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At the same time many Japanese companies, which continue to make world-class products, are posting record profits, and through the 1990s recession Japan enjoyed huge trade surplus[r]

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A short history

of Japan

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Dr Curtis Andressen is a senior lecturer in the School of Political and International Studies at Flinders University, South Australia He has been a willing student of Japan for over two decades and has spent several years living there Curtis Andressen has published widely on a variety of aspects of contemporary Japanese Society and is co-author of Escape

from Affluence: Japanese students in Australia and author of

Educational Refugees: Malaysian students in Australia

Series Editor: Milton Osborne

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A short history

of Japan

From Samurai to Sony

Curtis Andressen

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For my parents, Thorsten and

Marilyn Andressen

First published in 2002

All rights reserved No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without prior permission in writing from the publisher The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10 per cent of this book, whichever is the greater, to be photocopied by any educational institution for its educational purposes provided that the educational institution (or body that administers it) has given a remuneration notice to Copyright Agency Limited (CAL) under the Act

Allen & Unwin 83 Alexander Street Crows Nest NSW 2065 Australia

Phone: (61 2) 8425 0100 Fax: (61 2) 9906 2218 Email: info@allenandunwin.com Web: www.allenandunwin.com National Library of Australia Cataloguing-in-Publication entry:

Andressen, Curtis A (Curtis Arthur), 1956– A short history of Japan: from samurai to Sony Bibliography

Includes index ISBN 86508 516 Japan—History I Title 952

Set in 11/13 pt Sabon by DOCUPRO, Canberra Printed by South Wind Productions, Singapore 10

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CONTENTS

Acknowledgments vii

Abbreviations viii

1 Introduction

2 In the beginning 16

3 Chaos to unity: Feudalism in Japan 47

4 Modernisation and imperialism 78

5 War and peace 104

6 The miracle economy 128

7 Japan as number one? 147

8 Bursting bubbles 178

9 The way ahead 210

Glossary 223

Notes 228

Selected further reading 231

Bibliography 236

Sources 240

Index 241

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ACKNOWLEDGMENTS

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ABBREVIATIONS

ADB Asian Development Bank ANA All Nippon Airways

APEC Asia–Pacific Economic Cooperation forum ASEAN Association of South East Asian Nations CEO chief executive officer

DAC development assistance committee EEOL equal employment opportunity law EU European Union

FTA US–Canada Free Trade Agreement GDP gross domestic product

GNP gross national product JAL Japan Airlines

JNR Japan National Railways JR Japan Railways

LDP Liberal Democratic Party

MITI Ministry of International Trade and Industry MOF Ministry of Finance

NAFTA North American Free Trade Agreement NEC Nippon Electric Company

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ODA official development assistance

OECD Organisation of Economic Cooperation and Development

OPEC Organisation of Petroleum Exporting Countries POW prisoner of war

PRC People’s Republic of China

SCAP Supreme Commander for the Allied Powers SDF Self Defence Forces

SDPJ Social Democratic Party of Japan

UNHCR United Nations High Commission for Refugees UNTAC United Nations Transitional Authority in

Cambodia

A b b re v i a t i o n s

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INTRODUCTION

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In the late 1980s Japan appeared on the verge of an economic takeover of the world The purchase of Columbia Pictures by Sony and the Rockefeller Center by Mitsubishi Real Estate at the time were two of the more dramatic examples of Japanese economic power In Australia residents of Queensland’s Gold Coast (with the notable exception of local real estate agents) protested the Japanese buy-up of prime real estate The reaction in many parts of the world was fear Movies such as Rising Sun intimated that there was a rather sinister plot by inscrutable kingpins to make Japan the next superpower by taking control of the global economy Yet governments around the world at the time vied for the

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investment opportunities held out tantalisingly by Japanese megafirms

