Japan — recovery, the economic miracle and its limits
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Question
What was SCAP, and who led it?
Answer
Supreme Commander for the Allied Powers — the US-led authority that occupied and governed Japan 1945–52, led by General Douglas MacArthur.
Question
What does Article 9 of the 1947 constitution say?
Answer
Japan renounces war as a sovereign right and agrees never to maintain armed forces with war potential — the 'peace clause'.
Question
Explain the purpose and effect of Japan's 1946–50 land reform.
Answer
Absentee landlords were forced to sell farmland, which was resold cheaply to tenant farmers — turning millions of tenants into small landowners and reducing rural unrest.
Question
What was MITI and what did it do?
Answer
The Ministry of International Trade and Industry — it directed cheap credit, loans, and import protection toward strategic export industries like steel, cars, and electronics.
Question
What are keiretsu?
Answer
Networks of allied companies grouped around a central bank, giving firms stable long-term financing; they replaced the pre-war zaibatsu conglomerates.
Question
Why was the Korean War (1950–53) significant for Japan's economy?
Answer
US 'special procurement' contracts for the war gave Japanese industry a sudden, large injection of capital and demand right when it needed it most.
Question
Give an example of the debate around MITI's role in the economic miracle.
Answer
Some argue MITI's planning was the key cause of growth; others argue high savings, skilled labour, and export demand would have driven growth regardless, and MITI sometimes misjudged industries (e.g. discouraging Sony's transistor radios).
Question
What triggered the end of Japan's asset bubble in 1989–90?
Answer
The Bank of Japan raised interest rates to cool speculative property and stock prices, causing the bubble to burst and prices to collapse.
Question
What is meant by the 'Lost Decade(s)'?
Answer
The prolonged period of economic stagnation, deflation, and near-zero growth in Japan from the 1990s into the 2000s–2010s, following the bubble's collapse.
Question
Why were 'zombie companies' a problem after 1989?
Answer
Banks kept failing firms alive with fresh loans rather than writing off bad debts, trapping capital and workers in unproductive businesses instead of letting them move to growing ones.
Question
What demographic crisis compounded Japan's economic troubles after 1989?
Answer
An ageing and shrinking population — falling birth rates and low immigration meant fewer workers, more retirees, and rising pension/healthcare costs.
Question
Compare the two main causal debates in this micro-topic.
Answer
For the economic miracle: was it mainly MITI's planning or external circumstances (Korean War, Article 9 savings)? For the Lost Decades: was it mainly policy failure (slow bank reform) or deeper structural/demographic forces (ageing population, rigid keiretsu system)?
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Topic 12.9 hub
Politics and economy in Japan (1912–2020)
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