE SCHOOL
MONTEREY, CA93943-5101
ABSTRACT
This thesis examines the anatomy ofpostwar Japanese economic development. It is
illustrated by the reform and reconstruction era (1945-52) and those factors which caused
the Japanese economy to grow during the 1953-73 period. Furthermore, on the basis of
Japanese economic successes, the role ofthe Japanese in world affairs again became
important. However, due to the world experiencing economic inflation and an oil shock
after 1974, the Japanese economy also experienced slower growth. Discussed in detail are
those factors that made the Japanese economy slow down in this period. This thesis
stresses the three decades ofJapanese economic development after World War II.
Evaluation ofthe Japanese economy is necessary to analyze its weaknesses and strengths
which will shape its future development and competitiveness.
In particular, the end ofCold War brought new kinds ofthinking and concern
about what type ofproblems Japan might face in the next century. Ofcourse those issues
include regionalism, economic strategy shifts after the end ofCold War, and intricate
major power relations among Japan, China and the United States. In reality the post-Cold
War challenges are also a turning point for Japan compelling it to deal with new problems
and to decide what kind ofroles it is going to play.
..
VI
TABLE OF CONTENTS
INTRODUCTION
I. 1
REFORM AND RECONSTRUCTION
II. 9
ECONOMIC DEMOCRATIZATION
A. 9
1. The Breakup ofthe Zaibatsu 9
a. Breakup the Holding Companies 10
b. Set up the Laws 11
2. Land Reform 12
3. Labor Democratization 16
RECONSTRUCTION AND STABILIZATION
B. 19
THE AMERICAN CONTRIBUTIONS DURING THE
C.
OCCUPATION PERIOD
23
1. Breakup the Monopoly 23
2. Wake the Labor and Peasant's Consciousness 25
3. Assist the Land Redistribution 25
4. Provide a Peaceful and Stable Environment 26
END OF THE OCCUPATION
D. 27
m. THE RAPID ECONOMIC GROWTH PERIOD 29
THE INTERNAL FACTORS
A. 29
1. Aggressive Behavior by Firms 29
a. Accelerated Toward Professional Managers 30
b. Developed "Product-Monopoly Busting" 31
vn
c. Make Profits Based on Bold Business Expansion 31
2. Advances in Technology 32
3. The Labor Force 34
a. High Education ofLabor Force 34
b. Decreased the Labor Force in Low-Productivity Positions 34
4. Capital Stock 35
a. Business and Managerial Skill Optimize the Economic Growth 35
b. High and Rising Saving Rate 36
5. Government Policies 37
EXTERNAL FACTORS
B. 39
The Role ofKorean War 39
1.
2. The Establishment ofthe International Monetary Fund 42
IV. THE SLOWDOWN IN GROWTH 47
SLOWER CAPITAL FORMATION
A. 47
END OF TECHNOLOGICAL CATCH-UP
B. 49
HIGHER ENERGY COSTS
C. 50
D. DIVERSIFICATION OF SOCIAL GOALS 53
SLUGGISH WORLD ECONOMIC ENVIRONMENT
E. 58
A CFIANGING LABOR MARKET
F. 59
SLOWER PRODUCTIVITY GROWTH
G. 65
AN EVALUATION OF THE JAPANESE ECONOMY
V. 69
A. APPRECIATION OF TFIE JAPANESE YEN 70
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