History of Global Arms Transfer, 17 (2024), pp. 109-130

Japan’s Defence Industry and Arms
Transfers During the Cold War: Between
Independence and Alliance
By ATSUSHI KOKETSU*
The purpose of this paper is to discuss the development process of the Japanese
defense industry during the Cold War in relation to the issue of arms transfers.
After World War II, the U.S. promoted the lending of surplus weapons to Japan,
and at the same time, it hoped for the revival of Japan’s independent defense
industry, albeit with restrictions. In Japanese domestic politics, a conflict emerged
between the Shigeru Yoshida Cabinet’s vision of light armaments and therearmament plans of those in the defense industry. Thus, the issue of rearmament
became an important political issue in Cold War Japan, and at the same time, also
conflict over restrictions on the defense industry and its independence influenced
the political situation. The conflicts and confrontations over the revival of the
defense industry and demands for arms transfers that occurred during the Cold
War have continued to have a strong influence on Japan-U.S. relations and thenature of Japan’s national security policy to the present day. This paper analyzes
the above issues in light of the controversy over the theory of self-defense and
the Japan-U.S. alliance.

1. Introduction: Problem-Setting and Previous Studies(1) Assignment of tasks
The Korean War, which began on June 25, 1950, forced the United States to change its
military strategy during the Cold War. The new strategy was to move away from the‘forward base strategy’, which was based on deploying forces in areas close to the Soviet
Union, to a new strategy of dispersing forces to surrounding areas at a certain distancefrom the point of force projection. It would reduce the deployment of forces in areas whereconflicts were expected to erupt and, as an alternative, encourage the establishment of adefence community between Japan and South Korea in the Asian region. As a result, theU.S. would counter the Soviet threat, especially to Japan. Moreover, it would force Japanto rearm in accordance with the Mutual Security Act (MSA).
The U.S. lent Japan its surplus weapons after World War II in the hopes that Japan would
become self-reliant in its defence, as well as continue and develop defence production
through the MSA. It also made Japan’s rearmament inevitable. At first, both the Supreme
Commander Douglas MacArthur of the Supreme Headquarters of the Allied Powers (GHQ)and the Cabinet of Shigeru Yoshida were reluctant to rearm Japan. However, proposals* Researcher, Emeritus Professor, Institute for the History of Global Arms Transfer, Meiji University

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from the private sector led by businessmen with high hopes for the defence industry were
pioneering; public organisations, such as the National Security Agency, the Economic
Council and the Ministry of Finance, also submitted proposals for rearmament. In the midstof these developments, there was a heated debate among political parties in Japan over the
scale of rearmament and the nature of defence production.
The gap between Japan’s intention to extract special economic demands through the MSA
agreement and the U.S.’ desire to strengthen Japan’s self-defence capabilities became
apparent. In other words, the Yoshida cabinet’s attitude of struggling to respond to themutually contradictory demands for self-reliance and alliance came to the fore.
This paper will first examine how Japan’s defence production during the Cold War
responded to the conflicts and contradictions over independence and alliances. Second, it
will point out that the supposedly contradictory interrelationship between independence
and alliances has been deeply inherent in the foundation of the Japanese defence industry
and policy from the end of the Cold War to the present. Third, the reality of such conflicts
and contradictions has not been fully recognised or overcome even today. Fourth, theseconflicts and contradictions remain unrecognised and unresolved to this day, which is why
the defence industry and policy have fallen into a semi-independent state, far from being
self-reliant.
(2) Previous studies
Due to paper length limitations, I would like to highlight only two papers. The first is
Minoru Sawai’s ‘From Special Demand Production to Defense Production: The Case of
Osaka Prefecture’.1 In the postwar period, Japan’s economy was more inclined towards
special demand production (initially called ‘separate demand’) during the Korean War.
However, after determining that it could not expect to expand military production due tothe extraterritorial procurement of the U.S. forces under the MSA agreement, the economy
did not overly lean towards the defence industry; instead, it focused its efforts on enhancing
civilian production. Based on the common theory that the result was high economic growth,
Sawai states that ‘taking on weapons production in the late 1950s caused great social
friction’.2 He also underscores that while weapons production was considered taboo insociety, the entrepreneurs who sought to produce weapons had a deep interest in and acertain ideology of national defence. The words and actions of these entrepreneurs suggest
the existence of a certain ideology and a deep interest in national defence among thoseentrepreneurs who sought to produce weapons. Although it is undeniable that militarydemand, i.e. the defence industry, was declining in proportion to the development ofcivilian demand, we point out that there was strong support from MITI), the Defence
Agency and the Keidanren Committee on Defence Production.3
Thus, Sawai does not give credence to the common belief that the Japanese economy as awhole will re-transform from military to civilian production and enter an era of full-fledged
1 Sawai [2018].
2 Sawai [2018], p. 58.
3 In this connection, Sawai states, ‘Behind the decision not to let go of defense production was not only the

judgment of management, which considers defense production as the basis of the nation, but also the Ministry ofInternational Trade and Industry, which has jurisdiction over defense production companies and calls forcooperation in strengthening defense capabilities while preventing bleeding orders, the Defense Agency, which is
the user of defense equipment, and the Keidanren Defense Production Committee, which has strong It is
imagined that there was strong lobbying by the Ministry of International Trade and Industry, which has
jurisdiction over defense production companies, the Defense Agency, which is the user of defense equipment,
and the Keidanren Defense Production Committee’ (Sawai [2018] p. 59).

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rapid economic growth.4 He emphasises that attention should be given to the fact that thedefence industry will surely take root in the Japanese economy even in the midst of rapid
economic growth. Several things cannot be seen from an understanding of the actual stateof the economy on a quantitative level, and we agree with this point. The defence industry
should be viewed not from a quantitative perspective but from a qualitative one, focusing
on its potential and possibilities.
Next, Yoshio Asai’s ‘Special Demand in the 1950s s’5 in the ‘Ⅳ Japan-U.S. Economic
Cooperation Concept’ traces in detail the fact that under the name of ‘Japan-U.S. Economic
Cooperation’, strategies were skilfully devised and implemented from around the outbreakof the Korean War to extract Japanese munitions production capacity for the benefit of the
U.S. It also argues that there was a clear difference among the various forces in Japan interms of their response to these strategies. Asai also postulates that there was a clear
difference between the various forces in Japan over how to respond to this situation. Asai
details the process by which the revival and utilisation of Japan’s munitions industry led toprospects for the development of Japan’s civilian munitions industry and Japan’s role as abulwark nation for the U.S. in both economic and military terms.
The above paper is in the category of economic history. Thus, it is essential to analyse the‘Japan-U.S. Economic Cooperation’ and Japan’s ‘industrial mobilisation’ at the economic
level, as presented in the Asai paper, as well as at the military level, that is, to mention theextent to which the security environment surrounding Japan during the Cold War wasaffected by the U.S. military’s actions. It has already become a clear historical fact thatJapan’s rearmament was forced in response to the U.S.’ intentions. In the context of thishistorical fact, it is necessary to discuss the issue from political and military perspectives
because it is no exaggeration to say that in Cold War-era Japan, the military determined theeconomy.
(3) Definitions of terms: ‘self-defence’ and ‘independent defence’If self-defence is conditioned on the compatibility of unilateral defence intentions andcapabilities, then it seriously lacks validity as a practical matter. This is because, from thestandpoint of economic and military rationality, it does not seem to make much sense tofortify the nation with equipment of its own manufacture. Citing Kwon Tae-young’s article‘Our Country’s Self-Reliance Defence Efforts and the Direction of Advanced National
Defence in the 21st Century’, 6 Chung Kyung-aw distinguishes between ‘self-reliance’
defence, which excludes outside interference, and ‘independence’ defence, in which thenation does not depend on outside forces but rather on its own capabilities.7 7However, as
military technology continues to evolve, it is now largely impossible for a single country to
carry out either self-reliance or independent defence on its own. Therefore, it is highly
doubtful how much meaning there is in this distinction.
In South Korea under the Park Chung-hee administration and Taiwan under the ChiangKai-shek and Ching-kuo administrations, ‘self-defence’ was repeatedly emphasised in theirpolicies, but only to the extent that they mentioned the rate of domestic production offrontline equipment. It is often possible to emphasise the independence and autonomy of anation or administration by estimating its dependence on the U.S. at a low level. The terms‘independence’ and ‘originality’ are nothing more than a kind of propaganda. From there,
4 Sawai [2018], p.41.
5 Asai[2003a]
6 Korean Association for International Politics [1997].
7 See Zheng[2015],p.70.

