The success of Japan is due more to the US. Discuss.

Japans success from 1945 to 1973 can be seen in 2 phases: before 1955 and after
it. Initially, although the high speed recovery of the Japanese economy is facilitated
by the inherent industrial and social discipline of Japan, external factors like benign
occupation by the US and unrestricted access to US market and technology were
fundamentally the contributing factor. However, after the Japanese economy had
recovered to its pre-war level in 1943 by 1955, further acceleration of the economy
as well as the Golden Sixtieswhat quintessentially characterized Japans
economic success when it turned into the second largest economy by 1968were
primarily the result of internal factors like role of state institutions and good
employment and wage system. Therefore, this essay seeks to argue that the role of
the US was in Japans economic success is largely limited because even though it
was sufficient in helping Japan to recover at an astonishing pace, it was not enough
to sustain high growth rate in the longer term, unlike Japanese initiatives to develop
an independent economy.
Benign occupation by the US through the SCAP from 1945 to 1952 played a critical
and positive role in creating favorable conditions for growth. Early plans to strip
Japan of its remaining industrial plant and equipment were scrapped in favor of
promoting Japanese growth as according to the needs of Cold War aims, thereby
minimizing war reparations to confiscating Japans oversea capital which amounted
to only about $3billion as compared to the initial claims. The US stabilized Japanese
government finances and fixed the exchange rate at a low level favorable for
exports. Land reforms like transferring the land ownership to farmers who actually
till the land played a critical role in boosting food production and creating a middle
class of consumers for the products of Japanese industry. The US also undermined
the dominance of the zaibatsu by implementing a series of Anti-Monopoly and
Decentralization law, thereby permitting the emergence of some of Japans leading
companies such as Sony and Honda as well as enterprise Unions which played a
crucial role in taming labor movement in a time when Japan experienced intense
labor conflict, resulting in economic stability for growth. The US also provided
financial assistance amounting to about US$1.9billion during the occupation, mostly
in the form of food and in part, of industrial and transportation material.
War procurement by the US military during the Korean War are often credited with
pulling Japan out dire post-war recession, and putting the economy on a steep
growth trajectory. Not only did the sped up the signing the Treaty of San Francisco in
May 1951 with 47 of the Allies which thereby excluded Japanese from most
reparations except about $1.1billion to the countries like Burma, Indonesia, Thailand
and the Philippines, the Korean War Special Procurement increased orders from
Japan amounting to as high as $2billion, approximately 60% of export. Heavy
demand for goods created large employment opportunities and the accumulation of
capital during this period allowed Japan to embark on future planning needs and
industrial strategies.
Unhindered access to US market and technology coupled with allowance of
protectionism by the US also played a key role in Japans growth spurt. The licensing
of US technology on favorable terms due to US Cold War aim played an important
role as it saved Japanese companies enormous R&D expenses. Japanese firms were

quicker to adopt recent technological innovations than their foreign counterparts

because war devastation had provided Japan the opportunity to build from scratch.
Meanwhile, although the Japanese tapped into export markets, it kept its own
market relatively tightly protected. Due to Cold War aims, the US tolerated this until
the Nixon administration sparred with the Japanese Prime Minister Eisaku Sato over
textile in 1969.
However, socio-economic reasons like the prerequisites for growth and high level of
literary and good education system explain when Japan was able to recover so
quickly when aid was given. Before the war, Japan already had a relatively
advanced industrialized nation before the war and already possessed advanced
technological knowledge. This is the very reason why John Foster Dulles contested
in the 1950 that if the USSR were able to add itself the industrial capacity and
trained manpower of Western Germany and Japan, the world balance of power
would be profoundly altered. As Japan had a reservoir of human capital and
scientific expertise, Japans economic recovery was relatively quick. The rapid pace
of change and dissemination of new technologies in factories necessitated constant
job training and upgrading of skills. This was made easier by the fact that even blue
collar workers relatively well educated with a good foundation in math and science.
Moreover, the Japanese government had good employment policies and wage
system which contributed to the high growth. Lifetime employment worked to the
mutual advantage of workers and employers. Workers gained job security and
steady wage increases while employers could safely commit to human capital
investment as a result of that. Job security also facilitated the introduction of new
labor-saving, productivity-enhancing technologies, because unions and workers did
not feel threatened by innovation. With high saving rate and a government decision
to favor producers over consumers by keeping interest rates low gave Japanese
firms a competitive edge in terms of the cost of capital, which is an important factor
in expanding and modernizing production facilities and adopting new technologies.
On the other hand, with the Seniority Wage System, young workers which post-war
Japan had plenty of were paid below work productivity in return for the promise that
once they reach a certain level of seniority, they will be rewarded for their loyalty
with relatively high wages. This conferred a competitive edge on Japanese firms that
is beyond US aid.
Furthermore, since its creation in 1949, Ministry of International Trade and Industry
played the main role in orchestrating economic growth by channeling low cost loans
essentially from the Bank of Japan and extending other benefits like protectionist
measures to targeted sectors of the economy. Although the process of selecting
infant industries with the potential to develop comparative advantage was not
infallible, it was often very successful in nurturing the growth of industries in
promising areas like shipbuilding, electric power, coal. In fact, by 1956 shipbuilding
share exceeded 20% of the world total order. Moreover, MITI also played a key role
in brokering technology licensing deals with US corporations on attractive terms. As
long as they did not contradict laws like Anti-Monopoly, the US were willing to
transfer technology to them. Furthermore, the fact that economically-significant
Keiratsu like Mitsubishi, which mirrored the very wartime Zaibatsu that the US
clamped down remerged with the relaxation of Anti-Monopoly laws showed that the
impact of the role of the US is limited.

In conclusion, the role of the US is largely limited because even though they are
enough to contribute to the high speed recovery of Japan, they were not primarily
the reason for Japans exceptional growth rate. Given the US aid granted to any
other war-torn countries, they would more or less too have recovered relatively
quickly. However, whether they would be able to achieve the same economic
success or not is questionable and therein lies the reason as to why Japans
economic success is due more to internal factors. These are the unique policies and
condition of the Japanese, what many look to and call the Japanese economic
model.