Japan and the Reconstruction of East Asia

Japan and the Reconstruction of East Asia Dominic Kelly

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International Political Economy Series General Editor: Timothy M. Shaw, Professor of Commonwealth Governance and Development, and Director of the Institute of Commonwealth Studies, School of Advanced Study, University of London Titles include: Pradeep Agrawal, Subir V. Gokarn, Veena Mishra, Kirit S. Parikh and Kunal Sen POLICY REGIMES AND INDUSTRIAL COMPETITIVENESS A Comparative Study of East Asia and India Roderic Alley THE UNITED NATIONS IN SOUTHEAST ASIA AND THE SOUTH PACIFIC Dick Beason and Jason James THE POLITICAL ECONOMY OF JAPANESE FINANCIAL MARKETS Myths versus Reality Mark Beeson COMPETING CAPITALISMS Australia, Japan and Economic Competition in Asia-Pacific Deborah Bräutigam CHINESE AID AND AFRICAN DEVELOPMENT Exporting Green Revolution Steve Chan, Cal Clark and Danny Lam (editors) BEYOND THE DEVELOPMENTAL STATE East Asia’s Political Economies Reconsidered Abdul Rahman Embong STATE-LED MODERNIZATION AND THE NEW MIDDLE CLASS IN MALAYSIA Dong-Sook Shin Gills RURAL WOMEN AND TRIPLE EXPLOITATION IN KOREAN DEVELOPMENT Jeffrey Henderson (editor) INDUSTRIAL TRANSFORMATION IN EASTERN EUROPE IN THE LIGHT OF THE EAST ASIAN EXPERIENCE Takashi Inoguchi GLOBAL CHANGE A Japanese Perspective Dominic Kelly JAPAN AND THE RECONSTRUCTION OF EAST ASIA L. H. M. Ling POSTCOLONIAL INTERNATIONAL RELATIONS Conquest and Desire between Asia and the West Pierre P. Lizée PEACE, POWER AND RESISTANCE IN CAMBODIA Global Governance and the Failure of International Conflict Resolution

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Ananya Mukherjee Reed PERSPECTIVES ON THE INDIAN CORPORATE ECONOMY Exploring the Paradox of Profits Cecilia Ng POSITIONING WOMEN IN MALAYSIA Class and Gender in an Industrializing State Ian Scott (editor) INSTITUTIONAL CHANGE AND THE POLITICAL TRANSITION IN HONG KONG Mark Turner (editor) CENTRAL–LOCAL RELATIONS IN ASIA-PACIFIC Convergence or Divergence? Fei-Ling Wang INSTITUTIONS AND INSTITUTIONAL CHANGE IN CHINA Premodernity and Modernization

International Political Economy Series Series Standing Order ISBN 0–333–71708–2 hardcover Series Standing Order ISBN 0–333–71110–6 paperback (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and one of the ISBNs quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England

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Japan and the Reconstruction of East Asia Dominic Kelly Department of Politics and International Studies University of Warwick

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© Dominic Kelly 2002 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2002 by PALGRAVE Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE is the new global academic imprint of St. Martin’s Press LLC Scholarly and Reference Division and Palgrave Publishers Ltd (formerly Macmillan Press Ltd). ISBN 0–333–96433–0 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Kelly, Dominic, 1965– Japan and the reconstruction of East Asia/by Dominic Kelly. p. cm. – (International political economy series) Includes bibliographical references and index. ISBN 0–333–96433–0 1. Japan – Foreign economic relations – East Asia. 2. East Asia – Foreign economic relations – Japan. 3. Japan – Economic policy – 1945–1989. 4. Japan – Economic policy – 1989– . 5. East Asia – Economic conditions. I. Title. II. Series. HF1602.15.E2 K45 2001 337.5205 – dc21 2001036355 10 9 8 7 6 5 4 11 10 09 08 07 06 05

3 2 04 03

Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham, Wiltshire

1 02

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For Brigid Mary Kelly and in memory of John Michael Kelly and Clare Croft

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Contents List of Tables

ix

Preface and Acknowledgements

x

Abbreviations and Acronyms

xii

Maps of the Region

xv

1 Introduction: Japan in the New World Order

1

Part I Theory 2 Historical Materialism, World Order and ‘New IPE’ Theory Part II

13

History and Society

3 1945–1960: Occupation and Aftermath

33

4 1960–Present: Fracture and Response

54

Part III

Contemporary Political Economy

5 Mapping Japan’s Role in East Asia: Production

67

6 Mapping Japan’s Role in East Asia: Finance

89

7 Mapping Japan’s Role in East Asia: Security

106

8 Mapping Japan’s Role in East Asia: Knowledge

128

9 Conclusion

149

Notes

159

Bibliography

205

Index

234

vii

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List of Tables 3.1

Purgees by categories

37

5.1

Regional distribution of Japan’s bilateral ODA

83

7.1

Defence expenditures of 5 largest nations

ix

117

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Preface and Acknowledgements This book has two major goals. The first is to present an empirical overview of the current state of relations between Japan, its neighbours and its closest ally the United States, and to detail how and why these are changing. The second, and perhaps more important, is to break down barriers – between the domestic and international levels of analysis, between the economic and the political and between the disciplines of political science, international relations and area studies. As such, I hope that it will appeal both to established researchers and those new to the study of Japan, East Asia and international political economy. Unlike many who have benefited from having lived in Japan for several years and having subsequently been taught in an East Asian Studies department, the vagaries of being a teacher of English as a second language and then a student majoring in International Political Economy have left me with a more limited facility in the Japanese language than I would wish. As a consequence, I have had to make a number of difficult choices in order to bring this book to public view: First, to do so without recourse to Japanese language materials, except in translation, and second, to omit macrons from Japanese words used in the text. No doubt this will displease the purists from among the Japanese Studies fraternity, but I hope to mollify them somewhat by citing Japanese names in the traditional manner (family name followed by given name) except where the particular individual has published in English using western conventions. In completing the book I have incurred a great many debts, not all of which can be repaid. My initial experience of Japan was shared with Ciara Brennan, and through her insight I observed and learned a great deal more about Japan and its people than I otherwise would have done. On my return to Japan in 1996 I had the good fortune to be able to use the International University of Japan as a base of operations, and I would like to thank Bruce Stronach and John Welfield in particular for making my stay there both rewarding and stimulating. I gratefully acknowledge the Japan Foundation Endowment Committee for providing me with the funds that made the trip possible. Much of the work that went into the book was undertaken in Sheffield at the Political Economy Research Centre. I would like to thank everyx

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Preface and Acknowledgements xi

one at the Centre, past and present, for making me so welcome. Tony Payne, Glenn Hook, Andrew Gamble, Randall Germain, Ankie Hoogvelt and Sylvia McColm have in their separate ways all made major contributions to the book and the larger project over the years. If I may, Tony deserves special mention for service above and beyond the call of duty, including endless hours of editing, cajoling and threatening in the absence of which the book would not be as it now appears, and indeed may never have appeared at all. In addition a number of friends and acquaintances, in Sheffield and beyond, deserve particular mention for various reasons. My thanks to Hazel May, Jim Buller, Joanne Cook, Marion Faerber, Pan Fong, Julie and Simon Gilson, Mike Harris, Ian Kearns, Gavin Kelly, Micky Kerr, Mike and Karen Kinley, Akis Konidaris, Jane and James MacNamara, Lizzie Newton, Sue Presland, Gillian Pye, Caroline Rose, Matthew Flinders and Tamsin Ryder, and Peter Wells. If much of the initial work was undertaken at Sheffield, it was finished at Coventry University. With a whip in his hand, and the RAE on his mind, Brian Hocking oversaw the final stages of production, allowing me the time and space in which to finish it even though this impinged upon my other duties. I record my thanks and appreciation to him here, even though I moved across town to my current institution before the ink was dry on the contract! My thanks also to Tim Shaw, Mark Beeson and an anonymous reviewer for reading parts or all of the text in its raw form, and for suggesting some significant improvements; and to Nicola Viinikka for steering the book through the editorial process. The usual disclaimers apply. I owe a very large debt indeed to my family, who have supported me throughout. I could not have done it without Brigid, Fran, Chris, James, their progeny and significant others. Likewise to my wife, Linda Hunt. No words of mine could adequately convey the extent of her contribution toward my professional and personal fulfilment and happiness. That said, the final word must go to my beloved cat, Morpheus. Aside from myself (and possibly my mother), Morph spent more time worrying about this book than anyone else. Many hours of his time sailed past in contemplation of the text; usually carried out upside down as he lay on the monitor, sometimes in my lap and occasionally on the keyboard itself. His disappearance, on the day I completed the first draft, was a bitter blow. DOMINIC KELLY

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Abbreviations and Acronyms ADB AIDS APEC AMF ARF ASDF ASEAN ASEAN-ISIS ASEAN-PMC BBC BOJ BTWC CSCAP CSCE CTBT CWC DAC DRB EAEC EAEG EU FDI GATT GDP GSDF HCLC HIV IAEA IBRD IISS IMF IPE IR JCP JSP

Asian Development Bank Acquired Immune Deficiency Syndrome Asia Pacific Economic Cooperation Asian Monetary Fund ASEAN Regional Forum Air Self Defence Force Association of Southeast Asian Nations ASEAN Institutes of Strategic and International Studies ASEAN Post-Ministerial Conference British Broadcasting Corporation Bank of Japan Biological and Toxin Weapons Convention Council for Security Cooperation in the Asia Pacific Conference on Security and Co-operation in Europe Comprehensive Test Ban Treaty Chemical Weapons Convention Development Assistance Committee Deconcentration Review Board East Asian Economic Caucus East Asian Economic Group European Union Foreign Direct Investment General Agreement on Tariffs and Trade Gross Domestic Product Ground Self Defence Force Holding Company Liquidation Committee Human Immunodeficiency Virus International Atomic Energy Agency International Bank for Reconstruction and Development International Institute for Strategic Studies International Monetary Fund International Political Economy International Relations Japan Communist Party Japan Socialist Party xii

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Abbreviations and Acronyms xiii

LDP LTCB MITI MNC MOF MOFA MOSS MSDF MTCR NAFTA NATO NICs NPT NSG ODA OECD PKO PRC PTBT RIMPAC SCAP SIPRI SDF SLOC SLORC SPDC TMD UN UNESCO UNROCA UNSC VER WTO

Liberal Democratic Party Long Term Credit Bank Ministry of International Trade and Industry Multinational Corporation Ministry of Finance Ministry of Foreign Affairs Market-Oriented Sector Specific Talks Maritime Self Defence Force Missile Technology Control Regime North American Free Trade Agreement North Atlantic Treaty Organisation Newly Industrialising Countries Nuclear Non-Proliferation Treaty Nuclear Suppliers Group Official Development Assistance Organisation for Economic Cooperation and Development Peace-Keeping Operations People’s Republic of China Partial Test Ban Treaty Rim of the Pacific Supreme Commander Allied Powers Stockholm International Peace Research Institute Self-Defence Force Sea Lines of Communication State Law and Order Restoration Council State Peace and Development Council Theatre Missile Defence United Nations UN Educational, Scientific and Cultural Organisation UN Register of Conventional Arms United Nations Security Council Voluntary Export Restraint World Trade Organisation

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0333_964330_01_pre.qxd 11/9/01 10:07 AM Page xvi

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1 Introduction: Japan in the New World Order

This book investigates the unfolding process of regionalism and regionalisation in East Asia, focussing on the leading role being played by Japan. It attempts to integrate theoretical argument, historical interpretation and empirical mapping in order to both address gaps in the literatures of political science, international relations and Japanese studies and to foster dialogue between them. A central contention of the study, and the starting point of the book, is that accounts of regionalism emerging from the mainstream of theorising in international relations (IR) and international political economy (IPE) have been unable to understand and explain adequately the resurgence of regionalism in world politics that has taken place in the last two decades.1 This deficiency results from a prior inability to fathom the sources of power in modern society. Despite differences in approach, accounts of regionalism emerging from neo-realist and world systems theory ultimately betray themselves through a common focus on changes in the relative power of states and on the ability (or lack thereof) of a hegemonic power to create and maintain a degree of order in the ‘system’ sufficient to facilitate the smooth operation of global capitalism. This similarity can be attributed variously to an atomistic ontology and empiricist epistemology (accepted by leading neo-realist scholars such as Gilpin, Keohane and Krasner, and world systems theorists such as Wallerstein) the theoretical and practical implications of which have long been understood.2 As Wendt has shown, both neo-realism and world systems theory run the risk of oversimplification and determinism, since ‘both attempt to make either agents or structures into primitive units, which leaves each equally unable to explain the properties of those units, and therefore to justify its theoretical and explanatory claims about state action’.3 1

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2 Japan and the Reconstruction of East Asia

Explanations offered by area studies specialists and ‘Japanologists’ are, for the most part, equally unimpressive since they have, by and large, fallen into this same ontological and epistemological trap. Indeed, it is fair to say that the majority of published work on the international relations of Japan and the economics and politics of regionalism undertaken by Japanese, other Asian, European and North American scholars has followed the mainstream orthodoxy to a fault.4 In practical terms what this means is that when seeking powerful explanations of regionalism and world order we need to look elsewhere.5 In contrast to these efforts, this book draws upon the rich legacy of Marx, Lenin and others as it has been interpreted and developed by Gramsci in the Prison Notebooks and elsewhere, and in the contemporary work of Cox.6 Their attempts at understanding the modern condition have focussed not on states as autonomous sovereign units or on structures as generative of states but on social forces themselves – on the social relations of production and the transformative potential inherent within them. Although the number of scholars working within the field of IR/IPE who draw upon Gramscian analysis is relatively small, the published results of their work has had quite an impact. The focus, however, tends to be on the hegemony of transnational social forces and the implementation of the neo-liberal agenda at either the global, regional or national levels. Hence, for example, Gill’s work on American Hegemony and the Trilateral Commission; van der Pijl’s work on The Making of an Atlantic Ruling Class; Augelli and Murphy’s study of America’s Quest for Supremacy and the Third World; and Overbeek’s analysis of the Thatcher decade in Global Capitalism and National Decline.7 In contrast to these earlier studies, Rupert, in Producing Hegemony, examines the politics of mass production within the United States and the subsequent emergence of US global hegemony.8 This redirects the initial focus of inquiry away from transnational social forces and toward the social relations of production within states themselves. It is in this latter direction that this book seeks to move. The debate over the existence or otherwise of Asian values and the possibilities for ‘Confucian’ capitalism points to the fact that there are undoubtedly interesting developments underway at the transnational level in East Asia.9 It is my contention, nevertheless, that a fuller understanding of the process of regionalism in East Asia should be built upon an analysis of developments within the boundaries of the Japanese state, and draw upon a Gramscian-derived account of the forces contributing to social change.

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Introduction 3

Regionalism and world order: mainstream accounts10 Various accounts of the future shape and characteristics of the immanent world order have been sketched out in the mainstream literature. In general, these seek to come to terms with a world where the US is no longer the undisputed master of the system of states, where global economic forces seem to have acquired an unstoppable momentum, and where political regionalism and economic regionalisation are the result. Such accounts range from the relatively benign picture of a posthegemonic world characterised by co-operation between advanced industrial states acting rationally through the mechanism of international regimes offered by Keohane, to the cautious pessimism of Thurow who sees a world possibly soon to be plunged into a protracted struggle between incompatible variants of capitalism led by the US on the one hand and by Japan on the other with Europe somewhere in between, to the alarmism of Olsen and others who draw upon metaphors associated with the Cold War in order to construct an argument which replaces the Soviet military ‘threat’ with the Japanese economic ‘menace’.11 Five such scenarios of varying degrees of credibility (and elegance) have become popular and can be listed as follows: Pax Americana II, ‘Bigemony’, Pax Consortis, Pax Nipponica, and the ‘regional bloc scenario’.12 Of the first four, Pax Americana II places particular emphasis on the continuing ‘strength in depth’ of the US, especially vis-à-vis its major perceived rivals in the context of the post-Cold War world.13 ‘Bigemony’, on the other hand, anticipates an equalisation of power between the US and Japan, although in different spheres. In such a future, the US would continue to play its traditional role of ‘world policeman’ but would be supported by Japanese (and perhaps also German) economic muscle, as was the case during the Gulf War.14 Pax Consortis envisions a world where no single power dominates, and where the stability of the system is maintained by co-operation between the major states, mediated through a number of international regimes,15 whilst, as the name implies, Pax Nipponica foresees the passing of American hegemony and its replacement by Japan.16 The fifth scenario predicts the emergence of three competitive regional blocs embracing North America, East Asia, and the European Union (EU). This scenario has been lent additional credibility by the signing of the North American Free Trade Agreement (NAFTA) in the context of increasingly strained relations between the US and Japan, and also by the steady process of integration and expansion of the EU

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4 Japan and the Reconstruction of East Asia

(or, for some, ‘fortress’ Europe).17 Indeed, through a process of osmosis and amplification amongst US political, academic and media circles, this scenario has appeared increasingly to represent the most likely future for the inter-state system.18 It was not so much the EU that Americans feared, however (although this may be changing with monetary union and the Asian crisis), but the challenge represented by the booming economies of East Asia and, more specifically, by the prospect of Japanese economic leadership of the region.19 Whether entirely sanguine or grimly doom-laden, these accounts of future world order rest for the most part on analytical foundations and conceptual tools provided by neo-realism.20 The ‘neo’ in neo-realism points to the ongoing efforts of (mostly US-based) IR specialists to recast ‘classical’ realism in light of the movement of economic issues from the margins to the centre of world politics since the 1960s and 1970s. These efforts have entailed the rapid and wholesale incorporation into IR of a set of concepts and a methodology developed over long years by those working in the field of economics.21 The resultant synthesis of international politics and economics (or ‘international political economy’) is open to critique on several grounds and the remainder of this section sets out to explore the major elements of such a critique.22 A convenient starting point is the theory of hegemonic stability, which asserts that ‘for the world economy to be stabilized there needs to be a stabilizer – one stabilizer.’23 According to this view, the role of the stabiliser, or ‘hegemon’, is to create and underwrite the public goods of order and openness throughout the global economy. In the absence of such a hegemon (that is, a dominant state) management of the global economy becomes untenable, and mercantilist competition and economic closure become the order of the day. The Netherlands and the United Kingdom are usually cited as former exemplars and the chaos of the inter-war period as an interval between the decline of the UK and the rise of the US as the new hegemon. This conceptual framework has been appropriated by mainstream IPE in order to explain the relative stability of the global political economy in the post-war era, focussing on the absolute and relative strength of the US economy vis-à-vis its capitalist allies.24 It was for this reason that the perceived decline in US power from the early 1970s onward caused an unprecedented outpouring of argument and debate, both over the reality or otherwise of decline and over what would happen next.25 Could the US recover, or would Japan take over as ‘number one’?26 Were established international regimes strong enough to ensure co-operation after hegemony, or would the global economy

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Introduction 5

spiral downwards toward another bout of mercantilism, regional bloc formation and perhaps even war?27 These were the issues that the accounts outlined above sought to address, and which were the source of orthodox debate on the nature and likelihood of regional bloc formation in coming years.28 Make no mistake, some of the output produced by those mining this analytical vein is rich and highly sophisticated. Yet, as Keohane himself freely admits: ‘That the theory of hegemonic stability is supported by only one or at most two cases casts doubt on its general validity’.29 It is overly concerned with the search for order between states.30 It tends to prejudice economic sources of power, economic issues and the analysis of economic ‘regimes’ at the expense of important geo-strategic concerns such as the Cold War.31 It is based on a selective and largely inaccurate picture of the American post-war experience; one which obscures the fact that the US was at times far from dominant even over its closest allies.32 It is far too sanguine about the nature of ‘public goods’ and their provision by a hegemonic US to the rest of the world.33 Finally, hegemonic stability theory fails to capture the complex nature of hegemony, relying on mechanistic calculations of economic performance and military strength that ultimately point not to hegemony but to dominance.34 These criticisms point to deeper flaws in the argument, and hence with mainstream IPE as a whole.35 Most obvious is the fact that hegemonic stability theory is constructed at the level of the international system. It claims to provide a ‘structural’ explanation of international relations capable of identifying the key actors or ‘agents’ involved and understanding their essential motivations and behaviour. Neo-realists regard the state as the basic unit of analysis since it is in this political entity that legal sovereignty resides. Being sovereign, the state assumes an identity of its own separate from the domestic sphere, and as the interests of the domestic society are aggregated at the national level state behaviour is seen as being constrained only by the structure of the interstate system. Since this system derives from the interaction of its autonomous individual units (states) its defining characteristic will be that of anarchy, and in such a situation power-maximisation is the only rational foreign policy and war the final arbiter. All this is very well, but because (to paraphrase Wendt) neo-realism refuses to look ‘inside’ the state, it cannot fully explain why states behave as they do, and, perhaps more importantly, why state behaviour differs so radically in both time and space.36 It is, moreover, impossible in neo-realist terms to characterise the inter-state system as anarchic without first fashioning a

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6 Japan and the Reconstruction of East Asia

concept of the state as a unitary actor.37 Far from providing a structural explanation of international relations, neo-realism actually conflates structure with agency, leaving its exponents with no other choice but to shore up their arguments with explanations drawn from the domestic level.38 In regard to issues of changing world order, and to the resurgence of regionalism in particular, these flaws throw some doubt upon the ability of mainstream IPE to capture fully the complex nature and dynamics of the process of social change at the international and global levels. However, mainstream IPE suffers other more damaging deficiencies. Rooting around in the structure-agency debate necessarily uncovers issues of ontology and epistemology; of the philosophy and methodology of neo-realism. The ‘black-boxing’ by neo-realism of the sovereign state under presumed conditions of anarchy is reminiscent, as noted above, of the methodological individualism common to neo-classical economic analysis. Thus, like economists, neo-realists endeavour through empirical manipulation of verifiable ‘facts’ to discover universal ‘laws’ of politics and political economy.39 As a consequence, not only do they remove or abstract states from their social and historical context, but so too do they remove themselves from the analytical frame; they self-consciously assume the role of impartial observer standing apart from the ‘real’ world of social action. This has several related consequences. Neo-realism has no understanding of history as an unfolding process constantly making and re-making social structures. In the place of such an understanding, neo-realism presents an ahistorical description of the unending re-distribution of material power resources between sovereign states. With the exception of their relative ‘sizes’, these states are indistinguishable from one another: an indication of the fact that neo-realism has no appreciation of the differentiation extant between socially contingent state forms.40 This inability to appreciate historically and socially determined differences between states leads to the conclusion that neo-realism has no appreciation of politics as a form of social struggle at the national level. The focus on the material world belies the importance of ideas and ideology as sources of change. At one level neo-realism has sought to incorporate ideology into its explanatory framework, but only as a means of disabling its potential for social transformation.41 Thus, for neo-realism, the identification of contending ideological positions or perspectives (liberalism, nationalism and Marxism) within IPE indicates only that there are different interpretations of or ‘answers’ to the same key questions; that is, what is the nature of the relationship between

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Introduction 7

the public and private spheres, the state and the market and the national and international? Moreover, as supposedly passive and impartial observers of the philosophical struggle between contending ideologies and the material competition between states, neo-realists deny themselves the opportunity of reflecting on the purpose their theoretical approach serves beyond the explanation of real world events. This is effectively a sleight of hand designed to disguise the fact that neorealism actively supports the status quo in the global political economy.42 Thus, in reference to the central purpose of this book, the inevitable conclusion as regards the ‘other’ purpose of hegemonic stability theory must be that it is designed to prevent the regional bloc scenario from becoming reality, preferably by finding ways of restoring the hegemony of the United States but, failing that, by sharing power among the other dominant states through a series of international regimes.43 Neo-realism defends the existing world order in the name of stability, ignoring the fact that the needs of the majority of the world’s inhabitants are compromised as a consequence.44

The plan of the book The failings of mainstream accounts of regionalism constitute the starting point of this book. The next step is to sketch out an alternative analytical framework capable of capturing more fully the sheer complexity of regionalism and regionalisation in East Asia, of reflecting on its own origins, of accepting the fact that it has a purpose beyond simple ‘explanation’ and therefore of recognising that its relevance is both contingent and transient. As indicated above, the neo-Gramscian IPE introduced to the field by Cox provides just such a framework, and in Chapter 2 I introduce my own ‘eclectic’ interpretation of his account. This provides the foundation upon which the rest of the book is built. The book is presented in two parts. The first of these deploys the Gramscian concepts of the state, hegemony, historic bloc and passive revolution in order to examine the historical background to Japan’s re-emergence as a regional ‘power’ following the devastating consequences of Japanese imperialism from 1895 to 1945. Thus, Chapter 3 looks in detail at the period of US occupation between 1945 and 1952 and charts the planning, implementation and consequences of the reforms undertaken by the Supreme Commander Allied Powers (SCAP). I argue that the Occupation failed in its stated aim of fully democratising Japan, and in its undeclared aim of turning Japanese society into a mirror-image of American society. Instead, post-war Japanese society

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8 Japan and the Reconstruction of East Asia

exhibited many more continuities than discontinuities with its pre-war past. Having established these continuities, which form the foundations upon which the post-war historic bloc was built, the chapter then moves to discuss the period between 1952 (when Japan regained formal sovereignty) and 1960, by which time the final pieces of the historic bloc were set in place. Attention focuses in particular upon reactionary elements within Japanese society, whose efforts were directed toward the rolling back of key SCAP reforms. This period came to an end with the resignation of Prime Minister Kishi in 1960, following the signing into law of the Treaty of Mutual Cooperation and Security between the US and Japan. The chapter closes by spelling out the central components of the historic bloc. These were the pursuit of ‘low posture’ politics at home and abroad, meaning on the one hand the pursuit of ‘economism’ and on the other a peculiar form of ‘pacifism’ within the enveloping folds of the US alliance system. Achievement of these goals required the dominance of conservative political programmes in the guise of Liberal Democratic Party (LDP) supremacy. In exchange, the Japanese people accepted a promise by the government to deliver high-speed economic growth and, tacitly, a limited democratic role in the Diet (one-party dominance) and in the workplace (enterprise unionism). A number of events in the early 1970s rocked the consensus holding the historic bloc together and in Chapter 4 I argue that the series of responses thereby elicited fostered Japanese regionalism in and regionalisation of East Asia. Set against the backdrop of the Cold War, the chapter opens with a brief overview of Japan’s domestic and international economic achievements between 1960 and the early 1970s suggesting that it was in this period that the historic bloc functioned beyond all expectations. The ‘economic miracle’ was achieved with a minimum of social and political disharmony, while Japan sat quietly and safely within the US alliance system. This ended in the early 1970s following the Nixon and oil ‘shocks’, the revelations of government collusion in the concealment of mercury poisoning at Minamata and increasing resistance to the supportive role that Japan was perceived to be playing in US prosecution of the Vietnam war. I briefly analyse the effects of these shocks in relation to their separate and cumulative impact on the domestic economy, polity and society, and on subsequent changes in Japanese domestic and foreign policy. These impacts and the response to them fractured and threatened to shatter the existing historic bloc. The response took many forms at multiple levels, and I introduce the most crucial of these in Chapter 4 before discussing them

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Introduction 9

in more depth in subsequent chapters. The Japanese government began to rethink its security relationship with the US, East Asia and beyond, and subsequently developed a ‘comprehensive’ security policy whilst simultaneously sharing more of the security ‘burden’ with the US. The bureaucracy began to rethink its existing approach to economic growth and development. Business began to automate and further sub-contract stages of the production process, demand ever-greater sacrifices from existing labour, employ ever-larger numbers of marginal labour and, finally, to move offshore to the US, Europe and Asia. The development and impact of these changes on Japan, East Asia and on the world order as a whole is assessed in the four chapters covering the structures of production, finance, security and knowledge that make up the final part of the book, which concludes by pointing to some of the possibilities for resistance in Japan and elsewhere.

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Part I Theory

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2 Historical Materialism, World Order and ‘New IPE’ Theory

The task before us is to find a theoretical approach capable of answering, without contradiction, some of the questions posed in the preceding chapter concerning the nature of regionalism and regionalisation in East Asia and Japan’s role in it. Broadly, we need to confront the theoretical terrain upon which neo-realism (as representative of the mainstream of current IPE theory) fears to tread. We need to come to a deeper understanding of the nature and sources of power in the global political economy. We need to integrate fully historical analysis so as to gain a clearer picture of how the Japanese ‘state–society complex’ came to exist in its present form. We need to integrate analytically the domestic and the international spheres and to combine an analysis of the global economic structure with the global security structure. In this chapter, I argue that the tools necessary to accomplish most, if not all, of this are to be found in a modified rendering of the historical materialist approach adopted by Cox.

The historical materialism of Robert Cox As the limitations of neo-realism as a vehicle through which to understand the mechanism of world order establishment and maintenance have become clear, increasing numbers of IPE scholars have begun to look elsewhere for a solution to the structure–agency impasse that has confounded the mainstream. One such attempt, led in the first instance by Cox, has used the Frankfurt School’s critique of mainstream sociology as a basis upon which to re-examine the work of the Italian political philosopher Antonio Gramsci (1891–1937).1 Although, as Cox himself freely admits, Gramsci had little of an explicit nature to say about international relations in general and about world order in 13

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particular, Cox has nevertheless employed several of the central concepts developed in Gramsci’s Prison Notebooks as the building blocks for a revision of traditional international relations theory.2 Cox famously starts from the understanding that ‘theory is always for some one and for some purpose’.3 All theories are constructed within the context of a particular social and political time and space and, as a consequence: ‘there is no theory in itself, no theory independent of a concrete historical context’.4 The problem of each theory is shaped by the issues and problems posed by the particular historical circumstances of the time. Thus, at a moment of profound technological and social change (for which the concept of ‘globalisation’ has become the dominant metaphor), and at a time when it is widely believed that a hegemonic power no longer holds sway over the international system, it is little wonder that Cox’s work, and the work of others, has tended to focus on the changing nature of the world order itself.5 Through a series of articles and papers, Cox in particular has placed himself in the vanguard of those seeking to highlight and question the negative effects of globalisation as they manifest themselves in, for example, environmental destruction, the ever-increasing marginalisation of the lower end of the labour force in both developed and developing countries and the exclusion of those unable to work.6 In addition, he has recorded the related unilateralism of the US as its adjustment to the perceived loss of its hegemonic role has taken the form of a series of ill-advised and mostly cosmetic military adventures, as well as the imposition of ‘hyperliberalism’ on the world economy. In this, Cox is performing a function that arguably corresponds to Gramsci’s concept of an organic intellectual in as much as he is seeking, through analytical discourse, to highlight the problems of (and to discover new strategies for opposition to) the dominance of the contemporary economic and social orthodoxy.7 In other words, he is attempting to contribute to the foundation of an alternative vision of the future, but one which is within the ‘limits of the possible’; a minimal interpretation of this phrase being ‘nonutopian’, but which in Cox’s usage is clearly a reference to the Braudelian notion of the limits imposed on social change by society itself.8 By virtue of both his theoretical position and his overtly political stance, therefore, Cox distances himself from the self-proclaimed ‘neutral’ and ‘value-free’ position and role arrogated to themselves by neo-realist scholars. As noted above, this ‘critical turn’ in Cox’s theory of international relations has been profoundly influenced by the Frankfurt School’s critique of mainstream sociology.9 Its significance is evident in Cox’s

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distinction between ‘problem-solving’ and ‘critical’ theories of international relations. The former accept the world as it stands ‘with the prevailing social and power relationships and the institutions into which they are organised, as the given framework for action’.10 In essence, this means that neo-realists are unable or unwilling to envisage an alternative to the ‘real’ world that confronts them. As a consequence the concept of social change accepted by problem-solving theory must be narrow and essentially static, and one, moreover, whose general aim ‘is to make these relationships and institutions work smoothly by dealing effectively with particular sources of trouble’.11 For evidence of this one need look no further than the rise to prominence of regime theory in the 1980s, as mainstream IPE struggled to come to terms with the continued stability of the international system at a time when, lacking a hegemonic power, neo-realism anticipated a major breakdown in relations between the advanced capitalist states.12 In marked contrast to problem-solving theory, a critical perspective ‘stands apart from the prevailing order of the world and asks how that order came about’. More specifically, critical theory ‘unlike problemsolving theory, does not take institutions and social power relations for granted but calls them into question by concerning itself with their origins and how and whether they might be in the process of changing’.13 Critical theory, then, rests on firm historical foundations.14 It refuses, however, to reify those foundations, accepting that in the course of time they will be torn up and replaced. Where mainstream IPE theory dictates that history endlessly repeats itself, Cox understands that the constant inter-play of opposing social forces of various strengths results in the continual ‘re-making’ of history, occasionally in such radical ways that it throws up contradictions that may be so profound as to alter fundamentally the nature of the social framework through which actions attain meaning. In his attempts at understanding global power relations Cox employs what he terms a method of historical structures, these being defined as configurations of social forces (material capabilities, ideas and institutions) that do not determine actions but do impose pressures and constraints: ‘Individuals and groups may move with the pressures or resist and oppose them, but they cannot ignore them’.15 At moments of profound technological change and amid the social turbulence this inevitably brings about, the very continuation of the existing structure itself can be threatened; an understanding that leads him to search for evidence of a completely new and distinctive emergent structure within the decaying body of the old.

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This method of historical structures can be applied at various levels or with respect to different spheres of activity (that is, at the level of social forces, at the level of forms of state and at the level of world order), but only so long as they are understood to be inter-related in a non-unilinear fashion.16 Moreover, historical structures can be studied at any of the three levels, so long as the starting point of the inquiry begins at the level of the production process itself, at the physical means and the social relations of production. As Cox suggests, these combine to form the base or structure of any society from which superstructures ‘of ideology and political organisation’ emerge to ‘shape the development of both aspects of production and [be] shaped by them’.17 Put another way, different forms of state–society complexes emerge from the process wherein historically determined varying production processes both throw up and interact with the social forces specific to each geographically defined national area. Thus, just as any ‘organic’ (that is, long-term, structural) change in the production process brings about fundamental changes in the social structure of states, so too do changes in the social structure of states bring about changes in world order. As Gramsci famously put it, ‘any organic innovation in the social structure, through its technical-military expression, modifies organically absolute and relative relations in the international field too’.18 In short, in order to approach an adequate understanding and explanation of alterations in the world order, attention must focus primarily upon the changing social relations that provide the motive power for such alterations, and these are to be found within nation states. It may be useful at this point to distinguish between this approach and that taken by others working within the field of ‘new’ political economy using ideas drawn from Gramsci but to different purposes. In his major book American Hegemony and the Trilateral Commission, for example, Gill bases his analysis of what he sees as the increasing structural power of transnational capital firmly on developments taking place within the core capitalist states, and in particular on the contradictory effects of US attempts to retain its dominant position in the global economic and military structure. He argues that ‘Reaganomics’ facilitated the strengthening of transnational forces favourable to the strongest US transnational corporations, through the process of promoting the further inter-penetration of capital and the liberalisation of markets, and by deepening the interdependence between US macroeconomic policymaking and that of other states. Moreover, the high interest rates necessary to finance the Reagan budget deficits were act-

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ually less painful for the US than for many other countries, since they effectively siphoned capital from abroad, raised the dependence of other states on the American market and globalised the financing of American military programmes.19 The contradictory effects of Reaganomics, for Gill, manifest themselves in his assertion that these policies have led to a marked acceleration in the process of widening and deepening transnationalisation, which has created new social forces that have come together to form the basis of a new class, or fraction of a class, with a shared interest in the extension of capital, and the interests of capital, on a global rather than a national or international scale. This class, or class fraction, is made up of the members of such groups as the Trilateral Commission and the Bilderburg meetings, and others such as the higher echelons of the major global corporations, bureaucrats in international institutions such as the IMF, the World Bank and the WTO, and leading academics in the core states. Their interests, while often broadly paralleling the interests of the leading industrial states, occasionally run counter to the interests of these same states. There is nothing here with which Cox would fundamentally disagree. Indeed, he has himself signalled his agreement with Strange’s notion of a ‘business civilisation’ ‘with its universal norms of economic and political conduct, and its homogeneity of tastes and hierarchy of values molded in global consumerism’, at the apex of which sits the transnational managerial class, through which ‘American culture, or a certain American business culture, has become globally hegemonic’.20 The point here is that my purpose is somewhat different to Gill’s, in that his focus is on the formation of a new transnational class across the three major capitalist regions of the world economy, whilst in this book I concern myself only with one major state (or state–society complex), the efforts of its hegemonic class to repair its fracturing domestic historic bloc and the effects of these attempts on the East Asian region. Such an endeavour is fully compatible with the definition of world order set out above.21 This is not to say that I disregard or attempt to isolate from the analysis the effects of events outside the region as they place pressures and constraints on the behaviour of Japanese people, or on the Japanese state–society complex’s place in that wider order. On the contrary, such events figure prominently in the analysis that follows. It is simply to say that in order to understand adequately the role and position of the Japanese state–society complex within the East Asian region the most logical place from which to proceed is at the level of social forces within Japan itself. This is essentially the point being made by Germain and Kenny in

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Theory

their critique of the ‘new Gramscians’.22 They have, rightly, questioned the applicability of Gramsci’s work to anything other than a national social formation, the argument being that since Gramsci formulated his ideas mainly on the basis of an analysis of the socio-political circumstances obtaining within early twentieth century Italy ‘it is not at all clear that his conceptual categories can be meaningfully “internationalized” ’.23 Whilst admitting that they have made a good case, my initial response is to argue that in this book I attempt to develop a conceptual approach based in the first instance upon the work of Cox, which is itself an interpretation of Gramsci, not a direct application. Further, I include an attempt, set out below, to mitigate some of the problems associated with Cox’s work through the adoption of a synthetic or eclectic approach developed from ideas put forward by Cox and Strange. As a consequence of adopting this synthetic approach the chapters which make up Part II of the book conform closely to Gramsci’s original formulation, whilst the final four chapters provide an analysis of Japanese activity in East Asia that is distinctly more neo-Gramscian in flavour, pointing, as it does, to nascent, though contradictory, Japanese hegemony over the region. Be that as it may, Germain and Kenny appear both to have over-generalised the work of the ‘Italian School’ and forgotten Cox’s admonition that ‘a concept, in Gramsci’s thought, is loose and elastic and attains precision only when brought into contact with a particular situation which it helps to explain’.24

Key concepts A critical theory of international relations does not seek simply to tear down competing theorisations of reality, but to engage with them in an attempt to gain greater insight into the unfolding processes of world order and the possibilities for social emancipation. Indeed, much of the force of Gramsci’s analysis (and particularly his reflections on the nature of power) is provided by the insights contained in Machiavelli’s The Prince, itself so central to realist and neo-realist thought. Thus, acceptance of the Gramscian position does not imply the jettisoning of all that has gone before. It does, however, call for the re-definition of some concepts familiar to IPE and the introduction of entirely new ones. It is for this reason that the following section briefly examines some of the concepts (the state, hegemony, historic bloc and passive revolution) central to the work of both Gramsci and Cox.25 Before doing so, however, it may be useful to recall once again Cox’s admonition that ‘a concept, in Gramsci’s thought, is loose and elastic and attains precision

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only when brought into contact with a particular situation which it helps to explain’.26 This will become both obvious and crucial when we come to the historical analysis in Part II. The state By virtue of his understanding that power can be wielded by social groups other than the narrowly conceived state (that is, the government, bureaucracy, judiciary, police and armed forces), Cox is able to present the notion of an ‘extended’ state or ‘state–society complex’. An extended (or in Gramsci’s term, ‘integral’) state is one whose component parts include but reach beyond the legislative, bureaucratic and coercive elements to include other social organisations such as business, the church, the media, masonic lodges and the like.27 If this image is accepted, then the state immediately appears much more extensive in scope and far-reaching in influence throughout society and, if these parts come together in a hegemonic configuration (that is, as a hegemonic class), much more resilient in the face of potential challenges. In this context, the collapse of the communist system in the Soviet Union under the weight of the forces unleashed by Perestroika seems almost to mirror Gramsci’s analysis of the collapse of Czarist Russia; the one a revolution from below engineered by a relatively small cadre of intellectuals with a clear understanding of the precariousness of the ruling regime’s hold on power, the other a revolution from above based on the decision by a political leadership to undertake economic reform in the vague hope of restoring the vitality of ‘real socialism’ but without a ‘clear strategy based upon real social forces as to how this result could be achieved’.28 Lacking an appreciation of just how weak were the links binding the state to the society and lulled into complacency by the long years of subservience that the coercive apparatus had guaranteed them, the leadership made an error of judgement from which the Soviet Union could not recover.29 The state is much more than the sum of its formal parts as they are traditionally conceived. It is much broader in scope and more dynamic in its make-up than the functional representation offered by neorealists. More than this, however, the common ideas, histories, experiences and interests that loosely tie the members of these disparate groups together lend a complexity and a strength in depth to the state that is essential to any understanding of state behaviour and resilience, but that, because of its amorphous and shifting form, is easily overlooked. By employing the concept of the extended state, the possibility that this might happen is removed.30

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Hegemony Mainstream IPE accepts that power is both quantifiable and fungible. When comparing states, the size and dynamism of the national economy and the number and type of weapons systems in a state’s possession are taken as reliable indicators of relative national power. In combination, these lend a state less tangible but still undeniable benefits in the form of political power exercised through traditional diplomatic channels and through membership of international organisations. Thus, in order to achieve ‘hegemony’ one state must be clearly dominant in economic and military terms over all others in the international system. Such a reading is undoubtedly useful. However, this conception of power (and therefore its reading of hegemony) has, more than once, failed even in its limited claim to be able to predict the outcome of conflict between states of widely disparate ‘power’. In this regard, it has become almost axiomatic to quote Vietnam’s victory over the US as a prime example of the dangers inherent in reducing a concept that has its origins in social interaction to a simple numbers game involving technology and weapons. Such a narrow conception of power can, moreover, tell us almost nothing about the form and durability of the social structure of any particular state–society complex. To the US–Vietnam debacle has been added, more recently, the disintegration of the Soviet Union, an event which has again confirmed that possession of great military strength is in the end useless if the society that produces it no longer believes in or will tolerate its collective subjugation to the will and direction of the political elite holding the reins of power.31 Because it is radically different from that accepted by mainstream IPE theorists in several respects, Cox’s conception of hegemony overcomes, by and large, these twin difficulties. With regard to the first of these (accurately assessing the power of the state in the international system) Cox accepts the narrow definition of power-as-dominance as an important component of this wider understanding, but rejects the notion that dominance can be equated with hegemony. In his view, there is also a consensual component, and one, moreover, that generally obscures the coercive element. Only when the former begins to fail does the latter come to the fore. This is precisely the interpretation he brings to the analysis of increasing US unilateralism in the 1980s and 1990s. For him, it is not a sign of renewed American power and vigour, but the result of the loss of the hegemonic position occupied by the US between the 1940s and late 1960s. The US may still be dominant in terms of the economic and military power it can bring to bear on opponents, but it

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Historical Materialism, World Order and ‘New IPE’ Theory 21

is not hegemonic because it no longer commands the unquestioning consent of its major partners through the propagation of a shared ‘world view’ or common-sense understanding of the present and future shape of the world order. With regard to the second difficulty (the inability to analyse the social relations of the state), power is seen as being firmly anchored in society itself. Hegemony is thus wielded by a social group or class or by fractions of separate but allied classes, and manifest as ‘hegemony over allied classes and dictatorship over enemy classes’.32 Thus, in the Coxian conception, a hegemonic class or state rules with the consent of the ruled: ‘Coercion is always latent but is only applied in marginal, deviant cases’.33 A state or class that has to resort to systematic violence in order to enforce its rule is no longer hegemonic, merely dominant. Historic bloc Hegemony and the state are familiar concepts in mainstream IPE. The concept of an historic bloc, however, is new and alien to it. One way into an explanation of the concept is to recall that thus far we have on several occasions had cause to mention the formation of a hegemonic configuration of social forces. This configuration may be said to denote the existence of a hegemonic class, but such a class is not a historic bloc. A historic bloc emerges when the interests of the hegemonic class embodied in the extended state become indistinguishable from the interests of civil society. In effect, their interests become the interests of civil society. A historic bloc is, therefore, ‘a dialectical concept in the sense that its interacting elements create a larger unity’, and is more than simply a collection of loosely combined interests that may or may not come together to form a hegemonic class.34 Such a bloc is formed when the ‘interacting elements’ referred to (the extended state and civil society) come together to form a ‘solid structure’. The underlying motivating force behind this union is not purely economic self-interest but the result of a complex series of inter-relationships between the economic, social, political and ethical spheres (the ‘structure’ and ‘superstructure’) from the workings of which emerges the potential for the formation of an historic bloc.35 It takes the coercive and persuasive efforts of a hegemonic class acting through the extended state to transform this potential into reality, with the state maintaining ‘cohesion and identity through the propagation of a common culture’.36 It is to US efforts to tear down the Japanese historic bloc forged during the Meiji era, and to the efforts of the Japanese hegemonic class to resist these and to forge a new historic bloc in the early post-war years, that

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we will turn in the next chapter. Before we do so, however, one further concept is in need of elaboration, and that is the concept of ‘passive revolution’. Passive revolution Passive revolution may be regarded as the counterpart of hegemony, ‘in that it describes the condition of a non-hegemonic society – one in which no dominant class has been able to establish a hegemony in Gramsci’s sense of the term’.37 The revolution is ‘passive’ to the extent that major changes in the organisation of the economic, political and social fabric are undertaken without the participation of the bulk of the population, in effect not a ‘revolution from below’ but one from above. A passive revolution, then, may be seen as one way in which previously hegemonic social forces can attempt to re-occupy their former position: ‘The passive revolution is in fact a technique which the bourgeoisie attempts to adopt when its hegemony is weakened in any way’.38 As Part II of the book will show, this is just what happened in Japan between 1945 and 1960. In the context of a war-torn economy, largescale unrest and the deracination of military power and influence, leading elements of Japanese society simultaneously co-operated with and opposed the US occupation forces in order to create the conditions necessary to regain hegemony.39 One component of this, via a process of ‘transformism’, was the co-optation of the bulk of the Japanese population into a vision of a new Japan put before them by leading elements of Japanese society and by SCAP.40

Applying Cox: hegemony and world order To this point, we have seen that the theoretical framework constructed by Cox has both a practical and an ethical component. It is powerfully normative by virtue of its critique of the constraining influence of the prevailing order, a critique which, because it throws into stark relief the power relations underlying these constraints itself contains the tools necessary for the practical attempt to break them. We have further seen that the Coxian method involves the analysis of historical structures (defined as configurations of social forces) that impose pressures and a degree of constraint on social action. Unlike the notion of a structure of states around which neo-realism builds its arguments, the structures envisaged by Cox are not static but dynamic; they are transformed by the constant and cumulative consequences of agents’ actions, and replaced by new structures that emerge from the bodies of the old. This

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Historical Materialism, World Order and ‘New IPE’ Theory 23

notion of dynamic structures (which can be applied at the level of social forces, at the level of states and at the level of world orders) can be most fruitfully explored and analysed using a number of key concepts (the state, hegemony, historic bloc and passive revolution). I suggest that the theory is persuasive in all but one respect. This is that the concept of hegemony requires a degree of measurement and precision that the theory cannot sustain. Cox fails to provide the tools we need to fully employ his method of historical structures. We are given no suggestion as to how much power is needed to secure hegemony in any given situation, and no guidance as to the elements constitutive of hegemony nor of the relative importance and necessary mix of each.41 Was it the power of its combined military forces that was primarily responsible for US hegemony or was it the economy, or the language, or the culture, or its system of inter-locking alliances, or its construction of global institutions such as the IMF and the UN? By employing Cox’s concept of hegemony we are able and indeed required to ask such questions but we experience difficulty in gaining clear answers to them. Of course, when discussing the power of ideas and power in general there is no possibility of ‘measurement’. We are forced to rely on what we see and hear all around us in our daily lives or, in other words, on our ‘common sense’.42 Yet hegemony does also refer to the material world and must therefore be open at least to an attempt at measurement. The question then becomes, what do we ‘measure’ first and how do we go about it? Do we count the number of guns or missiles or do we measure the size of the economy that produced them? Do we look at the technology that allowed them to be made, or at the people who designed them, or at the theorists who realised that they could be made? Again these are difficult questions, not easily answered, since material power blends into and becomes one with ‘ideational’ power. Nevertheless, the attempt must be made. How much would it take for Japan to gain hegemony over the East Asian region, and how far has it travelled down the path to that goal? What are the implications of this for the future shape of the international system? We must remember one thing: Japanese hegemony over East Asia does not have to be a conscious choice.43 Indeed, Part III of the book is designed to introduce the moreoften-than-not unintended international effects accompanying domestic efforts by the Japanese hegemonic class to re-configure the existing historic bloc in the light of its fracturing under the pressures exerted by failing US hegemony and the globalisation of economic activity. In order, therefore, for us to be able to apply the knowledge we will gain

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of the Japanese state–society complex through the Coxian method of historic structures to an analysis of the impacts of the domestic changes now underway in Japan as they bring about the regionalisation of East Asia (perhaps under Japanese hegemony), we need to find a way of by-passing, or of at least mitigating, the problems inherent within his concept of hegemony. To re-iterate, these are, firstly, the problem of ‘measurement’: approaching (although, it should be emphasised, never ‘solving’ or reaching) an understanding of the amount of power required to attain hegemony, and, secondly, (and more importantly in the context of this book) the difficulties associated with identifying and unravelling the constituent elements of hegemony and the relevant mix of each. Fortunately, the work of Strange may help us. Susan Strange, structural power and world order Strange was a consistent critic of the academic disciplines of both International Relations and Economics for over twenty years. More than this, she was concerned with their mutual estrangement as disciplines within the social sciences, an estrangement that has lasted since the demise of the classical political economy of the late eighteenth and early nineteenth centuries.44 In my view, Strange had an unmatched talent for making sense of what appears nonsensical.45 The secret of this talent was her insistence on focusing on core values (security, wealth, justice and the freedom to choose) before all else: on placing the relative mix or balance between these at the centre of her analysis of social systems and interaction so that in any particular situation she could ask and answer the questions ‘Who gets the benefits and who pays? Who gets new opportunities to acquire wealth or power, security, or the freedom to choose? And who has imposed on them new risks of being denied these things?’46 It is on an understanding of these core values that she based her concept of ‘structural power’, and by means of them that she was able to avoid neo-realism’s obsession with the state (and world systems theorists’ obsession with the capitalist economy). According to Strange there are two types of power, relational and structural.47 Relational power is the ability of one actor to influence others, while structural power is the ability to shape the frameworks of interaction within which actors relate to one another or, in other words, ‘power over the way things are done and the beliefs sustaining the way things are done’.48 Relational power can be encompassed by structural power but the reverse does not hold. In States and Markets Strange draws attention to four readily identifiable structures of power, all of which

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interact with and in fact overlap the others, although for the sake of explanatory clarity she separates them out. These structures are: production, finance (or credit), security and knowledge (or ideas). She famously depicts this relationship as a four-faceted triangular pyramid or tetrahedron in which ‘no one facet is always or necessarily more important than the other three. Each is supported, joined to and held up by the other three’.49 There are a few problems marrying this image with the Coxian framework, which we will discuss briefly below. The important point for the moment, however, is to keep in mind the fact that these structures are heuristic devices that demarcate general areas of enquiry (or frameworks of interaction) towards which we may direct sets of specific questions concerning amounts and sources of power and the relevant ‘mix’ necessary for hegemony in any given situation. They represent, therefore, a methodological advance on the Coxian approach. Strange supplies simple definitions of all four structures.50 The security structure ‘is the framework of power created by the provision of security by some human beings for others’. The production structure is ‘the sum of all the arrangements determining what is produced, by whom and for whom, by what method and on what terms.’ The financial structure is the ‘sum of all the arrangements governing the availability of credit plus all the factors determining the terms on which currencies are exchanged for one another.’ Finally, the knowledge structure ‘comprehends what is believed; what is known and perceived as understood; and the channels by which beliefs, ideas and knowledge are communicated’. The simplicity of these definitions is not a weakness but a strength. All of them avoid the theoretical prejudices of neo-realism, and all can, like Cox’s historical structures be applied at the level of social forces, states and world order. Moreover, changes in any one of the structures brings about change, or the possibility of change, in all the others. Thus, in recent years a major change in the security structure (the end of the Cold War and the dissolution of the Soviet Union) has caused a major re-ordering of the production, financial and knowledge structures as the ex-communist states have joined the race to attract manufacturing investment, have begun to raise money on global capital markets as well as creating domestic versions of such markets, and have begun to share their technological strengths with their former adversaries and to embrace the ‘wisdom’ of capitalist ideas. Equally, it is possible to argue that it was an earlier change in the knowledge structure that caused such a momentous change in the security structure: endemic oppression and corruption in the Soviet Union

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fostered a disillusion with communism (exacerbated by the knowledge of alternate social systems filtering into the USSR via telephone, fax, satellites, electronic mail and so on) that so weakened the system that the leadership began to lose their grip on power just at the moment when the Soviet armed forces were finding it impossible to match the technological sophistication of the US-led Strategic Defence Initiative. One could go on to re-work this argument in a number of ways or to choose different examples, but this would serve only to emphasise the main point, which is simply that changes in one structure are linked to changes in other structures. Thus, exploring the same questions from the differing perspectives of the various structures throws a great deal of light on any particular issue, whilst tackling each structure separately allows us to ask very specific questions without losing sight of the wider philosophical issues raised by considering the combined effects of the inter-actions of all four structures. Can we marry the historical materialist approach adopted by Cox to the methodological framework put forward by Strange? Achieving a Cox–Strange synthesis This is not such a difficult task as it might at first appear. First, Cox and Strange are aware of and broadly sympathetic towards each other’s work.51 Second, while each brings their own approach to the subject of world order, and while Strange does have something of a reputation for hard-headed pragmatism in her analysis, both share a concern with values.52 We have discussed in some detail the ethical foundations upon which Cox bases his work: the search for countervailing tendencies and the attempt to build bridges between forces of opposition and emancipation. As such, we need not dwell on these here. Less obvious and less commented upon is a similar tendency in Strange’s work. We noted above her insistence on placing core values at the centre of her analysis, but this is often overlooked in the scramble to get to her notion of structural power. It is worth repeating that, valuable as these four structures are, they are only a device, a means to an end, not the end itself.53 Far more important as a guide to her intellectual philosophy are the questions she asks. In her own words: The international political economist has to ask questions about the political and social consequences, the who-gets-what in terms of benefits and costs, risks and opportunities; and to consider the mix of values that this produces for society and therefore the political issues that it presents.54

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This statement may seem practical and pragmatic, and it may not have the emotional force of Cox’s prose, but its meaning is very close indeed. There is a difference in degree, perhaps, but not ultimately in intent: she does after all raise the key issue of eventual political outcomes. There is thus very strong evidence that the work of these two scholars is directed towards the same object of study and the same emancipatory goal. Philosophical sympathies coupled with broad agreement over the object of study is not, however, the end of the argument; in addition we must find common theoretical and methodological ground and, happily, there is ample evidence of this also. Returning to the concept of hegemony, we find that they are almost of one accord. Like Cox, Strange rejects the simplicity of neo-realist conceptions of power, arguing that power lies not in a simple numbers game but in the possession of a predominance of power across all four of her structures. Her explicit reference to the realm of ‘ideas’ as a source of power, and her refusal to become seduced by technology as an end in itself rather than as a means to an end give the lie to those who assume that she herself is a member of the realist camp. There is little doubt that she continuously emphasises the coercive face of hegemony at the expense of a closer consideration of the power of persuasion, but this too can be seen as a question of emphasis: the implication that persuasion is a component of hegemony is present in her work, but she rarely picks it up. One consequence of this is a lack of agreement with Cox over the continued hegemony of the US. We have already seen that in his opinion US hegemony disappeared in the late 1960s and early 1970s. In contrast, Strange sees US hegemony as undiminished and perhaps even enhanced in the contemporary era. In her view, the US is now clearly without equal in terms of its military might, but even the technological sophistication of other states such as Japan is of little consequence compared to the overall capacities of the US: It does not seem unreasonable to conclude that technical changes in the knowledge structure have served to increase the concentration of power in the financial structure. And there is little doubt among financial circles that the centre of this concentrated financial power lies in the United States.55 Given the persuasiveness of Cox’s argument on the question of US hegemonic decline it is tempting to suggest that Strange is in error in this instance. However, this does no harm to her concept of structural power, merely the conclusion she draws from its employment. Thus, this

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particular disagreement between Cox and Strange does not preclude a synthesis which joins his method of historical structures to her concept of structural power. The same can be said for the only other major disagreement between them, which is that Cox, while supportive of her notion of structures of power (although he is uncomfortable with the possible confusion this might raise with regard to his own concept of historic structures), insists that there is in fact a hierarchy of structures. It is his contention that the production and knowledge structures are primary, and that the security and financial structures, although important, are of less significance. With regard to the latter, Cox argues that, unlike the production structure, the financial structure is not firmly connected to the ‘real’ economy.56 With regard to the former, he argues that, since the security structure is a temporary manifestation of the interactions of the production and knowledge structures, it is derivative and transitory. It is not only not firmly grounded in the real economy, but is in fact a drain upon it.57 Again we may argue that this is a question of degree, for in discussing the inter-relationships between the structures Strange herself has said that ‘no one facet is always or necessarily more important than the other three’.58 From this reading it follows that one of the structures may dominate (as, arguably, did the security structure between 1945 and 1989) for quite some time.

Conclusion It appears, therefore, that we can achieve a synthesis between the two scholars using the method of historic structures proposed by Cox in combination with the concept of structural power manifest in the realms of production, finance, security and knowledge proposed by Strange. Cox’s method of historic structures gives us the ability to unpack the state, to uncover the material and ideological sources of power which coalesce within it, and which are moulded into the form and shape of an historic bloc. This historic bloc is both a source and a manifestation of hegemony at the level of social forces and at the level of the state. It is potentially a source of hegemony at the level of world order. Strange’s concept of structural power bridges the gap. It gives us the ability to analyse the manner in which this hegemony is expressed on the domestic and the international scene. It enables us not only to trace the combination of pathways through which hegemony is expressed at any given or particular moment, but also to formulate a more accurate estimation of what we may take hegemony to mean at

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that moment, to begin to solve the problem of how much power it takes to achieve hegemony in that situation and at that moment. Having established both the necessity and the utility of achieving a synthesis of the work of Cox and Strange, the remainder of the book forms an attempt to employ just such a synthesis through an analysis of Japan’s contemporary role in East Asia. Part III of the book will ‘map’ this role in the production, financial, security and knowledge structures. In anticipation of that mapping, however, Part II traces the evolution of the contemporary Japanese state–society complex, and investigates whether and how it might be changing.