So what happened? Since the early 1990s this image has been turned on its head Suddenly Japan is a giant with feet of clay Financial institutions are closing their doors, or merg-ing, and their leaders are being marched off to jail or are hanging themselves in hotel rooms At the same time, the Liberal Democratic Party (LDP), in power almost continuously since the end of the Pacific War, has managed to remain in control of the government, while voter apathy—reflected in the 1995 election of former comedians as governors of both Tokyo and Osaka—is at an all-time high The recession in Japan, which has dragged on for more than a decade, seems to present a problem too large and complex for the govern-ment to handle Politicians appear unable to dissociate themselves from long-standing interest groups, so stimulus packages designed to pull Japan out of recession continue to take the form of pork-barrelling, with massive contracts awarded to construction companies and the like who in turn fill LDP coffers Unfortunately, the money is not spent effec-tively, public confidence has not been restored, and Japan’s economy in the early twenty-first century continues to slump Part of the problem concerns the demographic profile of Japanese society Voting is not compulsory, and those who vote are disproportionately older and more conservative, so out-dated policies tend to endure Japan also has a very rapidly ageing population, with high numbers of people entering retirement over the next ten to twenty years At the same time the birthrate has dropped to its lowest levels ever, so there are fewer and fewer people to support an ageing population Hence, when contemplating retirement, older Japanese workers have a tendency to save even more than usual This lack of spending continues to inhibit economic recovery

Japanese companies, too, which appeared unstoppable in the 1980s, are suddenly looking for international partners to help them out of their dire financial straits, hence the recent link-up between Nissan and the French automobile company Renault, preceded by the American company Ford’s massive

A S h o r t H i s t o r y o f J a p a n

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purchase of Mazda shares At the same time many Japanese companies, which continue to make world-class products, are posting record profits, and through the 1990s recession Japan enjoyed huge trade surpluses It is an unusual type of economic downturn Furthermore, Japan continues to hold by far the greatest foreign exchange reserves of any country in the world, is second only to Germany in overseas assets and has been the world’s largest creditor nation since 1985 The country pro-vides nearly 16 per cent of the world’s economic output and is therefore, for a range of reasons, watched carefully by other countries

On the international front, however, Japan is relatively subdued A few personalities have emerged on the international scene, such as Akashi Yasushi, the head of the United Nations Transitional Authority in Cambodia (UNTAC) during the UN reconstruction of that country in the early 1990s and, more recently, Ogata Sadako, present head of the United Nations High Commission for Refugees (UNHCR), especially promi-nent during the UN’s recent intervention in East Timor These are exceptions, though, and Japan continues to play a less visible role than is appropriate for a country that still has the second largest economy in the world At the same time, it is a key source of funds and direction for many international organisations such as the UNHCR and the Asian Development Bank

In part the Japanese reluctance to be more assertive is a reflection of the country’s vulnerability In many ways the label of ‘fragile superpower’ continues to hold true In spite of massive investments abroad, trade surpluses and cutting-edge products, Japan remains vulnerable to fluctuations in foreign policies and economies It continues to import 80 per cent of its primary energy requirements and is dependent on value-added exports for its wealth When restricted to its home islands Japan is a poor, isolated, island nation It must trade to create wealth, and this fundamental reality has moved the country into imperialism, war, destruction and global trade at various times over the last century At the same time, given Japan’s massive foreign investments and level of trade, other

I n t r o d u c t i o n

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countries are dependent on its goodwill for economic growth In this sense economic globalisation serves to protect Japanese interests

There is a curious tension in Japan’s foreign relations Many in the region still remember Japan’s wartime aggression; as a result, while investment is welcomed, the investor is watched with some wariness In the history of the region the Pacific War did not end so long ago, certainly not long enough for fundamental cultural change to take place Foreign trade, regardless, does not take place for altruistic reasons and Japan, like other countries, tries to maximise its benefits Japanese companies also tend to recreate their structures overseas They claim to need the quality products that only Japanese firms can provide In other countries, though, Japanese companies are often seen as supporting each other while freezing out local suppliers Hence, the extent to which Japanese investment produces long-term local benefits (particularly ones that are spread around rather than going mostly to local elites) is hotly debated

