Transcript Japan in 1960s - University of Mississippi

Shifts in Japan’s Political
Economy Regime
Adjustments and changes
Conservative dominance (’60s)
• Power and influence of conservatives rose
– at the expense of the political left
• conservative supporters benefited
– prosperity and peace
– side payments
• successes in economy and in politics
reinforced each other
• favorable international environment
Challenges (1970s and 1980s)
• Socioeconomic bases of support
– new political parties, independent
movements, and changes in voter patterns
– divisions within regime supporters
superseded earlier left-right divisions
– central concern of regime continuity
Socioeconomic challenges
Socioeconomic challenges
Employment at Different Businesses in Japan
100%
90%
40%
80%
66%
70%
79%
60%
20%
50%
40%
30%
18%
40%
20%
11%
16%
10%
0%
firms
self-employed
family business
10%
1947
1970
1985
40%
20%
40%
66%
18%
16%
79%
11%
10%
Socioeconomic challenges
• rise of large and technologically more
sophisticated industries
• rise of the service sector firms
• relative decline of agriculture sector
• relative decline of small businesses
• shrinking bases of the conservative
regime’s electoral coalition
Challenge 2: aging population
% of Japanese Population Aged 65 or Older
Ratio of Retirees to Workers
14%
33%
14%
35%
12%
30%
10%
25%
7%
8%
20%
14%
5%
6%
25%
15%
4%
10%
2%
5%
0%
0%
1945
1975
1995
1975
2000
2015
Challenge 3: labor shortage
• Economic success
– rising demand for labor
• expanding influx of labor after WWII
– low-cost, young, highly-skilled
• changing age profile of the population
– bargaining power shift from management to
labor
Challenges to LDP
• Urbanization and rise of middle class
• Socioeconomic base of conservative
support shrank
• Mobilization capabilities of LDP supporters
declined
• People identified with party independents
increased
– outnumbered LDP supporters in 1974
Challenges to LDP
• Increased voter option in 1960s and 1970s
– formation of new parties
– transformation of existing parties
– in both conservative & the political left
• threatened both LDP and JSP
• threatened conservative electoral and
legislative hegemony
LDP responses (1970s & ’80s)
• Attract new electoral support
– shore up conservative support
– draw away organized labor from DSP & JSP
– attract the new middle class
• non-voters and non-partisan voters
• LDP dilemma between traditional
supporters and new appeal
Infrastructure Spending as % of GDP
7
6
5
4
3
2
1
0
1970
1975
Japan
1980
1985
United States
1990
1991
1992
Japan
United States
1970
1975
1980
1985
1990
1991
1992
4.5
2.6
5.3
2.1
6.1
1.7
4.7
1.7
5.1
1.7
5.1
1.8
5.7
1.8
LDP responses
•
•
•
•
Adjustments in policy or institutions
less tightly linked policy profile
firm-level cooperation with labor
substantial deficit finance for political
target
• fiscal austerity and privatization
• manufacturing firms became multinational
• defense and security policies
LDP electoral recovery
Economic recovery (1980s)
Bubble burst
Stock market woes (2000s)
International challenge
• External conditions
– challenged conservative policies
– threatened conservative socioeconomic
support
• challenges to exchange rate policies
– Bretton Woods monetary system broke down
International challenge
• international price of raw materials
– Japan’s dependency on imported oil (99%)
– oil prices quadrupled in 1973
– oil prices rose by 2.8 times in 1979-80
– inflation
– balance of payments
– domestic productivity
International challenge
• Increasing pressure from US and Europe
– reductions in Japanese tariffs, import quotas,
and non-tariff barriers
– voluntary export restraints
– open Japanese market
– Japanese military spending
• challenges to vital aspects of Japan’s
conservative economic policy profile