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Part II History and Society

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3 1945–1960: Occupation and Aftermath

When approaching the history of the modern Japanese state, which we take here to concern the period from 1945 onwards, one must be extremely cautious.1 Caution is required because many scholars within the broad field of Japanese studies appear to accept uncritically arguments suggestive of the fact that the American Occupation (1945–1952) changed the social and institutional fabric of Japan so fundamentally that there is little point in studying this period and what went before.2 Equipped with a democratic constitution and with the institutional trappings that normally accompany such a document, the Japanese people are assumed, within the space of a few decades, to have been able to throw off the social habits ingrained in them by centuries of feudal and oligarchic oppression, and to have taken to their hearts the democratic values and principles with which a formal constitution and institutions are normally associated. With this long history of disenfranchisement in mind, we might be forgiven for suggesting a certain amount of naïveté on behalf of US planners even if the Occupation had proceeded entirely along the lines and in the spirit of its original inception. However, it has been persuasively argued that the Occupation was not the turning point in Japan’s social and political history that it is often assumed to have been. The exigencies of the Cold War ensured that the thorough democratisation and de-militarisation envisaged was never carried through.3 Assuredly, the constitution was re-written, the Diet reformed, and the Japanese armed forces neutered militarily and politically, but many of the more far-reaching reforms were either never undertaken, were later only partially implemented, or were reversed.4 It was noticeable in the late 1980s and early 1990s, when the Japanese economy appeared all-conquering and unstoppable in relation to its major competitors, that some feudal and semi-feudal habits, customs, 33

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practices and ideas were being actively propagated and lauded as ‘traditional’ sources of national strength and cohesion through which to resist foreign pressure for Japan to ‘internationalise’ its economy and society in line with the new hyper-liberal orthodoxy.5 That these efforts were seen as perfectly reasonable and appropriate in the contemporary Japanese setting demands that we examine just how much Japan was changed by the Occupation. In place of an exhaustive social history, it is the task of the two chapters in this Part of the book to briefly examine and explain the major ideological and material continuities and discontinuities between the social fabric of the Japan of the recent past and the Japan of the present, and to analyse the implications of these as they relate to the changes through which contemporary Japanese society is presently moving. This will allow us to prefigure our discussion, presented in the final part of the book, of the effects on the East Asian order of these changes in Japan’s domestic circumstances. In order to facilitate our pursuit of this task, we draw upon Cox’s understanding of the concepts of the state, hegemony, historic bloc and passive revolution, and deploy these concepts in an historical analysis of the (re)construction of the modern Japanese state–society complex. The first chapter in this section initially considers the period of occupation in some detail, focusing in particular on the relative successes and failures of attempts to break down the material and ideological components of the already existing historic bloc. It then moves to a brief examination of domestic attempts to recreate the old historic bloc, based upon the de-politicisation of Japanese politics and society and the pursuit of economism rather than militarism.6 Anticipating the four chapters in Part III of the book, the second chapter in this section briefly considers the fractures that appeared in this structure in the context of economic stagnation and renewed political dialogue in the 1970s and 1980s leading, most dramatically, to the end of the ‘1955 system’ of one party (that is, Liberal Democratic Party) dominance, before suggesting that these fractures have not yet become deep or wide enough to threaten fundamentally the integrity of this historic bloc. If this is so, the task then becomes one of searching for evidence of attempts at repairing the major fractures that have appeared thus far, and of creating the social, economic and political conditions thought necessary to prevent the appearance of new fractures. As we shall see in the latter stages of Chapter 4, and in the final part of the book, these attempts not only have implications for Japanese society but for the societies of

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East Asia as well. We begin, however, with the transition from militarism to ‘democracy’ under US occupation.

The Occupation and the ‘reverse course’ Three major questions are addressed during this discussion of the occupation period and after. The first points to its duration, and the peculiarities of the so-called ‘reverse course’. The second highlights the aims and objectives of the Occupation, and discusses whether these were achieved, whilst the third assesses the effects on Japan at the time and analyses the backlash which took place following independence. The Occupation lasted for just under seven years, from 2 September 1945 to 28 April 1952 and, in contrast to the situation in Europe, was carried out solely under American auspices.7 These seven years have traditionally been sub-divided into two parts, with the line of demarcation falling roughly at the time (early 1948) that the fall of the Kuomintang on mainland China began to appear inevitable to the US leadership.8 It is evident, then, even following this standard depiction of events that there was a period of some twenty-eight months during which the stated goals of the Occupation (de-militarisation and democratisation) were officially pursued, followed by a longer period of fifty-six months (the ‘reverse course’) during which the goals were reoriented toward the economic stabilisation of the country under conservative leadership and its re-instatement as a de facto (if not de jure) military power.9 In other words, almost exactly double the amount of time was spent during the overall occupation period in re-militarising Japanese society and rebuilding the Japanese economy than was spent on the democratisation of the country. Perhaps more important than the duration of the Occupation, however, was the efficacy of the attempts at implementing policy as laid down in Washington in the first place.10 Aims and consequences of the Occupation Within the overall context of de-militarisation and democratisation, the initial aims of the Occupation were twofold. To punish those thought responsible for Japanese aggression and to secure reparations for those who had suffered at Japanese hands, and to achieve a variety of social reforms.11 The first of these was attempted through the mechanism of the Tokyo war crimes trials and a series of purges undertaken in the early years, as set out below.12 The second was encapsulated by a document handed to Prime Minister Shidehara by MacArthur on 11 October

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1945, which outlined five basic reforms: the emancipation of women through legal and political enfranchisement, encouragement of the unionisation of labour, formation of a more liberal education system, abolishment of the police state and the extension of legal protection (particularly the concept of habeas corpus), and the democratisation and de-concentration of the economy.13 In concrete terms, these social reforms were pushed forward under a series of policy initiatives: revision of the constitution, dissolution of the zaibatsu, land reform, labour reform, civil service reform, and reform of the education system.14 Had each of these been successfully implemented then there is little doubt that they would cumulatively have ‘remade’ Japanese government, economy and society in major ways, and would have left its relations with its neighbours on a different footing than that which eventually transpired. Whether any remnants of the pre-war historic bloc would have survived such an onslaught is doubtful. In any case, many of the reforms were less than successful to begin with, and many were left unfinished or were reversed. In what follows we consider first the two reforms that are generally regarded as the greatest failure and the greatest success of the Occupation – the purge and the constitution – before moving on to discuss the other initiatives identified above.

The purge and the new constitution The first major reforms were a purge of Japanese officialdom, and the creation of a new constitution. Of the two, the laxity of approach, inefficiency of implementation and often arbitrary selection of those designated as undesirable in, or unfit to hold, public office as well as the obvious exemptions (of which the emperor was the chief example) can be said to represent the overall tone and efficacy of the occupation reforms in most of the other areas. Table 3.1 shows the number of those purged and the areas of Japanese society from whence they came. What is immediately clear from this, is that while the military was substantially purged bureaucracy and business got away almost scotfree, with only 0.9 per cent of their respective numbers being removed from office. As Halliday suggests, there were several reasons for the fact that these two pillars of Japanese militarism were left substantially untouched by the purge.15 The first of these was that it was not always in the interests of the US for certain people to be purged. Again the emperor is the obvious example, but several leading politicians also escaped, as did a number of business leaders and military personnel.16 The second was that the purge was seen by occupation officials largely

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1945–1960: Occupation and Aftermath 37 Table 3.1 Purgees by categories Category Military elite Bureaucratic elite Political elite Ultranationalistic elite Business elite Information media elite Total Source:

Per cent 79.6 0.9 16.5 1.6 0.9 0.5 100.0

Adapted from Halliday, A Political History, p. 173.17

as a bureaucratic affair to be carried out according to objective criteria, and could therefore be left in the hands of the Japanese government. This resulted in the absurd situation whereby the purge was undertaken by the same people largely responsible for Japanese policymaking and implementation during the war in the first place! Under such circumstances, it was relatively easy for these officials to name rivals or adversaries as undesirables, for those named to retire or step aside in favour of an appointed successor, and for many simply to avoid being named at all. Only 830 of the designated bureaucrats actually lost their jobs, the remainder either retired or resigned.18 Much the same took place in the area of big business, where many of those actually purged by the authorities slipped away into private life, leaving their companies in the hands of a chosen successor. The results of all this can be quickly described. The surface changes effected on behalf of the occupation authorities by their Japanese subordinates, and displayed in the media in the US and elsewhere, did in fact change very little: either the same people occupied the same jobs after the purge as they did before, or they were filled by individuals of like mind. What is more, the purge actually strengthened the hand of the bureaucracy within Japanese society as the absences in the Diet, which had been denuded of politicians by the relative severity of the purge in this area (16.5 per cent of total purgees), were filled by a big increase in the numbers of former civil servants among Dietmen. Fifty-five exbureaucrats were elected to the Diet in 1949, and forty-two of those were assigned important party posts, including eight cabinet appointments.19 This strengthened position casts serious doubt on the notion that the administration of Japan was in safe, ‘liberal’ hands by the time the country regained its sovereignty in 1952.

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In contrast to the anti-militarist purge, the passage into law on 3 November 1946 (coming into effect on 23 May 1947) of a new constitution for Japan has been generally regarded as a major success for SCAP which, when one takes on board the fact that in contrast to the other policy areas under discussion MacArthur had no mandate from Washington to undertake the task, lends the project a certain irony.20 This sense of irony is given re-doubled force when one considers that, initially at least, the Japanese leadership saw no need for the Meiji Constitution to be altered, and, in fact, fought the new constitution tooth and nail. In the same meeting held between Prime Minister Shidehara and MacArthur (on 11 October 1945) at which the General gave notice of the social reforms to be undertaken by the Japanese government, MacArthur also instructed Shidehara to begin work on the drafting of a new constitution. Accordingly, Shidehara established a research committee headed by a law professor of the Tokyo Imperial University, Matsumoto Joji. At the same time, MacArthur had Prince Konoe initiate an identical project.21 Matsumoto’s initial draft replicated 39 of the 76 articles contained in the Meiji Constitution and, most importantly, retained the emperor as the sovereign authority. Since this was in direct contravention of the SCAP principle that sovereignty reside with the people and was therefore ‘wholly unacceptable as a document of freedom and democracy’, MacArthur instructed Major General Courtney Whitney, the chief of SCAP’s Government Section, to produce a document that incorporated the principles of limited monarchy, renunciation of war, and the abolition of feudalism. This Whitney and his team did, producing a completed draft containing 92 Articles within the space of two weeks.22 Taken at face value there is little doubt that the draft constitution fulfilled all of MacArthur’s requirements. The identity and role of the emperor was changed from absolute monarch to ‘the symbol of the State and unity of the people’.23 Sovereignty now resided with the people, and was exercised through the Diet as the highest organ of state power, to which the Cabinet was made directly responsible. The Diet itself was composed of an upper house (the House of Councillors) and a lower house (the House of Representatives), to which members were directly elected. The lower house was the more powerful of the two, and could overturn a negative vote in the upper house by passing a bill for a second time with a two-thirds majority. Laudable as these changes were, serious questions remain as to the quality of democracy that these institutions bestowed upon Japan. As

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Whitney argued in putting his case to Shidehara for removing sovereignty from the emperor, the provisions of the new Constitution actually strengthened the position of the imperial family, rendering the emperor himself ‘practically unassailable’.24 In this one decision rests much of the argument for continuity between pre- and post-war militarism and feudal authoritarianism, symbolised by the continuing role of Emperor Hirohito who, far from being prosecuted as a war criminal, did not even see the need to abdicate his position and thus establish a clean break with the past.25 Similarly, the Diet and the cabinet system can be criticised on the grounds that there was a considerable degree of continuity of personnel, as noted above, and that the links between the bureaucracy and elected representatives were actually strengthened rather than weakened. Moreover, the fact that the new Constitution was imposed upon the Japanese people at a time when the country was not officially a sovereign nation raises disturbing parallels with the Meiji Constitution, handed down as it was as a ‘gift’ of the emperor. When we consider that until 1868 Japan had no tradition of democratic government at all, and that after this date there was little or no genuine democratic participation on behalf of the majority of the populace (women were excluded from the electorate, as were all men under twenty-five and all men under a certain earnings/tax threshold), then it is difficult to see from whence the organic linkages between state and society would emerge.26 At the very least, the absence of a tradition of democratic accountability and practice casts doubt on the efficacy of the institutions created to serve the needs of state and civil society and the pathways between them in occupied Japan. Such scepticism is borne out by the subsequent suppression of media and labour freedoms imposed by the very institution (SCAP) whose task it was to create those democratic institutions and pathways and encourage those social movements in the first place.27 Since the Japanese government was charged with carrying out SCAP’s orders, the government and the institutions associated with it were tainted from the outset. One should not take this argument too far, since there is no doubt that the constitution was and remains an extremely liberal document and that the institutions through which its provisions were to be administered had the potential to take on a meaning greater than that with which they were originally endowed. There is, however, sufficient evidence of continuities, exceptions and ambiguities running throughout the entire political structure of the post-war Japanese state and constitution to cast serious doubt on claims that this aspect of Japanese society was fundamentally transformed by the Occupation.

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This is most evident in the success of US-sponsored efforts to secure the re-militarisation of Japan. At first glance Article IX of the new Constitution appears to provide a cast-iron guarantee of the renunciation of war by Japan. It reads: Aspiring sincerely to an international peace based on justice and order, the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as a means of settling international disputes. In order to accomplish the aim of the preceding paragraph, land, sea and air forces, as well as other war potential, will never be maintained. The right of belligerency of the State will not be recognized. Discussions of the ambiguities contained within Article IX abound, so a detailed analysis need not concern us here.28 There are, however, several points that should be noted, some of which are raised all too infrequently. First, the peaceful aspirations contained within Article IX are unique to a major power, and certainly go a lot further than the kind of military restraints required of post-war (West) Germany. Second, although the constitution was regarded with suspicion by the bulk of the Japanese population at the time (who were all too aware that it had been written by the SCAP authorities), support for it gradually blossomed and was particularly marked with regard to Article IX. It represents, then, a classic example of the infusion of a legal document devoid of emotional content with an identity and meaning all of its own. This has made revision of the constitution, and particularly of Article IX, a difficult and politically sensitive task, one which, in the context of the emergent Cold War, resulted in a series of reinterpretations of Article IX allowing for the creation of Japan’s ‘self-defence’ forces. These reinterpretations have proved embarrassing to US and Japanese leaders alike. Echoes of the debates surrounding these changes reverberated throughout the post-war period, and are particularly resonant in the contemporary post-Cold War era, as questions are once again asked as to the future of Japan’s role.29 The ambiguities associated with Article IX are a major and continuing source of political and economic friction between the US and Japan, and contain all the ammunition needed for those (in the US, Japan and elsewhere) who either support or oppose an expanded role for Japan on the geo-strategic scene. The constitution, then, despite being a gener-

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ally liberal and progressive document in some if not most areas of sociopolitical life, contains within it silences and ambiguities, deliberately placed there, of sufficient scale as to cast a shadow of doubt over the social outcomes it might produce. This shadow may have been lifted if all of the other major reforms had been successfully undertaken but, as we will discover in the discussion of a second pair of reforms, land and labour, such was not always the case. Land and labour reform In considering this pair of reforms, one is at first glance struck by the similarities in outcome between these and the two reforms discussed above. Land reform has been hailed by many as one of the great triumphs of the Occupation (not least by MacArthur himself, who apparently claimed that Japanese land reform had been the greatest effort in that direction since Gracchus in the days of the Roman Empire).30 In contrast, reform of labour laws is generally regarded as having been less than successful, particularly as the original provisions regarding the encouragement of political activism of whatever stripe, freedom of the press and freedom of association were increasingly ignored and trampled upon as the Cold War and fear of communist insurrection spread throughout Asia. Up to and including World War Two, the character of the Japanese economy and society remained overwhelmingly agrarian despite the heavy industrialisation implied by the pursuit of military expansion on a grand scale. Seventy per cent of farmers were either out-and-out tenants or rented some land in order to augment their own holdings.31 Approximately 46 per cent of cultivated land was tenanted, the overwhelming majority of which was in small parcels measuring no more than ten acres.32 Following intense opposition from domestic sources and in the Allied Council for Japan, an initial attempt at reform embodied in the Land Reform Act of December 1945 was superseded by a second Land Reform Act passed in the Diet on 21 October 1946.33 This Act effectively prohibited absentee landlordism, specifying that all the land of absentee owners was to be purchased by the government, as was all tenanted land owned by resident landowners in excess of one cho (2.5 acres), or 4 cho in Hokkaido. The purchase price, in bonds bearing interest rates of 3.6 per cent and redeemable in 30 years, worked out at about ¥4000 per acre.34 The effects of this were dramatic. After the transfer of land had been completed in 1950, about 2.8 million acres of rice land and about 1.95 million acres of upland had been compulsorily pur-

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chased from 2.34 million landowners and resold to 4.75 million tenants and farmers who owned less land than the legal minimum. Only 12 per cent of all arable land remained under tenancy, and rents on this were kept low by provision of the second Land Reform Act. It is clear, then, that these reforms brought about a considerable redistribution of land during the period of occupation, transforming the dependent status of many former tenants and stimulating a major rise in agricultural production in subsequent years and a concomitant rise in the rural standard of living.35 These cheery statistics hide a darker reality, however, addressed here only in point form.36 First, even though the amount of land under the tenant system following the reforms was much lower than it had been previously, the number of tenantlandlord relationships after reform was still very high since over 40 per cent of all farm households possessed less than half a hectare of land, whereas the minimum amount considered necessary to sustain an average household was one hectare. Second, the reform programme left forested land, amounting to two-thirds of the entire country, entirely untouched, thus facilitating the perpetuation of traditional exploitative relationships between the owners of such land and the vast majority of the rural population heavily dependent on wood and wood products. Third, while pushing rural living standards higher, both in absolute terms and relative to industrial labour, rural incomes remained low and were kept low by the huge influx of returnees (approximately 6.5 million) to Japan in the early post-war years. Combined with the shortfall of land per household noted above, this served to drive huge numbers of people into the cities. From the government’s perspective this was no bad thing, since the rebuilding of Japan’s industrial structure could not be achieved using available industrial labour, even counting the influx of returnees. A second, and even more advantageous development as far as the government (and SCAP) was concerned, however, was the increasing number of agricultural workers who supplemented their income with part-time or seasonal work in industry. At best this served to drive down already low wages; at worst it fostered the development of a financially weak and politically conservative section of the population that, because of the peculiarities of the electoral system (which at that time delivered a weighting of roughly 5:1 in favour of the rural vote), was able to keep the LDP in power for almost five decades. Despite obvious and seemingly emancipatory success, the cumulative effect of land reform appears, therefore, to have been to substantially defuse peasant discontent while simultaneously ‘preserving enough of the substance of dependency and inequality to

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enable the upper class to deliver the rural vote regularly for the antiCommunist conservative parties’.37 If it is more difficult to assess the success of the land reforms than it would at first appear, the same cannot be said of reform of the labour movement.38 In this sphere of activity there is clear evidence that the initial reforms sponsored by SCAP and, more reluctantly in certain cases, by the Japanese government led to a series of events that threatened to spiral out of control.39 The major objective was to reinvigorate the independent trades union movement, which had been quieted rather than snuffed out by the Peace Preservation Law of 1925 which persecuted anyone who organised an ‘association with the objective of altering the Kokutai (national polity) or of denying the system of private property’.40 In order to facilitate this re-invigoration, in October 1945 SCAP secured the release of a variety of political prisoners including former trades union leaders such as Matsuoka Komakichi who went on to revive the Japan Federation of Labour (Sodomei). By the middle of 1946 this organisation had been joined by a major communist labour union, Sanbetsu (Congress of Industrial Unions), with a membership of 1.6 million. Following passage of the Trade Union Law in December 1945, the number of unions grew exponentially, so that by July 1948 there were 33 940 such organisations with a combined membership of more than 6.5 million, up from 675 unions and a membership of 496 000 two years before.41 In the new atmosphere of political freedom fostered by the Occupation, and amid the context of post-war shortages and general turmoil, it is unsurprising that labour began to make its voice heard. The first major example was the almost year-long strike (begun in October 1945) at the Yomiuri, one of the leading newspapers. So protracted and bitter was this dispute that SCAP and the Yoshida cabinet made sure that the Labour Relations Adjustment Law, withdrawing the right to strike from government employees, was pushed through the Diet on 20 September 1946.42 This Law also required those working in utility industries (transportation, mail, telegraph, telephone, water, gas and electricity, medical, sanitation and public health) to give thirty days notice prior to going out on strike and, further, reserved the right of the government or SCAP to re-define any industry as a public utility if its suspension threatened ‘public well-being’. In effect, this meant that any and all action that might possibly be taken by or on behalf of the unions could result in the relevant industry being re-designated. Roughly a year after the commencement of the Occupation, then, and well before events on the international scene had begun to seriously

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impinge upon US visions of the future role Japan was to play in its global strategy, the Japanese government had begun to tighten its grip on labour freedoms (and on freedom of expression as well, as the example of the suppression of press criticism over the use of the atom bomb made clear), and all with SCAP’s blessing.43 This was confirmed on 31 January 1947 when, with the prospect of a general strike looming ever larger, and following a certain reluctance on behalf of SCAP to be seen to be interfering in a train of events that it had manifestly set in motion, MacArthur issued a public statement to the effect that he had forbidden union leaders to go ahead with the strike.44 Although this response did not signal the end of labour unrest, it effectively squashed any notions that labour would be allowed to undertake action deemed detrimental to SCAP’s goals, and paved the way for the ‘red purge’ of Japanese society, and of the labour movement in particular, set in motion by the Chinese revolution and the Korean War. According to Moore, this also effectively ended the debate over whether Japan would enjoy a capitalist or a socialist future.45 The sequel to this effective emasculation of the labour movement was the re-concentration of the power of big business. Democratising the economy: the proposed dissolution of the zaibatsu In contrast to the reform of the labour movement, which, as we have seen, took concrete form only to be reversed in several respects or curtailed in others, the central plank on which the democratisation of the economy was to be built, the dissolution of the zaibatsu, never really got much further than the planning stage. Economic reform as originally envisaged by the Edwards mission of January 1946 had two intertwined aims: to rid Japan of the zaibatsu once and for all, and to spread the wealth of the country more evenly through its populace, which in effect meant the creation of a middle class.46 As far as SCAP was concerned, destroying the zaibatsu was necessary not only because of their prominent role in the promotion and prosecution of the war but because they absorbed most of the wealth of the country, thereby perpetuating the old feudal relationships of power and dependence.47 Destroying the zaibatsu physically would go a long way towards creating a free market economy and to securing higher wages and better conditions for the workforce, while destroying the psychological power of the zaibatsu would give these workers a democratic voice in the workplace and set an example for use of the electoral franchise in the political sphere.

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Despite early recognition of the action required to achieve the aims of the Edwards mission, it was not until December 1947 that the Law for Elimination of Excessive Concentration of Economic Power was passed in the Diet. Securing passage of the Law, which gave the Holding Company Liquidation Committee (HCLC) the authority to identify ‘excessive economic concentrations’ and to reorganise these into independent companies, was merely the first step. According to Eleanor Hadley, one of the officials charged with dealing with the zaibatsu, SCAP had then to overcome efforts by Japanese officialdom to emasculate the various provisions of the legislation before moving on to the final battleground, which was to prevent sabotage of enforcement.48 Nevertheless, by early 1948 a total of 325 companies, accounting for approximately 80 per cent of Japan’s industrial, financial and commercial enterprises, had been designated for de-concentration. Eighty-three zaibatsu holding companies were either reorganised or dissolved, and approximately 5000 other companies were forced to reorganise in order to comply with the provisions of monopoly and de-concentration laws. The two biggest zaibatsu, Mitsubishi and Mitsui, were fragmented into 240 separate companies, and the family members holding stock were forced to sell their shares either to company employees or to the general public (although, quite how the ‘general public’ could have afforded to do this was never established, leaving wide open the possibility that the majority of shares would have been picked up by employees and other individuals loyal to the companies concerned). Domestic opposition to the reforms was stiff, however, particularly within the business community, which turned for help towards US business in Japan. As early as the summer of 1947, James Lee Kauffman, a prominent lawyer representing a large number of US companies with pre-war interests in the country, issued a series of damning criticisms of the programme, calling it ‘socialistic’ and claiming that it would not only remove from the scene leading entrepreneurs vital to the economic reconstruction of the country, but would effectively prevent Japan from becoming a bastion against communism in the Far East, a role that senior figures in the US Administration were just then beginning to envisage for it. Such a role held great appeal to George Kennan, the recently appointed head of Secretary of State Marshall’s Policy Planning Staff, and to others in Congress who gathered behind a proposal to create the Deconcentration Review Board (DRB) whose task it was to look again at those companies designated by the HCLC and at the various provisions regarding de-concentration. Made up of ‘independent’ US businessmen, the DRB effectively halted the de-concentration

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programme, and by April 1948, when the US government announced the abandonment of the programme, the initial list of 325 companies had been whittled down to 100 and all banks had been removed. By December 1948, when the programme officially closed, this had been further reduced to a total of just nine companies. It was not just Japanese business interests that sought to obstruct, delay and sabotage the de-concentration programme and the democratisation and antifeudalism associated with it, therefore, but a coalition of these and US interests – economic, political and military. Civil service and educational reform In this, the final pairing of reforms undertaken during the Occupation, a similar pattern of almost abject failure in one area and relatively more success in the other holds broadly true. Reform of the Japanese civil service, carried out under the direction of Blaine Hoover (the then president of the Civil Service Assembly of the United States and Canada), was an almost complete failure on several counts. First, despite major efforts on behalf of the Occupation authorities and a considerable degree of co-operation from some sections of the Japanese government, the influence of the primary target for reform (and to SCAP minds the major institutional villain of the piece) the Ministry of Home Affairs (Naimusho), remained virtually undiminished even though the Ministry itself was broken up.49 Its attempted destruction was inevitable given the common understanding that it had played a major role in the prolongation of feudalism through the decades of the 1920s and 1930s, and acted as overseer of the police force in the repression of the war years. The Ministry remained a force even after reform simply because its various administrative sections were not broken up but relocated within other ministries, leaving their membership and ethos largely unchanged. Thus, even though the Ministry itself disappeared its influence did not, nested as it was within other institutional structures. As Tsuru suggests, this mistake was a reflection of Hoover’s failure to understand the sources and loci of power within the Japanese bureaucracy, which stemmed chiefly from the scope of civil service operation across a range of social and economic activities, and from the common personal and institutional backgrounds of all senior civil servants, and especially their association with the Imperial Universities.50 Not only was Hoover’s attack focused upon too narrow an institutional target, but this attack was blunted by his failure to root out the elitism that had been a central characteristic of the civil service since the days of the Meiji Restoration. In 1958, a full decade after the Hoover reforms,

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98 per cent of first grade, 82 per cent of second grade and 57 per cent of third grade civil servants were still graduates of the seven former Imperial Universities.51 In these circumstances, there must have been some continuity of thought and attitude within the civil service, even given the recognition that the Japanese themselves pushed for administrative reform. Nevertheless, with so many pre-war bureaucrats emerging from the Imperial Universities, and in light of the almost total militarisation of all aspects of Japanese lives, it is little wonder that the final major plank of reform was the education system itself.52 The object of the reforms was to remove all aspects of militarism and ultra-nationalism from the school system and to introduce and inculcate democratic values throughout the student body ‘in harmony with representative government, international peace, the dignity of the individual, and such fundamental rights as the freedom of assembly, speech and religion’.53 In line with these aspirations, text-book production was removed from the ambit of the Ministry of Education and turned over to private companies regulated by a certification system.54 Locally elected committees were granted the power of oversight in regard to selection of staff, curriculum content and choice of text books, whilst the teaching of ‘ethics’ was dropped completely, and geography and history combined in a social studies course designed ‘to teach an objective and critical knowledge of the nature and history of Japanese institutions’.55 Teachers formed a trade union, the Japan Teachers Union, which proved not only militant but tactically effective, and particularly so in 1949 when it fought a rear-guard action against a major offensive by the occupation authorities designed to remove all traces of communism from the school system.56 The formation of a militant students union in 1948, the National Student Federation, provided a natural counterpart to the Japan Teachers Union, although it involved itself in all matters pertaining to the democratisation of the country. Finally, the Fundamental Law of Education, drafted jointly by a new advisory body, the Japanese Education Reform Council, and the occupation authorities, was passed in the Diet on 31 March 1947. This Law stated that the goals of education would be ‘the development of people healthy in spirit and body, who are filled with an independent spirit, respect the value of individuals, and love truth and justice’.57 Laudable as the sentiment expressed in the Fundamental Law of Education undoubtedly is, it is difficult to imagine that, on the Japanese side at least, it was anything more than empty words.58 Prominent figures associated with the reform process had, after all, been actively fighting to preserve the Imperial Rescript on Education at the same time

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that negotiations over the Fundamental Law were in progress. As a result, it was not until June 1948, fifteen months after the Fundamental Law was passed, that both Houses of the Diet voted to annul the Imperial Rescript.59 Moreover, in the decade following the end of the Occupation concerted efforts were made to reverse some of the ‘excesses’ of these reforms, including the introduction of bills in the Diet seeking to prevent teachers from joining political parties, prohibiting teachers’ unions from disseminating political literature, replacing elected education committees with nominated ones, the establishment of a new morals course, and the introduction of a merit rating system for teachers that included within its ambit political activity.60 Finally, despite the introduction of co-education, which brought with it a significant change in the political awareness of the female population, women continued to be disadvantaged by the education system.

Reaction to reform: forging a new bargain The record of the reforms to the society, economy and polity of Japan undertaken during the period of occupation between 1945 and 1952 was at best mixed. Nevertheless, for powerful elements within Japanese society, represented in the Diet by the Japan Liberal Party ( Jiyuto) and the Japan Progressive Party (Minseito) and in the business world by the Japan Federation of Employers’ Associations (Nikkeiren, formed in 1948) these reforms, however denatured by the increasing heat of the Cold War, went too far and had to be at least neutered, if not reversed.61 Opposing these views in the Diet were the Japan Socialist Party ( JSP) and the Japan Communist Party ( JCP), both relying for their support on the militant union movement that, despite the trials associated with the ‘reverse course’, had firmly established itself during the occupation period largely under the banners of the Japan Federation of Labour (Sodomei), which had links with the JSP, and Sanbetsu which had concomitant links with the JCP.62 These were the major players in the struggle for control over the direction that Japanese society would take throughout the decade of the 1950s. The struggle, driven by both domestic and international concerns and events, would largely take place on the terrain of industrial relations and the signing of the Peace and Security treaties between Japan and the United States. Regaining the right to manage As noted earlier, the occupation period was divided roughly into two parts, with the line of demarcation falling in early 1948. By the close of

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that year, the conservative counterattack on the democratic reforms was building momentum, all with the sanction and encouragement of SCAP. The central plank of the counterattack in the economic sphere was enforcement – with the full knowledge and approval of Prime Minister Yoshida Shigeru – of the Dodge Plan (approved by the Diet on 20 April 1949). This constituted a radical programme of austerity measures and was designed, in the context of an inflation rate of 127.9 per cent in 1948, ‘to reassert an absolute right to manage through a program of union busting, mass dismissals, red purges in public and private enterprises, and reactionary revision of Japan’s new labor laws’, the combination of which was intended ‘to put the burden of austerity on the workforce and insofar as possible to destroy the basis for independent labor unions’.63 Whether we agree with Moore’s conclusions or not, the fact remains that Dodge sought to counter the deficit in Japan’s trade balance by imposing an exchange rate fixed at ¥360 to the dollar, a rate that was to remain in place until December 1971 and in so doing prove a major source of friction between the US and Japan.64 In any case, the attack on the unions had begun as early as 1946, in the face of mass action by the working classes, which Halliday characterises as ‘a major challenge to capitalist rule’.65 Faced with imminent economic collapse and a political situation which was far from clear, Japanese business staged a capital strike that effectively shut down large-scale industrial production, preferring to hoard what capital they had rather than put it at risk. In circumstances that threatened what little livelihood they had left, workers responded in several ways, chief among which were the ‘work-in’ and ‘production control’. Briefly, the first of these involved taking control of a certain business – as happened in 1946 when the Yomiuri was temporarily taken into the hands of its workers. The second, production control, involved stepping up production whilst simultaneously improving working conditions through such measures as cutting working hours, and thereby demonstrating what workers could achieve given the right conditions. In some cases production control also contributed directly to the protest movement, as happened in May 1946 when National Railway workers allowed demonstrators to travel for free. In response, the Japanese government and SCAP, egged on by conservative politicians, bureaucrats and business interests, initiated a thorough crackdown on the protest movement involving arrests and beatings, the introduction of new laws banning strikes (but not unions per se), and enforced ‘arbitration’ procedures that imposed a mandatory thirty day moratorium on strikes by public utility workers.66 In the meantime, drawing extensively on pre-war institutions, a

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bureaucratic and financial structure was being set in place that would not only serve the interests of reconstruction, but go on to serve as the institutional framework underpinning the economic ‘miracle’ of the late 1950s and 1960s.67 These included the Economic Stabilisation Board established in 1946, the Reconstruction Finance Bank established in 1947, the Ministry of International Trade and Industry (MITI) in 1949, the Export Bank of Japan in 1950 (re-named the Export-Import Bank of Japan in 1952), and the Japan Development Bank, a creature of MITI’s, set up in 1951 as a replacement for the Reconstruction Finance Bank. The function of the Japan Development Bank was to provide funds on easy terms for major investments in industrial projects, backed up by tax reforms in the shape of investment allowances, a system of foreign exchange allocations that facilitated the targeting of individual industries and companies, and agreements on technical co-operation with overseas firms. The individual industries (food, fertiliser, coal, iron and steel) and companies (zaibatsu—re-modelled as keiretsu centred not upon a family but upon a bank) so targeted constituted not only the core of economic rebuilding efforts, but also the centrepiece of efforts at social restructuring at this crucial stage, placed as they were at the forefront of the struggle to impose discipline upon an unruly and militant workforce. This role was to become all too evident during the government-sanctioned action taken by Mitsui to break the strike at its Miike collieries in 1960.68 These institutions were buttressed in the security sphere by the creation of a national police reserve in 1950 (following commencement of the Korean War), joined by a ‘maritime’ police force two years later to form the core of what would in 1954 become the Self-Defence Force (SDF) under the administrative control of a Defence Agency.69 In the political sphere, the LDP was brought into existence in 1955 by the merger of the Jiyuto and Minseito, in reaction to the renewed political unity of the Socialist Party engendered by opposition to the Korean War and effective Japanese rearmament following the signing of the Peace and Security Treaties with the United States in 1951. In the years following, the LDP secured and institutionalised its grip on power by ensuring that what amounted effectively to a rural gerrymander remained in place through the operation of a system of subsidies to rice farmers, by indulging to an unprecedented degree in porkbarrel politics, and by maintenance of an election system based on multimember constituencies bound to favour incumbents.70 Thus, the conservative elements in Japanese political circles, bureaucracy and business, ensured for themselves continuing influence and control over the country by

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smothering the one institution – the Diet – explicitly set up in order to safeguard and extend the democratic gains made during the period of occupation. This control continued even after 1967 when the LDP share of the vote fell below fifty per cent, never to rise above it again.71 After 1960 it was, however, a control based not upon the outright domination of the industrial workforce and society at large, but upon a certain amount of compromise on both sides of the perceived boundaries separating the state from society. In other words, the emergent historic bloc was maintained on a broad measure of consensus as to the nature of Japanese society and the limits to which it could be stretched, the economic and political direction it had to take in the post-war era, and the methods to be employed in reaching the agreed destination. The ‘destination’ was economic growth, given substance in ordinary people’s minds by the announcement in 1961 of Prime Minister Ikeda’s plan to double the national income within the space of ten years.72 This apparently new approach, the adoption of ‘low posture’ politics on both the domestic and international scene, was in fact not new at all but had been the goal of Yoshida Shigeru from the very start.73 Nevertheless, its adoption at this stage was in part a recognition that the conservative, reactionary elements in Japanese politics, business and bureaucracy had triumphed over their adversaries in the labour movement and the Diet, and were seeking to put an end to political debate. With regard to the JSP and JCP, we have already noted the victory of the newly-formed LDP and its subsequent direct dominion in the Diet. With regard to Sodomei and Sanbetsu, victory had been foreshadowed in November 1946 by the agreement of the Council of Electric Power Industry Workers’ Unions (Densan) to accept a system of wages based on seniority or age.74 This not only de-coupled financial remuneration from individual ability and hence devalued the work performed by each employee, but also tied each worker to a particular firm more or less for life (since an employer would always pay less to a new employee) and effectively restricted wage-bargaining within the boundaries of the firm, thereby preventing industry-wide pay bargaining.75 The advantages accruing to big business from the operation of the Densan wage system and enterprise unionism were further added to by the virtual emasculation of radical labour following the rise to pre-eminence of the General Council of Trade Unions (Sohyo) in the decade of the 1950s. After some resistance to the Korean War and the alliance with the US, and to the policies of the Kishi administration (1957–1960), Sohyo was finally tamed by business and government toleration of the annual ‘Spring Offensives’ it led in pursuit of wage increases, albeit these were lame

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affairs characterised by the rapid acceptance by individual enterprise unions of the wage figures set within peak corporations in their particular sector.76 In the event, victory for the conservative forces in quelling unrest in the workplace was not sufficient to persuade these same forces to relent in their efforts at turning back the clock. The strike-breaking at the Miike mines, involving brutality on an unprecedented scale by hired thugs, the police and the army, took place with the consent of the Prime Minister of the time, Kishi Nobusuke, himself an indicted Class-A war criminal who was detained during the Occupation. If any single individual personified the reactionary elements opposed to the reform of Japan under occupation, it was he. During his stewardship, efforts were made to increase the power of the emperor at the expense of the Diet, increase the power of the police, remove Article IX from the Constitution, and generally denude it of its democratising force, and reintroduce the old-style teaching of ethics in the schools. He did not succeed in these efforts. However, with regard to the signing of the revised Security Treaty with the US in 1960 he did succeed, but at a price. So great was the opposition to the revised treaty that thousands took to the streets of Tokyo and surrounded the Diet, while inside the building socialist members boycotted and picketed the chamber. Kishi reacted by having the entire body of socialist members forcibly removed by the police, and the revised treaty was ratified in their absence. Demonstrations continued throughout the country, and a planned visit by President Eisenhower in celebration of the new treaty was cancelled at the request of the Japanese. The protests continued until formal ratification on 18 June 1960, at which point Kishi resigned and calm was restored.77 Thus began the period of high speed economic growth.

Conclusion The Occupation was far from successful in achieving its stated aim of democratisation and de-militarisation, despite the much-trumpeted purge of wartime leaders and a variety of initiatives including constitutional revision, liberalisation of the economy, land and labour reform and reform of the civil service and education system. The relative failure across the entire reform programme can be attributed to several major factors. Firstly, the inexorable reversal of the reforms as a consequence of the perceived exigencies of the Cold War. Secondly, the ineptitude of SCAP personnel, evident in particular in the decision to allow Japanese bureaucrats to handle the implementation of much of the programme.

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Finally, resistance to the reforms from domestic and US-based interests, united by a shared satisfaction with various elements of the status quo ante. As a consequence, economic power remained highly concentrated in the hands of big business, and Japan retained its military capability, although with overt signs of militarism greatly diminished. Despite these failures, there is little doubt that in institutional terms the post-war Japanese state–society complex was significantly more open to and potentially representative of the wishes of the bulk of the population who, previously, had been effectively disenfranchised. Nevertheless, a conservative backlash, led by Yoshida and Kishi, was well underway before the period of occupation had even finished. This resulted in the effective domination of the Diet by forces largely sympathetic to Yoshida and Kishi’s views on the domestic settlement and supportive of the alliance with the US, the neutering of the most vocal opposition parties and their allies in the militant unions, and broad acceptance of the direction Japan would take in the post-war world and the disbursement of the social costs and benefits associated with it. The undoubted improvements in the collective lot of ordinary Japanese citizens sits uncomfortably with the clear continuities between the pre- and post-war condition of the state–society complex. This makes it very difficult to determine whether or not the pre-war historic bloc was broken, or if it managed to survive in a slightly modified form. To a degree this does not matter to us here, since we are concerned with the real or potential breakdown of the existing historic bloc regardless of when it came into being. Nevertheless, we are constrained to comment on this difficulty, since it draws attention to potential theoretical limits as well as having implications for the analysis of the current status of the existing historic bloc. These implications are at their most visible as regards the eradication of militarism from Japanese society. If, as the foregoing analysis strongly suggests, this was not wholly accomplished during the Occupation and its aftermath, then we must put a very different gloss on the recent resurgence of nationalism and remilitarisation apparently identified by Hook, amongst others.78 Is it a wholly new and different phenomenon, or is it connected in some way? Will the militarisation of Japanese society presently (and arguably) underway lead ultimately to militarism, or are there forces of resistance now in place that may effectively block any such developments? We will deal with these specific issues fully in Chapter 7, but suggest here that there is powerful evidence suggestive of the fact that the pre-war historic bloc was broken, even though continuities remain.

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4 1960–Present: Fracture and Response

The preceding chapter considered the period of occupation of Japan by US forces and the conservative backlash that followed it, arguing that through what amounted to a ‘passive revolution’ a new historic bloc was forged from the broken structure of the old, based not upon militarism but on economism and ‘pacifism’.1 This set the scene for the advent of what has become known as the ‘era of high speed economic growth’. Since the concern in this book is with the formation of this historic bloc and its fracturing (if not destruction) from the 1970s onwards, it is not necessary here to explore the period of high speed growth in any detail. It is the response to the appearance of these fractures by the existing Japanese hegemonic class and the attendant impacts upon Japanese and other East Asian societies (and, subsequently, on the world order), that forms the central focus of this study. As we shall see in the final part of the book, these impacts are clearly manifest, within and beyond Japan, in each of the four structures of power – production, finance, security and knowledge – previously identified as key areas of human activity. Before proceeding to that analysis, it is the task of this chapter to briefly outline the changing circumstances of the existing Japanese historic bloc as it began to feel the strain of domestic and international pressures for change, and to detail the efforts of the Japanese hegemonic class to hold the bloc together.

The fracturing of the post-war Japanese historic bloc2 As just noted, a consideration of the era of high speed growth is not central to the argument we are pursuing here, and for that reason we pass over it with little direct comment.3 Suffice it to say only that the 54

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‘low posture’ policy, combining the single-minded pursuit of economic growth and subservience within the US alliance structure (i.e. economism), succeeded beyond expectation, allowing Japan to take its place as the third largest economic power in the world behind the US and the Soviet Union. Commensurate with these achievements came membership of all the relevant major economic and political organisations such as the General Agreement on Tariffs and Trade (GATT), the Organisation for Economic Cooperation and Development (OECD), the World Bank, the International Monetary Fund (IMF), the United Nations, and so on.4 In the meantime, heavy involvement in the economies of the US, Southeast Asia and (to a lesser extent) Europe, was offset against official isolation from Northeast Asia. Alliance with the US prevented normalisation of relations with China and North Korea for many decades, a situation that has continued with regard to Russia as the successor state to the Soviet Union.5 The key point here is that despite its many inherent contradictions, maintenance of a ‘low posture’ in economics and politics both within and beyond Japanese shores ensured not only that the existing Japanese historic bloc would survive, but that it would thrive. Thrive, that is, until a series of developments on the domestic and international scene coalesced around one or two major events to deal it a massive blow from which it has arguably never fully recovered. On the domestic scene, these events – the Nixon and oil ‘shocks’ (dollar devaluation, US recognition of China, oil price rises), the officially-sanctioned cover up of the mercury poisoning suffered at Minamata, and domestic opposition to Japanese support for US actions in Vietnam – signalled the end of high speed economic growth and the rise of domestic expressions of social discontent ranging from non-conformism to outright attack on the visible institutions of the Japanese state. On the international scene, these events signalled a gradual divergence of Japanese and US interests and the pursuit of a more proactive Japanese foreign policy, albeit still within the straitjacket of the US–Japan Security Treaty.6 The conventional wisdom has it that Japan bounced back from these shocks apparently with the same breathtaking ease with which it had overcome its defeat in war, that is, by using the mechanism of state intervention coupled with the now legendary resilience and capacity for self-sacrifice of the average ‘salaryman’, to raise productivity whilst at the same time cutting costs. This is partly true, but obscures the harsher reality of fundamental restructuring that went on throughout the 1970s and 1980s, the effects of which are being felt even in the new millennium.7 This restructuring took place in the economic, social and

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political realms, and involved not just the Japanese but others as well – most noticeably in East Asia. Breaking the bargain: effecting repairs in the economy As previously noted, the social conditions necessary to bring about high speed economic growth were hammered out through a series of conflicts and compromises between state and society in Japan concerning the broad goals of post-war Japan and the limits to which the country could be stretched in attainment of those goals. One major compromise was reached in the realm of industrial relations, and was built upon a commitment by all sections of the labour force to be prepared to work long hours without meaningful representation (either by trades unions or, tacitly, by political parties in the Diet), so long as jobs were plentiful and wages continued to rise. This applied to some more than to others, and especially to those working in big corporations who received the promise of ‘permanent’ employment, seniority wage rates, generous pension provision and other benefits. The ‘salaryman’, as he (and it was always a ‘He’) became known, was to regard himself as a corporate warrior whose mission it was to further the success of his company and, subliminally, the state. This not only altered his perception of society but also his relationship with his family, to such an extent that it became inseparable from the corporation for which he worked. Typically, while he was working late at the office (which could mean drinking in a bar, since there was no real distinction between work and leisure), his wife was at home cooking, cleaning, and bringing up the children. The system was thus mutually dependent and reinforcing. All this began to change in the decade of the 1970s. The spiralling costs brought about by the dollar devaluation in 1971 and the oil price hikes in 1973 and 1979, could not all be soaked up by the traditional shock absorber of the Japanese economy – those small- and mediumsized businesses (comprising the majority of all business activity in Japan) occupying the part of the economy where the privileges accruing to the salaryman were little more than a dream.8 As a result, big corporations began shedding jobs, mainly through a process of greater subcontracting and capital investment in automation, but also through initiating a programme of redundancies. By 1994, this relentless pressure on salarymen across the board had led to the first fall in average earnings in the private sector for 44 years.9 Redundant males have increasingly been replaced by lower-paid, part-time, non-unionised and therefore more vulnerable female workers entering or re-entering the

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workplace after their children have reached adulthood. Thus, not only has the ‘jobs for life’ system begun to be dismantled by big business, but so too has its counterpart in the social realm, the implicit patriarchy that keeps women at home.10 Concurrently, big corporations began to put pressure on their employees to raise productivity while accepting a falling rate of return on their labour. At one level, this meant forcing the adoption of new working techniques associated with such terms as ‘lean production’, ‘just-intime-production’, ‘flexible production’, ‘continuous improvement’ or, more cynically, ‘management by stress’.11 At a second level, this meant squeezing the already weak union movement both directly and indirectly. The first by discouraging membership of any union, including in-house enterprise unions, through intimidation; the second by bringing in non-unionised staff (that is, part-time female workers and, significantly, foreign workers).12 These initiatives were matched by government adoption of a policy of privatisation in the public sector, including the militant rail industry, that was to result in the dissolution of Sohyo in 1989 and the move by most of its member unions to the rival Japanese Trade Union Confederation (Rengo), widely regarded as the tame creature of big business.13 These measures prompted a fall in the percentage of those workers belonging to unions from a high of 35.4 in 1970 to 24.1 by 1994 and a low of 22.6 in 1997.14 Finally, big Japanese corporations began to move their operations offshore, where costs were lower.15 This may have been partly in reaction to the pollution laws of the late 1960s, which finally began to bite after the creation of the Environment Agency in 1971, but it was also in large part due to the first oil shock in 1973 and wage differentials between Japan and Southeast Asia, to where most of the firms decamped.16 These movements were the international equivalent of the subcontracting out by big business of stages of the production process taking place on the domestic scene, and can be viewed as an early sign that in its attempts at self-repair the Japanese historic bloc was reaching out beyond its traditional borders.17 Not only were cheap foreign workers being drafted in to the country as replacements for their more expensive (and choosy) Japanese counterparts, but so too were Japanese workers being sent abroad as the managers of foreign workers.18 From the 1970s onwards, then, the position of labour within Japanese society has been progressively and substantially weakened relative to what it was during the period of high growth. Insecurity, which has always been present in the lower portion of the ‘dual-structure’ economy, has not only deepened but widened to embrace core workers

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previously sheltered from such worries. Recent figures show that the unemployment rate is continuing on a more or less upward trend (1.7 per cent in 1960, 1.1 in 1970, 2.0 in 1980, 2.6 in 1985, 2.1 in 1990, 2.9 in 1994), with the official unemployment figure reaching 3.9 per cent in March 1998 and the ratio of job offers to applicants falling to 0.58, its lowest – at that time – since the second oil shock.19 In July 1999 the unemployment rate peaked at 4.9 per cent (more than 3 million people), before falling slightly to 4.7 per cent by September.20 Amongst white collar middle managers, such as those made unemployed as a result of the 1997 collapse of Yamaichi Securities, this has resulted in a rush to ‘re-skill’.21 Others have turned to crime, as figures measuring crimes by the unemployed – showing a steep rise from 3474 in 1992 to 6526 in 1996 – readily attest.22 Perhaps more significant have been the increasingly visible and vocal public demonstrations.23 Lack of confidence in the ability of government and industry to lift Japan out of its current crisis is widespread and growing, and can only add fuel to the discontent manifest in other areas of Japanese society. Breaking the bargain: effecting changes in the political settlement This discontent is focused at several sites of opposition and resistance. The first of these can be (artificially) bundled into a series of single issues associated with economic growth such as pollution of the environment, the sacrifice of ‘traditional’ values at the altar of consumerism, and re-dressing the balance in favour of those regions left economically disadvantaged. The second site of opposition is related to the first, and manifests as a general disillusionment with government as a result of its perceived failure to address and solve the single-issue problems outlined above, and a particular dissatisfaction and disgust with government as a result of its failure to root out what has become known as ‘structural’ corruption in Japanese politics. Finally, a third site of opposition relates to the gradual abandonment of the pacifist principles laid down in Article IX of the constitution, despite the absence of a clear mandate to do so. In all of these areas the government has been perceived to be breaking the implicit post-war bargain to the effect that low-posture politics would not only bring about economic growth, but would do so in a manner befitting the minimum standards of political behaviour set down in the constitution. As already noted, part of this bargain allowed for a degree of autonomy for big business and government in creating the framework in which such growth could take place. This, in turn, implied the placing of limits on representation and control for workers and voters on the factory floor and in the Diet. Issues of

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pollution, consumerism and unevenness in the allocation of economic benefits do challenge this bargain but not to the extent that they are in themselves capable of threatening the immediate future of the historic bloc. In addition to discussion in later chapters, we will here briefly consider the two latter sites of opposition – structural corruption and remilitarisation – since both are capable of challenging fundamentally the existing historic bloc. The issue of structural corruption in Japanese politics is not simply restricted to the problems associated with the electoral system and the vast sums of money swallowed up by it. Structural corruption can, in addition, be seen as a by-product of the failure over many years to address adequately the problems associated with the imposition of the legal framework set out in the constitution, and the institutions through which this framework is administered. This refers in almost equal measure to the pre- and post-war constitutions and their respective institutions, since both were imposed from above. Thus, given the weak roots of genuine democracy and the thin soil in which these were planted, we cannot easily identify any particular point at which the issue of corruption gelled, in the public mind, with the perception that democracy was not all that it should be in Japan and, more specifically, that the post-war bargain or consensus was in the process of being broken.24 We can, however, as others have done before us, identify the role of Tanaka Kakuei as perhaps the single most important individual in this regard, since it was he who turned electoral corruption and porkbarrel politics into an art form. The result of this, for many, has been to turn Japanese politics into a joke, and the concepts of representation, accountability and democracy associated with it into so many meaningless words.25 Tanaka’s incumbency as Prime Minister between 1972 and 1974 sits neatly within the onset of the crisis suffered by the Japanese historic bloc in the 1970s as set out above, as does the brevity of his term in office. In the 24 years between 1948 when Yoshida occupied the position for the last time, and 1972 when Tanaka began his tenure, Japan had just six Prime Ministers all of whom by and large represented the ‘old school’ associated with staunch conservatism and bureaucratic backgrounds.26 With the entry into Japanese politics of money, corruption and factionalism on an unprecedented scale associated with Tanaka, the next 24 years witnessed no less than 13 Prime Ministers if Hashimoto is included.27 All this has not been lost on the Japanese public, and the number of people turning out to vote has been falling steadily ever since.28

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On the other hand, awareness of structural corruption has been growing, and successive revelations of corruption on a massive scale, from Tanaka’s involvement in the Lockheed scandal, through Takeshita Noboru and the Recruit scandal, and Kanemaru Shin and the Sagawa Kyubin scandal finally took the LDP out of power in 1993, thus ending – officially at least – the so-called ‘1955 system’ of LDP dominance.29 As subsequent events have confirmed, this rejection of corruption by the voting public was not the death blow either to corruption or the LDP it at first appeared, sparking as it did a frenzy of factional in-fighting, betrayals and defections that saw Hosokawa Morihiro into office as the first non-LDP Prime Minister in 38 years. This might have been cause for celebration were it not for the fact that Hosokawa was at one and the same time a front man for dissenting LDP interests represented by the figure of Ozawa Ichiro.30 Hosokawa, too, carried on a longestablished tradition by resigning from his post in 1994 under the cloud cast by a financial scandal left over from a previous prefectural electoral battle, and subsequently resigned his seat in the Diet on 30 April 1998.31 This was all the more disappointing to many Japanese people, since he and his party had made their bid for office on a platform of electoral reform and clean government.32 Despite the persistence of LDP power into the late 1990s illustrative of its resilience in the face of adversity, the issue of structural corruption clearly has continuing potential to break the existing historic bloc by virtue of the fact that it has focused the collective mind on the need for electoral reform, thus effectively ending the cosy arrangement that kept the LDP in office for so long.33 Not only that, but corruption is perceived to be spreading cancer-like through the fabric of Japanese society. In 1996 an internal investigation revealed that the Ministry of Health and Welfare had systematically covered up evidence of its involvement in a scandal involving the sale of HIV-contaminated blood for treatment of haemophilia sufferers.34 In March 1998, Matsushita Yasuo, Governor of the Bank of Japan, resigned following police raids on the Bank in pursuit of an investigation into insider dealing. In the months following, three officials committed suicide, 44 received severe reprimands, 58 were warned and the Minister of Finance, Nagano Atsushi, and his vice-Minister, Sakakibara Eisuke, were forced to take a pay cut of 20 per cent for one month.35 As the Daiwa and Sumitomo scandals make clear, corruption and collusion also extend deep into the private sector, and graphically illustrate the damage corruption can do to international as well as domestic confidence.36 Little wonder, then, that ordinary Japanese savers cannot be persuaded to invest their money

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in domestic institutions but are instead putting it into safes and cash boxes, whilst other countries insist at every turn that Japan reform its financial system.37 The cosy electoral arrangement engineered by the LDP is threatened, of course, by other related issues such as the increasing urbanisation of Japanese society (that reveals ever more glaringly the disparity in political ‘weight’ existing between the rural and urban vote, which these days is usually put at 4:1) and US-sponsored pressure in the GATT/WTO on Japan to liberalise its agricultural sector.38 Nevertheless, the issue of corruption and accountability is unlikely to go away for another important reason, which is that it links directly with the third of the key issues outlined above – the remilitarisation of Japan. The ambiguities associated with Article IX and its re-interpretation have placed the Japanese government in a difficult position on many occasions, since it must continually reconcile its security relationship with and obligations to the US with its obligations to maintain lowposture politics on the international scene – part of the tacit bargain upon which the current Japanese historic bloc is built.39 Just as this bargain has been broken in the economic and political spheres from the 1970s onwards, so too has it been broken on the international scene from the late 1960s onwards as Japan became a staging post for US troops and material on their way to and from Vietnam, and as a location for ‘R&R’. This function continued to be developed in line with the US Cold War policy of containment, and was formally institutionalised through implementation of the ‘Guidelines for Japan-US Defence Cooperation’ drawn up in 1978.40 It was extended and deepened during the tenure of Nakasone Yasuhiro in the 1980s (who attempted to revise the Constitution in line with a greater military role for Japan, re-introduced the issue of nationalism to the mainstream of Japanese politics by visiting the Yasukuni Shrine in his official capacity as Prime Minister, and sought revision of Japanese history books used in schools) and again in the 1990s during the war against Iraq in defence of US attempts to construct a post-Cold War ‘new world order’.41 It has, more recently, been greatly enhanced after the LDP forced legislation through the Diet, over the objections of its coalition partners the Social Democratic Party and New Party Sakigake, allowing for the revision of the Guidelines (perhaps) requiring Japan to enforce regional naval blockades, take part in minesweeping operations and provide greater logistical support to US forces in Japan.42 These obligations risk bringing Japan into conflict with its close neighbours, most of whom reacted with anger and dismay to the latest

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revision of the Guidelines.43 The key point here, however, is that all this has been done not only in violation of the Constitution strictly interpreted, and against the wishes of the majority of the Japanese people and East Asians generally, but also in violation of the procedures and principles of democratic accountability supposedly guaranteed by the existence of the Diet. The security treaty has been expanded from a strictly regional to a global commitment without ever being re-written, and the role of the SDF has grown and developed to an extent which makes it unrecognisable as the Controversial ‘defence force’ tacitly allowed for in a loose reading of the Constitution.44 All this has been despite opposition in the Diet and Japan at large, and has been made possible by the arrogation of power by the Cabinet at the expense of the Diet. It was through the use of a Special Cabinet Order that the Japanese government secured SDF participation in the Gulf War, and something similar seems to have occurred in relation to the most recent revision of the Guidelines for Cooperation with the US, since the agreement was signed by the then Japanese foreign minister, Obuchi Keizo, before the required legislation had been passed by the Diet. We will pick this issue up again in Chapter 7, but end here with the observation that the creeping militarisation of Japan links directly with the issue of structural corruption. The use of Cabinet Orders, and other methods of directly by-passing the floor of the Diet, is the functional equivalent of the wider by-passing of the Diet implied by the perversion of the democratic process by money politics. Militarisation is therefore a loaded weapon pointed not just potentially at East Asia and beyond, but at the very heart of the Japanese historic bloc, as the demonstrations against revision of the Security Treaty clearly showed in 1960 and as protests over the legal recognition of the national anthem (Kimigayo) and the Rising Sun flag (Hinomaru) as national symbols showed again in 1999.45

Conclusion The internal and external pressures brought to bear upon the existing Japanese historic bloc from the 1970s onwards created cracks in the historic bloc at several key points. In the industrial relations regime, which was built upon the foundations laid down in a compromise between big business and core employees to the effect that these employees would be guaranteed certain benefits (permanent employment, seniority wages and so on) not available to the majority, in exchange for total commitment to the success of the company even at the expense of

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the family, and in a compromise between business, government and workers in general that the economy would keep growing at a pace commensurate with rising living standards measured in terms of consumer buying power rather than quality of life. Cracks developed also in the domestic political arena, in which the economic benefits accruing to the population at large were seen as part-payment for a lack of representation in the workplace and in the Diet, provided only that those given the responsibility for exercising economic and political power did so in a manner at least befitting the minimal guidelines for such standards set down in the Constitution. Finally, cracks appeared in the international political arena, in which Japan was originally to play a minimal role contingent upon its relationship with the US. This provided for a pacifist constitution and the pursuit of economic growth within a nominally liberal democratic structure, in exchange for military protection for Japan by US forces. All three of these implicit bargains, the key pillars upon which the existing Japanese historic bloc rests, are in the process of being worn away, a process that has been going on for the better part of thirty years. The industrial relations pillar is breaking down under the pressures brought to bear primarily by the US and other competitors in East Asia and elsewhere that have forced structural adjustments on the Japanese economy, and also by its rejection at home in the face of severe pollution and other social costs not accounted for under the bargain. The political settlement is breaking down because of the rejection by the populace of the corruption endemic in political life, and the associated perceived inability of politicians to solve real economic problems. It is breaking down also because politicians are in the process of ending Japan’s post-war rejection of militarism and militarisation. Moreover, the method politicians have consistently chosen by which to break this bargain fundamentally contravenes the limits placed on what is and is not acceptable behaviour in Japanese politics. This leaves us with a simple question, the answer to which is rather difficult to supply. Namely, why has the historic bloc not yet cracked under the combined force of these separate pressures? The answer comes in two parts, the first insisting that the resilience of the historic bloc has not yet been tested to its limits. Although the cumulative effect of the separate pressures described above is very great, they are visible only at certain times and in certain places. We could, for example, be assured that were China to attempt forcibly to bring Taiwan back into the ‘fold’ then the recent revision of the Guidelines for Cooperation between Japan and the US would spark massive reaction in Japan, since they

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tacitly commit the SDF to assist in US naval blockades. In the absence of such a trigger event, reaction is muted. Second, the Japanese hegemonic class has not taken all this lying down. Polluting industries have been exported, job losses have (until recently at least) been kept to a minimum, legislation has been passed ostensibly guaranteeing the rights of women, the issue of structural corruption is now central to the political platforms (such as they are) of all parties in the Diet, Japan has ‘internationalised’ and become a ‘life-style’ power, and certain limits not in the constitution have been positioned so as to restrict or at least slow down the pace of militarisation – the list could go on. Behind all these efforts, the goal has been to preserve the status quo – to hold the historic bloc together – and in this the Japanese hegemonic class has thus far succeeded. The remainder of the book goes on to explore these efforts and their effects, and finds that they have impacted not just upon Japanese society but upon other East Asian societies as well. This raises the interesting and controversial issue of the extension of the Japanese historic bloc outwards to embrace East Asia.