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the only forceful terminology is eclectic coinage, such as ‘semi-autonomy’, ‘semiindependence’ and ‘semi-dependence’, but even this terminology remains ambiguous.
Japan’s security policy has been consistently dependent on the U.S. since the end of WorldWar II, and this excessive dependence is now merely replaced by the terms ‘joint’ and‘alliance’. I dare say it is dependence and subordination in the name of alliance.
Another distinction between the military and defence industries is the use of the term
‘munitions industry’ in this report, which refers to the prewar and postwar periods as thedefence industry.

2. Dismantling the Munitions Industry and Military Spending(1) Dismantling process of the military industrial industry
After the defeat of Japan, GHQ issued a series of orders to dismantle and convert stateowned and private munitions factories. On 22 September 1945, an order was implemented
banning the production of weapons and aircraft (GHQ Directive No. 1), as well as an orderfor former munitions companies to submit civilian munitions development plans (GHQDirective No. 2). Furthermore, on 15 October of the same year, military institutions wereabolished (General Staff Headquarters, the Army and Navy academies, and others). The
dismantling of the military arsenals consisted mainly of a total of 100 plants (50 Army, 46
Navy and the Army and Navy Research Institute) and a total of 46 plants in the eight Armyarsenals (Tokyo No. 1, Tokyo No. 2, Sagami, Nagoya, Osaka, Kokura, Incheon and South
Manchuria), along with the fuel headquarters, transportation department, clothing depot,
medical material depot, veterinary material depot, military stores and various researchlaboratories. Meanwhile, the Navy dismantled four arsenals. The Navy had four arsenals(Yokosuka, Kure, Sasebo, Maizuru), a machine shop, a gunpowder plant, ten air arsenals,
six fuel plants (Yokkaichi, Tokuyama, Iwakuni, Yokohama and others), three technicalministries, two medical supply plants and a technical research institute.
The Yokosuka Arsenal was converted into a base facility for the U.S. Navy, and otherfacilities were developed as private shipyards. For example, Kure Arsenal became Harima
Shipbuilding Kure Dockyard, Sasebo Arsenal became the Sasebo Shipbuilding Industry,
Maizuru Arsenal became Iino Sangyo Maizuru Plant, and so on. In addition, aircraft
manufacturing companies were banned from production and research altogether, andairframe factories were converted from military to civilian production plants for producing
passenger cars, freight cars and train bodies. More than 600,000 units of machine tools
were used for compensation, reducing the total number owned to 175,000 units;
approximately 5 million tons of blast furnaces 3 million tons of electric furnaces, 6 million
tons of flat furnaces and 6 million tons of rolling mills were removed.8
By August 1948, 16,736 pieces of machine tools from the Army and Navy arsenals in 17
locations throughout Japan had been transferred as compensation in kind. In parallel, allweapons and production materials under the control of the Army were transferred to the
Allied Forces. The buildings and various production facilities of the Army arsenal, valued
at 1.3 billion yen as fixed assets, were turned over to the Allied Forces. Navy vessels,
weapons and production facilities were likewise destroyed. A portion of these will be used
for compensation, and a portion will be converted for the peace industry.
The above are examples of the dismantling and destruction of state-run military arsenals,
8 Koyama [1972], pp. 334–335. See also, e.g., Toyo Keizai Shinposha [1950] Cohen [1950].

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but the civilian munitions facilities that had greatly supported the munitions industry were
uprooted in November 1946 with the Final Report on Compensation (commonly known as
the Pauley Plan). However, in March 1947, the year after the Pauley Proposal waspresented, the Truman Doctrine was announced in the midst of the emerging Cold War
between the U.S. and the Soviet Union. This led to a revision of Japan’s prewar policy ofdismantling its munitions industry.
During this period, the Tetsu Katayama Cabinet enacted the ‘Law for Eliminating
Excessive Concentration of Economic Power’ (Law No. 207) on 18 December 1947, which
resulted in the June 1949 reorganisation of Mitsubishi Heavy Industries, the top company
in the prewar Japanese munitions industry, into East Japan Heavy Industries (later
Mitsubishi Nippon Heavy Industries), Central Japan Heavy Industries (later New
Mitsubishi Heavy Industries), West Japan Heavy Industries (later Mitsubishi Shipbuilding
and then New Mitsubishi Heavy Industries) and West Japan Heavy Industries (later
Mitsubishi Shipbuilding). The dismantling of the munitions industry was part of the GHQled policy of ‘democratisation’ of Japan. However, the brakes were applied to this moveafter the Truman Doctrine.
When the Korean War begins, Japan will assume the role of a U.S. military supply base.
This was the start of the postwar defence industry. The postwar defence industry was to bebooming, covering a broad range of industries, ranging from those that could be producedwith relatively low-cost technology, such as jute bags for sandbags, military uniforms,
cement, barbed wire and fuel tanks, to aircraft repair, bomb manufacture and tank andarmoured vehicle repair. The U.S. government’s extraterritorial procurement, or the socalled ‘special procurement’, amounted to $10 billion (360 billion yen) over a three-year
period when the government budget was around 1 trillion yen. If domestic consumption by
U.S. soldiers in Japan (so-called ‘indirect special procurement’) is added, the amount isestimated to have reached $30 billion (about 1 trillion yen).
(2) Commencement of arms lending and MSA agreements
Japan, which was prohibited from manufacturing, importing or exporting weapons, began
de facto arms imports in the form of U.S. military assistance in the form of weapons to be
deployed in the Police Reserve Corps that was established. On 8 July 1950, GHQ Supreme
Commander Douglas MacArthur issued a letter ordering the creation of a 75,000-member
National Police Reserve Corps and the increase of the Japan Coast Guard from 8,000
personnel.
Following the Police Reserve Corps, Patrol Frigates (PFs) and Landing Support Ships(LSSLs) were provided free of charge to the Coast Guard, which was established in 1952,
followed by the signing of the ‘Japan-U.S. Vessel Lending Agreement’ in November 1952
and the ‘Japan-U.S. Naval Vessel Lending Agreement’ in May 1954, respectively, in which
the former provided 18 PFs and 50 LSSLs and the latter provided 14 destroyers and otherlarge vessels. On 28 April 1952, the former Japan-U.S. Security Treaty came into effect,
creating the so-called ‘path of arms’ between the two countries.
Specifically, the MSA law was applied to Japan (and North Atlantic Treaty Organization
countries). According to the ‘Vandenberg Resolution’ (U.S. Senate, June 1948), ‘The
United States will participate in regional and collective defence agreements affecting its
national security’. Such agreements shall be based on the principle of ‘continuous andeffective self-help and mutual assistance’. The purpose of the MSA Act was to ‘strengthen
the mutual security and individual and collective self-defence of the free world’ and113

