Culture as Ideology in the Conquest of Modernity: The Historical Roots of Japan's Regional

Regulation Strategies
Author(s): Maarten H. J. van den Berg
Source: Review of International Political Economy, Vol. 2, No. 3 (Summer, 1995), pp. 371-393
Published by: Taylor & Francis, Ltd.
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Review of InternationalPolitical Economy2:3 Summer 1995: 371-93

Culture as ideology in the conquest of

modernity: the historical roots of
Japan's regional regulation strategies
Maarten H.J. van den Berg
Facultad LatinoamericanaDe Ciencias Sociales, Quito

ABSTRACT
The preoccupation of critical IPE theory with the global neo-liberal
programmeof deregulationand restructuringtends to hide the emergence
of alternative patterns of regulation in different sites of global transformation. Currently, Japanese capitalism projects on a regional plane,
concepts of regulation that negate neo-liberaldiscourse. The contours of
the regionalizationof Japan'sstate and economy are taking shape in the
form of tightly coordinatedproductionnetworks,administrativeguidance
of investment patterns,and a regionaldivision of labour.The paper traces
the roots of Japan'sregulationstrategy for the Asian region to a historical
logic of ideological, political and institutionalresponses of Japanesecapitalism to structuralchange in the world order.At threesuccessivemoments
in the history of Japanesecapitalism,the strategiccompetence, conscious
compromises and 'sense of direction' of administratorsplayed a critical
role. It is contended that an account of the history of this intellectual
stratum in the process of social differentiationwill not only shed light on
the persistence of Japan'senigmatic political culture, but also clarify the
absence of liberal ideas in Japaneseconcepts of regulation.
KEYWORDS
Japan;capitalism;modernity;regulation;history;ideology.
This paper posits that at the present conjuncture of global restructuring
of production and accumulation, social change should be analysed as a
process of situated transformation. Transnational forces are evidently
pre-eminent in this process of change. Consequently, Neo-Gramscian
scholars of International Political Economy (IPE) have identified the
emergence of a 'transnational historic bloc' (Cox, 1987; Gill and Law,
1989). This bloc is clustered around the corporate-economic exigencies
of transnationally oriented production and money capital. The combined
? 1995 Routledge 0969-2290

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ARTICLES

efforts of these forces seek global deregulation, liberalization and expansion of markets for goods, capital, money and labour. Hence, neo-liberal
discourse has become the cornerstone of a hegemonic global accumulation strategy - or 'comprehensive concept of control' (van der Pijl, 1984;
Overbeek, 1990) deployed by a transnational ruling class.
However, transnational forces are not transcendental forces, that is,
they do not operate in a coherent universe of relations between
economic, political and cultural practices. The world order is not a single
social space yet, but a dialectic ensemble of historical structures of social
relations. Specifically, in terms of normative patterns, or ideas that are
embodied in social practices, the world order is not a transparent
symbolic order. Therefore, the currently prevailing ideas that are
embodied in the practices associated with transnational forces require
contextualization.
In adopting this perspective, I present the case of Japan's political
economy as a site of global transformation. Notably, since the dramatic
political reshuffles after the elections of 18 July 1993, foreign observers
have presumed that Japan's ruling class sees itself faced with new
choices and a new sense of responsibility. Newspapers have reported
that 'all over Tokyo there is talk of deregulation' (NRC Handelsblad, 10
September 1993). Does this indicate that Japan's political economy is
finally bound to embrace 'global perestroika' (Cox, 1992)? The answer
is burdened with the record of past experience and analysis.
Despite US attempts to open the Japanese market for imports,'
the trade surplus of Japan with the rest of the world continues to
persist. This indicates that the free market paradigm is hard to impose
upon Japan. The presence of a 'visible hand' (McMillan, 1984) is sometimes obvious: when the economic downturn finally hit Japan too, the
government did not hesitate to intervene. Two unprecedented 'rescue
packages' were put forward by the government in August 1992 and
April 1993.
However, notions of a visible hand in Japan's political economy do
not necessarily refer to state intervention. For instance, the agricultural
sector is controlled by an extended cartel of agricultural industry, trading
companies and banks of the Nokyo (the central federation of agricultural cooperatives). The Nokyo also serves as a protectionist lobby for
the maintenance of external barriers for agricultural products and extraordinarily high prices for rice (van Wolferen, 1990). Various authors have
pointed at the tight corporate control of a limited number of conglomerations (keiretsu) at the core of huge dependent networks of
subcontractors in industry (Dore, 1987; Ruigrok and van Tulder, 1993).
In addition, the Japanese experience with 'administrative guidance'
(Johnson, 1982) does not remain limited to Japan. As I will point out
below, bureaucrats and managers of Japanese corporations promote their
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JAPAN'S REGIONAL REGULATION STRATEGIES

