The Impact of the United States on the Economy of Japan

There are many factors behind Japan’s being a developed and powerful country today. One of them is that the United States of America invaded Japan after the Second World War and brought political and economic configurations. Although these interventions were evaluated negatively by some authors, from a general perspective, it was a great chance for Japan and also an important turning point in order to achieve its current size (Beckley, et al.,2018). In this essay, the contributions of the USA to the Japanese economy will be discussed.

Japan left the Second World War with defeat and was occupied by the USA. Between 1945 and 1952, under the command of a soldier named General Douglas A. MacArthur (Office of the Historian, n.d.), practices were made for a more prosperous Japan, for a peaceful constitution, civil development and disarmament of Japan (Grabowiecki, 2006). To achieve this, MacArthur controlled the Supreme Commander for the Allied Powers (SCAP) and disbanded the Japanese army, ensuring complete control for a new Japan. SCAP played an important role in restructuring the Japanese economy. The first of these was a set of policies for economic development. These policies included agricultural reform, the dismantling of large family conglomerates (zaibatsu), and the security of union freedoms such as worker rights (Office of the Historian, n.d.). Among these policies, undoubtedly the most important was the US breaking up the large industrial conglomerates (zaibatsu) to create a competitive environment, which allowed for the emergence of competitive companies and new entrepreneurs. At this point, important Japanese companies were given a public organizational character and the importance of individual investors increased initially, rather than large zaibatsu. Thanks to this radical liberalization of the economic system, access to foreign technologies became easier, and many new companies and ventures such as Sony and Honda were born (Grabowiecki, 2006). Another important policy was in the field of agriculture, which provided advantages to tenant farmers and reduced the power of landowners. Additionally, important issues such as women’s rights, and a strong parliamentary system were also being presented (Office of the Historian, n.d). By the 1950s, however, the influence of the US alliance was waning and Japan was shifting towards the communist movement. However, this did not last long, and Japan began to be ruled by an administrator supported by the USA, away from communist movements(Beckley, et al.,2018). The renewed US-Japan relations were aimed at the growth of the economy of Japan from where they left off. In this direction, reforms were made in the financial sector and low interest loans were offered (Beckley, et al.,2018). In addition, restrictions on stock markets were adjusted, the importance of shareholders was increased by restricting cross-ownership, and shareholders were turned into creditors. In addition , as banks moved away from transparent and political structures , businesses carried out their activities faster and created a kind of trust environment (Grabowiecki, 2006).

By joining the members of Japan General Tariffs and Trade (GATT) in 1955, the USA took the first step to increase Japanese exports. However, this agreement was deemed unsuccessful due to the attitudes of other member states. As a result, the USA continued its efforts to bring Japan to a good position in foreign trade, and the customs duties were first reduced by 20%. Thus, with the increase in Japan’s exports, Japan had a trade surplus between 1958 and 1960 (Beckley, et al .,2018).

In addition to all these, the USA also provided information transfer to the Japanese economy. The first of these was transfer in the field of education. Students were sent to the USA for educational purposes to bring science to Japan. Another is technology transfers that took place in order to strengthen their alliance with the USA, and defense cooperation was achieved and eventually Japan developed in this area (Gönen, 2014). Finally, women started to play an active role in the workforce (Çelik, et al., 2021).

Finally, the restriction of Japan‘s defense expenditures caused its resources to shift to other sectors. The purpose of this was to make it a priority by promoting economic growth. And thus, economic growth was realized by transferring resources to the private sector (Beckley, et al., 2018).

In conclusion, the contribution of America to the economic development of Japan during the post-World War II occupation period is significant. Reforms carried out by SCAP have paved the way for many initiatives and important regulations have been provided in labor law. At the same time, regulations to increase Japan’s exports caused Japan to have a foreign trade surplus. In addition, in this process, knowledge transfer between the two countries was ensured in areas such as technology and education, and economic growth was achieved by transferring resources to other sectors with the restriction of defense expenditures.

References

1-Beckley, M., Horiuchi, Y., & Miller, J. (2018). “Amerıca’s Role In The Makıng Of Japan’s Economıc Mıracle”. Journal of East Asian Studies, 18(1), 1–21. doi:10.1017/jea.2017.24.

2-Çelik, H. & Çoker, G. C. (2021). “Japonya Siyasetinde Kadın: Liberal Demokrat Parti (LDP) Üzerinden Bir Değerlendirme” . Eskişehir Osmangazi Üniversitesi Sosyal Bilimler Dergisi , 22 (1) , 65–76 . DOI: 10.17494/ogusbd.952752

3-Grabowiecki, J. (2006). “Keiretsu Groups: Their Role in the Japanese Economy and a Reference Point (or Paradigm) for Other Countries”.Retrieved from https://www.researchgate.net/publication/333134570_Keiretsu_Groups_Their_Role_in_the_Japanese_Economy_and_a_Reference_Point_or_Paradigm_for_Other_Countries

4-Gönen, H. (2004). “ABD-Japonya Güvenlik Antlaşmaları: Oluşumu, Evrimi ve Sonuçları”. Uluslararası İlişkiler, 1(4), 115–139.Retrieved from https://dergipark.org.tr/tr/download/article-file/539649

5-Office of the Historian. (n.d.). “Japan: Reconstruction after World War II”. Retrieved from https://history.state.gov/milestones/1945-1952/japan-reconstruction