Japan Growth

Japan is one of the largest, most highly developed countries in the world. It’s infrastructure and technology are unparalleled. Japan is truly a remarkable country and has a remarkable economy with a high standard of living for its’ people. But, how did this small island nation, located in the midst of the Pacific, become one of the largest and most advanced economies the world has ever seen?

In this article, I will be talking about the Japanese economy, from the days following World War II, to the modern day, to analyze the rise of Japan.

The year was 1945. Japan had just surrendered from the second world war. Upon surrendering, the United Sates sent hundreds of thousands of military personal to occupy Japan. The goal was to oversee the demilitarization of Japan and transition it into a democracy.

President Harry Truman appointed General Douglas McArthur in charge of this operation. Japan was in a state of turmoil after the war. Many of their cities had been bombed into shreds, many people were homeless, and there were mass food shortages across the country. McArthur’s first objective was to establish a reliable food network into Japan.

He achieved this through receiving donations through various charities, as well as U.S government loans. The next phase was to win over support from the Japanese emperor. Emperor Hirohito was seen as a God amongst the Japanese people. Many westerners, as well as Japanese leaders wanted to abolish the emperor from power and convict him as a war criminal.

However, General McArthur resisted these demands and advocated that the emperor stay in power. He knew the Japanese people adored and worshipped the emperor and removing him from power would only cause conflict. This move was successful, as McArthur won the support of the emperor and Japan transitioned relatively smoothly into a democracy.

A new Constitution of Japan was created in 1946. Many industries were privatized. On April 10, 1946, the Japanese people elected their first prime minister. Under the new constitution and leadership, the culture of Japan liberalized, and aspects of society, like women’s rights soured.

In the early 50s, the United States withdrew their troops from Japan and Japan was now yet again, an independent state. The 50s marked a turn for the Japanese economy. It began to industrialize and new technologies were introduced into society, which helped all industries, including farming.

In the 60s, Japan transformed into a consumer economy. The Japanese government invested heavily in education and social welfare, turning the country into a highly educated and productive workforce. It became a hub for the development of electronics, automobiles, steel, and other high tech devices, being renown for the precision and reliability of its’ products. Japan became a highly successful international trader and achieved a trade surplus, meaning it was exporting more products than it was importing. The demand for Japanese products soared and the economy skyrocketed in the 60s.

It was dubbed the “economic miracle.” In just 20 years, Japan went from a poverty-stricken, war-torn country under the occupation of the United States military, to one of the most highly developed and prosperous countries the world had ever seen. At the rate the Japanese economy was growing, there were fears among western leaders that Japan would soon overtake the United States as the largest economy in the world. However, this did not happen, as things began to shift, starting in the 1970s, as Japan’s economy slowed significantly. Starting in the 70s, Japan’s economy faced many challenges. Many of the once dominant Japanese industries, especially in manufacturing, began to decline. The international trading scene began to shift as well, as the OPEC oil embargo hit the Japanese economy hard, as they were highly dependent on foreign oil.

All of these factors contributed to the stunting of the Japanese economy. Despite these setbacks, Japan’s economy remained strong. Although it did not see the growth it saw in the 50s or 60s, the economy of Japan still grew throughout the 70s and 80s. However, by the 90s, japan’s housing bubble burst and ultimately lead to a recession, which caused a great stagnation in its’ economy. People started purchasing less which resulted in an increase in prices of goods. Thus, deflation kicked in, which further caused people to cutback spending. This vicious cycle of deflation has been one of Japan’s main problems since the 90s, because they still battle it to this day.

Japan is a nation of resilience. They went from a war torn country to one of the greatest economies in the span of just 20 years.