ATSUSHI KOKETSU‘develop the resources of friendly nations for the national interests of the United States, forthe security and independence of its friends’. It confirmed Japan’s determination to fulfil
its military obligations under the Japan-U.S. Security Treaty, while the U.S. side confirmedin the text that Japan would ‘contribute to the development of its own defence capabilities
and the development and maintenance of the defence capabilities of the free world’ (Article
8 of the MSA Act).9 Furthermore, following the start of the grant aid, the Defence Secrets
Protection Law was enacted (1954), which established penalties of up to 10 years in prison
for those who detected, collected or leaked secrets.
Thus, ‘financial support for Japan’s defence industry was entrusted to the U.S. under the
MSA agreement concluded in 1954. Between 1954 and 1967, Japan received military
assistance amounting to 576 billion yen. This amount accounted for 27% of total equipment
purchases during the same period, and this value reached 58% by 1957 alone’.10 As pointed
out, the MSA agreement at least allowed the Japanese defence industry during the Cold
War to develop based on the will and requests of the U.S.
(3) The inside story of the U.S.’ economic and military assistance to JapanThe U.S. envisioned an increase in economic and military aid to prevent the Korean War
and the subsequent penetration of communism into Southeast Asia. According to Yoshio
Asai, the gist of the ‘Japan-U.S. Economic Cooperation’ was, first, to mobilise Japan’s
industrial production capacity to supplement the U.S. military mobilisation system; second,
to help Japan gain access to the Southeast Asian market; and third, to support Japan’s
economic independence by indirectly procuring reconstruction aid supplies for Korea fromJapan. The three points are summarised in the following article.11In other words, the U.S.
was using the special procurement from Korea as leverage to encourage Japan’s economic
recovery and self-reliance while simultaneously planning industrial mobilisation and therevitalisation of the defence industry.
This U.S. plan diverged from the stance of Prime Minister Shigeru Yoshida, who was also
a light-armaments activist. However, Yoshida, who was also a realist, judged that, apartfrom the ostensible theory of light armaments, accommodating the U.S. intentions would
strengthen Japan-U.S. relations, counter communism and ensure economic expansion into
Southeast Asia.
The ‘Data on U.S.-Japan Economic Cooperation’ dated 3 April 1951 and prepared by the
Economic Stability Headquarters, which was the general manager of economic policy in
the Japanese Government, stated, ‘In order to maintain a rational and smooth circulation of
the national economy, it is necessary to coordinate domestic and foreign demand, and thefollowing measures should be taken. (1) The Government of Japan should be fully informedof the details of the items, quantity, duration, etc., of the goods expected from Japan. (2)Establish a reasonable mechanism and method of ordering and receiving orders for
expected goods from Japan’.12
In short, the Japanese government was strongly aware that the Korean War had createdspecial procurement demand for Japan, and that actively responding to the U.S.’ requests
would be an effective means of economic recovery. In the end, the U.S. agreed to Dulles’
9 Appendix A of the MSA Act states, ‘The development of the defense capabilities of Japan should besignificantly facilitated if the United States Government would consider assisting in financing the various
industries of defense production in Japan’.
10 Parler[2010]p.118.
11 Asai[2003b],p.123.
12 Material on U.S.-Japan Economic Cooperation (Economic Stability Division)” prepared by General Affairs
Division, Ministry of Finance (Center for Asian Historical Records, Rec. A19110145600)

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demands on Japan.
As Dulles stated on 18 January of the same year, the purpose of his visit to Japan was toincorporate Japan into the U.S. wartime mobilisation system and expect Japan’s defence
production capabilities to play a complementary role. He said, ‘In order to have Japan
actively cooperate with the free world, the United States must commit itself militarily andeconomically to Japan’.13 In particular, after the Korean War, Japan’s defence production
capacity and munitions were given increasingly greater weight in military assistance toSoutheast Asia. However, unlike the Yoshida administration and the Japanese business
community, which were active in strengthening Japan-U.S. relations, the Ministry of
Finance was not necessarily positive about the unconditional Japan-U.S. Economic
Cooperation at a stage when sufficient prospects for economic recovery were not yet
available.14(4) Emergence and consequences of the rearmament proposal
Even before the outbreak of the Korean War, rearmament proposals were initially presented
on a civilian basis. In March 1953, in addition to the ‘Tentative Proposal on Defence ForceDevelopment’ by the Keidanren and the Defence Production Committee of the Economic
Cooperation Roundtable and the ‘Economic Study of Japanese Rearmament’ by the
National Economic Research Association, three concrete rearmament proposals were
proposed: the Security Agency proposal, the Economic Council proposal and the Finance
Ministry proposal. The three proposals were suggested as concrete rearmament
proposals.15The reason for this was the need to set a more reasonable and realistic figurethat took into account the size of Japan’s economic power and military aid provided by the
MSA.
The problem was the economic strength to support the set figures. In other words, nomatter which rearmament plan was adopted, the question was how to secure financial
resources and how much of a burden it would be on the Japanese economy, which was stillin the process of reconstruction. It has been pointed out that the above three proposals ‘aresaid to have been prepared with the aim of covering the annual defence expenditures within
the framework of the natural increase in national income each year, with the shortfall
expected to be covered by U.S. assistance, so as not to devalue the national lifestyle’.16
In particular, in all three proposals, the amount of Japanese defence spending and MSA
military assistance funds were roughly equal, and Japan’s rearmament expenditures wereroughly split 50-50 between Japan and the U.S. At the same time, the total amount ofmilitary spending as a percentage of national income was kept in the range of 2% to a
maximum of 5.5% over the five-year period from 1954 to 1958.17
Even if U.S. military assistance is provided for the time being under the MAS agreement,
13 Igarashi[1995],p.229.
14 See, for example, ‘Documents on Japan’s Economic Cooperation’, prepared by the General Affairs Division,

Minister’s Secretariat of Finance (Economic Stability Headquarters). The same document is in the collection of
the Center for Contemporary Asian History (Ref. A1911014550).
15 There are numerous previous studies on the rearmament issue, but I will cite Masuda [1999] here.
16 Economic Affairs Department, Financial Division, ‘The Economic Burden of Japan’s Rearmament’, in
Reference No. 36, February 1954, p. 34, edited by the Research and Legislative Examination Bureau, National
Diet Library.
17 The three proposed military budgets in 1954 were as follows: the NISA proposal for 118 billion yen forJapanese military spending and 108 billion yen for U.S. MSA aid, for a total of 226 billion yen; the Economic
Council proposal for the same, 1038 yen and 80.1 billion yen, for a total of 183.7 billion yen; and the Daisho
proposal, 76.4 billion yen and 54 billion yen, for a total of 130.4 billion yen (see ibid., Reference No. 36, Table 2
ロ, p. 32).

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once Japan decides to rearm, capital investment in response to the development of militarytechnology will become indispensable, and growth in defence expenditures will be
inevitable. This would inevitably place a burden on the Japanese economy, which was in
the process of reconstruction soon after the war. Therefore, it was predicted that Japan
would become increasingly dependent on the U.S. to equip its police reserve forces,
security forces and even the Self-Defence Forces. Indeed, ‘Japan’s defence forces would
become the “metabolism” of U.S. weapons, and in that sense, a loss of autonomy’ (bypass
marks are in quotations). The judgment of the Finance Division of the Ministry of
Economy18was right on the mark.
(5) Conflict over the MSA agreement
The MSA is shifting from support for Europe to support for Asian countries from theviewpoint of military strategy to check and deter the Soviet Union and China. In Japan,
there will be a fierce debate between those who want to take advantage of the U.S. strategy
of focusing on Asia and find ways to increase defence production and defence capabilities
and those who believe that Japan should choose the path of economic development byenhancing trade relations, especially with China, while improving relations with the Soviet
Union and China.19
The fierce debate between Shigeru Yoshida’s Cabinet and the Socialist Party over theinterpretation of the MSA was a complex issue of security in Japan during the Cold War.
As already noted, Prime Minister Yoshida, while accepting the intentions and requests of
the U.S., tried to keep the strengthening of defence forces to a minimum and prioritise
economic development as much as possible. However, the policy debate was muddled by
the expectations of the defence industry, which was eager to use the MSA agreement asleverage to get Japan’s defence industry off the ground.
Regarding the MSA agreement, Government Commissioner Ueki Koukoro (Parliamentary
Vice Minister of Finance) had a positive outlook: ‘I think the first point that MSA
assistance will have a positive impact on the Japanese economy is that it will reduce theburden of national expenditures required for the implementation of Japan’s defence
programmes. Secondly, the cooperation in economic measures will provide us with a gift of$10 million, which is necessary to contribute to the enhancement of our country’s industrial
and other economic strengths’.20
Ueki’s remarks summed up the Yoshida Cabinet’s view of the government’s insistencethat the MSA was a highly beneficial agreement for Japan, including the reduction ofJapan’s defence burden through the assistance of the U.S. and other countries, theenhancement to the Japanese economy, the yen purchase of wheat imports and theconvenience in the introduction of foreign capital.
However, the aid by the MSA consisted of military assistance and economic and technicalassistance (mutual defence financing, defence support assistance, economic and technicalassistance, technical assistance and others). ‘The U.S. fiscal year 1954 budget was roughly
70% military assistance, defence support assistance (economic assistance to the military
18 Economic Affairs Department, Financial Division, ‘The Economic Burden of Japan’s Rearmament’, in
Reference No. 36, February 1954, p. 34, edited by the Research and Legislative Examination Bureau, National
Diet Library.
19 For more information on the actual state of arms expansion plans in Europe and the issue of MSA aid, see
Masao Fujii’s ‘Western European Military Expansion Plans and U.S. MSA Aid’ (Reference No. 31, 1953) andMichizo Yamakoshi’s ‘West German Rearmament and Financial, Economic, and Human Resources’ (Reference
No. 53, June 1955)
20 Official Gazette Extra No. 19, Proceedings of the House of Councillors, No. 21, March 19, 1954, p. 299.

