Japan: the Other Side of the Miracle

The following is the text of a talk first given as an open lecture at the University of York, England, in October last year. We reproduce it not only because of its interesting factual content but also because we share its general analytical approach.

Everyone has heard about the "Japanese miracle". Not only is it a term which is constantly on the lips of journalists, politicians and other hacks, but wage-earners outside Japan are constantly admonished to work harder and emulate the Japanese in order that a similar 'miracle' can be achieved in 'their' countries. Of course, socialists are little inclined to believe in miracles, least of all those which are attributed to capitalism. But, with certain qualifications, we too can recognise that the economic growth of Japanese capitalism since Word War Two has been phenomenal. Measured solely by capitalism's standards, there is something miraculous in the way in which, during only four decades, an utterly defeated nation-state such as Japan has been transformed into a major economic power, overtaking many rival nation-states in the process. To put it another way, there is something miraculous in the sheer quantities of wealth which the wage-earning class has created in Japan since World War Two. How has this come about? What price has the wage-earning class paid for the "miracle" of Japanese capitalism? And what lessons should we draw from the experiences of our fellow wage-earners in the land of the rising capital?

Firstly, let us briefly review the economic growth and social changes which are said to constitute the "Japanese miracle". At the end of the Second World War, Japan's economy had been pounded into submission. Due principally to the military blockade of Japan's ports, industrial production in 1945 was only 60 per cent of average production during the period 1934-6, and a mere 40 per cent of the level attained in 1940. Between 1937 and 1945, 3.1 million Japanese had been killed. Apart from the nuclear bombing of Hiroshima and Nagasaki, somewhere in the region of 120,000 people are thought to have died in one night of horror alone, when on 9/10 March 1945 American B-29 planes set much of Tokyo alight with incendiary bombs. By the time of Japan's surrender, 30 per cent of all Japanese had lost their homes as a result of war damage. In addition, wages had been driven down remorselessly throughout the years of war. Taking the average wage for 1934-6 as 100, the wage index had fallen to 79.1 by 1941, to 65.8 by 1943, and had reached the starvation level of 41.2 by 1945. By the end of the war, many workers had no alternative but to leave the devastated cities for the countryside and attempt to scrape a living from the land. The drift back to the land continued during the first, punitive years of the American occupation of Japan, so that by 1947 49.9 percent of the workforce was engaged in agriculture (compared to 16.3 per cent engaged in manufacture). Postwar governments also continued the policy of attempting to increase production while forcing down real wages. For example, in 1947-8 the coalition government led by the Japan "Socialist" Party sought to implement a policy whereby wages would be pegged at 26.8 times the 1934-6 levels, while prices would be allowed to rise to 65 times the corresponding levels. One statistic will suffice to illustrate the misery experienced by Japanese workers of the period: the rate of infant mortality was as high as 67 per 1000 live births during 1947-9.

In contrast to the battered state of Japan's economy in the late 1940s, the outbreak of the Korean War in 1950 marked the beginning of unprecedented economic growth for Japan. The average growth rate for the period 1955-73 was a staggering 10.5 per cent per annum, and although the Japanese economy has suffered from the ill effects of world capitalism's economic slump since then, it has nevertheless generally continued to outperform the economies of most other countries, be they private capitalist countries such as the USA or West Germany, or state capitalist countries such as Russia or China. Tables 1-3 compare the growth rates of Japan's economy over recent decades with the corresponding rates of growth of various categories of capitalist countries.

The result of this spectacular growth is that Japan's economic muscle has increased enormously. In 1955, Japan's GNP (Gross National Product) was less than half the size of the UK's GNP. As late as 1965, Japan's GNP was still smaller than either the UK's or West Germany's, and was a mere 12 per cent of the USA's GNP. By 1984, Japan's GDP (Gross Domestic Product) was more than twice the size of the UK's, 47 per cent greater than West Germany's and 43 per cent of the USA's GDP. Not only has the Japanese economy grown, but its structure has changed fundamentally. Agriculture, forestry and fishing now account for less than 10 per cent of the workforce, whereas 55 per cent of the workforce are engaged in the tertiary (services) sector of the economy. Within the industrial sector of the economy too, restructuring has taken place, so that textiles (which were the mainstay of the pre-war Japanese economy) and heavy industries such as steel and shipbuilding (which were at the cutting edge of Japan's economic growth in the 1950s and 1960s) have been relatively marginalised by the rapid development of "high-tech", "knowledge intensive" industries such as electronics and engineering.

