Japan’s Economic Development
+ early 20th century; Japanese corporations took advantage of international technological and
managerial innovations -> “second industrial revolution” = produced great electrical technology
+ mass production
+ large enterprises developed new metallurgical and chemical technologies
+ dual structure characterized Japan’s modern economy
Trading companies (zaibatsu = financial cliques) dominated most modern sectors of economy –
mining, ship-building, machinery, steel and chemicals – and produced standardized, high-volume
+ each company within pursued a single enterprise and remained legally distinct…. Access to zaibatsu’s
capital through its bank, a central advisory committee that set policy and long-term goals, and
interlocking boards of directors that tied them together
+ Zaibatsu chairmen enjoyed access to bureaucrats and cabinet ministers who steered public
investments their way
+ small firms made speciality items and basic consumer goods – food and clothing. Produced ceramics
and toys for export by zaibatsu and functioned as suppliers and subcontractors to large enterprises
COAL fueled locomotives, factories, and generators.
+ Mitsubishi built ships and operated worldwide shipping; profited from Allies’ demand for war material
+ and Japanese textiles and consumer goods… profits soared!
Imbalances between different sectors of economy and cycles of contraction and expansion.
Japanese companies assumed demand continue after World War I….
Trouble at domestic market: silk sales slipped and cotton mills in China cut into Japan’s market -
> decline in textile industry and agricultural sector;
+ CONTRAST: old zaibatsu grew by abstracting existing enterprises and diversifying into new areas.