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industry), technical assistance and others at 10%’.21 As noted, it is fair to say that it was a
military aid itself. 22
Opposition parties led by the Socialist Party of Japan increasingly criticised the Yoshidacabinet on the grounds that the MSA agreement would lock in a subordinate relationshipwith the U.S. and make rearmament inevitable and that the defence industry could growalongside it. In particular, the General Council of Trade Unions of Japan (formed in 1950),
a labour union supporting the Socialist Party, launched a campaign in various regions
against the MSA agreement, claiming that it would spur the militarisation of Japan. Prime
Minister Shigeru Yoshida responded to these movements by stating, ‘Regarding the MSA
issue, we did not agree to the MSA because of pressure from the United States but as aresult of discussions between the United States, which requested and hoped for the MSA,
and Japan, which also requested and hoped for the MSA. It was concluded, and it was notconcluded under the command and order of the United States government. I believe that
the Minister of Foreign Affairs has already explained this to you’. 23
The gap in perception between the U.S. and Japan over the MSA agreement wasimmense. The U.S. expected Japan to take the initiative in this agreement to expand its
defence capabilities and play a pivotal role in the U.S. military strategy against China andthe Soviet Union in East Asia. Therefore, in August 1953, when it became evident that the
Yoshida Cabinet was not serious about expanding its defence capabilities, U.S. Secretary
Dulles and other high-ranking officials were dispatched to Japan to press for the expansionof Japan’s defence capabilities. In fact, Secretary Dulles and others ‘expressed
dissatisfaction with Japan’s defence efforts, and as the MSA negotiations progressed, it
became increasingly clear that the real heart of the negotiations lay in Japan’s defencebuildup plan, which should be commensurate with the U.S. military assistance’.24
In light of this situation, it was Japanese Socialist Party member Yoshihachiro Kimura
who most sharply attacked the explanations of Prime Minister Yoshida and Yoshida’s
cabinet ministers. Mr. Kimura argued, ‘As for the self-reliance of the Japanese economy, itcannot become truly self-reliant if it continues to depend on special procurement’. 25
Kimura insisted that ‘Japan’s economy cannot truly become self-reliant if it continues todepend on special procurement’. In particular, Kimura recognised that the MSA agreement
would lead to an acceptance of Japan’s dependency on the U.S. and that the ongoing
rearmament would lead to excessive government investment in the defence industry, which
would put a brake on Japan’s economic independence.
Similarly, in connection with the MSA agreement, Sukeharu Soma of the Japan Socialist
Party asked, ‘What kind of future subsidies are intended for heavy weapons, aircraft, naval
vessels and other such items, not just orders as in the past, to promote these industries? The
government itself intends to promote these industries by subsidising heavy weapons,aircraft, naval vessels and others in the future. 26 In response to this question, Minister ofFinance Ogasawara Sankuro responded, ‘The government itself intends to promote theseindustries. For example, even if we were to direct the defence industry, since we have theso-called Security Forces in Japan, of course, we would not be able to receive or borrow all
21 Ishii [2003], p. 179.
22 In fact, in terms of the economic history of Japan during the period in question, Nakamura [1982] states that

‘this was the period in Japan’s postwar history of more than 30 years in which the country was most inclined
towards rearmament and military production’.
23 The 19th Budget Committee Minutes of the House of Councillors, No. 26, April 22, 1954, p. 4.
24 Nihon no Bouei [Defense of Japan], Asagumo Shinbunsha, 1958, p. 39.
25 The 19th Budget Committee Minutes of the House of Councillors, No. 26, April 22, 1954, p. 11.
26 Ibid, No. 27, April 23, 1954, p. 9.

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of these weapons and other items that we use from them. Even if we were to build what wehave now, it is likely that there would be a considerable amount of money needed for
security forces’ other items’. 27
While pointing out the possibility that the economic independence stipulated in the MSA
agreement will eventually result in overinvestment in the defence industry, he says that thisis to be limited to the enhancement of the defence industry, which secures equipment forthe security forces, to avoid pressure on other civilian demand industries. This is where thecontradiction between the two policies of economic independence and enhancement of the
defence industry becomes a point of contention between Yoshida’s cabinet and the
opposition parties in relation to the MSA agreement. Even though the government steered
the economy away from dependence on special procurement for the purpose of economic
independence, as long as the MSA agreement existed, the quality of the independent
economy and the direction of the defence industry would ultimately have to proceed under
the will of the U.S. In short, the opposition parties are unanimous in their view that there islittle possibility of resulting in an independent economy. From this, it is clear that both the
Yoshida cabinet and the opposition parties were fundamentally aware of the structuraldifficulty of reconciling the U.S.’ military assistance with Japan’s self-reliant economy.
The issue of weapon exportation was proposed as a way to resolve this contradiction.
From the opposition side, Kimura Yoshihachiro makes the following noteworthy statementon this point: ‘In relation to Japan’s defence production in the future, you said that you
would foster the production of weapons to be supplied to Japan’s security forces, but in thecurrent situation in Japan, when fostering weapons production, it is not possible for abusiness unit to meet the demand of the Japanese security forces alone. The company as aunit cannot be established unless it is based on the premise of the so-called extraterritorialloans and exports of weapons. In this way, an economy dependent on special procurement
cannot be allowed to continue. Therefore, the production of weapons is immediately
dependent on special procurement demand. This is inconsistent with the independence of
the Japanese economy’ (quoted in parentheses). 28
For economic independence and the expansion of the defence industry to proceed without
contradiction, he was proposing an arms export method that would seek orders for weapons
production from overseas, outside of the MSA), as a precondition for the defence industry
to develop on its own. Councillor Kimura pointed out that the domestic market is not
sufficient for the defence industry to be established as a sustainable industry, and the only
way is to seek sales channels overseas. This is not an active endorsement of arms exports
by Mr. Kimura but rather a judgment that the only way to achieve both economic
independence and a defence industry is through arms exports.
The reality of the orientation towards arms exports to ensure the sustainability of the
defence industry can be seen in similar examples in the prewar Japanese munitionsindustry. 29 It is inevitable for the expansion of any industry, not only the munitionsindustry, to seek markets and sales channels not only domestically but also abroad. Similar
issues were actively discussed in the Diet during the postwar reconstruction of the Japanese
defence industry.
Furthermore, Mr. Kimura disagreed with the government’s response to Prime Minister
Yoshida and Mr. Kiichi Aichi and went on to make the following statement: ‘If we were tofinance the arms industry, as the Keidanren has clearly stated, it would be difficult to27 Ibid.
28 The 19th Budget Committee Minutes of the House of Councillors, No. 28, April 24, 1954, p. 7.
29 See KOKETSU [2018] and KOKETSU [2019] for such prewar examples.