For most people in the region the effects of Japanese trade and investment are highly visible Whether it is downtown Bangkok, Sydney, Ho Chi Minh City, Shenzen or the Klang Valley outside Kuala Lumpur, the names of famous Japanese companies are everywhere Automobiles bear Japanese brands, as stereos, televisions, computers and a vast range of other types of consumer electronics Goods that carry Japanese names, too, are often made (or at least assembled) in the low-wage countries of Asia There are few countries in which Japanese companies are not playing a substantial role and in which their goods are not readily accessible

While Japanese goods are moving around the world, so too are Japanese people Tourist departures rose dramatically in the 1970s and 1980s, and even in the 1990s they continued at record levels More than 17 million Japanese travelled abroad in 2000, more than 80 per cent of them as tourists While there are increasing numbers of independent, especially budget, travellers, most still prefer package tours Indeed, Japanese are renowned for their failure to blend into local

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cultures, remaining observers rather than participants (though younger Japanese seem to be challenging this trend) In part this is a result of the Japanese employment system, which gives few holidays to workers, and in part it reflects the essentially culture-bound character of the Japanese nation

One group which is increasingly visible on foreign land-scapes, however, is young Japanese women They are the ‘bachelor elite’ of Japanese society They tend to live at home and work full-time after completing their education, thereby saving substantial sums Foreign travel is one of the preferred ways of spending this money Indeed, they are a prized group for marketing companies Does this indicate a substantial change in women’s roles, though? Today there remains much debate about the extent to which contemporary changes are part of the mainstream The Equal Employment Opportunity Law (EEOL) of 1986 (most recently revised in 1999) helped women to access management-track positions This change has been driven to some extent by an increased assertiveness on the part of women, and partly by the demographic shift in Japan

Although the economic downturn of Japan in the 1990s has meant relatively high unemployment levels, the ageing population will lead to substantial labour shortages in the not-so-distant future, and this should have a significant impact on women’s participation in the labour force At the moment, although it is clear that more women are being provided more opportunities in the labour force, the classic working-life profile, where women in their 30s and 40s quit working to raise children and re-enter the labour force later in life, is still evident However, women are increasingly being given the option of a career path in Japanese companies, and this trend will almost certainly become stronger over time

Participation in the labour force is, of course, linked to changes in the social roles of women in Japan The average age of first marriage for women has increased three years over the past three decades and now stands at 27.5 years At the same time the fertility rate has dropped, from 4.5 children per Japanese woman in 1947 to 1.36 today, well below the

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replacement level of 2.1 children This is having an impact throughout the social system, from work expectations to gender roles to demands for specialised services

Japanese men, on the other hand, seem to be stuck in the past, where the traditional life cycle is still very much the norm There are a few indications, however, that young Japanese men are beginning to question the dedication and compliance that such a life demands, and are considering alternatives This dissatisfaction is in part related to the increasingly visible costs of the existing system Indeed, one of the most recent issues being publicly debated is that of karo−shi, literally ‘death from overwork’, though it generally refers to the problem of chronic exhaustion Former Prime Minister Obuchi, who died in 2000 while still in office, is its most recent high-profile victim

An increasingly rare sight in modern Japan. A S h o r t H i s t o r y o f J a p a n

