Sociopsychological Analysis of Japanese Industrial Policy: The Sumitomo Metals Incident

Abstract:  In the 1960s, the former Japanese Ministry of International Trade and Industry (MITI) controlled key industries through its industrial policy. It is commonly believed that this policy was based on an economic rationale. In particular, the MITI justified what are known as recession cartels on the grounds that reducing production volume would prevent destructive competition. Our purpose is to go beyond this current economic understanding via a sociopsychological analysis. We focus on the so-called Sumitomo Metals incident of 1965 when the Sumitomo Metals Company refused to follow the MITI guideline demanding a reduction in steel production. This was the first such incident in which a private company explicitly refused to abide by MITI administrative guidance. We hold that the industrial policy was not necessarily based on an economic rationale. Sumitomo was alone enjoying profit while all other companies were suffering loss. The MITI and major steel manufacturers insisted, without economically sound reasoning, that Sumitomo should reduce its steel exports. On an economic basis, however, steel exports should have been promoted, not restricted, to counterbalance the domestic recession. The whole incident was a sociopsychological battle disguised as an economic debate, and the economic argument of the MITI and other steel manufacturers was actually an elaborate scheme of psychological rationalization. Their severe denouncement of Sumitomo is best explained by the psychological defense mechanisms of projection and displacement. Furthermore, the recession cartel in this case was essentially a ritual of collective suffering under the orchestration of state authority.     

Methodology for setting risk-based concentrations of contaminants in soil and groundwater and application to a model contaminated site

In Japan, environmental standards for contaminants in groundwater and in leachate from soil are set with the assumption that they are used for drinking water over a human lifetime. Where there is neither a well nor groundwater used for drinking, the standard is thus too severe. Therefore, remediation based on these standards incurs excessive effort and cost. In contrast, the environmental-assessment procedure used in the United States and the Netherlands considers the site conditions (land use, existing wells, etc.); however, a risk assessment is required for each site. Therefore, this study proposes a new framework for judging contamination in Japan by considering the merits of the environmental standards used and a method for risk assessment. The framework involves setting risk-based concentrations that are attainable remediation goals for contaminants in soil and groundwater. The framework was then applied to a model contaminated site for risk management, and the results are discussed regarding the effectiveness and applicability of the new methodology.     

The Adaptation of Western Management Ideologies: The Revised Capitalism of Keizai Doyukai in Postwar Japan

Abstract:  Keizai Doyukai (The Japan Committee for Economic Development) proposed a unique management ideology known as "revised capitalism" immediately after World War II. Doyukai was a totally new business association established by young managers in 1946, and this was in sharp contrast with Keidanren, which evolved from its prewar predecessor. The concept of revised capitalism consisted in the equilibrium of management, labor, and capital on an equal power basis, and had a solid theoretical foundation. Although it was an important milestone in the history of management ideology, it has been misinterpreted to date. In particular, it is commonly believed that Banjo Otsuka, one of Doyukai's inaugurators, imitated the ideas of Western management thought in Burnham's The Managerial Revolution and Berle and Means's The Modern Corporation and Private Property in formulating revised capitalism. This comparative analysis reveals otherwise. I hold that Otsuka enhanced the role of labor and blended the prewar management thought of Japan with the ideologies of Burnham and of Berle and Means. The role of labor was critical because the initial occupation policy of SCAP (Supreme Commander for the Allied Powers) encouraged the labor movement. It also explains why revised capitalism disappeared so rapidly once SCAP changed its policy and started to suppress labor unions in 1948. In broader terms, this analysis has two theoretical implications: that political context can strongly influence the rise and decline of a management ideology; and that a management ideology can retain certain traditional elements even under radical political changes.