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develop such an arms industry in Japan because the demand from the Japanese SelfDefence Forces alone is too large for an industrial unit. In the end, the larger the economic
unit, the more unprofitable it will be, and so the export of weapons to Taiwan, Korea andother areas in Southeast Asia will be a prerequisite’.30 In the end, it will be based on theexport of weapons to Taiwan, Korea and other Southeast Asian countries.
One of the reasons given by the opposition party members, including Mr. Kimura, fortheir criticism of the government was that the defence industry is positioned as an obstacle
to economic independence and that the only way to ensure the sustainability of the defence
industry is to seek overseas sales channels for the defence industry. This would lead toJapan’s participation in the Pacific Alliance Organization (PACO), as Senator Kimurastated, which would undermine the pacifist goals of postwar Japan and force Japan toparticipate in the U.S.-centred collective self-defence system.
Around the time of the creation of the Self-Defence Forces across the Security Forces,
there was suddenly a lively debate, mainly in the Diet, over the state of Japan’s defence
industry. This debate highlighted that Japan’s policy of rearmament through the creation of
the Self-Defence Forces was determined through its approach to the MSA agreement,
which guarantees U.S. military support. At the same time, the expansion of Japan’s defence
industry was discussed over the equipment of the Self-Defence Forces.
To ensure the sustainability of the defence industry, there is a prevailing view that entry
into the U.S.-centred collective self-defence system is inevitable while also making the
expansion of the defence industry conditional on arms exports, in addition to dependenceon military assistance from the U.S. The Yoshida cabinet, which seeks the independent
development of Japan’s economy through the concept of light armaments, scrambles topromote a policy that avoids domestic and international criticism of Japan’s military
superpower status by placing a certain degree of restraint on the defence industry.

3. Conflicts Between the Theory of Self-Defence and the Theory of theJapan-U.S. Alliance: The Ambiguous Choice Between Independence andSubordination(1) Inauguration and activities of the Defence Production Committee
In addition to the Diet debates, we would like to review the stance of the defence industry,
led by the Defence Production Board, towards new policy developments, such as
rearmament, the defence industry and arms exports. This review will confirm the reality of
the Japanese government’s ambiguous choice between the theory of independent defence,
which emerged in the process of Japan’s rearmament, and the theory of alliance, which isessentially dependent and subordinate to the U.S. 31
The Japan-U.S. Economic Partnership Roundtable, which had been established on 13
August 1952 to facilitate U.S.-Japan economic relations, was divided into threecommittees: the General Policy Committee, the Asian Reconstruction and Development
Committee and the Defence Production Committee, which, for the time being, would focus
30 30) The 19th Budget Committee Meeting of the House of Councillors, No. 26, April 22, 1934, p. 11.
31 John Palmer, in his article ‘The Future of Japan’s Defense Industry’ points out four unique characteristics of

the Japanese defense industry: ‘First, the ambiguity of the public’s attitude toward defense; second, the attitudeof maximising domestic production (inclination toward domestic production); third, the ban on exports; andfinally, the principle of limiting defense spending to 1% of GDP. The third is a ban on exports, and the last is theprinciple of limiting defense spending to 1% of GDP, a principle with unclear grounds’ (Palmer [2020], p. 116).

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on the activities of the Defence Production Committee while receiving economic andmilitary support from the U.S. 32
The Defence Production Committee began its activities in the order of preparation forarms production activities centring on special procurement from the U.S. military, theJapanese business community’s response to the issue of concluding the MSA agreement
and the establishment of a defence production stance in connection with the policy ofequipment expansion for the Self-Defence Forces. At the time of its establishment, the‘Urgent Request Opinions on the Utilisation of National Munitions Industry and Other
Facilities’ (28 October 1952), the ‘Request Opinions on the Service Life of Aircraft andWeapons Manufacturing Equipment’ (27 February; 5 March; 27 March 1952) and the‘Request Opinions on Securing Working Capital for Special Weapons’ (6 October 1953)
were successively published.
Earlier, Keidanren had prepared a resolution for its 8th General Meeting entitled ‘Our
Preparedness for Rejoining the International Community’. The resolution called forJapan-U.S. economic partnership and integration, the U.S.’ utilisation of Japan’s industrial
strength for the security of Far East Asia and U.S.’ understanding of Japan’s efforts toachieve early economic independence.33
How did the U.S. position the MSA agreement in the first place? The following is a quotefrom U.S. Secretary of State Dulles, who played an important role in the agreement madeon 6 May 1953 before the U.S. House of Representatives Committee on Foreign Affairs.
‘Japan’s future is closely tied to the future of the United States. Japan is a reliable ally,
but its economic situation is extremely unstable. Japan wants to develop trade with
Southeast Asia, the breadbasket of Asia, and needs Southeast Asian oil, iron ore and otherraw materials. Therefore, if Southeast Asia were to fall under communist rule, Japan’s
future would be extremely precarious’34.
In short, the MSA was positioned as part of the U.S. anti-communist bulwark-building
effort by providing economic and military support to Japan to stop the spread ofcommunism into Southeast Asia. This is nothing new; however, the Yoshida administration
was eager to interpret the MSA as a means of extracting economic aid from Japan.
Therefore, it did not show any sympathy for the U.S.’ military strategy.
Due in part to this attitude of Yoshida's cabinet, the Defence Production Committee
positively evaluated the MSA. The committee also developed a variety of activities toextract funds for defence production from the MSA. As a typical example, the Defence
Production Committee drafted a ‘Statement of Opinion on the Acceptance of MSA
Assistance’ (5th Defence Production Committee Meeting). Thereafter, the ‘General Request
Opinion on Acceptance of MSA (Draft) 28, 7, 6 Keidanren Economic Cooperation
Roundtable Meeting’, dated 6 July 1953, was prepared under the name of the Keidanren
Cooperation Roundtable Meeting. A portion of the text there is quoted below.
‘We believe that for Japan, as a member of the free world, to truly prepare itself for the
future, it is necessary to take measures to increase its self-defence capabilities on its own
initiative, within the limits of political and economic conditions, and consider contributing
fully to the strengthening of the defence capabilities of the free world through its industrial
power. If the application of MSA assistance is based on Japan’s current situation and can
32 Committee on Defense Production [1964], p. 7.
33 Ibid, p. 19.
34 Planning Division 2, Planning Department, Economic Affairs Council, ‘General conomy, General Economy,

1953–1954 (7)’ (in the collection of the Center for Contemporary Asian Materials, Ref. A18110493200 ‘1. U.S.
Views on MSA Aid to Japan’, Image p. 286).

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contribute to the realisation and promotion of the right basic issues through such assistance,
we believe that Japan should not hesitate to accept it. If the application of MSA assistanceis based on Japan’s current situation, and if such assistance can contribute to the realisationand promotion of the basic issues mentioned above, we believe that we should not hesitate
to accept it at the earliest opportunity’.35 While the gap between the government andopposition over the interpretation of the MSA remained unresolved, the Defence Production
Board’s position would eventually lead to an eclectic discussion of independence anddependence on the U.S. Independence and dependence were to be marked by the terms‘coexistence’ and ‘alliance’ as Japan-U.S. relations deepened.
(2) Keidanren Defence Production Committee’s arms export theory and defence force
development proposal
The Defence Production Board is strongly oriented towards arms exports, with a view
towards Southeast Asia. During this period, a draft plan for defence force development was
submitted in a manner that embodied the intentions of the business community. In
particular, the ‘One Proposal on Defence Force Improvement’ (hereinafter referred to as the
Keidanren Proposal) submitted by the Defence Production Board was numerical proof thatthe business community of the time viewed rearmament and the defence industry as two
sides of the same coin.
The Keidanren’s proposal for the defence force after the maintenance plan from 1953 to1958 included 15 divisions on land (300,000 personnel), 292,000 tons at sea (70,000
personnel) and 3,750 aircraft (130,000 personnel).36 Of the total defence expenditure of
2.8943 trillion yen over the six-year period, 1.6252 trillion yen was paid by Japan and1.2691 trillion yen by the US. On the other hand, the ‘Economic Study of Japanese
Rearmament’, prepared by the National Economic Research Institute, set the defence force
after the same six-year plan at seven land divisions (175,000 personnel), 220,000 tons atsea (35,000,000 personnel) and 1,200 aircraft (28,000 personnel), with total defence
expenditures of 2.2653 trillion yen (2.5223 trillion yen required, defence contributions of
213 billion yen), defence spending limit of 1.4059 trillion yen and a shortfall equal to the
expected U.S. aid of 858.4 billion yen.37
Other rearmament plans, such as the NISA, the Keihin and the Daizo plans, have been
submitted at this point; however, Japan’s rearmament and defence force development plans
will be built based on the above two plans. While it is true that there are differences in thesize of the Army and Navy between the two plans, there is no significant difference in the
total cost over the six years. The problem is that the two plans relied on military assistancefrom the U.S. for about half of the total cost. This was because the U.S. expectations forJapan’s defence capability and the existence of the MSA agreement were decisive reasons.
At the same time, the expectations for the expansion of the defence industry, led by theJapanese Defence Production Board, was positioned as an extremely important industry in
the process of Japan’s economic recovery.
In this sense, the country’s orientation towards economic self-sufficiency led to increased
expectations for U.S. military spending support. In other words, economic independence
and military support emerged as two sides of the same coin. Self-reliance and subordination
35 Ibid, image pp. 299–300.
36 Economic Affairs Department, Financial Division, ‘The Economic Burden of Rearmament in Our Country’,

Reference No. 36, February 1954, p. 29, edited by the Research and Legislative Review Bureau of the Library ofCongress.
37 Ibid.