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The educational system also plays a key role in defining the roles of young Japanese At least since World War II, the (ideal) expectation has been that a Japanese man should well in his entrance examinations, enter one of the top uni-versities in the country and, after graduation, secure a position in a well-known company or government department He should work diligently, get along with his colleagues and stay with that organisation until retirement or death A Japanese woman, on the other hand, should gain entry to a good education institution, secure a partner from among the well-heeled young men there, work a few years, then marry and have children, raise them and perhaps re-enter the labour force at a relatively low level when she reaches middle age This model for Japanese women is presently undergoing significant change, though there is less change in the life cycle of males Although it reinforces very traditional roles, the education system has served the needs of Japan very well and has enjoyed widespread support in the postwar era This is primarily because, in spite of some abuses of the system, and a bias towards higher income groups, the system is, at least in theory, a meritocracy—which has, however, come under increasing criticism in recent years There have been charges made by a range of writers about the focus on rote learning, pressures to conform, lack of flexibility, censorship of textbooks and little emphasis on creative thinking Violence in schools, directed at both students and teachers, has become a particularly pressing problem Perhaps the most contentious issue, however, and one which is very difficult to change, is the use of entrance examinations throughout the educational system One of the key roles of the education system in Japan is to stratify society, and this is done most visibly at the end of the final year of high school (though arguably much earlier), when students sit entrance examinations for various universities The university one attends is linked to status, field of employment and hence upward mobility Competition to enter the top universities in Japan is intense (as exemplified by the term shiken jigoku, ‘examination hell’) Preparation can begin as early as kinder-garten Indeed, a segment of private industry, the juku (‘cram

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school’) has been developed primarily to help students pass these examinations, and such schools are increasingly visible High incomes and a high standard of living are leading to this approach to education and social stratification coming under increasing pressure, however The decline in the school-age population also means that accessing elite universities has recently become somewhat easier

There have been some changes in the education system in recent years, one of the most important developments being the support for internationalisation, the key feature of which is study-abroad programs for high school and university stu-dents There is also a variety of programs that facilitate Japanese students taking part of their tertiary education in an overseas educational institution, ranging from obtaining a foreign degree either partially or wholly in Japan (or overseas), securing credit towards a Japanese degree while studying abroad for a year or more, or taking short-term courses overseas for credit Altogether some 180 000 Japanese studied abroad in 2000, an increase of nearly 100 000 over the 1988 figure These programs serve a number of purposes In a shallow sense they allow the educational institutions concerned to improve their attractiveness at a time of significantly declin-ing enrolments They are, in this case, a marketdeclin-ing tool that dresses up a tourist trip as a study-abroad program Other programs are organised with more profound pedagogic intent, and give students the benefits of traditional programs of overseas study with individuals meaningfully interacting with people from different races and cultures

There is no doubt that young Japanese people are caught in a transitional period Their parents created Japan’s economic miracle, and young people generally want for little in a ma-terial sense However, not having experienced the country’s devastation during the Pacific War, with the costs of dramatic economic growth becoming clearer, and a number of leaders calling for changes in the way in which the economic and social systems are organised, it is understandable that younger Japanese are questioning their goals Indeed, in the late 1980s it was official policy to spend more on consumer items which

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would enhance quality of life (and in the process, help to reduce the trade surplus) The recession of the 1990s has tended to slow such changes But the traditional systems are still firmly in place and those who are searching for alternatives are still on the periphery, although women have much more flexibility in this regard than men Given the profound nature of the changes which are occurring in Japan, however, it may be expected that those who are now the trendsetters will be part of a significantly modified mainstream in the future

In the meantime the people who continue to hold power in Japan are mostly older men, conditioned by the hardships they faced in the 1940s and 1950s, who have seen Japan defeated, impoverished and at the mercy of foreign powers They owe their success to the existing system, are part of a web of obligations and naturally have a vested interest in maintaining the status quo This is a powerful force in resisting fundamental change

Change is also inhibited by the way in which power is distributed within Japanese society Just who governs Japan continues to be debated, especially by Western political scien-tists Conventional wisdom has it that there is an ‘iron triangle’ of power in Japan—politicians, the bureaucracy and big busi-ness—and these groups balance each other No one group has overall control This is especially puzzling given that the structure of government is easily recognisable to anyone from a Western country It functions, however, in a uniquely Japan-ese manner

A key point here is that the different centres of power in Japan are locked together Politicians, for example, look to Japan’s large business conglomerates for funding and they in turn expect appropriate support Politicians find themselves so busy raising funds for the favours expected by business and electorate alike that they have little time to gain expertise within a portfolio and therefore to formulate new laws This is essentially left to the bureaucracy, which gives this group enormous authority: over time the bureaucracy has come to be a centre of power, often seemingly independent of politicians

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