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U.S. Militarism and Imperialism and the Japanese “Miracle”

Joseph Halevi teaches political economy at the University of Sydney, and is associated with the center of development studies, IREPD, at the Université Pierre Mendès France in Grenoble, France. With Jean-Marc Fontaine he edited Restoring Demand in the World Economy: Trade, Finance and Technology, (Edward Elgar Publisher, 1998).

Aaron Forsberg, America and the Japanese Miracle: The Cold War Context of Japan’s Postwar Economic Revival, 1950-1960(Chapel Hill and London: University of North Carolina Press, 2000), 332 pages, $45.

Historical research on postwar Japan and East Asia has produced a number of high quality studies that have contributed to the formation of a political and economic perspective not too distant from the Monthly Review conception of the transformation of modern capitalism. These works point out that the conditions for Japanese economic recovery were found not only in the willingness of Japan’s capitalist elites to reignite the process of industrial accumulation, but also in the propulsive role played by military spending and by actual wars. This sort of spending was not done by Japan, but by the United States—thereby helping Japanese capitalism, which had lost all its areas of imperialistic influence, to find an anchor on which to start a new wave of accumulation. It is legitimate to say that without such U.S. spending, Japan’s economic recovery would have been much more problematic and may not have happened in any sustained way.1

In this context, the view that Japan and Europe grew faster than the United States because they had a comparatively smaller military budget is misleading.2 American military expenditure fueled the production and profits of the most advanced components of U.S. monopoly capital as well as the economic expansion of Europe and Japan. The links between American armament expenditures and capital accumulation in Europe and Japan are manifold. Consider, for example, the formation of NATO. The bulk of its costs were borne by the United States, generating a flow of dollars to Europe that helped ease the dollar shortage of the 1950s. At the same time, NATO’s military procurements were of crucial importance for the modernization of, at least, the electronic and aviation industries of the European countries. In the Japanese case, beginning with the Korean War, the links are much clearer. American war orders uplifted the whole industrial sector of the shattered Japanese economy. A decade later, the American escalation in Vietnam “actually helped Japan reenter the Southeast Asian economy.”3

America and the Japanese Miracle reveals additional evidence of this process but, as we shall see, the historical role of the United States is interpreted in a way that obscures the contradictions inherent in the system of monopolistic capitalism. Forsberg starts by addressing Washington’s postwar strategic objective of “keeping Japan on our side.” He correctly points out, as Noam Chomsky and Gabriel Kolko did several years earlier, that the other side was not the Soviet Union or China, but simply a neutralism similar to that of Nehru in India. He does not tell us why such a path should have been regarded as a threat. But Forsberg’s work is entirely constructed on the premise that the Cold War was a response to a threat, which sharpened the wit of U.S. policy makers in international relations. The restoration of the power of Japan’s monopolistic groups (Zaibatsus) is seen, in this context, as the product of the Cold War. Yet there is evidence that salvaging Japan’s powerful monopolies was already on the agenda of influential figures and bodies in Washington even before Japan’s surrender.

U.S. strategy involved a special economic sponsorship of Japan, which Forsberg illustrates very well, and with approval. The Washington-imposed embargo on trade with the People’s Republic of China provided a major justification for the all-embracing support given to Japan. The picture that emerges is that the United States took unilateral actions, requiring unilateral measures of protection, because Japan would otherwise have ceased to function. Thus, contrary to the author’s own claim, Washington’s policies did not stem from an enlightened attitude but were the logical corollary of the hegemonic view of the world which matured within the U.S. government during the Second World War. Sponsoring Japan entailed, however, a number of frictions and conflicts. Japan’s desire to keep some trade relations with China could not be altogether ignored, and had to be offset by other arrangements. The substantial decline in the ties with China meant that an anchor for Japan could be found only by opening up export markets in the United States, and possibly elsewhere. The urgency of finding such outlets increased as the Korean War approached its end, engendering a slow down in the demand for military related supplies.

Domestically, therefore, the U.S. government had to mediate with business groups, at the time mostly in the textile and apparel industry, which feared Japanese competition. Internationally, the strategy required U.S. authorities to coordinate with their allies, especially Britain and France. These countries were reluctant to open their markets because of the perceived lack of reciprocity from Tokyo. The diplomatic pressure became particularly intense during the negotiations leading to Japan’s membership in the General Agreement on Tariffs and Trade (GATT) in 1955. A similar pressure, we may add, occurred when Japan applied to join the Organization for Economic Cooperation and Development in 1964. In the first instance, Washington signed a dozen trilateral treaties allowing third countries greater access to U.S. markets—provided they waived the right to use GATT’s clause thirty-five against Japan. This clause enabled a contracting nation to deny GATT privileges to another when trade could injure domestic producers.

