It was known as the “economic miracle”. I was wondering how this was accomplished and what actually took place to turn a capitulated nation into an economic powerhouse.
Hi! So this is rather complicated in explaining the whole history. The US solely causing Japanese economic miracle is rather problematic, but there was contribution by the US. Yet there are also questions of intentionality.
We have to take into account that the Japanese miracle began mostly after the Americans left. The so-called ‘Japanese miracle growth’ occurred during the 1960s, nearly a decade after the Americans left in 1952 when Japan had its sovereignty returned where they did as they pleased (such as dismantling the policies established by the Occupation). That is too much of a lag for direct causation, and it puts a lot of variables in play. So French et al (2018) take up the question of whether the Occupation in fact was a change, or a pause, or a continuity in Japanese history. They argue that Japan was on a continuous trend toward advanced economic development with the Occupation being like a pause or a slowdown.
It has to be noted that Japan was rather industrialized by the time of its defeat, but there was chaos at war’s end. So the pre-existing conditions need to be considered.
The US initially was not concerned about Japan’s recovery (French et al, 2018; Caprio & Sugita et al, 2007). Here is quotation from a Supreme Commander of the Allied Powers (SCAP) directive:
“You [SCAP] will not assume any responsibility for the economic rehabilitation of Japan or the strengthening of the Japanese economy.” The Japanese alone were made responsible for avoiding “acute economic distress.” (Fuchs, 2007 in Caprio & Sugita - eds, 2007)
This only changed due to MacArthur seeing that democracy in Japan could crumble without economic recovery and Japan could end up like post-WW1 Germany. So he did some convincing to Washington, but it was not about an about-face. The US was only concerned for the two D’s, democracy and demilitarization initially. Then it should be noted the shifts depending on who had influence. The FDR New Deal administrators and the later Truman conservatives had different directions with the latter being concerned less on democracy and giving more priority to economic development. The shift away from democracy is known as the “reverse course” (Dower, 1999) occurring after 1948 when it was found that the Nationalists in China were going lose to Mao’s Communists. Thus beginning the Cold War. So there was significant political issues and changing concerns as time passed. So even the goal of democracy is rather ambivalent since the Occupation favored conservatives and purged leftist leaning people in government, politics, and academia. This can also be seen in the suppression of labor movements and their supposed Communist sympathies. In addition, the Occupation was more autocracy than democracy. So mind the contradictions that existed, and many theorize this has had lasting implications.
In regards to the Marshall Plan and recovery of Europe, it should be noted how different they were compared to Japan and the rest of Asia. (As far as the literature does not state, the Marshall Plan did not occur in Asia and this remains a separate policy and history altogether). First, there is a huge difference in aid. Germany got almost 3 billion dollars in aid while Japan had about 2 billion. Most aid was in grants, but Japan was also loaned more money percentage-wise than Germany (Serafino, Tarnoff, & Nanto, 2006). Japan repaid a slightly higher percentage than Germany. Then, the Occupations was quantitatively shorter by 3 years in Germany. Germany was occupied from 1945 - 1949 while Japan’s occupation was nearly double from 1945 - 1952. There are various things affecting this, but it has to be noted that the Americans could have left sooner had their plans not changed because of the Cold War. However, there are some that argue that the longer occupation was motivated by openly prevalent assumptions on race and remaking Japanese society (in the image of American society), and there are certainly statements by American officials reflecting this. MacArthur and others were recorded on how the Japanese mind was not like others (to put the racism mildly), and it was a motivating factor why the emperor was kept as an institution (Dower, 1999). There was open debate in Japanese society about the emperor, but it was clearly not open for debate with the Occupation. The decision was already decided by SCAP. So this is an illustrative of the contradictions the Occupation created.
So, there are differences in the US occupation of other countries. The cases of US occupation in the Philippines, Iraq, and Afghanistan were clearly different outcomes from Japan and Germany. In studying the history of US occupations and the policies of ‘nation-state building’, instituting such concepts of social change, democracy, markets, and governance is more thorny and arduous than meets the eye. Also theory of government was remarkably different in each circumstance. (Such that even Japan’s occupation was schizophrenic.) Institutional design is just not easy to get right and immediately, and put in the wrong hands leads to corruption or other distorted incentives.