own 'recipe' for capitalist development in the Asian region. Recently,

this recipe has been suggested to the former Soviet Union: the Japanese
blueprint for the economic restructuringof the Commonwealthof Independent States (CIS), 'flies in the face of Western economic orthodoxy
as espoused by the IMF'.While the IMF stresses the primacy of market
principles, the Japanese recommendations'stress the value of centrally
guided policies based on common goals' (Far EasternEconomicReview,
13 August 1992:59).
THE JAPANESE

ENIGMA

In sum, the responses of Japanesecapitalism to the exigencies of global

restructuringare different from the free market paradigm emanating
from the Atlanticarea,echoed in the offices of the IMF.To explain persistent forms of regulation in Japan's political economy, various authors
have pointed at the close cooperationbetween bureaucrats,business and
politicians in the management of structuralchange (Johnson,1987;Cox,
1989; Williams, 1994). This triangle constitutes an enigmatic form of
interest coordination;a balance of rival domestic interests, expressed in
elite-factionsin the bureaucracy,the LiberalDemocraticParty (LDP)and
the private sector. The rationaleof these semi-autonomousgroups is the
stabilizationof their particularinterestsand a consolidationof the status
quo. No one of the groups is ultimately in charge. 'The enigma of
Japanese power' is that there is no responsible centre (van Wolferen,
1990:5).
This power structure is, what van Wolferen calls, 'the System' (van
Wolferen, 1990: 44). The System operates through a web of jinmyaku
(networkof special informalrelations)among membersof the elite triad.
Jinmyakutend to blur the lines of demarcationbetween the public and
the private sector, as well as between the legislative and the executive
branch of the government.
Van Wolferen's account of the 'elusive state' suggests that not only
liberal understandings of Japan's political economy should be rejected,
but also state-centricapproaches and popular notions of 'Japan Inc.'
(Vogel, 1986). Also, orthodox Marxist conceptions of 'state-monopoly
capitalism' (Morris-Suzuki and Seiyama, 1989) do not satisfactorily
capture the modusoperandiof the System. There is too much rivalry and
competition in the ruling class to justify instrumentalist accounts of
Japan's state-society relations. Furthermore,van Wolferen's 'System of
irresponsibilities'is not a static monolith but is in fact susceptible to
outside pressure (gaiatsu).
At the same time, the ad hoc modusoperandiof the System does not
align the ruling class behind a coherentcomprehensiveconceptof control
that defines foreign economic policy:
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It is difficult ... to identify any conceptual framework behind the

internationalmonetary policies espoused by Japanese politicians,

if indeed any existed. Inherently they are pragmatists and rarely
advocate an ideological preference,especially in matters of foreign
economic policy.
(Funabashi,1989:97)
The absence of comprehensive world views, universally applicable
principles, or identifiable norms that define 'the general interest in the
eyes of the ruling class' is the most crucial factor in the understanding
of the System. Generally applicable rules and universal values would
underminethe complex webs of jinmyakuand (in)formalprocedures(van
Wolferen, 1990: 134). This argument is echoed in other studies
of Japan'spolitical economy (see: Dore, 1987;Cox, 1989;Williams, 1994),
and expresses a lingering awareness that there is a 'JapanProblem'that
transcends the familiar controversiesbetween realists, liberals and neoMarxists.
From the vantage point of numerous 'cultural explanations'
(Nihonjinron,literally: 'theorizing on the Japanese')the 'JapanProblem'
amounts to a cultural gap. Nihonjinronholds that the Japanese share a
different set of social values from those that are dominant in 'the West'
(Okimoto, 1988; Ishida, 1989;Nakane, 1972). These authors explain the
raison d'etre of Japan's sociopolitical order by delineating culturally
specific norms of behaviour, such as group-affiliation, loyalty and
consensus orientation. Such static cultural explanations presuppose
that the Japanese subordinate themselves to the demands of a fairly
structuredset of patron-clientor hierarchicalrelationships.It is assumed
that the Japanese are socialized to share such similar values and that
consensus and acceptanceof authority can, therefore,be said to exist a
priori.