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Part III Contemporary Political Economy

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5 Mapping Japan’s Role in East Asia: Production

Having briefly examined the emergence of the current Japanese historic bloc, its fracturing from the 1970s onwards, and attempts at repairing these fractures during the same period, the final four chapters of the book bring the analysis firmly into the contemporary era by examining in detail how and to what extent these attempted repairs have impacted upon Japan, East Asia and the wider world. Each chapter looks for evidence that the Japanese state–society complex is reaching out beyond Japanese shores in such a way that it is visibly shaping the regional order in East Asia, and hence the contemporary shape of the post-Cold War world order. In neo-Gramscian terms, this involves an inquiry into whether or not the Japanese state–society complex has the potential to achieve hegemony over East Asia using material capabilities, institutions and ideas as instruments both of coercion and of consensus. Thus, very broadly, what we are looking for is a large economy combined with a powerful military, and the creation of dependent and interdependent links between these and other state–society complexes in the region and beyond. We are looking for evidence that the Japanese state–society complex is taking a larger, more assertive and more creative role in international institutions than it has hitherto, and that this role has some coherence and vision stretching beyond pure self interest. Finally, we are looking for evidence that the Japanese state–society complex presents itself (or is presented) as representative of a set of ideas, a vision or an ideology capable of embracing or being embraced by other state–society complexes in the region and beyond. In order to keep the analysis sharply focused, we have recourse to the concept of structural power developed by Strange, and the sets of questions suggested by her delineation of structures of production, finance, security and knowledge. Since these have been discussed at length pre67

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viously, it is not necessary to go over the same ground again. However, in noting once more that the production structure encompasses ‘all the arrangements determining what is produced, by whom and for whom, by what method and on what terms’, we come face to face with the dilemmas and difficulties posed by the internationalisation or transnationalisation of production, and with the wider issue of the globalisation of economic activity.1 This apparent sea change in the nature of the productive process has led some, including Strange, to conclude that the state is no longer necessarily the central actor in the international or global economy.2 It is not my intention to delve into the complexities of these arguments here.3 However, one or two observations do seem relevant. First, although it has undeniably suffered under the abrasive effects associated with globalisation (in ways outlined in Chapter 4), Japan appears at least until recently to have been able to avoid or deflect, to a much greater extent than other state–society complexes, the socioeconomic problems associated with some variants of the globalisation thesis. In support of this argument, one need only bring to mind the constant pressure exerted by the US for ‘structural’ reform of the Japanese economy – the point being that if market forces are unable to prise it far enough open to facilitate foreign entry, then bureaucrats in Washington stand ready to add the necessary political force. This capacity for resistance can be construed as both a powerful ascriptive weapon to which Japanese government and business interests have recourse in their attempts to extend hegemony over East Asia, and, at the same time, a source of weakness by virtue of the fact that state–society complexes with less capacity for resistance may suffer the pangs of jealousy and fear previously exhibited, for example, in the 1970s during the visit to the region of the then prime minister Tanaka.4 A second observation is that important as these changes in the global economy undoubtedly are, they do not significantly affect the present analysis, since we already accept that it is not the Japanese state narrowly conceived that is the focus of our attention, but the Japanese state–society complex. This naturally includes, to take just one example, Japanese and Japanese-owned firms of whatever size and type, in whatever location, acting not necessarily with some sort of grand master plan in mind that would result in domination or hegemony for Japan over the region, but in pursuit of their own interests and agendas.5 As the analysis of the security structure obtaining in East Asia will demonstrate, these interests may at times coincide with the interests of other Japanese actors and at times may clash with them, but the overall or cumulative effect is the same. That is, to tie Japan and the remaining

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countries of the region very closely together in a way not often captured in the existing literature. This chapter, and those that follow, will focus on Japanese behaviour in the region at a number of levels: regional, subregional and, where appropriate, microregional. These divisions are purely artificial, designed at this point not to indicate or take issue with arguments addressing the globalisation and/or regionalisation debate, but simply to facilitate an analysis that avoids the common division of East Asia into two parts, north and south, and also dispenses with a countryspecific orientation. The latter approach would simply take too long and deflect us from our larger task, while the former is to all intents and purposes an outmoded demarcation in the advent of a ‘greater’ China, and especially now that China has laid claim to large parts of the South China Sea.6 However, before we begin this stepped analysis of the configuration presently obtaining in the production structure, there is one further point to be made. This is that any analysis of regionalism or regionalisation must consider events at the global level that inform, interact with and depend upon events taking place at other levels.7 Specifically, we cannot disregard the fact that there is already a global production structure: one set in place primarily by the United States in the full bloom of its hegemonic strength. Logically, if we are to discuss the manner in which Japan is pursuing hegemony and the extent to which it has succeeded in the East Asian production structure, we must first discuss the efforts it has made in tearing down and replacing the existing global structure and the contradictions inherent within these efforts. This also applies, of course, to the finance, security and knowledge structures.

Japan, the United States and the production structure in East Asia In the late 1980s and early 1990s Japan seemed to be making a challenge to US economic power sufficient to send analysts and commentators the world over scrambling for their dictionaries in search of pithy commentary with which to capture the sense of surprise, awe and fear that attended such a major change in the economic hierarchy. Quite suddenly, or so it appeared, the strength of Japan’s domestic economy, now the world’s second largest, had enabled it to become the second largest exporter of manufactured goods, the largest creditor nation, the largest financial contributor to various global institutions and (by some measures) the third largest spender on military equipment and person-

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nel. At the time, it was this latter aspect that appeared most ominous to various spectators, since increased spending on all aspects of military preparedness could easily be linked to Japan’s lead over the US in a variety of advanced technologies, such as ceramics and some areas of micro-electronics. The military capability of the US appeared to be at the mercy of Japanese decision makers in both the public and private sectors. This vulnerability first came to light in 1983 when a subsidiary of the Toshiba Corporation illegally sold milling machinery to the Soviet Union, thus enabling their submarines to be fitted with much quieter propellers.8 It was rammed home in 1986 when the Fujitsu Corporation tried to buy the Fairchild Semiconductor Company, described by one author as ‘literally and figuratively the mother of Silicon Valley’.9 The deal was eventually vetoed on grounds of national security, but such high-profile incidents in the realm of dual-use technology inevitably raised serious questions in the minds of many in the US concerning the steadily deepening Japanese influence over the US economy as a whole, particularly regarding the buying up of huge amounts of public and private debt, and high-profile purchases such as Columbia Pictures and the like.10 The subsequent sale of Fairchild to a French firm, served only to demonstrate how great the perceived threat from Japan had become and confirm the enduring force of war-time images of the ‘yellow peril’. It was innumerable incidents such as these that brought the diplomatic heat generated by trade friction between the US and Japan to boiling point and beyond in the 1980s and 1990s, and from this source that the regional bloc scenario draws a major portion of its strength.11 A brief survey of this area of the bilateral relationship (undertaken below) reveals steadily increasing Japanese resistance to US demands, based upon two major strands of thinking. First, the perceived ‘unfairness’ of these demands given Washington’s inability to set its own economic house in order. Second, a growing confidence that the ‘structural’ differences between the Japanese state–society complex and its US counterpart are of positive benefit to Japan and can be so to other countries, Asian as well as non-Asian. This growing confidence has become more and more obvious in recent years, and manifests through differences in Japanese and US foreign policy decisions over individual cases and in their respective stances in global organisations such as the IMF and the World Bank. In short, Japanese reaction and resistance to US pressure concerning the trade relationship may be taken to represent a significant and sustained challenge to the US’s hold over the production structure. In the meantime, however, the ‘bursting’ of the bubble economy, the

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stagnation that followed and the current recession into which Japan has slumped, must have soothed many a fevered brow in US (and European) boardrooms and government offices. No doubt it has furrowed some others, and the next few years will surely witness the emergence of a super-abundance of academic analysis and political commentary purporting to explain why the Japanese (and East Asian) challenge could only have been transitory, and how and why the US was able to throw off its own economic malaise.12 Be that as it may, to dismiss the Japanese challenge prematurely would be a grave error of judgement. The Japanese economy is still the world’s second largest, the country is still a major contributor to the IMF and UN, it remains a major donor nation and it has a powerful military force structure.13 The very fact that the agenda’s of the Asia–Europe and G-8 summit meetings of 1998 were overshadowed by discussions of the health of the Japanese economy, demonstrates quite clearly just how important Japan has become to the well-being and vitality of the global economy.14 Nevertheless, other than pointing to Japan’s obvious centrality in the global economy, we have as yet gained little sense that the country has issued a hegemonic challenge to the US. To be sure, in material terms, the narrowing gap in the size and technological prowess of the two economies, as well as their increasing interdependence, are significant as indicators of a possible Japanese challenge to US dominance of the production structure, but this does not add up to hegemony. In order to achieve hegemony, Japan must be shown to have altered not just its position in the global economic hierarchy but to have altered the way in which that hierarchy is configured and to have done so in such a way that it is Japanese values and ideas that have become the norm. This is obviously a difficult task, but the Japanese have not shrunk from it. The ideological, ideational and technical challenge will be discussed in some detail in Chapter 8, although some of the ideas presented therein will be introduced below. In the next two sections I first identify what, arguably, can be seen as the initial stirrings of a challenge to US hegemony at the global level in the areas of trade negotiations and representation and associated agenda-setting and decision-making powers in global institutions. I then move on to consider the strength of the Japanese challenge in East Asia, where hegemony has at times appeared to be within reach. US-Japan trade friction Economic friction between the two allies began to show itself quite soon after Japan regained its sovereignty in 1952. By 1955, Japan had recovered its traditional strength as an exporter of textiles and had success-

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fully penetrated the US market, exporting 140 million square yards of cotton to that country in that year, up from a total of only 2 million square yards in 1951.15 In response, the US quickly persuaded Japan to agree to impose a voluntary export restraint (VER) on cotton from December 1955, an agreement made more stringent and formal in January 1957 as part of a multilateral deal known as the Long-Term Arrangement Regarding International Trade in Cotton Textiles. In subsequent years, VERs were reached between the two countries on steel (1972), television sets (1977), automobiles (1981) and semiconductors (1986).16 Quantitative restrictions such as these are an obvious sign that ‘bad blood’ exists between the two countries. From the US come charges that the Japanese economy is virtually closed to foreign goods (mainly manufactured but also primary products such as rice) and that Japanese business indulges in ‘unfair’ practices. From Japan come charges that US business simply cannot compete and that to make up for this lack of competitiveness it (US business) pressures its government into demanding intervention in the market clearly at odds with the free market principles Washington espouses so loudly at every opportunity. Moreover, such are the contradictions in Washington’s stance that Japan can never win, since for the Japanese government to intervene in its domestic market in order to get rid of so-called market-inhibiting practices (associated most strongly with the Keiretsu business groups and the structure of Japan’s distribution system) would itself contravene the principle of non-interference.17 Were this apparent contradiction the only problem, it could perhaps be attributed to a simple matter of over-heated political rhetoric. However, VERs have been accompanied by unilateral initiatives undertaken by the US government and by a series of trade negotiations between the two countries that have slowly zeroed in on the structure of the Japanese state–society complex as a whole, moving far beyond simple quantitative restrictions on certain Japanese exports. In pursuing this approach, the US has not only blotted its already less than clean copybook as a free trader, since in the eyes of many these efforts more properly fall within the remit of the GATT and its successor the World Trade Organisation, but so too has it stirred the wrath of Japanese business, government and popular opinion. The most significant unilateral initiative undertaken has been the so-called ‘Super 301’, which is clause 301 of the Omnibus Trade and Competitiveness Act of 1988.18 This clause empowers the US Trade Representative to name countries engaged in ‘unfair’ trade practices,

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and further empowers the US government to impose import sanctions on any countries so named if, after a period of 18 months of negotiations, the US is not sufficiently satisfied that its grievances have been resolved. By 1992, Japan had been cited 13 times under the 301 clause and its successor. Clause 301 was joined in 1985 by the commencement of a series of bilateral discussions known as the Market-Oriented Sector Specific Talks (MOSS). These deliberations aimed at opening the Japanese market in four key areas: electronics, telecommunications, medical and timber products. Although some success for US exporters was recorded in the four areas covered by the MOSS, the advent of the Omnibus Trade and Competitiveness Act in 1988 revealed continuing dissatisfaction with the trade relationship. Accordingly, in 1989, the US and Japan opened new negotiations under the rubric of the Structural Impediments Initiative. As the name implies, these negotiations sought to remove barriers to trade perceived to lie within the structure of the Japanese economy, such as the seemingly antiquated shape of its retail sector characterised most visibly by the very high number of small neighbourhood ‘mom and pop’ stores relative to the number of large department stores, the anti-competitive nature of the Keiretsu, a general paucity of anti-monopoly legislation and lax policing of existing laws, and even the high savings rate. The acidity of these particular demands, centring as they did on what amounted to the need for Japan to alter the very fabric of its society, caused serious damage to the trade relationship and threatened to corrode the wider bonds joining the US and Japan in their longestablished security relationship.19 The final straw came in the summer of 1993 at the Tokyo meeting of the G-7 nations, when Japan flatly refused to accept the Clinton administration’s proposal to allocate numerical targets for US imports to Japan. The then Japanese Prime Minister Miyazawa Kiichi (facing an upcoming election) suggested publicly that it was ‘impossible’ for market economies such as the US and Japan to actively manage the level of exports and imports in pursuit of a reduction in Japan’s surplus.20 The ferocity of the Japanese counterattack, which continued almost unabated through the brief period the LDP spent out of power, was carried forward with some vigour under the leadership of Hashimoto Ryutaro, who had earned his spurs during the various US-Japan trade negotiations of the 1980s. Japanese determination led, in December 1997, to a victory in the WTO for Japan’s Fuji Film Company over its US-based rival Eastman Kodak concerning unfair restrictions on market access in Japan.21 This use of the dispute mechanism of the WTO is indicative of greater

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participation by Japan, beginning roughly in the early 1980s, in global economic institutions such as the IMF, World Bank and the GATT.22 In matters of trade, Japan has shown itself more and more willing to use the GATT and now the WTO to challenge other states over unfair trade practices. In 1995, for example, Japan secured its first ever favourable GATT panel ruling, when it successfully petitioned against antidumping duties imposed by the EU on electronic goods assembled at so-called Japanese ‘screwdriver’ plants within the boundaries of the European Union.23 Japan has not only been fighting individual incidents of alleged discrimination, but has opted to launch a broadside against a whole raft of discriminatory practices carried on by its economic competitors. For example, in their deliberations over the shape and function of the WTO as a successor to the GATT, Japanese representatives were reported as suggesting the introduction into the new body of measures designed to prevent the sort of legal harassment implied by domestic legislation such as Super 301, to investigate regional arrangements such as the NAFTA and EU, and to question elements of competition policy adopted by the US and EU.24 By vigorously defending itself against charges of unfair trading, prosecuting as far as is possible alleged discrimination against Japanese firms and seeking maximum compliance to the letter (if not always the spirit) of GATT/WTO rules, Japan can claim to be an exemplary member of the WTO and at the same time highlight the shortcomings of other members, especially the US. In so far as Japan is perceived to have been successful in some if not all of its efforts, it can be shown to have turned the tables on other leading industrial states that have for so long criticised its own economic policies and trading practices. This in turn has placed added domestic pressure on Washington to abandon its central role in these institutions and to concentrate instead on unilateral action, thus further eroding US claims to leadership of the global political economy based upon its reputation as a champion of free trade and political equality amongst the family of states.25 Japan has not been content, however, with simply ensuring that all the leading states play by the same rules equally. It has also sought to change those rules so as to make them reflect more accurately its own path to economic development. It was during the aforementioned period of really intense US pressure over trade (exacerbated by Japan’s purely financial contribution to the war in the Gulf amid bitter recriminations voiced inside and outside the US Congress) that voices began to be heard in Japan and elsewhere in Asia to the effect that the time was right for Asian countries to make a collective stand against

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perceived US hypocrisy in the economic, social and political realms. Under eastern eyes, this hypocrisy manifested itself most clearly in Washington’s stance on human rights, which appeared to be applied selectively depending on the success (or lack thereof) of US business in penetrating this or that market. Closely related to this have been added charges of economic ‘sabotage’ carried out by western financiers determined to undermine East Asia’s boom economies.26 Whether or not these claims and counter-claims have any substance, the fact remains that industrial and industrialising East Asia has found itself under frequent attack in the past decade or so because of perceived differences between its socioeconomic structure and that obtaining in the West, despite the obvious difficulties and contradictions associated with such blanket comparisons. Since many of these perceived differences can be linked with Japan and the special role Japan has played in post-war, post-colonial East Asia, it is little wonder that Japan has been called upon with increasing frequency by some representatives of these countries to spearhead their common defence. This willingness to accept some form of leadership role for Japan is confirmed by the scattering of official ‘learn from Japan’ schemes launched in the past two decades, beginning with Singapore’s ‘Learn from Japan’ initiative in 1978, Malaysia’s ‘Look East’ policy in 1981, and statements emerging from official Filipino sources for the country to become more like ‘Japan Incorporated’.27 Japan as a force for global institutional change One of the most frequently voiced and telling criticisms of Japan in the post-war era has been that since it recovered from the effects of the Second World War and transformed itself into the economic powerhouse it undoubtedly is, it has not fulfilled its obligations to the global community in terms of supplying appropriate levels of diplomatic and military support for and/or financial contribution toward ensuring stability, relieving poverty, enhancing opportunity and so on. Since we will discuss what has become known as the Japanese ‘legitimacy deficit’ in the final chapter, it is necessary here only to point out that Japan’s perceived lack of commitment to various global institutions has been viewed as a metaphor for this general lack of international contribution, and as a clear indicator that Japanese society is selfish and introspective. Such charges can only be strengthened by the widely held perception that the legacy of war-time aggression under which successive Japanese governments have laboured should ensure that contributions to international organisations take centre stage in Japanese foreign

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policy, since its ability to act unilaterally outside these institutions or beyond the framework of the US–Japan alliance remains fairly tightly circumscribed. Despite the fact that some of these criticisms appear justified, recent events indicate significant changes in Japanese attitudes to participation in and co-operation with international organisations in the last two decades. This evidence may be used to suggest that not only has Japan begun to shed its image as an uncaring and selfish nation unprepared to support the aspirations of the global community, but that it is doing so in a way which differs from the approaches and methods associated with the status quo. Specifically, Japan is using its new political weight in the various international economic organisations to call to account other leading industrial nations for their perceived misuse of their positions of privilege attained by virtue of their status as founding members of these organisations and their dominance (for some, only a memory) in the global political economy.28 More significantly, perhaps, Japan is challenging the various canons of knowledge upon which the ideology of free market capitalism has been constructed. Similarly, in the various political organisations, and most importantly the UN, Japan is pressing for greater recognition and acceptance of changed realities in the hierarchy of states (meaning a permanent seat on the Security Council for itself, and an expanded membership of that body), and of the changing nature of international relations that place economic issues at the same level of importance as strategic issues.29 In this, Japan’s longestablished policy of ‘comprehensive’ security provides a ready-made model upon which a reformer such as Kofi Annan may push forward his plans to forge closer links between the UN and private business.30 In this area too, therefore, Japan may be said to be challenging the dominance of the US in the production structure. In regard to membership of international organisations, for reasons of legitimisation, prestige and status, Japan has been keen to join at the earliest possible moment all of the key organisations such as, amongst others, the International Labour Organisation and World Health Organisation (1951), the IMF and World Bank (1952), the GATT (1955), the UN (1956), the IAEA (1957), and the OECD (1964). Finally, as a mark and confirmation of its renewed economic ascendancy, in 1975 Japan became a founder member of the Group of Seven (G-7) leading industrial powers.31 Membership does not infer influence, however, and, until the 1980s, Japan refrained from attempts at playing a major role in policymaking, preferring instead to follow very closely the US line on almost all issues.

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Japan did not have many people in place within the bureaucratic structures of these organisations. Despite rapid and major increases in its financial contributions in the mid- to late 1980s (when Japan was attempting to recycle its huge surplus on balance of payments), this situation persisted in the 1990s. In March 1991, for example, Japan had 25 people out of a total of 1199 at the IMF, while there were 70 Japanese staff, or 1.7 per cent of the total, at the World Bank. These low numbers simply do not gel with the fact that Japan became the secondranked donor to the IMF in 1990 and to the World Bank in 1984. Meanwhile, at the UN, where the minimum staff quota for Japanese nationals was 165 in 1992, only 89 of the posts were filled.32 Much of the blame for the relative lack of Japanese at these institutions is undoubtedly to do with the strictures imposed by Japanese society. For children, the fact that personal academic achievement is less important in employment terms than the institution at which they receive their education, means that being absent from the education system for any length of time is to be placed in a position of life-long disadvantage no matter how good the education they receive elsewhere may have been.33 For adults, in the rare event that they are released by their respective ministries, taking up even temporary positions abroad means missing out on seniority promotions and therefore falling behind their contemporaries. This is not to say that these problems are insurmountable. The changing nature of Japanese society – where life-time employment is no longer guaranteed for white-collar workers and where women are more and more becoming permanent members of the workforce – suggests that demand for jobs, even abroad and in international organisations, will rise. With regard to female workers, Drifte makes the point that since Japanese women find their career prospects severely limited at home, they are more willing to fulfil their aspirations abroad. As of June 1992, 42 out of the 89 Japanese professional staff at the UN were women.34 Meanwhile, Japan’s effort at ‘internationalisation’ is having some effect on the education system, if only to the extent that with more Japanese people living abroad, more Japanese children are receiving large proportions of their education outside the home country.35 While it may take some time before these personnel-based problems become a thing of the past, the Japanese government has already gone a long way toward ending its relative isolation from the centre of decision making in the major international organisations. Central to these efforts has been the achievement of more equitable voting shares. In their analysis of this issue, Rapkin and Strand clearly demonstrate that, contrary to established procedures at the IMF and the World Bank,

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Japan’s share of voting power at both these institutions has lagged far behind domestic growth in a variety of economic indicators (Gross Domestic Product, Exports, Imports, Reserves and Official Development Assistance) against which quotas are supposedly measured.36 As previously noted, Japanese efforts had succeeded in catapulting it into the number two spot in the IMF and World Bank by 1990, behind the United States. The victory rang hollow, however, since the new Japanese shares were only fractionally higher than those held by Germany, France and Britain, and lagged far behind the share held by the US. At the World Bank, for example, in 1984 the US share quota was 20.91 per cent, compared with Japan’s 5.19 per cent and Germany’s 5.17 per cent.37 Several rounds of negotiations followed, with the Japanese quota eventually rising to 6.69 per cent in 1986, while the US share fell to 18.91 per cent. This latter figure is significant since it was lower than the 20 per cent share required by the US at the time to sustain its veto power over the organisation. However, since the US had refused to contemplate any changes in quotas until the special majority required for quota, policy and constitutional changes had been raised from 80 to 85 per cent, it retained its veto. This has been the pattern, in the World Bank and the IMF, throughout the latter half of the 1980s and the early 1990s, with Japan pushing for and being granted changes that improve its position within the voting hierarchy but do not in fact seriously improve its ability to challenge the veto power of the US.38 Since both of these organisations have developed informal systems of coalition and compromise in response to these formal constraints, the Japanese government obviously has some scope to influence proceedings and policy as it did, for example, when it fought and won the battle to get the so-called ‘Miracle’ study published.39 Nevertheless, Japanese victories, small as they have been, have not been achieved without cost. In order to reach its longcherished goal of second spot behind the US at the IMF, for example, Japan was forced to sweeten its bargaining position with contributions to an IMF special fund (to the tune of $3.6 billion) and additional payments for co-financing loans at the IMF and other multilateral institutions, neither of which are included in the calculation of voting shares.40 More importantly, the Japanese government has been forced to concede to arguments emerging from Washington to the effect that before it can claim greater voting rights it should alter its trade and financial policies in line with the official policy of these institutions or, in other words, in line with US thinking on free market capitalism. It is significant, however, that Washington’s opposition to changing the quotas at the

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IMF faded very quickly when it became clear that, in the face of monetary restrictions imposed by the US Congress, the 1989 Brady plan on debt relief could not be made to work without substantial Japanese monies. This demonstrates again the precariousness of the US position at the helm of these international organisations, hostage as the government is to the domestic agenda of Congress. This arguably incipient isolationism leaves Japan with a significant degree of policy freedom in the council chambers of multilateral organisations, and even more freedom in the one multilateral organisation over which it apparently holds dominion, the Asian Development Bank (ADB).41

Japan in East Asia42 There can be little doubt that in certain parts of the globe US economic power and influence have been less dominant than in others. If this was perhaps the case in early post-war Europe, it is doubly true in regard to East Asia, where the US has not been quite so hegemonic in shaping the production structure as one might think given the evidence of its unparalleled achievements at the global level.43 Rather, the development of the East Asian production structure over the past forty or so years has been profoundly affected by the region’s relationship with Japan. This has occurred through provision of Japanese war reparations, aid, and investment leading to high levels of intra- and inter-regional trade, through the creation of a web of production networks based around Japanese firms, through Japanese actions within international organisations, and through the propagation and dissemination of an ideology, initially rooted in Japanese management and production techniques, that seeks to emphasise similarities between Japan and the countries of East Asia expressed in cultural and historical terms and encapsulated in the belief that there is an ‘Asian’ or ‘Pacific’ way of doing business and of living life.44 All these activities add up to the fact that in East Asia ‘Japan has quietly supplanted the United States as the dominant external factor in growth’.45 There is more to the relationship than this, however, as Richard Cronin rather breathlessly described it in the early 1990s: The ripple effect of rapidly growing Japanese offshore investment is changing the economic face of the Asia-Pacific region. The physical landscape of Asian cities and their environs is coming to be dominated by Japanese business offices, hotels and manufacturing plants. Increasing numbers of consumer products bearing brand names such

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as Sony, Panasonic and Canon are being produced in Japanese-owned factories in Asia rather than in Japan itself. Japanese tourists, business travellers, and expatriate employees have become mainstays of regional airlines, hotels and related service industries in much of the Asia-Pacific region, with spillover impact on emerging indigenous middle class lifestyles. Karaoke lounges and Japanese pop singers now compete with Western popular culture symbols in burgeoning Asian capitals.46 All these influences are significant – at root, however, lies the domination of the regional economy by Japanese firms, guided, to a greater or lesser extent, by their government and bureaucracy. Increasingly it is they who set the standards under which goods are produced in the region; they who determine working conditions, infrastructural development and the like. It is Japanese management techniques, Japanese ideas that increasingly shape production methods, management–worker relations, government policies concerning acceptable employment, pollution, and other social practices and habits. What, then, has happened to the firms of US origin? The historical record The fact is that US firms are still there in East Asia, as they have always been, but not (at least until the Asian crisis of 1997) in quite as much force as their Japanese counterparts. In the 1988–1990 period, US foreign direct investment (FDI) in East Asia (defined as the NICs, ASEAN and China) came to 6.2 per cent of total foreign direct investment in the region, whilst Japanese FDI totalled 12 per cent (1.8 per cent came from Europe). The corresponding figures for the 1991–1993 period were 10 per cent (US), 16.6 per cent ( Japan), and 3.6 per cent (Europe). In 1993, Japan was the largest trading partner of China, Thailand, Malaysia, and Indonesia, and the second largest trading partner (after the US) of South Korea, Taiwan, Singapore and the Philippines. In other words, in every case except that of China, either Japan or the US is the largest or second largest trading partner with the countries of East Asia. Hong Kong is (or was), of course, a special case, but for the record China was its largest trading partner in 1993 followed by the US and Japan in second and third places respectively. The major reasons for this Japanese ascendancy are fairly clear. First, as part of the post-World War II settlement the US demanded and largely received the break up of colonial privileges, and hence opened a door for investment into the region. These efforts were hampered, however,

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by resistance from newly independent states fearful of neocolonialism disguised as investment, and by the wars against Communism fought in Korea and Vietnam that, although they brought floods of US public money into specific parts of the region, left US business barred from Indochina, the People’s Republic of China (PRC) and North Korea.47 Second, and perhaps more importantly, the exigencies of the Cold War very soon brought Washington to the conclusion that Japan had to recover quickly from the devastation wrought by the war, and that in light of the ‘loss’ of the China market this could only be achieved through renewal of some sort of relationship to the South. The initial mechanism through which Japanese money re-entered Southeast Asia was by way of war reparations.48 Payment of reparations to communist China and North Korea was naturally out of the question. On the other hand, payment of reparations to certain Southeast Asian countries was very much on the agenda, the structure and pace of such payments being set not primarily by the Japanese government but by Japanese business, which had from the outset seen the potential for these payments to act as a bridge (or bridgehead) between Japan and the region, across which later Japanese investment could flow. Starting in November 1954, and ending in March 1963 reparations payments to the four recipient countries – Burma, the Philippines, Indonesia and South Vietnam – totalled just over $1.1 billion, supplemented by around $740 million in loans (to Burma, the Philippines and Indonesia).49 These payments and loans had, by the mid-1960s, ensured that 30 per cent of total Japanese overseas investment was in East Asia, excluding the PRC.50 The second wave of Japanese money to enter the region came through the mechanism of foreign aid. Japan’s aid programme has been controversial more or less since its inception.51 The primary critique has been that the programme has from the outset been guided by the principle of self-interest and commercial benefit for Japanese firms.52 Examples of this type of criticism range in time and perspective from the Marxist critique of Halliday and McCormack in the 1970s, who state that ‘imperialist “aid” is, of course, only disguised investment or export credits’, to more recent neo-realist analyses as exemplified by the work of Edward Lincoln, who focuses attention on the fact that, historically, most Japanese aid has been bi- rather than multilateral, that a high proportion of such aid has been ‘tied’ aid, and that much of it has taken the form of loans rather than grants.53 From a certain – that is, ‘western’ – perspective these criticisms appear to be based upon fairly solid foundations, albeit circumstances are in the process of changing.54 What should be

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recognised, however, is the fact that Japanese officials are constantly at pains to point out that in the opinion of the Japanese government aid should not be seen by recipients as a simple handout but as a method of self help. To their way of thinking, by imposing financial discipline on recipients through repayments schedules and so forth, the Japanese aid programme helps recipients gain knowledge and experience of international financial dealings and ‘best practice’, and promotes an atmosphere of trust and respectability (along with feelings of self-respect for the target countries) upon which recipients are able to draw when they are in position to engage with these markets independent of outside help.55 Such pronouncements should, of course, be taken with a pinch of salt, but there is little doubt that they strike a chord within a post-colonial East Asia with aspirations toward self-reliance, drawing upon common images of the importance of hard work, family values and so on. Viewed through other lenses, the picture becomes a little more hardedged. As in the case of reparations, aid can also be seen to have represented the perfect opportunity for Japanese firms to re-engage with Asia, first as a source of raw materials with which to fuel the era of high speed economic growth. Later, aid facilitated reception of the highly polluting industries that Japan was forced to move ‘offshore’ in the 1970s as these became unacceptable to the Japanese public. Finally, aid was seen as a method of mollifying negative reactions to ever increasing amounts of FDI (delivered in an era of rising trade friction between Japan, the US and Europe, and rising production costs in Japan following the upward movement of the value of the yen) and facilitating the smooth running of these operations in the absence of a sufficiently robust infrastructure. From whatever perspective one looks at Japanese aid, it should be noted that many of the criticisms directed at it can be directed with equal force against other major aid donors, including the United States.56 Japan has fought vigorously to alter perceptions of mercantilism in its aid policy by, for example, changing the balance between grants and loans, by prioritising certain ‘global’ issue areas such as the environment, population growth and AIDS awareness, and by identifying key criteria against which to decide whether to disburse aid to a particular country or not. These criteria, which were adopted in 1991, take account of the following information: 1. the trends of military expenditures of recipient countries; 2. the trends of their development and production of weapons of mass destruction and the delivery systems;

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3. their export and import of arms; 4. their efforts at promoting democratisation, basic human rights and freedoms and the introduction of market-oriented economic policies.57 There are undoubtedly some major problems with these criteria, not least of which is the fact that most of the countries in East Asia in receipt of Japanese aid, and particularly China, contravene some or all of them. Nevertheless, as a political and ideological device, they serve to distance Japan from charges of mercantilism and to create an image of Japan as a global player. In their future implementation, these criteria also contain the potential for Japan to differentiate itself from the US and from the image of Japan as a supporter of US global strategy, since their existence provides Japanese policymakers with an escape hatch through which to side-step US pressure to punish this or that enemy on the basis of real or perceived threats. The sheer scale of Japanese ODA is impressive. In 1986 Japan distributed $5.6 billion in aid, in 1987 the figure was $7.4 billion, in 1988 $9.1 billion, and in 1989 $10.95 billion.58 The figure fell to $9 billion in 1990, before climbing once more to reach $11.2 billion in 1993 and $13.2 billion in 1994, before falling once more to $11.4 billion in 1998.59 At 0.28 per cent of GNP in 1998, this was far higher than the amount of aid disbursed by the US, as that country spent $8.6 billion or 0.10 per cent of GNP in the same year.60 Of the total bilateral aid disbursed in 1997, Asia was by far the highest recipient, receiving 46.5 per cent (the next highest was Africa at 12.1 per cent). Within Asia, China was the major recipient at $576 million.61 As Table 5.1 shows, this concentration on (East) Asia is a longTable 5.1 Regional distribution of Japan’s bilateral ODA (%) Region

1970

1980

1985

1990

1993

1995

1997

Asia (Northeast) (Southeast) Middle East Africa Latin America Europe Oceania Unclassifiable

98.3

70.6 4.2 43.9 2.5 18.9 6.0 0.2 0.5 1.2

67.7 15.3 37.6 1.7 15.0 8.8 1.1 0.9 4.8

59.3 12.0 34.3 1.5 15.4 8.1 6.9 1.6 7.1

59.5 17.7 29.9 2.2 15.9 9.0 1.7 1.7 10.0

54.4 15.2 24.6 6.8 12.6 10.8 1.5 1.5 12.3

46.5 8.0 21.4 7.8 12.1 10.8 2.0 2.4 18.3

Note:

a

3.3 2.3 -4a -0.2 0 0.3

indicates net recovery.62

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established trend and, what is more, is popular at home, with 56.7 per cent of respondents to a recent opinion poll favouring support for Asia as a priority region, against 16.6 per cent in favour of distributing ODA equally between regions and 7.3 identifying Africa as the priority.63 Despite this apparent favouritism, since the early 1970s Japan has clearly widened the geographic spread of its ODA disbursements beyond Asia, in line with its declared aim of making an ‘international contribution’, its perceived resource dependence, and the necessities of burden sharing with the US.64 This latter category includes the extraordinary sum of between $9 and $13 billion paid out by Japan in support of the US-led prosecution of the Gulf War in 1991.65 Finally, in combination with its bilateral ODA, Japan’s growing contributions to multilateral agencies (between 25 and 30 per cent of its total ODA) such as the UN, has had the effect of causing ‘the poorer countries of Asia to look increasingly to Japan to help finance their budget and trade deficits and alleviate their problems of lagging development and unemployment’.66 FDI constitutes the third wave of Japanese money to enter the region, and has more or less followed the lead set by aid payments. That is, from small beginnings in the mid-1950s, to significant amounts in the 1970s following the Nixon shocks and the revaluation of the yen against the dollar under floating exchange rates, to huge amounts following the further revaluation of the yen after 1985, giving Japan pride of place as the largest provider of FDI to the region in the late 1980s.67 Indeed, in 1990 Japanese companies invested just over $7 billion in the East Asian region, almost twice that invested by their US counterparts.68 Again, as the above suggests, the rising value of the yen had a great deal to do with these outward flows, as did increasing levels and fears of protectionism in Europe and the US. These fears also persuaded Japanese manufacturers to locate within these other two core regions, and in 1994 North America was the preferred destination, receiving almost $18 billion in Japanese FDI or 43.4 per cent of the $41 billion total (of which the US received $17.3 or 42.2 per cent), while Europe received $6.2 billion or 15.2 per cent. (East) Asia received the second largest amount at $9.7 billion or 23.6 per cent of total flows.69 The contemporary scene These broad movements have resulted in the close material connections currently evident between Japan and East Asia. Although the analysis in the previous section was directed predominantly toward Southeast Asia, Japan’s domination of the Northeast Asian economy is in some

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ways as complete.70 Certainly, the focus of Japanese ODA has swung away from Southeast Asia and toward the Northeast in recent years, as shown in Table 5.1. North Korea is heavily dependent on Japanese ODA and on the remittances sent home by Koreans working in Japan but with family in the Democratic People’s Republic. Much of the economic success achieved by the Republic of Korea can be attributed to its triangular relationship with Japan and the US, in which its role, crudely sketched, has been to import machinery and components from Japan and to export finished goods to the US.71 Again crudely sketched, the position of Taiwan is similar, although its connections with China and its experience of Japanese colonisation introduce a degree of variation.72 For a variety of reasons – its long history (including prolonged and bitter conflict with Japan), the economic contribution made by the Chinese diaspora, its status as a nuclear power and the attendant political weight it carries in the global political economy – China is something of a special case, and has become a major focus of Japanese economic and political interests.73 As well as being the largest recipient of Japanese ODA ($1.4 billion or 16.5 per cent of total Japanese ODA in 1993), China is the only country to receive aid on a multi-year basis rather than support for specific projects.74 Public loans ($1 billion in 1993, $5.8 billion over the 1996–1998 period) and private investment ($3.5 billion in 1994) add substantially to ODA totals. However, these began to fall away slightly toward the middle of the 1990s as fears of growing social unrest due to a number of factors – including economic restructuring, the uncertainty engendered by Deng’s failing health and the problems associated with the succession, seemingly endemic corruption and the inability of the Chinese bureaucracy to set in place the usual legal framework safeguarding economic transactions, and the handover of Hong Kong in 1997 – began to erode Japanese confidence.75 Disappointment with the lack of progress achieved in various subregional projects, in the development of which Japan had either taken the lead or played a keen supporting role, have contributed to this relative downturn in interest.76 Nevertheless, the Chinese government has responded to this major thrust by the Japanese in much the same way as have some of its southern neighbours. That is by partially emulating the Japanese economic model in pursuit of its own development under the rubric of ‘socialism with Chinese characteristics’. To be sure, this has not gone as far, at least in public, as it has in some of the countries in Southeast Asia – being limited to the undertaking of a careful study of the place and role in Japanese history of its Ministry of International Trade and Industry (MITI). There is, however, evidence that

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lessons from the Japanese experience are being sought and learnt throughout the Chinese government and business community.77 Despite this swing toward its immediate neighbourhood of Northeast Asia in recent years, Japanese domination of the Southeast Asian economy has attracted the greatest amount of interest, and for good reason. In essence, this is because analysts have apparently detected a deepening of Japanese influence, to a greater or lesser extent, in the private and public sectors of the various economies that combine to make up the regional economy. This set of deepening relationships is illustrated most clearly by Hatch and Yamamura’s depiction of a movement from a ‘hub and spoke’ model, through an intermediate stage represented by a ‘cluster’ model to the current situation which is depicted as a ‘web’ of production networks reaching out from Japan to embrace Southeast Asia entirely in what they call a ‘production alliance’.78 As they suggest in the preface to their book, this deepening regional influence in what we refer to as the production structure is no accident, and has in fact been driven along by, amongst other things, the conscious actions of the Japanese government and bureaucracy in reaction to events and circumstances in the domestic environment: Japanese elites in government and business are using this alliance to buy time. After building and maintaining a political economy based on the interests of export-oriented, high-technology producers, not on the interests of consumers, they now face demands at home and abroad for fundamental change. They hope to prolong the life of this embattled system by regionalizing it, by building a broader foundation for economic revitalization.79 The official force behind this effort at regionalisation has been MITI, working through a number of subordinate and affiliate bodies, although other components of the Japanese bureaucracy have been involved at a variety of levels.80 In 1987, MITI announced the creation of the New Asian Industries Development (New AID) plan that, despite its public billing as a region-wide initiative intended to boost potential export capacity, was in essence an attempt, in three stages, to facilitate the technological upgrading of the Japanese economy by encouraging smalland medium-sized companies using low- to medium-range technologies to move offshore so as to take advantage of low-cost production, thus freeing much-needed resources within the domestic economy.81 In the first stage, which was well under way by 1992, Japanese bureaucrats were set to help their counterparts in Southeast Asian countries draw up

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‘master plans’ for ‘comprehensive co-operation’ in targeted industries thought to have the potential, with Japanese investment, to become globally competitive. In the second stage Japanese bureaucrats, aided by consultants from private industry, developed detailed plans for each targeted industry in the selected country, focusing on the enhancement of ‘hard’ infrastructure (industrial estates, free trade zones and so on) and ‘soft’ infrastructure (such as the development of new Japanese-style organisations – MITI clones – and policy initiatives akin to those associated with the Japanese development ‘model’). Finally, the third stage envisaged full-scale implementation.82 As noted previously, all this should not convince us that there is a master plan afoot aimed at Japanese domination of the productive capacity of the East Asian region and the working lives of those who reside there. Later chapters will demonstrate the fragmented nature of and myriad contradictions inherent within Japanese foreign policy and within Japan’s overall relationship with the region and, beyond its boundaries, with the wider world. Indeed, as we note in Chapter 7, the New Aid plan is as much a result of pressure from the US and Europe for Japan to ‘internationalise’ its economy than it is an attempt at regional domination (although it is difficult to imagine that the final result will gel with US and European expectations). In addition, there is the matter of bureaucratic wars over ‘turf’, with MITI quite clearly muscling in on territory long ago ring-fenced by the aid agencies. Nevertheless, the arguments put forth by Hatch and Yamamura do appear justified in the light of evidence that Japanese corporations, and not just large MNCs but SMEs following in their wake and filling their traditional role as sub-contractors to their larger brethren, dominate the industrial skyline right across the region. Their sheer physical presence gives them an enormous amount of clout within the local environment, and the fact that individual firms (the classic example has become the Toyota Motor network, which produces its diesel engines in Thailand, steering gear in Malaysia, transmissions in the Philippines, gasoline engines in Indonesia and so on) manufacture their products in a number of countries, lend them economic and political power far greater than a country-by-country survey would suggest.83 Small wonder, then, that faced with this display of material wealth and power, and confronted as they are by the ideological arguments that accompany them, many Asian governments have tried to make ‘learning from Japan’ part of official policy, and particularly so when the alternative – learning from the United States – seems so unappealing and inappropriate.

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Conclusion The evidence presented thus far is, undoubtedly, mixed. At the global level, Japan’s economic achievements have enabled it to confront the material and ideational power of the US in both bilateral and multilateral trade negotiations and in the councils of the major multilateral institutions. However, the close historical relationship between the two countries, and in particular Japan’s reliance on US military power, places the US in a very strong position with regard to its continuing domination of the production structure. Similarly, while Japan is in material economic terms obviously a major power (perhaps the major power) in the East Asian region, the evidence presented shows, nevertheless, that the economic fortunes and prospects of the East Asian region are inextricably linked into the global economy and, more specifically, to the North American and European regions. As a result, it is unlikely that the Japanese state–society complex will come to dominate the regional economy based upon the coercive use of these linkages and/or the exclusion of North American and European interests. This casts more than a shadow of doubt on the possibility that the Japanese state–society complex will achieve hegemony over the region: a shadow only lightened by Japanese efforts to push forward an ideological agenda which, at the regional level, emphasises perceived connections between Japan and East Asia expressed in terms of shared historical experiences, common cultural bonds and, hence, similar social structures. In an era of globalisation that, almost by definition, threatens to fragment and erode these social structures, the development of ideas and policy tools with which to combat these possibilities is a major weapon in the Japanese arsenal. That these overtures have been, by and large, welcomed in the region is an indication that the possibility of Japanese hegemony in the production structure should not be dismissed out of hand.

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6 Mapping Japan’s Role in East Asia: Finance

In the modern world, production is a function of credit and vice versa. Without credit, large-scale industrial production is not possible whilst, conversely, production generates new sources of credit.1 The formative structure and shape of Japan’s huge productive capacity was designed and set in place by a triumvirate made up of government, bureaucracy and big business working more or less in tandem, as noted in earlier chapters.2 Throughout Japanese history, by and large, it was the bureaucracy that came up with the plans and big business that executed them. However, none of this would have been possible without the political and financial backing of the government that took from one segment of the country (broadly, by levying heavy taxes on the rural population and granting labour only a small share in national income) and gave to another, mostly in the belief that the country as a whole would benefit.3 A similar emphasis obtained after the Second World War, as Japan sought to rebuild and ‘catch up’ with the western industrial powers once more.4 Again, big business received all the help it needed, while the bulk of the population paid the price in low wage rates in comparison with their relatively high productivity, poor housing and living standards generally, a poisoned environment and so on.5 An analysis of Japan’s productive capacity then, cannot be divorced from the social costs that come with it and these costs are imposed, in part, by the priorities of the Japanese government. Much the same is true with regard to East Asia. Japanese finance played a large part in the post-war, post-colonial development of Southeast Asia, and a large part also in the development of the economies of South Korea and Taiwan. Here again the iron triangle of relations between government, big business and bureaucracy held true, and a consensus was reached on policy, funding and execution. The result was 89

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to place Japan at the centre of the production structure of East Asia, at the pinnacle of a hierarchy of economic relationships that not only shaped the economies of the region to a marked degree, but also the social and political conditions and settlements obtaining within these countries.6 Certain countries were favoured over others according to economic and political priorities, as were certain segments or interests within these countries.7 Once again, East Asian big business and government projects drew most of the funding, while social projects of direct benefit to the mass of the population were few and far between.8 Occupying this central position in an important and dynamic region of the world economy gave Japan the opportunity to exercise political and social power unprecedented in its history, and arguably transformed it into the second or third most important state in the international system.9 Huge productive capacity generates huge sums of money. At the risk of over-simplification, by the 1980s Japan was awash with money, not all of which could be ploughed back into the development of new productive capacity at home because domestic demand continued to be kept artificially low relative to high productivity, while on the international scene Japan was being pressured by the US and European Union to accept more and more trade restrictions, particularly in the form of voluntary export restraints.10 Similarly, the bulk of the money could not be spent on arms, since Japan has a ‘Peace Constitution’. Part of the solution was to begin to spend and produce abroad, tapping ever more deeply into foreign markets whilst simultaneously mitigating international criticism of Japanese trade surpluses.11 Another, related to the first, was to set in train a process of liberalisation in the Japanese economy, including liberalisation of its tightly controlled financial sector.12 The liberalisation of the Japanese financial sector thus has its roots not just in pressure generated in the external environment, but also from pressures generated within the domestic economy as Japanese firms fought to gain the right to raise and invest money in the global marketplace.13 The slow but steady liberalisation and internationalisation of Japanese finance set the scene for Japan to match its productive power in the global economy with a new and untried power in the realm of finance.14 It is with an analysis of this new-found power in the financial structure, the uses to which it has been put and the challenge it represents that this chapter is concerned. Amongst other things, the analysis will show that although the realm of high finance appears at first glance to have very few connections with the ‘real’ world the connections are in fact legion. For along with the benefits that come with

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possession of great financial power come risks of equal magnitude, risks that ultimately are borne not by the institutions that take them but by the ordinary taxpayer.15 The irony is that not only do ordinary people generate the wealth needed to fund financial dealings through exercising their labour power, but so too do they pay the price when these dealings backfire: losing their savings, bailing out failed institutions with their taxes, and paying higher prices for goods and services. In short, financial dealings, which are inherently risk bearing activities, incur economic, political and social costs and therefore contain within them the seeds of resistance. Although difficult given the truly ‘global’ nature of the financial system, where possible the analytical structure follows the loose framework set out in the previous chapter, containing an analysis of Japan’s relationship with the United States and events and initiatives at the global level, and a consideration of those aspects of Japan’s financial role in East Asia not discussed in the previous chapter.16 Before launching into the analysis, however, several preliminary points need to be made. First, this will be a relatively short chapter: partly because many of the issues – such as Japan’s financial contribution through the mechanisms of ODA and FDI and its role in multilateral development institutions like the IMF and IBRD – have already been raised; and partly to maintain a rough balance in the book between the analysis of economic, strategic and ideological issues. Second, the complex nature of global finance suggests that before embarking on the analysis it would be advisable to indicate in more concrete terms what is understood by the ‘financial structure’, and to identify a solid framework upon which to hang an analysis of it. The financial structure According to Strange the financial structure can be defined as ‘the sum of all the arrangements governing the availability of credit plus all the factors determining the terms on which currencies are exchanged for one another’.17 The financial structure thus has two inseparable aspects, comprising ‘not just the structures of political economy through which credit is created but also the monetary system or systems which determine the relative values of the different moneys in which credit is denominated’.18 According to this understanding of the financial structure, then, in what follows we must show to what extent and in what ways the Japanese state–society complex is governing the availability of credit in East Asia and the wider world, and is affecting the relative values (that is, the price) of the key currencies. In this, macroeconomic

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policy plays a large part, since, for example, the rate of interest in Japan affects both the flow of speculative investment into or out of the country and the value of the yen on global money markets. The magnitude of Japan’s economy, in other words, means that domestic policy decisions have global consequences.19 In order to facilitate completion of an analysis of this sort, the work of Eric Helleiner is quite useful. Drawing on detailed historical investigation, Helleiner suggests that there are five features common to the financial hegemons of the past – Holland, Great Britain and the United States.20 The first feature is that all were the leading creditors of their time; the second, that all of them exercised control over the central public financial institutions of the day; the third, that the private financial institutions of each dominated the international financial markets of the era; the fourth, that the leading financial markets (Amsterdam, London, New York) in each country were the most important globally; and, finally, that their respective national currency was the dominant global currency. According to his analysis of the relative strengths and weaknesses of Japan and the United States based upon this framework, Japan has for some time exercised structural as well as relational power over the global financial order, but at the same time the US also continues to wield substantial structural and relational power in the same sphere.21 If this line of argument is correct, then it opens up a debate over the origins of the financial turmoil experienced throughout the global financial system in the past several years. Were the financial crises in East Asia, Brazil and Russia due to the very nature of global capitalism and the tendency toward ‘manias, panics and crashes’, or were they due to lack of co-ordination, tension and mismanagement caused by the sharing of power between a rising and declining hegemon?22 Helleiner’s conclusion, however, which needs of course to be balanced against the context of the Asian economic crisis and the Japanese recession (discussed below), contrasts with that of Gilpin, who argued in the late 1980s that Japan had already wrested global financial hegemony away from the US.23 Helleiner’s position is much closer (although still more optimistic of Japan’s capabilities) to that taken by Strange, who in 1990 admitted that Japan was capable of wielding a certain amount of relational power, but argued that the US continued to shape the financial structure to its own ends, and therefore to wield structural power.24 It is not necessary here to make a determination between these positions, or to reach definite conclusions regarding Japanese hegemony in the financial structure. It is interesting to note, however, such a wide

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divergence of opinion between leading scholars, which is suggestive not just of their differing approaches but of the inherent complexity of the subject matter.25 These difficulties are mitigated to a certain extent in the present study by the fact that the analysis of the financial structure is part of a larger analysis across three other spheres of human activity. Nevertheless, the core task is a difficult one made easier by the analytical framework set out by Helleiner, which – despite the fact that it is itself based upon an implicit acceptance of orthodox accounts of hegemony and the role of hegemonic states and is therefore insufficient as an account in itself – appears to provide the tools with which to identify at least some of the tendencies, contradictions and possible sites of resistance we are looking for.

