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Published online by Cambridge University Press: 01 August 2014
The political activities of the business community in Japan have not received the scholarly attention they deserve. Because of the paucity of information and the lack of serious studies, the nature of the political power of Japanese business is poorly understood. The popular notion that big business is influential in politics is quite correct, but just how the influence is exercised, or how much influence can be brought to bear in a particular field of policy, or what conditions limit or augment business influence are far from clear.
This paper seeks to single out some of the important conditions affecting the impact of business influence in Japanese government and politics. The case approach is used, and the case is the abortive effort toward central bank reform. Even though this episode concerns only a small portion of the government machinery and the single field of monetary policy, it nevertheless demonstrates the methods commonly employed by business to reach decisions within its own group, the competition with others encountered in persuading the government to act, and the strength of bureaucratic forces resisting change. The simplicity of this case is an advantage in depicting the conflicting groups and the influence they were able to exert. Later studies may reveal more of the pattern of business action on other economic problems and in other areas of government and politics. The bank case showed the great influence of group and personal loyalties as well as the power of one of the government ministries.
The material presented here was collected during a trip to Japan in 1960 made possible by grants-in-aid from the Canada Council, the President's Committee on Research and the Institute of Social and Economic Research, both of the University of British Columbia. Much of it is based on interviews with high-ranking officials and businessmen, who were readily accessible but generally reluctant to reveal much, and with middle-ranking personages, who were usually more willing to speak freely and sometimes able to give very useful information. Even high-ranking leaders, however, in their need to persuade others, often find it advantageous to take favored reporters into their confidence, with the result that much valuable information finds its way into news stories. Government and business reports and privately printed business organizations' histories, on the other hand [see Keizai Dantai Rengokai (Federation of Economic Organizations), Shashi, Keizai Dantai Shi Mokuroku (Catalogue of Histories of Companies and Business Associations) (Tokyo, May 1961)], are almost devoid of practical details concerning policy advocacy. Future studies need to be supplemented by the personal records and accounts of leaders, if they can be obtained. Otherwise, the investigator is dependent on news accounts, formal reports, interviews, and detective work.
1 Nihon Shakaito Seisaku Shingikai Zaisei Kinyu Bukai (Public and Private Finance Section of the Socialist Party Policy Board), “Nichigin Seido ni Kan Suru Taido (Attitude Toward the Bank of Japan System),” April 20, 1960, mimeographed statement; Hyoe, Ouchi, “Nihon Ginko wa Dare no Mono ka (Just Who Does the Bank of Japan Belong to?),” Asahi Janaru (Morning Sun Journal), Vol. 1 (11 8 1959), pp. 8–15 Google Scholar.
2 The Kinyu Seido Chosakai (Committee of Financial System Research) was set up on June 3, 1956 with forty-five members, comprising bankers, journalists and professors mainly. It also had a committee of experts, thirteen officials from the finance ministry, Bank of Japan, and several other banks.
For some background, see Ott, David J., “The Financial Development of Japan, 1878–1958,” Journal of Political Economy, Vol. 69 ( 04 1961), pp. 122–141 CrossRefGoogle Scholar; Economic Research Department, Bank of Japan, Outline of the Financial System in Japan, 3d ed. (Tokyo, 04 1959)Google Scholar; Cohen, Jerome B., Japan's Postwar Economy (Bloomington, Indiana University Press, 1958)Google Scholar.
3 The Standing Committee for Planning (Joji Kikahu Iinhai) of six was to prepare basic materials for discussion by the Special Committee on the Central Banking System (Chuo Ginko Seido Tokubetsu Iinkai) of eighteen which included the six members of the other committee.
4 Nihon Keizai Shimbun (Japan Economic News), “Nichiginho Kaisei Mondai o Raigetsu kara Honkaku Shingi (Full Discussion of the Bank of Japan Law Revision Problem to Start Next Month),” 05 31 1958, p. 1 Google Scholar. (All newspaper citations are to the morning editions.) Shimomura was then a fiscal research officer of the finance minister's secretariat and at this writing is an economic advisor to Prime Minister Ikeda. He is the architect of the government policy of maintaining a very high rate of economic growth to increase employment and personal income.
5 Ibid. Matsumoto was then chief of the economic research department.
6 Tsukumo, Shionoya, “Chuo Ginko Seido no Kihon Mondai ni Kan Suru Oboegaki An (Draft Memorandum Concerning the Basic Problems of the Central Banking System),” 10 23 1958 Google Scholar, in Okurasho Ginkokyoku (Finance Ministry Banking Bureau), Chuo Ginko Seido (Central Banking System) (Tokyo, 1959), pp. 1–3 Google Scholar.