If Japanese capital has expanded in this fashion over recent decades, what about the wage labour half of the capital/wage labour equation? After all, structural change for capitalism's economy necessarily means structural change for the wage-earning class, and if we talk about "knowledge intensive" industries, the knowledge in question is not an attribute of industry as such but of flesh-and-blood working men and women. Since the 1950s, the Japanese working class has experienced major improvements in its living conditions and educational standards. Average wages rose rapidly during the peak years of economic growth (doubling in real terms during the period 1965-75, for example) and although since then they have increased only marginally (0.86 per cent in real terms between 1976 and 1985, due to the influence of the world recession) they are now among the highest in the world. This is reflected by the spread of consumer durables among the population. Whereas a bicycle was a prized possession for many working class families in the 1940s, by 1984 69 per cent of all Japanese households owned motor cars and more than 98 per cent owned vacuum cleaners, colour TVs, refrigerators and washing machines. Life expectancy has increased from 59.6 years for males and 63.0 years for females in 1950-2 to 74.8 years and 80.5 years respectively in 1985. As for educational levels, over 90 per cent of young people remain at school until 18 years old and 35 per cent go on to attend universities and colleges.

All this has created the impression for some that Japanese-style capitalism confers benefits on all - capitalists and wage-earners alike. Needless to say, this is an illusion which the agents of capital accumulation have fostered vigorously. The truth, however, is rather less cosy. There has been a price to pay for the success of capitalism in Japan and it comes as no surprise to socialists to discover that it is wage-earners who have been forced to pick up the bill. In other words, the "Japanese miracle" has another, darker side - one which never finds its way into the glossy, technicoloured accounts of Japan's postwar economic development. There are many facets of this "other side" of the "Japanese miracle", but in this article we shall concentrate on two aspects. One is the increasing exploitation and alienation experienced by the better paid and better educated wage-earning class and the other is the rising threat of nationalism and militarism.

Before examining these two aspects of modern Japan, however, one point should be made abundantly clear. Socialists are in no sense embarrassed by the fact that capitalism has developed spectacularly in Japan over recent decades. It is no part of our purpose to paint a misleadingly gloomy picture of Japan or anywhere else. On the contrary, this development has made capitalism riper than ever before for socialist transformation. The accumulation of ever greater quantities of capital in Japan has added to the productive forces which would be available to a socialist world, just as the growth and maturing of the wage-earning class in Japan has created the social force which (in cooperation with wage-workers elsewhere) can bring about socialism.

One indication that those who praise capitalism are a lot less confident of the virtues of the system which they defend than they pretend to be is the number of lies which they are forced to tell. Many readers will have seen the Nissan advertisements which boast about a company where there has never been a strike. This is blatant deception, ignoring the bitter struggle at Nissan in 1953 which lasted for many weeks and took the form of the company whose workers "have never been on strike" locking out the workforce and engineering the creation of an alternative, compliant trade union. The resulting defeat of the workers' struggle was the rock on which Nissan built its subsequent prosperity. In the same league as Nissan's lies is a graph in a recent issue of the Japan Education Journal which, under the caption 'More for less', purports to show that wage rises in Japan have outstripped productivity. Not only are the wage rises which are shown nominal rather than real (ignoring inflation) but it is wage rises in large companies alone which are compared with general increases in productivity in large and small companies. In fact, when like is compared with like, one sees that increases in productivity have consistently outstripped wage increases. Even though real wages more than doubled between 1965 and 1975, productivity kept ahead, with the result that at the end of this period workers in Japan were receiving wages which represented a smaller proportion of the wealth which they created than previously. This is an important point when we consider the extent to which wage-earners in Japan are exploited. The rate of exploitation is not directly related to the level of wages. Workers do not necessarily become less exploited as their wages rise, nor more exploited as wages fall. Rather, the rate of exploitation expresses a relationship between, on the one hand, the quantity of wealth which workers create which is extracted from them as surplus value and, on the other hand, the quantity of wealth which workers create which is equivalent to the value of their wages. In the light of this, the fact that productivity increases have outstripped wage rises shows clearly that Japanese wage-earners have been subjected to an increasing intensity of exploitation, despite their rising wages and living standards.

