Japanese Economic Success Post Wwii

"Japanese economic success is based on the ability to fuse the best of the west with the powerful traditions underlying Japanese life". The success of Japan in the world free market and its rapid ascension to the ranks of the worlds most powerful is subject to much debate. Having stagnated in isolation until the arrival of Commodore Perry in 1853 and suffering a massive blow to the economy following the loss of World War II, the success of the Japanese Economy is attributed to a number of factors. These range from the breakdown of social class by the creation of the Conscript Army and its victory over the Satsuma Rebellion through to the manufacturing of an artificially low and stable interest rate after WWII to stimulate venture capital . Yet most of these individual factors can be attributed to the rapid importation of western social theory, technology and economic practices and the combination of these with traditional values of Bushido, State Shinto and Japanese Tradition . The main exceptions to note is that the majority of reform came from the upper echelons of society; which in Japan meant the government. In contrast the majority of European reform came from the middle up, the signing of the Magna Carta, the October Revolution and the Tennis Court Oath are all examples where limitation of monarchial power is applied from below . The speed of Japans economic ascension can be attributed to the novel transition instituted by those in power to democracy. When looking at Japanese economic success the two main important periods to look at are the Meiji Restoration and post WWII reconstruction of Japan, as it is these periods in which Japanese economic growth is at its peak, which in turn set up Japan to be modern economic powerhouse.

"History is filled with the sound of silken slippers going downstairs and wooden shoes coming up". Voltaire

The Meiji Era saw the rapid economic growth through the importation of Western knowledge and the fusion of Japanese traditional values, to such an extent that Japan became a leading industrialized Asian comparable to that of some of the other western powers like Russia . This came through numerous economic reforms implemented by the young group of Imperial Advisors that controlled the Emperors seals . These reforms included the creation of a uniform decimal currency, founding of institutionalized banking and the employment of "o-yatoi gaikokujin" (hired foreigners). In a unique twist the Japanese Government had very little debt as Meiji Leaders equated "foreign debt with foreign control" This reluctance to borrow may be attributed to the Samurai's code or bushido , which classed debt as being dishonorable. The Meiji Era shows Japan as a culture that is able to adopt change rapidly, the change did have some teething problems with the Satsuma Rebellion. Yet when these changes proved effective against the ways of the old (i.e. the Conscript Armies defeated the Satsuma Samurai), doubt was quickly removed from the majority of the populations mind.

After the catch up of the Meiji Restoration, the main area of economic success in Japan can be seen in its post World War II reconstruction. Again we see the heavy influence of Western forces in economic capacity building. The first and foremost reason for this is the occupation of Japan by the allied forces and America's tight control over Japan. With the legalization of the communist party and the USSR biding for a split of Japan in the same manor of Germany, Japans economic future could have shared the same fate as the rest of the communist block. Yet due to protection from the United States, lack of public support for the often-violent communist lead trade unions and wide following for State Shinto, communism faded from the minds of Japanese people and focus was put back on nation building. Despite offering protection from communism and foreign squabbling over Japans internal affairs, General Macarthur made the mistake of purging Japan of "experienced commercial, industrial and financial personnel" and dissolving the Zaibatsu.

Yet in the same manor seen in the Meiji Restoration Japan pulled itself back to its prewar industrial production level by 1951 through westernized skillful management and traditional hard work by its people . Low rates of foreign borrowing meant that profits were kept in Japan and control over business stayed local. Realization that Private banks would be a Primary source of credit for industrial expansion & construction meant that the Government created an artificially low and stable interest rate which in turn lead to a favorable environment for capital investment . Combine this with the fact that the Japanese maintained a budget surplus that encouraged venture capital and protected it from the rising inflation seen around the world