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became one set of factors, and rearmament was initiated, followed by the development of
the defence force improvement plan. Although the discomfort between independence andsubordination manifested itself in the form of various protests, the military support by the
U.S. must have been linked to the development of the U.S. military strategy for East Asia.
At the same time, the Japanese business community actively tried to promote the path toeconomic independence by inviting military support.38(3) Defence industry putting pressure on the national economy
While expectations for the defence industry were rising, there were also concerns about the
opposing pressures on national life. Among them, the National Security Agency’s proposal
estimated that the ratio of national income to GDP would rise to 3.9% in 1954, 4.2% in
1955, 4.8% in 1956, 5.1% in 1957 and 5.5% in 1958. This was higher than the Keikin
proposal, which had corresponding figures of 3.1%, 3.7%, 4.1%, 4.1%, 4.1% and 4.1%,
and the Daisho proposal, which had 2.2%, 2.4%, 2.8%, 2.1% and 3.6%.39
As it became clear that the proposed NISA, which would put pressure on the national
economy, could undermine Japan’s greatest postwar challenge of economic independence,
the NISA proposal of 283,000 personnel in total for land, sea and air security forces was
not acceptable to the Yoshida Cabinet, which had a vision of light armaments. In thisrespect, the Defence Production Board’s desire to expand the defence industry and the
independence of the Japanese economy through the realisation of the light armaments
concept became the basic stance of the Yoshida cabinet. However, the Yoshida Cabinet did
not hold a stable seat in the Diet. Therefore, it was faced with the difficult task of accepting
the views of the Defence Production Board while striving for economic independence atthe same time. From this point on, Yoshida’s cabinet emphasised the MSA agreement as
economic assistance from the U.S. more than it actually was, thus avoiding criticism fromthe public and opposition forces.
This policy of contradicting the two principles of economic self-reliance and acceptanceof military assistance became the basic principle of Japanese conservative politics and theconservative system after the Yoshida administration. This became the reason for theambiguity of Japan’s defence policy.
Criticisms of the limits of economic self-reliance and the expansion of the defence
industry resulting from the MSA agreement have been active in the discourse. For example,
in an article titled ‘MSA Aid Demands a Life of Impoverishment’, Seijiro Usami, aprofessor at Hosei University, wrote, ‘The MSA is a military aid, unlike the Keidanren andthe government, which emphasised the economic aspect of the MSA and propagandised
and frightened the public by saying that the MSA was dollar income to replace special
demand and that rejecting it would destroy the Japanese economy. Unlike the Keidanren
and the government, which have been promoting and trying to scare the public into
believing that the MSA is a single-minded military aid package, it has become clear in thecourse of the negotiations that the MSA is a single-minded military aid package. In other
38 Incidentally, other than the above two proposals, the total defense cost of the NISA proposal (1954–1953)
was 1.496 trillion yen (956 billion yen for Japanese military spending and 540 billion yen for U.S. MSA
assistance). The total defense cost of the Keishin proposal was 1.2162 trillion yen (809 billion yen for theJapanese portion and 407.2 billion yen for the projected U.S. MSA assistance). The total defense cost of theDaisho proposal was 897 billion yen (627 billion yen for Japanese military spending and 270 billion yen for U.S.
MSA assistance). (Economic Affairs Department, Finance Division, ‘The Economic Burden of Wagakuni
Rearmament’, National Diet Library, Research and Legislative Review Bureau, Reference, No. 36, February
1954, p. 32).
39 Ibid.

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words, the MSA is an assistance that the U.S. will send weapons and military advisors toJapan if it strengthens its defence capability (military equipment)’.40
Similar to Usami’s view, Inihachiro Kimura, who criticised the MSA agreement as amilitary aid in the Diet, wrote an article entitled, ‘The Transformation of Japan through theProgress of Defence Production’ in the ‘Defence Production’ Special Issue of the magazine
Chuokoron. He pointed out that Japan’s ‘defence production’ is a part of the U.S.’ strategy
against the Soviet Union, based on the name of collective security through cooperation
with the United Nations and the Japan-U.S. Security Treaty, and includes (a) the provisionof military supplies to the U.S. Far Eastern Command and the regular repair of its weapons,(b) Japan’s own rearmament and (c) the return of Asian countries to the U.S. Japan was
assigned the role of the so-called ‘arsenal of Asia’, supplying the weapons necessary tomobilise the Asian nations for the U.S. policy of turning the tide against the Soviet Union;
this role was necessarily subordinate to the U.S. operations against the Soviet Union.41
The MSA agreement spurred rearmament and the munitions industry and, at the sametime, clearly pointed out the possibility of Japan being incorporated into the U.S. military
strategy towards the Soviet Union. The Korean War had already demonstrated that Japan
had become the ‘arsenal of the U.S.’, and after the Korean War, Japan was a shoo-in as anarsenal to support the U.S.’ strategy against the Soviet Union.
The Japanese industry, which had quickly sensed the intentions of the U.S., took an evenstronger interest in munitions production. In particular, Kiyoshi Goko of Mitsubishi and
Ichiro Ishikawa of Showa Denko took the lead in deciding that the munitions industry
would act in unison. The Special Supplies Trading Companies Advisory Board of the
trading companies and the Weapons Production Advisory Board of the manufacturers
established close working relationships with the government’s Economic Deliberation
Agency (formerly the Economic Stability Headquarters, later the Economic Planning
Agency) and the U.S. Army Procurement Agency in Japan (JPA). The JPA established aclose working relationship with the government’s Economic Advisory Agency (formerly
the Economic Stability Board, later the Economic Planning Agency) and the JPA. The roleof these two groups, among others, was to ‘ensure that the most important concern at the
moment is to make the government determined to make progress on rearmament and gain
visibility into its own weapons production’.42 example, in October 1947, after Yoshinari
Kawai, who had been active in munitions production and arms exports, was appointed
president, Komatsu responded to the JPA’s first special arms procurement in June 1952 bybidding for a large quantity of shells (totalling 16 billion yen over the next several rounds).
In October 1952, the company made an unofficial offer to sell the Hirakata Works, an Army
Arsenal, to Komatsu. In October 1952, the company was offered the disposal of the
Hirakata Works of the Army Arsenal. In September 1953, Komatsu received a series oforders for the Kaita area of the former Hirakata Arsenal, and in October 1953, it received
orders for the Nakamiya and Nakamiya areas of the (former Army) Arsenal. In October
1953, Komatsu Manufacturing became a typical example of a company that was steadily
becoming a munitions company.43
40 Usami[1953],p.104.
41 Kimura[1953],p.91.
42 Hirai[1953],p.110.
43 43) From the chronology in Komatsu Seisakusho [1971]. Yoshinari Kawai, president of Komatsu Ltd., wasalso keenly interested in arms exports: ‘As far as ammunition is concerned, we are able to meet the demands ofSoutheast Asian countries in addition to satisfying our own defense needs in peacetime. ... We have no regrets
about engaging in this business, and we have created a huge export industry for Japan’ (Defense Production
Committee [1964], p. 83).