The intense exploitation of Japanese wage-earners is reflected in the vertiginous rate at which capital has been accumulated in postwar Japan. Competition between rival capitals dictates that the bulk of the surplus value which is extracted from wage-earners will be used to renew and expand the stock of capital. Figures show that the capitalist class in Japan has proportionally achieved a far higher rate of capital formation than capitalists in many other "advanced" countries. Hence one can say that key elements in the success of capitalism in postwar Japan have been the linked processes of the high rate of exploitation of wage-earners and the capitalists' ability to achieve a high rate of investment.

Statistics on wage levels and enrolment in educational institutions are at best crude indicators of life as it is actually experienced by wage-earners. Set against the relatively high wage levels found in Japan in recent years, one has to put the expenditures which wage-earning families are obliged to make, and in this regard, education expenses are an important factor. Educational qualifications are vitally important in a highly competitive society such as Japan and are a key element in the capitalists' strategy towards the wage-earning class of divide and rule. Workers in large companies are set against workers in small companies, permanent workers against temporary workers and so on, and the chief means by which each new generation of wage-earners attempts to gain the coveted jobs as workers on the permanent payroll of giant companies is via educational qualifications. This means that most wage-earning families are obliged to make enormous sacrifices in order to educate their children. Current wage levels of workers in Japan look a lot less high when one realises that in 1984 Japanese families spent on average Y170,000 (£569) on education-related items (books, tutors, extra classes etc.) per child in elementary school, Y210,000 (£703) per child in junior high school, and proportionally increasing amounts for children in senior high schools and universities. In addition to regular schooling, more than one in four elementary or junior high school children attend an after-hours cramming school 2 or 3 days per week, paying an average monthly fee of Y9,200 (£30.80).

Not only is education a crippling financial burden on wage-earning families, but the psychological strain is unbelievable too. Socialists might talk about alienation, but many workers use more graphic terms such as the "examination hell". Since pensions are notoriously low in Japan, wage-earning parents buy education for their children as a hoped-for insurance for their old age. Conversely, working class children find that the future well-being of the entire family rests on their young shoulders. Small wonder, then, that many simply cannot bear the strain. During the 1985-6 academic year, the number of children who missed more than 50 days' school for psychological reasons was 30,998. More horrific still are the figures on child suicides. During 1985, 83 children under 15 years of age killed themselves. In 1986, 802 youths aged 19 or under committed suicide, 207 (25.8 per cent) of these because of problems directly arising from education. Could anyone quibble at describing as murderous a system which results in such deaths of young people?

Japanese capital is locked in a life and death battle with rival blocs of capital, and each victory for Japanese capital has provoked threats of retaliation. For the moment the straggle is taking the form of propaganda salvoes and economic/ political manoeuvring, but due to the nature of capitalism, verbal confrontations and diplomatic sparring of this sort have a habit of escalating, as they did in the 1930s. It is not for nothing that representatives of US capital have been muttering ominously that if Japan wins the race to produce the "fifth-generation" computer, it will be "an economic Pearl Harbour".

In a world of carnivores, the Japanese state too needs fangs. But although the rearming of Japan and the resurgence of nationalism are under way, the Japanese state is having to tread warily in order to realise its ambitions in these fields. The chilling words of the Vice-Chief of the Naval General Staff, who flatly stated on 13 August 1945 that "if we are prepared to sacrifice 20 million Japanese lives in a kamikaze effort, victory shall be ours!", are still remembered by millions of Japanese workers. How could the horrors of war be forgotten when on 6 August 1986 the names of 4,941 people who had died in the previous twelve months from the effects of the Hiroshima nuclear bomb were added to the roster, bringing the total so far to 143,590 dead?

