JAPANESE MIRACLE: CAUSES, CHARACTERISTICS AND CONSEQUENCES - HISTORY - 2025

Japanese miracle is the term used by economists and historians to designate the period of great economic development in Japan after World War II. The consequences of the Japanese defeat and the American bombings had left the country devastated and totally ruined.

To this circumstance had to be added the scarcity of raw materials, as well as the geographical characteristics of the islands that make up Japan. As a noteworthy fact, only 14% of its surface is arable.

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However, from 1960 to the 1980s, the Asian country experienced economic growth rates that made it the second world power, only surpassed by the United States.

Many experts say that the causes of this growth had begun to be established before the war, when Japan modernized its structures with the Meiji Revolution, but the conflict paralyzed these advances.

After the war, several factors came together that helped the country to recover and improve its situation. The American aid, which wanted an ally against communist China, the reforms in the country's industry and a protectionist regulation, were some of the causes and characteristics of the Miracle.

Causes

The Second World War left Japan practically devastated. It is estimated that 40 percent of its cities were destroyed and millions of citizens died. In the economic sphere, per capita income fell sharply.

The atomic bombs dropped on Hiroshima and Nagasaki caused the immediate surrender of Japan. The victors, the United States, took control of the situation and changed the political system to a great extent.

They kept the figure of the Emperor, but devoid of the previous divine character. Likewise, they demilitarized society and began to democratize it.

The country had already undertaken a series of reforms before the war. It was the Meiji Restoration, which produced up to 600% growth in industrial production in the late 19th and early 20th centuries.

However, the post-war recovery was much more spectacular and economists began to call it the "Japanese miracle."

American aid

The United States, as the winning power of the war, soon began helping Japan to recover. On the one hand, the Cold War was beginning, and Japan had a privileged position against China and the Soviet Union. On the other, it was a new market for American products.

Initially, the United States imposed tough austerity targets. She was dealing with this plan to contain inflation. Likewise, it introduced advanced technology, in addition to capital. Finally, I help boost Japanese trade throughout Southeast Asia.

Within Japan, the United States found the support of the bourgeoisie, eager to gain economic power. A liberal democracy was established and the most important US military base, Okinawa, was opened in the country.

Although in 1951, with the Treaty of San Francisco, the American occupation officially ended, the truth is that it continued to influence the government of the country.

State policy

The new Japanese government began to institute policies to drive economic recovery. Although the system to be established was capitalist, for many years there was a great state interventionism that helped Japanese companies.

The state became responsible for industrial, commercial and financial policy, with the intention of promoting economic progress.

Among the declared objectives of the Ministry of Economy and Industry was to promote large-scale production through economic concentration; the protection of the country against foreign competition; and promote the foreign market.

The government encouraged the formation of large industrial groups, the so-called Keiretsu. After the war, these corporations were banned, but they re-emerged.

In the 1960s, corporations such as Mitsubishi, Fuji or Toyota dominated the market. To further help these large conglomerates, the MICE (agency in charge of the economy) protected them against foreign competition.

Exports also increased after 1960. Its main market was the United States, in addition to Western Europe. In the 1970s, exports grew by 800%. The positive balance in its trade balance caused a lot of capital to flow out and made Japan one of the main creditors in the world.

Class cooperation

The United States, as the occupying power, reorganized the state apparatus. He enacted laws to democratize the country, decreed an agrarian reform and banned the Zaibatsu.

At the same time, it gave workers the right to strike and the ability to organize. Communist-inspired parties and associations began to act, taking control of some companies. This situation went against the American capitalist policy, so the authorities declared this practice illegal.

The following wave of strikes led Americans to initiate the so-called "red purge" against left-wing unions and workers.

As early as the 1950s, anti-communist labor movements were created in Japan. At first, they had clashes against the businessmen, although the repression unleashed meant that their struggle came to nothing.

However, by the 1960s, the industry had expanded greatly and there was a shortage of labor. This gave workers an advantage in demanding wage increases and, at the same time, caused companies to start automating plants.