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These moves were similar to those of other companies involved in heavy industries,
literally speaking of Japan’s pride as the ‘arsenal of Asia’ and the leading sector of theJapanese industry as a whole.44 However, the percentage of that defence industry to thetotal Japanese industry in terms of numbers was never significant. For example, ‘Japan’s
defence industry was of low relative importance from an economic standpoint. After theend of the Korean War, the production of defence equipment as a percentage of industrial
output declined from 1.2% in 1954 to 1.0% in 1955 to 0.5% in 1965. It has generally
remained at that level since then’.45 The report also pointed out that ‘the rate of return on
investment has been declining since then’. Critical discussions of the Keidanren’s proposal
were not infrequent. For example, economist Ryozo Takahashi, known as the author of‘Introduction to the Theory of Controlled Economy’ (Gakurinsha, 1950), criticised the‘Keidanren Draft’ in an essay entitled, ‘The Whole Picture of the “Defence Production”
Plan’ by highlighting four points.
The first was to strike a balance among the three forces. Second, it involves enormous
capital investment, which puts pressure on the peace industry. Third, only a small fractionof the equipment that has been built with such an unreasonable investment will operate atall. Fourth, subordination to the U.S. and British military capital will become inevitable’.46
While implicitly criticising the idea of creating the Self-Defence Forces as a receptacle
for the defence industry without a strategic theory by equipping the three Self-Defence
Forces, the author expresses his concern that excessive investment in the defence industry
will put pressure on civilian demand. He also cites that even excessive capital investment
will not be returned as corporate profits and, under the expectation that capital
accumulation will not progress, the defence industry will eventually become subordinatedto the Anglo-American military capital. In the end, it will continue the defence industry
through inflated capital investment.
Takahashi’s concerns have since become a real issue, spreading to many economists,
politicians and even entrepreneurs. It became not only an issue of Japan’s economic
independence but also a heated debate over how to build Japan’s defence system. 47

4. The Rise of Self-Defence and the Parallels Between Self-Defence and Light
Armaments: Japan’s Defence Policy During the Cold War(1) Conflict over the defence policy
The Yoshida Cabinet’s policy was basically to restrict capital investment in the defence
industry to prioritise the independence of the Japanese economy and equip the forthcoming
Self Defence Forces with as light equipment as possible. 48 It was also clear to all that
44 Indeed, one aspect of Japanese arms exports during the period in question is that ‘Japan exported 37mm
shells to Thailand in 1953, and other weapons were also exported to Burma, Taiwan, Brazil, South Vietnam,
Indonesia, and the United States, but not in large quantities. It has been noted that “the Japanese defense industry
concentrated on meeting the demands of the Self-Defense Forces and its growing defense industrial base”’(Palmer [2010], p. 119).
45 Sakuragawa[1995],p.125.
46 Kimura[1953],p.90.
47 Terasawa [1952] introduced Nabayama [1950a]; Nabayama [1950b]; Ashida [1950a]; Ashida [1950b];
Ashida [1951a] Ashida [1951b]; Ito [1951]; Akiyama [1951], etc.
48 There are a number of studies that have put forward the viewpoint that the rearmament theory of Shigeru
Yoshida, who consistently advocated the concept of light military forces from the rearmament process to thecreation of the Self-Defense Forces, is the ‘Yoshida Line’ and that this is a characteristic of Japan’s postwar
defense policy.

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Japan’s defence policy during that period was dictated by the U.S. military strategy.
This issue was also discussed in the Diet debate. For example, Fukuzo Nakayama of the
Liberal Party said, ‘Assuming that a Pacific defence alliance of liberal nations is formed asa result of the MSA, there was considerable discussion in the House of Representatives
recently, and Director General Kimura of the National Security Agency said that he might
mobilise some of the troops to take a joint stand, but he would not deploy them to the front
lines. However, we will not deploy troops to the front lines but may cooperate internally’.
In response to this statement, Prime Minister Yoshida said, ‘We have not promised to
deploy troops overseas. We have no intention of participating in the Pacific Alliance, nor
do we have any such plans at this time’.49
What this meant was that he denied that Japan’s defence during the Cold War was definedby the U.S. and emphasised Japan’s self-defence policy. In Yoshida’s judgment, following
U.S. regulations would force the Self-Defence Forces to become heavily armed instead oflightly armed, and he developed the theory that excessive capital investment in the defence
industry was inevitable.
Prime Minister Yoshida also stated, ‘Regarding the MSA issue, we did not agree to the
MSA because of pressure from the U.S. but because the U.S. requested and hoped for it,
and Japan also requested and hoped for it. As a result of discussions, the MSA wasestablished. I believe that the Minister of Foreign Affairs has explained this fully’. Indeed,
the Minister of Foreign Affairs had already explained this to the Socialist Party and others
who criticised his policy of subservience to the U.S.50
One serious point of contention that cannot be avoided when discussing defence policy is
its relationship with Article 9 of Japan’s Constitution. The government side has been atpains to explain this point. Although Ogata Taketora, Deputy Prime Minister of the Yoshida
Cabinet, argued that ‘the MSA arrangement does not add any military obligation and, inthat sense, I believe it is not a violation of the Constitution’, he was criticised by Soma
Sukenji of the Japan Socialist Party for saying that Article 8 clearly ‘reaffirms the decision
to fulfil military obligations under the Security Treaty. Article 8 clearly states, ‘We reaffirm
our determination to fulfil our military obligations under the Security Treaty. And bydetermination, I think this is generally intended to involve action’.51 This was rejected
outright.
From these exchanges, the question of how to explain the consistency between the
military and the Constitution, including Prime Minister Yoshida’s concept of lightarmaments, has been a consistent issue in Japan’s defence policy since the end of WorldWar II. It is for this reason that Japan’s defence policy has lacked consistency and has
repeatedly become an ambiguous policy issue for the ruling and opposition parties. This is
why Japan’s defence policy lacks coherence and has become a recurring point of contention
between the ruling and opposition parties as an ambiguous policy issue.
(2) Arms export markets and export performance
Until then, the defence industry had been a wartime depletion compensation for the Korean
War. After the armistice of the Korean War in 1955, when the suspension of orders forammunition, a consumable item, became a reality, the Defence Production Board began the3.

49 The above is the ‘19th House of Councilors Budget Committee Meeting Minutes’, No. 26, April 22, 1954, p.
50 The 19th Budget Committee Meeting of the House of Councillors, No. 26, April 22, 1954, p. 4.
51 The 19th Budget Committee Minutes of the House of Councillors, No. 27, April 23, 1954, p. 11.

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process of identifying ammunition and other arms export destinations.52 With the rapid
increase in U.S. military assistance to Southeast Asian countries, which emerged as a pointof contention in international conflicts during the relevant period, the Defence Production
Board also embarked on a detailed investigation to explore the possibility of arms exports
to the region. It was reported that a total of 219 items were surveyed, including 54 items offacility equipment, military vehicles, tanks and others, 54 weapons and important items, 63
items of communication equipment, 41 items of ammunition, 2 aircraft models and 5 otheritems.53
The following year, in March 1956, the Japan Federation of Economic Organisations also
dispatched an economic goodwill civilian mission to Vietnam, Cambodia, Thailand, Burmaand Pakistan, with economic development cooperation as the main issue. Military assistan
ce, in a broad sense, was also planned, including technical assistance to the Vietnamese nav
al arsenal. However, it took some time before the dispatch of engineers was realised in thespring of 1958. Thereafter, arms exports did not achieve the initially expected export perfor
mance due to political problems and the underdevelopment of the defence production syst
em. Specifically, as of June 1959, the total amount of actual weapons exports was $16.74
million, of which $4.91 million was compensation payments. 54
Despite the enthusiasm of the Defence Production Board, the results were disappointing,and an ‘Opinion on Arms Exports’ was prepared on 12 July 1962. The report pointed out
the reasons for the sluggish exports and concluded that arms exports should be further
increased to overcome such problems. The Defence Production Board was trying hard tofind ways to increase arms exports as much as possible.
In tracking the actual situation, although about 46% of the weapons procured in 1958,
when the First National Defence Force Development Plan was announced, came from grant
aid from the U.S. military, the shift to domestic production of equipment steadily
progressed. In this sense, the trend towards self-reliance became apparent. In thisconnection, Masao Kihara stated, ‘In 1955, when the Basic Policy for the Defence Program
was decided, there was a development from military production based on special
procurement to “self-reliant” defence production based on the defence program. In 1958,
when the First Defence Force Development Plan was openly launched, more procurement
was made by the SDF compared with special procurement, and defence production also
became “stable”. With a “market”, the items of military goods changed and diversified, andthe foundation for domestic production of military supplies was established’,55 noted thereport. Furthermore, ‘In 1962, the mass production system of military production thatenabled the domestic procurement of the SDF became established and autonomous, withmonopoly capital at the centre of the system’56.
However, it should be noted that Kimura’s point about independence in terms ofmunitions is not necessarily true at the quantitative level. It goes without saying that Japan
had no choice but to depend on the U.S. for many of the high-value weapons that required
52 In this connection, the Federation of Economic Organizations of Japan (Keidanren) stated, ‘At present,
Japanese arms production has resumed on the basis of special demand from the United States. Therefore, for thisto proceed systematically, it is an indispensable requirement that orders be placed systematically andcontinuously with a certain outlook, along with the development of Japan’s own readiness to receive such orders’(Resumption of Weapons Industry and Future Problems: A Summary Report on the Work of the Defense
Production Committee, Keidanren Monthly Report, Vol. 1, No. 3, March 1953, p. 34).
53 Committee on Defense Production [1964], p. 183.
54 Defense Production Board [1964], p. 202. By item, $744,000 for ammunition and explosives, $4,140,000 for
aircraft, $584,000 for ships, $1,574,000 for vehicle parts, etc.
55 Kihara [1972], p. 7.
56 Kihara [1972], p. 8.