Japan, the United States and the financial structure in East Asia Although somewhat arbitrary, in a review of this kind three dates – 1971, 1985 and 1998 – appear particularly significant. 1971 because this was the year that Nixon ended the link between the dollar and gold, 1985 because of the Plaza Accords in which the major economic powers agreed to engineer the revaluation of the yen, and 1998 because this was the year of the Japanese ‘Big Bang’ signalling an apparently determined effort by the Japanese government to overhaul and liberalise the Japanese financial sector, and particularly the banks. In other words, the 1970s saw the end (arguably) of US financial hegemony, the 1980s saw the emergence of Japan as an economic superpower and possible financial hegemon, and the 1990s marked either a resurgence in Japanese economic and financial fortunes or its stagnation and decline. Returning to Helleiner’s criteria for financial hegemony, until the late 1960s and early 1970s not only was the US the major direct supplier of public and private credit to East Asia and the rest of the world, but so too did it dominate the co-ordination of other sources of credit through its control over international institutions such as the International Bank for Reconstruction and Development (IBRD or, more popularly, World Bank) and the IMF, through regional development banks such as the Asian Development Bank, and through bilateral influence exerted over Britain, Japan and other major industrial economies. Similarly, the US was the principal architect of a remarkably stable monetary system that lasted from the establishment of the Bretton Woods system in 1944 until the late 1960s and early 1970s.26 Backed by gold, the dollar was

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unquestionably the key currency. The pattern extended to East Asia, where US spending on the Korean and Vietnam wars constituted the functional equivalent of the Marshall Plan, while the main pillar of financial stability was the yen–dollar exchange rate which remained fixed at ¥360 to $1 until 1971. In short, until 1971 or thereabouts, the US fulfilled every one of Helleiner’s criteria for financial hegemony. Japanese capital, meanwhile, was hamstrung by the structure of the national financial system in which it operated.27 This system had, in effect, been held over from the Meiji era, and was characterised by relatively undeveloped capital markets and heavily intermediated credit markets in the context of tight bureaucratic control.28 Many of the proposed revisions to this system during the US occupation of Japan were, as discussed in Chapter 3, either reversed or not implemented. Particularly relevant is the revision of the 1947 Anti-Trust Act in 1949, which allowed for the de facto re-concentration of economic power in the hands of a few small companies – the zaibatsu/keiretsu – that claimed a virtual monopoly over commercial funds through their development of a close-knit network of ‘parent’ banks and interlocking share ownership, all of which took place under the paternalistic eye of a government that set in place an institutional structure (at the pinnacle of which stood the Ministry of Finance and its proxy, the Bank of Japan) and a series of very tight regulations designed to create the best possible environment for the rapid economic reconstruction of Japan after 1945 based upon domestic rather than international resources. This required, above all, a system designed to encourage saving rather than consumption.29 All in all, the system operated so as to create an environment of longterm stability in which investment in the economy could take place free from the short-term profit-maximising pressures commonly felt in the US and UK (or Anglo-Saxon) capitalist economies.30 It was thus largely responsible for Japan’s high speed economic growth, but destined to become a drag on this growth in an era characterised by the globalisation of economic activity. By the mid-1980s Japan had, in any case, become a major economic power, and Japanese exporters had established an enviable record of successfully penetrating the US and other markets. Rather than halting the tide of exports, the devaluation of the dollar against the yen brought about by the Plaza Accords of 1985 spurred Japanese firms into a frenzy of cost-cutting and efficiency drives that not only helped them maintain and deepen their presence but simultaneously doubled, trebled and quadrupled the value of Japanese assets and transformed Japan into the economic superpower it is today.31 Such was the extent of this power

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that Japan had not only become the largest supplier of ODA in the world by the late 1980s and early 1990s, but was at one and the same time supplying the world’s largest national economy with the funds it needed to maintain its basic services. As noted in Chapter 5, Japan’s financial contribution to both the IMF and the World Bank allowed it to claim second place behind the US in terms of the proportion of voting shares held in each organisation. Moreover, at one point in the late 1980s it was reported that the five largest banks in the world measured in terms of total assets were all Japanese.32 By 1993 Japanese banks filled the top eight positions according to this ranking criteria, and sixteen out of the top twenty five. Similarly, the four largest securities companies (Nomura, Nikko, Yamaichi and Daiwa) had come to dominate the Eurobond market by the early 1990s.33 These achievements were matched by the massive growth exhibited by the equities, bond and foreign exchange markets, which had variously come either to rival or surpass the equivalent London and New York markets.34 The size of these institutions and of the Japanese market ensures that decisions taken by private institutions and individuals, and the policies pursued by the Japanese government, impact on the global economy. If this was only suspected after the stock market crash of 1987, it was clearly demonstrated ten years later when, according to some, the Japanese ‘put the boot in’ to Wall Street.35 This remains the case even in the context of economic stagnation in Japan and the, at times, farcical nature of efforts to restructure the banking sector.36 The beginning of the 1990s saw the emergence of a debate over the role of the yen as an international currency, and in particular the beginnings of a so-called yen bloc in East Asia.37 At first glance the potential for the yen to become the leading global currency seems very weak given the continuing centrality of the dollar. Indeed, if one were to characterise each of the three major currencies as mediaeval dramatis personae, the dollar might take the role of sovereign, the euro that of a young pretender and the yen, for the moment at least, court jester.38 This characterisation may, however, be somewhat harsh, particularly in the light of the poor performance of the euro and recent financial liberalisation in Japan, through which has come internationalisation and a growing though still relatively limited role for the yen. In 1988 approximately seven per cent of the world’s official currency reserves were denominated in yen, compared with 15 per cent denominated in German marks and 67 per cent in US dollars.39 Nine years later the yen’s share had risen to 15 per cent.40 The proportion of international bond issues denominated in yen stood at 15 per cent in 1987, and rose to

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almost 40 per cent in 1994 before falling back to below 20 per cent in 1996.41 Meanwhile, 34 per cent of Japanese exports were denominated in yen in 1988; a figure that had risen to 42.8 per cent by 1993, before falling back to 35.8 per cent by March 1997.42 There is some evidence that the yen is more widely used in the East Asian region, which, as noted above, has caused speculation regarding the emergence of a ‘yen bloc’ at some point in the future. The emergence of a yen bloc did appear more likely in 1992 following the creation of the ASEAN Free Trade Area, which itself was seen as a reaction to the advent of the single European market and the NAFTA.43 In the interval, however, any fears that may have arisen because of this have subsided as concerns over protectionism have faded and as the value of the yen has fluctuated.44 Nevertheless, it is the case that 41.9 per cent of Japan’s exports to East Asia were denominated in yen in 1991, and that many of the region’s central banks are holding increasing amounts – 17.5 per cent in 1992 – of yen in their foreign exchange reserves.45 According to some, the yen has also acquired a significant if not dominant influence over interest rates in Singapore and Taiwan.46 Thus, while there is little prospect that the yen will become the dominant global currency, there is some evidence of a significant regional role.47 All this appeared to point to a growing role for Japan in financial markets and in the global political economy more widely, which, in the minds of many, gave the country a power to disrupt the world economy.48 Such fears surfaced most regularly in the US, and centred on the possibility that Japanese investors might withdraw their funds from the US market in retaliation against US pressure over trade.49 Although these fears often reflected a failure to understand the wider relationship between the US and Japan, and a misunderstanding of the lines of power running between the Japanese government and private business, they did underscore the importance of Japan in the global economy and in particular the increasing equality and interdependence of the Japan–US relationship. From the current vantage point, much of the debate over the advent of some sort of Pax Nipponica on the back of financial gigantism seems ridiculously overblown. Heightened by the general malaise created by the bursting of the ‘bubble’ economy, the financial crisis in East Asia has hit the Japanese economy hard over the past few years and in 1998 it entered its first recession since 1974.50 Especially telling has been the exposure of Japanese banks to the East Asian crisis generally, and to Indonesia especially. Already swamped by domestically generated bad debt problems left over from the deflating bubble, Japanese banks were

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at the time also the biggest lenders to Indonesia with approximately $23.14 billion (£14.2bn) of outstanding loans as of June 1997. The Bank of Tokyo-Mitsubishi, for example, had between $3 and $3.5 billion invested in Indonesia in 1998. Estimates by the Indonesian authorities suggested at the time that 40 per cent of the debt held by Indonesian companies was owed to Japanese institutions of one sort or another. Thus, in the words of one commentator at the time, ‘it is Japanese assets, from shopping centres to office blocks and factories, which are being torched by the rioters’.51 Restructuring the financial system, and the banking sector in particular, was the goal of the Japanese ‘Big Bang’ of April 1998. Whilst the list of reforms within the package was extensive, three of its key aims were to ease restrictions on foreign exchange transactions, set in place an economically and politically viable plan for restructuring the ailing banking sector, and to provide the Bank of Japan (BOJ) with a certain degree of autonomy (from the Ministry of Finance).52 The fact that these measures, taken together, signalled the effective dismantling of Japan’s post-war financial structure – one of the major pillars of Japan’s economic ‘miracle’ – is an indication of just how serious the deterioration of Japanese fortunes appeared to the Hashimoto government. Passage of the Foreign Exchange and Foreign Trade Control Law was intended to liberalise, amongst other things, cross-border capital transactions and to open up the foreign exchange business to local (non-bank) and global competition by abolishing the authorised foreign exchange bank system. The new Bank of Japan Law, meanwhile, invested the Bank with formal independence over the setting of monetary policy, which was to be managed by a policy board the membership of which was to be drawn from ‘outsiders’ such as industrialists and academics in addition to the usual coterie of bureaucrats. Given both the context in which these changes took place, and the results of the measures in the intervening months and years one could be forgiven for suggesting that they delivered all the ‘bang’ of a wet paper bag in the hands of a two year old. The collapse of the Cosmo Credit Corporation in 1995 had set the scene for a series of bankruptcies in the next few years including, significantly, the governmentsanctioned failure of the Hokkaido Takushoku Bank, Japan’s 10th largest, in November 1997.53 Also in November 1997, the collapse of Yamaichi Securities, Japan’s fourth biggest brokerage firm, sent shock waves around the world.54 Amidst the unfolding Asian economic crisis, these events placed Japan in the centre of a wave of international pressure to undertake substantive measures to stimulate domestic demand

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and thereby lead the region back into growth.55 Sorting out the bad debt problem confronted by the banks was seen as a vital component in any recovery, but hopes that the government could use public funds to bail out the banks floundered on the rocks of opposition from the Democratic Party of Japan, the Heiwa-Kaikaku parliamentary group, the Liberal Party and the Social Democratic Party, all of whom refused to sanction the use of public money.56 This stalemate over the restructuring of bank debts effectively destroyed any chance the Big Bang may have had of restoring confidence in the Japanese economy. A mere two days after its launch the Chairman of Sony, Ohga Norio, delivered a stunning critique of the government’s handling of the economic situation, suggesting that not only was the Japanese economy on the verge of collapse but that it might take the global economy down with it.57 In this he was reflecting the concerns of Japanese business as a whole, demonstrated by their wholly negative response to the annual tankan survey of business confidence carried out by the BOJ.58 Two weeks later the financial press reported the closure of nine Japanese finance houses (including 6 banks and 3 deposit-taking companies) in Hong Kong, five of which had withdrawn since the Big Bang.59 In May, ten of Japan’s largest banks announced pre-tax losses in the 1997 fiscal year due to provisions for bad loans.60 Three days later the government announced further plans for disposing of the problem loans (which at the time conservative estimates put at approximately £343bn), one aspect of which was to create tax incentives for the banks to off-load the debt.61 The plan foundered again, however, under the weight of opposition from other political parties who remained united against any use of public funds to aid private institutions. Agreement did not come until mid-September 1998, by which time a major corruption scandal had erupted at the BOJ, Sumitomo corporation had agreed to pay $133m in claims arising from manipulation of the copper market by its senior trader, the euro had been launched amid much fanfare, the value of the yen had nosedived creating even more international pressure for the government to intervene in the economy (which it did in April to the tune of $17bn), the US-based Travelers Group had announced its intention to spend $1.6bn acquiring a 25 per cent equity stake in Nikko Securities (Japan’s third largest broker), the US and Japanese governments had jointly intervened to halt the slide of the yen – the first time that Washington had intervened since 1995 and a sign of just how great had become the pressure on other regional currencies to devalue – and Prime Minister Hashimoto had been forced to resign (on 13 July) following

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the LDP’s poor showing in upper house elections which left the party with no choice but to search for a coalition partner.62 Agreement over banking reform did not prevent a further slew of damaging headlines as 1998 drew to a close.63 The day after the nationalisation of the LTCB, Japan Leasing, one of the bank’s affiliates, filed for protection from its creditors in one of Japan’s biggest ever bankruptcies.64 In November, Nomura announced the expected loss of 2000 jobs, the first time since 1965 that the firm had been forced to downsize. Again in November, Daiwa Bank announced that it was to shut down its overseas operations and that all its employees would be forced to take a 10 per cent wage cut. This move was part of a trend that saw Nikko Securities withdraw from Malaysia and Thailand, and Sumitomo close down its retail banking operations in the US. The month closed with the depressing news that Moody’s, the credit rating agency, had downgraded Japan’s sovereign credit rating from AAA to AA1 on account of the government’s deepening indebtedness. The year closed with the nationalisation of yet another bank, Nippon Credit, as its bad debts homed in on the $27 billion mark. In a continuation of these trends, 1999 saw, inter alia, the merger of three Japanese banks – Fuji Bank, Dai-Ichi Kangyo and the Industrial Bank of Japan – to form the world’s largest (if not the strongest) bank with combined assets amounting to approximately $1300bn. 1999 also saw the sale of the LTCB to Ripplewood for $9.5 million, the first ever sale of a Japanese bank to a foreign firm, and the merger of Sumitomo Bank and Sakura Bank to form the second largest bank in the world. In this context, Japanese global financial hegemony can be seen only for what it is – a pipe dream. Nevertheless, explaining what has gone wrong with the Japanese financial system, and why, is no easy task. As such the future remains murky and indistinct, even given Japan’s current woes and the effects of the Big Bang. Equally, unclear however, is the underlying strength of the US financial system that, despite the currently booming economy, is itself undergoing a slow and contradictory process of liberalisation and re-regulation that has left the markets extremely jumpy and volatile, and speculation rife.65 What is clear is the growing interdependence of the Japanese and US economies (and others, of course) and their attendant financial fortunes. Indeed, in addition to the development of new technologies of information storage, retrieval and transmission (which Japanese institutions have been relatively slow to exploit), a central part of any explanation for the increasingly antiquated and inefficient Japanese financial sector must lie in pressures emanating from the US after the 1971 suspension

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of dollar–gold convertibility and the abrogation of the Bretton Woods agreement. This began to force a regulatory homogenisation or orthodoxy – geared towards internationalisation and liberalisation, access, accountability and transparency – on the major national financial systems throughout the globe.66 Referring again to Helleiner’s criteria for financial hegemony, these moves ensured that the dollar would remain the dominant global currency despite the huge debt-overhang caused by the profligacy of US citizens and government and the growth of rival centres of public and private financial power.67 The attendant liberalisation of national financial markets and structures forms another central part of any explanation of Japanese financial woes. The slow (and contradictory) liberalisation of the system described above, combined with other factors such as the switch to a tighter monetary policy, the ageing population and the growing deficit caused by foreign travel and tourism, threatened its ability to deliver the stability required for growth.68 Moreover, the speculative excesses and corruption liberalisation permitted, together with the freedom of capital movements anywhere in the world, were in large measure responsible for the mess in which the system and the real Japanese economy now find themselves. This has weakened Japan’s strength in the financial structure and threatened its capacity to invest in the productive capacity of East Asia. Nevertheless, the crisis in Japanese banking, and the wider Asian crisis have themselves given Japan an opportunity to push forward its own agenda within negotiations over domestic regulatory reform and to challenge the prevailing views in the IMF.69 Moreover, for much of the 1990s Japan remained the world’s largest creditor nation, and had external assets valued at $690bn in 1994, which were up from $610bn in 1993, $330bn in 1990, $129bn in 1985 and $11bn in 1980.70 Despite a slowdown in recent years, its firms continue to invest heavily in East Asia and the government remains the largest source of foreign aid and development assistance – providing $10.8bn in total in 1998, fourteen per cent up on the previous year. Of that, $5.37bn went to Asia, which gives it both major clout and major interests in the financial future of the region.71

Japan in East Asia If the picture is mixed, though dark, at the global level, it is no less so in East Asia. What is not at issue is the fact that Japan’s position as a major creditor nation has given it substantial power to influence events within the East Asian region through ODA contributions and attendant

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FDI as noted in the previous chapter. Indeed, the failure of speculative investments is likely, in tandem with lower costs, to make FDI all the more popular in future. As such, Japan will inevitably seek to exert more control over the global financial structure.72 Nevertheless, the Japanese recession and the government’s failure to resolve decisively the banking issue, coupled with its inability to stabilise the value of the yen have been seen as major contributory factors in the onset and prolongation of the Asian crisis – often resulting in charges that Japan is incapable of exercising the sort of leadership required to ensure the smooth running of the global and regional economies, and therefore of exercising hegemony.73 As the following brief analysis of Japan’s role in the search to bring about a solution to the East Asian crisis will show, such a reading is misplaced. Japan has, in fact, contributed heavily in both material terms and in defence of the continuing relevance of the model of economic development it itself pioneered and that was one of the key ingredients in its post-war success. Whilst the material assistance rendered has been aimed mostly at the short to medium term, the ideological or ideational defence of the ‘Japanese model’ is directed toward the longer term and points to continued resistance to western (USbased) solutions to economic development trajectories and crises.74 Japan’s response to the Asian financial crisis With regard to immediate and medium-term assistance to those countries most affected by the crisis, the Japanese government has pursued a number of tacks.75 Dragging the domestic economy back into growth must be seen as the most important of these, and, despite the fact that reform of the banking system has been slow and halting, the measures taken thus far have had some – if transitory – effect. These include nine economic stimulus packages since 1991 – including, for example, the $120bn package announced on 24 April 1998, which was matched in November of the same year and again in November 1999; related tax cuts; and even voucher schemes designed to get consumers spending again.76 They also include ¥30 trillion in loan guarantees to small- and medium-size enterprises designed to slow the bankruptcy rate and halt the rise in unemployment.77 According to the (former) prime minister, these efforts were intended to push the economy into modest (0.6 per cent) growth by the end of the financial year (March 2000) and up towards the 2 per cent mark in the year following.78 Such measures have been complemented by an unfolding package of assistance to the worst affected East Asian economies that had reached approximately $80bn by December 1999, making it by far the largest

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contribution by any single country including the United States. In summary, this has involved bilateral co-operation (mainly to Thailand, Indonesia and South Korea) in the context of the IMF-led assistance packages to each country; assistance for private investment activities; financing of trade facilitation measures; assistance toward economic structural reforms; aid for the socially vulnerable; and what is now being called ‘human resources development’, which includes the setting up of higher education networks, promotion of joint research at the university level and the targeting of university programmes producing qualified engineers, and the exchange of students between Japan and the countries of the region.79 In more concrete terms, as is their custom, the Japanese have associated each new initiative with a particular member of the government. Hence, the ‘New Miyazawa Initiative’ launched in October 1998 provided $30bn in support, half of which was to be directed toward short-term capital needs and half toward maintaining recovery into the medium term. In addition, the Initiative proposed the establishment of a $3bn ‘Asian Currency Crisis Support Facility’ to be administered by the ADB under the auspices of the ‘Asian Growth and Recovery Initiative’, officially announced jointly by the US and Japan at the annual APEC summit meeting held in Malaysia in November 1998.80 This was designed to guarantee government loans to private banks and companies and to underwrite interest rate subsidies. Then, shortly after the ASEAN+3 Summit Meeting in Manila held in November 1998, the Japanese prime minister announced what has since become known as the ‘Obuchi Plan’.81 This involved the provision by Japan of a special yen loan facility (adding up to $5bn spread over a three year period) for economic structural reforms, infrastructure development and employment promotion. With an interest rate set at 1 per cent over a repayment period of forty years, including a ten-year grace period, the yen loan facility was at least as attractive as some of the alternatives offered as part of separate IMF packages. Associated with, but not directly attributable to the ‘Obuchi Plan’ has been a host of other measures such as, for example, the disbursement of approximately $20 million to the ASEAN Foundation Solidarity Fund directed at training 10 000 people at the local level in the performance of a ‘core role in industry’.82 Finally, Japan has moved toward acceptance of a larger international role for the yen. The commitment to this role was first announced in May 1998, at the APEC Finance Ministers’ Meeting, by the then

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Minister of Finance Matsunaga Hikaru. In the interval, the currency has appreciated dramatically from its eight-year low (¥147) against the dollar reached in August 1998, spilling the wind from the sails of those who have argued that the low yen has inhibited export-led growth in other Asian economies (and even precipitated the advent of the Asian crisis). Indeed, even intervention by the European Central Bank in June 1999 (for the first time ever) could not hold the yen at the preferred level of ¥120 to the dollar, and it had appreciated to around ¥100 to the dollar by late 1999. This new strength, although damaging to Japanese exports, may have contributed to the announcement by the Japanese prime minister of Japan’s desire to see the yen take its place at the heart of the global financial system alongside the dollar and the euro – a development welcomed by the then German Finance Minister Oskar Lafontaine.83 More importantly, however, it signals recognition by the Japanese government that in the light of repeated crises – in Asia, Brazil, and Russia – financial stability represents the holy grail of global economic policy in the new millennium.84 This will require active Japanese participation in the management of the global financial architecture and a higher profile for the yen. These immediate measures have been complemented by pressure from the Japanese government to preserve the validity, strength and vitality of the so-called ‘Japanese model’ of economic development. Japanese resistance in the IMF to the Fund’s policy of refusing to use its money in order to rescue ailing financial institutions throughout East Asia was noted in the previous chapter, as were successful attempts to publish the so-called ‘Miracle’ study.85 Although it suffers from many of the same limitations concerning voting shares as it suffers in the IBRD and IMF, Japan also has been active and assertive in the Asian Development Bank (ADB), the one multilateral development organisation over which it is capable of wielding a significant degree of control.86 Once again, however, its attempts at increasing the level of the Bank’s capital in response to greater demand from countries such as China and India, have generally been thwarted by a wary US.87 Moreover, the management at the bank (which is always headed by a Japanese) has come under criticism in recent years for a perceived laxity in administering projects with which it is involved, and for poor review procedures.88 Nevertheless, in contrast to the situation at the IBRD, net transfers from the ADB to its members increased in 1995. The bank offered a $2bn bond issue in May 1998; and a month earlier, Sato Mitsuo, the president of the ADB outlined his vision of a wider role for the bank

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embracing institutional reform as well as project business.89 Echoing the official Japanese line on the Asian crisis and on development issues generally, he suggested that: it may not be sufficient to address the crisis by resorting to conventional prescriptions of monetary and fiscal austerity. The need for countries to have strong government and financial institutions if they are to exploit the ‘large’ benefits from open capital account [sic] was a further reason for concentrating on reform in this area. These movements, and particularly the statement by the president of the bank demonstrate that the US is not having it all its own way at the ADB. Indeed, the Sato statement is quite some distance away from the official IMF line, and from US priorities as set out a year earlier.90 The funnelling of Japanese public money through the bank (see above) may even be regarded as a sort of proxy Asian Monetary Fund (AMF) – an idea floated by the Japanese leadership in late 1997 and rejected by the US and IMF but that, nevertheless, refuses to lie down.91 This reflects other criticisms emerging from within the Japanese bureaucracy and government over the IMF’s handling of the Asian crisis, and from other governments in the region.92 In their opinion the IMF exacerbated rather than aided the situation by reducing private and public consumption through the standard formula of reduced government spending, higher taxes and increased interest rates combined with the pursuit of structural reforms to the economy including changes in the banking system, the break-up of industrial conglomerates and price controls. In this context it is not too much of a leap to reach the conclusion that the ‘Wall Street–IMF Complex’ was more interested in opening up these economies to global (that is, US) competition through dismantling the very system that had ensured their success in the first place.93 Once again, the IMF was seen to have been acting not in the interests of the economies it was designed to support in the short term but in the long-term interests of private US companies. This has prompted the former Minister for International Trade and Industry, Yosano Kaoru, for one, to chide the IMF (rather gently it must be said) for dealing with the crisis by a process of ‘trial and error’.94 It has, in addition, prompted the veteran Finance Minister Miyazawa to call for reform of the IMF.95 Finally, it has not stopped the Japanese prime minister from calling for a ‘Third Way’ – hovering somewhere between old-style Japanese developmentalism and the free-market rigours of Anglo-Saxon capitalism.96

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Conclusion As in the previous chapter, the evidence presented here is mixed. By and large the conclusions we reached concerning Japan’s role in the production structure also apply here. Japan is obviously a major global financial power and has certainly reached a position where it can indirectly affect the global economy. On the other hand, its ability to directly affect the rules by which the global political economy is ordered, and particularly the rules governing financial dealings, has been shown to be extremely weak. This weakness is exacerbated by the failure to resolve the banking crisis, and by the restrictions placed upon Japan by virtue of its overall relationship with the US, although the security relationship is also exhibiting contradictory signs of greater involvement coterminous with increasing estrangement. Finally, the globalisation of economic activity has ensured that the economic fortunes and prospects of the East Asian region, including Japan, are inextricably linked to those of the global economy.

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7 Mapping Japan’s Role in East Asia: Security

Japan has a chequered past when it comes to its relationship with its neighbours in East Asia. Two hundred and more years of isolation in the Tokugawa era were followed by five decades of political intrigue and subversion, military provocation, war and colonisation. This, in turn, was followed by perhaps another forty or so years of what we may call ‘semi-isolation’, where Japan’s security was nominally guaranteed by the US in return for Japan’s promise not to possess ‘offensive’ military capabilities and thus not to engage in offensive or ‘aggressive’ wars. This relationship cut two ways and operated both at the global and regional levels: Japan providing the US with a forward base of operations from which to direct its anti-Communist activities in Asia, the US acting as guarantor of Japan’s security from Soviet invasion and continued good behaviour on behalf of its neighbours throughout the region.1 This chapter explores the possibility that this period of semi-isolation has either come to an end already or will shortly do so. The immediate aim, then, is to focus attention on what Japan is actually doing in and beyond the region in order to bring additional security to its peoples and to show whether and how Japan is seeking to manipulate and transform ‘the framework of power created by the provision of security by some human beings for others’ so that Japanese interests and purposes become synonymous with the interests and purposes of East Asians everywhere.2 In order to achieve this, a thematic approach is again adopted: analysing the changing nature of the US-Japan alliance, the promotion of regional initiatives aimed at securing multilateral dialogue on security issues, and subregional initiatives aimed at securing bilateral dialogue and practical military co-operation between Japanese Self Defence Forces and their counterparts in East Asia.3 The chapter closes 106

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with an analysis of the implications of the transition from semiisolation to full engagement suggested by the success achieved by Japan in some or all of these areas, expressed in terms of its effects on the structure of power relations within Japan and on the pattern of relationships in the East Asian region.4 Acceptance within and outside Japan of a more independent, proactive role in East Asia for Japanese security forces implies the existence within Japan of a historic bloc and its (at least partially) successful extension outwards. Rejection and resistance to such a role is suggestive of problems that need to be overcome, but that at the same time do not preclude attainment of dominance. As we shall see, there is evidence both of acceptance of a Japanese role and rejection of it.

Japan, the United States and the security structure in East Asia The biggest problem associated with arguments relating to the achievement of a hegemonic role in the East Asian security structure, or even an independent role for the Japanese military, is its close and institutionalised relationship with the United States. Expressed in the terms of the author’s theoretical approach, the problem is that creating a new ‘framework of power’, or security structure in this case, will necessarily mean breaching the walls of the existing structure created by the US in the aftermath of World War II. At first glance this appears an all but impossible task.5 Closer examination, however, reveals this is not necessarily the case. There is no doubt at all that the US is far superior to Japan in terms of the material power its armed forces can bring to bear in any given situation, and in its willingness to use this power.6 These attributes are suggestive at least of dominance for the US in East Asia, if not of hegemony. However, the deployment of several arguments may serve to raise some doubts over suggestions that the existing walls constitutive of the security structure in East Asia will never be breached, and point to areas in which fresh foundations may possibly be laid. These will be dealt with separately under a series of headings used here only for the sake of convenience; it is the emphasis on the cumulative effects of any differentiation that is sought. Before moving to these arguments it is worth recalling that the analysis in Chapter 1 noted solid empirical evidence suggestive of the fact that possession of preponderant military might is not sufficient in itself to grant the moral or political authority that forms part of the fabric of the security structure. Britain at its hegemonic peak

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was never the dominant power in terms of size of GNP or military expenditures, while North Vietnam not only defeated a hegemonic US but precipitated its fall from that position.7 The lesson here is that in neither instance did the material power of the hegemon form the decisive factor or element constitutive of the authority to create the security structure. To be sure, material power is a major element and one that Japan has already amply provided for, but it is not sufficient in itself. Moreover, if Japan sought dominance over the East Asian region one would correctly expect to see a massive expansion of its already large armed forces, and perhaps its procurement of nuclear weapons.8 This is not necessarily the case if the pursuit were of hegemony rather than dominance, and particularly in the case of Japan, which continues to derive a certain amount of moral power from its unenviable record as the only victim of atomic bombing. Approaches to security In Japanese eyes, the passing of the Cold War has brought with it two major shifts in their perception of the global military–strategic situation and the utility of war. These are, firstly, that the threat of global war, and particularly of global nuclear war, has been removed, and secondly that war in general is less likely to occur now that economics rather than ideology is at the top of the international and domestic political agenda. In August 1991, Owada Hisashi, Japan’s vice foreign minister at the time, expressed these sentiments in the following terms: Military power no longer has the decisive weight even though the Gulf Crisis proved that it is still a very important component. But there are now other kinds of power – economic, scientific, technological, along with the ability to analyse information, and the power of people to take collective action in a sense of solidarity, and what will be at stake as the power of the nation will be the sum total of all these elements. In that sense Japan must play a role commensurate with its power, as has been said for these several years.9 These sentiments echoed a key speech by the then Japanese Prime Minister, Kaifu Toshiki, delivered in Singapore in May 1991, to the effect that Japan had a major role to play in world affairs now that military power was becoming less important than ‘the sum total of economic strength, scientific and technological prowess, social stability and order, and the whole range of other factors that constitute the influence of a country’.10 A year earlier he had voiced the opinion that:

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with dialogue and cooperation now replacing missiles and tanks as the tools for achieving order, Japan has both the chance and the duty to apply its economic and technological strength, along with its store of experience and its conceptual ability, to the creation of a new framework for international relations. Japan must contribute to the building of an international community full of hope through what I call ‘a motivated foreign policy’.11 The Gulf War of 1991, the war in former Yugoslavia, the Kosovo crisis, East Timor, the civil war in Chechnya and the various wars in Africa imply, of course, that these comments should be hedged tightly around by any number of caveats. The testing by India of several nuclear devices (at least one of which was of the powerful hydrogen type) in early May 1998, is a more worrying development, eliciting not only global condemnation but sharp reaction from China and Pakistan that has seen a resumption of Pakistan’s nuclear test programme.12 These events do not, however, negate the main point, which is that in this new strategic environment Japan is much better situated than it was before. Primarily by dint of its well-established credentials as a ‘civilian power’, but also by virtue of the fact that it remains the only victim of nuclear attack.13 Both attributes can be used to differentiate itself from the US, which is, after all, the only country to have used atomic weapons in war. Since previous chapters have reflected upon the extent to which Japan has become a civilian or economic rather than a military power, the focus here will be on the nuclear issue. Japan’s status as an atomic victim can be used to great effect as a weapon with which to overcome the legacy of its conventional military assault on East Asia.14 Starting from common sense understandings that place the victim of any crime in a position of relative ‘wisdom’ compared to those who have not experienced the said crime, it requires only a short mental step to deploy arguments suggestive of Japan’s unique understanding of the horrors of war and of atomic war in particular, and a still shorter step to see how such arguments could be used to differentiate Japanese from US approaches to conflict.15 In this regard, the following comment is instructive, made as it was in 1992 by a senior (unnamed) official in the Bush administration on the development by Japan of the Rokkasho plutonium re-processing plant, which is capable of turning out weapons’ grade material: If it was any other country than Japan, we would look at this plutonium project and conclude a bomb was the real motive. But the fact

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is that it’s OK for the Japanese because we trust them, and it’s not OK for North Korea because we don’t trust them.16 It may be ‘OK’ for Japan to possess the wherewithal to produce nuclear weapons, but notice that the official never denies the fact that developing the ‘bomb’ may in fact be the real motive. Whatever the case may be, in a world where human beings are less frequently involved in face-to-face combat but battle instead across vast distances through the medium of technology, then control over technology and the understanding and restraint that comes with being a victim of technology, may prove a decisive factor in any discursive battle in favour of Japanese approaches to security. With this in mind, it is worth noting that the civilian deaths caused by the ‘precision’ bombing of Iraq have done little to enhance US power since the Gulf war.17 Picking up again on the comment by the US official, one is struck by the fact that it is rarely, if ever, pointed out that, at the elite level at least, the US has taken great strides in overcoming its suspicion and fear of the Japanese, and has therefore come close to defeating its own historical demons. Certainly, this has much to do with its victory over Japan in war, the position of strength it occupies in the world and particularly its very close security relationship with Japan. It may also only apply to Japan’s attitude to nuclear weapons, but the question is still there to be asked: why, if the US can forgive (if not forget), can the countries of East Asia not do likewise? True, the historical legacy is different, and the US has its own measure of nuclear guilt to quietly bear. This merely points, however, to arguments suggestive of the fact that the countries of East Asia also experienced different facets of Japanese aggression, and that some of them (the Philippines, China, Korea, Vietnam, Cambodia) have, in addition, experienced the US version.18 When these impressions and perceptions are brought out into the open for examination, we do not necessarily see that great a difference in the historical legacy of US and Japanese military involvement in East Asia. What we do see is a far more differentiated, less monolithic reaction against Japan taking a greater political role in the region commensurate with its economic strength, and small but significant signs that a degree of military involvement is no longer seen as anathema, albeit these latter opinions have been voiced almost exclusively in Southeast Asia. In this regard, Japan was more than a little surprised when, in May 1990, the Thai Prime Minister suggested to Ishikawa Yozo, the then Director General of the Japanese Defence Agency, that Thailand and Japan carry out joint military exercises in the event of a US withdrawal from the

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region.19 This was followed later in the same year by Malaysian Prime Minister Mahathir’s proposal of an East Asian Economic Group (EAEG) including Asian but not western states (which tacitly acknowledged Japanese leadership), and by the suggestion of the Chinese Minister of Foreign Economic Relations and Trade, made to the Japanese Minister of International Trade and Industry in March 1991, that the two countries endorse the proposal and study it.20 With the passing of the war generation, these movements are likely, all other things remaining equal, to become at least entrenched in this part of the region, if not commonplace. At some point in the future, it may be the Japanese who quietly (or not so quietly) put it about that it is they, and not the US, who are the ‘cap in the bottle’ preventing an outbreak of aggression by their chief ally.21 The US commitment to Asia The increasing use of and reliance on technology (nuclear and nonnuclear) look set to continue now that there is a question mark hanging over the degree to which the US is willing to commit its own troops in battle. Domestic opposition to US war casualties has resulted in more and more pressure from Washington for its allies to take responsibility for military actions, as the 1991 Gulf War, the war in the former Yugoslavia and the Kosovo intervention amply demonstrate. It was this type of opposition that led to the promulgation of the so-called Weinberger Doctrine, announcing that the US will not use force anywhere in the absence of clear goals and without first specifying how it will disengage its forces.22 This implies that the US will avoid involvement in any major land battles, and the use of anything other than battlefield nuclear weapons. Consequently, this reduces the level of defence it can offer Japan (and other US allies in East Asia) in the case of conventional, nuclear, biological or chemical attack by China, Russia or North Korea.23 In the presence of such uncertainty it is little wonder that East Asia has become the centre of the arms-buying world, especially with renewed speculation that China is seeking to equip itself with an aircraft carrier.24 Abandoning its commitment to securing the peace in East Asia is bound to cause resentment directed against the US, no matter how muted, particularly in light of its active discouragement of multilateral solutions in the past.25 It has, moreover, already sparked the search for multilateral, bilateral and unilateral alternatives, as discussed below. In addition to a perceived reluctance to engage militarily in the region, the general reduction in the military budget accompanying the diminution of political tensions following the end of the Cold War has

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sparked a series of defence reviews aimed at consolidating US military power, and thus potentially limiting its ability to intervene in a military conflict even should it wish to do so. A report published by the Department of Defence in 1991, The Strategic Framework of the AsiaPacific Region, revealed plans for a three-stage reorganisation of US forces in the western Pacific, involving in the first stage a reduction of between 14–15 000 military personnel (about 10 per cent of the total); in the second, the reorganisation and further reduction of combat units, with further cut-backs envisaged in the final stage.26 The withdrawal of US forces from Subic Bay Naval Base and from Clark Air Base in the Philippines can be regarded as part of this adjustment, and one that the various co-operative options taken up with other states in Southeast Asia cannot fully replace.27 In February 1995, the publication by the Department of Defence of the East Asia Strategy Report further clarified the US East Asia strategy after the end of the Cold War. The document positioned the US–Japan security relationship at the core of US security policy for the Asia Pacific region, and described the US–Japan alliance as the principal factor for securing the peace and security of not only the two countries but the Asia Pacific region as a whole. It also reaffirmed the US intention to maintain forward deployment forces totalling some 100 000 and involve itself in the peace and stability of the region.28 Note the centrality of Japan to US plans regarding the Asia Pacific region, and the absence of a central role for multilateral security arrangements, both of which are indicative of the fact that strategic thinking in Washington remains essentially unchanged despite rhetorical commitments to multilateralism and membership of the ASEAN Regional Forum (ARF). Certainly, with a complement of 60 ships and 150 aircraft the US Seventh Fleet continues to operate as a major military force in the region, as its presence in the vicinity of the Taiwan Straits demonstrated in 1996. In March 1996, China undertook major war games designed to simulate an attack on Taiwan’s Kinmen island situated three miles off the mainland coast in the Taiwan Straits. Perceived as a direct response to the first democratic elections for the presidency in which several pro-independence candidates stood, the war games went ahead under close scrutiny by two carrier battle groups deployed in the area by the US.29 At sea, then, the US remains dominant, even if it can no longer frighten the Chinese into submission. By contrast, on land the presence of US ground troops in Japan and Korea can no longer be relied upon indefinitely given recent controversies regarding the behaviour of these troops, particularly in Japan.30 The implication is clear; if the US

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loses these bases and thus can no longer hope to dominate through use of its military machine, then hegemony is not even an option. Burden sharing If the walls of the framework of power can be breached from without, they can also be weakened from within. As reported above, the end of the Cold War has brought about a reappraisal of US security policy and this has impacted upon East Asia as a region. Perhaps more important, however, has been the impact upon bilateral relations, and particularly the US relationship with Japan. There are several components to this, including a general sense of ‘drift’ brought about by the focus on domestic reconstruction and, latterly, of the 1994 intake in Congress on the enactment of the ‘Contract with America’; the confrontation over trade that has soured the relationship for many years and threatens now to take centre stage; and the associated issue of military ‘burden sharing’, which is becoming even more heated and controversial than it was during the Cold War.31 It was in the light of all these issues that on 4 September 1995, the abduction and rape by three US marines of a 12year-old Japanese schoolgirl resident on the island of Okinawa sparked such bitter and prolonged protest over the basing of roughly 50 000 US servicemen and women in Japan, and the concentration of fully 75 per cent of these on Okinawa itself.32 Although a temporary solution was eventually brokered, the issue of basing rights is unlikely to go away and contains real potential for dissent within the US–Japan security relationship.33 Such dissent is unlikely to lead to the breakdown of the relationship, but it does cast doubt on the long-term viability of the US commitment to East Asia. Japan not only houses the majority of US ground troops in the region but also the major concentration of US equipment for re-supply and the centre of its information and intelligence gathering operations. Were these removed, not only would Washington’s ability to monitor and influence events in the region be severely curtailed, but Japan would find itself exposed to all the dangers it has traditionally feared in Northeast Asia including, most importantly, its fear of attack from or through the Korean peninsula. The continued instability of the situation on the Korean peninsula, particularly evident in the past several years with the famine in North Korea, the withdrawal of North Korean personnel from the Korean Armistice Committee, military incursions into the de-militarised zone, and the increase in ‘spying’ incidents combines with Japan’s territorial dispute with South Korea over ownership of the Takeshima or Tok-do islets to form a volatile mix of potential conflicts. Most worrying are continuing doubts over the

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status of North Korea’s missile development and (suspected) nuclear, biological and chemical weapons programmes.34 Were a combination of any or all these potential conflicts to flare into actual violence, there is little or no doubt that Japan would reach for ‘offensive’ conventional and perhaps even nuclear weapons.35 The perceived lack of commitment by Japan to prosecution of the Gulf War in 1991 also placed the relationship under great strain, and sparked renewed and determined efforts on Washington’s part to secure a greater and more active role for Japan in the provision of security in East Asia.36 To be sure, in Japan at least, this potential role as a ‘normal’ power is always represented as one which is both commensurate with the aims of the United Nations and performed under its auspices. It is, moreover, always linked firmly to partnership with US forces and with Washington very much in the driving seat.37 Nevertheless, regardless of such pious statements, sustained pressure has given Japan a clear opportunity to venture beyond the physical limits it set for itself in the early post-war years. In the case of the Maritime branch of the Self-Defence Force (MSDF), for example, this means that it now regularly takes part in combined Rim of the Pacific (RIMPAC) exercises with US forces, and patrols the sea lines of communication (SLOC) out to a distance of 1000 nautical miles from the Japanese mainland. This is far beyond the 12 mile limit associated with limited defence, and extends Japanese responsibilities into the Okhotsk, Yellow, East China and Philippine seas, as well as into the Sea of Japan and the North Pacific. Moreover, this role has been greatly enhanced recently after the LDP forced legislation through the Diet allowing for the revision of the Guidelines for Japan–US Cooperation possibly requiring Japan to enforce regional naval blockades, take part in minesweeping operations and provide greater logistical support to US forces in Japan.38 Since the issue of revision became ‘live’ in the latter half of 1997, it has elicited strong reactions from China and North Korea, and more muted comments by South Korea and the countries of Southeast Asia. Nevertheless, the agreement has been signed, and without a commitment by either the US or Japan that the Taiwan Straits would be exempted.39 In addition to an enhanced maritime role, the SDF has also found itself operating on foreign soil. Since the passage by the Diet of the United Nations Peace-Keeping Operations Cooperation Bill in June 1992, the SDF has been given a legislative mandate to operate alongside other members of the United Nations in peacekeeping operations. The Ground Self-Defence Force (GSDF) has done so quite successfully in Cambodia, Mozambique, Zaire and the Golan Heights; and while

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there is still some controversy surrounding the limited role that the 2000 members of the SDF eligible for dispatch at any one time can perform, it now seems unlikely that the Bill will come under serious challenge in the future.40 The contribution of Japanese citizens to UN peacekeeping operations has been put to full use in efforts to secure a place for Japan as a permanent member of the UN Security Council (UNSC).41 Concerted efforts to secure reform of the UNSC were officially announced in March 1994 by the then Japanese ambassador to the UN, Hatano Yoshio, and were reflective of the increased authority granted Japan by both the enhanced role of the SDF and the fact that Japan is the second largest donor to the UN, paying 14 per cent of total contributions to the ordinary budget and 15 per cent to the budget for UN peacekeeping operations in 1995.42 The US, on the other hand, nominally the largest donor, is notorious for not paying its bills.43 To date, these facts have meant nothing, and Japan has not been granted its request for a permanent UNSC seat.44 However, there is little doubt that Japan will continue along this tack, especially in the present climate of reform at the UN, which stresses the links between political and economic approaches to security and calls for these to be reinforced.45 An independent role for Japan? From the analysis thus far, it is clear that in the 1990s, and especially following international reactions to its contribution to the Gulf War, Japan has been attempting to make a larger, more ‘personal’ contribution to the UN in line with political ambitions that require it to avoid its former practice of ‘cheque-book diplomacy’, whilst at the same time minimising the risk of an anti-Japanese backlash. This has gone hand in hand with the emergence of Japan as a major exponent of nuclear and conventional arms reduction and control. Japan is a member of or signatory to the Nuclear Suppliers Group, the Australia Group (which seeks to restrict the export of raw materials for use in or production of chemical or biological weapons), the Wassenaar Arrangement (which attempts to place controls on the export of conventional arms and dualuse goods and technologies), the Missile Technology Control Regime (of which Japan is a founding member), the Partial Test Ban Treaty, the Treaty on the Non-proliferation of Nuclear Weapons, the Biological and Toxin Weapons Convention, the Chemical Weapons Convention, and the Comprehensive Nuclear Test Ban Treaty (CTBT).46 Besides joining and/or signing various international agreements, Japan has taken on a much more proactive role in its sponsorship of

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and continued support for the establishment of the UN Register of Conventional Arms (UNROCA).47 Building upon momentum for control of conventional weapons provided initially by the end of the Cold War, and amplified by the obvious potential of these weapons for large-scale destruction demonstrated during the Gulf War, Japan and the member states of the European Community jointly proposed the adoption of UNROCA in 1991. This followed the announcement by Japan in June of the same year of its intention to submit to the General Assembly of the United Nations a draft resolution calling for the establishment of just such a Register. The proposal was accepted and adopted as a UN resolution in December 1991.48 Not only does this represent a major global initiative on Japan’s part, but it gels very closely with the development by Japan of an approach to security very much favoured by the states of Southeast Asia; an approach that takes as its centrepiece the slow accretion of confidence and trust between states, as opposed to the results-oriented summitry and associated diplomatic and legal wrangling preferred by the United States. As has been long-recognised, this is a central feature of relations between the member states of the Association of Southeast Asian Nations (ASEAN).49 In addition to its UN-related efforts, Japan is also taking on a bigger share of the duties commensurate with its security alliance with the US. This has involved and resulted in changes in military planning and the size and structure of the SDF.50 Turning to the first of these, in 1990 as many as five LDP committees were engaged in studying the military alliance with the US and the implications for this relationship of the end of the Cold War. In January 1992 the then Prime Minister, Miyazawa Kiichi, acting under extreme fiscal constraints, ordered a review of the Mid-Term Defence Plan governing spending needs and requirements of the SDF for the fiscal years 1991–95, and the government subsequently reduced the original allocation by ¥580 billion (out of a total spend of ¥22 170 bn, ¥4440 bn of which was for front-line equipment) whilst promising to ‘replace and modernise’ old equipment and ‘fill lacking capabilities’ as soon as possible.51 The focus on the replacement and modernisation of old equipment is reflected in the emphasis placed on military research and development (R&D), on which Japan ‘now spends more than any other non-nuclear weapon state except Germany’.52 Japanese planning is thus directed at the long term, which implies that we should not place too much emphasis on recent falls in overall budget allocations for defence.53 The Miyazawa-ordered review was followed in August 1994 by publication of the so-called ‘Higuchi Report’ containing the recommenda-

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tions of a select group of individuals charged by Hosokawa Morihiro with assessing the strategic situation of Japan after the Cold War.54 It laid down the following three policies as fundamentals of Japanese security: promotion of multilateral security co-operation on a global and regional scale; enhancement of the functions of the US-Japan security treaty; and development of a highly reliable and efficient defence capability based on strengthened information and crisis management capabilities. Like the Kaifu and Owada pronouncements before it, then, it contained elements of unilateralism, bilateralism and multilateralism, all of which have been in evidence in subsequent Japanese foreign policy, although this should come as no surprise given that the various elements have been present since the 1970s.55 The ability to perform multiple roles in a number of environments must, of course, be based to a certain extent on material strength, and in military terms Japan is amply equipped. According to the Military Balance, 1997–1998, Japan ranked fourth in terms of global defence expenditures, spending $40 891 million in total, or $325 per capita, or 1 per cent of its gross domestic product (GDP). As Table 7.1 shows, despite ranking in fourth place in terms of absolute totals, the percentage GDP figures compare very favourably with every other country listed. Japan has a large defence budget (which appears even larger when the fact that all three of the countries above it in the table devote considerable sums to their respective nuclear forces) that costs its economy comparatively little to produce. This defence outlay provided Japan, in 1997, with total GSDF personnel of 151 800 troops, with the use of some 1090 main battle tanks, 60 armoured infantry fighting vehicles, 870 armoured personnel carriers, almost 480 towed artillery pieces, 410 Table 7.1 Defence expenditures of 5 largest nations (1997)

Ranking

Country

Defence Expenditure $Usm

1 2 3 4 5 6

USA Russia France Japan China UK

272 955 64 000 41 545 40 891 36 551 35 736

Per Capita Defence Expenditure $US

Ratio of Defence Expenditure to GDP

1018 435 708 325 30 611

3.4 5.8 3.0 1.0 5.7 2.8

Note: Amounts are in US dollars at 1997 constant prices. Source: Adapted from The Military Balance, 1998–1999.

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surface-to-air missiles and some 90 attack helicopters. It paid for 43 800 MSDF personnel, and 140 naval vessels including 16 submarines, 9 Destroyers, and 48 Frigates. Finally, it paid for 45 600 Air Self-Defence Force (ASDF) personnel and 329 combat aircraft including 50 F-1 and 69 F-4EJ ground-attack aircraft, 180 F-15J/DJ fighters, 13 E-2C earlywarning aircraft and 2 Boeing E-767 Airborne Warning and Control Systems. The equipment operated by all three services is state-of-the-art including, for example, the Type-90 main battle tank developed between 1982 and 1989, the latest Kongo-class Naval Destroyer, which comes equipped with the AEGIS radar system, and the P-3C antisubmarine aircraft.56 In comparison, while its equipment is also stateof-the-art, the US Seventh Fleet, with responsibility for the western Pacific and Indian Oceans, deploys less than half the number of Destroyers and less than a quarter of the number of P-3Cs. Moreover, as several analysts have pointed out, Japan deploys roughly the same amount of air power in defence of its islands as is deployed defending the continental United States.57 As already noted, much of this weaponry was acquired following pressure from Washington for Japan to play a larger role in US global strategy. Hence, during the Cold War the P-3C Orion anti-submarine aircraft could, for example, be used to detect Soviet submarines throughout their 1000 nautical mile operating area. Pressure to share the burden of defence has, then, given Japan the opportunity to gradually increase the size and sophistication of its armed forces, deploy these on regular training missions in the region and push back some of the barriers preventing its resumption of a military role.58 It has also given Japan the opportunity to side-step the US agenda – to do things its own way.59 The opportunity has been grasped with both hands by policy makers in Tokyo and has resulted, at one level, in the adoption of political stances at times quite different from those pushed forward as the ideal by Washington, as demonstrated, for example, by its resumption of high-level diplomatic contact and the unfreezing of economic aid and loans to the PRC only a few months after the suppression of the pro-democracy movement in Tiananmen Square, its refusal to join the US in blockading North Korea during the worst months of the conflict over the possible development by Pyongyang of a nuclear weapons programme, its long courtship of Vietnam, and its refusal to isolate the State Law and Order Restoration Council (SLORC) in Burma.60 Having thrown some doubt upon the continuing strength of the US to uphold the existing security structure in East Asia, and, further, having provided some indications as to how Japan may step into the

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multiple breaches implied by US behaviour, the next step is to explore the practical application of Japanese policy as it has impacted upon East Asia. This is done in two phases. First by identifying the steps already taken in establishing an independent security role, and in articulating an alternative conception of security through involvement in multilateral bodies such as, amongst others, the ASEAN Post Ministerial Conference (PMC) and ARF; and second, by outlining bilateral Japanese activities and relationships.

Regional initiatives The end of the Cold War in Asia brought with it a plethora of suggestions for the development of co-operative initiatives in the security sphere at both governmental and non-governmental levels. The former included a proposal in July 1990 by the Australian government for an organisation based upon the Conference on Security and Co-operation in Europe (CSCE) model; one from Canada in the same year entitled the North Pacific Security Co-operation Dialogue, again based upon the CSCE model; and one even from the Soviet Union entitled the All Asia Forum.61 At this early stage, Japan was engaged in the re-appraisal of its security environment and relationship with the US noted above, and these overtures and initiatives were politely rebuffed. The ASEAN states also demurred, perceiving the advances as either reflective of western values and approaches and therefore inappropriate to the Asian context, or as attempts by non-Asian states to involve themselves where they were either not welcome or had no business.62 Less than a year later, attitudes had, nevertheless, gone through a rather remarkable transformation. Freed from the constraints imposed by the Cold War, an announcement was made at the ASEAN-PMC in June 1991 to the effect that ASEAN now considered this body to be ‘an appropriate base’ for security discussions.63 At the same meeting, the Japanese Foreign Minister, Nakayama Taro, suggested that the ASEANPMC might become a forum for the discussion of political and security issues in addition to its traditional focus on economic issues. He further proposed that senior ASEAN officials and officials of ASEAN dialogue partner countries initiate studies on security issues and, in particular, on Japanese foreign policy.64 These suggestions emerged at almost exactly the same time, Summer 1991, that the ASEAN Institutes of Strategic and International Studies (ASEAN-ISIS), a significant nongovernmental or ‘Track Two’ organisation, met in Jakarta to discuss the establishment of a ‘Pacific Dialogue’. This was intended to reduce

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conflict and resolve contentious problems, enhance and enrich ‘understanding, trust, goodwill and cooperation’, and manage emerging regional processes, ‘with a view to the establishment of a multilateral framework of cooperative peace’.65 As Kerr notes, the timing of these announcements was no coincidence, and the work of ASEAN-ISIS had in fact contributed greatly to the decision that came out of the ASEANPMC, and would do so again in July 1993 when the ASEAN foreign ministers announced the formation of the ARF.66 Japanese foreign ministry officials, operating in their ‘private capacities’, were not only present at the meetings but had a hand in the deliberations and proposals that subsequently emerged from them. Again, much of this renewed activity on behalf of the Japanese government can be seen as a reaction to the stinging criticism Japan had suffered in light of its almost purely financial contribution to the Gulf War. However, Japan’s successful intervention in the Cambodian crisis, and in particular its ability to prevail upon the Chinese leadership to reduce, if not end, its support for the Khmer Rouge, was certainly just as important.67 Indeed, the ‘engagement’ of China continued as a central plank of Japanese foreign policy in the 1990s, as demonstrated by the unfreezing of a substantial Japanese loan shortly after the events that took place in Tiananmen Square in the face of fierce criticism from other G-7 countries, the US in particular; close collaboration over the simultaneous admission of North and South Korea into the UN in 1991; the visit to China of Emperor Akihito in 1992; mediation between South Korea and China leading to the establishment of diplomatic relations between them in 1992; co-operation to bring about a peaceful resolution of the nuclear crisis sparked by North Korea’s refusal to submit to inspection by officials of the International Atomic Energy Agency (IAEA) as mandated in the NPT; Jiang Zemin’s visit to Japan in 1998; and Japan’s support for China’s entry into the WTO in 1999. The cumulative effect of these efforts has been to draw China into the wider process of security dialogue currently taking place within the region, as signalled by its participation in the ARF.68 To be sure, there were good reasons other than Japanese persuasion behind China’s decision to participate, chief amongst which was the fact that the ARF gives China a forum in which to express its views and in which it can keep an eye on the activities of its rivals, whilst at the same time avoiding international isolation. Nevertheless, there is no doubting the fact that China is now very much engaged in regional dialogue, and that Japan has been a major instigator in this engagement.69 This contrasts rather starkly with US–Chinese relations and US relations with Southeast Asia

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that, until recently, have been soured by repeated attempts by the US to link trade with human rights issues. These efforts have not served US interests in the region well, as demonstrated by their repeated denunciation by Chinese, Malaysian, Singaporean and Indonesian leaders.70 In contrast, on this issue Japan has taken a diplomatic tack that distinguishes it from US policies and goals and places it (almost) alongside the stance taken by other Asian states. As David Arase suggests: The contrast is subtle but important for some governments in East Asia who believe that Western liberalism, including democratization and human rights, detracts from their economic growth and political stability. Japan could, if it chose to do so, help insulate them against inconvenient Western pressures. In fact, this seems to be a role that Japan is falling into. It has repeatedly stated that its postCold War partnership with the West would be based on the promotion of common values, including democracy and human rights, but in its ‘main theatre’ of diplomacy, Japan has not acted to promote democracy and human rights, despite the fact that the region could move in this direction now that the threat of communist subversion has ended.71 Not only that, but US opposition to the initiation of a multilateral security dialogue was widely recognised, and ended only with the advent of the Clinton administration in January 1993. Japan has, then, become an initiator of security dialogue and practical co-operation through the mechanism of regional organisations such as the ASEAN-PMC and the ARF.72 This, in itself, is a path-breaking change from its former policy of following the US lead on most issues in the security sphere, even given the fact that SDF activities in Northeast Asia (such as the patrolling of the SLOCs) indicate that Japan has set itself to remain firmly lodged within the US–Japan security alliance for the foreseeable future. In addition to moves relating to the ASEANPMC and ARF, Japan proposed the setting up of UNROCA in 1991 and sent troops to Cambodia on peacekeeping duties in 1993, as already discussed. Activism and involvement thus appear to be the defining features of Japanese security policy in the 1990s. One important but nevertheless relatively neglected aspect of this transformation of the Japanese role and position in the security structure of East Asia, is the ideological dimension. Very few analysts have thus far directly addressed the benefits possibly accruing to Japan of its championing of a definition of security somewhat at variance with that

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traditionally obtaining in the West.73 We have already discussed the benefits possibly accruing to Japan of its perceived identity as a ‘civilian’ power and as a victim of atomic bombing. This has no doubt bolstered acceptance of its participation in the security dialogue now taking place in East Asia, and particularly in the ARF. Additionally, it presents Japan with the option of developing an independent security role still further, through the accentuation of philosophical and/or ideological differences between US and Japanese conceptions of security. This option stems from the fact that the ASEAN states are largely supportive of Japanese notions of ‘comprehensive security’ that rank economic growth and social stability alongside military preparedness in order of importance as policy goals, and also, therefore, define security policy in terms of its various levels – domestic, bilateral, regional and global.74 All this sits comfortably with the leadership of the ASEAN states, most of which consider internal threats to their supremacy emanating from a mixture of racial, economic, territorial and ideological grievances as of at least equal if not more importance than external threats.75 In this regard, the fall of President Suharto of Indonesia on 21 May 1998, provides a recent and dramatic confirmation that these fears continue to be justified.76 Moreover, this consistency of approach to foreign and security policy issues between ASEAN and Japan has yet greater potential to deliver into Japanese hands the tools with which to begin the replacement of the existing security structure with one of their own making. This potential lies in the extension of Japan’s physical presence, accentuation of policy differences with the US and emphasis of the aforementioned consistency of approach to security issues, so that cumulatively they begin to take on the shape of a distinctive ‘Japanese way’ of doing things in the security sphere that can be made to dovetail with and perhaps eventually co-opt movements already in train in the region calling for the development and promotion of a distinctive ‘Asian Way’.77 Given the proposals for Japan to play a larger role outlined above, this attempt would be less difficult than one might think in view of the past record of Japanese military activity in the East Asian region. The Asian Way itself is, arguably, a rather thinly disguised political effort aimed at replacing the predominance of western (that is, US) values and ideas with values and ideas supposedly indigenous to the region.78 As such, and given the number, strength and depth of the material connections extant between Japan and the region, it is little wonder that leading figures such as Malaysian Prime Minister Mahathir have at various times and in various places called for greater participation by Japan in shaping

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events in the region.79 In this regard, the ARF can itself be seen to serve as a metaphor for Asian resistance to and differentiation from western ideas and understandings of the concept of security and its practical attainment. In general the ASEAN states prefer a slower, more relaxed and informal pace in keeping with their ‘collegiate’ style developed over many years. More specifically, the ‘ASEAN way’ is characterised by a strict adherence to informality and the avoidance of excessive institutionalisation, the pursuit of consensus through non-hostile negotiation, and the pursuit and tolerance of bilateral diplomacy between members in the context of multilateralism.80 These have become issues through which East–West tensions and rivalries have lately been expressed. This is particularly evident in the struggle within the ARF over control of the agenda and over the pace and character of the negotiations and discussions that take place there.81 With regard to Japan, these tensions and rivalries place it in a very strong position within the organisation, by virtue of the fact that as an Asian power deeply embedded within western economic and political structures and processes it has a foot in both ‘camps’, and is thus in the perfect position to play the role of mediator between competing cultural/political interests. What is more, pressure from people like Prime Minister Mahathir for Japan to play a leadership role on behalf of less powerful Asian states gives Japan a powerful fall-back position should its relationship with the US deteriorate beyond repair, and a subtle weapon with which to prod the US and other western countries should it see fit.