By contrast, other authors have argued that these ideas constitute a

discourse of 'Japaneseuniqueness' espoused and consecratedby Japan's
ruling class to secure political power and to legitimize the condition of
Japanese state-society relations (Mouer and Sugimoto, 1986; van
Wolferen, 1990; Miyoshi and Harootunian, 1989). Nihonjinrontheory
juxtaposes Western 'universalism'to the unique cultural foundations of
Japan'sstate-society relations and serves to legitimate the consolidation
of power relations underpinning the System.
In the currentlight of waning Japanesenationalism,sluggish economic
recovery and the exposure of political scandals, the viability of the
System is questioned by many. Indeed, since the 1993 elections, subsequent coalition governments have promised a democratic government
free of corruption,major political reforms, the liberalizationof Japan's
economy and a more active foreign policy. Such a political programme
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JAPAN'S REGIONAL REGULATION STRATEGIES

seems to challenge the 'inescapable embrace' of van Wolferen's System.

However, it is not the first time that it has been asserted that Japan's
state-society relations are at the crossroads.2 Kenichi Ohmae argues that
the recent political reshuffles are misleading, for they have not diminished the power of 'the iron triangle' of politics, bureaucracies and
business (Ohmae, 1993). Both Ohmae and van Wolferen conclude that
the System has become an anachronism. However, they share a scepticism as regards current political transformations.
Yet, both writers fail to specify the long term perspective of political
and social transformation. Ohmae merely refers to inevitable developments in all economies, that is, 'the coming shape of global competition'
(Ohmae, 1985). Such visions are perceived by revisionists like van
Wolferen as liberal wishful thinking. In turn, the major deficiency of the
revisionist approach is that it does not take into account structural transformation in the global political economy. The arguments remain limited
to a behavioural framework of understanding power relations as an
intra-elite bargaining process in a national setting.
REFRAMING

THE 'JAPAN

PROBLEM'

I want to suggest the need to reframe the 'Japan Problem' within a more
comprehensive perspective of social transformation. Van Wolferen's
System pertains to a historical process of political, ideological and institutional responses to structural changes in the global political economy,
that is, Japan's historic bloc. First, this process should be considered on
its own terms and not just as a 'deviant case' subsumed under global
categories. In this respect, I object to the isolated notion of 'Japan's persistent ideological deviation' from the global neo-liberal programme of
deregulation. Rather, I suggest a reassessment of the often presumed
universality of neo-liberal discourse. Following Bob Jessop, I propose
that the deployment of a hegemonic regulation strategy proceeds globally as a series of differential moments of articulation between
accumulation and politics in different social formations (Jessop, 1990:
193). In these terms, regulation strategies are reproduced through preexisting cultural, ideological and political patterns in different sites of
transformation.
Thus, neo-liberal discourse carries specific notions of state-society
relations, ideological presentations and economic practices, mostly of
Western origin. The typical liberal notions of the congruence between
the market economy, democracy, individualism, civil law and the social
contract are burdened with a particular cultural heritage. By contrast, in
Japan hegemonic discourse has articulated a different heritage. As I will
point out below, during crucial periods of capitalist development,
Japan's ruling class consciously prevented liberalism from taking root.
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Second, this process of assimilation and embedding of capitalism in

different social contexts is a sine qua non for any potentially hegemonic
regulation strategy that sheds crude forms of repression and social dislocation. As Karl Polanyi pointed out, the self-regulating market is a myth,
a fallacy that obscures the social embeddedness of economic practices
(Polanyi, 1957). In addition, the reduction of social (re)production to the
operation of market forces denies the actual history of capitalist development as a socialization process.3 This process has resulted in the
increasing complexity of advanced capitalist societies. Since the end of
the last century, the self-regulating market has been challenged by the
development of 'rational knowledge': ideas coping with the organizational requirements of production, 'social management and planning'
and the distribution of the social product - hence, the typical concerns
of modernity. The concomitant rise of technocratic management and the
tertiary sector produced different forms of intervention in the accumulation process, ranging from modest forms of social regulation to
state-led capitalist development.
Third, rather than a teleological structural process, the socialization of
capitalism has been mediated by concrete social agents. Modernity gave
birth to a particular category of functionaries necessary for the social
regulation of capital accumulation. Drawing on the work of Alain Bihr,
Kees van der Pijl even conceives of a distinct 'cadre class' of bureaucrats, managers, and (other) intellectuals who come to realize the 'social
embedding' of capital accumulation so to speak (van der Pijl, 1992).
However, the cadre class cannot be merely considered as the agent of
the ruling class, but performs an intermediary role in social (re)production. This informs a framework of reference for understanding society
or 'habitus'. The cadre class 'habitus' does not so much reflect the
economic position of its constituents but relates to their common role in
the process of socialization (van der Pijl, 1992: 7).4
Adopting van der Pijl's notion of the emergence of cadre consciousness in advanced capitalist societies, I suggest we consider a diversity
of 'cadre habituses' related to historically and culturally differentiated
experiences of modernity. Consequently, the contending ideological
tendencies that accompany global restructuring may not merely be
traced to the outlook of economic interests in the accumulation process.
They may also be associated with the responses of 'organic intellectuals'
to the exigencies of social regulation in different sites of global transformation. From this angle, the Japanese defiance of the neo-liberal
programme of deregulation may reflect the presence of an intellectual
stratum that frames regulation strategies in alternative conceptions of
social differentiation and state-society relations.
In the remainder of this paper, I will trace the roots of Japan's historic
bloc. In the development of Japanese capitalism, the strategic com376