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advanced technology.

5. Conclusion: Summarising the Three Issues
Finally, we conclude with a summary of the three issues raised in this paper. For the firstissue, Japan’s defence production and policy during the Cold War period were enacted in
the midst of rapid changes in the security environment in the Asian region after the Korean
War. In addition, the U.S. continued to request Japan to enhance its defence capabilities
from its democratisation policy. Moreover, Japan’s independence and alliance framework
were certainly defined by trends in the U.S. strategy towards Asia. In other words, the U.S.
defence buildup against Japan was a key factor in the U.S. strategy towards the region. The
U.S.’ request to strengthen Japan’s defence against the Soviet Union and China came froma part of the U.S. military strategy against the Soviet Union and China. Japan’s economic
development was positioned as a means to achieve this goal.
Within this framework, the pace of development of the defence industry during the Cold
War period of the 1950s, which began around the time of the Korean War, was regulated.
The process of such regulation resulted in economic independence. In this sense, thestrengthening and development of the military (defence) and the economy in Japan were
inextricably linked. From there, the inherently conflicting and contradictory relationship ofindependence and alliance became diluted, making the development process of Japan’s
defence policy very difficult to watch.
It should be a given that a country’s defence should be self-sustaining. However, during
the Cold War, Japan was forced to identify itself with the superpower, the U.S. Therefore,
to sum up this reality in terms of subordination or dependence is an extremely cynicalunderstanding of the situation. The uncertainty in the defence policy of the postwar
Japanese nation that has persisted to the present actually stems from this uncertainty during
the Cold War period.
The second issue concerns the controversy over the evaluation of the defence policy
under the Yoshida administration, which is the subject of this paper. In other words, there isa limit to understanding Prime Minister Yoshida’s stance, which responded to the U.S.’
demand for increased defence capabilities with a light arms concept to maintain a course of
economic priority in terms of independence and self-reliance. Although Yoshida was very
careful to ensure that quantitative expansion did not become the sole focus of his policy, he
was by no means opposed to the strengthening of defence forces, nor was Hitoshi Ashidanegligent in his relations with the U.S.
Therefore, it is said that the expectations and evaluations of Yoshida were higher thanthose of Hitoshi Ashida, who had aggressively advocated the strengthening of defence
capabilities. Even for Ashida, the defence buildup was certainly a defence buildup in thesense of preparing the appearance of Japan as an independent country, and he always hadin mind the strengthening of the alliance with the U.S. for this purpose. In this sense, there
is a contrast between Yoshida’s theory of light armaments and Ashida’s theory of heavyarmaments; however, in reality, while emphasising Japan’s independence in the rearmament
process, Ashida, who placed this issue within the context of the Japan-U.S. Security Treaty,
considered ‘independence’ and ‘alliance’ to be two sides of the same coin and not concepts
that were oriented in different directions. As Ashida pointed out in his essay ‘The United

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States and Japan’,57 ‘Independence’ or ‘self-reliance’ and ‘alliance’ were not conceived ofas opposing concepts or as opposing policies. From this point of view, the difference
between Yoshida’s and Ashida’s defence policies was not fundamental.
The coexistence of ‘self-reliance’ and ‘alliance’ within the same vector was the same in
Korea and became a characteristic of Japan’s postwar defence policy to a greater degree
than in Korea as a homogeneous issue, whether conservative or innovative. As discussed inthis paper, the defence industry forced Japan to restart its postwar industry and to revive
civilian demand. It was essential to leverage the defence industry, even though the prewar
military industry was partially dismantled. This was spurred on by the special procurement
demand resulting from the Korean War. The fact that civilian demand was revitalised withthe military as the leading sector may be accepted today as an undeniable economic andpolitical reality. The business executives represented by the Defence Production Committee
were keenly aware of this fact and insisted on its implementation.
Regarding the third issue, we can learn from the heated debate in the Diet between theruling and opposition parties over the status of the MSA agreement that it was a dispute
over self-defence and the Japan-U.S. alliance rather than a dispute that resulted fromdifferences in interpretation. Certainly, the MSA agreement was an agreement between the
U.S. and Japan that should be viewed under the category of military assistance. It is also
true that the MSA agreement was filled with intense feelings of rejection. Moreover, thememories of the war had a strong influence on the debate. More than that, it was the factthat Japan had made a fresh start as a peaceful nation under the new Constitution, and theprinciples of defence policy optimal for a peaceful nation, the enhancement of the defence
industry to support it and its support for economic independence while suppressing the riseof new militarism were the main points of the debate.
Among these, the role of the Defence Production Board was particularly noteworthy inthis paper. It is known that it was not only oriented towards the expansion of defence
production for the purpose of increasing defence capability in a linear fashion but also
called for complementary development and enhancement within a certain balance between
the so-called civilian and military demands. This was a rational choice that would curb
Japan’s militaristic political climate and enable the gradual development of an optimal
minimum defence force. However, it was also true that amid the fierce disputes between
the ruling and opposition parties, the formulation of a stable and definitive defence policy
did not proceed smoothly.
Therefore, the U.S. did not necessarily have absolute confidence in the Japanese
government, including the administration of Shigeru Yoshida, which is said to have been
relatively more credible from the U.S. perspective. It was always aware of the possibility
that the Japanese government and people might turn anti-American, and for this reason, it
never nakedly called for a coercive buildup of defence capabilities. For the U.S., Japan was
an important nation in its strategy towards the Soviet Union and China. At the same time,
the U.S. was consistently wary of Japan moving towards a trend of de-U.S. neutrality.
In the context of the overall intent of this paper, defence production in the broad sense,
including the issue of defence policy, has been extremely autonomous and has the potential
to change in any way depending on international factors. The future of Japan’s
independence and alliances as an independent nation would ultimately be defined by thepressure of the U.S., and the ambiguity would deepen without end.
As a result, in the absence of a firm and steadfast Japanese defence policy, the57 Nakano [2006], p. 115.

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development of the defence industry has also been influenced by extreme political factors.
While defence policy and the defence industry have changed substantially since the end of
the Cold War and through Japan’s rapid economic growth to the present, the structure of
the defence industry, which continues to be tied to the external factor of the U.S., hasremained unchanged.
The MSA agreement is divided into two categories: end-item aid and defence support aid.
The former is further divided into U.S.-made weapons loans and offshore procurement of
weapons. This makes us keenly aware of the need to explain the actual status of the U.S.
military and aid from the perspective of the U.S. military strategy through a detailed
analysis of the actual status of military aid applied to Japan based on the diversity of U.S.
military aid. I would like to leave this as an issue for the future.
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＊This paper is an English translation of a previously published article in Japanese （Atsushi Kouketsu,"Defense Industry and Arms Transfer in Cold War Japan: Between Independence and Alliance," inKatsuhiko Yokoi (ed.), Military and Aid in Cold War Asia, Nihon Keizai Hyoronsha, 2021）.

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