Subregional initiatives As might be anticipated given Japan’s militarist past, direct dealings between Japanese SDF personnel and their counterparts in East Asia remain relatively few compared with contacts between US and Japanese personnel, although they are increasing steadily. Just as Japan has sought to overcome the legacy of the past in other areas of security relations, so too has it been working to end the pariah status endured by SDF personnel for most of the past fifty years. In this there is little doubt that participation from 1980 onwards alongside US military forces in the biennial RIMPAC exercises has done much to reintroduce and accustom other states in the region to the reality of the Japanese presence, and particularly after South Korean forces began to participate in RIMPAC from 1990. Similarly, the port calls made by the Japanese minesweepers to the Philippines and Malaysia en route to the Gulf in 1991 were significant events in the eyes of Japanese defence officials,

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and were extensively reported on in its annual publication, Defence of Japan.82 Subregional initiatives are clearly a central rather than peripheral part of the overall Japanese push to enhance its role in the East Asian security structure. This is confirmed in the writings of the Japanese ambassador to the Hague in 1995, who sees the need for a ‘multifaceted approach’ based upon the maintenance of existing security arrangements, the enhancement of security at the subregional level in Northeast and Southeast Asia, enhancement of the level of mutual reassurance among all countries in the region, and the deepening of region-wide economic co-operation.83 While his main focus of concern is the conflict on the Korean peninsula (which, at the time he was writing, was more tense than it had been for some time), Southeast Asia is also of obvious importance, particularly with regard to its relations with China. These interests are mirrored in various issues of the annual Defence of Japan, particularly after 1993 when the long-standing subsection entitled ‘International Exchanges Between the SDF and Foreign Countries’ was, for the first time, moved from its place in the traditional chapter on ‘The Self-Defence Forces in the Society’ to a wholly new chapter entitled ‘The Self-Defence Forces: Response to Changes’, and included within a section entitled ‘Efforts to Create [a] Stable Security Environment’.84 This move may appear trivial at first glance. However, it is important to note that the Japanese government places great store by this particular publication, since it is part of its attempt to encourage other states in the region to publish defence information and statistics in line with its promotion of UNROCA and in initiating a regional equivalent. Clearly, Japan has linked success in one area of its foreign and defence policy to success in others. This is reflected in its emphasis on both top level diplomatic negotiations and exchanges, and what it calls ‘day-to-day’ and ‘routine’ international exchanges of defence authorities and students.85 In the former category, the 1994 edition of the Defence of Japan reports the visits of the Director General of the Defence Agency to South Korea in 1979 and 1990 for talks with his opposite number. This was reciprocated on the Korean side for the first time in April 1994. These meetings started out as public relations exercises, but have slowly built up a momentum of their own, moving from agreements on the exchange of students between various military schools, to joint training on a very small scale, to promotion of working-level dialogue between officials in charge of defence policies. Most dramatically, these exchanges of personnel and

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ideas led, in 1994, to the first port calls by South Korean warships to Japan.86 As far as Hughes is concerned, these exchanges at all levels between South Korean and Japanese defence personnel represent ‘nothing less than a transformation in security relations between the two states in the 1990s’.87 If more recent developments are any indication, this transformation looks set to continue. In June 1995, for example, the two countries exchanged notes concerning the prevention of accidents between SDF and South Korean military aircraft. In May 1996 the two countries held a defence summit meeting at which ‘there were frank exchanges of views about the Northeast Asian situation, Japan’s defence policy and Japan-ROK defence exchanges’, all leading to ‘deepened mutual understanding’; and in September of the same year an MSDF training squadron visited South Korea for the first time.88 The same cannot be said for Japan’s security relations with China. Despite strenuous diplomatic efforts by Japanese officials to reinforce the Sino–Japanese relationship, many of which have been successful, these have not been markedly closer defence and security linkages between the two. Personnel exchanges were initiated in the mid-1970s following normalisation of relations, and this led to the visit of the Chinese defence minister to Japan in 1984, reciprocated in 1987 by the director general of the Japanese Defence Agency.89 These visits ceased after the 1989 Tiananmen Square incident, and the situation only began to show signs of improvement in 1993 when a conference held between the Chinese and Japanese foreign ministers resulted in an agreement to initiate dialogue on security issues. By 1996, three such meetings between officials from their respective foreign ministries had been held, at which ‘a free exchange of views was held regarding the Asia-Pacific region security situation, the defence policies of both sides and Sino–Japanese defence exchange’.90 These have paid off to a limited extent, and high-level meetings between defence officials have resumed. Problems in the relationship remain, however, as indicated by China’s demonstration of power in the Taiwan Straits and the announcement of alterations to the US–Japan Guidelines for Cooperation. The prospects for substantial progress between the two countries, in this area of relations at least, do not appear very bright.91 Aside from the historical record, two key and related problems suggest themselves as potential explanations for this lack of progress. The first is that the proposed joint development by the US and Japan of a TMD (Theatre Missile Defence) system has been greeted with suspicion by China, which sees in this the potential to alter the balance of power in Northeast Asia. On the other hand, the fact that China is a nuclear

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power automatically places it in fundamental opposition to one of the central aims of Japanese foreign policy, namely, the eradication of nuclear weapons throughout the globe. Japanese opposition is redoubled by China’s poor record on the export of missile technology to various destinations and the suspicion that it has passed on technical information and equipment relevant to the development of nuclear weapons programmes to various states, including Pakistan.92 Second, is the reluctance of China to comply with requests for transparency in its defence capabilities and policy. Unlike South Korea, until 1996 China had still not published essential background data and information requested by the UN in accordance with the requirements of its Register of Conventional Arms, although it does now publish data on arms exports and imports.93 Despite the fact that China published this data in 1996, suspicions remain.94 For these reasons, the prospects for the development of closer relations between the defence communities of these two countries appear bleak. With regard to Southeast Asia, we discussed above the many diplomatic connections, formal and informal, already in place between this area and Japan. These connections are maintained principally by officials of the Ministry of Foreign Affairs, but it is worth noting that they are assisted in their work by defence personnel. Formal visits and exchanges between defence personnel at all levels are common in their own right, however, although the war legacy is again an obstacle to greater contacts. Indeed, so frequent are these exchanges that specific meetings cannot be listed here. Suffice it to say that since 1988 the Defence Ministers of Indonesia, Singapore, the Philippines and Thailand have visited Japan (some more frequently than others), and these visits have been reciprocated by the Director General of the SDF, who has also visited Cambodia.95 Interestingly, in the section dealing with defence exchanges, the 1996 issue of the Defence of Japan dropped the use of the term ‘Southeast Asia’, replaced it with ‘Asia Pacific’ and included Canadian and Australian links for the first time. This appears to suggest a widening of Japan’s security focus at this level in accordance with the shift to a global focus in its defence and security policy. Be that as it may, in February 1996 Japan and Australia held talks on political and military issues, and in the same year the Canadian Minister of Defence visited Japan. Students from all the countries listed, and more besides, study at Japan’s National Defence Academy and the Staff colleges of the various branches of the SDF. In return, the SDF sends roughly 100 students abroad each year.96

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Conclusion From the foregoing discussion, several conclusions may be drawn concerning Japan’s role in the security structure obtaining in East Asia. First, that Japan has (at least partly) abandoned its former practice of following the US lead in policymaking in East Asia, and has launched itself down a path that can only lead to it taking a greater and more visible role in deliberations over the future of the region. Second, that Japanese initiatives have been instrumental in pushing forward the debate on the suitability of creating an organisation or ‘dialogue’ dedicated to enhancing regional security, and have in fact played a major role in bringing such an organisation into being. Third, that Japan does not always acknowledge officially the role it is playing in pushing forward its agenda at the non-governmental or Track Two level, where Japanese officials are free to speak and act safe in the knowledge that the polite fiction that they are doing so in their ‘private capacities’ will be maintained. It may be assumed, therefore, that Japan is taking a larger role even than its official pronouncements indicate. Fourth, that the Japanese understanding of the concept of security, and the methods through which to maintain and enhance security, are almost indistinguishable from those held by ASEAN leaders, both of which differ in key respects from western understandings and methods, most noticeably in the debate between ‘process’ and ‘structure’. Sixth, that while there is undoubtedly a strong pacifist cast to the perceptions of most Japanese people, the domestic structure of constraint preventing the remilitarisation of Japanese society and foreign policy is, through the efforts of diverse groups and individuals, slowly but surely being worn away.

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8 Mapping Japan’s Role in East Asia: Knowledge

Of the four structures of power analysed in this book, the knowledge structure is undoubtedly the most difficult to ‘map’. The difficult nature of the task flows from three major sources. The complexity of the technological–informational aspect, the amorphous and imprecise nature of the ideational or ideological aspect, and the general paucity of previous academic work in the field.1 Strange has herself been rightly criticised for leaving this area of her work undeveloped relative to the three other major structures of power she identifies, although no other has managed, as yet, to take the broad sweep of her initial work any further.2 A number of scholars have focused their attentions on the technological–informational aspect, but have failed satisfactorily to combine this narrow appreciation with the broader ideological aspect.3 Russell, for one, falls into this trap when he suggests that ‘while technology is the most important element within the knowledge structure we should remember it is not the only element. Knowledge is broader overall’.4 The technological–informational aspect and the ideational aspect of the knowledge structure are in fact inseparable, even though it may be convenient for the sake of analytical clarity to attempt to consider them as separate parts of a greater whole. That there are two aspects, the ‘technological-informational’ and the ‘ideational-ideological’, to the knowledge structure as perceived by Strange is quite clear, since she suggests that the knowledge structure ‘comprehends what is believed; what is known and perceived as understood; and the channels by which beliefs, ideas and knowledge are communicated’.5 Or, put another way, the knowledge structure is ‘the realm of ideas and the ways in which choices are made about the kind of knowledge to be valued and pursued and the means chosen for storing and communicating it’.6 For his part, Robert Cox notes the importance 128

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of ‘knowledge in the form of technology and market information [as] the principal resource in the world economy’, while insisting that the ‘knowledge form has to be broadened beyond science and technology to embrace the ways in which people understand the world, the construction and maintenance of the intersubjective meanings that make communication possible’.7 As we discovered in Part II of this book, the construction and maintenance of these intersubjective meanings involves every part and aspect of society and social life. From these understandings, it would appear that several points of entry into an analysis of a particular configuration of the knowledge structure are readily identifiable. One point of entry opens from the suggestion that the technological–informational aspect of the knowledge structure should focus on the ways and means of collating, storing and retrieving information; while analysis of the ideational–ideological aspect should focus on the decision or choice of whether to communicate or disseminate to others the information so collated and stored. The ability to acquire, store and communicate (or reserve) information is, then, central to the creation and maintenance of a particular configuration of the knowledge structure. A second point of entry (and one that bridges the false analytical gap between the technological–informational and ideational–ideological aspects) opens from the suggestion that the analysis should focus on the a priori understanding of what is and is not ‘valuable’ or ‘desirable’ information or, in other words, why some avenues of philosophical and/or scientific enquiry are seen as legitimate pursuits, while others are not. The ability to assign relative value to some knowledge at the expense of other knowledge is, therefore, also central to the creation and maintenance of the knowledge structure. One amongst many possible illustrations of this point is the debate concerning the development of nuclear technology, despite its inherent potential for destruction. In this, the divergence of views on the utility of nuclear power in the US and Japan is instructive. On the one hand, for reasons chiefly of resource-dependence, Japan has developed a large nuclear energy generating capacity that has the potential through accident or design to wreak damage on the human population and biosphere comparable to that caused by the dropping of the atom bombs in 1945.8 Furthermore, development of this same nuclear generating capacity has given Japan the wherewithal to produce weapons of mass destruction of vastly greater power and effect than those dropped on Hiroshima and Nagasaki. That it has chosen not to pursue this option indicates the existence of a normative decision, based upon perceived necessity and

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past experience, to pursue one application of knowledge and to forego another. In the US, on the other hand, where the threatened and actual use of nuclear weapons has generally been seen in a far more positive light, there is no such ambivalence toward the application of nuclear technology in both the civilian and military spheres.9 The fact that the US state and US citizens have, by and large, a very different perception of the utility of nuclear power and nuclear weapons than those of their Japanese counterparts serves therefore to open up a further point of entry into the analysis of the knowledge structure. Just as the value and desirability of one type or source of knowledge or line of enquiry changes over time and becomes outmoded or is transcended, so too does the value or desirability of knowledge, or different types or facets of knowledge, vary from person to person and from state–society complex to state–society complex at one and the same time.10 These transitory yet divergent values and understandings or intersubjective meanings are historically contingent and thus vary depending on the socio-cultural, economic and political milieux in which they are grounded. There is, then, the potential for conflict between the champions of one set or body of knowledge and the champions of other sets or bodies of knowledge. In the present configuration of world order these champions are most likely to be of the ‘national’ variety, that is nation states. In addition to the ability to acquire, store and communicate (or reserve) information, and to assign relative values to the information so acquired, the creation and maintenance of the knowledge structure thus requires the ability to actively promote and propagate some forms of knowledge (or ideas or beliefs) at the expense of others.

Japan, the United States and the knowledge structure in East Asia For Japan, as for any other state or group of states in the international system, breaching the walls of the existing knowledge structure set in place by the US during the 1945–1969/71 period will not be easy.11 Nevertheless, just as there is evidence that the attempt is being made by Japan in all three of the previous structures thus far explored, so too is there substantial evidence suggestive of the fact that the same process has been set in train in the knowledge structure. Two points made at the outset of the analysis will suffice to suggest that Japan has a greater chance to succeed than ‘common sense’ or other work in the field would

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appear to indicate.12 First, the transition from ‘embedded liberalism’ to ‘hyperliberalism’ as the legitimising basis of economic restructuring in the global economic core can be viewed as solid evidence that the US has itself abandoned the orthodoxy upon which its material and ideational hegemony was built. This abandonment inflicted suffering and hardship on all parts of the world economy and society, as US-led attempts to impose the ‘discipline’ of the market resulted in a debt crisis for the developing world, and recession and unemployment in much of the industrialised world.13 This, in turn, has opened up plenty of socio-political space into which Japan can move toward its own ends. In East Asia, this has been clearly demonstrated through the myriad calls for the adoption of an ‘Asian Way’ or approach to economic, social and political matters. It has also opened up a debate in Europe as to the existence and/or suitability of alternative models of capitalism.14 On the other hand, it has sparked a race for conformity in much of the developing world, based on the prescriptions of US-dominated institutions such as the IMF and World Bank.15 Second, at the technological–informational level, Japan has itself proved to be the dominant source of innovation in the movement toward flexible (or ‘lean’) rather than mass production. The adoption of these production methods in the US and throughout the industrial core is illustrative of a major ‘victory’ for Japan in the knowledge structure, even discounting the fact that along with this adoption must come, arguably, implicit acceptance of key Japanese values and ideas.16 The analysis presented below will build upon these two key points and others in order to suggest that the cumulative Japanese challenge to US domination of the knowledge structure is very real. This same analysis will also, however, point to contradictions within and reactions against the Japanese challenge that cast doubt on the prospects for Japanese hegemony in this structure in East Asia and elsewhere. Political culture and universal norms A clear understanding of the current configuration of the knowledge structure remains elusive for several reasons, some of which were discussed above. A different set of problems emerges from the ossification of stereotypical perceptions concerning the degree of openness, or receptivity, of state–society complexes to ideas, beliefs and practices generated elsewhere and, conversely, the transmission of home-grown ideas, beliefs and practices outwards (that is, the generation, dissemination and propagation of knowledge). In regard to the US and Japan, Richard Falk characterises these stereotypes effectively:

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The United States purports to be exceedingly open to diversity, priding itself on being a land of immigrants and a place of asylum for those suffering privation elsewhere. This image of receptivity is best expressed, perhaps, by the Statue of Liberty, a welcoming of the outside world to partake of American ‘blessings of liberty’. In contrast, Japan is viewed as closed and hostile, proud of its ethnic homogeneity and threatened by and hostile towards outsiders. Japan borrows technique, but operates within a framework of traditions and behavioural patterns that is now the object of admiration throughout the world.17 If there is a certain level of congruence between these stereotypes and reality, it is in fact quite small.18 Hundreds of thousands of Mexicans have direct experience of US receptivity, and have found it wanting either because they have been unceremoniously turned away from the country or systematically exploited and disadvantaged economically, socially and politically after being admitted.19 That the US is in fact ‘quite provincial, lacking deep cultural traditions of its own and quite inept about projecting its influence elsewhere’, is indicated by such things as the tradition of oscillation between isolation from and intervention in international affairs.20 It is indicated also by its virulent reaction to communist ideology and socialism in general both at home and abroad, and by its subsequent failure to make a distinction between genuine independence movements and communist-inspired attempts to ‘overthrow’ global capitalism. After the collapse of communism, this same provincialism now manifests itself as an almost equally virulent rejection and condemnation of Islamism, except in ‘friendly’ states such as Saudi Arabia.21 As the contextual background against which important foreign policy decisions are taken, antipathy toward Islamic culture has had direct effects on the ability of the US to influence events taking place around the globe, manifest most recently in its almost complete lack of a policy toward the unrest in Indonesia and the eventual resignation of President Suharto. Certainly Madeleine Albright called on Suharto to resign, but this ‘shouting from the sidelines’ by the US Secretary of State was all that could be done given that US policy on Indonesia has become so wrapped up in human rights issues in general and the resolution of the East Timor situation in particular.22 In contrast with events surrounding the fairly swift removal of President Marcos of the Philippines, in its dealings with Indonesia there is little doubt that a deep-rooted suspicion and even fear of Islam as a religion and Islamic culture more widely has inhibited US thinking and policy.23

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US triumph in the Cold War served, of course, to confirm all that was good about the country in the minds of its citizens, and to negate the few remaining doubts about the negative impact of US policy in other parts of the globe. Impressions of US power and dominance can only have been reinforced in the intervening years, as the US economy appears to have come through the worst of the most visible signs of economic decline and seemingly matched its major economic competitors in levels of technological sophistication in leading sectors.24 The Asian crisis of 1997–98 must, to many US citizens, constitute the final confirmation that the social, economic and political future of the world lies not in the East, in authoritarian ‘corporate-familyism’, but in western market-oriented individualism and constitutional democracy. Comforting as this kind of thinking may be to the US government and US citizens alike, there are many problems associated with it. For one, it builds upon and reinforces those same stereotypes outlined above, and thus serves to entrench more deeply than ever the arrogance of leadership within the collective psyche. ‘American exceptionalism’ is unattractive at best and hazardous at worst. Moreover, as a leading British journalist turned speech-writer for the UN Secretary General has commented, US domination of the international scene ‘is so comfortable, and so little challenged, that few Americans feel the need to concern themselves with world affairs’.25 Such complacency is not only indicative of a collective – yet from a certain perspective, understandable – selfishness, but suggests a naïve turning away of the US from the world once again into the kind of splendid isolation in which it wrapped itself during the inter-war years.26 At the policy level, this indicates severe difficulties for Washington in making coherent global policy.27 Events in India, Pakistan, and Indonesia, the Asian crisis, the continuing transformation of China and the consequences of its accession to the WTO, the environment and a whole host of major economic, social and political problems the world over need to be addressed. If the US is to retain its dominant role it must prove itself consistently willing to address itself to such issues. If it is to regain a hegemonic role, it must do so in a manner befitting a hegemonic power: that is in line with the creation and maintenance of universal norms of acceptable behaviour across all areas of social, economic and political life. Given the severity of domestic pressures, particularly in election years, attempts to propagate and disperse universal norms may fall victim to the predatory instincts of domestic particularistic interests. It is difficult to escape the impression that US dominance of the knowledge structure appears secure, even in the absence of hegemony and given the presence of the manifest contradictions inherent within

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US dominance introduced above. Language is obviously important, but more often than not the source of impressions of continuing strength can be attributed to the pervasive nature of ‘American’ popular culture, which provides an indefinable yet apparently immensely strong supportive framework upon which values and norms of US origin are ineluctably and irresistibly spread throughout the globe.28 The aspirations and tastes evoked through the eyes of Hollywood and the ears of the US music business, lead people the world over to sample the delights of Coca Cola and McDonald’s, and to do so wearing bluejeans.29 Despite the aura of rebelliousness surrounding rock music, much of the ‘product’ of the US music industry is bland and unthreatening to the prevailing social order.30 Similarly, Hollywood endeavours to thrill and excite, and moralise, but does so almost unvaryingly within a set of closely circumscribed limits defining what is and is not acceptable behaviour in public and private and in the domestic and international (and even galactic) spheres. On the big screen, law, order and the American way seldom if ever fail to win the day.31 This vision flatters to deceive. ‘Americanisation’ creates perpetual losers as well as winners, both within and beyond its confines.32 As such, continuing reaction and resistance are assured. At home, rates of suicide, drug-addiction, divorce, homelessness and crime are high by any standards, while the poor condition of the environment has become an issue of global import.33 Abroad, resistance takes several forms, and is evident in the anti-Americanism of many Islamic states, not all of which can be tarred with the ‘fundamentalist’ brush.34 From Iran to Malaysia and to China and beyond, Washington has been castigated as the progenitor of a new colonialism of the mind in its efforts at imposing ‘universal’ definitions of human rights that in fact reflect American understandings of that concept.35 The very act of recognition is, in itself, evidence that US hegemony in the knowledge structure has been lost. Similarly alienated are large swathes of the developing and less-developed world (the old ‘Third’ world), to whom the benefits of global capitalism have either been refused or only patchily dispensed, leaving them permanently economically disadvantaged. Pervasive as ‘Americanisation’ undoubtedly is, it is clearly neither global in extent nor free from internal and external dissent and challenge. This dissent and resistance indicate the availability of social, economic and political ground on which US domination can be contested, and at least one scholar has been prepared to consider seriously the Japanese challenge in one or several of these areas.36 Yet to my certain knowledge, no scholar has so far been willing to suggest seriously that

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it might be Japanese ideas and culture that either issue this challenge or act as the catalyst of other challenges. According to David Rapkin, this is because Japan suffers from what he calls a ‘legitimacy deficit’, involving a set of external constraints including the legacy of militarism and colonialism, a mercantilist reputation, a perceived lack of universalisable values and ordering principles, and US and European reluctance to accept Japanese leadership. These external constraints are buttressed by a further set of internal constraints centring round the restrictive state and socio-cultural obstacles.37 For his part, Robert Cox suggests much the same, arguing that ‘Japanese dominance would likely take the form of one people’s mastery over others, not of the establishment of a universally acceptable concept of order’.38 While more optimistic, Drifte also largely dismisses Japan’s ‘cultural power’, saying that even under Gramscian understandings of power ‘Japan’s cultural emanation and influence does not yet go far enough to justify speaking of hegemony’.39 To the extent that the Japanese state–society complex is trapped by its militarist past, is largely perceived as a mercantilist state, and does appear to adhere to a set of cultural values and norms unacceptable the world over, then US, European and other geographic sites of resistance seem perfectly understandable. Likewise, internal constraints, whether institutional or socio-cultural must surely hamper an enlarged Japanese role in the knowledge structure. These things are not at issue. However, as we have seen above, the US suffers from many of the same legitimacy deficits. It has its own legacy of militarism loosely defined, and of colonialism; it has never practised free trade as it has preached it; its values and norms are not, in fact, universal, and it has never been shown that they are ‘universalisable’; and its leadership has never been unquestioned even within the industrial core of the global political economy. France, for example, has fought against US hegemony and domination for many decades. Likewise, US foreign policy is famously constrained by the wishes and whims of Congress, while its populace has a reputation as inward-looking and selfish. What, then, explains the difference between the potential and actual contributions the Japanese and American state–society complexes have made to the knowledge structure? Is it language and the attendant pervasiveness of American popular culture, or is it simply a matter of scale, or even of happenstance (the genius of Henry Ford)? In seeking to answer this question it is necessary to fall back on the fact that hegemony in any one structure of power requires hegemony in all the other structures. Lacking hegemony in one, Japan cannot hope to

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achieve hegemony in all. However, if we accept uncritically the conclusions of Rapkin, Cox and Drifte, and a host of unnamed others, we would not even be asking these questions. To refrain from doing so would be to assume the existence of a static social model that can never exist in real life. Much has changed in international relations and in the domestic context obtaining within both the US and Japan, and while this implies that no complete, final or authoritative determination can ever be made, it also demands that the questions continue to be asked. Some changes are already visible. The age and frailty of the British war veterans who turned their backs on Emperor Akihito during his visit to the UK in May of 1998 are a sad but timely reminder that the memories of the suffering of war linger most in the minds of those present, and that those minds will shortly no longer be with us. Perhaps more telling is the reaction of the British government and the efforts made by the Japanese business community to rally their Japanese employees and families behind the visit.40 These reactions signal a determined effort on both sides to put the question of war guilt to one side. Indeed, as Timothy Garton Ash pointed out in an essay published shortly before Akihito arrived in Britain, ‘the whole idea that nations should systematically and publicly face up to their difficult pasts has only become commonplace since 1945’.41 This shows how the values and norms underpinning the knowledge structure are constantly changing. Forgiveness and reconciliation have become part and parcel of the diplomatic repertoire, one that in the past few years has seen Tony Blair apologise to the Irish for Britain’s role in the potato famine, Bill Clinton apologise for the African slave trade, and the setting up of the Truth Commission in South Africa. The key point is that just as old soldiers die, so too do memories, values and norms pass away. The Japanese war legacy is a transitory phenomenon. Active Japanese attempts at stifling criticism of Japan during the visit of Emperor Akihito can be seen as a metaphor for much wider and sustained efforts by Japan to improve its international image and, hence, to improve its standings in the context of the knowledge structure. These moves have been underpinned and informed by Japanese government policy, the intent of which is to ‘internationalise’ Japan.42 Public and private initiatives in the spheres of business and education have sought to build intellectual and emotional bridges between Japan and the rest of the world based upon the solid foundations of increased material interdependence between it and other countries.43 The Japan Foundation, the Japan Centre for International Exchange, the Japan

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Exchange Teachers programme and other bodies (public and private) have become valued repositories of funding and organisational expertise on which foreign and domestic students and other interested parties may draw in order to facilitate travel to and from Japan for the purpose of study, business, or recreation. To be sure, much of the initial impetus behind these moves was prompted by intense criticism (mostly from the US) of the apparently ‘closed’ Japanese economy, and in the event did not prevent the US Congress from passing legislation on the Structural Impediments Initiative, but to an extent this does not matter.44 What matters is that these efforts are continuing and that they are seen as part of a long-term attempt by the Japanese government to introduce Japanese people, ideas and culture to the world audience. While Ogata is sure that ‘Japan is inducing internationalization at the grass-roots level in the United States’, we can be sure that it is inducing internationalisation in the UK and elsewhere.45 Culture and technology Culture is also disseminated through work and working practices.46 This has clearly been the case with Fordism, where a particular method of production of material goods has played a major and almost certainly hegemonic role in shaping the way in which the majority of people in the world live their lives.47 Discounting, for the moment, arguments pointing to the recent transformation to a supposed ‘post-Fordist’ era where production has taken on a more flexible, disjointed and variegated appearance, most children in the industrialised world are still conceived, born and raised in accordance with patterns and expectations laid down and enforced by the rigours of a working life that is still recognisably Fordist in orientation.48 Set hours for set wages worked in one location at a particular task that is itself part of a chain of tasks linked together in a coherent way so as to ensure delivery of a standard product to a standard quality at a standard rate remains the norm, even though it is under pressure from the growth in flexible working and the growth of service industries at all levels.49 Standardisation at work brings, as a consequence and to a greater or lesser degree, standardisation at home: the life pattern then becomes overwhelmingly (one) school, (one) ‘job’, followed by retirement.50 Government planning and policy throughout the industrialised world have reflected this, again to a greater or lesser extent and in one form or another, although certainly within a fairly narrowly defined range (hence the ‘competing capitalisms’ literature). In turn, the standardisation of work and life experiences brings along with it a certain standardisation in tastes and aesthetic values, which

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dictates habitual behaviour such as shopping, tourism and so forth. The self-replicating character of the whole system, and every layer within it, is nowhere more obvious than in this realm of tastes and sensory experience, where a distinct ‘fashion’ is curiously transient but determinedly resilient in its ability to make a comeback some years or even only a matter months into the future. As this elementary depiction of the Fordist mode of production implies, a major change initiated in the realm of work and working practices would ring like a bell throughout the entire social and political structure built upon it. Hanging on to the bell analogy, from 1973 onwards Japan, the Japanese automobile industry, and the Toyota Motor Company in particular, took hold of the clapper and began ringing that bell furiously, with spectacular and controversial consequences.51 As noted in Chapter 4, the oil shocks of 1973 and 1979 had a profound effect on Japan, and the entire Japanese economy was forced to restructure. At firm level, the way was led by Toyota, which had been refining what has become known as the ‘Toyota’ or ‘lean’ production system since the late 1940s (that is, just as the social consequences of Fordism were beginning to fully emerge).52 This production system differs in many respects from that pioneered by Ford and, in essence, is designed to eliminate any and all waste from the very start of the process (design) until the very end (customer satisfaction).53 According to the man credited with its genesis, this requires the application of two key concepts: ‘autonomation’ and ‘just-in-time’.54 Autonomation or, as Ohno likes to call it, ‘automation with a human touch’ originated as a device attached to a weaving loom which, on detecting a broken thread, would shut down the machine without human intervention. The concept is now applied throughout the Toyota production system but with a further twist. This being that the workers manning the production line now stop the entire line if they detect an error, and the line remains stopped until the problem has been resolved, preferably by the line workers themselves (where ‘resolved’ means understanding what went wrong and how to fix it, and embedding this new knowledge into the production process so that in theory it never happens again).55 The second key concept upon which Toyota bases its production process is ‘just-in-time’. This simply means acquiring products (components) at the time and in the order and quantity needed so as to cut out all unnecessary waiting, storage and handling costs. Engines, for example, are delivered to the production line itself and are unloaded directly into the receiving chassis. Taken together, these two concepts introduce a degree

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of flexibility into the production process unimagined by Ford and his contemporaries.56 We could go on to discuss in great detail the operational characteristics of this system. In introducing the two key concepts named above, however, and the linking concept of flexibility, the leading edges of most of the implications can already be perceived. What is important here is the fact that just as Ford became ‘Fordism’ so too has Toyota become ‘Toyotaism’, that is, the adoption of the mechanical and organisational precepts of the Toyota Production System at firm level has had (or is having) a cascade effect into society at large. The changes introduced by Toyota into its working practices have been (or are being) adopted throughout the industrialised world and accepted as a new paradigm replacing the outdated Fordist paradigm.57 These changes are spilling over into the social and political spheres. Education no longer stops at the age of 16, 18 or 21 but continues on to become ‘life-long learning’. One job becomes many jobs, and each job demands the mastery of several tasks rather than one. The worker is (at least on the surface) no longer divorced from the creative process but becomes empowered by his or her ability to make inputs into it. Pay and conditions, including retirement provision, also become flexible. All this underscores the fact that rather than indicating a new spirit of togetherness and co-operation, ‘team-working’ is in fact a result of the doing away with of trade unions and their replacement by company unions. The worker becomes even more isolated, pressured, accountable (the flip-side of ‘empowerment’) and, hence, vulnerable.58 Government policy reflects these changes, as the regulatory framework of the state slowly swings into line behind the creation of a supporting framework of institutions and social norms. Obviously the above is a caricature of one part of the transformation of society and life through which the industrialised world appears now to be moving. Clearly, the Toyota corporation is not the sole well-spring from which these myriad social and political movements have flowed.59 At least as important, has been the rapid pace of technological change in the communications, information-processing and other industries. Nevertheless, from the perspective of this book, the role of Toyota and of the socio-political framework upon which the success of the Toyota Production System was built is indicative of a major challenge to the existing knowledge structure mounted by Japan and Japanese working processes. It is, at the very least, suggestive of the fact that the seeming US monopoly on the knowledge structure has ended. How and whether

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this grip can be replaced by Japan or any other state is another matter entirely. Even so, there are several points that should be addressed. First, some response must be forthcoming to the argument that, in the presence of an already existing and deeply entrenched mode of production (Fordism) and in the context of a global economy in which information and ideas are able to flow rapidly and at will, there is no way that Toyotaism can have – or be identified as having – the same impact. It is not possible from our current historical position to make a definitive judgement. Nevertheless, an initial response must be to challenge the extent and depth of globalisation, and to suggest that national and regional economies still matter.60 A blind faith in the apparently irresistible material and ideational forces promoting globalisation ignores counter-tendencies that may one day prove equally strong.61 It also leads to a marked enthusiasm for exaggerating just how far the process of globalisation has actually progressed.62 This suggests, at the very least, that the implications of Toyotaism should not be dismissed out of hand. After all, according to another practitioner closely linked to the development of the Toyota Production System, ‘it took Toyota Motors twenty years to develop the Toyota Production System fully, and others will require at least ten years to obtain satisfactory results by copying it’.63 Another issue that needs to be addressed, is whether or not the working practices adopted by Toyota are inseparable from Japanese cultural norms. Can Toyotaism can be successfully transplanted?64 Again, let us first insist on questioning the entire basis on which the question is posed, for it assumes that while American ideas and culture can be universalised, Japanese (and other) ideas and cultural norms cannot. As noted above, this line of argument can be challenged in a number of ways. Nevertheless, it has been the case that foreign firms have experienced difficulties in adjusting to lean production, which has led some to propose that it is not possible to adopt the system world-wide.65 However, this assumes that current resistance will remain strong, and ignores the fact that if it is proven to be more profitable in the longrun then management will make sure it is adopted no matter what the short-run cost.66 Moreover, the statement by Shingo cited above acts as a reminder that it takes time for the transformative effects of new production techniques to work their way through the system. It is unfair, then, to pre-judge the unknown long-term effects of Toyotaism. What is not in doubt is the zeal with which all those closely associated with the Toyota Production System trumpet its beneficial economic effects,

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even when they are not so certain whether its benefits can in fact be shared. The following from Ohno is positively restrained compared to statements by US converts: Although we have a slight doubt whether our just-in-time system could be applied to the foreign countries where the business climates, industrial relations, and many other social systems are different from ours, we firmly believe that there is no difference among the final purposes of the firms and people working in them. Therefore we hope and expect that another effective American production system will be created utilizing this book for reference.67 This confidence in the long-term positive economic and social effects of adopting and adapting to lean production can, in itself, be put forward as evidence of how deeply Japanese ideas have penetrated the fabric of industrial economies the world over. Transforming the system If there is a case to be made that the Japanese government and other private agencies are making a concerted effort at internationalising Japanese ideas and culture, and that the development and transplantation of Japanese production techniques may be playing a major part in transforming the way many in the industrialised world and beyond live their lives, then there is a perhaps even stronger case to be made that the Japanese government is pushing firmly for the explicit recognition by the industrialised world (and the US in particular) of the positive benefits of the Japanese ‘model’ of development. This can be seen most clearly in the politicking surrounding the publication by the World Bank of its 1993 policy document The East Asian Miracle, but this was itself part of a much broader push to ‘market’ Japan and Japanese ideas on a world and regional scale. Earlier chapters have established that in material terms Japan has taken a firm grip on the economic future of the East Asian region. In the 1980s and 1990s, the Japanese state–society complex sought, quite openly, to strengthen this material grip on East Asia and extend it further afield through the propagation of a set of socio-economic ideas at some variance with the accepted (that is, US-dominated) norm. These efforts began with the revival of an argument put forward in the 1930s by a Japanese economist, Akamatsu Kaname, who proposed that East Asian economic development bore close (analogous) similarity with the ‘v-shaped’ formation adopted by flying geese, with the Japanese

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economy (and, by extension, society) at the head of the formation playing the role of lead ‘goose’.68 By the late 1970s, Kojima Kiyoshi felt able to declare that Japanese investment in Asian economies would enable these countries to ‘raise their economies to the level and quality of Japan’s’.69 Beyond the fact that the flying geese theory assumes a central role for the state in economic development, the intricacies of the theory and its failings need not detain us here, since we are more interested in the ideational–ideological goals underpinning it.70 What is important, is that its revival was symptomatic of the confidence and pride felt by Japanese business, government and citizens in the years following Japan’s recovery from the oil shocks and, later, the 1985 revaluation of the yen. These perceived accomplishments bolstered a more general feeling that Japan had ‘made it,’ that it had finally reached a sort of parity with the group of leading western industrial countries at the core of the global political economy. This confidence and pride, while stimulating demand for better living standards at home, have also been turned slowly outwards as Japanese business, bureaucracy and government have demanded recognition by the rest of the world of the benefits of the Japanese approach to economy and society. Moreover, the clear implication of the flying geese theory is that domestic readjustment will not only have beneficial effects for Japanese people but will spread throughout East Asia since Japan’s new status as a ‘life-style’ power will encourage other countries to step naturally into the hightech manufacturing shoes it leaves behind.71 At an official level, these sentiments were partially and variously reflected in a series of policy documents and reports, the most famous of which is perhaps the 1986 Maekawa Report, or, to give it its formal title, The Report of the Advisory Group on Economic Structural Adjustment for International Harmony.72 In recommending an increase in domestic demand, improvements in market access for foreign goods and investment, and revision of the agricultural support mechanism, the report signalled a shift away from the company-centric ‘Japan Inc.’ image of the Japanese economy and society towards an economy and society that served the needs of consumers and individuals. It also signalled a more benign, less rapacious attitude and tone to Japan’s international economic image.73 In so doing, it spoke to US critics of Japanese ‘protectionism’, Asian critics of its mercantilist penetration of the region, and Japanese critics unhappy with the ‘growthism’ of their society. That the Maekawa Report was followed in 1991 by a report entitled Looking to a Society Giving Priority to Individual Life conducted by an advisory body

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(The Commission on National Living) to the Prime Minister, confirms that attempts to put the measures outlined in the original report were less than successful.74 Nevertheless, the point remains that efforts are being made and are slowly having some effect. More important here is the external dimension – what producing these reports tells the world about Japan and the Japanese people. This is, simply, that the Japanese state–society complex is trying to accommodate social and political pressures situated at home and abroad, and is doing so in such a way that changing interests and priorities are fairly accounted for. These efforts, whether reactive or proactive, are in themselves positive signs that can be used to suggest that the Japanese polity is a responsive and responsible one. Running in parallel with these quasi-domestic/quasi-internationally oriented reports, were a series of initiatives firmly directed toward the international scene and strongly supportive of the Japanese model of development.75 To be sure, the 1987 MITI publication The New Asian Industries Development Plan, which sets out a strategy for the industrialisation of Southeast Asia, was more of a response to protectionist pressures from the US and Europe and spiralling wage and environmental costs than it was of altruism and a crusading belief in the minds of the Japanese bureaucracy in the benefits of the Japanese model, but this is beside the point.76 What matters is the fact that this development model was seen (and could be claimed) to have worked. In the minds of many, Japanese aid and investment in Southeast Asia played a fundamental part in the dramatic growth rates achieved throughout the region in the 1980s and 1990s. These growth rates, coupled with the general perception of a certain (albeit varying) degree of congruence between Japanese ‘authoritarianism’ and the post-colonial experiences of many of the Southeast Asian state–society complexes, was enough to elicit a grudging respect for Japan and the Japanese from the leading social forces in these countries, and lead to suggestions that not only should Japan stop apologising for its past behaviour but that it should also become the ‘voice of Asia’ in G-7 meetings.77 This grudging respect was in stark contrast to the growing resentment felt at the heavy-handed approach to economic and social issues displayed during the Reagan/Thatcher experiment and the unleashing of hyperliberal forces that resulted.78 Such resentment was built upon by the Japanese in their attempts at redressing the balance of power in such major institutions as the IMF and World Bank. Having substantially increased the level of its financial contributions to these institutions (and their various affiliates) in the late 1980s and early 1990s,

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Japan now sought to gain a greater degree of influence over the policydirection taken by such organisations.79 Nowhere was this more open and determined than in its efforts to get the World Bank to publish The East Asian Miracle. Stung by formal criticism by a senior vice-president of the Bank aimed toward Japan’s policy of directed credit; emboldened by the arrival at the Bank of Masaki Shiratori, formerly a senior official at the Japanese Ministry of Finance (MOF); and angered by the Bank’s refusal to retract the criticism, MOF produced a paper setting out the Japanese government’s understanding of structural adjustment. This paper became the first step on the road to publication of the Miracle study.80 Since Wade has done such a thorough job of explaining the making of the final report it is not necessary to go into further detail here. Except, that is, to note that in the end the study sided quite firmly with the free-market views championed by the Bank (and, therefore, the US) and played down, without totally rejecting, the developmental-state model put forward by the Japanese.81 It thus allowed both sides to claim victory.82 It seems, then, that Japan and other Asian state–society complexes have, in the past decade or so, become less enamoured of western solutions to socio-economic and political problems thrown up by industrial growth; more critical of US-led attempts to assert and propagate these solutions, and more inclined to look closer to home for solutions adjudged more suitable. This has led to significant attempts to express and adhere to a distinctly ‘Asian’ way or approach to economics, politics and society.

Japan and the ‘Asian way’ Japan has a central though mainly passive role to play in the propagation of the Asian way as a concrete alternative to western approaches to economics, politics and society.83 Earlier chapters introduced the concept of the Asian way and detailed the part its adherents expect or hope Japan will play in its propagation, suggesting that in the economic sphere it has been used as a means of defending a set of public policy instruments and choices characterised strongly by government involvement in, and guidance of, the economy. This defence has been made necessary not so much by domestic opposition, which has variously been absent, tolerated within limits or crushed, but because such intervention – whether it be called ‘administrative guidance’, ‘statecapitalism’ or ‘authoritarianism’ – has been deemed unacceptable and unfair by the US and the international organisations over which it holds

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sway. In the socio-political and strategic spheres, the Asian way has again been used as a means through which to express difference and dissent from the US-mandated norm, although not without some variation in emphasis and a degree of contradiction. The chief source of contradiction, shared by Japan, is the overt rejection and even condemnation of the possession and use of nuclear weapons (in Japan the three non-nuclear principles, in ASEAN the Southeast Asia Nuclear Weapons Free Zone Treaty of December 1995). This, despite the fact that US conventional forces are openly acknowledged to be insufficient to fully guarantee the security of the region in the absence of US nuclear forces. In addition, this anti-nuclear stance does not hold across the region, given China’s nuclear arsenal and the situation on the Korean peninsula. Variations and contradictions aside, however, there is no doubt that the Asian way exists, if only as a rhetorical device through which to express difference and dissent.84 The differences are therefore less important than the similarities, although differences do point to latent contradictions. What is the Asian way, and how does Japan figure in it? In answer to the first part of this question, and building upon explanations set out above, the major characteristics, assumptions and beliefs associated with the Asian way have been set out as follows: • A presumption that there is a set of core civilisational values, common to both the Confucian and non-Sinic traditions of East Asia, which unites the region’s politics and differentiates ‘Asians’ from the inhabitants of other regions and civilisations, notably the West. • A rejection of western liberalism’s negative and destructive aspects, in particular its perceived obsession with individual rights, a lack of social discipline and a decline in moral standards. • A concomitant eschewal of the western model of economic, political and social development’s universal application, and, in some cases, a questioning of the legitimacy and efficacy of the underlying structure and principles of the international system of states. • A desire to create a new East Asian identity by fusing the best values of the West and the East, and in so doing, provide an alternative developmental and normative model for the world. • A conviction that the West is in decline politically, economically and socially, while Asia is on the rise.85 The rights and wrongs of this characterisation need not be of concern here, since we are more interested in discovering how the Japanese

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state–society fits into this picture.86 The Asian way is the end result of two processes. The first is a crude mental distillation, performed by certain Asian leaders and intellectuals, of the unique but similar historical experiences of the separate Asian state–society complexes (pre-colonial patterns of development; colonialism; struggles for independence; and post-colonial rebuilding) so as to come up with a set of stereotypical social attributes – patriarchy, consensus-building, tolerance, self-reliance, hard work – that both explains the centralised and authoritarian nature of the various political settlements reached in each state–society complex, and differentiates the region as a whole from the West. This attempted differentiation was obviously the driving force behind Prime Minister Mahathir’s 1990 proposal to establish an East Asian Economic Group, which, just as obviously, he wanted Japan to lead.87 The second process, intimately linked with the first, has been to equate the recent economic success (measured in terms of economic growth rates) of East Asia with the long-established success of the Japanese economy.88 In this, it is not the material post-war relationship (reparations, aid and investment) that takes centre-stage in the explanation, but the much deeper historical legacy of Japan’s absorption of ideational constructs from the mainland; that is, Confucianism. Although it has certain drawbacks, the concept of a shared Confucian heritage is attractive for several reasons. Firstly, it provides a unifying body of philosophical work upon which to differentiate East from West. Secondly, it destroys the idea that Japanese success is unique. In other words, it is a way for these states to break the hierarchy implied by the flying geese model of development, since, if Japan’s economic success is based upon its Confucian-type society, then it is ideas and concepts whose origins lie on the mainland that are ultimately responsible for that success, not attributes unique to the Japanese. Thus, instead of the linear explanation for Asian success implied by the flying geese scenario, the Asian way provides for a circular explanation of continuous learning and relearning based upon deeper historical roots. At the same time that Japan is held up as model and exemplar, it is reproached as an errant child suffering the pangs of misplaced arrogance. Whether errant child or economic model, Japan’s place at the centre of the Asian way gifts it with enormous potential as a leader of the East Asian region.89 It has the potential to act as both mouthpiece and model for other Asian states in their perceived struggles against the West. In relation to single-issue areas such as the environment, human rights and

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trade relations, Japan can speak on behalf of (East) Asia in the councils of the G-7 and other global institutions. In more general terms, Japan can act as a model of development that rejects the worst excesses of the West, whilst demonstrating that some aspects of westernisation can be successfully adapted by other cultures and civilisations. No other East Asian state, including the PRC, has this capacity for (potential) leadership. While there may be little chance of an Asian way based on Japanese achievements and attributes becoming hegemonic in a global sense, there are signs that a regional role along these lines is not only possible but likely, the Asian crisis notwithstanding.

Conclusion In several ways – the dissemination of Japanese ideas through technology, and overt attempts at subverting US dominance and replacing it with Japanese-led or sourced ideas – the Japanese state–society complex has set about the task of wresting control of the knowledge structure away from the US. Whilst it is not possible to make an overall determination as to the outcome of these myriad challenges, it is reasonable to suggest that not only have they had some effect but so too have they elicited a positive response from other Asian state–society complexes, themselves chafing under the strictures of the US imperialism of the mind. If, then, the Japanese state–society complex may be said to be pushing at the supports of the existing knowledge structure, other East Asian state–society complexes may be said to be pulling from the other side. This is demonstrated most vividly in calls for adherence to and adoption of an ‘Asian way’ in economics, politics and society that gels more closely with the historical experiences and cultural norms of Asian societies than do western precepts and norms. As the major economic power in the region, Japan has been offered (and refused) the leadership of the institutional expression of the Asian way, the East Asian Economic Caucus. It is impossible to measure the power of ideas, but it is all too obvious that ideas shape our lives at least as much as do the material conditions that sustain us. For that reason alone it is necessary to explore the nature of the Japanese challenge to the US-dominated knowledge structure, even if we cannot say with any degree of certainty how much power the US has ‘lost’ and how much Japan has ‘gained’ in the last twenty or so years. What we can say is that the challenge has been issued, and that it has succeeded in some areas (high technology, production

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processes) and failed in others (wide dissemination of Japanese language and culture). More importantly, the Japanese challenge serves to open up political space in which a variety of actors – Japanese and nonJapanese – can give voice to their challenge to the prevailing orthodoxy. To that extent, the Japanese challenge can be regarded as a progressive force for global social change.

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9 Conclusion

The myriad processes of social, economic and political change underway within Japan are having often unintended knock-on effects throughout East Asia and beyond. Without doubt, these will in turn elicit reaction at all levels and in all areas of human activity within, across and beyond Japanese borders. Since social and economic tension presents opportunities for political action and reaction, it is the task of this final chapter to highlight just a few of the areas – in production, finance, security and knowledge – in which reaction and resistance are most likely to appear if they have not appeared already. Charting the development and significance of resistance and reaction in these and other areas is a task best considered elsewhere and at a later date. Starting with the production structure, it will come as little surprise given the number and depth of the economic linkages between Japan and East Asia that there exist a number of objections or sites of resistance to these linkages. The legacy of war and colonial dominance is obviously key in this regard, as is the environmental damage wreaked to a greater or lesser extent upon various countries in the region by Japanese firms and/or the activities of firms with links to Japan. Several other sites of resistance, such as sex tourism (including the creation of Japanese-only ghettos in various cities in the region such as Bangkok) and the exploitation of female and male workers of foreign origin in Japan itself, are associated with these wider issues. Important as these are, we merely note them here and move on, dealing with some (the historical legacy, the environment) below. This leaves room to consider two other major areas of resistance (extant, emergent and/or potential) to Japanese attempts to wrest control over the production structure away from the US, namely, resistance from the US itself and from within Japan. 149

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Clearly, the US has no intention of losing its grip on the global political economy, especially this soon after the demise of communism as a viable political strategy. The fact that this demise resulted in an awareness that the Japanese economic ‘model’ represents or can be represented as an alternative form of capitalism to that espoused in the US and championed by those who inhabit Washington’s corridors of power, has been met head-on by those same individuals, as shown in earlier discussions of the evolution of US trade policy and its behaviour in multilateral institutions such as the IBRD and IMF.1 The intent of these initiatives has been to force the transformation of the Japanese economy (and, implicitly, its social structure) so as to make it resemble more closely the situation and structure of the US. Pressure exerted in the geostrategic sphere, principally over ‘burden sharing’, is linked to ‘reciprocity’ in the economic realm. In other words, Japan is asked to make economic sacrifices and concessions in order to redress the perceived imbalance in the relationship caused by its inability to contribute militarily to the common defence. That there are yawning gaps and deep contradictions in these arguments is clear. Returning to a specific focus on the production structure, we find in the struggle for Japanese endorsement of the formation of an East Asian Economic Caucus (EAEC) or an alternative conference on Asia-Pacific Economic Cooperation (APEC) a suitable metaphor for the wider struggle between the hegemony of a Japanese-centred as opposed to a US-centred capitalism.2 Quite simply, EAEC is the brainchild of the Malaysian Prime Minister Mahathir Mohamad, who, as part of his post-colonial political project, is anxious to exclude as far as is possible the influence of the ‘West’ from Asian affairs.3 Thus EAEC in its original form specifically excluded the US, Canada and Australia as potential members, by virtue of their non-Asian identities. It is important to note at the outset that EAEC itself (and the eventual call for Japanese leadership of it) was not motivated solely by a desire for cultural or racial emancipation from the caucasian world. Equally important, and perhaps more so, was the desire on behalf of the Malaysian leader to slow the flow of ‘domestic’ Chinese capital away from Malaysia toward the liberalising Chinese economy by integrating China into the regional economy, and a fear of protectionism engendered by the reinvigoration of the EU project and the signing of the North American Free Trade Agreement.4 Nevertheless, in calling for Japanese leadership (which, of course, would have guaranteed a continuing and perhaps more concentrated flow of Japanese money into the region) Mahathir has explicitly challenged the dominance of the US

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over the production structure and offered Japan a perfect opportunity to make a challenge of its own without having been seen to have acted unilaterally. That Japan has so far resisted, though not rejected, this offer is understandable in the context of its relationship with the US. More interesting is the US response, which came at the APEC leaders’ meeting in Seattle in November 1993, and injected some much-needed impetus into APEC as a vehicle for the enhancement of free trade and economic liberalisation across the Pacific.5 It was, in effect, an attempt to counter the protectionist implications of the EAEC and secure its own economic domination.6 It also signalled and reflected a new interest in multilateral engagement with the region, where previously bilateralism had been the method of choice.7 Given the recent disillusionment with organisations such as the IMF and World Bank (mitigated perhaps by the leading role taken by the IMF in attempting to bring about structural change in the South Korean, Thai and Indonesian economies), we may speculate that Washington feels it has more to gain by working through less formal bodies such as APEC where it can push forward with its agenda without having to pay high financial costs and in the absence of countervailing proposals from other states for greater representation. In any case, the EAEC versus APEC struggle was really no contest in the end, and Mahathir has had to be content with seeing his grouping smothered – without being snuffed out – under the APEC banner. The other major area of resistance identifiable in the production structure has its roots in the domestic arena. As we have seen, Japan’s economic, political and ideological strength abroad ultimately rests upon the foundations laid at home during the post-war period. Should these crumble, then it is more than likely that any thoughts of Japanese hegemony in East Asia and elsewhere will quickly fail. While it is true to say that Japanese society does not appear to have produced the sort of social resistance witnessed in the US during the Vietnam era, there is evidence of significant change that is either producing resistance already, or appears likely to in the future in the absence of further change. The period of ‘structural adjustment’ through which Japan is presently struggling is undoubtedly the main cause of domestic unrest. Unemployment, homelessness and crime rates have all risen in recent years, as noted in Chapter 4. Particularly significant is increasing unemployment amongst young school leavers and university graduates. This situation is almost unique in post-war Japan and as such threatens to spill over into long-term disillusionment with the ‘system’ should it prove anything more than temporary. Coupled with this is, of course,

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the general wish on behalf of Japanese to embrace the lifestyle of the ‘leisure society’ in line with the government’s 1992 programme for Japan to become a lifestyle power as well as an economic superpower. While it is true that working hours, including overtime hours, have been falling in recent years, it is not clear whether this has more to do with the long period of economic slowdown than with the success of the government’s initiative. Certainly, in the manufacturing industries at least, Japanese put in comparable hours to those done by US workers, but have shorter holidays and a much lower standard of living if this is measured according to estimates of purchasing power.8 As also noted in Chapter 4, the role of women, and particularly their position in the workplace, has been changing quite rapidly in recent years. The quest for efficiency has made women – whose wages have traditionally been much lower than their male counterparts and whose legal status in the workplace is much more precarious – highly attractive as temporary, part-time workers. These (usually non-unionised) women may be cheaper and relatively less troublesome in the workplace, but in breaking away from the usual life-path they may be considered the first of a new generation of women who work throughout their adult lives. Again, this may be only a temporary phenomenon, although it appears more than likely that it will persist and therefore have an added effect on the already low rate of childbirth in a country burdened by an ageing population. The point is that the government, business and men in general have to cope – legally and socially – with a newly empowered segment of society with its own social and political agenda. There is little doubt that the socio-economic changes in the fabric of Japanese society introduced thus far have impacted upon the political status quo.9 The final site of resistance we identify in the production structure may also impact on the political settlement and have more visible effects on Japan’s relations with East Asia and the wider world. This is the employment of foreign workers in Japan and, most visibly, the employment of foreign women as entertainers and prostitutes. Two points can be made very briefly. First, that the influx of foreign workers during the boom years (and the employment of more Japanese abroad) has been seen, in some quarters, to have threatened the racial and cultural purity of the nation. While resisting the efforts of some to have these workers (illegal as well as legal) thrown out of the country, and generally pleading for tolerance, the government has been left, in the context of a loose labour market, with the political problem of a perceived surfeit of foreign workers, even though they most often perform

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tasks that most Japanese would be reluctant to do themselves. It would not be good publicity for the Japanese to suddenly begin to expel large numbers of workers back to Asia, especially since the families of these workers often rely on the money sent home by them. The second point, related to the first, concerns the difficult issue of prostitution and sex tourism.10 Much of the growing influx of female workers into the Japanese sex industry in recent years has been due to the fact that many Asian countries no longer welcome ‘sex tourists’, many of whom are Japanese. The brutal and demeaning treatment of these women does Japan’s image in Asia no good at all, especially since many have no legal right of redress, and serves to confirm its world-wide reputation as a misogynous society. The close relationship between the financial and production structures does not leave us with a great deal of new information to impart in a discussion of resistance to Japan’s role in changes in the former. Furthermore, the esoteric nature of the financial structure and its apparent distance from the ‘real’ world in which people live out their everyday lives, seems to resist or inhibit gritty social critique. Nevertheless, there are a few points to be made. Firstly, the liberalisation of Japan’s financial structure has been both a cause and a consequence of changes taking place in other areas of Japanese society. The deeply rooted nature of these changes points to the fact that a return to the tight financial controls of the past will not be possible at any time in the near future. Addressing the economic and social problems unleashed by the efforts of the Japanese hegemonic class to repair the fractures in the existing historic bloc will therefore require new tools and the forging of new bargains. These efforts are themselves likely to create new sites of resistance as yet unforeseen. Second, the Asian crisis represents a serious threat to the success of Japanese activities in the area, and hence to the success or failure of its domestic restructuring process. At one level these opportunities and dangers relate to the amount of ODA and other forms of investment entering the region from Japan. At another level they relate to Japanese efforts at setting its financial house in order and, presumably, the subsequent reinvigoration and renewal of its credentials as an economic powerhouse upon which the Asian Way may safely be built. Given the abysmal record on financial reform thus far, the prospects do not look good.11 This leads to a third and final point, which is that these credentials are in any case, justly or unjustly, being rubbished on an almost daily basis by the US government and by US business interests, which, as in the case of Travelers, have taken full advantage of the ‘crisis’ and are

