No.8 1930s and War Economy - PowerPoint Presentation

Slide1

No.8 1930s and War Economy

Economic Development of JapanSlide2

Pure dictatorship

Full democracy

Democratic institution

(Form)

Political competition

Constitution

Laws

Parliament

Election

Court

Reform vs conservatism, big vs small government, other policy debates

Edo

Meiji

Taisho

Fascism

Constitution

Parliament

Democracy movement, Party cabinet

Democratization

New constitution

Showa2

War

1937

1945-51

LDP dominance

Lack of policy debate

Male suffrage

1960

Now

US rule

Defeat

Showa1

1889

1925

1931

Military rises

1937-45

(Content)

Political fightsSlide3

Japan's Road to Militarism

& All-out War

TaishoDemocracyMovementEconomic

recession

&

banking

crisis

DisarmamentPeaceful diplomacy (Hamaguchi Gov’t)Rise of militaryMilitary intervention in China (Tanaka Gov’t)Distrust of political parties1920s1930sFascism vs. democracy

Economy-politics interactionEconomic depressionMilitary vs. political parties

Political terrorism

Coup attemptsExit League of NationsKantogun

(army in China)UncontrollableStarts invasion & colonization of Manchuria(1931)Japan-China War 1937-1945Pacific War 1941-1945

Full-scale War1937Slide4

Two-party Politics 1924-1932

PP.130-32

Minsei

Party

民政党

(

Kenseikai

until 1927)

Seiyukai

政友会(Estab. in 1900 by Hirobumi Ito)

Economy

Small government, free market, fiscal austerity & industrial restructuring for return to gold

Big government, fiscal activism, local public works for securing votes

Foreign policy

(*)

Oppose militarism, protect Japan’s interest by diplomacy, promote disarmament

To attack Minsei

Party, support military and fascism if necessary, even deny democracy

Workers & farmers

Elevate the rights of farmers and workers

Not interested

ProblemDeepening economic crisis

Undemocratic & close to military

Seiyukai statements:“Prof. Minobe’s theory denies the supreme dignity of Emperor. Just banning his books is not enough.”“Go, go, Japan, the leader of Asia, the vast land of Manchuria and Mongolia is waiting for you!!!” (election campaign song)”

(*) Foreign policy positions prior to 1925 were reverse of what is shown; Minsei was more aggressive than Seiyukai. Slide5

Shidehara DiplomacyHis policy was more moderate than before or after him

Maintain good relations with US and UKRespect Washington Naval Disarmament Treaty (1921-22)No military intervention in China; secure Japan’s economic interest through diplomacy and negotiationWhen China protests and resists, his diplomacy breaks down

Domestically, his policy was criticized as Coward DiplomacyFailed to stop Manchurian Incident (1931) started by Kantogun (Japanese Army stationed in China)

PP.106-9

Kijuro Shidehara, 1872-1951

Foreign Minister, 1924-27, 1929-31

Prime Minister 1945-46Slide6

Tanaka Cabinet (Seiyukai), 1927-1929

Support Capitalism & Intervene militarily in ChinaThe Oriental Conference (Japan’s policy toward China):

defend Japan’s interests in Manchuria-Mongolia 満蒙, but welcome FDI from any country.Send Japanese troops to prevent Chiang Kai-shek 蒋介石’s army from unifying China (1927 & 1928).Suppress communists and proletariat parties.Strengthen Security Maintenance Law 治安維持法(introduce death penalty).Kantogun 関東軍 (Japanese army in China) kills Chinese military leader Zhang Zuolin 張作霖 by train bombing. PM Tanaka did not report the truth to Emperor (but Emperor already knew). Emperor criticizes him and he resigns.

PM

Giichi

Tanaka 1864-1929Slide7

Hamaguchi Cabinet (Minsei Party), 1929-31Fiscal austerity and industrial restructuring for returning to gold standard at the old parity ($1=2 yen)

Disarmament (supported by people, opposed by navy)Social policies for workers and farmers

Prime Minister

Osachi Hamaguchi

Finance Minister

Junnosuke Inoue

Foreign Minister

Kijuro Shidehara

Hamaguchi

Cabinet is regarded as the crown of pre-WW2 democracy

movement. However, its stubborn deflation policy encouraged fascism and militarism, despite Minsei Party’s peace orientation.Slide8

Promoting Naval DisarmamentLondon Naval Disarmament Treaty (1930) signed and ratified against opposition by Navy and Privy Council

(cruisers & submarines, 69.75% vs 70% of US/UK tonnage)Navy attacks government for “violation of Emperor’s supreme command authority” 統帥権干犯Seiyukai supports Navy to undermine Minsei Party Government (=helping fascism)PM Hamaguchi shot at Tokyo Station (1930), dies next year

Note: Before WW2, many PMs were assassinated or almost killed: Ito, Okuma, Hara, Inukai, Hamaguchi, Takahashi, Saito, SuzukiSlide9

Showa Economic Crisis 昭和恐慌Causes

(1) Impact of global depression (2) Austerity policy initiated and continued by FM InoueConsequences

(1) Severe price deflation (2) Rural impoverishment, coupled with famine (3) Cartelization and rationalization (“free market doesn’t work”) (4) Rise of fascism (army, navy, right-wing groups) --Rejection of party politics--“Reform” movement 1/ Military readiness for total war 2/ Totalitarian state for the benefit of farmers and workers

PP.126-130

Nominal GNP (bil yen)Slide10

Takahashi Budget and Recovery 1932-36Korekiyo Takahashi, Finance Minister of

Inukai Seiyukai Cabinet and two other cabinets (1932-36)--“Japanese Keynes” “If someone saves 30,000 yen out of his income of 50,000 yen, his savings will increase, which is fine for him. But from the viewpoint of national economy, his saving will surely reduce demand elsewhere, which lowers national output. For the nation, it is actually better that this person spend all his income of 50,000 yen.” (Takahashi speech on austerity and returning to gold standard, 1929)Reversing Inoue’s austerity policy

--Terminate gold standard, let the yen fall--Central bank monetization of fiscal deficit--“Spending Policy” on public worksWhen the economy recovered sufficiently, Takahashitried to cut spending & military budget; this angeredthe military.