7 Keizai Dantai Rengokai or Keidanren. This might also be translated as “federation of business associations.” See Rengokai, Keizai Dantai, Keidanren No Junen (Ten Years of the Federation of Economic Organizations) (Tokyo, 1956), pp. 2–3 Google Scholar.
8 The Special Committee on the Financial System (Kinyu Seido Tokubetsu Iinkai). See Rengokai, Keizai Dantai, “Keidanren Jigyo Hokoku, Showa Sanjusan Nendo, Dai Juhachi Go (Federation of Economic Organizations Report of Activities, 1958, No. 18)” 05 1959, p. 47 Google Scholar.
9 On March 31, 1960 the Federation contained 718 corporations and 101 associations representing many thousands of individual firms. Rengokai, Keizai Dantai, “Keidanren Jigyo Hokoku, Showa Sanjuyo Nendo Dai Juku Go (Federation of Economic Organizations Report of Activities, 1959, No. 19)” 05, 1960, p. 103 Google Scholar. “Keizai Dantai no Genjo Ichiran (The Conditions of the Economic Organizations in Outline)” (Tokyo, 1960), 183 pp.Google Scholar, lists the member associations.
10 “The federation shall engage in the following activities … the presentation of proposals and recommendations to the National Diet, the Government and other agencies concerned in regard to adjustment, coordination and revision of economic policies, economic administration and legislation; and the rendering of cooperative services for satisfactory implementation of said proposals and recommendations,” the Federation of Economic Organizations, “Constitution” pamphlet (Tokyo, 1954), p. 1 Google Scholar; Japanese text in Keidanren No Junen, p. 247. See also “Federation of Economic Organizations (Keidanren)” pamphlet (Tokyo, 1958–1959), p. 1 Google Scholar.
11 Keizai Saiken Kondankai (Economic Reconstruction Council).
12 On the party fund council see Mainichi (The Daily News), “Seito to Toshikin (Political Parties and Party Funds)” 11 30 1955, p. 2 Google Scholar; Asahi Janaru, “Seikai ni Tsunagaru Zaikai no Kane (The Business World's Money Ties with the Political World)” Vol. 2 (10 30 1960), pp. 78–79 Google Scholar; Asahi Shimbun (Morning Sun News), “Towaku Suru Jiminto, Keizai Saiken Kondankai no Kaisanron (The Perplexed Liberal Democratic Party, the Advocacy of the Abolition of the Economic Reconstruction Council),” 01 29 1961, p. 1 Google Scholar.
13 Dinner on August 31, 1960 given by the Federation of Economic Organizations, Federation of Employers' Organizations (Nihon Keieisha Dantai Remmei or Nikkeireri), and the Japan Management Association (Keizai Doyukai). See Yuichiro, Yaguchi, “Yottsu no Keieisha Dantai (The Four Employers' Organizations),” Chuo Koron (Central Review), 10, 1960, p. 157 Google Scholar.
14 Ishizaka Taizo, president of the Tokyo Shibaura Electric Company and president of the Federation, said at the twenty-first general meeting, May 19, 1960, “The federation has reached the greatest common measure of agreement possible when it announces an opinion as that of its organization, but there is the feeling that it is lukewarm since the firms which are related to it are divergent in their interests. It would not do for the president to arbitrarily try to push matters forward, but, as a basic position, I think we should pull together under the slogan of a free economy.”
15 Rengokai, Keizai Dantai, “Nihon Ginkoho Kaisei ni Kan Suru Yobo Iken (Recommendations Concerning the Revision of the Bank of Japan Law),” 03 30 1959 in Chuo Ginko Seido, p. 315 Google Scholar.
16 Ibid., p. 314.
17 The more important Medium and Small Enterprise Federation (Nihon Chusho Kigyo Dantai Remmei) and the Japan Chamber of Commerce and Industry (Nihon Shoko Kaigisho) left the Federation in 1952 because of feelings of discrimination against them by big business. See Masatomi, Nagata, Keizai Dantai Hattatsushi (History of the Development of Economic Organizations) (Tokyo, 1956), p. 209 Google Scholar.