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entering the region in droves. This discrediting of the developmental state model continues in official circles, where domestic interests and US representatives in the major global and regional institutions preach the doctrine of free markets everywhere. Evidence of the rejection of Japanese attempts to play a dynamic leadership role in the global and East Asian security structure is at its most apparent in relation to the historical legacy of war-time aggression. This has been expressed by David Rapkin as a ‘legitimacy deficit’ for Japan ‘among potential followers, which will significantly impair efforts at world leadership’.12 One year earlier, Robert Cox had reached a similar conclusion.13 That the wounds inflicted by Japanese militarism and colonialism in East Asia on Asian and other peoples remain open and sore is not in dispute.14 However, as the television and newspaper reportage of Akihito’s visit to the United Kingdom clearly showed, there is a generational aspect to the issue of war-guilt that foreshadows its passing at some point in the not too distant future. The reaction of the Blair government is also noteworthy, since, in the words of one old soldier, Blair ‘seems more interested in Japanese cars than justice for us’.15 The Japanese, meanwhile, were busy mobilising their own not inconsiderable support base upon which to build alternate perceptions of Japan and war guilt.16 Moreover, as noted in Chapter 7, the invitation from China to study the EAEG proposal and the Thai invitation to conduct combined military exercises demonstrates that Japan does now have some options in this area, no matter how limited. This is only confirmed by the weight of evidence presented above concerning Japan’s enlarged role in the US–Japan alliance, its efforts in the UN, and the success it has had in increasing the number of personal contacts and relationships between its defence personnel and personnel from members of other armed forces in East Asia and elsewhere. Clearly, the historical legacy remains of central importance in understanding contemporary relations between Japan and the outside world. At the same time, there are indications that this legacy no longer has the power it once had to stir the public imagination. Elements of persistence and change can also be found at the domestic level. As Hook has shown, the vast majority of Japanese people would reject an outright military role for their country.17 On the other hand, since the 1960s there has been overwhelming support for the existence of the SDF even given the existence of the ‘Peace Constitution’, although only within carefully defined limits. Specifically, these limits include support for status quo levels of spending on defence providing this is put toward ‘defensive strength’ rather than ‘military roles’,

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support for SDF contributions to disaster relief and, latterly, peace keeping operations, but only so long as these do not involve combat missions, and support for the US–Japan security alliance, but determined rejection of nuclear weapons. In other words, ‘mass attitudes are not “pacifist” in a western sense – that is, rooted in a belief in unarmed, non-violence – and are prepared to accept a role for the SDF under constraint’.18 It remains to be seen whether the recent revision of the US–Japan Guidelines for Cooperation allowing for an enhanced role for the SDF in East Asia will significantly affect these attitudes, but past experience suggests that any perturbations will quickly subside given solid ‘post-factum support’ for government policies, such as despatch of the SDF to the Gulf and on peace keeping assignments.19 Moreover, popular opposition to the presence of US forces in Japan is unlikely to fade, particularly now that the Japanese government has begun, under the auspices of Article VI of the Treaty of Mutual Cooperation and Security between the United States and Japan and the Law for Special Measures for Use of Land, to acquire Title to private land leased to the US armed forces on Okinawa.20 Resistance to Japan in the knowledge structure manifests in a variety of locations and with respect to a number of key issues. Before considering what appear to be the most important of these within the context of the present study, it is worth noting just how difficult the struggle for control may prove to be, even in the absence of these sites of resistance. Despite all its efforts, public and private, Japan remains a littleknown and more often than not misunderstood country, particularly outside East Asia. Very few people have any firm understanding of the history and culture of the country and, apart from the occasional election result reported in the media, the majority of Europeans and Americans hear little or nothing of contemporary events, and apparently do not care to. This situation may have changed somewhat in the light of the current recession and its knock-on effects for the global economy, but on past experience there is no guarantee that the status quo ante will not be re-established once the immediate threat to jobs and profitability fades away. One key element in this circle of neglect must be the perception of Japan as a strange and alien place, fit, in Britain at least, only for ridicule on so-called comedy shows that screen the outlandish exploits of Japanese game show contestants and represent this as typical Japanese behaviour. Another key element is the communication barrier that has resulted from the real and perceived difficulties of learning the Japanese language, and the failings of the Japanese education system whose much-heralded rote learning techniques are blamed

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for a lack of proficiency at oral English skills by Japanese people of all ages. These difficulties or deficiencies, do not bode well for Japanese attempts at wresting control of the knowledge structure away from the English-speaking world. Add to this equation the kinds of resistance evinced by the US in particular through its leading role in stifling attempts to create a new economic orthodoxy through the medium of the IMF, World Bank and WTO and, further, Japan’s continued economic links and strategic relationship with the United States, and the chances for success look even more bleak.21 It is possible to lift this blanket of gloom somewhat, if one focuses attention not upon the global scene but upon the East Asian region. At the regional level, Japanese prospects for shifting the balance of power within the knowledge structure appear much brighter. The geographic distances are much shorter and the lines of communication correspondingly stronger. Japanese ‘hardware’ (typically, electronics equipment) and ‘software’ (‘low-brow’ culture in the guise of manga, computer games, karaoke, department stores and so on), are prevalent in the everyday lives of East Asian people, and serve as a constant reminder of the economic links between Japan and the region. Japan’s sometime role as interlocutor between (East) Asia and the ‘West’ based upon its economic position and status strengthens these links, as does its role as ‘filter’ for western ideas and customs, domesticating outlandish habits and practices so that they become acceptable to the East Asian palate. Finally, the language barrier is neither so high nor so impenetrable given the shared nature of the problem and the use of English as the language of business. That said, there are major sites of resistance in East Asia that deserve more protracted attention. One of these is Japan’s approach to the environment, which, on past evidence, has been rather poor. As a matter of government policy, during the 1970s Japan effectively ‘exported’ to Southeast Asia the industries responsible for wreaking very heavy environmental damage on its own shores.22 In addition, the later penetration of Southeast Asia by Japanese business brought further damage through logging, mining and the infrastructural ‘development’ associated with these activities. More recently, Japan’s dependence on imported foodstuffs has provoked concern over the loss of traditional fishing grounds and the destruction of mangrove forests as a result of intensive farming of shrimp and other sea foods destined exclusively for the Japanese market. Finally, the prohibitive costs associated with playing golf at home have forced many Japanese to look abroad for cheaper venues, with the result that a large number of prime sites throughout East Asia have been redeveloped as

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golf courses and leisure complexes, creating much resentment as even more land is taken away from the indigenous inhabitants, including the wildlife. This reputation for visiting high levels of pollution and destruction on the natural environment of East Asia impacts not just on East Asians themselves but further afield also, and is magnified by frequent images portraying evidence of Japanese cruelty towards and general neglect of the animal kingdom. Recent reports of a Japanese television programme showing people sitting down to a meal including tiger meat, and their ringing endorsement of its ‘delicious’ taste, is only the latest in a long line of perceived misdemeanours and gaffes almost certainly guaranteed to leave a bad taste in western mouths. Whales, elephants, dolphins, turtles and bears are also seen as frequent victims of a basic lack of humanity and common decency toward those unable to defend themselves – a lack which can be and frequently is readily equated with a perception of Japanese people’s inhumanity to their fellow man.23 Nevertheless, there is increasing evidence that Japan is succeeding in countering charges of environmental vandalism by developing a coherent and consistent environmental aid strategy of its own. At the 1992 Earth Summit in Brazil, for example, the Japanese government announced a $700 million increase to its environmental ODA over five years, and in the same year the cabinet issued guidelines calling for aid allocation for projects that combined development with environmental protection. Other initiatives followed.24 Moreover, as the responses to an Economic Planning Agency questionnaire issued in 1991 to élites in developing countries demonstrated, there is evidence that developing countries themselves often put economic growth before the environment, with respondents almost evenly divided between those ‘who felt environmental conservation efforts should be carried out and those who felt that such efforts should be carried out “if they don’t damage economic growth” ’, while a significant majority put economic growth first.25 Clearly, not only is Japan attempting to improve its image regarding its relationship to the environment, but there is also a marked ambivalence amongst leaders in developing countries as to the wisdom of protecting the environment at the expense of the economy, particularly when this wisdom emerges fully blown from the advanced industrial states in the West. In this, Japan’s record of development experience may help rather than hinder its cause, despite the fact that other East Asians have been made to suffer the consequences. A second potential site of resistance draws its energy from Japanese

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economic success and the supposedly shared Confucian heritage upon which it is assumed to have been built. In reference to the flying geese model of development introduced in earlier chapters, Japan’s role as lead goose has not always been seen in a positive light, rather, some see this type of argument as a thinly disguised attempt to re-impose a form of co-prosperity on East Asia reminiscent of its war-time ambitions. Moreover, as Berger’s analysis clearly shows, the many voices raised in praise of Asian exceptionalism sound a note not of harmony but of discord, with some (Malaysia) drawing on a Japanese and others (Singapore) a Chinese model simultaneously linked and riven by a nebulous Confucian philosophical heritage.26 Given China’s recent demonstration of economic ‘probity’ in refusing to devalue its currency in the face of immense pressure from the market, one suspects that it will not be much longer before Chinese officials begin anew to suggest that rather than learning from Japan, East Asia should begin to look again at the regenerative powers of the ‘Middle Kingdom’, from whence, after all, Confucianism first emanated. Nevertheless, there is broad recognition across the region that Japan has added significantly to the economic fortunes of its neighbours, even if the spread is a little uneven at the extremes. Finally, the echoes of history reverberate more strongly in Northeast Asia than they do in Southeast Asia and elsewhere. Relations with both states on the Korean peninsula remain soured by the colonial and war-time legacy and by continued discrimination against Koreans living and working in Japan. The failure to grant full rights of citizenship, the fingerprinting of Korean and other ‘foreign’ workers (both permanent and ‘guest’ workers), and the forced adoption of Japanese names by Koreans born in Japan do nothing for Japan’s chances of uniting the region as one behind it.

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Notes 1

Introduction

1. The use of the terms ‘international relations’ and ‘international political economy’ indicate the fact that there is some debate as to whether IPE is a distinct discipline or simply a sub-field of IR. 2. R. Gilpin, US Power and the Multinational Corporation (New York: Basic Books, 1975); R. Keohane, After Hegemony (Princeton, N.J.: Princeton University Press, 1984); S. Krasner, ‘State Power and the Structure of International Trade’, World Politics, 28 (1976) 317–47; I. Wallerstein, ‘The Rise and Future Demise of the World Capitalist System: Concepts for Comparative Analysis’, Comparative Studies in Society and History, 16 (1974) 387–415; The Modern World-System I (New York: Academic Press, 1974); The Capitalist WorldEconomy (Cambridge: Cambridge University Press, 1979); The Modern WorldSystem II (New York: Academic Press, 1980); and The Politics of the World-Economy (Cambridge: Cambridge University Press, 1984). 3. A. Wendt, ‘The Agent-Structure Problem in International Relations Theory’, International Organization, 41 (1987) 349. 4. See, inter alia, W. Nester, Japan’s Growing Power over East Asia and the World Economy (London: Macmillan 1990); T. Inoguchi, ‘Japan’s Role in International Affairs’, Survival, 34 (1992) 71–87; J. Frankel and M. Kahler (eds), Regionalism and Rivalry (Chicago: The University of Chicago Press, 1993); R. Garnaut and P. Drysdale (eds), Asia Pacific Regionalism (Pymble, NSW: Harper Educational, 1994); C. H. Kwan, Economic Interdependence in the Asia-Pacific Region (London: Routledge, 1994); R. Ross (ed.), East Asia in Transition (Armonk, N.Y.: M.E. Sharpe, 1995). An interesting though ultimately flawed exception is R. Drifte, Japan’s Foreign Policy in the 1990s (London: Macmillan, 1996). M. Bernard, ‘Regions in the Global Political Economy: Beyond the Local-Global Divide in the Formation of the Eastern Asian Region’, New Political Economy, 1 (1996) 335–53 is much closer to the mark. 5. There are several comparative studies available. See, in particular, A. Gamble and A. Payne (eds), Regionalism and World Order (London: Macmillan, 1996). See also, L. Fawcett and A. Hurrell (eds), Regionalism in World Politics (Oxford: Oxford University Press, 1995); B. Hettne, A. Inotai and O. Sunkel (eds), Globalism and the New Regionalism (London: Macmillan, 1999), and the other four volumes in this series; and J. Grugel and W. Hout (eds), Regionalism across the North-South Divide (London: Routledge, 1999). 6. A. Gramsci, Selections from the Prison Notebooks (New York: International Publishers, 1971), edited and translated by Q. Hoare and G. Nowell Smith [hereafter cited as Selections]. R. Cox, Production, Power, and World Order (New York: Columbia University Press, 1987); and R. Cox with T. Sinclair, Approaches to World Order (Cambridge: Cambridge University Press, 1996). 7. S. Gill, American Hegemony and the Trilateral Commission (Cambridge: Cambridge University Press, 1990); K. van der Pijl, The Making of an Atlantic Ruling 159

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160 Notes

8. 9. 10.

11.

12.

13. 14.

15. 16.

Class (London: Verso, 1984); E. Augelli and C. Murphy, America’s Quest for Supremacy and the Third World (London: Pinter, 1988); H. Overbeek, Global Capitalism and National Decline (London: Unwin Hyman, 1990). See also, H. Overbeek, Restructuring Hegemony in the Global Political Economy (London and New York: Routledge, 1993). M. Rupert, Producing Hegemony (Cambridge: Cambridge University Press, 1995). See M. Beeson, Competing Capitalisms (London: Macmillan, 1999). For background to the existing literature see, A. Hurrell, ‘Explaining the Resurgence of Regionalism in World Politics’, Review of International Studies, 21 (1995) 331–58; W. Hout, ‘Theories of International Relations and the New Regionalism’, in Grugel and Hout (eds), Regionalism across the North-South Divide, pp. 14–29; and E. Mansfield and H. Milner, ‘The New Wave of Regionalism’, International Organization, 53 (1999) 589–627. Note that this section selects for discussion ‘mainstream’ accounts of regionalism and world order, leaving aside the ‘radical’ (that is, Marxist) account provided by Wallerstein and other world systems theorists. The reason for this omission is simply that Wallerstein’s analysis suffers the same methodological and ontological drawbacks as neo-realism. Subsequently, his analysis of hegemony, hegemonic stability and world order adds only ‘the suggestions that hegemony is gained and lost in a particular sequence of preponderance (production, commerce, finance) and that it only exists when advantage is simultaneously held in all three spheres of economic activity.’ A. Payne, ‘US Hegemony and the Reconfiguration of the Caribbean’, Review of International Studies, 20 (1994) 151. Compare, for example, Keohane’s, ‘The Theory of Hegemonic Stability and Changes in International Economic Regimes, 1967–1977’, with Wallerstein’s, ‘The Three Instances of Hegemony in the History of the Capitalist World-Economy’, both reprinted in G. Crane and A. Amawi (eds), The Theoretical Evolution of International Political Economy (Oxford: Oxford University Press, 1991). Keohane, After Hegemony; L. Thurow, Head to Head (London: Nicholas Brealey, 1993); E. Olsen, ‘Target Japan as America’s Economic Foe’, Orbis: A Journal of World Affairs, 36, 3 (1992) 441–503. These alternative ‘futures’ are discussed in detail in T. Inoguchi, ‘Four Japanese Scenarios for the Future’, International Affairs, 65 (1989) 15–28; see also Inoguchi, ‘Japan’s Role in International Affairs’. There are a host of other such scenarios linked with the globalisation thesis: for a review see D. Held et al., Global Transformations (Cambridge: Polity Press, 1999), pp. 2–14. R. Gilpin, ‘American Policy in the Post-Reagan Era’, Daedalus, 116, 3 (1987) 33–67; J. Nye, Bound To Lead (New York: Basic Books, 1990). R. Holbrooke, ‘Japan and the United States: Ending the Unequal Partnership’, Foreign Affairs, 70, 5 (1991–92) 41–57; Y. Funabashi, ‘Japan and America: Global Partners’, Foreign Policy, 86 (1992) 24–39; T. Koji, ‘Japan as Number Two: New Thoughts on the Hegemonic Theory of World Governance’, in F. Langdon and T. Akaha (eds), Japan in the Posthegemonic World (London: Lynne Rienner, 1993), pp. 251–63. Keohane, After Hegemony; R. Rosecrance, ‘A New Concert of Powers’, Foreign Affairs, 71, 2 (1992) 64–82. F. Iklé and T. Nakanishi, ‘Japan’s Grand Strategy’, Foreign Affairs, 69, 3 (1990)

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Notes 161

17.

18.

19. 20.

21. 22. 23.

24.

81–95; P. Meeks, ‘Japan and Global Economic Hegemony’, in Langdon and Akaha (eds), Japan in the Posthegemonic World, pp. 41–67. See also, D. Rapkin, ‘Japan and World Leadership?’, in D. Rapkin (ed.), World Leadership and Hegemony (Boulder and London: Lynne Rienner Publishers, 1990), pp. 191–212; R. Leaver, ‘Restructuring in the Global Economy: From Pax Americana to Pax Nipponica?’, Alternatives, 14 (1989) 429–62; and R. Rosecrance and J. Taw, ‘Japan and the Theory of International Leadership’, World Politics, 42 (1990) 184–209. In addition to the references cited above, see R. Cox, ‘Middlepowermanship, Japan, and Future World Order’, International Journal, 44 (1989) 823–62; C. Johnson, ‘Where Does Mainland China Fit in a World Organized into Pacific, North American, and European Regions?’, Issues & Studies, 27, 8 (1991) 1–16; J. Garten, A Cold Peace (New York: Random House, 1993); and D. Unger and P. Blackburn (eds), Japan’s Emerging Global Role (Boulder, CO: Lynne Rienner, 1993). Due in large measure to the commercial success and public notoriety achieved by Paul Kennedy’s, The Rise and Fall of the Great Powers (London: Fontana Press, 1988). For a more recent analysis see R. Gilpin, The Challenge of Global Capitalism (Princeton, NJ: Princeton University Press, 2000). On early US thinking concerning monetary union see G. Baker, ‘The Emu has Landed’, The Financial Times, 5 May 1998, p. 27. Since I agree with Grieco when he argues that the major differences between neo-liberal institutionalism and neo-realism are simply the result of divergent interpretations of the nature of anarchy, I do not propose to spend time exploring their separate natures and claims here. J. Grieco, ‘Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism’, International Organization, 42 (1988) 485–507. Neo-realism is a broad church: see R. Keohane (ed.), Neorealism and its Critics (New York: Columbia University Press, 1986). For more recent reflections on neo-realism and its antecedents see J. Rosenberg, The Empire of Civil Society (London: Verso, 1994); and S. Guzzini, Realism in International Relations and International Political Economy (London: Routledge, 1998). The best short critique of neorealism and world systems theory is in Rupert, Producing Hegemony, pp. 3–10, but see also S. Gill, ‘Epistemology, Ontology and the “Italian School” ’, in Gill (ed.), Gramsci, Historical Materialism and International Relations (Cambridge: Cambridge University Press, 1993), pp. 21–48. It is for this reason that in what follows I use the terms ‘neo-realism’ and ‘mainstream IPE’ interchangeably. See also R. Cox (ed.), The New Realism (London: Macmillan, in association with the United Nations University Press, 1997). C. Kindleberger, The World in Depression, 1929–1939, 2nd revised edn (Berkeley: University of California Press, 1986), p. 304. See also Kindleberger, ‘Dominance and Leadership in the International Economy: Exploitation, Public Goods, and Free Rides’, International Studies Quarterly, 25 (1981) 242–54. R. Gilpin, US Power; War and Change in World Politics (Cambridge: Cambridge University Press, 1981); and The Political Economy of International Relations (Princeton, NJ: Princeton University Press, 1987). S. Krasner, ‘State Power’; Defending the National Interest (Princeton, NJ: Princeton University Press,

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162 Notes

25.

26. 27. 28.

29. 30.

31.

32.

33. 34. 35. 36. 37.

1978); and ‘The Tokyo Round: Particularistic Interests and Prospects for Stability in the Global Trading System’, International Studies Quarterly, 23 (1979) 491–531. R. Keohane, After Hegemony; and ‘The Theory of Hegemonic Stability’. In a recent review, Wyatt-Walter has suggested that the ‘theory of hegemonic stability probably remains the most popular and influential theory in the subject of international political economy today.’ A. WyattWalter, ‘The United States and Western Europe: The Theory of Hegemonic Stability’, in N. Woods (ed.), Explaining International Relations since 1945 (Oxford: Oxford University Press, 1996), p. 126. See, amongst many others, I. Wallerstein, ‘The Reagan Non-Revolution, or the Limited Choices of the US’, Millennium: Journal of International Studies, 16 (1987) 467–72; S. Huntington, ‘The U.S. – Decline or Renewal?’, Foreign Affairs, 67, 2 (1988–89) 76–96; J. Nye, ‘Soft Power’, Foreign Policy, 80 (1990) 153–71; B. Russett, ‘The Mysterious Case of Vanishing Hegemony; or, Is Mark Twain Really Dead?’, International Organization, 39 (1985) 206–31; S. Strange, ‘The Persistent Myth of Lost Hegemony’, International Organization, 41 (1987) 551–74. See E. Vogel, Japan as Number One (Cambridge, Mass.: Harvard University Press, 1979). See G. Friedman and M. LeBard, The Coming War with Japan (New York: St. Martin’s Press, 1991). For evidence that such thinking has not changed overmuch see D. Wilkinson, ‘Unipolarity without Hegemony’, International Studies Review, 1 (1999) 141–72. After Hegemony, p. 37. R. Leaver, ‘Restructuring in the Global Economy’; and ‘International Political Economy and the Changing World Order: Evolution or Involution?’, in R. Stubbs and G. Underhill (eds), Political Economy and the Changing Global Order (London: Macmillan, 1994), pp. 130–41. See also D. Snidal, ‘The Limits of Hegemonic Stability Theory’, International Organization, 39 (1985) 579– 614; and I. Grunberg, ‘Exploring the “Myth” of Hegemonic Stability’, International Organization, 44 (1990) 431–77. S. Haggard and B. Simmons, ‘Theories of International Regimes’, International Organization, 41 (1987) 504. See also S. Strange, ‘Cave! Hic Dragones: A Critique of Regime Analysis’, International Organization, 36 (1982) 479–96. J. Ruggie, ‘International Regimes, Transactions and Change: Embedded Liberalism in the Postwar Economic Order’, International Organization, 36 (1982) 379–415; A. Stein, ‘The Hegemon’s Dilemma: Great Britain, the United States, and the International Economic Order’, International Organization, 38 (1984) 355–86; and G. Ikenberry, ‘Rethinking the Origins of American Hegemony’, Political Science Quarterly, 104 (1989) 375–400. Haggard and Simmons, ‘Theories of International Regimes’, 503; see also Russett ‘The Mysterious case of Vanishing Hegemony’, 208. Payne, ‘US Hegemony’; Ikenberry, ‘Rethinking the Origins’. See R. Ashley, ‘The Poverty of Neorealism’, International Organization, 38 (1984) 225–86. Wendt, ‘The Agent-Structure Problem’. J. Rosenberg, ‘What’s the Matter With Realism?’, Review of International Studies, 16 (1990) 285–303.

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Notes 163 38. As witnessed in the following two examples taken from the work of Krasner: ‘The British state was unable to free itself from the domestic structures that its earlier policy decisions had created, and continued to follow policies appropriate for a rising hegemony long after Britain’s star had begun to fall’, and ‘for in America the state is weak and the society strong. State decisions taken because of state interests reinforce private societal groups that the state is unable to resist in later periods.’ ‘State Power’, 342 and 343 respectively. 39. Gaddis has called this ‘physics envy’. J. Gaddis, ‘History, Science, and the Study of International Relations’, in Woods (ed.), Explaining International Relations, p. 37. 40. Rupert, Producing Hegemony, p. 3. 41. C. Murphy and R. Tooze, ‘Getting Beyond the “Common Sense” of the IPE Orthodoxy’, in Murphy and Tooze (eds), The New International Political Economy (Boulder, CO: Lynne Rienner, 1991), pp. 22–3. 42. S. Smith, ‘Paradigm Dominance in International Relations: The Development of International Relations as a Social Science’, Millennium: Journal of International Studies, 16 (1987) 189–206. See also S. Hoffmann, ‘An American Social Science: International Relations’, Daedalus, 106, 3 (1977) 41–60. 43. See Snidal, ‘The Limits of Hegemonic Stability Theory’, 580. 44. See S. Strange, ‘The Westfailure System’, Review of International Studies, 25 (1999) 345–54, and R. Hormats, ‘Making Regionalism Safe’, Foreign Affairs, 73, 2 (1994) 97–108.

2 Historical Materialism, World Order and ‘New IPE’ Theory 1. R. Cox, ‘Social Forces, States and World Orders: Beyond International Relations Theory’, Millennium: Journal of International Studies, 10 (1981) 126– 55. 2. R. Cox, ‘Gramsci, Hegemony and International Relations: An Essay in Method’, Millennium: Journal of International Studies, 12 (1983) 162–75. 3. ‘Social Forces’, 128. 4. R. Cox, ‘Critical Political Economy’, in B. Hettne (ed.), International Political Economy (London and New Jersey: Zed Books, 1995), p. 31. 5. In addition to references in Chapter 1, see C. Murphy, International Organization and Industrial Change (Cambridge: Polity Press, 1994), and R. Palan and B. Gills (eds), Transcending the State-Global Divide (London and Boulder, CO: Lynne Rienner, 1994). As regards definition of the term ‘world order’, I follow Cox’s usage: ‘ “World” designates the relevant totality, geographically limited by the range of probable interactions (some past “worlds” being limited to the Mediterranean, to Europe, to China, etc.). “Order” is used in the sense of the way things usually happen (not the absence of turbulence); thus disorder is included in the concept of order.’ ‘Social Forces’, 151–2, n. 4. 6. Especially, ‘Global Perestroika’, in Miliband and Panitch (eds), The Socialist Register 1992, pp. 26–43, and ‘The Global Political Economy and Social Choice’, in D. Drache and M. Gertler (eds), The New Era of Global Competition (Montreal: McGill University Press, 1991), pp. 335–50.

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164 Notes 7. Gramsci, Selections, pp. 6–16. For Gramsci, the social function of organic intellectuals was clearly both practical and philosophical. ‘The mode of being of the new intellectual can no longer consist in eloquence, which is an exterior and momentary mover of feelings and passions, but in active participation in practical life, as constructor, organiser, “permanent persuader” and not just a simple orator’ (Selections, p. 10). Recent comments reveal, nevertheless, that Cox sees himself as ‘a simple orator’. See The Editors, ‘Robert Cox in Conversation’, New Political Economy, 4 (1999) 397. 8. See F. Braudel, The Structures of Everyday Life (London: Collins, 1981). 9. A. Linklater, Beyond Realism and Marxism (London: Macmillan, 1990), pp. 27–30. See also M. Hoffman, ‘Critical Theory and the Inter-paradigm Debate’, Millennium: Journal of International Studies, 16 (1987) 231–48, and the series of exchanges concerning the advent of critical theory into International Relations theorising that took place in Millennium throughout the late 1980s and early 1990s. 10. Cox, ‘Social Forces’, 128. 11. Ibid., 129. 12. See Keohane, After Hegemony. See also Strange, ‘Cave! Hic Dragones’; and F. Gale, ‘Cave “Cave! Hic Dragones”: A Neo-Gramscian Deconstruction and Reconstruction of International Regime Theory’, Review of International Political Economy, 5 (1998) 252–83. 13. Cox, ‘Social Forces’, 129. 14. For a good short review see R. Devetak, ‘Critical Theory’, in Scott Burchill et al., Theories of International Relations (London: Macmillan, 1996), pp. 145–78. 15. Cox, ‘Social Forces’, 135. 16. Ibid., 138. 17. Cox, ‘An Essay in Method’, 168. 18. Gramsci, Selections, p. 176, quoted in ibid., 169. 19. Gill, American Hegemony, Chapter 5. 20. First quote from Cox, ‘ “Take Six Eggs”: Theory, Finance and the Real Economy in the Work of Susan Strange’, in Cox with Sinclair, Approaches to World Order, p. 183. For the notion of a ‘business civilization’ see S. Strange, ‘The Name of the Game’, in N. Rizopoulos (ed.), Sea-Changes (New York: Council on Foreign Relations Press, 1990), pp. 238–73. Second quote from Cox, ‘Social Forces, States and World Orders: Beyond International Relations Theory’, in Cox with Sinclair, Approaches to World Order, pp. 122–3, n. 31. For a discussion of the nature, membership and origins of this class see this same chapter, p. 111. 21. See n. 5. 22. R. Germain and M. Kenny, ‘Engaging Gramsci: International Relations Theory and the New Gramscians’, Review of International Studies, 24 (1998) 3–22. 23. Ibid., 4. 24. Cox, ‘An Essay in Method’, 162–3. See also C. Murphy, ‘Understanding IR: Understanding Gramsci’, Review of International Studies, 24 (1998) 417–25, (esp. 421–4); and M. Rupert, ‘(Re-)Engaging Gramsci: A Response to Germain and Kenny’, Review of International Studies, 24 (1998) 427–34. 25. For a more detailed treatment in which Cox also considers the Gramscian

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Notes 165

26. 27.

28. 29.

30. 31.

32. 33. 34. 35. 36. 37. 38. 39.

40. 41. 42. 43.

44. 45.

concepts of ‘war of movement’, and ‘war of position’ see ‘An Essay in Method’. Ibid., 162–3. See B. Jessop, ‘A Neo-Gramscian Approach to the Regulation of Urban Regimes: Accumulation Strategies, Hegemonic Projects, and Governance’, in M. Lauria (ed.), Reconstructing Urban Regime Theory (London: Sage, 1997), pp. 51–73. Cox, ‘Global Perestroika’, p. 26. See also Cox, ‘ “Real Socialism” in Historical Perspective’, in Cox with Sinclair, Approaches to World Order, pp. 209–36. The Chinese system of ‘socialism with Chinese characteristics’ is likewise creaking under the strain. See L. Ling, ‘Hegemony and the Internationalizing State: A Post-Colonial Analysis of China’s Integration into Asian Corporatism’, Review of International Political Economy, 3 (1996) 1–26. For a critique of this view see P. Burnham, ‘Neo-Gramscian Hegemony and the International Order’, Capital and Class, 45 (1991) 73–93. See Cox, ‘Global Perestroika’, and F. Kratochwil, ‘The Embarrassment of Changes: Neo-Realism as the Science of Realpolitik without Politics’, Review of International Studies, 19 (1993) 63–80. ‘An Essay in Method’, 163. Ibid., 164. Ibid., 167. See ibid., 167–9. Ibid., 168. Ibid., 167. A. Showstack Sassoon, Gramsci’s Politics, 2nd edn (Minneapolis: University of Minnesota Press, 1987), p. 207. For a brief treatment of the Japanese case using Gramscian concepts see M. H. J. van den Berg, ‘Culture as Ideology in the Conquest of Modernity: The Historical Roots of Japan’s Regional Regulation Strategies’, Review of International Political Economy, 2 (1995) 371–93. For the relation between transformism and passive revolution see Cox, ‘An Essay in Method’, 166–7. As noted by Payne, ‘US Hegemony’, 153–4. For a discussion of ‘common sense’ as applied in the work of Antonio Gramsci, see Augelli and Murphy, America’s Quest. ‘ “[P]ower over” need not be confined to outcomes consciously or deliberately sought for. Power can be effectively exercised by “being there”, without intending the creation or exploitation of privilege or the transfer of costs or risks from oneself to others.’ S. Strange, The Retreat of the State (Cambridge: Cambridge University Press, 1996), p. 26. S. Strange, ‘International Economics and International Relations: A Case of Mutual Neglect’, International Affairs, 46, 2 (1970) 304–15. There have been several critical analyses of Strange’s work. See, for example, S. Guzzini, ‘Structural Power: The Limits of Neorealist Analysis’, International Organization, 47 (1993) 443–78, and C. May, ‘Strange Fruit: Susan Strange’s Theory of Structural Power in the International Political Economy’, Global Society: Journal of Interdisciplinary International Relations, 10 (1996) 167–89. See also R. Morgan et al. (eds), New Diplomacy in the Post-Cold War World

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166 Notes

58.

(New York: St. Martin’s Press, 1993), and T. C. Lawton, J. N. Rosenau and A. C. Verdun (eds), Strange Power (Aldershot: Ashgate, 2000). S. Strange, States and Markets, 2nd edn (London: Pinter, 1994), p. 121. The concept is developed most fully in Strange, ‘An Eclectic Approach’, in Murphy and Tooze (eds), The New International Political Economy, pp. 33–49, and in States and Markets. S. Strange, ‘Territory, State, Authority and Economy: A New Realist Ontology of Global Political Economy’, in Cox (ed.), The New Realism, p. 4. States and Markets, p. 26. All taken from ibid., pp. 45, 64, 90 and 119 respectively. For Cox on Strange see ‘Take Six Eggs’, in Cox with Sinclair; Approaches to World Order; ‘Realism, Political Economy and the Future World’ in Morgan et al. (eds), New Diplomacy, pp. 27–44; his book review of States and Markets in Millennium: Journal of International Studies, 18 (1989) 107–10; and his review of The Retreat of the State, in International Journal, 52 (1997) 366–9. For Strange on Cox see her review of Approaches to World Order in New Political Economy, 1 (1996) 425–6. See C. Brown, ‘Susan Strange – A Critical Appreciation’, Review of International Studies, 25 (1999) 531–5. In his review of States and Markets, Cox makes the following point: ‘In a social relations approach, Strange’s four primary structures could be used as an heuristic device with which to undertake an enquiry into the genesis and transformation of global historical structures’ (p. 109). This is precisely the use to which I attempt to put them in Part III of this book. Strange, States and Markets, p. 93. Ibid., p. 134. See ‘ “Take Six Eggs” ’, pp. 179–83. Cox, ‘Production and Security’, in Approaches to World Order, pp. 276– 95. States and Markets, p. 26. My emphasis.

3

1945–1960: Occupation and Aftermath

46. 47.

48. 49. 50. 51.

52. 53.

54. 55. 56. 57.

1. For reflections on this theme see C. Gluck, ‘The Past in the Present’, in A. Gordon (ed.), Postwar Japan as History (Berkeley: University of California Press, 1993), pp. 64–95. 2. Chalmers Johnson is one major exception. For his views and a critical survey of other work extant in the field at that time, see his discussion of the ‘Japanese Miracle’ in Johnson, MITI and the Japanese Miracle (Stanford: Stanford University Press, 1982), pp. 3–34. 3. In particular, J. Halliday, A Political History of Japanese Capitalism (New York: Pantheon Books, 1975); J. Halliday and G. McCormack, Japanese Imperialism Today (Harmondsworth: Penguin, 1973); J. Moore, ‘Democracy and Capitalism in Postwar Japan’, in J. Moore (ed.), The Other Japan (Armonk, NY: M. E. Sharpe, 1997), pp. 353–93; K. van Wolferen, The Enigma of Japanese Power (Tokyo: Charles E. Tuttle, 1993); and R. Harvey, The Undefeated (London: Macmillan, 1994). 4. There is an opposing body of literature that asserts that no matter how

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Notes 167

5.

6.

7.

8.

9.

10.

flawed, the occupation period was successful in inculcating a spirit of democracy into all levels and areas of Japanese life. Known, rather pejoratively, as the ‘Chrysanthemum Club’, the loose grouping of scholars associated with this way of thinking is ‘led’ by Edwin Reischauer. See E. Reischauer, Japan 3rd edn (Tokyo: Charles E. Tuttle, 1990). These individuals include Sakakibara Eisuke (a former senior official in the Ministry of Finance), Ishihara Shintaro (author of The Japan That Can Say No and, since 11 April 1999, Governor of Tokyo), and Morita Akio (the – recently deceased – former head of Sony and co-author of the first Japanese edition of The Japan That Can Say No). For a discussion of these and other expressions of a ‘triumphal’ East Asia see M. Berger, ‘The Triumph of the East? The East Asian Miracle and Post-Cold War Capitalism’, in M. Berger and D. Borer (eds), The Rise of East Asia (London: Routledge, 1997), pp. 260–87. To posit the ‘reconstruction’ of an historic bloc is to court danger, since it is difficult to conceive of a situation in which, once having been broken, the exact same ties that originally bound the hegemonic class and civil society as one could be re-forged. Whilst acknowledging these dangers we persist with this terminology, since there is little doubt that early post-war Japanese elites thought it entirely possible to do just that, whilst at the same time restraining the power of the military. There seems little doubt that a ‘new’ historic bloc was built in the 1960s, on the foundations of economism and a form of pacifism, but the faint whiff of militarism that lingered through these years and down to the present suggests that some caution should be exercised when the temptation to reach absolute determinations becomes overwhelming. For preparations leading up to the Occupation see H. Borton, American Presurrender Planning for Postwar Japan (New York: Columbia University, Occasional Papers of the East Asian Institute, 1967). For details of the manoeuvring undertaken by the US to ensure that they were the sole administrators of the Occupation see I. Nish (ed.), The British Commonwealth and its Contribution to the Occupation of Japan (Suntory-Toyota International Centre for Economics and Related Disciplines, London School of Economics, International Studies Discussion Paper IS/91/227, 1991). Set, of course, within the broader context of the onset of the Cold War in Europe. Tsuru Shigeto highlights the speech of The Secretary of the US Army, Kenneth Royall, on 6 January 1948 in San Francisco as the moment when it became clear to the Japanese that US policy had changed. Tsuru, Japan’s Capitalism (Cambridge: Cambridge University Press, 1993), p. 38. See J. Dower, ‘Occupied Japan and the Cold War in Asia’, in Dower, Japan in War and Peace (London: Fontana, 1996), pp. 155–207; and idem, Embracing Defeat: Japan in the Aftermath of World War II (London: Allen Lane, The Penguin Press, 1999). We do not have the space here to consider the enormous impact on developments within Japan during the occupation years of General MacArthur in his role as Supreme Commander for the Allied Powers. MacArthur did undoubtedly interfere with, ignore and countermand the directives and orders of his superiors but no single individual, however powerful, could have more than scratched the surface of events as they were unfolding

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168 Notes

11. 12. 13. 14. 15. 16. 17. 18. 19.

20. 21.

22.

23. 24. 25. 26. 27. 28.

29.

30.

31. 32.

within and around Japan at that time. The exception, of course, is that he took it upon himself to provide Japan with a new constitution. See R. Finn, Winners in Peace (Berkeley: University of California Press, 1992); and D. MacArthur, Reminiscences (New York: McGraw-Hill, 1964). The reparations issue is considered in Chapter 5. The war crimes trials are not considered here. See V. Minear, Victor’s Justice (Princeton: Princeton University Press, 1971). Hane, M. Eastern Phoenix (Boulder CO: Westview, 1996), p. 21. As identified in Tsuru, Japan’s Capitalism. Halliday, A Political History, pp. 170–5. On the position of the emperor see Dower, Embracing Defeat, p. 277ff. Citing H. Baerwald, The Purge of Japanese Leaders Under the Occupation (Berkeley and Los Angeles: University of California Press, 1959), p. 80. Halliday, A Political History, p. 174. Ibid. Hane (Eastern Phoenix, p. 36), puts the number of ex-bureaucrats elected to the Diet in 1949 at 62, seven more than Halliday’s figure. For more detail see van Wolferen, The Enigma of Japanese Power, pp. 453–89. Borton, American Presurrender Planning; Dower, Embracing Defeat, p. 346ff. Konoe’s draft, which contained no substantial changes from the Meiji Constitution, was never seriously considered as he was shortly thereafter indicted as a war criminal and committed suicide. The quotation is attributed to MacArthur, and is taken from A. Amakawa, ‘Japanese Reactions to Political Reform Under the Allied Occupation’, in I. Nish (ed.), The Occupation of Japan, 1945–52 (Suntory-Toyota International Centre for Economics and Related Disciplines, London School of Economics, International Studies Discussion Paper IS/91/224, 1991), p. 29. Article I of the Constitution of Japan. Amakawa, ‘Japanese Reactions’, p. 29. The preservation of the imperial line is provided for in Article II of the Constitution of Japan. Dower, Embracing Defeat, p. 319ff. See J. E. Thomas, Learning Democracy in Japan: The Social Education of Japanese Adults (London: Sage, 1985). Dower, Embracing Defeat, p. 405ff. See J. Welfield, An Empire in Eclipse (London: Athlone, 1988), pp. 63–5; and G. Hook and G. McCormack (eds), Constitutional Revision – The Japanese Debate (London: Routledge, 2001). On 20 October 1999, for example, the Deputy Defence Minister, Shingo Nishimura, was forced to step down after declaring in an interview that Japan should consider abandoning its commitment to its non-nuclear principles. He had been in post for only 15 days. See M. Nakamoto, ‘Minister Quits over Japanese N-arms Call’, The Financial Times, 21 October 1999, p. 11. Hane, Eastern Phoenix, is particularly effusive in her remarks on land reform, while Tsuru, Japan’s Capitalism, is more cautious. On MacArthur and Gracchus, see Tsuru, Japan’s Capitalism, p. 21. See also MacArthur, Reminiscences, p. 313, where he claims that ‘One of the most far-reaching accomplishments of the occupation was the program of land reform’. Hane, Eastern Phoenix, p. 27. Ibid.

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Notes 169 33. Details of the first Land Reform Act in Tsuru, Japan’s Capitalism, p. 21; details of the second Act in idem, pp. 21–2 and Hane, Eastern Phoenix, pp. 27–8. 34. Figures from Tsuru, Japan’s Capitalism, p. 21. Hane gives an interest rate for repayment of 3.2 per cent. The discrepancy makes little difference, however, since rampant inflation and the decline of the value of money between the time when compensation was set and when it was actually paid meant that landowners received practically no compensation at all. 35. Figures in Halliday, A Political History, p. 193. 36. Unless otherwise indicated what follows is from ibid., pp. 191–5. 37. A. McCoy, ‘Land Reform as Counter-Revolution’, Bulletin of Concerned Asian Scholars, 3 (1971) 21, cited in Halliday and McCormack, Japanese Imperialism Today, p. 170. 38. For background see A. Gordon, Labor and Imperial Democracy in Prewar Japan (Berkeley: University of California Press, 1991). 39. For a detailed examination of events as they unfolded in the crucial period between 1945 and 1947 see J. Moore, Japanese Workers and the Struggle for Power, 1945–1947 (Wisconsin and London: University of Wisconsin Press, 1983). 40. Cited in Tsuru, Japan’s Capitalism, p. 23. For a fuller discussion see S. Garon, The State and Labor in Modern Japan (Berkeley: University of California Press, 1987), p. 130ff. 41. Tsuru, Japan’s Capitalism, p. 24. 42. Garon, The State and Labor, p. 239ff. 43. G. Hook, ‘Roots of Nuclearism: Censorship and Reportage of Atomic Damage in Hiroshima and Nagasaki’, Multilingua, 7 (1988) 133–58. 44. Tsuru, Japan’s Capitalism, pp. 24–5. 45. Moore, ‘Democracy and Capitalism’, p. 361. 46. Tsuru, Japan’s Capitalism, pp. 18–20, 40–3. 47. See Dower, Embracing Defeat, p. 528ff. 48. See her comments reproduced in Moore, ‘Democracy and Capitalism’, p. 19. 49. See Johnson, MITI and the Japanese Miracle, pp. 157–97. 50. Tsuru, Japan’s Capitalism, pp. 29–31. 51. H. Passin, Society and Education in Japan (New York: Columbia University Teachers College Press, 1965), p. 129, cited in ibid., p. 30. Between 1955 and 1980 ex-bureaucrats held office as Prime Minister for a total of twenty years, fifteen years more than their counterparts who had risen through the ranks of the LDP. W. G. Beasley, The Rise of Modern Japan (London: Weidenfeld and Nicolson, 1990), p. 232. 52. For background see T. Wei-Ming (ed.), Confucian Traditions in East Asian Modernity (Cambridge, Mass.: Harvard University Press, 1996). 53. T. Nishi, Unconditional Diplomacy (Stanford: Hoover Institution Press, 1982), p. 59. 54. See Halliday, A Political History, p. 241ff. 55. R. Dore, ‘Education’, in R. Ward and D. Rustow (eds), Political Modernization in Japan and Turkey (Princeton, NJ: Princeton University Press, 1964), p. 196. 56. For details of this and of the student movement, see Halliday, A Political History, pp. 249–59. 57. Cited in Tsuru, Japan’s Capitalism, p. 34. 58. For a broader (and more positive) view, see S. Garon, Molding Japanese Minds:

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170 Notes

59. 60. 61.

62.

63.

64.

65. 66. 67. 68. 69.

70.

71. 72.

73. 74.

75.

The State in Everyday Life (Princeton, NJ: Princeton University Press, 1997), Chapter 5. Tsuru, Japan’s Capitalism, pp. 31–3. Dore, ‘Education’, pp. 196–7; Halliday, A Political History, pp. 245–7. Formed in 1946, the Federation of Economic Organisations (Keidanren), which is now seen as the most powerful of the peak business organisations in Japan, was greeted with hostility by SCAP and did not come into its own until 1952. It should be noted that Sanbetsu was effectively destroyed in 1949 (most of its members being sacked from their jobs), during the series of red purges undertaken in that period. It was replaced by a less militant organisation, Sohyo (General Council of Trade Unions), formed in July 1950. For details see Halliday, A Political History, pp. 217–20; Moore, ‘Democracy and Capitalism’, pp. 364–5. Quotation from Moore, ‘Democracy and Capitalism’, p. 363. Inflation figure from Tsuru, Japan’s Capitalism, p. 45, Table 2.2. This was up from 48.2 per cent in the previous year and therefore represented an increase of 165.3 per cent. Joseph Dodge, a banker from Detroit, was the personal representative of President Truman and had been granted the rank of minister. For a fuller, personal account of the arrival of Joseph Dodge in Japan, and of the ‘Dodge Plan’ and the imposition of a fixed exchange rate and its eventual flotation see Tsuru, Japan’s Capitalism, pp. 44–52 and 179–80. See also K. Hamada and H. Patrick, ‘Japan and the International Monetary Regime’, in T. Inoguchi and D. Okimoto (eds), The Political Economy of Japan, Volume Two (Stanford: Stanford University Press, 1988), pp. 108–37. For an analysis completely in tune with Moore’s, see Halliday, A Political History, pp. 211– 28. A Political History, p. 207. See also Moore, Japanese Workers. This was the Labour Relations Adjustment Law as discussed above. See Moore, Japanese Workers, p. 235ff. See in particular, Johnson, MITI and the Japanese Miracle, pp. 198–241. Moore, ‘Democracy and Capitalism’, pp. 366–7 and references therein. For details of the creation of the SDF, see Welfield, An Empire in Eclipse, pp. 60–87. On the police, see C. Aldous, The Police in Occupation Japan (London: Routledge, 1997). Moore, ‘Democracy and Capitalism’, pp. 368–9; Halliday, A Political History, pp. 265–71; van Wolferen, The Enigma of Japanese Power, pp. 167–81. See also P. Francks, ‘Agriculture and the State in Industrial East Asia: The Rise and Fall of the Food Control System in Japan’, Japan Forum, 10, 1 (1998) 1–16. Moore, ‘Democracy and Capitalism’, p. 369. Details in Beasley, The Rise of Modern Japan, pp. 248–9. For context see L. E. Hein, ‘Growth Versus Success: Japan’s Economic Policy in Historical Perspective’, in Gordon (ed.), Postwar Japan as History, pp. 99–122. Dower, Empire and Aftermath; Welfield, An Empire in Eclipse. Details in Halliday, A Political History, pp. 211–13. For an alternative view, see A. Gordon, ‘Contests for the Workplace’, in Gordon (ed.), Postwar Japan as History, pp. 373–94. See H. Kawanishi, Enterprise Unionism in Japan (London: Kegan Paul, 1992);

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Notes 171 and Hasegawa, H., and G. D. Hook (eds), Japanese Business Management (London: Routledge, 1998), Part III. 76. Details in Moore, ‘Democracy and Capitalism’, pp. 364–5, and Gordon, ‘Contests for the Workplace’. See also M. Sako, ‘Shunto: The Role of Employer and Union Coordination at the Industry and Inter-Sectoral Levels’, in M. Sako and H. Sato (eds.), Japanese Labour and Management in Transition (London: Routledge, 1997), pp. 236–64. 77. Beasley, The Rise of Modern Japan, pp. 236–8; Halliday, A Political History, p. 264. 78. G. Hook, Militarization and Demilitarization in Contemporary Japan (London: Routledge, 1996). Further references in Chapter 7.

4

1960–Present: Fracture and Response

1. As Hook expresses it, ‘mass attitudes are not “pacifist” in a western sense – that is, rooted in a belief in unarmed, non-violence – and are prepared to accept a role for the SDF under constraint’. Militarization and Demilitarization, p. 125. 2. Looking backwards from the late 1990s enables us to be fairly accurate in our analysis of what happened next. That is, that Japan went through a period of ‘internationalisation’ that transformed it from being simply a major economic power with little or no political influence, into an economic and political player of global significance. The confidence accompanying such certainty is potentially dangerous. In attempting to effect repairs to the Japanese historic bloc, not only were the Japanese elite not always sure of what they were doing, or speaking with one voice, but so too did they lack certainty about where they were going and what their efforts were intended to achieve. 3. For excellent analyses, see W. Tabb, The Postwar Japanese System (Oxford: Oxford University Press, 1995); and K. Sheridan, Governing the Japanese Economy (Cambridge: Polity, 1993). 4. Japan had already joined the GATT in 1955, some time before the period sketched here. 5. See M. Yahuda, The International Politics of the Asia-Pacific, 1945–1995 (London: Routledge, 1996), and J. Glaubitz, Between Tokyo and Moscow (London: Hurst & Company, 1995). 6. See S. Sudo, The Fukuda Doctrine and ASEAN (Singapore: Institute of Southeast Asian Studies, 1992). 7. See P. Drucker, ‘The End of Japan, Inc.? An Economic Monolith Fractures’, Foreign Affairs, 72, 2 (1993) 10–15; and T. J. Pempel, Regime Shift: Comparative Dynamics of the Japanese Political Economy (Ithaca and London: Cornell University Press, 1998). 8. Small- and medium-size enterprises are generally defined as those with less than 300 employees. 9. G. Baker, ‘Japanese Salaryman’s Earnings Fall by 0.6%’, The Financial Times, 5 October 1994, p. 4. See also R. Dore, The End of Jobs for Life? Corporate Employment Systems: Japan and Elsewhere (London: London School of Economics, Centre for Economic Performance, 1996), Occasional Paper No. 11.

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172 Notes 10. See M. White, ‘Home Truths: Women and Social Change in Japan’, Daedelus, 121, 4 (1992) 61–82; M. Nakamoto, ‘Death of the Salaryman’, The Financial Times, 17–18 May 1997, p. 1; and A. Wakisaka, ‘Women at Work’, in Sako and Sato (eds), Japanese Labour and Management in Transition, pp. 131–50. 11. Moore, ‘Democracy and Capitalism’, pp. 382–3. According to Itoh, approximately 23 000 Japanese people of working age die each year. M. Itoh, ‘Is the Japanese Economy in Crisis?’, Review of International Political Economy, 1 (1994) 46. Issues raised by adoption of ‘lean production’ techniques are discussed in Chapter 8. 12. In 1975 the proportion of women working in all industries was 32.2 per cent. By 1985 this had risen to 35.9 per cent, and had reached 39.5 per cent by 1997. Figures from the Management and Coordination Agency, various years. On foreign workers see K. Imano, ‘Internationalisation of the Labour Market: Foreign Workers and Trainees’, in Sako and Sato (eds), Japanese Labour and Management in Transition, pp. 168–83; Y. Selleck, ‘Illegal Foreign Migrant Workers in Japan: Change and Challenge in Japanese Society’, in J. Brown and R. Foot (eds), Migration: The Asian Experience (New York: St. Martin’s Press, 1994), pp. 169–201; and K. Yamanaka, ‘New Immigration Policy and Unskilled Foreign Workers in Japan’, Pacific Affairs, 66 (1993) 72–90. 13. van Wolferen, The Enigma of Japanese Power, pp. 93–5; but as a corrective see T. Shinoda, ‘Rengo and Policy Participation: Japanese-style Neocorporatism?’, in Sako and Sato (eds), Japanese Labour and Management in Transition, pp. 187–214. 14. Figures from the Ministry of Labour, various years. 15. By March 1991 Japanese corporations abroad employed a total of 1 514 000: 452 000 in North America; 211 000 in Europe; and 666 000 in Asia. Itoh, ‘Is the Japanese Economy in Crisis?’, p. 46. 16. According to an economist at the Shimizu construction company, following the first oil shock ‘Japanese contractors were literally forced to look outward by a sharp plunge in domestic orders, shrinking profits, a slump in home building, and a slash in government public work budgets’. Iwasaki, H., ‘Transnational Strategy’, in Hasegawa, F. and the Shimizu Group FS, Built by Japan (New York: Wiley, 1988), p. 82. 17. See M. Bernard, ‘Post-Fordism, Transnational Production, and the Changing Global Political Economy’, in Stubbs and Underhill (eds), Political Economy and the Changing Global Order, pp. 216–29, and ‘Regions in the Global Political Economy’; Ikeda, M., ‘Globalisation’s Impact upon the Subcontracting System’, in Hasegawa and Hook (eds), Japanese Business Management, pp. 109–27. 18. See Imano, ‘Internationalisation of the Labour Market’. The number of foreign workers legally entering Japan each year jumped from just over 80 000 in 1988 to more than 110 000 in 1991 and 100 000 in 1994 before falling back to 94 000 in 1997. Meanwhile, the number of illegal entries reached a high of 64 341 (45 144 male and 19 197 female) in 1993 before falling back to 59 352 (40 029 male and 19 323 female) in 1994 and 41 604 (25 781 male and 15 823 female) in 1997. The actual figures for illegal workers are probably far higher, but it is noticeable that the proportion of females working illegally in Japan has risen dramatically. These women are over-

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Notes 173

19.

20.

21. 22.

23. 24.

25.

26.

27.

28.

29.

whelmingly employed in the ‘service’ industry as sex workers – making the parallel with war-time ‘comfort women’ very difficult to ignore. Figures from the Ministry of Justice, various years. Trend figures from the Management and Coordination Agency, various years. 1998 figures from M. Nakamoto, ‘Japan’s Hidden Army of Unemployed Takes to the Streets’, The Financial Times, 8 May 1998, p. 6. The actual figure for Japanese unemployment is usually cast at around double the official figure, which would put it at a higher level than in the US during 1998 and 1999. For an analysis of the job prospects of university graduates see M. Rebick, ‘The Japanese Labour Market for University Graduates: Trends in the 1990s’, Japan Forum, 10 (1998) 17–30. The ratio of job offers to applicants was 0.46 in July 1999 and 0.47 in September of the same year. Economic Planning Agency, main economic indicators, at http://epa.go.jp/geturei/1999nov.9.gif. See B. Hutton, ‘Eliminate the General, Accentuate the Special’, The Financial Times, 11 May 1998, p. 15. The number of reported crimes topped 2 million in 1998: a rise of 7.1 per cent on the previous year, and the highest total ever. Figures from the National Police Agency. Nakamoto, ‘Japan’s Hidden Army’. In November 1995, The Economist, basing its remarks on a series of editorials by the conservative Daily Yomiuri, was prepared to say that ‘in most areas of life, people agree that Japan’s post-war formula no longer works’ (‘The Decline of Faith and Discipline’, 18–24 November 1995, p. 94). See C. Johnson ‘Tanaka Kakuei, Structural Corruption, and the Advent of Machine Politics in Japan’, in idem, Japan: Who Governs? (London and New York: W.W. Norton and Co., 1995), pp. 183–211. The generational side of this equation has not changed in the interim. Roughly a third of all MPs in the Diet are the children of MPs, as are nearly half of all LDP MPs. Tanaka Makiko, for example, the daughter of the disgraced Prime Minister, was elected to the Diet in 1993 as an independent, while Ishihara Nobuteru, the son of Ishihara Shintaro was elected as the youngest LDP candidate. As the leader of the largest LDP faction, Keizo Obuchi became Prime Minister in July 1998 following the resignation of Hashimoto. Like many others, Obuchi ‘inherited’ his seat in the Diet following his father’s demise. See M. Ishikawa, ‘New Heights, Louder Message: Abstensions in Japan’s National Elections, 1993–95’, in P. Jain and T. Inoguchi (eds), Japanese Politics Today (Melbourne: Macmillan Education Australia, 1997), pp. 30– 44. In 1993 voter turnout for elections to the House of Representative was 67.26 per cent, the lowest in post-war history. In 1995, voter turnout for elections to the House of Councillors was 44.52 per cent, again the lowest in post-war history. Figures from the Ministry of Home Affairs, various years. It should be noted, however, that the figures do fluctuate in accordance with periods of economic boom and recession, and have plummeted since the bursting of the ‘bubble’ economy and the current recession this brought about. On the ‘1955 system’ and the changes wrought to it before and after 1993, see J. A. A. Stockwin, ‘Reforming Japanese Politics: Highway of Change or

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174 Notes

30.

31.

32.

33.

34. 35.

36. 37. 38.

Road to Nowhere?’, in Jain and Inoguchi (eds), Japanese Politics Today, pp. 75–91. See also I. Kearns, ‘The Recruit Scandal and Corruption in Japanese Life’, Corruption and Reform, 5 (1990) 63–70. Ozawa is a reformer who, amongst other things, wants to see Japan pursuing a more active role on the world stage. See Ozawa I., Blueprint for a New Japan (Tokyo: Kodansha International, 1994). See K. Rafferty, ‘Japan’s PM Steps Down’, The Guardian, 9 April 1994, p. 15. On the significance of the 1993 election see, inter alia, P. Jain, ‘A New Political Era in Japan: the 1993 Election’, Asian Survey, 33 (1993) 1071–82; M. Tadokoro, ‘The End of Japan’s ‘Non-Decision’ Politics’, Asian Survey, 34 (1994) 1003–15; and Stockwin, ‘Reforming Japanese Politics’. For an alternative view see K. van Wolferen, ‘Japan’s Non-Revolution’, Foreign Affairs, 72, 4 (1993) 54–65. Note, however, Stockwin’s argument (in ‘Reforming Japanese Politics’) that Hosokawa and his successor, Murayama Tomiichi, did bring about and consolidate substantial changes in the electoral system, including the re-drawing of constituency boundaries and the move to a mixed voting system of firstpast-the-post and proportional representation. See also R. Christensen, ‘The New Japanese Election System’, Pacific Affairs, 69 (1996) 49–70. Indeed, in 1997 Prime Minister Hashimoto was forced to apologise publicly for appointing Sato Koko, a long-standing member of the Diet, to the cabinet. Sato had been disgraced during the 1976 Lockheed Scandal when he was convicted for taking ¥2 million from All Nippon Airways. See G. Robinson, ‘Hashimoto Apologises for Sato Appointment’, The Financial Times, 23 September 1997, p. 4. The rehabilitation of disgraced politicians is nothing new. Kishi exemplified this in the 1940s, while in 1993, the same year in which the LDP lost its overall majority in the Diet, disgraced former Prime Minister Takeshita was re-elected to his seat with over 100 000 votes. The current Minister of Finance, Miyazawa Kiichi, was forced to resign as Prime Minister in 1993 after losing a vote of no confidence called after his connection with the Sagawa Kyubin scandal. There is a useful chronology of events surrounding the HIV scandal at http://www.japantimes.co.jp/special/hivchrono.html. See J. Watts, ‘Japanese Bank Chief Under Pressure to Quit’, The Guardian, 12 March 1998; G. Tett, ‘Sakakibara Reprimanded for Accepting Lavish Entertainment’, The Financial Times, 28 April 1998, p. 24, ‘Bank Puts Brave New Face on the Future’, The Financial Times, 4 May 1998, p. 5, and ‘Japan to Scale Back Probes into Financial Institutions Corruption’, The Financial Times, 25 May 1998, p. 18. On Daiwa, see The Economist, 2–8 March 1996, p. 7; on Sumitomo, see The Financial Times, 12 May 1998, p. 7. See, for example, reports of the run on the assets of the Cosmo Credit Corporation in The Far Eastern Economic Review, 17 August 1995, pp. 56–61. For an introductory overview of the latter issue see Francks, ‘Agriculture and the State in Industrial East Asia’, 11–12 and references therein. On US pressure in particular see M. Itoh, ‘Kome Kaikoku and Japanese Internationalization’, Asian Survey, 34 (1994) 991–1001; and M. Milner, ‘Cracks Begin to Appear in the Edifice of Japan’s Closed Rice Production Market’, The Guardian, 27 October 1990, p. 13. On 21 September 1995, The Far Eastern

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Notes 175

39. 40. 41.

