MacArthur and Hirohito

 One of the most impressive triumphs for the Western liberal capitalist vision was the emergence of Japan as an economic powerhouse after World War II.  By the middle of the 1970s, Japan had emerged as a politically stable civilian regime with a dynamic, thriving economy.

 Results were due to American military protection, investment, and transfers of technology. ◦ Example of the benefits of being incorporated into the First World.

 By 1951, the U.S. had poured more than $2 billion into the Japanese economy.  The Korean War led to the U.S. spending $4 billion in Japan for supplies, equipment, services, and recreation facilities for American troops.  This would continue with the Vietnam War.

 To facilitate recovery, the U.S. opened its enormous domestic market to Japanese goods. ◦ Cameras, watches, and television sets emerged as a major export. ◦ Initially, Japanese goods were rather primitive, but over time became more and more sophisticated.

 To replace the country’s physical plant, which had largely been destroyed, the U.S. transferred considerable technology to Japan. ◦ A greater percentage of up-to-date equipment than other countries.

 To promote an export-drive economy, the Japanese government encouraged its citizens to save, not spend.  At the same time, it erected import barriers that allowed specially targeted industries to take off without foreign competition.

 Already in the 1950s, Japan’s economy was surging upward at nearly 10 percent per year.  Japan maintained that rate through the 1960s and into the 1970s.

 The oil crisis of 1973 caused Americans to purchase smaller cars which Japan was ready to supply.  By 1993, Japan had gained 30 percent of the U.S. automobile market.  1966 Toyota

 The U.S. has remained Japan’s biggest trading partner since the end of WWII.  In 1972, the U.S. returned Okinawa to Japan but retained the right of American military bases.

 Sources of disagreement/concern: ◦ Trade imbalance. ◦ U.S. forces stationed in Okinawa.

 By the early 1990s, Japan’s economy had peaked and it began experiencing economic difficulties and entered a period of recession.

 By 1994, Japan began falling behind in consumer electronics because of world access to the Internet as the computer and consumer-electronics industries merged. ◦ The U.S. software industry surpassed Japan’s.

 Overcrowding: ◦ The population of Japan was million. ◦ The density per square mile in 1998 was 863 compared to 70 plus in the U.S. ◦ Highest life expectancies in the world: 84 for women and 77 for men.

 The steady increase in population size has created problems of overcrowding, housing shortages, congestion, and pollution.

 Cost of Living: ◦ The phenomenal economic growth naturally resulted in a rise in the standard of living.  Per capita national income in 1994: $29,244; U.S.: $20,382.

◦ With the growth in the economy the prices of goods skyrocketed.  In 1991, prices in Tokyo were 27% higher than in New York City.  Mid 1990s– Gas: $4.25 a gallon; $13 a pound for average-grade beef; BMW: $104,000.

 World War II ended empires in Asia.  Between 1946 and 1957, countries fought for freedom. ◦ U.S. grants independence to the Philippines in ◦ Great Britain leaves the Indian subcontinent in ◦ France leaves Indochina in 1954.