The discussion of the legal and political procedures of the GATT case is most interesting. It illustrates how U.S. activities in support of Japan’s entry into the organization constituted yet another step in the weakening of the British position both in Asia and in the world. Japan’s membership in GATT contributed to the demolition of the imperial system of preferences, which was the pillar of British hegemony in the Commonwealth. Although not explicitly stated by the author, the narrative of the book shows that shoring up Japan implied extending American influence at the expense of Britain. The discussion of Japan’s laws limiting foreign investment is informative, well written, and one of the best sections of the book. The laws were passed when the country was still under occupation. But why did the United States allow regulations that ultimately discriminated against American multinationals? Unfortunately, the explanation given by Forsberg is particularly weak. He maintains that Japan’s precarious balance of payment position throughout the 1950s prevented the United States from pressuring Tokyo. However, it can be as easily argued that Japan should have opened its doors to American multinational companies, precisely because it was suffering from a dollar shortage. More realistically, we can say that salvaging Japanese capitalism from within demanded that the cohesion of Japan’s dominant classes be safeguarded. Without the network of the yen area, and with a shattered country, the opening up of the economy to foreign direct investment would have jeopardised the solidity of the ruling groups and further diminished their legitimacy.

Forsberg’s analysis is weakened by the interpretative angle through which he views the policies that ushered in Japan’s economic recovery and, later, the process of accelerated growth. According to the author, the Cold War and the need to guarantee security, enhanced the leadership capacity of the American administration. Eisenhower, Dulles, and Acheson battled, not always successfully, against protectionist tendencies at home as well as sectional interests abroad. According to Forsberg, American authorities provided global guidance that remains valid in the light of contemporary economic problems. Thus the author concludes that “[T]he world will do well if it can match the record of the United States and Japan during the years after the Pacific-War.”4

The hegemonic function of the United States nowhere implied stability and enlightened leadership. From a capitalist perspective the need to put the Japanese ruling classes firmly back on their feet was understood by Herbert Hoover before the end of the war. After 1945, the former President counselled Truman, Marshall, and Patterson against undoing the power of the Zaibatsus and pleaded for a swift transformation of Japan into a faithful ally. The international role of the United States did not stem from the urgency imposed by the external event called the Cold War. On the contrary, the Cold War was constructed to enforce the rule of international capitalist relations, especially on the Third World.

Thus began a path that led to a large number of conflicts, most notably in Asia, culminating in the Vietnam War. It follows that it is impossible to separate the American support of Japanese recovery from the road that led to Vietnam. This connection has been captured by Michael Schaller, who in his seminal study wrote: “The protracted effort to assure Japan access to Southeast Asia, and to isolate China trapped the United States in a ‘dead end alley’ of its own device in Vietnam.”5

Forsberg is not alone in providing an undialectical reading of the postwar period where war and military spending are viewed in terms of enlightened guidance.6 This romantic conception of the Cold War era involves two misunderstandings. The first is historical: the long boom supported by wars was not viable in the long run. Indeed, during the Vietnam War, economic expansion began to deteriorate first and foremost through instability in international monetary relations. Paradoxically, while enriching our knowledge of the period with important institutional and political information, Forsberg prevents us from grasping the human and political gravity of the policies that brought the people of Asia at least two additional decades of destruction. The second misunderstanding is theoretical. The fact that the imperialist powers maintained a prolonged phase of prosperity by means of external military stimuli, and imperialist wars, should make people aware of the fundamental weakness of profit-based economic and political regimes.


  1. In relation to Japan the most significant books are those by William Borden, The Pacific Alliance (Madison: University of Wisconsin Press, 1984); Michael Schaller, The American Occupation of Japan (New York: Oxford University Press, 1985); and Andrew Rotter, The Path to Vietnam (Ithaca: Cornell University Press, 1987).
  2. R. P. Smith, “Military Expenditures and Capitalism,” Cambridge Journal of Economics 1, March 1977, 61-76.
  3. Schaller, American Occupation of Japan, 239.
  4. Forsberg, America and the Japanese Miracle, 239.
  5. Schaller, American Occupation of Japan, 297.
  6. Diane Kuntz, Butter and Guns (New York: Free Press, 1997).
2001, Volume 53, Issue 04 (September)
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