42.

43.

44. 45.

5

Economic Review (p. 15) reported that 63 per cent of all Japanese farmers were aged 60 years and over, 15 per cent were aged between 50 and 59 years, 10 per cent between 40 and 49 years, 6 per cent between 30 and 39 years, and 5 per cent between 16 and 29 years. See n. 28 in Chapter 3. For background and analysis see Hook, Militarization and Demilitarization, pp. 47–53. The Guidelines will be considered further in Chapter 7. On Nakasone see ibid., pp. 70–71 and references therein. On education and the textbook issue see C. Rose, Interpreting History in Sino-Japanese Relations (London: Routledge, 1998); and S. Ienaga, ‘The Glorification of War in Japanese Education’, International Security, 18, 3 (1993/94) 113–33. M. Nakamoto, ‘Tokyo Strives to Fulfil Pledge on Defence’, The Financial Times, 28 April 1998, p. 6; and ‘Japanese-US Defence Support Agreement Signed’, The Financial Times, 29 April 1998, p. 8. See, for example, the reaction of North Korea reprinted in The Guardian: Editor, 9 May 1998, p. 6, to the effect that ‘We [North Korea] cannot remain a passive onlooker to the moves of the Japanese reactionaries for aggression on the DPRK in league with the South Korean puppets. Our army is in full readiness to destroy at one stroke even an aircraft carrier, let alone mine sweepers’. See Hook, Militarization and Demilitarization, pp. 77–81. See C. Dawson, ‘Flying the Flag’, The Far Eastern Economic Review, 12 August 1999, pp. 18–19.

Mapping Japan’s Role in East Asia: Production

1. The quotation is from Strange, States and Markets, p. 64. 2. Strange, The Retreat of the State. 3. For a review of the literature, see D. Held et al., Global Transformations, pp. 2–14. 4. For details, see R. Manglapus, Japan in Southeast Asia (New York: Carnegie Endowment for International Peace, 1976). It should be noted that the riots, particularly in Indonesia, were in part a response to domestic issues also. 5. I make this point here and do not raise it again. It may be taken, however, to remain in force throughout the chapters that follow. Hegemony is the result of unconscious as well as conscious intent and effort. 6. See R. Taylor, Greater China and Japan (London: Routledge, 1996). 7. See Bernard, ‘Regions in the Global Political Economy’. 8. For details see R. Vernon, D. Spar and G. Tobin, Iron Triangles and Revolving Doors (New York: Praeger, 1991), pp. 113–28. 9. For details of both sets of events and others, see C. Prestowitz, Trading Places (New York: Basic Books, 1988). The citation is from p. 10. 10. For this kind of thinking see ibid., pp. 26–8 and references therein. In 1991 Japanese investors held $49.8 billion in US debt, whereas foreign companies held only $8.3 billion in Japanese debt in 1990. Drifte, Japan’s Foreign Policy in the 1990s, p. 97. 11. The current Japanese recession and the Asian crisis of 1997 look set to renew fears of trade conflict and protectionism since Japanese companies, aided by

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176 Notes

12.

13.

14.

15. 16.

17.

18.

19. 20. 21.

22.

23. 24.

the sliding value of the yen, are falling back on the traditional policy of exporting their way out of financial difficulties. As early as September 1997 Japan’s trade surplus had tripled in value compared to the year before, and by February 1998 the US trade deficit had reached $12 billion (the highest since 1992), with the deficit with Japan up by 21 per cent. See P. Abrahams, ‘Japanese Trade Surplus Triples’, The Financial Times, 5 September 1997, p. 3; and (on the US-Japan trade figures) The Financial Times, 9–10 May 1998, p. 10. The various works of Bill Emmott will almost certainly be reprinted. See for example Emmott, The Sun Also Sets (London: Simon and Schuster, 1989). In April 1998, the then Prime Minister, Hashimoto, pointed to his country’s huge net overseas assets and foreign exchange reserves as well as its lack of external debt in order to refute the suggestion that Japan was on the verge of collapse. See M. Essex, ‘Japanese PM Vows to Take Crisis Action’, The Financial Times, 5 April 1998, p. 1. See G. Baker, ‘Crisis in Asia Casts A Shadow Over G-8 Gathering’, The Financial Times, 16–17 May 1998, p. 3. See also M. Atkinson, ‘Clinton Puts Pressure on Japanese’, The Guardian, 4 April 1998, p. 12; and M. Wolf, ‘Before they All Fall Down’, The Financial Times, 25 November 1997, p. 23. Unless otherwise indicated, figures for this section are from V. Argy and L. Stein, The Japanese Economy (London: Macmillan, 1997), pp. 204–23. See I. M. Destler and H. Sato, Coping with US-Japanese Economic Conflicts (Lexington, MA.: Lexington Books, 1982); L. Tyson, Who’s Bashing Whom? (Washington, DC.: Institute for International Economics, 1992); and S. D. Cohen, An Ocean Apart: Explaining Three Decades of U.S.-Japanese Trade Frictions (Westport Conn., and London: Praeger, 1998). Such practices include cross-holding of shares within Keiretsu, the structure of Japan’s distribution system, product standards, testing and certification procedures, customs practices, inadequate protection of intellectual property rights, government procurement practices, official administrative guidance, collusive practices, and ‘cultural’ barriers. The clause owes its ‘super’ prefix to the fact that it superseded clause 301 of the US Trade Act of 1974, which only allowed the US Trade Representative to name individual products as unfairly traded. See J. Bhagwati, ‘Samurais No More’, Foreign Affairs, 73, 3 (1994) 7–12. Cited in The Financial Times, 7 July 1993, p. 18. N. Dunne, G. de Jonquieres and M. Nakamoto, ‘WTO’s Film Ruling Angers Washington’, The Financial Times, 8 December 1997, p. 3. Some months earlier, the US had imposed sanctions on three Japanese shipping companies as a result of a prolonged dispute over Japanese harbour practices. This was the first time Washington had resorted to this tactic since 1987. See D. Rapkin and J. Strand, ‘The US and Japan in the Bretton Woods Institutions: Sharing or Contesting Leadership?’, International Journal, 52 (1997) 265–96. This and what follows in the current paragraph from Drifte, Japan’s Foreign Policy in the 1990s, pp. 88–93. For background see V. Cable, ‘The New Trade Agenda: Universal Rules Amid Cultural Diversity’, Foreign Affairs, 72, 2 (1996) 227–47; B. Hoekman and

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Notes 177

25. 26.

27. 28. 29. 30.

31.

32.

33.

34. 35.

36. 37. 38.

39. 40. 41.

P. Mavroidis, ‘Dumping, Antidumping and Antitrust’, Journal of World Trade, 30, 1 (1996) 27–52; and M. Trebilcock, ‘Competition Policy and Trade Policy – Mediating the Interface’, Journal of World Trade, 30, 4 (1996) 71–106. Rapkin and Strand, ‘The US and Japan in the Bretton Woods Institutions’, 293. In July 1997 the Malaysian Prime Minister, Mahathir Mohamad, publicly attacked the financier George Soros for (allegedly) speculating against the Malaysian Ringgit after ASEAN decided to extend membership in the organisation to Burma. See N. Cumming-Bruce, ‘ “Sabotage” Blamed for Asean Money Troubles’, The Guardian, 29 July 1997, p. 9. On Filipino statements see Drifte, Japan’s Foreign Policy in the 1990s, p. 122. Key issues include veto power in such organisations, but recall also the discussion of Japan’s interventions in the GATT/WTO outlined above. R. Drifte, Japan’s Quest for a Permanent UN Security Council Seat (London and Tokyo: Macmillan and Iwanami Shoten, 1999). We consider the issue of comprehensive security in Chapter 7. See L. Silber, ‘UN Reformer Looks for New Friends in World of Business’, The Financial Times, 17 March 1998, p. 7; and K. Annan, ‘Markets for a Better World’, Speech delivered to the World Economic Forum, Davos, Switzerland, 31 January 1998 (UN Press Release SG/SM/6448). Two years earlier it had become a member of the informal but influential Trilateral Commission linking European, US and Japanese interests, public and private. See Gill, American Hegemony and the Trilateral Commission. Staffing figures (which refer to the category ‘professional level and above’) from Drifte, Japan’s Foreign Policy in the 1990s, pp. 129–30. By 1994, 91 of the posts had been filled. Contribution figures from Rapkin and Strand, ‘The US and Japan in the Bretton Woods Institutions’. For a recent, and tragic, confirmation of the continuing strength of this trend see J. Watts, ‘Girl, 2, Strangled by Exam Rival’s Mother’, The Guardian, 27 November 1999, p. 2. Drifte, Japan’s Foreign Policy in the 1990s, p. 130. In 1980 just under 27 500 Japanese children were being educated abroad. In 1994 the number was 49 397, 39.8 per cent of whom were living in North America, 25.5 per cent in Asia and 25.1 per cent in Europe. Figures from the Ministry of Education, various years. The policy of ‘internationalisation’ is considered in Chapter 8. Rapkin and Strand, ‘The US and Japan in the Bretton Woods Institutions’, 276–87. Ibid., 282 (n. 38). Unless otherwise indicated, all other figures in this section are from this source. It should be noted that Japan’s share has actually fallen in the interim, and stood at 6.24 per cent in 1995, while the US share stood at 16.98 per cent in the same year. The full reference is World Bank, The East Asian Miracle (Oxford: Oxford University Press for the World Bank, 1993). This issue is covered in Chapter 8. Rapkin and Strand, ‘The US and Japan in the Bretton Woods Institutions’, 283. The ADB is considered in Chapter 6, but note that the struggle for control

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178 Notes

42.

43.

44.

45.

46. 47.

48.

49. 50. 51.

52.

53.

54.

over policy has followed a similar pattern to that identified in the IBRD and IMF, the difference being that in this instance Japan holds, by the smallest of margins, the largest share of votes. For an excellent short survey see D. Arase, ‘Japan in East Asia’, in Langdon and Akaha (eds), Japan in the Posthegemonic World, pp. 113–36. See also M. Mochizuki, ‘Japan as an Asia-Pacific Power’, in R. Ross (ed.), East Asia in Transition (Armonk, N.Y.: M. E. Sharpe, 1995), pp. 124–59. That Japanese domination of the economic fortunes of much of the East Asian region was facilitated by the US in line with its global strategy of antiCommunism and guaranteed by US hegemony is not at issue. The long-term consequences of this strategy, however, went unforeseen. Nobody in Washington seriously believed Japan would become anything other than a second-rank power dependent on the largesse of the United States. Y. Funabashi, ‘The Asianization of Asia’, Foreign Affairs, 72, 5 (1993) 75–85; M. Kishore, ‘The Pacific Way’, Foreign Affairs, 74, 1 (1995) 100–11; A. Acharya, ‘Ideas, Identity and Institution-building: from the “ASEAN Way” to the “Asia-Pacific Way” ’, The Pacific Review, 10 (1997) 319–46. A. Yoshikawa with P. Kenevan, ‘Globalization and Restructuring of the Japanese Economy’, in H. Kendall and C. Joewono (eds), Japan, ASEAN and the United States (Berkeley: University of California Press, Institute of East Asian Studies, 1991), p. 36. R. Cronin, Japan, the United States, and Prospects for the Asia-Pacific Century (New York: St. Martin’s Press, 1992), p. 13. Between 1952 and 1956 special US military procurements from Japan totalled $3.4 billion, 25 per cent of US commodity imports at that time. G. C. Allen, Japan’s Economic Policy (London: Macmillan, 1980), p. 130. See Halliday and McCormack, Japanese Imperialism Today, pp. 21–4; and C. Yanaga, Big Business in Japanese Politics (New Haven and London: Yale University Press, 1968), pp. 202–28. Halliday and McCormack, Japanese Imperialism Today, pp. 21–2. Beasley, The Rise of Modern Japan, p. 245. For an overview see Ministry of Foreign Affairs, Japan’s Official Development Assistance: Annual Report 1994 (Tokyo: Ministry of Foreign Affairs, Association for the Promotion of International Co-operation, 1995), Chapter 1. 1994 was the 40th anniversary of the inauguration of Japanese ODA. See D. Yasutomo, The New Multilateralism in Japan’s Foreign Policy (New York: St. Martin’s Press, 1995). Besides that of mercantilism, his discussion identifies the following criticisms of Japan’s aid programme: corruption, negative quality of life outcomes, effectiveness, type (that is, infrastructural projects as opposed to projects relating to basic human needs), politicisation, and the bureaucratic structure of the policymaking process. Halliday and McCormack, Japanese Imperialism Today, pp. 25–31, (citation on p. 21); E. Lincoln, Japan’s New Global Role (Washington DC: The Brookings Institution, 1993), pp. 111–33. A selection of the major books on this subject are: D. Yasutomo, The Manner of Giving (Lexington, MA.: Lexington Books, 1986); R. Orr, The Emergence of Japan’s Foreign Aid Power (New York: Columbia University Press, 1990); S. Islam (ed.), Yen for Development (New York: Council on Foreign Relations Press, 1991); M. Ensign, Doing Good or Doing Well (New York: Columbia

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Notes 179

55. 56. 57. 58. 59.

60.

61. 62.

63. 64. 65. 66.

67.

68. 69. 70. 71.

University Press, 1992); B. Koppel and R. Orr Jr., Japan’s Foreign Aid (Boulder, CO: Westview Press, 1993); and A. Rix, Japan’s Foreign Aid Challenge (London: Routledge, 1993). For recent changes see Yasutomo, The New Multilateralism. For a critique of the ‘free rider’ argument in relation to Japanese ODA see S. Islam, ‘Foreign Aid and Burdensharing: Is Japan Free Riding to a Coprosperity Sphere in Pacific Asia?’, in Frankel and Kahler (eds), Regionalism and Rivalry, pp. 321–89. See Ministry of Foreign Affairs, Japan’s Official Development Assistance: Annual Report 1994, pp. 4–5. See Islam, ‘Foreign Aid and Burdensharing’; and D. Yasumoto, ‘Why Aid? Japan as an “Aid Great Power” ’, Pacific Affairs, 62 (1989–1990) 490–503. Ministry of Foreign Affairs, Japan’s Official Development Assistance: Annual Report 1994, p. 5. Yasumoto, ‘Why Aid?’, 490. Development Assistance Committee Geographical Distribution of Financial Flows to Developing Countries, (Paris: Organisation for Economic Co-operation and Development), various years. Development Assistance Committee, Geographical Distribution of Financial Flows to Developing Countries (Paris: Organisation for Economic Co-operation and Development, 1999). Neither the US nor Japan has followed the Committee’s recommendation that its members contribute 0.7 per cent of GNP. Figures from Ministry of Foreign Affairs, Japan’s Official Development Assistance: Annual Report 1998, p. 104 (Chart 34). Figures from the Ministry of International Trade and Industry (various years), and from Ministry of Foreign Affairs, Japan’s Official Development Assistance: Annual Report 1998, p. 103 (Chart 33). Opinion poll figures from Drifte, Japan’s Foreign Policy in the 1990s, p. 112. See Sudo, The Fukuda Doctrine and ASEAN. See Hook, Militarization and Demilitarization in Contemporary Japan, and other references given below in Chapter 7. Cronin, Japan, the United States, and Prospects for the Asia-Pacific Century, p. 18. See also Ministry of Foreign Affairs, Japan’s Official Development Assistance: Annual Report 1994, pp. 157–61. For an overview see R. Doner, ‘Japanese Foreign Direct Investment and the Creation of a Pacific Asian Region’, in Frankel and Kahler (eds), Regionalism and Rivalry, pp. 159–216. Cronin, Japan, the United States, and Prospects for the Asia-Pacific Century, pp. 10–16. Figures from the Ministry of Finance, various years. For an overview see H.-C. de Bettignies (ed.), Trade and Investment in the AsiaPacific Region (London: International Thomson Business Press, 1997). B. Bridges, Japan and Korea in the 1990s (Aldershot, Hants.: Edward Elgar, 1993); J. Lind, ‘Gambling with Globalism: Japanese Financial Flows to North Korea and the Sanctions Policy Option’, The Pacific Review, 10 (1997) 391–406; B. Cumings, ‘The Origins and Development of the Northeast Asian Political Economy: Industrial Sectors, Product Cycles, and Political Consequences’, in F. C. Deyo (ed.), The Political Economy of the New Asian Industrialism (New York: Cornell University Press, 1987), pp. 44–83; M. Bernard and J. Ravenhill, ‘Beyond Product Cycles and Flying Geese: Regionalization,

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180 Notes

72.

73. 74. 75.

76.

77.

78.

79.

80.

81. 82.

Hierarchy, and the Industrialization of East Asia’, World Politics, 47 (1995) 171–209; and Bernard, ‘Regions in the Global Political Economy’. Both South Korea and Taiwan are, of course, competing with Japan in the global and regional marketplace, and have both forged their own ‘hub and spoke’ relationships with various Southeast Asian countries. See K. Calder, ‘Japan and the NIEs: The Political Economy of Rising Interdependence’, in Kendall and Joewono (eds), Japan, ASEAN and the United States, pp. 222–43. L. Newby, Sino-Japanese Relations (London: Routledge, 1988); Taylor, Greater China and Japan. Aid figures from Ministry of Foreign Affairs, Japan’s Official Development Assistance: Annual Report 1994, p. 111 (Chart 33). 1993 loan figure ibid. Other figures from Drifte, Japan’s Foreign Policy in the 1990s, p. 112. For an optimistic view see H. Sender, ‘Let Me Introduce You: The Shosha are Making it Easier to Set Up in China’, The Far Eastern Economic Review, 1 February 1996, p. 51. F.-W. Tzeng, ‘The Political Economy of China’s Coastal Development Strategy: A Preliminary Analysis’, Asian Survey, 31 (1991) 270–83; G. Rozman, ‘A Regional Approach to Northeast Asia’, Orbis: A Journal of World Affairs, 39 (1995) 65–80; A. Marton, T. McGee and D. Paterson, ‘Northeast Asian Economic Cooperation and the Tumen River Area Development Project’, Pacific Affairs, 68 (1995) 8–33; and K. Postel-Vinay, ‘Local Actors and International Regionalism: The Case of the Sea of Japan Zone’, The Pacific Review, 9 (1996) 489–503. On the MITI study see Taylor, Greater China and Japan. For other evidence see G. Lewis and S. Wanning, ‘Discourses about “Learning from Japan” in Post-1979 Mainland Chinese Management Journals’, Issues and Studies, 30, 5 (1994) 63–76; and R. Taylor, ‘Japanese Investment Strategy and Management Training in China: Lessons for British Investors’, Asian Affairs, 24 (1993) 315–26. W. Hatch and K. Yamamura, Asia in Japan’s Embrace (Cambridge: Cambridge University Press, 1996), p. 24. Although the literature is vast, we base the brief discussion that follows on this admirable text. For other views see J. Fallows, Looking at the Sun (New York: Vintage Books, 1995); and P. Katzenstein and T. Shiraishi (eds), Network Power (Ithaca: Cornell University Press, 1997). The image of a succession of ‘models’ should not be taken to suggest that there is some sort of fixed relationship or inevitability of progression from one to another. Clearly, each model is representative of an ideal type and each may exist alongside the others. Hatch and Yamamura, Asia in Japan’s Embrace, p. xi. This is very close to the argument in this book concerning the objectives and role of the extant Japanese hegemonic class. Where Hatch and Yamamura fall down is in their failure to consider adequately Japan’s domestic social situation and its geostrategic relationships, and especially that with the United States. For a discussion of the concept of an ‘Asian Brain’, which originated in a report commissioned by Japan’s Economic Planning Agency and envisioned the region-wide coordination of aid, investment and trade policies by an organisation (the ‘Brain’) located in Japan, see ibid., pp. 119–20. Ibid., pp. 138–41. There is a growing literature on what we might call ‘microregions’, but which

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Notes 181 others refer to as ‘growth triangles’. See inter alia L. Tsao Yuan (ed.), Growth Triangle (Singapore: ISEAS, 1991); S. Kumar and L. Tsao Yuan, ‘Growth Triangles, Belts and Circles’, Trends, (Singapore: ISEAS, April 28th, 1991); Mark Turner, ‘Subregional Economic Zones, Politics and Development: The Philippine Involvement in the East ASEAN Growth Area (EAGA)’, The Pacific Review, 8 (1995) 637–48; and I. Yamazawa, ‘Economic Integration in the AsiaPacific Region’, in G. Thompson (ed.), Economic Dynamism in the Asia-Pacific (London and New York: Routledge, 1998), pp. 163–84. 83. On the Toyota Motor network see Hatch and Yamamura, Asia in Japan’s Embrace, pp. 26–7.

6

Mapping Japan’s Role in East Asia: Finance

1. For a good introductory overview, see G. Thompson, ‘Financial Systems and Monetary Integration’, in Thompson (ed.), Economic Dynamism in the Asia-Pacific, pp. 83–111. The classic text is, perhaps, J. Zysman, Governments, Markets, and Growth (Ithaca, NY: Cornell University Press, 1983). 2. For a good recent review of the literature, see M. Wright, ‘Who Governs Japan? Politicians and Bureaucrats in the Policy-making Processes’, Political Studies, 47 (1999) 939–54. 3. See R.W. Goldsmith, The Financial Development of Japan, 1868–1977 (New Haven: Yale University Press, 1983). 4. See K. Calder, Strategic Capitalism (Princeton, NJ: Princeton University Press, 1993). 5. M. Itoh, The World Economic Crisis and Japanese Capitalism (London: Macmillan, 1990). 6. R. Stevens, Japan’s New Imperialism (London: Macmillan, 1990); Bernard, ‘Regions in the Global Political Economy’, and ‘Post-Fordism, Transnational Production, and the Changing Global Political Economy’. 7. See, for example, R. Stevens, ‘Japanese Investment in Thailand, Indonesia and Malaysia: A Decade of JASEAN’, in Moore, (ed.), The Other Japan, pp. 199–245. 8. See Islam, ‘Foreign Aid and Burden Sharing’. 9. Lincoln, Japan’s New Global Role; P. Meeks, ‘Japan and Global Economic Hegemony’, in Langdon and Akaha (eds), Japan in the Posthegemonic World, pp. 41–67. 10. See inter alia, A. Leyshon, ‘Under Pressure: Finance, Geo-economic Competition and the Rise and Fall of Japan’s Postwar Growth Economy’, in S. Corbridge, R. Martin and N. Thrift (eds), Money, Power and Space (Oxford: Basil Blackwell, 1994), pp. 116–45. 11. See Yamazawa, I., ‘Gearing Economic Policy to International Harmony’, in Hook and Weiner (eds), The Internationalization of Japan, pp. 119–130. 12. See, inter alia, J. R. Brown Jr., Opening Japan’s Financial Markets (London: Routledge, 1994); M. J. B. Hall, Financial Reform in Japan (Cheltenham and Northampton, MA: Edward Elgar, 1998); and K. Sato (ed.), The Transformation of the Japanese Economy (Armonk, NY and London: M. E. Sharpe, 1999), Part V. 13. Shinkai, Y., ‘The Internationalization of Finance in Japan’, in Inoguchi and

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182 Notes

14.

15. 16.

17. 18.

19. 20.

21. 22. 23. 24. 25. 26. 27.

28.

29. 30. 31.

Okimoto (eds), The Political Economy of Japan Volume Two, pp. 249–71; D. Encarnation and M. Mason, ‘Neither MITI nor America: The Political Economy of Capital Liberalization in Japan’, International Organization, 44 (1990) 25–54; M. Moran, The Politics of the Financial Services Revolution (London: Macmillan, 1991). E. Helleiner, ‘Money and Influence: Japanese Power in the International Monetary and Financial System’, Millennium: Journal of International Studies, 18 (1989) 343–58; Sakamoto, K., and R. C. Conquest, ‘The Internationalization of Japanese Capital’, in Hook and Weiner (eds), The Internationalization of Japan, pp. 131–48. See A. Blinder, ‘Eight Steps to a New Financial Order’, Foreign Affairs, 78, 5 (1999) 50–63. On the structural power of capital see S. Gill and D. Law, ‘Global Hegemony and the Structural Power of Capital’, International Studies Quarterly, 33 (1989) 475–99; and S. Gill, ‘The Emerging Hegemony of Transnational Capital: Trilateralism and Global Order’, in Rapkin (ed.), World Leadership and Hegemony, pp. 119–46. See also R. Martin, ‘Stateless Monies, Global Financial Integration and National Economic Autonomy: The End of Geography?’, in Corbridge, Martin and Thrift (eds), Money, Power and Space, pp. 253–77. Strange, States and Markets, p. 90. Ibid. See also J. Frieden, ‘Domestic Politics and Regional Cooperation: The United States, Japan, and Pacific Money and Finance’, in Frankel and Kahler (eds), Regionalism and Rivalry, pp. 423–44. See B. Emmott, ‘The Economic Sources of Japan’s Foreign Policy’, Survival, 34, 2 (1992) 50–70. E. Helleiner, States and the Reemergence of Global Finance (Ithaca, NY: Cornell University Press, 1994); and ‘States and the Future of Global Finance’, Review of International Studies, 18 (1992) 31–49. E. Helleiner, ‘Japan and the Changing Financial Order’, International Journal, 47 (1992) 420–44. See C. Kindleberger, Manias, Panics and Crashes, third edn (London: Macmillan, 1996). Gilpin, The Political Economy of International Relations, pp. 328–39. S. Strange, ‘Finance, Information and Power’, Review of International Studies, 16 (1990) 259–74. For a good review, see B. J. Cohen, ‘Phoenix Risen: The Resurrection of Global Finance’, World Politics, 48 (1996) 268–96. Helleiner, States and the Reemergence of Global Finance. For overviews see Robert Feldman, Japanese Financial Markets (Cambridge, Mass: MIT Press, 1986); and F. McCall Rosenbluth, Financial Politics in Contemporary Japan (Ithaca: Cornell University Press, 1989). See H. Patrick, ‘Japan, 1868–1914’, in R. Cameron, Banking in the Early Stages of Industrialization (Oxford: Oxford University Press, 1967), pp. 239–89; and references at n. 3, 12, and 27. Leyshon, ‘Under Pressure’, is particularly clear on this. See inter alia, R. Dore, Taking Japan Seriously (London: The Athlone Press, 1987); and Beeson, Competing Capitalisms. For background to the Plaza Accords, see Y. Funabashi, Managing the Dollar (Washington DC: International Institute for Economics, 1988).

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Notes 183 32. S. Lyon, ‘From Strength to Awesome Strength’, The Banker, January 1988, pp. 56–61. For a more detailed analysis, see Shigeo Nakao, The Political Economy of Japan Money (Tokyo: University of Tokyo Press, 1995). 33. See Nakao, The Political Economy of Japan Money. 34. Details in Helleiner, ‘States and the Future of Global Finance’, 41. Again, the recent economic crisis has cast a shadow over this success. See G. Tett, ‘London Replaces Tokyo as Fund Management Capital’, The Financial Times, 19 May 1998, p. 37. 35. See A. Brummer, and M. Tran, ‘Japan Puts Boot into Wall St.’, The Guardian, 24 June 1997, p. 18. Details of the background to the 1987 stock market crash and Japan’s role in them in Helleiner, ‘Money and Influence’, 347. 36. Discussed below. 37. See, for example, J. Frankel, ‘Is Japan Creating a yen Bloc in East Asia and the Pacific?’, in Frankel and Kahler (eds), Regionalism and Rivalry, pp. 53–85; and Emmott, The Sun Also Sets, pp. 177–93. 38. On the potential challenge to the dollar signalled by European monetary union see V. Barnett, ‘Watch Out, Dollar’, The Financial Times, 23 April 1998, p. 25; G. Baker, ‘The Emu has Landed’, The Financial Times, 5 May 1998, p. 27; and a special survey on the birth of the Euro in The Financial Times, 30 April 1998. See also, C. F. Bergsten, ‘The Dollar and the Euro’, Foreign Affairs, 76, 4 (1997) 83–95, and ‘America and Europe: Clash of the Titans?’, Foreign Affairs, 78, 2 (1999) 20–34. 39. Helleiner, ‘Money and Influence’, 353. 40. G. Tett, ‘Yen Comes Out Fighting’, The Financial Times, 5 October 1997, p. 13. 41. 1987 figure from Helleiner, ‘Money and Influence’, 353; later figures from Tett, ‘Yen Comes Out Fighting’. 42. 1988 figure from Helleiner, ‘Money and Influence’, 353; later figures from Tett, ‘Yen Comes Out Fighting’. For an update see Thompson, ‘Financial Systems and Monetary Integration’. 43. See P. Bowles and B. Maclean, ‘Understanding Trade Bloc Formation: The Case of the ASEAN Free Trade Area’, Review of International Political Economy, 3 (1996) 319–48. 44. See P. Abrahams, ‘Weakening yen Threatens to Take Neighbours Down with It’, The Financial Times, 28 May 1998, p. 6; and P. Coggan, ‘Living with a Weak yen’, The Financial Times, 1 June 1998, p. 21. 45. Drifte, Japan’s Foreign Policy in the 1990s, p. 140. 46. Ibid., and references therein. 47. For an overview see Thompson, ‘Financial Systems and Monetary Integration’. For later developments see below. 48. See Emmott, ‘The Economic Sources of Japan’s Foreign Policy’, pp. 57–9. 49. See R. T. Murphy, ‘Power without Purpose: The Crisis of Japan’s Global Financial Dominance’, Harvard Business Review, March–April 1989, pp. 71–83; and Helleiner ‘Money and Influence’. 50. G. Tett and B. Hutton, ‘Japan Banks Edge Up Rates to Companies’, The Financial Times, 29 May 1998, p. 6; and G. Tett and P. Abrahams, ‘Japan Enters First Recession since 1974’, The Financial Times, 13–14 June 1998, p. 3. 51. A. Brummer, ‘Indonesia Takes Japan to Abyss’, The Guardian, 16 May 1998, p. 28. See also J. Ridding and S. Thoenes, ‘Jakarta Riots Leave the Economy

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184 Notes

52. 53.

54.

55.

56.

57.

58. 59. 60. 61. 62.

63.

Paralysed’, and G. Baker, ‘Indonesia Exposes Political Dimension to Asian Crisis’, both in The Financial Times, 18 May 1998, pp. 3 and 5 respectively. See Hall, Financial Reform in Japan. For details of the Cosmo Credit Corporation collapse, see H. Sender ‘Waiting to Happen’, The Far Eastern Economic Review, 17 August 1995, pp. 56–8. See also J. Lee, ‘The ‘Crisis’ of Non-performing Loans: A Crisis for the Japanese Financial System?’, The Pacific Review, 10 (1997) 57–83. On the Hokkaido Takushoku failure, see B. Hutton, ‘Japan Lets Bank go to Wall, Gently’, The Financial Times, 18 November 1997, p. 8; and P. Abrahams, ‘Back from the Brink’, The Financial Times, 18 November 1997, p. 23. See G. Tett, ‘Tokyo Acts Over Yamaichi’, The Financial Times, 24 November 1997, p. 1, and (on p. 23, same date) ‘Japan’s Bombshell Explodes’. See also L. Elliott and M. Atkinson, ‘Asian Meltdown’, The Guardian, 25 November 1997, p. 15; J. Watts and M. Atkinson, ‘Inquiry into Yamaichi Illegal Deals’, The Guardian, 25 November 1997, p. 21; and G. Tett, ‘Global Plan to Firm Markets as Yamaichi Shuts’, The Financial Times, 25 November 1997, p. 1. See inter alia G. Baker, ‘US Urges Bigger Role on Japan’, The Financial Times, 26 November 1997, p. 8 and; ‘Crisis in Asia Casts A Shadow Over G8 Gathering’, The Financial Times, 16–17 May 1998, p. 3; M. Atkinson, ‘Clinton puts Pressure on Japanese’, The Guardian, 4 April 1998, p. 12; and M. Essex, ‘Japanese PM Vows to Take Crisis Action’, The Financial Times, 5 April 1998, p. 1. See G. Tett, ‘Hopes of Public Bank Aid Electrify Tokyo Markets’, The Financial Times, 19 November 1997, p. 6; and ‘Japan Scrambles to back Public Money Solution’, The Financial Times, 25 November 1997, p. 10; P. Abrahams, ‘Hashimoto backs Aid Plan for Banks’, The Financial Times, 21 November 1997, p. 6. P. Abrahams, ‘A Conductor calls Time’, The Financial Times, 4–5 April 1998, p. 9; A. Mackay and S. Kawakami, ‘Japan faces Meltdown’, The Financial Times, 5 April 1998, p. 12. M. Atkinson and I. Black, ‘Japan Economy near Collapse’, The Guardian, 3 April 1998, p. 1. L. Lucas, ‘Nine Japan Finance Houses close in HK’, The Financial Times, 17 April 1998, p. 6. G. Tett, ‘Bad Loans Hit 10 of Japan’s Largest Banks’, The Financial Times, 26 May 1998, p. 28. M. Nakamoto and G. Tett, ‘Tokyo Tax Plan to Cure Bad Loans’, The Financial Times, 29 May 1998, p. 6. On corruption at the BOJ, see Chapter 4. On Sumitomo see N. Tait, R. Wolffe and K. Gooding, ‘Sumitomo to pay $133m in Claims’, The Financial Times, 12 May 1998, p. 7. On the launch of the euro, see n. 38 above. On support of the yen, see G. Tett, ‘Japan spends $17bn to help Support yen’, The Financial Times, 2–3 May 1998, p. 3. On the Travelers-Nikko tie-up, see T. Corrigan, ‘Travelers’ Deal Maker Shakes Financial World’; G. Tett and T. Corrigan, ‘Tokyo Backs Nikko Alliance’; and G. Tett, ‘Braced for Invasion’, all in The Financial Times, 2 June 1998, p. 24, p. 19 and p. 16 respectively; on the joint US–Japan intervention, see S. Fidler, ‘US and Japan act to boost yen’, The Financial Times, 18 June 1998, p. 1. The key points of the deal included: the effective nationalisation of failed

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Notes 185

64. 65.

66.

67. 68.

69. 70. 71. 72. 73.

74. 75.

financial institutions by purchasing shares to provide capital needed to write off bad loans; the nationalisation of the Long Term Credit Bank (LTCB); shared authority over the regulation of financial industry crises between MOF and a newly created independent committee; and the creation of a Japanese version of the Resolution Trust Corporation set up in the US following the saving and loan scandal of the 1980s. For early reflections on the effectiveness of these measures see P. Abrahams, ‘Gripped by Policy Paralysis’, The Financial Times, 28 September 1998, p. 25. See also ‘Reviving Japan’, The Economist, 26 September-2 October 1998, pp. 25–7. P. Abrahams, ‘Japan Leasing on the verge of collapse with debts of £8.5bn’, The Financial Times, 28 September 1998, p. 26. See P. Cerny, ‘Gridlock and Decline: Financial Internationalization, Banking Politics and the American Political Process’, in Stubbs and Underhill (eds), Political Economy and the Changing Global Order, pp. 425–38; and F. Moseley, ‘The United States Economy at the Turn of the Century: Entering a New Era of Prosperity?’, Capital and Class, 67 (1999) 25–45. G. Ingham, ‘States and Markets in the Production of World Money: Sterling and the Dollar’, and Strange, ‘From Bretton Woods to the Casino Economy’, both in Corbridge, Martin and Thrift (eds), Money, Power and Space, pp. 29–48 and 49–62 respectively; Helleiner, ‘From Bretton Woods to Global Finance: A World Turned Upside Down’, in Stubbs and Underhill (eds), Political Economy and the Changing Global Order, pp. 163–75. See also Leyshon, ‘Under Pressure’, pp. 128–34. Strange, ‘The Persistent Myth of Lost Hegemony’. Even the more sober US policy journals have been quick to twist the knife. See, among many others, M. Hirsh and E. K. Henry, ‘The Unravelling of Japan Inc.: Multinationals as Agents of Change’, Foreign Affairs, 76, 2 (1997) 11–16; M. Ezrati, ‘Japan’s Aging Economics’, Foreign Affairs, 76, 3 (1997) 96–106; and M. Porter and H. Takeuchi, ‘Fixing what Really Ails Japan’, Foreign Affairs, 78, 3 (1999) 66–81. See below, and, inter alia, François Godement, The Downsizing of Asia (London: Routledge, 1999). Japanese Ministry of Finance, various years. Y. Naito, ‘Another Century: Strategies turn to Partnerships with Asia’, The Japan Times (electronic version), 4 January 2000. See Helleiner, ‘Japan and the Changing Financial Order’. Competing and complementary explanations for the crisis abound. See inter alia, Godement, The Downsizing of Asia; R. Wade and F. Veneroso, ‘The East Asian Crash and the Wall Street-IMF Complex’, New Left Review, 228 (1998) 3–23; J. Garten, ‘Lessons for the Next Financial Crisis’, Foreign Affairs, 78, 2 (1999) 76–92; D. Lo, ‘The East Asian Phenomenon: The Consensus, the Dissent, and the Significance of the Present Crisis’, Capital and Class, 67 (1999) 1–24; L. Weiss, ‘State Power and the Asian Crisis’, New Political Economy, 4 (1999) 317–42. See also Chapter 8 below. For more detailed analyses, see C. Hughes, ‘Japanese Policy and the East Asian Currency Crisis: Abject Defeat or Quiet Victory?’, Review of International Political Economy, 7 (2000) 219–53; and C. B. Johnstone, ‘Strained Alliance: US-Japan Diplomacy in the Asian Financial Crisis’, Survival, 41 (1999)

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186 Notes

76.

77. 78.

79. 80.

81.

82.

83.

84.

85.

86.

87. 88.

121–37. See also Ministry of Finance, Japan’s Official Development Assistance: Annual Report 1998, pp. 11–17. See MOFA, ‘Statement by Foreign Minister Keizo Obuchi on Japan and East Asia: Outlook for the New Millennium’ (4 May 1998) and ‘Asian Economic Crisis and Japan’s Contribution’ (November 1999), both available at the MOFA web site at http://www.mofa.go.jp. Interview with Obuchi Keizo conducted on 18 November 1999, in The Far Eastern Economic Review, 2 December 1999, p. 12. Ibid. To put all these figures together, the Japanese government has, since 1991, spent $227bn on public works projects; ¥60 trillion on bank bailouts; and ¥30 trillion on loan guarantees for small- and medium-size enterprises. Although it was not all new money, the ¥18 trillion stimulus package announced in November 1999 was in addition to these sums. Ibid. For further details see the MOFA documents cited at n. 76 above. The $3bn of Japanese money was made up to a total of $5bn by the ADB and the IBRD and this figure was matched by the US, making for a grand total of $10bn. The ASEAN+3 formula includes meetings between ASEAN and Japan, China and South Korea, generally in the days leading up to the annual ASEAN Summit. See MOFA, ‘Asian Economic Crisis and Japan’s Contribution’, and ‘Signing of Agreement concerning Japan’s Contribution for the ASEAN Foundation (Solidarity Fund)’, 28 January 1999. See M. Nakamoto, ‘Japanese PM in Call to Boost Profile of yen’, The Financial Times, 4 January 1999, p. 2; and S. Iskandar, ‘Japan’s PM Calls for Currency Co-operation’, The Financial Times, 8 January, 1999, p. 2. On the debate over the desirability of the emergence of regional currencies or even a global currency, see, for example, Z. M. Beddoes, ‘From EMU to AMU? The Case for Regional Currencies’, Foreign Affairs, 78, 4 (1999) 8–13; R. Hausmann, ‘Should there be Five Currencies or One Hundred and Five?’, Foreign Policy, 116 (1999) 65–79; and J. Sachs and F. Larrain, ‘Why Dollarization is more Straitjacket than Salvation’, Foreign Policy, 116 (1999) 80–92. Wade and Veneroso, ‘The East Asian Crash and the Wall Street–IMF Complex’, 17–18. On Korea and the IMF, see G. Baker, ‘Riding to the Rescue’, The Financial Times, 5 December 1997, p. 17; and J. Burton, ‘Painful Prospect’, The Financial Times, 8 December 1997, p. 18. On Thailand and the IMF, see N. Cumming-Bruce, ‘IMF and Asia Agree $16bn Thai Aid Deal’, The Guardian, 12 August 1997, p. 16. On Indonesia, see P. Montagnon and S. Thoenes, ‘IMF to Recommend Indonesia Aid Resumes’, The Financial Times, 1 May 1998, p. 4. For critical commentary, see ‘The Bitter IMF Legacy’, The Guardian, 7 May 1998, p. 21. D. Yasutomo, Japan and the Asian Development Bank (New York: Praeger, 1983); M. Wan, ‘Japan and the Asian Development Bank’, Pacific Affairs, 68 (1995–96) 509–28. See P. Montagnon, ‘ADB Faces Shortfall in Development Fund’, The Financial Times, 2–3 May 1998, p. 3. Wan, ‘Japan and the Asian Development Bank’. See also P. Montagnon, ‘ADB Chief Denies Slow Response to Asia Crisis’, The Financial Times, 30 April 1998, p. 6.

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Notes 187 89. On net transfers, see Drifte, Japan’s Foreign Policy in the 1990s, p. 121; on the bond issue, see E. Luce and V. Boland, ‘ADB Issue Generates Strongly Differing Views’, The Financial Times, 14 May 1998, p. 44; on a new role for the ADB, see Montagnon, ‘ADB Chief Denies Slow Response to Asia Crisis’. The quotation that follows is from this latter source. 90. See G. Baker and G. de Jonquieres, ‘Clinton Team Wins Most of APEC Tricks’, The Financial Times, 27 November 1997, p. 6. 91. For further details, see R. Higgott, ‘The Asian Economic Crisis: A Study in the Politics of Resentment’, New Political Economy, 3 (1998) 333–56. See also Hughes, ‘Japanese Policy and the East Asian Currency Crisis’. 92. On the latter see Higgott, ‘The Asian Economic Crisis’. 93. Again, even the US policy journals are prepared to admit that the IMF perhaps went too far in its policy prescriptions for Asia. See D. Kapur, ‘The IMF: A Cure or a Curse?’, Foreign Policy, 111 (1998) 114–29. 94. In a policy speech entitled ‘Revitalizing Japanese and ASEAN Economies’ delivered to the Singapore business community on 23 September 1998. Available at the MITI web site at http://www.miti.go.jp. 95. For this and other examples, see Hughes, ‘Japanese Policy and the East Asian Currency Crisis’. 96. See the interview with Obuchi Keizo cited at n. 77 above.

7

Mapping Japan’s Role in East Asia: Security

1. See Welfield, An Empire in Eclipse; and Yahuda, The International Politics of the Asia-Pacific. 2. The quote is from Strange, States and Markets, p. 45. It is possible, of course, to define ‘security’ in economic terms, which would imply some discussion of the broader benefits accruing to Japan with regard to an enhanced military role from its economic presence in East Asia. Instead, since our earlier discussion of the concept of structural power made the point that each of the four major structures of power identified by Strange is supported, joined to and held up by the other three, we will simply note the connection and move on. For discussion, see S. Harris, ‘The Economic Aspects of Security in the Asia/Pacific Region’, in D. Ball (ed.), The Transformation of Security in the Asia/Pacific Region (London: Frank Cass, 1996), pp. 32–51; and B. Buzan, ‘The Interdependence of Security and Economic Issues in the “New World Order” ’, in Stubbs and Underhill (eds), Political Economy and the Changing Global Order, pp. 89–102. 3. For a statement by an official from the Japanese Ministry of Foreign Affairs, see Y. Satoh, ‘Emerging Trends in Asia-Pacific Security: The Role of Japan’, The Pacific Review, 8 (1995) 267–81. For an authoritative analysis, see W. Mendl, Japan’s Asia Policy (London: Routledge, 1995). 4. For a particularly clear and perceptive statement of Japan’s defence ‘problematique’ after the Cold War, but one, nevertheless, that fails to make the distinction between dominance and hegemony, see B. Buzan, ‘Japan’s Defence Problematique’, The Pacific Review, 8 (1995) 25–43. 5. Buzan, for example, argues that although Japan has become economically

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188 Notes

6. 7.

8.

9. 10. 11. 12.

13. 14.

15. 16. 17.

18.

19. 20.

dominant in the region, ‘it remains unacceptable as a political leader and as a military great power’. Ibid., 29. For the latest figures see Table 7.1. For the British case see Russett, ‘U.S. Hegemony: Gone or Merely Diminished, and How Does it Matter?’, in Inoguchi and Okimoto (eds), The Political Economy of Japan Volume Two, pp. 83–107. On the nuclear issue see the discussion in Buzan (‘Japan’s Defence Problematique’) of Japan’s policy of ‘recessed deterrence’, which entails ‘conspicuously cultivating advanced rocket and nuclear technologies in order to signal both lack of desire to deploy nuclear weapons and capability to quickly do so if pushed’ (36). Cited in Drifte, Japan’s Foreign Policy in the 1990s, p. 76. Cited in Cronin, Japan, the United States, and Prospects for the Asia-Pacific Century, p. 64. T. Kaifu, ‘Japan’s Vision’, Foreign Policy, 80 (1990) 31–2. See M. Nicholson, ‘China “Greatest Threat” to India’, The Financial Times, 5 May 1998, p. 8; D. Buchan and S. Fidler, ‘India N-test seen as Setback for Asia and Worldwide Curbs’, The Financial Times, 12 May 1998, p. 6; and ‘Pakistan Defiant as it Carries Out Five Nuclear Explosions’, The Financial Times, 29 May 1998, p. 1. For an update, see F. Bokhari and D. Gardner, ‘Pakistan pulls Troops back from Border’, The Financial Times, 19 October 1999, p. 14. See H. Maull, ‘Germany and Japan: the New Civilian Powers’, Foreign Affairs, 69, 5 (1990/91) 91–106. One tenuous but potentially potent component of this argument is that since the Japanese military was not defeated on the field of battle but by a new technology, then Japan was never really ‘defeated’ at all. Rather than the pacifism normally associated with the image of ‘Japan-as-victim’, these types of argument leave plenty of room for a resurgence of militarism into Japanese life. See R. Harvey, The Undefeated (London: Macmillan, 1994). However, the political discourse concerning the militarisation of Japan is extremely complex. For a detailed analysis see Hook, Militarization and Demilitarization. For a critique of ‘Japan-as-victim’ arguments, see van Wolferen, The Enigma of Japanese Power, pp. 556–67. Cited in Harvey, The Undefeated, p. 581. See also S. Harison, ‘A yen for the Bomb?’, The Washington Post, 31 October 1993. For a more optimistic but flawed assessment, see I. Grunberg, ‘The Persian Gulf War and the Myth of Lost Hegemony’, in Morgan et al. (eds), New Diplomacy in the Post-Cold War World, pp. 246–59. Since Iraq, of course, the reaction to the US bombing of the Chinese Embassy in Belgrade has become another case in point. See J. Kynge, ‘China Hits at “Gunboat Diplomacy” ’, The Financial Times, 11 May 1999, p. 2. See inter alia N. Chomsky, American Power and the New Mandarins (Harmondsworth: Penguin, 1969); and A. Iriye, The Cold War in Asia (New York: Prentice Hall, 1974). C. Hughes, ‘Japan’s Subregional Security and Defence Linkages with ASEANs, South Korea and China, in the 1990s’, The Pacific Review, 9 (1996) 236. C. Johnson, ‘Where Does Mainland China Fit in a World Organized into

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Notes 189

21.

22. 23.

24.

25.

26. 27. 28.

Pacific, North American, and European Regions?’, Issues and Studies (Taipei), 27, 8 (1991) 15. More examples in C. Johnson, ‘Japan in Search of a “Normal” Role’, Daedelus, 121, 4 (1992) 1–33. On 20 March 1990, General Henry Stackpole, the then commander of the Marine Expeditionary Force on Okinawa, earned his place in history by suggesting that the US forces in Japan were the ‘cap in the bottle’ preventing the re-emergence of Japanese military power. For a recent argument to the effect that the US is maintaining its high military spending in preparation for a possible conflict with either or both Russia and China, see G. Achcar, ‘The Strategic Triad: The United States, Russia and China’, New Left Review, 228 (1998) 91–127. C. Weinberger, ‘US Defense Strategy’, Foreign Affairs, 64, 4 (1986) 675– 97. Hook (Militarization and Demilitarization, p. 60) cites a former Commanderin-Chief Pacific, as saying ‘Anyone who thinks that the Americans are going to start a nuclear war in defense of them is deluded’. On Russia, see G. Tett, ‘Hashimoto Prepares to Take Yeltsin Fishing in Hope of a Big Catch’, The Financial Times, 16 April 1998, p. 4; C. Freeland and M. Nakamoto, ‘Russia Denies Reports of Deal over Kurile Islands’, The Financial Times, 21 April 1998, p. 4; and C. Gall, ‘Russia Rules out Kuriles Deal’, The Financial Times, 8 May 1998, p. 6. On Korea, see C. Hughes, ‘The North Korea Nuclear Crisis and Japanese Security’, Survival, 38, 2 (1996) 79–103; and J. Burton, ‘N Korea Nuclear Warning’, The Financial Times, 15 May 1998, p. 8. As regards China, several issues have come to the fore: first a resumption of talks with Taiwan after a three-year break (The Financial Times, 23 April 1998, p. 3), although this has not stopped attempts by China to secure Taiwan’s continued diplomatic isolation; and second, the increase in tensions in its relations with India noted above. See inter alia D. Roy, ‘Assessing the Asia-Pacific “Power Vacuum” ’, Survival, 37, 3 (1995) 45–60; and E. van Wie Davis, ‘Who Rules the Waves? The Arms Race on the Pacific Rim’, Asian Affairs, 26 (1995) 291–304. For speculation concerning Chinese intentions to develop an aircraft carrying capability, see A. Higgins, ‘Aircraft Carrier Sold for “Flight of Fantasy” ’, The Guardian, 25 April 1998, p. 16. For discussion, see R. Scalapino, ‘The US Commitment to Asia’, in Ball (ed.), The Transformation of Security, pp. 68–83. In 1992, for example, George Yeo, Singapore’s Minister of State for Foreign Affairs, was quoted as saying that the US might have withdrawn from the region ‘by 1996, 2002, or 2004’. Cited in L. Buszynski, ‘Southeast Asia in the Post-Cold War Era: Regionalism and Security’, Asian Survey, 32 (1992) 846. See also N. Holloway, ‘No Retreat: Lawmakers see Continuing US Influence in Asia’, and R. Halloran, ‘The Krulak Doctrine: US Marine Commandant wants a Pacific Focus’, both in The Far Eastern Economic Review, 28 September 1995, pp. 30–2 and p. 32 respectively. US Department of Defense, The Strategic Framework of the Asian-Pacific Region: Looking Towards the 21st Century, April 1991. For a description of these see Buszynski, ‘Southeast Asia in the Post-Cold War Era’. East Asia Strategy Report (Washington: US Department of Defence, 1995).

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190 Notes 29. For details see The Far Eastern Economic Review, 10 August 1995, pp. 20–21; and The Economist, 9–15 December 1995, p. 72 and 75; 3–9 February 1996, p. 51; 9–16 March 1996, p. 76; 16–22 March 1996, pp. 15–16 and 71–3; and 23–29 March 1996, p. 74 and 76. 30. Of the approximately 100 000 US troops in the region, the aim is to station 40 000 in Japan, 37 000 in Korea and the remainder at sea with the Seventh Fleet. For the controversial presence of US servicemen and their families in Japan, a subject to which we return below, see C. Johnson, ‘Go-Banken-Sama, Go Home!’, Bulletin of the Atomic Scientists, July-August 1996, pp. 22–5 and 27–9. 31. For overviews see J. Auer, ‘The Imperative US-Japanese Bond’, Orbis: A Journal of World Affairs, 39, 1 (1995) 37–53, and G. Cameron Hurst III, ‘The USJapanese Alliance at Risk’, Orbis: A Journal of World Affairs, 41, 1 (1997) 69–76. For calls for Japan to play a larger role see R. Holbrooke, ‘Japan and the US: Ending the Unequal Partnership’, Foreign Affairs, 70, 5 (1991) 41–57. 32. The figure includes dependants, numbering approximately 23 000. See The Economist, 7–13 October 1995, p. 94; 21–27 October 1995, pp. 93–4; 28 October-3 November 1995, pp. 95–6; and J. Gerson, ‘ “I Refuse” ’, Bulletin of the Atomic Scientists, July-August 1996, p. 26. In November 1995, Richard Macke, the then commander of US forces in the Pacific, was forced to resign after saying that the rape could have been avoided if only the marines had hired a prostitute instead. Reported in The Economist, 25 November-1 December 1995, p. 6. On the issue of Japanese maintenance of US forces in Japan see Hook, Militarization and Demilitarization, pp. 62–4. 33. On 17 April 1996, President Clinton and Prime Minister Hashimoto signed an agreement declaring, amongst other things, that the US would reduce its presence in Okinawa. The fact that US troops will be moved (at Japanese expense) to other areas of Japan means that far from being solved the problem has been, for the moment, simply swept under the carpet. The Japanese Defence Agency contributed $1.8 bn to the overall costs of US forces in Japan in 1998. IISS, The Military Balance, 1998/99 (Oxford: Oxford University Press for the IISS, 1998), p. 167. 34. See M. Gurtov, ‘South Korea’s Foreign Policy and Future Security: Implications of the Nuclear Standoff’, Pacific Affairs, 69 (1996) 8–31; and Hughes, ‘The North Korea Nuclear Crisis and Japanese Security’. For recent developments regarding the US–North Korean Framework Agreement (concerned with the exchange of energy for North Korea’s adherence to the Nuclear Non-proliferation Treaty) see Japanese Defence Agency, Defence of Japan 1994 (Tokyo: Japan Times, 1994); and IISS, The Military Balance, 1998/99, pp. 165–6. For an overview see SIPRI, Yearbook 1997 (Oxford: Oxford University Press, 1997), pp. 388–9; and C. Hughes, Japan’s Economic Power and Security: Japan and North Korea (London: Routledge in association with the Sheffield Centre for Japanese Studies, 1999). 35. See Buzan, ‘Japan’s Defence Problematique’, as representative of the arguments of many others. Note, however, the serious setback to Japan’s nuclear programme dealt by revelations that the state-owned Power Reactor and Nuclear Fuel Development Corporation has been systematically covering up accidents at its facilities throughout Japan. See K. Rafferty, ‘N-Plant Safety Attacked as Pilot Japanese Reactor goes “Critical” ’, The Guardian, 6 April

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Notes 191

36.

37. 38.

39. 40.

41. 42.

43.

44.

45.

46.

1994, p. 11; and J. Watts, ‘Japan’s Nuclear Power Ambitions Melt Down’, The Guardian, 17 May 1997, p. 19. On the accident at the Tokaimura nuclear facility on 30, September 1999 see J. Watts, ‘The Day they Blew the Roof Off’, The Guardian, 2 October 1999, p. 4. On the Gulf crisis and Japan’s reaction to it see inter alia M. Brenner, ‘The Alliance: A Gulf Post-mortem’, International Affairs, 67 (1991) 665–78; M. Sayle, ‘Unconditional Surrender II’, The Spectator, February 9, 1991, pp. 9–12; C. Purrington, ‘Tokyo’s Policy Responses During the Gulf War and the Impact of the ‘Iraqi Shock’ on Japan’, Pacific Affairs, 65 (1992) 161–81; and Hook, Militarization and Demilitarization, pp. 74–99. See Kaifu, ‘Japan’s Vision’. This is the line taken in all official annual Japanese publications, such as the Diplomatic Bluebook and Defence of Japan. The Guidelines for Japan–US Defence Co-operation came into force on 27 November 1978. For details see Japanese Defence Agency Defence of Japan 1994, pp. 254–8. On the recent revision see M. Nakamoto, ‘Tokyo Strives to Fulfil Pledge on Defence’, The Financial Times, 28 April 1998, p. 6; and ‘Japanese–US Defence Support Agreement Signed’, The Financial Times, 29 April 1998, p. 8. See G. Robinson, ‘Japan in the Balance’, The Financial Times, 3 September 1997, p. 26. Under the law, participating SDF personnel are only permitted to wear sidearms for personal protection, must withdraw from areas of conflict, may not be dispatched to an area where hostilities are in progress (and indeed may not be dispatched at all in the absence of the assent of all the parties to the conflict), and they must observe strict ‘neutrality’ at all times. Be that as it may, on the ground SDF personnel have sometimes found it difficult to adhere to the letter of the law. For brief details of SDF activities in each country named see M. Itoh, ‘Expanding Japan’s Role in the United Nations’, The Pacific Review, 8 (1995) 283–302. See Drifte, Japan’s Quest for a Permanent UN Security Council Seat. The corresponding figures for the US have held steady at 25 and 30 per cent, although Washington has been attempting to reduce its level of commitment to 20 and 25 per cent respectively – much closer to Japanese levels. Figures from SIPRI, Yearbook 1997, pp. 49–50; and IISS, The Military Balance, 1997/98, p. 166. See also E. Luck, ‘Layers of Security: Regional Arrangements, The United Nations, and the Japanese–American Security Treaty’, Asian Survey, 35 (1995) 237–52. According to SIPRI, 69 per cent of total UN debt at the end of 1996 was owed by the US, which owed $1.3 billion in contributions towards peacekeeping by the end of 1997 (Yearbook 1997, p. 49; and Yearbook 1998, p. 48). However, in September 1995, the then US Ambassador to the UN Madeleine Albright, suggested that Japan and Germany should become permanent members of the UNSC. Reported in The Far Eastern Economic Review, 21 September 1995, p. 15. See K. Annan, ‘Markets for a Better World’, Speech delivered to the World Economic Forum, Davos, Switzerland, 31 January 1998 (UN Press Release SG/SM/6448). Japan has signed and ratified the CTBT. In addition, Japan is also a signatory to the Outer Space Treaty, the Seabed Treaty and the Convention on

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192 Notes

47.