PP.131-32

Takahashi was assassinated by rebellion army in 1936Slide11

Northeastern China todaySlide12

Manchurian Incident (1931)(Sep. 18 Incident)

Kantogun (関東軍 Japanese army stationed in China) initiates well-planned invasion of Manchuria without informing Tokyo.Tokyo Government and Army HQ try to stop it but fail. 

Kantogun is now uncontrollable.  Violating “Open Door & Equal Opportunity” doctrine.US Secretary of State Stimson’s press statement undermines FM Shidehara (regarding Jinzhou bombing).Inukai Government (Seiyukai) declares the “independence” of Manchuria (1932), accepting the Army invasion.The League of Nations determines that Manchuria is not an independent state and Japan’s action is not self-defense.  Japan withdraws from the League of Nations (1933)

PP.133-35Slide13

Democracy

Fascism/militarism

Pro-Zaibatsu,

Pro-

Capit

-

alism

Workers’ & Farmers’

Rights

Multiplicity of Political Players and Policy Debates

1930s

until the outbreak of Japan-China War (July 1937)

Seiyukai Party

Minsei Party

“Proletariat” parties

Military

UgakiSlide14

Proletariat

parties

Minsei

Party

Seiyukai

Party

Discipline

Faction

Imperial

Faction

Navy

R Wing

Political parties in parliament

Army factions

Social reform through parliament

Social reform thru coup & terrorism

Political terrorism

1931‐36

Failed coup

Feb. 26 Incident, 1936

X

Dominant & suppressive

Rivalry among fascio groups

Supports fascism to undermine Minsei Party

Lose election

Feb. 1936

Opposes fascism, promotes social policies

Gain seats under broad voter base, demands social policies

FASCIO

DEMOCRACY

Attempt to cooperate to fight fascism fails

Anti-military criticism in parliament

X

Japan-China War, 1937

Dissatisfied with two major parties, sympathetic to “social reform” by fascio groups

無産政党

民政党

政友会

陸軍統制派

陸軍皇道派Slide15

Why People & Media Supported Military?(Not all of them, but some)

The Sense of “Crisis in Manchuria-Mongolia” 満蒙の危機—need to protect Japan’s interests against anti-Japanese movement in China; Shidehara Diplomacy is regarded as too soft.Showa Economic Crisis—workers & farmers suffer severely while big businesses make money.

Disgust with political parties—both Seiyukai and Minsei Party are regarded as corrupt and unfriendly to workers’ welfare.However, some journalists criticized militarism & fascism consistently--Tanzan Ishibashi 石橋湛山, Kiyoshi Kiyosawa 清沢冽Slide16

Collective Social PsychologyLessons from Pre-War Japan

A nation with rapidly rising economic power becomes arrogant, militaristic & expansionist toward its neighbors. This is a collective human instinct, for which convenient justification is invented. Initially and potentially, people & organizations take diverse positions

on external aggression, from passionate support to strong opposition (there is even a split of opinions within military).Over time, however, appeal to patriotism and increased hatred against “enemies” suppress pacifist voices. Mass psychology and emotion begin to rule. Oppositions continue to fight but eventually lose.Media and general public are often more belligerent than government which prefers diplomatic solutions.Finally, government also gives in to militarism, and begins to lead war effort and restrict people’s freedom, ideas and life.Once such social momentum sets in, it becomes very difficult to stop.Slide17

War Economy 1937-45After the outbreak of Japan-China War (July 1937), political debate and democracy were suddenly & completely suppressed.

Economic planning to mobilize people & resources under private ownership (no nationalization or socialism).1937-39 Planning Board, National Mobilization Law; State Power Management Law1939-41 Control over civil life becomes pervasive1941-44

Total war with US--Ministry of Military Demand; Military Needs Company Act1944-45 Economic collapse due to lack of inputsWar escalates: War with China prolongs  Resource shortage within Yen Bloc (occupied Taiwan, Korea & part of China)  Invade Southeast Asia for resources (North & South Vietnam, later more)  This angers West and leads to total war with US and the rest of the world

PP.136-39Slide18
Slide19

Military Production

Consumer Product Supply

Maritime Transport during Pacific War 1941-1945Slide20

Origin of the Post-WW2 Japan SystemFeaturing long-term commitments and

official intervention Government-led industrial drive, administrative guidance, subcontracting, lifetime employment, keiretsu, mainbanks, friendly trade unions, BOJ window guidance, etc.Negative view—this system was installed artificially after 1937 to execute war. It continued to work reasonably well in the 1950s-60s, but it is now obsolete.Positive view

—advanced industrialization requires such features. Free markets do not generate high-tech or heavy industries. Japan needed such a system to develop.  This means laissez-faire policy supports light industries and simple processing only; to go further, developing countries need above features even today.

PP.140-41