Japan’s Path to Prosperity: 1945 to the Present

The years following World War II resulted in more change in Japan than any time since the beginning of the Meiji period. The U.S. occupation under the leadership of General Douglas MacArthur initiated this peaceful reconstitution of much of Japanese society. The general almost immediately won the respect and admiration of the Japanese people through his dedication to duty and his regal bearing. Partially because of the influence of MacArthur, and a widespread belief among the Japanese that the militarist course had been a disastrous one, the Japanese people were cooperative with their American conquerors, and the occupation was peaceful and orderly. MacArthur and his staff sought nothing less than a democratic and peaceful Japan and initiated sweeping reforms to achieve this goal. The wartime leadership was quickly purged from government. Despite the fact that many Americans wanted the imperial line abolished, MacArthur decided to allow the Japanese to retain their national symbol in hopes of ensuring stability.

A major event of the occupation was the largely U.S.-written constitution, which went into effect in May 1947 and established a framework for democratic government. The emperor was retained but only as a symbol of state. A democratic parliamentary system and an independent judiciary were established. Universal suffrage for both sexes was guaranteed for the first time in Japanese history. The Japanese Constitution also theoretically guaranteed equal rights for both sexes and for the right of labor unions to exist. Article 9 contained a renunciation of war and included the clause ‘‘land, sea, and air forces, as well as other war potential, will never be maintained.’’ Later, because Japan became a Cold War ally, American policy makers had second thoughts about this prohibition, and Japan developed land, sea, and air Self-Defense Forces (SDF) that are to be used only in defense of the home islands. In the decades that followed, the SDF have been deployed in other countries as part of United Nations peacekeeping forces. In 2004, the Japanese government deployed the SDF to Iraq in a noncombatant support role for coalition forces fighting insurgents.

In addition to bringing about the massive restructuring of the Japanese political system, the U.S. occupation produced major economic reforms. The zaibatsu were broken up, and the Americans made good their guarantee of labor unions by actively promoting them in the occupation’s early years. The occupation land reform policy brought about even more widespread economic change. Absentee landlordism was prohibited, and farmers could own no more than seven and onehalf acres (an exception was allowed in Hokkaido). The land reform policy ended long-standing rural inequities and stimulated agricultural productivity, as that sector was the first to recover.

Not content with just economic and political reform, MacArthur wanted to change Japanese thinking so as to create the appropriate climate for democracy. In 1947 occupation authorities forced the Japanese to radically change education. Japan’s schools were modeled after the American six-year elementary school, three-year junior high, and three-year senior high school system. The new curriculum included social studies courses designed to foster democratic thinking. American reformers also attempted to decentralize the Japanese public school system by including locally elected school boards in the education laws.

By the late 1940s, however, the United States was becoming less idealistic about changing Japan. Initially, occupation authorities gave higher priority to democratization than to rebuilding Japan’s economy. Once the Cold War began, U.S. policy makers feared that an economically weakened Japan could fall to the communists. By 1948 Americans ceased to encourage labor unions and backed off attempts to break up large business concerns. The new U.S. thinking was shared by a number of Japanese political leaders, including Yoshida Shigeru, prime minister during most of the occupation years. Shifts in U.S. policy, the good fortune of the Japanese to be convenient suppliers of American forces during the 1950–1953 Korean War, and the hard work of the Japanese people succeeded. By the early 1950s, the Japanese economy was on the way to recovery.

The U.S. occupation officially ended in September 1952, following the signing of a peace treaty in San Francisco the previous year. Although the Japanese later abolished some American reforms, such as the attempt to decentralize public schools, Japan today, as a democratic and free society, continues to benefit from the sweeping outside-initiated changes of the occupation years. It should be noted, though, that some of MacArthur’s decisions are controversial today. There is substantial evidence that Emperor Hirohito may have had more to do with promoting Japanese aggression in Asia than was earlier believed. Some scholars make the case that by allowing Hirohito to retain the throne and not to be tried as a war criminal, the United States enabled Japan to escape responsibility for causing the Pacific War.