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JAPAN'S REGIONAL REGULATION STRATEGIES

petence, conscious compromises and 'sense of direction' of administrators played an important role. An account of the history of this
intellectual stratum in the process of social differentiation is necessary
to clarify Japanese concepts of social regulation, and the persistence of
the System or, what has been called, 'the inertia of Japan's political
culture' (Cox, 1989).
THE MEIJI RESTORATION:
REVOLUTION

A PASSIVE

The Meiji restoration - that is the restoration of the authority of the

emperor by a proclamation issued on 3 January 1868 - should be seen
as a political moment in a wider context of social transformation: a
dialectic of internal social change in Japanese feudalism and external
interference.
Social power relations in feudal Japan displayed some characteristics
more akin to those in Marx's account of the Asiatic mode of production
than to European feudalism. Dominated by the Tokugawa Shogunate
(1603-1868), most lower ranked members of the aristocracy (samurai)
were deprived of their land. Instead, they occupied positions in a centralized and increasingly bureaucratized government, in return for a stipend
in rice. Such a form of political rule cut across the direct peasant-lord
mode of social relations of production.
The isolation of Japan from the outside world - which prevented the
infiltration of universal values and transcendental belief systems5 served the procurement of those normative patterns that reinforced the
legitimacy of the existing sociopolitical order. Feudal values were
principally centred on the maintenance and furtherance of local communities. During the Tokt-gawa period, this local 'in-group'
consciousness became overlaid by a status structure which placed the
samurai on top, followed by the peasants. The artisans occupied the
middle position while the merchants (chonin) were considered lowest in
rank - not counting the outcasts (hinin, or non-people). This status structure reflected the Confucian idealization of agriculture, partly signifying
the ethical primacy of production over profit, partly the dependence of
the samurai rulers on the farmers for revenue. Also, the Confucian principles of loyalty and filial piety that were supposed to guide samurai
ethics, were mirrored in the emphasis on hierarchy and group loyalty
fostered in the rural habitus. The status structure, reinforcing the cultural
hegemony of the samurai, effectively repressed the development of bourgeois values and tied the domestic bourgeoisie to the existing political
order.
However, the samuraibecame gradually more dependent economically
on the urban bourgeoisie for they had to convert their stipends into
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money to pay for their expenses. The urbanmerchantsfurthercontrolled

