Global Power in a Polarized
World1

Double Nixon Shocks• In July 1971, US President Richard Nixon
announced his stunning plan to visit thePeople’s Republic of China (PRC).
• In August 1971, he announced that US would
abandon the gold standard and allow the valueof US dollar to fluctuate in the foreign exchange
market.
• Japan was left embarrassed with the US policychange without prior notice to Japan.
• Until then Japan had loyally followed US policy
to contain the communist regime in China.
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US-Japan Trade Conflicts• Since 1970s Japanese exports to US haveoverwhelmed the US exports to Japan.
• The chronic trade surplus of Japan led to thechronic political tensions: American executives
and labor unions blamed Japan for unfair trade.
• Japan and US agreed a series of agreements inwhich Japanese exporters voluntarily agreed tolimit their sales to US: textiles (1972), steel (1969,1978), automobiles (1981-93).
• In 1988 the US Congress passed a trade bill ofwhich “Super 301” clause granted thegovernment the power to unilaterally impose
penalties on exporters of unfair trade partners.
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US Automobiles• The US automobile industries symbolized
the American Dream for decades.
• But now, unless the government helped
them with trade quotas, GM and Ford
could not convince Americans to choose
their vehicles.
• US consumers were turning to economical,
increasingly reliable cars from Toyota andother Japanese automobile makers.
4

Structural Impediments Initiative(SII) Negotiations• From 1989 to 1990, US and Japan
negotiated to reach an agreement on thestructural issues that produced economic
imbalance.
– US: budget deficits, low saving rates.
– Japan: import barriers, cumbersome
distribution system.

• The talk produced sensible ideas, but few
were politically feasible.
5

G7• In 1975, seven leading capitalist economies
started a regular series of annual “summit”
meetings.
• The finance officials (finance ministers andpresident of central banks) of G7 or G5 began tomeet on a regular basis in 1980s.
• Japan was one of the members, which was asource of pride as well as pressure to design
economic policies to serve international as wellas national interests.
6Plaza Accord 1985
• G5 nations agreed on the devaluation of US
dollar, which had been too high, thanks to theUS “strong dollar” policy associated with the“Reaganomics.”• Japan committed a policy to stimulate its
domestic economy.
• The BOJ took a drastic monetary expansion tocounter the Yen appreciation.
• The easy money provoked the dramatic inflationof the late 1980 (the bubble economy).
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Soviet - Russia• Japan normalized diplomatic ties withSoviet in 1956.
• But even now we have not concluded apeace treaty.
• Both governments claimed sovereignty
over the “northern islands” (located at thesouthern end of the Kuril chain).

8Korea• The Treaty on Basic Relations (1965)
recognized South Korea as the sole legitimate
Korean government, and South Korea waived
future reparation claims.
• In 1973 the Korean CIA kidnapped Kim Dae
Jung from a hotel in Tokyo, and took him byforce to Seoul.
• This action clearly violated Japanesesovereignty and infuriated public opinion inJapan.
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Public school history textbooks
disputes• In 1982 Japanese media reported that theMinistry of Education required the authors tomake revisions that minimize Japan’s
aggression during the War (ex: invasion ->incursion) .
• In fact the official made only a non-binding
suggestion.
• But China and South Korea reacted furiously
and made a formal protest to Japanese
government.
10Other “history recognition” issues• In 1986, a minister said that Koreans werein part responsible for the Japaneseannexation of Korea in 1910.
• Minimizing the massacres in Nanjing.
• “Korea was colonized willingly rather thanby force.”11

Left-wing views on the War• They contended that the war wasstrategically unwise and morallyunacceptable.
• The leaders must be responsible for the“war crimes”.
• But the popular support for the war during
the wartime was the result of censorship,
manipulation of education system andmass media.
12Right-wing Views on the War• The conservative with some rightwing bias defends Japan’s wartime
motive as pure.
• Hayashi Fusao, a proletarian novel
writer in 1920, who converted to aultra-nationalist later, published in
1963 a major statement of this view
under the title, In Affirmation of theGreat East Asia War.
• He argued that Japan led the war toliberate Asia from Western
Imperialism.
13Economy• In 1970s and 1980s, Japan’s economic
performance was outstanding, not onlywith rapid GDP and productivity growth,
but also with low inflation.
• Until then Japan had become an
extraordinary corporate-centered society:• The majority of people believed that what
was good for the company was good forthe larger society.
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Nihonjin-ron (theories of the Japanese)• Among others, The
Anatomy of Dependence,written by Doi Takeo, apsychiatrist, is eminent.
• The book identifies a
psychological trait ofdependence (amae) as adefining feature ofJapanese culture.
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Japan as Number One• The economicachievement wasacclaimed by aHarvard professor
in his The Japan as
Number One, whichsold more in Japan.

16

Politics• There are two sources of LDP leadership;– Career politicians with strong local bases,
usually in rural Japan.
– Career bureaucrats-turned-politicians

17

The “Computerized Bulldozer”• Tanaka Kakuei was a former archetype.
• He built his political fortune as king of theconstruction industry first in his native
Niigata and then throughout Japan.
• He served as prime minister from 1972 to1974.
• In 1974, a maverick reporter (TachibanaTakashi) revealed the shadow side of
Tanaka’s political empire financed byconstruction business. In the face of
public criticism, Tanaka resigned.
• However, he consolidated the mostpowerful faction within the party.
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The Lockheed Scandal• In 1976 a witness who spoke to US Senate
committee accused Tanaka of pocketing several
millions dollars in bribes from America’sLockheed corporation in 1972.
• In return, Tanaka had allegedly directed civilian
and military aircraft purchases to Lockheed.
• In 1983 he was convicted of bribe-taking, but henever served time in jail.

19More Scandals• The Recruit Scandal in 1988: Politicians wereaccused of taking illegal contributions and stock
options from the upstart Recruit Corporation.
• The Sagawa Express Delivery Scandal in 1992:
The Sagawa contributed gold bars illegally toKanemaru Shin, the successor of the Tanaka’s
powerful faction.
• In these cases, top politicians were notconvicted, but deepened public cynicism towardLDP.
20

Nakasone Yasuhiro• In 1982, he became PM and took
conservative reforms such aswelfare cut, deregulation, andprivatization of major industries(national railway, andtelecommunication).
• His policy was influenced byMargaret Thatcher and RonaldReagan.
21

The Equal Employment Opportunity
Law for Men and Women (1985)• Most leading employers redefined their jobs into
nominally gender-neutral categories of:– 総合職：Comprehensive Work: formerly men-only
career track.
– 一般職：General Work: formerly women-only clericaltrack.

• Small number of women began to enter thecomprehensive track and private sector careerscomparable to those of men.
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New Social Trends• 新人類 Shinjinrui (new spiecies) : roughlyborn in 1960s. The generation of theirparents did not recognize convincing signsof serious commitment from them.
• Freeter (Free Arbeiter): young people whorejected secure corporate jobs and took
unstable, temporary assignments.
• 過労死 Karoushi: death from overwork,
mainly of middle-age men.
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