Economic Model Of Japan In Post Second World War

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Write about Japan’s Economic Model after the Second World War.


Japan was the worst affected country during the Second World War.

Hiroshima and Nagasaki were the most affected, but Japan was in total affliction for the war.

A large number of industrial buildings were destroyed along with the machines and equipment that ran alongside them.

After the war, there were many social consequences such as unemployment, chaos, and starvation.

Japan lost over half its housing stock.

These conditions were not easy to repair by the allies.

Despite the devastation, Japan was able recover rand and reconstruct its economic situation.

This was only possible because of the Japan’s war experiences and the knowledge gained from other countries.

This essay is about Japan’s post-war economic model.

This paragraph provides a detailed description of the sufferings that Japan’s people have suffered.

The main problem was unemployment.

7.6 million troops were mobilized.

For this reason, 4 million people were made unemployed in military fields.

Additionally, 13.5million people from other countries were dismissed and 13.1 million people lost work.

The energy and food supplies were also cut.

The lack of coal caused a shortage of energy because the Koreans and Chinese who worked in coalmines decided not to continue.

Also, rice production was limited so people are forced to go without their main food source.

Japan’s people were shocked to learn that there was no food or energy available and they were afraid that they would die in 1946.

They began to work in agriculture and coalmines.

The inflation issue, or the increase in costs of essential items, is another important issue.

This is due to the fact that huge amounts of money were distributed for military purposes through compensation, advance payments and other means.

The war cost a lot of money.

The Dodge Plan was implemented in 1948, which solved the problem.

This was the beginning of Japan’s economic rebuilding process.

General Douglas Mac. Arthur was the supreme commander in the Allied power and launched reform policies which ended the use of military forces.

The constitution of Japan was created in 1949. Japan relinquished its military rights and completely rely on the U.S.A as their protector (Barnhart 2013).

The Cold war between USA, USSR was started after the post-war war.

The war was ideological.

The US supported Capitalism ideology while the USSR supported it.

USA was also concerned that China’s Communist might influence Japan. For this reason, USA supported Japan to solve their economic problems.

The U.S. created commercial treaties with Japan and other countries such as the Philippines.

This paragraph outlines the three factors that made Japan’s economy so successful.

Joseph Dodge, the president of Detroit Bank in 1948, created the Dodge Plan. This plan was primarily designed to make Japan strong and independent, so it could not rely on USA military support.

Dodge established three policies and measures in order to bring Japan back to stability and to lower Japan’s inflation.

These measures included a balanced and moderate budget and the adjournment for new loans from Reconstruction Finance Bank. Third, the curtailment/abolition government subsidies.

Japan found it difficult to revive its economy following these principles. However, the Korean War brought about an acceleration in the economy.

The fate of Japan was changed forever by the Korean War.

The Korean War took place between 1950 and 1951.

This war prompted a 34% increase in world trade and many countries including Japan were benefited.

The 70 percent increase in production in different companies led to a boom in Japanese business.

USA’s military accomplishment deluged, and it ordered Japan to produce military facilities worth $2 billion over the period 1951-1953.

Japan’s economy reached the top (Welfield 2013).

Japan’s gross domestic products (GDP) grew and developed at an average rate in excess of 9.1% per annum during the 1950s.

In contrast to the GDP growth of over 10% in the 1960s, it was only 9.1% per year.

However, the Korean War has accelerated technology and equipment industry innovation.

Japan was still far behind in this type of technology implementation, so they imported the technology knowledge and expanded its production.

Thus, Japan’s overall production growth was a positive factor in its economic health.

The 1958 signing of Japanese-American-Security Pact Act made Japan free from all Allied Powers interference.

Japan’s economic growth was due to certain factors.

The powerful Central Government Bureaucracy is the first.

The Ministry of International Trade and Industry ( MITI ) had a number of Civil servants. They worked together with businesses and motivated people to make progress and achieve financial success.

Certain industrial policies were implemented to promote new industries such as automobile manufacturing. Others planned out strategies for the decline of industries such as mining.

The export economy was also a focus of the Business experts.

The availability of technology was the third key factor. Japanese workers applied for productions using these technologies and there was no restriction on the access to this knowledge resource. (Flath,2014).

The fourth factor was Japan’s trading policy. It protected the domestic market and encouraged the economy to grow (Nakamura (2015)).

The fifth important factor is maintaining Japanese politics.

Japan was not shaped by democracy. The fate of the economy of Japan did not change because of the Liberal Democrat’s (DeGrasse 2016).

Instead, this Liberal Democrat worked with prominent corporate leaders and bureaucrats.

The sixth factor was the ‘Iron- Triangle. This allowed Japan to take the right decisions and measure for securing Japan’s unstable state ( Francks & Francks (2015)).

A key feature was the US military security Japan obtained.

Between 1951 and 1980, Japan’s Gross Domestic Product increased by 73 percent.

The Japanese currency rate Yen was deliberately subdued, but it was tripled by the 1980s.

Japan was able not only to recover from its worst situation but also changed its destiny after the second world war.

The Japanese government made it easier to obtain loans at very low rates for financial sectors and companies in order to improve the country’s financial condition (Sugimoto (2014)).

Japanese corporations borrowed huge amounts of money from the banks. The banks also obtained this money through domiciliary savings.

MITI aimed at bringing together small companies to form a large company that could challenge Toyota and Nissan (Choucri 2013).

Japan also took credit for founding Sony Corporation, which has since become a multinational corporation. Lockwood, 2015.

Japan is considered by Americans to be a ‘free rider’.

The reason for this is America spending 5-6 percent.

Japan promised to limit its military spending to 1% of its Gross Domestic Product.

The United States of America would defend Japan against military aggression from outside.

After the devastating effects of the post war Japanese civil war, Japan was able recover its economic circumstances thanks to the USA’s combative protection.

This does not mean Japan’s prosperity was solely due to this. The Japanese people still had the potential to rebound from the crisis (Tsurumi (2015)).

USA supported Japan to ensure that they did not support communist ideology (Hook & Spanier (2015)).

The conclusion is that Japan has become a role-model for other countries experiencing economic or social instability.

It is interesting to note that the USA had destroyed Japan and later formed an alliance with Japan.

This was one of the US strategies to maintain its global position.

Japanese citizens were well aware of their crisis, and they took the responsibility to heal it.

The Japanese government, bureaucrats and other officials worked tirelessly to restore the country’s financial health.

The Banks of Japan played a significant role in improving Japan’s overall situation.

Japan experienced a monetary boom due to the Cold War between USA & USSR that led to the Korean War.

Japan also produced huge corporations from 1950 to 1980. These corporations are now world-famous.

Despite these successes, Japan experienced a major setback in 1990.

The stock market fell completely and Japan entered a recession in 1990.

This was due to four Asian tigers: South Korea (Taiwan), Hong Kong (Hong Kong), and Singapore.


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Princeton University Press.

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Cambridge University Press.

Social change and individuality: Japan before and during World War II.

Princeton University Press.

An Empire in Eclipse. Japan in the Postwar American Alliance System. A Study in the Interraction Between Domestic Politics and External Policy.

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