the commercializationof the rice surplus via the samuraiby providing
interest and loans to the feudal aristocracy. Thus, while the chonin
had no political or legal rights, they grew economically strong through
the manipulation of the internal economic structure. In terms of class
interest, the mutual dependency of the choninand samurailaid the foundations for an emerging urban bourgeois-aristocraticbloc.
The intrusion of Western imperialism- preluded by Perry's gunboat
diplomacy of 1853 pressing for Japan's ports to open for foreign trade
- evoked a domestic response which took the form of a political alignment against the shogunal state. The progressiveforces in this alignment
consisted of the intellectual stratum of the feudal order: the low and
middle ranking samuraior bureaucratsof the old regime consisting of
an increasingly impoverished but highly educated governing elite. This
intellectual stratum played a pivotal role in the stalemate between
alliances within the ruling oligarchy. Thus, at first sight the Meiji
Restorationmerely represented a shift of power within the ruling class
and a continuity of personnel in class terms. However, the role of this
intellectual stratum rested as much on the political survival of samurai
rule as on the underlying economic changes and redistributionof social
power within the feudal order.
From this standpoint, the Meiji Restorationmarks the introductionof
capitalism in Japan.Although the bourgeoisie had no stake in the political developments, the international and domestic social context
accelerateda process of transformationakin to a bourgeois revolution.
Following Cox, I suggest that this process can be capturedin Gramscian
terms as a passive revolution (Cox, 1989).In the specific historicalcontext
of the Meiji restoration,Japan was faced by a world order of 'rival imperialisms' (Cox, 1987: 151-210) and was forced to trigger the process
of industrializationby capitalist development within the frameworkof
the nation-state. This resulted in a stalemate between conservative
constituents in the feudal oligarchy and 'progressive' elements that,
along with an emerging bourgeoisie, associated itself with a new configuration of social forces, without displacing the old order.
The common denominator that cemented the new ruling bloc
consisted of the project 'to catch up with, and to surpass the Western
Powers' (Ishida, 1989:4). To accomplish this, the political leaders of the
Meiji Restorationwere faced with a huge dilemma. On one hand, they
had to assimilate bourgeois ideas and institutions to strengthen Japan
as an independent capitalist nation in the interstate system, as well as
adopt Western technology to set the wheels of industrialization in
motion. On the other hand, they had to avoid the infiltration of undesirablepolitical influence.Specifically,the inevitableascendancyof the
bourgeoisie was to be prevented from underminingthe new ruling bloc.
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JAPAN'S REGIONAL REGULATION STRATEGIES

STATE

FORMATION:

THE POLITICAL
BOURGEOISIE

FATE OF THE

In the struggle over the outlook of the new state, preferences shifted
from Anglo-Saxon models to German concepts of state and society,
notably Prussian organicist state theory and forms of 'bureaucratic
constitutionalism' advocated by the writings of Stein and Gneist
(Halliday, 1975: 37; Gluck, 1985: 192). From the perspective of political
struggles within the ruling class, the shift reflected the growing influence of the bureaucrats in the process of state formation. From the
vantage point of the class contradictions that accompanied the emergence of capitalism in Japan, the shift embodied an attempt by the old
ruling class as a whole to ensure the continuation of samurai rule in the
framework of the nation-state. Prussian state theory shed the reliance
on liberal bourgeois concepts and institutions such as the Trias Politica,
parliamentary democracy and the like.
In addition, the exposure of Japan to an outside world where nationalism and imperialism reigned rather than freedom and democracy,
served as an imperative to integrate traditional values and norms into
a 'national value system' (kokutai).Through the mobilization of familism,
filial piety, love of one's native place and worship of imperial ancestors,
the concentric sphere of influence of the closed in-group at the village
level was extended to the national level.
In the final draft of the Meiji Constitution (1889), the Emperor was
regarded as the embodiment of absolute values transmitted from the
remote past. In what became known as the 'Emperor System', the
absence of the principle of legitimacy in the bureaucracy contributed to
a political culture in which 'decisions were shaped irresponsibly by an
interplay of factional influences gyrating about the centre of power' (Cox,
1989: 855). This political culture served to depoliticize the rivalries within
the ruling class. However, more importantly, it demobilized political
aspirations of the emerging classes. 'The existence of the Imperial
Institution placed the ultimate moral authority for all the state's acts
outside the bourgeois democratic arena' (Halliday, 1975: 40).
The incorporation of the bourgeoisie in the superstructures of the new
sociopolitical order was not brought about by the imbrication of bourgeois institutions in the realm of state-society relations. On the contrary,
the integration of the bourgeoisie proceeded within the framework of
the Emperor System and the cultural hegemony of the samurai.
CAPITALIST

DEVELOPMENT

The development of capitalism in Japan has not been accompanied by

an influx of dispossessed peasants to the cities, as was the case with the
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enclosures in the UK. With the rise of the textile industry in rural areas,
workers were recruited from the villages. The bulk of the early proletariat in Japan consisted of women, sold off to labour bosses and forced
to send wages back home. The preservation of family relations and traditional institutions secured a cheap labour supply from the villages to
the small and medium sized factories in the countryside. The symbiosis
of landlord and industrialist interests ensured maximum exploitation in
the rural areas.
Also, the mutual dependency between the aristocracy and urban
merchant capital in the old order was reproduced after the Meiji
Restoration. Banking, (overseas) trading and shipping traditionally
belonged to the core activities of a relatively small number of family
companies, financed or owned by (ex)-samurai and the urban bourgeoisie. As a result of the political weakness of merchant capital, these
companies came to function as semi-detached instances in the state
economy. The state promoted oligopolies, each of which operated across
the commercial, industrial and banking spectrum, leaving none of them
with a monopoly in one area. As such, the growth of family-conglomerates (the zaibatsu firms) strengthened the ties between the aristocracy
and the emerging bourgeoisie, and integrally connected core economic
activities to the central state.
EARLY FORMS

