The Trifurcating Miracle

Corporations, Workers, Bureaucrats, and the Erosion of Japan's National Economy

Satoshi Ikeda

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781317794448
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

This title examines the transformation of Japan's national economy. It employs the concept of the structure of accumulation composed of the organizations of labor, credit and markets. The postwar Japanese miracle trifurcated into prosperous corportions, squeezed workers and parasitic bureaucracy in the slow growth period, 1974-91. The "miracle" continues only for the major Japanese corporations that are East Asianizing and globalizing.

Chapter 1
CORPORATE PROSPERITY AND WORKER SQUEEZE

THIS CHAPTER FIRST REVIEWS THE ASCENDANCE OF THE JAPANESE “national economy” in the capitalist world-system in the postwar period. One of the indicators most frequently used for the comparison of national economic performance is GNP (either total or per capita) evaluated at current exchange rates with the US dollar. When we adopt this standard, the rise of the Japanese national economy is very impressive. Even after 1974 when the world-economy entered the slow growth period, the Japanese GNP in terms of the US dollar kept growing partly due to a steady, and at times rapid, appreciation of the Japanese yen.

When Japanese GNP per capita is evaluated by purchasing power parity (PPP), however, the “rise” of Japan is substantially down-graded. Substantial improvement in Japanese “national” economic position in the hierarchy of countries as measured by international market exchange rates suggests a rise of the economic power of the Japanese corporations which engage in international transaction of goods, services, and money. But the Japanese workers are separated from the fruits of corporate prosperity as indicated by the lagging GNP per capita in terms of PPP.

These two “realities” are indicative of the two divergent paths which became increasingly apparent in the 1990s for the Japanese corporations and the Japanese workers. In terms of corporate profit, the major Japanese corporations are prosperous even in the 1990s when the Japanese “national economy” is plagued by recession. Growth of income earned by the Japanese workers (measured in yen), however, lagged behind the growth of corporate income in the late 1970s and 1980s. Workers’ income stagnated and declined in the 1990s while the major corporations remained “prosperous.” In addition to declining income, expenditure, and net savings, the Japanese workers are facing long work hours and other unfavorable living conditions.

By reviewing these trends, this chapter sets the stage for the discussion in the subsequent chapters that detail the Japanese, East Asian regional, and world-systemic transformations in the postwar period viewed from the angle of the structure of accumulation. In Section 1, the GNP growth rates are examined to reveal Japan’s “national economic ascendance in the post-war period. Section 2 and Section 3 examine corporate prosperity and worker squeeze, respectively.

Japan’s Rise in the Hierarchy of “National” Economies

In the post-Second World War expansion of the world economy, Japan’s “national” economic performance stands out as exceptional. As a measurement of “national economic” ascent/descent in the capitalist world-system, Arrighi & Drangel (1986) used the size of the GNP per capita of a country relative to the GNP per capita of the “organic core” countries whose GNP per capita remained at the top level (giving them core status) throughout the period between 1938 and 1983. Japan’s GNP per capita in proportion to the GNP per capita of the organic core countries rose from less than one-quarter (23.2%) in 1960 to over one-half (52.1%) in 1970 and to over three quarters (76.3%) in 1980. In 1988, Japan’s GNP per capita exceeded that of the organic core (117.9%) (Arrighi, Ikeda, & Irwan 1993: 43, Table 3.1). After going through the process of semiperipheralization (movement upward in the hierarchy of “national” economies from periphery to semiperiphery) by the 1938 since its incorporation into the world-system in the nineteenth century and through the process of corification (from semiperiphery to core) in the 1960s (Arrighi & Drangel, 1986: 65-71, Appendix III), Japan came to occupy the top of “national economic” hierarchy of the world-system in the second half of the 1980s.

Such upgrading of the Japanese “national” economy raised the share of Japanese Gross Domestic Product (GDP) in Gross World Product (GWP) from 13.60% in 1973 to 16.06% in 1993. This 2.46% increase is matched by a 2.14% decline in the share of US GDP in GWP from 29.76% in 1973 to 27.62% in 1993 (calculated from World Bank, 1995: 30-3, Table 8). These inflation-adjusted GNP and GDP figures evaluated at market exchange rates show remarkable growth of the Japanese “national” economy. This “rise” is the result of a growth of national economic activities as measured in yen, on the one hand, and appreciation of the yen in the international currency market, on the other. Let us examine these developments.

Table 1.1 summarizes the annual real growth rate of the Japanese economy between 1957 to 1999 (estimates for 1998 and 1999). The rates were high between 1957 and 1973, ranging from the low 5.1% in 1965 to the highest 13.4% in 1960 and 1968. In 8 of these 17 years, the growth rate was two digit, and in another 3 years the rate was 9% and above. From 1974, the growth rate dropped significantly, but maintained four to five percent for most years until 1991. These growth rates justify naming the years from 1955 (when then prime minister Hayato Ikeda proclaimed the “income doubling plan”) to 1973 as the rapid growth period and the years from 1974 to 1991 as the slow growth period.

In these two subperiods, the Japanese economy recorded growth ra...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• CONTENTS
• List of Tables and Figure
• Acknowledgments
• Abstract
• Introduction
• Chapter 1 Corporate Prosperity and Worker Squeeze
• Chapter 2 The Japanese Structure of Accumulation in the Rapid Growth Period
• Chapter 3 The Globalization of the “Japanese” Structure of Accumulation in the Slow and Zero Growth Periods
• Chapter 4 World-Systemic Interpretation of the End of the miracle
• Conclusion
• References
• Index