*
(The prime minister), rev. ed. (Tokyo: Yomiuri Shimbun Sha, 1972), p. 80.
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mer bureaucrats but had also become very skilled politicians. This is something Sahashi did not understand.
The LDP was quite prepared to leave basic policy-making to the bureaucracy, but when bureaucrats began to try to use politicians in their own intrabureaucratic struggles, they had to be prepared to provide a quid pro quo. For example, while still director of the Heavy Industries Bureau, Sahashi had a brilliant idea for the promotion of exports of Japanese machineshe would send a ship outfitted as a floating industrial exposition to call at American and European ports. For this purpose he first used a converted cargo vessel, but he really wanted a new ship, to be constructed at government expense and specifically designed as an oceangoing trade fair. Officials of the Budget Bureau were not convinced that the new ship was needed. In order to bring some pressure on his budgetary colleagues to change their minds, Sahashi sought the assistance of Ono * Bamboku (18901964), a powerful LDP faction leader, strong man of the 'party-men's factions' (as distinct from the ex-bureaucrats' factions) in the Diet, and a fellow native of Gifu prefecture. Ono came through, Sahashi got his ship, and everyone agreed that it was a splendid idea. (Ironically enough, seventeen years later the Japanese loaned the ship, the
or
, to the United States so that it could bring
products to show off in Japanese ports.)
8
Sahashi made only one mistake; he forgot to thank Ono. A few years later, after Sahashi had tried this ploy with a few other politicians (some of them Ono's rivals), Ono got evenand Ikeda could not help Sahashi since Ikeda had political problems of his own. The
was very effective as a kind of waterborne JETRO, but it came back to haunt Sahashi in 1963 when he sought the vice-ministership.
9
While Sahashi was thus engaged in the Heavy Industries Bureau, a fellow member of the class of 1937, Imai Zen'ei, was busy dealing with the prime issue of the time: What should be the country's response to demands from international organizations and from Japan's allies that it liberalize its controls over the economy? Imai had had a career in MITI very different from Sahashi's. Born in Niigata on October 5, 1913, helike Sahashigraduated from Todai* Law, although he came to Tokyo University via the more elite First Higher School (Ichiko*) in Tokyo. During the war he worked on the materials mobilization plans, which was good preparation for his occupation-era assignments in the Coal Agency and the Economic Stabilization Board (see Appendix C). Many leaders of the ministry had identified Imai as one of the most capable officials from the class of 1937 well before Sa-
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hashi gained prominence. After the creation of MITI Imai worked primarily in international trade administration, and he served in the Japanese Embassy in Washington for the first year after it reopened. He and Sahashi served in the Secretariat at the same time, but in different sections, and Imai received his first assignment as a bureau chief two years before Sahashi got his. It was as chief of the Textiles Bureau from August 1958 to February 1961 that Imai had to confront the liberalization problem.
There is no question that MITI, as a bureaucracy, feared that liberalization might eliminate its raison d'etre, and for this reason, if no other, it sought to obtain new control powers. However, MITI officials, as economic administrators, were also deeply worried about structural flaws in the system they had createdwhat they sometimes called its
, or 'distortions'and about the likelihood that liberalization would heighten these 'distortions.' Nationalism played a part in their concernsthe possibility that a fully 'opened' Japanese economy would be swamped by larger, much better capitalized foreign enterprisesbut even without the pressures to liberalize, they knew that they would have to do something about the superficially risk-free overinvestment the system was generating. The rise of 'excess competition,'' as it was called, coincided with the appearance of liberalization as a policy problem, and the issues involved in dealing with the one greatly influenced the response to the other. The textile industry provided one of the worst examples of overinvestment and excess competition.
Imai's term as chief textiles administrator was one of deepening crisis. The system of foreign exchange budgets was still in full operation, but Imai recognized that he needed still more controls in order to prevent recurring overproduction in the unruly cotton textile industry. 'The abuses that accompanied the allocation system for raw cotton,' he has recalled, 'were simply extraordinary. I advocated replacing the system with a Raw Cotton Import Public Corporation [Menka Yu'nyu * Kodan*], but the industry violently opposed this idea. The fundamental problem of the allocation system was that it encouraged excess investment in production facilities and led to overcapacity. We needed allocation authority over investment, not just over raw materials.'
10
The big spinnersTeijin, Toray, Kanebo*, and Unitikawere hard enough to control, since they often fell back on the old Osaka tradition of resisting governmental intervention in their affairs; but the smaller manufacturers were even worse. They had borrowed from their banks and invested in their equipment with the full expec-
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tation that they would receive government-guaranteed allotments of imported raw cotton; the menace of liberalization brought down on the government and the Diet a