OF REGULATION

Partly because there was no labour force available from the countryside,
the zaibatsu were faced with a shortage of labour. The type of industrialization in the zaibatsu (more complicated, capital- and knowledgeintensive production processes, for example, in shipbuilding) -also
required better skilled workers than those occupied by industry in rural
areas. For the recruitment of labour, the zaibatsu had to pay increasing
fees to labour bosses. To counteract these practices, the zaibatsu agreed
not to interfere in each other's labour force and began to experiment
with forms of enterprise corporatism. Just like the ideology of the family
state, managers in zaibatsu firms articulated ideologies of paternalism,
resurrecting traditional values in response to the condition of the labour
market and labour unrest. Individual firms began to adopt policies of
pay and social welfare that encouraged long-term employment and
commitment. The Home Ministry (Naimusho) backed these efforts by
cultivating the idea of 'company-as-family' on a national scale.
The ideologies of the family state and the company-as-family complemented each other in the efforts of a new generation of government
bureaucrats and managers of zaibatsu firms to counteract social demands.
This new bureaucratic cadre, sharing a more or less liberal academic
education, became increasingly concerned with the management of social
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JAPAN'S REGIONAL REGULATION STRATEGIES

change. No longer bound by feudal precepts, the 'way of the samurai'

transmuted over time into 'the way of the bureaucrat', and became an
'ethic of commitment to service' (Cox, 1989: 853) for the new cadre.
On one hand, this ethic crystallized in the experiments with enterprise
corporatism in the zaibatsu and the initiation of legislation (for example,
the Factory Act of 1911, implemented in 1916) to improve working conditions by the government. Other reforms included the encouragement of
local social organizations, educational programmes, moderate political
reform (for instance, as when finally, in 1925, universal male suffrage
became law).
On the other hand, their concerns were underpinned by a commitment to kokutaiand the Emperor System. In effect, virtually all 'modern'
ideas that informed the 'discovery of society and social problems (shakai
mondai)' (Gluck, 1985: 27) were themselves affected by the ideological
language of kokutai. During the period which became known as the
'Taisho-democracy' (1912-26) not even liberal thinkers challenged
the interventionist role of the state in Japanese society or the position of
the Emperor at its apex. Japanese liberalism did not adopt the classic
'laissez-faire'liberalism of Mill and Smith centred around the notion of
individual freedom and autonomy. Rather, Taisho liberals drew heavily
on the late nineteenth-century 'collectivist' liberals such as Green and
Hobhouse (Hoston, 1992: 291).
THE FATE OF LIBERALISM
The aims of Taisho liberals were not rooted in the notion of civil society
as an ensemble of free individuals engaged in contractual relations with
others and vis-a'-visthe state. Hence, they did not demand a liberal infrastructure of social, legal and political arrangements ensuring 'the
freedom' to do so. Rather, Japanese liberals appreciated the value of
community and organic notions of state and society in Meiji political
thought. The consensual dimensions of kokutai ideology served as a
'contextual frame of reference' (Hoston, 1992: 291) for an identifiable
intellectual stratum - ranging from reformist bureaucrats, the technocratic manageinent of the large corporations, to political leaders, liberals,
socialists and Marxists alike.
However, the adherence to kokutai ideology also crippled the ability
of many progressive intellectuals to resist the identification of interests
of the military, bureaucracy and the Emperor, rather than the people,
with the well-being of the Japanese nation. They tacitly allowed for the
crude repression of the rice riots (1915-17), strikes (for instance, in the
shipyards in 1920), and democratic movements ranging from unionism
to liberal and Marxist political organizations.
By the 1930s, the Meiji restoration had accomplished the task of
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catching up with the West and of gaining, for Japan, acceptance as a

major world power. However, the dilemma of the Meiji restoration, as
to how to import modernity and, at the same time, restrict the infiltration of various undesirable political influences remained unresolved. As
soon as progressive intellectuals articulated more explicitly the political
aspirations of the bourgeoisie and the subordinate classes, they were
silenced and displaced by regressive forces. The military came to dominate the Emperor System and acquired political power. The rapid
industrialization of Japan was accelerated by the exigencies of warfare.
The state became increasingly involved in capital accumulation itself,
and fostered by imperialism, the army acquired its own material basis
within the state (Halliday, 1975: 100). Kokutai deteriorated into ultranationalism. Japan's new status in the Asian region, formulated in the
concept of the 'Asian Co-Prosperity Sphere' promoted by the military,
was sustained by the symbiosis of the interests of (samurai) finance
capital and industrial capital in economic and military expansion.
THE OCCUPATION