The Japanese state is dismayed that many wage-earners are lacking in patriotism and the spirit of devotion to the Emperor. In an effort to instil such sentiments, in August 1986 the Minister of Education launched a campaign for "moral education" within the schools in order to create "spiritually healthy Japanese, who can correctly inherit the nation's good tradition". Similarly, the government has been engaged in a multi-pronged strategy to revive the cult of the Emperor, whitewash wartime atrocities and re-establish symbols of militarism such as the Yasukuni Shrine, where the war-dead are commemorated. Japan currently has 270,000 men under arms and ranks eighth in the world in terms of military expenditure. The present objective of the Japanese military is to be able to control the sea lanes for 1000 miles around the Japanese archipelago (which, incidentally, means being able to control the entry routes of the Russian Far Eastern fleet into the Pacific). On the occasion of the 1986 RimPac (Rim of the Pacific) naval exercise, Japan dispatched eight destroyers, eight anti-submarine helicopters, eight anti-submarine patrol planes and a submarine. All of which is not bad for a country whose Constitution officially proclaims:

. . . the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as 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. (Article 9)

There has been considerable opposition from within the wage-earning class to the rising tide of nationalism and militarism. The following incident is typical. Recently, the Ministry of Education directed all prefectural boards of education to raise the national flag and sing the national anthem at all school events. In March 1986a disturbance occurred at a school in Okinawa when the headmaster carried the national flag into a school assembly. Schoolteachers surrounded the headmaster and asked him to remove the flag. When the headmaster refused, schoolchildren walked out of the assembly, together with their parents who were present. Socialists cannot help but be encouraged by incidents such as this and the distaste for symbols of nationalism which they indicate.

Within Japan there is a tradition of anti-capitalism which extends back to the early days of this century. A few quotations, taken at random, can illustrate the quality of this tradition:

What we are aiming at is a fundamental revolution in economic organisation -the abolition of the wages system, in other words. (Kotoku Shusui, 1970) [1]

. . . to take the example of the means of production having been nationalised, this would be nothing more than state capitalism in the end, since the workers could not escape their slave-like conditions. (Arahata Kanson, 1918) [2]

I raised the subject of the abolition of wage labour and commodity production, but that does not only apply to us in the capitalist countries. What is extremely regrettable, and what should be severely criticised, is that in the socialist countries too it is regarded as a dream 'which will come eventually in the distant future'. (Haniya Yutaka, 1974) [3]

Below these peaks of anti-capitalist consciousness is a plateau of hostility to capitalism, which is widespread among Japanese wage-earners. As a day labourer in a slum district of Osaka put it in July 1986:

Stiff competition between construction companies has produced day labourers like us. The companies can hire us only when business is good. So in a recession, we workers become unemployed and are forced to sleep in the streets or in the parks.
Japan is not a first-class country because the government is leaving us in the lurch. Not even gods and buddhas can help us. This place is like a slave market.

When this anger of exploited wage-earners fuses with the above insights into the alternative to capitalism, it will be a miracle indeed if capitalism can survive. Working men and women in Japan and throughout the world need to look beyond the tawdry gadgets and the gnawing insecurity which are all that even "successful" capitalism has to offer them. For until they act to abolish capitalism, their exploitation will continue (no matter whether wages are high or low) and the poisons of nationalism and militarism will fester (no matter how flowery the declarations written into Constitutions or uttered by political leaders).

John Crump

1. John Crump, The Origins of Socialist Thought in Japan (Croom Helm/St Martin's, 1983), p. 350. Japanese names are given in the normal East Asian form of family name followed by personal name. ,
2. Ibid., p. 280.
3. Haniya Yutaka, 'Chin Rodo to Shohin Seisan no Haishi' in Asahi Shinbun, 23 March 1974. Haniya here borrows the term "socialist countries" from popular parlance. In an interview with me, he agreed that the so-called "socialist countries" are state capitalist.