The bourgeoisie had recovered and managed to eliminate the most militant unions. A right-wing trade union organization appeared, sponsored by businessmen, proposing collaboration between social classes.

characteristics

One of the characteristics that the authors most highlight about the Japanese Miracle is the importance of sociocultural factors. The Japanese applied to their industry values ​​from Shintoism or Neo-Confucianism. Likewise, they had a great spirit of sacrifice and placed great importance on education.

New organizational models

The Japanese miracle was, to a large extent, based on new models of organization and operation in the industry. The management of work surpassed the American Fordian system and was exported to other parts of the world.

Toyota, a company in which many management techniques were applied, became synonymous with productivity. Tools such as Just in Time, Kanban, Kaizen or Quality Circles, were based on a mixture of ancient Japanese traditions and postulates of scientific organization.

Apart from this new production model, the Japanese miracle introduced concepts such as lifetime employment, which strengthened the link between workers and the company, or teamwork. Finally, he also placed great emphasis on the versatility of the workers, their qualification and their participation.

Limitation of raw materials

One of the problems that the industry encountered during the decades of recovery was the limitation of raw materials. The islands did not provide what was necessary for production, so they had to find ways to increase profitability.

The steelworks were located near strategic ports, to save costs. The authorities, for their part, established agreements with many countries.

It was about balancing the trade balance through the entry of capital and the exchange of products. Thus, 85% of exports corresponded to manufactured products.

Business concentration

The Zaibatsus had been financial groups that served to concentrate companies. After the war, the Americans banned them, as they had played an important financial role in the conflict.

However, shortly after, they recovered again and became a vital part of the recovery.

On the other hand, the experts also highlight the capacity for citizen savings as an important factor in the Miracle. These savings were destined, in large part, to industry and commerce, both internal and external.

The banks, thanks to that amount of money available, were able to provide loans at very low interest, something that small companies used to modernize equipment and for R&D departments.

Consequences

One of the most important figures in the Japanese miracle was Hayato Ikeda, the nation's Prime Minister in the 1960s. The politician designed a program of economic growth fundamental to Japanese success.

Ikeda set out to double the national income in just 10 years. In practice, he did it in half the time. From then on, Japan grew at a rate close to 13/14%.

The growth data reached an average of 5% during the 60s, 7% in the 70s and 8% in the 80s.

Industry development

The sector in which the Japanese miracle is best seen was industry. In two decades, since the end of World War II, Japan had half the world's maritime tonnage, was the third largest producer of steel and motor vehicles and the second in electronics.

In ten years, from 1962 to 1972, the Gross Domestic Product went from being a fifth of that of the United States to a third of the same. Its trade surplus quintupled by the early 1970s, being also the first country in shipbuilding, in the production of motorcycles and televisions and the second in automobiles and synthetic fiber.

Another strategy followed by Japanese companies was the use of what was invented in other countries. As an example, Sony used the patent for hearing aid transistors to build portable radios.

Finally, he highlighted the great automation in the industry, as well as the use of New Technologies and robotics to achieve better results and productivity.

Crisis of the model

Japanese success suffered a hiatus from the 90s, beginning the so-called lost decade. The economy stagnated, a situation that still persists. The beginning of this crisis was due to the bursting of a financial and real estate bubble caused by his performance as a global banker.

Similarly, the aging of the population and the appearance of the so-called "Asian tigers" also slowed down the country's economy.

For years, the Japanese situation has remained balanced, with figures that place it in deflation. Government policies have so far failed to put the country back on the growth path.

On the social level, on the other hand, progress was not at the same speed as in the economy. Suicide figures, the lack of minority rights, and the problems of youth stand out negatively in relation to the perception of happiness.

References

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4. Tetsuji, Okazaki. Lessons from the Japanese Miracle: Building the Foundations for a New Growth Paradigm. Retrieved from nippon.com
5. Crawford, Robert J. Reinterpreting the Japanese Economic Miracle. Retrieved from hbr.org
6. Farlex Financial Dictionary. Japanese Miracle. Retrieved from financial-dictionary.thefreedictionary.com
7. Herbener, Jeffrey M. The Rise and Fall of the Japanese Miracle. Retrieved from mises.org
8. Spacey, John. Japan's Economic Miracle. Retrieved from japan-talk.com