PERIOD: THE SECOND

REVOLUTION

PASSIVE

The occupation period, from 1945 to 1952, may be considered as a second

passive revolution. During a short period of time, the SCAP (Supreme
Commander of the Allied Powers) imposed upon Japanese society a
model of modernity based on liberal democracy and economic practice.
Feudalism was abolished once and for all by land reforms. Landlords
were forced to sell most of their land to the SCAP, who in turn sold
the land to tenants. Also, capitalist practices were redefined by the dissolution of the zaibatsu on the basis of the idea that the conglomerates
were an obstacle to domestic competition. An anti-monopoly law
was passed in April 1947 to prevent the emergence of any comparable
successors.
To separate state from society, the Emperor System was abolished and
the Naimusho, with its huge apparatus of social control, was dismantled.
All those who had close connections with the former regime were
removed from office and public life by the first 'purge' of January 1946.
In the new constitution (enforced on 3 May 1947), the Emperor's
presumed divinity was renounced. Legislative powers were given back
to an elected Diet. Political parties, regardless of their orientation, were
legalized and trade unions were granted the right to organize workers,
allowing for strikes and wage bargaining. A Fordist model of regulation
was pursued, featuring mass union membership, collective bargaining
and a modest social safety net.
However, events in 1949 and 1950 - Mao Tsetung's victory in the
Chinese civil war and the outbreak of hostilities in Korea - changed
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JAPAN'S REGIONAL REGULATION STRATEGIES

the priorities of the SCAP. The inclusion of Japan in the US strategy of

containment led to a 'red purge' that marginalized the Communist Party,
placed the Socialist Party in the opposition, and left popular movements
of neutralism and pacifism fragmented. Reformist administrators who
were initially encouraged by the social, political and institutional changes
instigated by the SCAP, were now replaced by conservatives.
Bureaucrats of the pre-war regime were reinstalled in office. The second
purge marked the beginning of what is known as the 'reverse course':
the successful attempt on the part of Japan's ruling class to undo the
most crucial reforms of the occupation period.
Conservative intellectuals did not challenge the integration of Japanese
capitalism into the emerging strategic and economic alliance under
American leadership. However, they did reject the political and
economic reforms that had been imposed upon them by the occupation
authorities. Their objectives were sustained by the conservatism of the
new peasant proprietors and the bureaucratic cadre of the dissolved
zaibatsu.Both rejected the principles of liberal economic practice on
which occupation reforms were based. The anti-monopoly law in particular met with fierce opposition. Actual implementation of the legislation
was avoided, and gradually the old zaibatsuconglomerates returned in
the form of keiretsufirms.
Another important objective concerned curbing the power of organized labour. The repression of strikes was backed by the state. Trade
unions engaged in wage negotiations and strikes were locked out by
'second' unions set up by corporate management. At the beginning of
the 1960s, class-based unions had been literally eradicated in the private
sector and were displaced by enterprise unions. With the defeat of organized labour, the reverse course effectively silenced the political
articulation of social demands.
THE POST-WAR

CADRE

TRIAD

The conservative alliance became a political fact with the formation of

the LDP in 1955. However, party politics did not become the vehicle for
the settlement of social compromises or the formulation of economic and
social policy. Instead, the informal networks of patron-client relationships and political bargaining which had cemented the Meiji oligarchy
were reproduced in the new political constellation. Politicians were
recruited from the bureaucracies which undermined the functioning of
the new parliamentary democracy. The representative function of the
Diet was further weakened by an increasing number of deliberation
councils attached to the ministries. The Ministry of International Trade
and Industry (MITI), in particular, directly consulted business representatives on the planning and implementation of policies. Indeed,
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before public political debate had a chance to mature, the bureaucratic

