Question

Discuss the conditions that made Japan’s postwar economic development possible? How did SCAP policies contribute to or hinder Japan’s economic miracle?

Answer 1

The Japan’s postwar economic development was achieved with the help of the execution of the Dodge Plan as well as the effect it had from the eruption of the Korean War. The economy experienced a rapid increase in production and marked the beginning of the economic miracle due to the so called Korean War boom. The aptitude of the Japanese to replicate while applying the knowledge and skill learned is the distinct and the most significant factor of Japan’s incredible growth. Some of other factors for growth include import of technologies and improved business condition. Economic policies and the subsequent strategies carried out to a great extent influenced and accelerated the economy. One of the key reasons for Japan’s economic miracle was the decreased spending on military and defense forces. There were three major reforms set forth by the SCAP which highly contributed to Japan’s economic miracle. The policies of the SCAP included the breakup of the zaibatsu, land reform, and labor democratization. Competition within all industries became severe and marked the foundation of the swift postwar economic growth with the breakup of the zaibatsu. Landlords were no longer accepted or acknowledged as above the social class (farmers or tenants) and thus this program was revolutionary to Japan. The expansion in the domestic consumption markets due to the improved working conditions and higher wages achieved by the labor unions greatly affected the development of the economy.