48. 49. 50. 51. 52.

53.

54.

55. 56.

57.

58.

59. 60.

the Physical Protection of Nuclear Material. For details see SIPRI, Yearbook 1997, pp. 345–63 and 527–44. Further details in IISS, The Military Balance, 1997/98, pp. 286–92. For background see I. Anthony, ‘Assessing the UN Register of Conventional Arms’, Survival, 35, 4 (1993) 113–29; M. Chalmers, ‘The Debate on a Regional Arms Register in Southeast Asia’, The Pacific Review, 10 (1997) 104–23; and SIPRI, Yearbook 1998 (Oxford: Oxford University Press, 1998), pp. 311–17. See SIPRI, Yearbook 1993 (Oxford: Oxford University Press, 1993), pp. 533–44. See, inter alia, M. Antolik, ASEAN and the Diplomacy of Accommodation (New York: M.E. Sharpe, 1990). We discuss this below. On planning see Hook, Militarization and Demilitarization, pp. 50–1; Drifte, Japan’s Foreign Policy in the 1990s, pp. 53–5. Citation from Japanese Defence Agency, Defence of Japan 1994, p. 275; figures from IISS, The Military Balance, 1997/98, p. 166. SIPRI, Yearbook 1997, p. 226. Even though the Defense Agency reduced its R&D request for 1998 (to ¥143.4 bn), this still represents a real increase over 1996. SIPRI, Yearbook 1998, p. 269. According to the IISS, Japan’s 1998 defence budget is down by 16 per cent measured in constant dollars (from $40.9 bn to $35.4 bn). Despite the fact that the yen value has only fallen by 0.3 per cent, from ¥4940 bn to ¥4929 bn, this still represents the first nominal decrease in the defence budget since the Japanese Defence Agency was established in 1954. IISS, The Military Balance, 1998/99, p. 167. The official title is The Modality of the Security and Defence Capability of Japan: The Outlook for the 21st Century. Details in Drifte, Japan’s Foreign Policy in the 1990s, pp. 54–5. See T. Akaha, ‘Japan’s Comprehensive Security Policy’, Asian Survey, 31 (1991) 324–40; and Sudo, The Fukuda Doctrine and ASEAN. See IISS, The Military Balance, 1998/99, pp. 183–5. In 1998 Japan had 150 Type-90 main battle tanks; 4 Kongo-class Destroyers; and 100 P-3C antisubmarine aircraft. Hook, Militarization and Demilitarization, p. 50; and M. Alagappa, ‘Japan’s Political and Security Role in the Asia-Pacific Region’, Contemporary Southeast Asia, 10 (1988) 31. Technology transfer is not discussed here. See Drifte, Japan’s Foreign Policy in the 1990s, pp. 66–72; and M. Chinworth, ‘Technology Leakage and US–Japan Security Relations’, and T. Taylor, ‘Japan’s Policy on Arms Exports’, in Matthews and Matsuyama (eds), Japan’s Military Renaissance?, pp. 191–216 and 217–32 respectively. For background see Cronin, Japan, the United States, and Prospects for the AsiaPacific Century, pp. 65–73. In 1997, SLORC renamed itself the State Peace and Development Council (SPDC), the term adopted from here on. For details of the Japanese response to the Tiananmen Square ‘incident’, see Mendl, Japan’s Asia Policy, pp. 83–8. On North Korea, see The Economist, 2–8 December 1995, p. 81. On Burma, see K. Rafferty, ‘Japan Renews Cash Aid to Burma’, The Guardian, 28 February 1994, p. 11; and T. Bardacke, ‘Japan may Aid Burma’, The Financial Times, 29 November 1999, p. 6.

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Notes 193 61. In 1988 South Korea had put forward a proposal for a Consultative Conference for Peace in Northeast Asia. See inter alia P. Dibb, Towards a New Balance of Power in Asia, Adelphi Paper 295, (Oxford: Oxford University Press for the IISS, 1995); P. Evans, ‘The Prospects for Multilateral Security Co-operation in the Asia/Pacific Region’, in Ball (ed.), The Transformation of Security, pp. 201–17; and S. Simon, ‘Alternative Visions of Security in the Asia Pacific’, Pacific Affairs, 69 (1996) 381–96. 62. See M. Hiebert, ‘Wizard of Oz: Australia’s Evans Redraws the Map of Asia’, The Far Eastern Economic Review, 17 August 1995, p. 26. 63. P. Kerr, ‘The Security Dialogue in the Asia-Pacific’, The Pacific Review, 7 (1994) 402. The following discussion draws heavily from this article. The ASEANPMC comprises the ten ASEAN states (Singapore, 1967; Malaysia, 1967; Indonesia, 1967; Thailand, 1967; the Philippines, 1967; Brunei, 1984; Vietnam, 1995; Myanmar/Burma and Laos, 1997; Cambodia 1999); seven ‘dialogue partners’ (the US, Canada, Australia, Japan, the EU, South Korea and New Zealand); one ‘observer’ (Papua New Guinea); and two ‘guests’ (China and Russia). The dates in parentheses indicate the year of accession to ASEAN membership: hence, Vietnam, Myanmar, Laos and Cambodia played no part in these discussions. 64. Ibid. See also Y. F. Khong, ‘ASEAN’s Post-Ministerial Conference and Regional Forum: A Convergence of Post-Cold War Security Strategies’, in P. Gourevitch et al. (eds), United States–Japan Relations and International Institutions After the Cold War (San Diego: University of California Press, 1995), pp. 37– 58. 65. Kerr, ‘The Security Dialogue in the Asia-Pacific’, 402–3, citing A Time for Initiative: Proposals for the Consideration of the Fourth ASEAN Summit, ASEANISIS, Jakarta, 4 June 1991, p. 1. ‘Track Two’ refers to ‘forums and organizations which include academics/intellectuals and government officials acting in their “private” capacities’ (408, n. 7). 66. Ibid., 397 and 403. 67. See Q. K. Wang, ‘Toward Political Partnership: Japan’s China Policy’, The Pacific Review, 7 (1994) 171–82. 68. For a view from the US, see G. Rozman, ‘A Regional Approach to Northeast Asia’, Orbis: A Journal of World Affairs, 39, 1 (1995) 65–80. 69. The participation of China in the ASEAN+1 and ASEAN+3 meetings is an important new step. See Press Release of the Chairman on the ASEAN+1 Summit Meetings between the Heads of State/Government of ASEAN and China, Japan and the Republic of Korea, Manilla 28 November 1999; Joint Statement on East Asia Cooperation, Manilla 28 November 1999; and T. Bardacke, ‘East Asian Nations reach Accords on further Cooperation’, The Financial Times, 29 November 1999, p. 8. 70. See M. Wan, ‘Human Rights and Sino–US Relations: Policies and Changing Realities’, The Pacific Review, 10 (1997) 237–55; S. Yamakage, ‘Human Rights Issues in Southeast Asia’, Japan Review of International Affairs, 11 (1997) 118–37; and D. Mauzy, ‘The Human Rights and “Asian Values” Debate in Southeast Asia: Trying to Clarify the Key Issues’, The Pacific Review, 10 (1997) 210–36. See also P. Montagnon and S. McNulty, ‘Gore Reform Call Leaves APEC Torn’, The Financial Times, 18 November 1998, p. 6.

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194 Notes 71. D. Arase, ‘Japanese Policy Toward Democracy and Human Rights in Asia’, Asian Survey, 33 (1993) 938. 72. The Japan Institute of International Affairs is a member of another important Track Two organisation, the Council for Security Cooperation in the Asia-Pacific, in the realisation of which Japan played a significant part. For details, see P. Evans, ‘Building Security: The Council for Security Cooperation in the Asia Pacific (CSCAP)’, The Pacific Review, 7 (1994) 125–39. 73. For discussion, see P. Katzenstein and N. Okawara, ‘Japan’s National Security: Structures, Norms, and Policies’, and T. Berger, ‘From Sword to Chrysanthemum: Japan’s Culture of Anti-militarism’, both in International Security, 17, 4 (1993) 84–118 and 119–50 respectively. 74. For background, see K. Snitwongse, ‘ASEAN’s Security Cooperation: Searching for a Regional Order’, The Pacific Review, 8 (1995) 518–30. On comprehensive security, see Akaha, ‘Japan’s Comprehensive Security Policy’; and D. Dewitt, ‘Common, Comprehensive, and Cooperative Security’, The Pacific Review, 7 (1994) 1–15. See also M. Leifer, The ASEAN Regional Forum, Adelphi Paper 302, (London: Brassey’s for the IISS, 1996). 75. See D. Kelly, ‘The Asssociation of Southeast Asian Nations’, in G. Hook and I. Kearns (eds), Subregionalism and World Order (London: Macmillan, 1999), pp. 169–95. 76. See the quality press between March and April, 1998. On the resignation of Suharto see ‘Indonesia Awakes to the Post-Suharto Era’, The Economist, 23–29 May 1998, pp. 75–6. 77. See A. Acharya, ‘Ideas, Identity and Institution-building: from the “ASEAN Way” to the “Asia-Pacific Way” ’, The Pacific Review, 10 (1997) 319–46. 78. Kelly, ‘The Asssociation of Southeast Asian Nations’. 79. See Berger, ‘The Triumph of the East?’, pp. 267–75; N.-L. Sum, ‘The NICs and Competing Strategies of East Asian Regionalism’, in Gamble and Payne (eds), Regionalism and World Order, p. 225; and G. Hook, ‘The East Asian Economic Caucus: A Case of Reactive Subregionalism?’, in Hook and Kearns (eds), Subregionalism and World Order, pp. 223–45. 80. Acharya, ‘Ideas, Identity and Institution-building’. 81. Kelly, ‘The Asssociation of Southeast Asian Nations’. 82. Japanese Defence Agency, Defence of Japan, various issues. 83. Satoh, ‘Emerging Trends in Asia-Pacific Security’, 270. 84. Japanese Defence Agency, Defence of Japan, 1993 and 1994. The 1993 edition also included for the first time a subsection on ‘Dealing with Globalization’ (pp. 195–7). 85. Japanese Defence Agency, Defence of Japan, 1994, pp. 144–7. 86. This latter point from Hughes, ‘Japan’s Subregional Security and Defence Linkages’, 240. All others from Japanese Defence Agency, Defence of Japan, 1994, pp. 138–9 and 144–6. 87. Hughes, ‘Japan’s Subregional Security and Defence Linkages’, 240. 88. Reported in Japanese Defence Agency, Defence of Japan, 1996 (electronic version). 89. Japanese Defence Agency, Defence of Japan, 1994, p. 140. 90. Japanese Defence Agency, Defence of Japan, 1996. 91. For a broader view, see W. Hu, ‘China’s Security Agenda After the Cold War’, The Pacific Review, 8 (1995) 117–35.

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Notes 195 92. See J. W. Lewis and H. Di, ‘China’s Ballistic Missile Programs: Technologies, Strategies, Goals’, and R. Bitzinger, ‘Arms to Go: Chinese Arms Sales to the Third World’, in International Security, 17, 2 (1992) 5–40 and 84–111 respectively. See also S. Chu, ‘The PRC Girds for Limited, High-Tech War’, Orbis: A Journal of World Affairs, 38, 2 (1994) 177–91. The SIPRI Yearbook 1998 (p. 297) notes, that while ‘China was still ranked as the sixth largest supplier for the period 1993–97, it exported 75 per cent fewer weapons in 1997 than in 1996’. However, this was more to do with the fact of the reluctance of buyers to purchase poor quality, outdated weapons from China than it was from Chinese reluctance to sell them. 93. See SIPRI, Yearbook 1997, p. 283, Table 9.4. 94. See SIPRI, Yearbook 1998, p. 312, Table 8.6. 95. Japanese Defence Agency, Defence of Japan, various issues. 96. Japanese Defence Agency, Defence of Japan, various issues.

8

Mapping Japan’s Role in East Asia: Knowledge

1. To his credit, Drifte has made a contribution in relation to Japan. See his Japan’s Foreign Policy in the 1990s, pp. 144–61. 2. Although it should be said that the realm of finance rather than the realms of production, security and knowledge were always her main focus. 3. See U. Hilpert (ed.), State Policies and Techno-Industrial Innovation (London: Routledge, 1991), and a number of the essays in M. Talalay et al. (eds), Technology, Culture and Competitiveness (London: Routledge, 1997). 4. A. Russell, ‘Merging Technological Paradigms and the Knowledge Structure in International Political Economy’, Science and Public Policy, 22 (1995) 115, n. 53. 5. Strange, States and Markets, p. 119. 6. S. Strange, ‘From Bretton Woods to the Casino Economy’, in Corbridge, Martin and Thrift (eds), Money, Power and Space, p. 51. 7. First quote cited in Russell, ‘Merging Technological Paradigms’, p. 108; second quote from Cox, ‘ “Take Six Eggs” ’, p. 184. 8. As demonstrated by the accident at the Tokaimura nuclear facility on 30, September 1999. See J. Watts, ‘The Day they Blew the Roof Off’. 9. To take one example: in August 1999, following Japanese protests, the National Atomic Museum at Albuquerque in New Mexico (owned by the US Department of Energy but run by a subsidiary of Lockheed Martin) was forced to withdraw from sale earrings fashioned in the shape of ‘Little Boy’ and ‘Fat Man’ – the bombs dropped on Hiroshima and Nagasaki in 1945 – priced at $20 a pair. 10. Logically, this also holds true between one world order and another. 11. In establishing this time frame we note with Hoogvelt – in Globalisation and the Postcolonial World (London: Macmillan, 1997), pp. 92–3: ‘that it took a good 30 years and the two biggest wars humankind has experienced before Ford’s techno-economic paradigm was complemented by a whole ensemble of supporting macro-economic institutions, social organisational forms, political settlements and even cultural values, which together and only when they

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12.

13. 14.

15. 16.

17. 18. 19. 20. 21.

22.

23.

24.

were in place, permitted the economic benefits of that system to materialise to the full’. For a Japanese view see Sumiya M., ‘Japan: Model Society of the Future?’, The Annals of the American Academy of Political and Social Science, 513 (1991) 139–50. See S. Gill, ‘American Hegemony: Its Limits and Prospects in the Reagan Era’, Millennium: Journal of International Studies, 15 (1986) 311–36. See inter alia H. Perkin, ‘The Third Revolution’, in G. Kelly, D. Kelly and A. Gamble (eds), Stakeholder Capitalism (London: Macmillan, 1997), pp. 35–48; and R. Dore, Japanese Capitalism, Anglo-Saxon Capitalism (London: Centre for Economic Performance, London School of Economics, Occasional Paper No. 4, 1992); and Beeson, Competing Capitalisms. See ‘True-loves and Truants’, The Economist, 25 September, 1999, pp. 137–9. According to Hoogvelt in Globalisation and the Postcolonial World: ‘The nub is that it is not enough to apply the new technology and to follow some new working methods. The lean production system was originally developed in Japan within a home-grown mode of regulation and its diffusion abroad requires a process of social adaptation, restructuring and reorganisation both at the firm-level and in the wider society’. (p. 103) R. Falk, ‘American Hegemony and the Japanese Challenge’, in Hook and Weiner (eds), The Internationalization of Japan, p. 37. Falk (ibid.) also makes this point. In this latter area, there is undoubtedly a comparison to be drawn with the experiences of Korean émigrés to Japan. Citation from Falk, ‘American Hegemony and the Japanese Challenge’, p. 37. See S. Huntington, ‘The Clash of Civilizations?’, Foreign Affairs, 72, 3 (1993) 22–49. For an alternative view see R. Cox, ‘Civilisations in World Political Economy’, New Political Economy, 1 (1996) 141–56. See S. Fidler, ‘Superpower Reduced to Shouting from the Sidelines’, The Financial Times, 21 May 1998, p. 28. Of course, the US has other avenues of influence available to it such as the IMF, but note the difficulties the Clinton administration had in gaining Congressional approval of the $18bn contribution it requested as a replenishment loan for the IMF following its heavy outlays to Indonesia, Thailand and South Korea. In this, the record of human rights violations in these three countries was the cause of dissent in Congress. The US was also unable to stop either India or Pakistan from testing nuclear weapons despite the threat of economic sanctions. In the case of Pakistan, an old ally of the US from the days of the Cold War, President Clinton found once again that his hands had been tied by a previous decision of Congress. The Pressler Amendment of 1985 (which requires the administration to impose economic and military sanctions upon any country which cannot be certified to be promoting nuclear non-proliferation) effectively removed any leverage Washington possessed over policy making in Pakistan. See Martin Kettle, ‘Washington Lacks Leverage’, The Guardian, 16 May 1998, p. 16. Although the trade deficit has grown to its largest levels ever as a consequence mainly of the Asian crisis, the fiscal deficit has been wiped out

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25.

26.

27. 28.

29.

30.

31.

32. 33.

completely and unemployment continues to fall. See for example M. Suzman, ‘US Budget on Course for Largest Surplus for 40 Years’, The Financial Times, 27 May 1998, p. 1. E. Mortimer, ‘Elusive World Order’, The Financial Times, 17 June 1998, p. 20. See also M. Walker, ‘A New American Isolationism?’, International Journal, 52 (1997) 391–410. See J. K. Galbraith, The Culture of Contentment (New York: Houghton Mifflin Company, 1992); and J. Rielly, ‘Americans and the World: A Survey at Century’s End’, Foreign Policy, 114 (1999) 97–114. See G. Baker, ‘A World Policeman’s Lot is Not Such a Happy One’, The Financial Times, 15 May 1998, p. 3. See, for example, G. Walden, ‘Cool Britannia is Made in the USA’, The Guardian Editor, 20 June 1998, pp. 12–13. According to recent studies, English, the language of business, has become the first ever ‘world’ language, and is spoken by between 1500 and 1800 million people world-wide (the figure given for Japanese is 125 million). This dominance looks set to continue given the standardisation implied by the development and spread of computers using the ‘Qwerty’ keyboard. See D. Crystal, ‘The Language that Took over the World’, The Guardian, 22 February 1997, p. 21. The United States remains the biggest consumer of its own culture. The US music market, for example, is the largest in the world at 31.3 per cent in 1997, while Japan was second in the same year at 16.5 per cent of total sales (L. Buckingham, ‘EMI Chief Faces the Music’, The Guardian, 26 May 1998, p. 19). The current batch of high-profile rock stars are much more interested in their long-term business interests than they are in fomenting unrest. Bands now sign multiple album deals in advance as, for example, did R.E.M., who were paid $80m by Warner in return for their services. More seasoned performers, such as David Bowie and Rod Stewart, have raised large loans on the strength of their future earnings through bond issues by major securities houses such as Nomura. Even popular Japanese films have not escaped from Hollywood’s grasp: Tanaka Tomoyuki, the creator of Gojira (Godzilla), was said to have died ‘from a broken heart’ shortly after hearing that the film rights to the monster franchise had been sold in preparation for a Hollywood-style make-over. See M. Nakamoto and C. Parkes, ‘It’s Bigger, It’s Badder, and It’s Back. . . . Hollywood is Hoping for a Monster Hit with the New Godzilla’, The Financial Times, 20 May 1998, p. 3. Falk, ‘American Hegemony and the Japanese Challenge’, pp. 42–8. In 1992 a Japanese high school student was shot dead whilst trick-ortreating in Baton Rouge, Louisiana. The outrage in Japan was redoubled when the homeowner was acquitted of manslaughter. Two years later, two Japanese students were murdered in a Los Angeles car park, prompting the unusual step of an official apology to the Japanese nation by President Clinton. S. Tisdall, ‘US Apologises to Japan for Double Murder’, The Guardian, 29 March 1994, p. 13. On the environment, see P. Brown, ‘US Trade its Way to Cooler Skies’, The Guardian, 27 June 1997, p. 16; and L. Boulton, ‘Clinton Urged to Beef Up Emissions Policy’, The Financial Times, 15 May 1998, p. 3. Unemployment in the US may be low and falling but economic inequality

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198 Notes

34.

35.

36. 37. 38. 39. 40.

41. 42. 43.

44.

45. 46. 47. 48. 49. 50.

51.

between rich and poor is already wide and is growing wider. In 1993 only 25 per cent of low-paid workers had employer-provided insurance cover; on average, US workers now work longer hours than their Japanese counterparts; 21.5 per cent of children live in families earning less than half the median income; 2 per cent (or 1.7 million) of the male population of working age are behind bars. Figures from S. Caulkin, ‘Treat ‘em Mean and Keep ‘em Keen, a Game Companies Can Not Win’, The Observer, 21 June 1998 (Business section, Work sub-section), p. i and viii. See M. Woollacott, ‘Bad Boys on the Block: India and Pakistan have Joined the Ranks of Nations Challenging Western-imposed Rules’, The Guardian, 30 May 1998, p. 22. See references at n. 70, in Chapter 7; and S. Douglas and S. Douglas, ‘Economic Implications of the US-ASEAN Discourse on Human Rights’, Pacific Affairs, 69 (1996) 71–87. See Leaver, ‘Restructuring in the Global Economy’. Rapkin, ‘Japan and World Leadership?’, pp. 195–207. Cox, ‘Middlepowermanship, Japan, and Future World Order’, in Cox with Sinclair, Approaches to World Order, p. 256. Drifte, Japan’s Foreign Policy in the 1990s, p. 160. See A. Parker and G. Malkani, ‘Blair Urges Welcome for Emperor: PM Fears Hostile Reception by Former PoWs May Hit Trade with Tokyo’, The Financial Times, 26 May 1998, p. 1. T. G. Ash, ‘It’s So Hard to Say You’re Sorry’, The Guardian, 16 May 1998, p. 3. See the collection of essays in Hook and Weiner (eds), The Internationalization of Japan. For an analysis of the distinctions to be made between ‘internationalisation’ and ‘interdependence’ as applied in this context, see Ogata Sadako, ‘Interdependence and Internationalization’, in ibid., pp. 63–71. Yamazawa I., ‘Gearing Economic Policy to International Harmony’, in Hook and Weiner (eds), The Internationalization of Japan, pp. 119–30. See also the discussion of the Maekawa Report and attendant issues below. Ogata Sadako, ‘Interdependence and Internationalization’, in Hook and Weiner (eds), The Internationalization of Japan, p. 66. See T. Jackson, Turning Japanese (London: Harper Collins, 1994). See Rupert, Producing Hegemony. For an introduction to the literature on post-Fordism, see A. Amin (ed.), PostFordism (Oxford: Blackwell, 1994). See R. Reich, The Work of Nations (New York: Knopf, 1991). Again, this is an idealised picture and one that encapsulates the lives of core workers rather than those on the periphery (home workers, part-time workers, those employed in basic service industry, and so on). For background to the Japanese automobile industry, see Shimokawa K., The Japanese Automobile Industry (London: Athlone, 1994). The Toyota system of production is discussed below, but note here that that system was built within and is dependent upon the wider socio-political milieu obtaining in Japan. Hence, the development of lean production at Toyota and other firms must be seen within its historical context. Toyota and Nissan, for example, played a large part in the destruction of trades unions and their replacement

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Notes 199

52.

53.

54. 55.

56.

57.

58. 59.

by enterprise unions in the 1940s. Arguably, lean production could not have been developed in the context of strong trades unions, which may go some way towards explaining why Japanese transplants have done better in the US and UK, where the union movement has been effectively neutered, than in continental Europe where it has yet to completely succumb. The literature is vast. In addition to the references given below, a thoughtful and reflective analysis can be found in Tabb, The Postwar Japanese System, chapters 2 and 5. For a genealogy of the Toyota Production System, see Ohno T., Toyota Production System (Cambridge, Mass.: Productivity Press, 1988), pp. 75–92. What follows is the ‘celebratory’ view of the lean production system. This description should in no way be taken as approval, and nor should the characterisation of the transition from Fordism to post-Fordism be seen as signifying ‘progress’. The portrayal of ideal-types is intended as an aid to understanding more fully how these are ‘championed’ by their various proponents and achieve legitimacy. For a searing critique of early European and North American work on the ‘benefits’ of Toyotaism, see Kato T. and R. Steven, Is Japanese Capitalism Post-Fordist? (Melbourne: Japanese Studies Centre, Paper No. 16, 1991). Ohno, Toyota Production System, pp. 77–9. This blurring of the distinction between human and machine obviously has disturbing connotations, although these do not seem to concern Ohno in the least. Nor have they disturbed the huge body of camp followers that extol the virtues of this system in ‘how to’-style management books. See inter alia D. Hutchins, Just in Time (Aldershot: Gower Technical Press, 1988); R. Schonberger, Japanese Manufacturing Techniques (London: Free Press, 1982); Monden Y., Toyota Management System (Cambridge Mass.: Productivity Press, 1993); and J. Womack and D. Jones, Lean Thinking (New York: Simon and Schuster, 1996). For a more balanced approach see J. Storey (ed.), New Wave Manufacturing Strategies (London: Paul Chapman, 1994). Other related concepts associated with lean production, such as ‘zero defect’ and ‘total quality management’ are not discussed here. These are examined exhaustively in the texts just referenced, and (adding the necessary element of critique) in Hoogvelt Globalisation and the Postcolonial World, pp. 93–101. For evidence that lean production is being adopted in Europe and the US, see V. Houlder, ‘The Good and the Bad’, The Financial Times, 5 September 1997, p. 19; and P. Marsh, ‘Black Belts Combat High Costs, Poor Standards’, The Financial Times, 27 April 1998, p. 16. For evidence that the current recession is forcing many Japanese firms (not all of them lean producers) to look at ‘western’ solutions see ‘Foreign Investment in Japan’ (Survey), The Financial Times, 19 October 1999. The classic example is the restructuring of Nissan. See T. Burt, ‘Nissan Stuns Industry with £6bn Revamp’, The Financial Times, 19 October 1999, p. 1; and A. Harney, ‘For 21 000 Workers there can be no Gain without Pain’, The Financial Times, 19 October 1999, p. 33. See A. Bolger, ‘Work “Taking its Toll on Home Life” ’, The Financial Times, 1 June 1998, p. 6. Amongst others there is ‘Fujitsuism’ and – if it survives Renault’s attentions – the ‘Nissan Way’.

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200 Notes 60. See inter alia J. Zysman, ‘The Myth of a ‘Global Economy’: Enduring National Foundations and Emerging Regional Realities’, New Political Economy, 1 (1996) 157–84. 61. See the special edition of New Political Economy edited by Barry Gills entitled ‘Globalisation and the Politics of Resistance’. New Political Economy, 2 (1997); and D. Singer, Whose Millennium? Theirs or Ours? (New York: Monthly Review Press, 1999). 62. See P. Hirst and G. Thompson, Globalization in Question (Cambridge: Polity Press, 1996). 63. Shingo S., A Study of the Toyota Production System from an Industrial Engineering Viewpoint, revised edition (Cambridge, Mass: Productivity Press, 1989) p. xxviii. Shingo seems to have played a part in the development of Toyota very similar to that of Taylor at Ford: that is Ohno took all the plaudits, while Shingo is credited with making the ideas reality. 64. See inter alia M. Trevor, ‘The Overseas Strategies of Japanese Corporations’, and S. Levine and M. Ohtsu, ‘Transplanting Japanese Labor Relations’, both in The Annals of the American Academy of Political and Social Science, 513 (1991) 90–101 and 102–16 respectively. In a survey recording the proportion of foreign manufacturing affiliates to whom Japanese parent companies transferred management practices, the United Nations World Investment Report for 1995 found that 69 per cent of foreign affiliates adopted a common dining room; 65 per cent adopted open-concept offices; 41 per cent adopted uniforms; 35 per cent morning meetings; 25 per cent a bonus system; 14 per cent just-in-time inventory; 12 per cent enterprise-based unions; 11 per cent lifelong employment; and 2 per cent seniority-based wage system. Cited in The Far Eastern Economic Review, 1 February 1996, p. 13. 65. See, for example, S. Milne, ‘Japanese Vexed By British Workers’, The Guardian, 2 August 1993, p. 5; and Summers, ‘Anger at Japan-style Work Practices’. 66. For example, the sub-title of the fourth chapter (which discusses the fairly disastrous debut of just-in-time production in the US) in Schonberger’s Japanese Manufacturing Techniques, suggests that resistance can be overcome. The sub-title reads ‘Lesson 4: Culture is no Obstacle; Techniques Can Change Behaviour’. 67. Cited in the foreword to Monden Y., Toyota Production System (Norcross, Georgia: Industrial Engineering and Management Press, 1983), pp. i–ii. 68. According to Saburo Okita: ‘the nations of the region engineer successive industrial take-offs and are soon moving on their way to higher stages of development. It is akin to a V-formation, and the relationship between the countries in the formation is neither horizontal integration nor vertical integration as they are commonly known. Rather, it is a combination of both. And because the geese that take off later are able to benefit from the forerunners’ experiences to shorten the time required to catch up, they gradually transform the formation from a V-formation to eventual horizontal integration’. Cited in W. Bello and S. Cunningham, ‘Trade Warfare and Regional Integration in the Pacific: The USA, Japan and the Asian NICs’, Third World Quarterly, 15 (1994) 455. 69. Cited in Tabb, The Postwar Japanese System, p. 260. 70. For a discussion see ibid., and, by the same author ‘Japanese Capitalism and the Asian Geese’, Monthly Review, 45, 10 (1994) 29–40. See also Bernard and

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71.

72.

73.

74. 75.

76. 77.

78.

79.

Ravenhill, ‘Beyond Product Cycles and Flying Geese’; and Kwan, Economic Interdependence in the Asia-Pacific Region, Chapter 5. There are obvious contradictions here, not least of which is the retention of key personnel, technology, design, and research and development functions within the ‘home’ islands of Japan. Nevertheless, the ideological power of the flying geese analogy remains. Maekawa Haruo was a former Governor of the Bank of Japan and the author of the Report. Efforts at reorienting Japanese society really began in the 1970s and can perhaps be dated from the establishment of the National Institute of Research Advancement in 1974, whose brief was to advise the government on various social issues emerging at the time. In the same year, MITI published its policy document entitled ‘Visions for the 1970s’, in which it laid out what it saw as the following major goals for government policy: 1. improving the working conditions and living environment of the general population; 2. improving and increasing social overhead capital; 3. improving the education system and making education more widely available to the people; 4. developing research activities; and 5. increasing both government and business contribution to international co-operation and associated activities. For these details and further background, see Sheridan, Governing the Japanese Economy, pp. 158ff. This image was added to and reinforced in the late 1980s and early 1990s by the development of a more positive perception of Japan’s leading role in the ADB, where ‘while contributing more than before, Japan has become less concerned about its concrete gains’. Wan, ‘Japan and the Asian Development Bank’, p. 526. Details in Tabb, The Postwar Japanese System, pp. 316–17. See also van Wolferen, The Enigma of Japanese Power, pp. 538–40. In what follows in reference to the publication of The East Asian Miracle we rely heavily on R. Wade, ‘Japan, The World Bank, and the Art of Paradigm Maintenance: The East Asian Miracle in Political Perspective’, New Left Review, 217 (1996) pp. 3–37. It should be clear by this point that we cannot support the view that there are ‘models of development’ – Japanese, Confucian, European, Anglo-Saxon or otherwise – ready and waiting to be picked up and used by other state–society complexes. For a review of some of the literature, see R. Wade, ‘East Asia’s Economic Success: Conflicting Perspectives, Partial Insights, Shaky Evidence’, World Politics, 44 (1992) 270–320. For details see Chapter 5. Both suggestions made by Prime Minister Mahathir of Malaysia. On the war legacy, see Drifte, Japan’s Foreign Policy in the 1990s, p. 156; on the ‘voice of Asia’ see Hook, ‘Japan and the Construction of Asia-Pacific’, in Gamble and Payne (eds), Regionalism and World Order, pp. 194–6. See A. Nicoll and W. Keeling, ‘Asians Seek a Head for their Bloc’, The Financial Times, 20 July 1993, p. 5. For popular and élite Japanese views prevalent at the time, see G. Cardinale, ‘Through the Japanese Looking Glass’, Asian Survey, 32 (1992) 635–48. For East Asian dissent, see inter alia Berger, ‘The Triumph of the East?’ in Berger and Borer (eds), The Rise of East Asia; and The Economist, ‘Japan: The New Nationalists’, 14–20 January 1995, pp. 14 and 19–21. Wade, ‘Japan, The World Bank, and the Art of Paradigm Maintenance’, 6–7.

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202 Notes

80. 81. 82. 83.

84.

85. 86.

87.

88. 89.

Note also recent attempts to secure top positions at UNESCO (Matsuura Koichiro elected on 12 November 1999) and at the IMF (Sakakibara Eisuke put forward in November 1999). On Sakakibara, see G. Tett, ‘Japan may put forward Sakakibara to Head IMF’, The Financial Times, 16 November 1999, p. 15. On Matsuura see J.-M. Pottiez, ‘Koichiro Matsuura at the Head of UNESCO’, Euro-Japanese Journal, 6, 2 (2000) 35–9. These and further details from ibid., 8–10. Wade, ‘Japan, The World Bank, and the Art of Paradigm Maintenance’, 23–7. Ibid., 27–30. Various statements by Japanese officials indicate that the Asian way is taken seriously. In July 1993, for example, Ogura Kazuo, the then head of the economic affairs bureau in the Japanese foreign ministry, called for ‘a new concept of Asia’, or ‘Asian Restoration’. Cited in E. Mortimer, ‘Blocs on the Horizon: The Notion of an “East Asian Economic Caucus” is Gaining Ground’, The Financial Times, 19 January 1994, p. 18. Drifte’s suggestion that Japan is acting as a sort of filter via which the excesses of US consumer culture are made more palatable to its Asian neighbours, points to one way in which Japan can compete in the realm of popular culture even without being particularly ‘attractive’ itself. Moreover, he goes on to paint a picture of East Asia as ‘swamped with Japanese “low-brow” culture’, such as comic books, computer games, music, etc., as well as hardware such as hi-fi equipment. Drifte, Japan’s Foreign Policy in the 1990s, pp. 157–8 (quote on p. 157). Funabashi, ‘The Asianization of Asia’; Mahbubani, ‘The Pacific Way’. Some go so far as to suggest that a process of convergence between the philosophical traditions of East and West has begun, although how far this process will go and with what results, remains unclear. See Acharya, ‘Ideas, Identity and Institution-building’. Asked to comment on what he thought was the greatest cliché about Asia, Allen Whiting (a former ‘old hand’ of the US State Department’s East Asia section) replied: ‘That there is a thing called the Asian Way – some mystical way of peace, harmony and consensus’. The Far Eastern Economic Review, 1 February 1996, p. 34. A. Dupont, ‘Is there an “Asian Way”?’, Survival, 38, 2 (1996) 16. See ibid.; and an interesting commentary by C. Patten, ‘Asian Values and Asian Success’, Survival, 38, 2 (1996) 5–12. Note, however, that the last point, concerning the economic and political decline of the ‘West’ does seem particularly overblown in the light of the Asian crisis beginning in 1997. As noted, Japan’s relationship with the US ruled out a leading Japanese role, but Japan has reserved the right to consider the issue. For details see inter alia W. Villacorta, ‘Japan’s Asian Identity: Concern for ASEAN-Japan Relations’, ASEAN Economic Bulletin, 11 (1994) 74–92. See Kelly, ‘The Association of Southeast Asian Nations’. This potential leadership depends, of course, upon the successful emergence of Japan from the stagnation and recession that has plagued the economy throughout the 1990s. Given their, at times, farcical attempts at managing the economy over the past several years, serious doubts must be cast on the ability of the political leadership and the bureaucracy to deliver sustained economic recovery.

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9

Conclusion

1. Resistance to the ‘unipolar moment’ has, however, caused some analysts to take stock of America’s place in the world. See S. Huntington, ‘The Lonely Superpower’, Foreign Affairs, 78, 2 (1999) 35–49; and G. Wills, ‘Bully of the Free World’, Foreign Affairs, 78, 2 (1999) 50–9. 2. The East Asian Economic Group quite quickly became the East Asian Economic Caucus as it was subsumed under the APEC banner. 3. See inter alia R. Higgott and R. Stubbs, ‘Competing Conceptions of Economic Regionalism: APEC versus EAEC in the Asia Pacific’, Review of International Political Economy, 2 (1996) 516–35. 4. Hook, ‘Japan and the Construction of Asia-Pacific’, in Gamble and Payne (eds), Regionalism and World Order, p. 194. 5. See J. Clarke, ‘APEC as a Semi-Solution’, Orbis: A Journal of World Affairs, 39, 1 (1995) 81–95; and V. Aggarwal, ‘Building International Institutions in Asia-Pacific’, Asian Survey, 33 (1993) 1029–42. 6. H. Nesadurai, ‘APEC: A Tool for US Regional Domination?’, The Pacific Review, 9 (1996) 31–57; H. Soesastro, ‘ASEAN and APEC: Do Concentric Circles Work?’, The Pacific Review, 8 (1995) 475–93. 7. See Kelly, ‘The Association of Southeast Asian Nations’. 8. According to the Japanese Ministry of Labour, in 1992 US manufacturing workers earned one and a half times the amount earned by their Japanese counterparts as measured according to purchasing power parity. 9. For an overview see H. Fukui and S. Fukai, ‘The End of the Miracle: Japanese Politics in the Post-Cold War Era’, in Berger and Borer (eds), The Rise of East Asia, pp. 37–60. 10. See Y. Sellek and M. Weiner, ‘Migrant Workers: The Japanese Case in International Perspective’, in Hook and Weiner (eds), The Internationalization of Japan, pp. 205–28. 11. In recent years there has been a much more explicit emphasis on ODA serving the ‘national interest’. MOFA’s summary of Japan’s ODA in 1999, for example, reveals that Japanese assistance over the medium term (roughly five years) will be linked closely ‘with Japanese foreign policies and other important policies pertaining to the national interest’. This is a remarkably candid statement for a government so often concerned with cultivating an image as a major contributor to international rather than national interests. Ministry of Foreign Affairs, Japan’s Official Development Assistance: Summary 1999, p. 4. 12. Rapkin, ‘Japan and World Leadership?’, in Rapkin (ed.), World Leadership and Hegemony, p. 196. 13. Cox, ‘Middlepowermanship, Japan, and Future World Order’. 14. See, for example, A. Parker and G. Malkani, ‘Akihito’s “Sorrow” Falls Short of Apology’, The Financial Times, 27 May 1998, p. 1. 15. Cited in The Mirror, 26 May 1998, p. 1. 16. ‘Japanese to Challenge ex-PoWs: Firms Asked to Cheer for their Emperor as ex-Prisoners Turn Backs and Whistle Colonel Bogey’, The Guardian, 26 May 1998, p. 1; G. Malkani, ‘ “Silent Majority” in Warm Farewell to Akihito’, The Financial Times, 30–31 May 1998, p. 7; and J. Ezard, ‘Ex-officers Apologise to Emperor over PoWs’ Protest’, The Guardian, 30 May 1998, p. 7.

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204 Notes 17. The following details on mass attitudes are drawn from Hook, Militarization and Demilitarization, pp. 100–26. 18. Ibid., p. 125. 19. Ibid. 20. Japanese Defence Agency, Defence of Japan 1996. 21. The extent of the power the US has over Japan and others is illustrated by something J. K. Galbraith said in an interview with The Guardian in June 1998. On being asked to comment on the state of the US stock market, he ended his reply by saying ‘One thing is wonderfully clear – when trouble comes on Wall Street, the blame will all be passed on to Indonesia, Malaysia and maybe Japan. Wall Street insanity – let me use a slightly milder expression, Wall Street “speculative error” – now has a perfect cover’. The Guardian (Business), 21 June 1998, p. 4. 22. Environmental destruction in the home islands did not cease with the removal of these highly polluting industries. See G. McCormack, ‘From Number One to Number Nothing: Japan’s Fin de Siècle Blues’, Japanese Studies, 18, 1 (1998) 31–44. 23. See P. Brown, ‘Japanese “Bribes” Threaten Wildlife’, The Guardian, 7 June 1997, p. 15; and R. Whymant, ‘Japan Condemned for Slow Death of Two Killer Whales’, The Times, 20 June 1997, p. 17. 24. See D. Potter, ‘Assessing Japan’s Environmental Aid Policy’, Pacific Affairs, 67 (1994) 200–15. 25. Ibid., 209. 26. Berger, ‘The Triumph of the East?’

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Index aid programmes 81–4, 116–17, 121, 154–5 Akamatsu Kaname 141 Akihito, Emperor 120, 136, 154 Albright, Madeleine 132 ‘Americanisation’ 134 anarchy of the inter-state system 5–6 Annan, Kofi 76 anti-Americanism 134 Anti-Trust Act (1947) 94 Arase, David 121 armed forces, Japanese 117–18 see also Self-Defence Force ‘ASEAN Way’ 123 Asia-Pacific Economic Cooperation (APEC) 150–1 Asian Development Bank 79, 93, 103–4 Asian economic crisis (1997–98) 92, 96, 100–1, 133, 153 Japan’s response to 101–4 Asian Monetary Fund (proposed) 104 Asian values 2 Asian Way 147, 153 characteristics, assumptions and beliefs of 145 in economics, politics and society 131, 144–6 in security 122 Association of South East Asian Nations (ASEAN) 96, 116, 119, 122–3, 127, 145 ASEAN Foundation Solidarity Fund 102 ASEAN Institutes of Strategic and International Studies (ASEANISIS) 119–20 ASEAN Regional Forum (ARF) 112, 120–3 Post-Ministerial Conference (PMC) 119–21

Augelli, E. 2 Australia 119, 126 Australia Group 115 autonomation 138 bad debts 97–8 Bank of Japan 60, 94, 97–8 Bank of Tokyo-Mitsubishi 97 bankruptcies 98–9 ‘Big Bang’ (1998) 93, 97–8 ‘Bigemony’ 3 Blair, Tony 136, 154 bourgeoisie, the 22 Brady plan (1989) 79 Braudel, F. 14 bubble economy 70 burden sharing 84, 113–15, 150 Burma 118 ‘business civilisation’ (Strange) 17 Cabinet Orders 62 Cambodia 120–1 Canada 126 Chechnya 109 cheque-book diplomacy 115 China 85–6, 109, 111, 114, 118, 120, 125–6, 133–4, 145, 147, 150, 154, 158 civil service, Japanese 46–7 civil society 21 Clark Air Base 112 Clinton, Bill 121, 136 Cold War, ending of 25, 113, 116 Commission on National Living 142–3 competition policy 74 Conference on Security and Cooperation in Europe (CSCE) 119 Confucianism 2, 145–6, 158 consensus 51 see also post-war consensus Constitution, Japanese 38–41, 59 Article IX 40, 52, 58, 61

234

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Index ‘Contract with America’ 113 conventional weapons, control of see United Nations Register of Conventional Arms ‘core values’ (Strange) 24, 26 corruption 58–64, 98, 100 Cosmo Credit Corporation 97 Cox, Robert 2, 7, 13–29, 34, 128–9, 135–6, 154 credit 89–93, 97 credit ratings 99 ‘critical turn’ in international relations theory 14–15, 18 Cronin, Richard 79–80 Dai-Ichi Kangyo 99 Daiwa Bank 99 debt relief 79 defence expenditure 117, 154 Defence of Japan (government publication) 123–4, 126 de-militarisation see militarisation democratisation in East Asia generally 121 in Japan 8, 33–9 passim, 44, 52 Deng Xiao Ping 85 Densan wage system 51 Diet, the 38–9, 51, 62 membership of 37 one-party dominance of 8, 34, 60 Dodge Plan 49 dollar, US convertibility into gold 93 exchange rate against the yen 94 Drifte, R. 77, 135–6 dumping duties 74 dynamic structures 22–3 Earth Summit (1992) 157 East Asian Economic Caucus (EAEC) 147, 150–1 East Asian Economic Group (EAEG) (proposed) 111, 146, 154 The East Asian Miracle (World Bank publication) 141, 144 East Timor 109, 132 Eastman Kodak 73 economic development, ‘Japanese model’ of 103, 141

235

‘economic miracle’ 8, 141, 144 economism 8, 54–5 education 47–8, 77, 155–6 Edwards mission 44–5 Eisenhower, Dwight D. 52 Emperor, Japanese see Akihito; Hirohito environmental damage 149, 156–7 euro, the (currency) 95 European Central Bank 103 European Union (EU) 3–4, 74, 116, 150 exceptionalism American 133 Asian 158 exchange rates 49, 93–4, 98 Fairchild Semiconductor Company 70 Falk, Richard 131–2 financial structure (of power) 25, 27–8, 90, 153 flexible production methods 131, 137–9 ‘flying geese’ theory 141–2, 146, 158 Ford, Henry 135 Fordism and post-Fordism 137–40 foreign direct investment (FDI) 80, 82, 84 Foreign Exchange and Foreign Trade Control Law 97 foreign policy 70, 87 foreign workers in Japan 149, 152–3, 158 France 135 Frankfurt school of sociology 13–14 Fuji Bank 99 Fuji Film Company 73 Fujitsu Corporation 70 Garton Ash, Timothy 136 General Agreement on Tariffs and Trade (GATT) 55, 74, 76 Germain, R. 17–18 Gill, S. 2, 16–17 Gilpin, R. 1, 92 globalisation 14, 23, 68, 88, 105, 140 golf courses 156–7

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236 Index Gramsci, Antonio 2, 7, 13–19 passim, 135 Group of Seven (G-7) 76, 143 Tokyo meeting of (1993) 73 Gulf War 3, 62, 74, 84, 108–9, 111, 114–16, 120, 123 Hadley, Eleanor 45 Halliday, J. 36, 49, 81 Hashimoto Ryutaro 73, 97–8 Hatano Yoshio 115 Hatch, W. 86–7 hegemonic class 19–21 in Japanese society 21–2, 54, 64, 153 hegemonic stability theory 4–7 hegemony 1, 14 American 2–7, 20–3, 27, 71, 92–4, 108, 112–13, 131–4 common features of 92 Cox’s and Strange’s conceptions of 27–9 as distinct from dominance 20, 107–8 financial 99–100 Japanese 18, 23–4, 67–71, 88, 92–3, 99–101, 107, 131, 135–6, 147, 151 problems inherent in concept of 23–4 Helleiner, Eric 92–4, 100 Higuchi Report 116–17 Hirohito, Emperor 36, 38–9, 52 historic bloc concept 21, 34, 36, 51, 53, 54–67, 107, 153 historical context of theory 14 historical materialism 13–18 historical structures, method of (Cox) 15–16, 22–5, 28 history, re-making of 15 Hokkaido Takushoku Bank 97 Holding Company Liquidation Committee 45 Hook, G. 53, 154 Hoover, Blaine 46 Hosokawa Morihiro 60, 117 Hughes, C. 125 human resources development 102

human rights 75, 121, 132, 134 hyperliberalism 14, 131, 143 ideology 6 Ikeda Hayato 51 image of Japan in the West 142, 156–7 India 109, 133 Indonesia 96–7, 122, 132–3, 151 Industrial Bank of Japan 99 insecurity of workers 57–8 international agreements, Japanese participation in 115 International Atomic Energy Agency (IAEA) 76 International Bank for Reconstruction and Development (IBRD) see World Bank International Labour Office 76 International Monetary Fund (IMF) 55, 70–1, 76–8, 93, 95, 100, 102–4, 131, 143, 150–1, 156 international organisations Japanese participation in 75–6 voting power in 77–8, 95 international political economy, mainstream of 3–6, 13–15, 20–1 international relations, problem-solving and critical theories of 15 internationalisation 136–7, 141 investment allowances 50 Iran 134 Iraq 110 Ishikawa Yozo 110 Islamic culture 132 Japan Communist Party (JCP) 48, 51 Japan Development Bank 50 ‘Japan Inc.’ image 142 Japan Leasing 99 Japan Socialist Party (JSP) 48, 51 Jiang Zemin 120 ‘jobs for life’ system 57–7, 77 ‘just-in-time’ concept 138, 141 Kaifu Toshiki 108–9, 117 Kanemaru Shin 60 Kauffman, James Lee 45 keiretsu 50, 72–3, 94

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Index Kennan, George 45 Kenny, M. 17–18 Keohane, R. 1, 3, 5 Kerr, P. 120 Kinmen Island 112 Kishi Nobusuke 8, 51–3 knowledge structure (of power) 25, 28, 128, 155 national domination of 133–5, 139–40, 147, 156 technological-informational and ideational-ideological aspects of 128–31 underlying values and norms 136 Kojima Kiyoshi 142 Konoe, Prince 38 Korean War 81, 94 Kosovo 109, 111 Krasner, S. 1 labour laws, reform of 41, 43–4 Lafontaine, Oskar 103 land reform 41–4 language skills 155–6 lean production 131, 138–41 ‘legitimacy deficit’ 75, 135, 154 Lenin, V. I. 2 Liberal Democratic Party (LDP) 8, 34, 42, 50–1, 60–1, 99, 114 liberalisation, economic 90, 100, 151, 153 Lincoln, Edward 81 Long Term Credit Bank (LTCB) 99 ‘low-posture’ politics 8, 51, 55, 58, 61 MacArthur, Douglas 35, 38, 41, 44 Machiavelli, Niccolò 18 Maekawa Report (1986) 142 Mahathir Mohamad 111, 122–3, 146, 150–1 Malaysia 75, 123, 134, 158 Marcos, Ferdinand 132 market access 73 Market-Oriented Specific Talks (MOSS) 73 Marx, Karl 2 Masaki Shiratori 144 Matsumoto Joji 38

237

Matsunaga Hikaru 102–3 Matsuoka Komakichi 43 Matsushita Yasuo 60 McCormack, G. 81 mercantilism 83, 135, 142 militarisation and de-militarisation 33–5, 40, 52–3, 59–64, 127 Minamata incident 8, 55 Ministry of Education 94 Ministry of Finance 144 Ministry of Foreign Affairs 126 Ministry of Health and Welfare 60 Ministry of Home Affairs 46 Ministry of International Trade and Industry (MITI) 50, 85–7, 143 Mitsubishi (company) 45 Mitsui (company) 45, 50 Miyazawa Kiichi 73, 104, 116 Moody’s (credit rating agency) 99 Moore, J. 44, 49 multilateralism 111–12, 117, 121 Murphy, C. 2 Nagano Atsushi 60 Nakasone Yasuhiro 61 Nakayama Taro 119 neo-realism 81 alternatives to 14–15, 19, 22–7 limitations of 1, 4–7, 13 Netherlands, the 4, 92 New Asian Industries Development (New AID) plan 86–7 New Miyazawa Initiative 102 Nikko Securities 98–9 Nippon Credit 99 Nixon, Richard (and Nixon shocks) 8, 55, 84, 93 Nomura (company) 99 North American Free Trade Agreement (NAFTA) 3, 74, 150 North Korea 85, 110, 113–14, 118, 120, 158 North Vietnam 108 nuclear power and nuclear weapons 108–10, 125–6, 129–30, 145, 155 Obuchi Keizo 62 Obuchi Plan 102

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238 Index Occupation of Japan 7, 33–54, 94 aims of 35 purge of officialdom 36–8 reforms introduced 35–8, 46–9 official development assistance (ODA) 116–17, 121, 154–5 see also aid programmes offshore operations and investments 57, 79, 82 Ogata Sadako 137 Ohga Norio 98 Ohno, T. 138, 141 oil shocks 8, 55, 138, 142 Okinawa 155 Olsen, E. 3 Omnibus Trade and Competitiveness Act (US, 1988) 72–3 Organisation for Economic Cooperation and Development (OECD) 55, 76 Overbeek, H. 2 Owada Hisashi 108, 117 Ozawa Ichiro 60 pacifism 8, 54, 58, 63, 127, 155 Pakistan 109, 126, 133 ‘passive revolution’, concept of 22, 54 Pax Americana II 3 Pax Consortis 3 Pax Nipponica 3, 96 peacekeeping operations 115, 155 Philippines, the 75, 123 Plaza Accords 93–4 political system of 1955 34, 60 popular culture, American 134–5 post-war consensus 59 power conceptions of 20–1, 27 measurement of 23 non-military 108–9 relational and structural 24, 92 see also structural power ‘private capacities’ of Japanese officials 127 privatisation 57 ‘problem-solving’ theory of international relations 15 ‘production alliances’ 86

‘production control’ action 49 production methods 131, 137–41, 149, 152–3 production structure (of power) 25, 28, 68–9 national domination of 149–51 productivity 57 ‘public goods’ 4–5 Rapkin, David 77–8, 135–6, 154 Reaganomics 16–17 reciprocity in economic relations 150 redundancies 56 regime theory 15 regional bloc scenario 3–4, 7 regionalism, mainstream explanations of 1–7 relational power 24, 92 Rengo (Japanese Trade Union Confederation) 57 reparations 81 restructuring (economic, social and political) 55–6 ‘reverse course’ 35, 48 RIMPAC (Rim of the Pacific) exercises 114, 123 Ripplewood (company) 99 Rokkasho re-processing plant 109 Rupert, M. 2 Russell, A. 128 Sakakibara Eisuke 60 Sakura Bank 99 ‘salarymen’ 56 Sato Mitsuo 103–4 scandals 60 ‘screwdriver’ plants 74 security policy 9, 107–27 ‘comprehensive’ 76, 122 different levels of 122 independent Japanese role in 121–2 Japan’s relations with individual states in East Asia 124–6, 154 Japan’s treaty with the US see United States multilateral approaches to 111–12, 117, 121

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Index security structure (of power) 25, 28 Self-Defence Force (SDF) 50, 62–4, 114–18, 121–6, 154–5 Maritime branch 114 sex tourism 149, 153 Shidehara Kijuro 35, 38–9 Shingo, S. 140 small- and medium-sized businesses 56, 86–7 social relations of production 2 social structures of states 16 Sohyo (General Council of Trade Unions) 51, 57 South Korea 113–14, 120, 123–5, 151, 158 sovereign credit ratings 99 sovereignty, Japanese 38–9 Soviet Union 19–20, 25–6, 70, 119 standardisation of work and life experiences, tastes and aesthetic values 137–8 state, the 5–6, 19–21 state-society complexes 67–72 passim, 135, 147 Strand, J. 77–8 Strange, Susan 17–18, 24–9, 67–8, 91–2, 128 Strategic Defence Initiative 26 strike action 43–4, 49–52 structural adjustment 63, 144, 151 Structural Impediments Initiative 73, 137 structural power, concept of (Strange) 24–8, 54, 67, 92, 128 structure-agency debate 5–6, 13 Subic Bay 112 Suharto, Raden 122, 132 Sumitomo Bank 99 Sumitomo Corporation 98–9 ‘Super 301’ 72, 74 Supreme Commander Allied Powers (SCAP) 39, 43–5, 49, 52 see also MacArthur, Douglas Taiwan 63, 85 Taiwan Straits 112, 114, 125 Takeshita Noboru 60 Tanaka Kakuei 59–60, 68 Thailand 110, 151, 154

239

Theatre Missile Defence (TMD) system 125 Thurow, L. 3 Toyota Motors and Toyotaism 87, 138–41 trade unions 43–4, 48–9, 56–7, 139 traditional habits, customs and practices 33–4 transnational corporations and the transnational class 16–17 Travelers Group 98, 153 Tsuru, S. 46 unemployment 58, 151 ‘unfair’ trade practices 72–3 United Kingdom 4, 92, 107–8 United Nations (UN) 55, 71, 76–7, 84, 114, 154 Register of Conventional Arms (UNROCA) 115–16, 121, 124, 126 Security Council membership 76, 115 United Nations Peace-Keeping Operations Bill (Japan, 1992) 114 United States commercial activities in East Asia 80 concern with human rights 75, 121, 132, 134 Guidelines for Japanese Defence Cooperation with 61–3, 114, 125, 155 hegemony of see hegemony, American isolation and provincialism of 79, 132–3 Japan’s economic impact on 69–70 Japan’s relations with 3, 49, 70–5, 110 Japan’s Security Treaty with 8–9, 50, 52, 55, 61–2, 105, 110, 112–13, 116–17, 121, 154–5 policy on use of military force 111–13 Seventh Fleet 112, 118 strength of financial system 99

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240 Index unilateralism of 14, 20 see also ‘Americanisation’; antiAmericanism; dollar, US USSR see Soviet Union van der Pijl, K. 2 Vietnam War 8, 55, 61, 81, 94 voluntary export restraints (VERs) 72, 90 Wade, R. 144 Wallerstein, I. 1 war legacy of 136, 149, 154, 158 threat of 108 Wassenaar Arrangement 115 Weinberger Doctrine 111 Wendt, A. 1, 5 Whitney, Courtney 38–9

women workers 56–7, 77, 152–3 ‘work-in’ action 49 working hours 152 World Bank 55, 70, 76–8, 93, 95, 131, 141, 143–4, 150–1, 156 World Health Organisation 76 world systems theory 1, 24 World Trade Organisation 73–4, 120, 133, 156 world views 21 Yamaichi Securities 97 Yamamura, K. 86–7 yen, the value of 93–4, 98, 142 yen bloc 95–6 Yosano Kaoru 104 Yoshida Shigeru 43, 49, 51, 53 Yugoslavia 111 zaibatsu 44–5, 50, 94