Also, although most diplomatic historians consider the U.S. occupation a success, it should be emphasized that the process that eventually resulted in the democratization of Japan was a joint endeavor. It almost certainly would have failed had not the Japanese been already a relatively highly educated people who worked hard and cooperated with the Americans. Japan also had a critical mass of private citizens and bureaucrats with industrial and economic development expertise as well as substantial experience with parliamentary government. U.S. policies worked because, in addition to good leadership and organization, the Americans believed in the benefits of liberal democracy, had confidence in their Japanese partners, were working with a relatively homogenous culture, and were highly motivated to check the advances of both Chinese and Soviet communism.

On February 24, 1989, on a cold, rainy day in Tokyo, thousands of mourners, including political leaders from 163 nations, attended the funeral service of Emperor Hirohito, marking the end of his 63-year reign and the accession of his son Akihito, who named his reign Heisei, or ‘‘May There Be Peace.’’ Hirohito’s death was symbolically significant because it marked the end of a period of Japanese history that included World War II and the ‘‘economic miracle.’’

Since the democratization of Japan, the economic miracle has been the most important development in Japanese history. From 1954 until the 1970s, Japan led all nations in annual economic growth rates. Although economic growth slowed in the 1970s, Japan continued to have impressive annual growth rates until the early 1990s. Today Japan has one of the world’s largest economies, and the lifestyle of the typical Japanese is an affluent one by the standards of any country. Japan’s postwar economic boom years carried costs, however. Until the 1970s, the government and private business concentrated so much on first rebuilding the nation and later fueling the economic miracle that such social concerns as adequate housing, protection against pollution, and attention to health and old age–related issues were ignored. By 2009, Japan’s economy, as was the case with many counties, felt significant effects from what appeared to be a global recession.

By the early 1990s, the economic situation also began to darken, and for the rest of the century Japan endured some serious economic problems, including low economic growth, postwar record unemployment rates, and high government deficits. There was general consensus among economists that Japan has structural economic problems, including an overregulated economy, a capital allocation system in need of overhaul, and an archaic lifetime employment system that helped to raise product costs to unacceptable levels. Japanese government and corporate decision makers struggled with these problems for more than a decade, but beginning in 2005, the economy, though not as impressive as the miracle years, has been performing relatively well.

The 1990s and the early years of the 21st century were a time of political as well as economic turbulence. In 1993 the Liberal Democratic Party (LDP) lost control over the Japanese government for the first time since its inception in 1955. Although the LDP soon returned to power in various coalition governments, Japanese domestic politics were extremely volatile throughout the 1990s. Parliamentary government after government fell, reflecting a general voter dissatisfaction with the economic and political status quo. The election of Koizumi Junichiro, who served as prime minister from 2001 to 2006, restored political stability, and the public largely appreciated this charismatic leader’s policies. The end of the Cold War, the North Korean threat, the rise of China, and the war on terrorism have caused significant changes in Japanese foreign policy as the nation’s leaders now give much more priority to regional and international security questions than was the case in previous decades.

The 1995 Tokyo subway poison gas attack by members of the Aum Shinriyko religious cult, which killed 12 people, was an extreme example of what many Japanese view as mounting social problems in a society that had been stable for almost half a century. Less dramatic but still troubling trends surfaced in the Japan of the 1990s and in the first decade of the 21st century, including rising divorce rates and some increases in certain types of crime. Still, both divorce and crime rates are lower in Japan than in other developed countries.

Despite these problems, postwar Japan rose from defeat in World War II to develop an economy that is still strong, societal support for democratic politics, and a relatively trouble-free society when compared with those of most other nations. Since the war, Japan has also achieved world leadership peacefully, which is a tremendous compliment to the hard work and resourcefulness of millions of ordinary Japanese.