18 The conflict between small and large ship operators in the member association, the Japan Shipowners' Association (Nihon Senshu Kyokai), almost resulted in the disintegration of that association recently. The small owners felt that most of the benefits of government aid were going to the big owners. The small owners put more reliance on their contributions made directly to party politicians than on the association.
19 Funds available to the commercial banks have been insufficient to meet the demand for loans by industry; the commercial banks have regularly borrowed large sums from the central bank to expand their loans.
20 The Financial Problems Investigation Committee (Kinyu Mondai Chosa Iinkai).
21 Zenkoku Ginko Kyokai Rengokai, Tokyo Ginko Kyokai (Federation of Bankers' Associations of Japan and the Tokyo Bankers' Association), “Kyokai no Shiori (Guide to the Associations),” pamphlet (Tokyo, 09, 1959)Google Scholar.
22 Rengokai, Zenkoku Ginko Kyokai, “Chuo Ginko Seido ni Kan Suru Iken (Views on the Central Banking System),” 04 2 1959, in Chuo Ginko Seido, pp. 317–318 Google Scholar.
23 Ibid., pp. 331–334.
24 Keidanren Geppo (Federation of Economic Organizations Monthly), “Nihon Ginkoho Kaisei no Mondaiten: Zadankai (Round Table on Bank of Japan Law Revision Issues),” 07, 1959, p. 21 Google Scholar.
25 Toyo Keizai Shimpo (Oriental Economic News), “Churitsusei de ketsudan o semarareru Nichiginho Kaisei (Neutral Stand Pressed as Basis for Decision in Bank of Japan Law Revision),” No. 2906 (09 12 1959), p. 50 Google Scholar.
26 See above, note 4.
27 Same as reference in footnote 25.
28 Nihon Keizai Shimbun, “Shijiken o Zoaho ni (Directive Power to the Ministry of Finance),” 08 25 1959, p. 1 Google Scholar. For text of the draft see p. 3.
29 Nihon Keizai Shimbun, “Nichigin, Shoiinkai ni Tsuyoku Hantai (Bank of Japan Strongly Opposes Sub-Committee Draft),” 09 3 1959 p. 3 Google Scholar.
30 Nihon Keizai Shimbun, “Shijiken, Churitsusei o Habamu, Taniguchi Fukusosai no Hatsugen Naiyo (Directive Power Will Obstruct Neutrality, the Contents of Vice-Governor Taniguchi's Statement),” 09 4 1959, p. 3 Google Scholar.
31 “Keidanren Jigyo Hokoku Showa Sanjuyo Nendo, Dai Juku Go,” pp. 60–61.
32 Nihon Keizai Shimbun, “Shijiken ni wa Tsuyoku Hantai, Hori Zenginkyo Kaicho Ra (Strong Opposition to Directive Power, President Hori of the Federation of Bankers' Associations of Japan and Others),” 09 11 1959, p. 3 Google Scholar.
33 Nihon Keizai Shimbun, “Churitsusei ni Ryoron Heiki (Both Versions on Neutrality Put Side by Side),” 04 1 1960, p. 1 Google Scholar, Text on p. 5.
34 Nihon Keizai Shimbun, “Nichigin Seido Kaisei de Toshin (Report on Revision of the Bank of Japan System),” 09 21 1960, p. 1 Google Scholar. See p. 3 for text of explanatory statement accompanying the report.
35 Doa, R. P. (Dore, R. P.), “Surogan no Hanran Suru Kuni (The Country Where Slogans Abound),” Chuo Koron, 01, 1961, especially p. 240 Google Scholar.
36 The Keizai Kenkyukai. Shukan Asahi (Weekly Morning Sun), “Zaikai no Ikeda, Seichoritsu 9% no Bureentachi (Ikeda of the Financial World … The Brains behind the 9% Growth Rate),” 10 30 1960, pp. 8–9 Google Scholar. See note 4, above.
37 Kyonosuke, Sakai, “Nihon Ginkoho Kaisei Rongi o Kaerimite (Looking Back Over the Discussion on the Revision of the Bank of Japan Law),” Keidanren Geppo, 11 1959, pp. 7–9 Google Scholar; Toshihiko, Yoshino, “Excessive Dependence of Commercial Banks on Central Bank Loans in Japanese Economic Development,” mimeographed, note pages 29 ff.Google Scholar
38 For Sato's, position see Nihon Kogyo Shimbun (Japan Industrial News), “Seifu no Nichigin Shijiken (The Government's Bank of Japan),” 04 12 1960, p. 1 Google Scholar.
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