cadre of the keiretsu firms and government bureaucrats set the postwar
agenda of industrial development and economic growth. A triad of
government, business and politics became operative beneath the surface
of liberal political practice in the postwar era.
The administrators, managers and politicians within this triad rejuvenated the attitudes and practices from the political culture of the
Meiji era, but without its military component (Maruyama, 1963: 264).
Thus, the 'system of irresponsibilities' that resulted from the Emperor
System found its postwar counterpart in the 'elusive state' in van
Wolferen's System: a power structure of rival factions and 'interlocking
decision-making' without an accountable centre. Modern institutions,
such as parliamentary democracy, collective bargaining, jurisdiction and
civil rights were not considered effective means of coordination
and social regulation. In these respects, the socialization of Japanese
capitalism after the war shed the liberal and social-democratic 'emancipatory project' of modernity in Western advanced capitalism. In fact,
amidst the elusive power relations and 'institutional ambiguity'
(Williams, 1994: 9) of Japan's state-society complex, there was no 'discursive space' for such a project. The modus operandiof the system prevented
rival interests from transcending their narrow outlook into a coherent
conception of the social order based on class compromise.
Even so, it is argued here that it is possible to conceive of an identifiable category of functionaries that synthesized and consolidated its
outlook on social regulation, political practice and economic management in postwar Japan. Indeed, the commonly held views of the tripartite
establishment endorsed the ideological potency of traditional values
(ranging from Confucian ethics, group-conformity to individual loyalty)
in Japan's 'conquest of the modern' through economic development
(Miyoshi and Harootunian, 1989: 86). An eclectic set of traditional values,
fused with American management ideas and accounting methods
(national statistics and the introduction of GNP measurements), was
effectively incorporated into management practices. Gradually, a loose
frame of reference was reconstructed to legitimize Japan's political
culture, rendering a new 'cadre habitus' of corporate management and
government bureaucrats alike. Befitting the Japanese aversion to macroeconomic models as outlined by the SCAP, new concepts of regulation
were worked out on the micro-level.

MICRO-CORPORATISM
In the first decade after the war, Japanese industry was faced with the
cheap and qualitatively better products of the Fordist industries in the
US and Europe. It was widely held that Japanese companies were highly
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JAPAN'S REGIONAL REGULATION STRATEGIES

inefficient and that the system of 'seniority wages' in the zaibatsu

contributed to this (Gordon, 1993). In an effort to modernize production, the Japan Productivity Centre (JPC) was established in 1953,
sponsored by the US government. The JPC encouraged companies to
rationalize production through the introduction of American management techniques, such as quality control, payment according to merit,
and 'job wages'. However, the restructuring of wages met with fierce
resistance by workers. Therefore, as the anti-union offensive gathered
strength through the 1950s, management revised its strategies by the
introduction of 'bonus-wages', and the reintroduction of 'seniority
wages' and 'lifetime employment'. This was done to lure workers away
from trade unions into the new enterprise unions. Workers feared that
opposition to their employer would result in the loss of a bonus-wage,
which was increasingly determined by such criteria as cooperation, shop
floor commitment and loyalty, rather than skill. This reflected a further
shift in management ideas by which the original American innovations
were adapted to the emerging pattern of capital-labour relations in
Japan.
With the tightening of the labour market and the general increase in
wages from the 1960s on, enterprise corporatism and the welfare practices of the large companies (providing housing, saving plans, pension
funds, study grants, etc.) came to endow 'paternalism' and 'benevolence'
- the consensual aspects of what has been coined 'Confucian management practices' (Dore, 1987) - with a tangible material meaning. In
exchange for the self-discipline expected of the labour force at the shop
floor, the long work days in the offices and factories, wage restraints in
times of recession and the implicit agreement not to interrupt production through strikes, enterprise corporatism came to function as a social
contract at the micro-level.
Just as in the late Meiji period, practices of enterprise corporatism
remained limited to large-scale enterprise. Nevertheless, with regard to
the condition of capital-labour relations in small- and medium-sized
enterprises, Dorinne Kondo claims that social relations of production are
embedded in mutual expectations of 'patronage' or 'paternalism'. Upon
these mutual expectations, identities of employer and worker are crafted,
and disputes over working conditions are negotiated (Kondo, 1990: 10).
Under patronage, the owner accepts 'some responsibility in guaranteeing
jobs and providing protection in return for worker loyalty and subordination, embedded in a model of "family" relations' (Ruigrok and van
Tulder, 1993: 119). However, in contrast to enterprise corporatism in
large companies, the diffused set of dispositions accompanying
patronage is not sustained by any institutionalized form of social regulation other than 'the government's scanty health insurance schemes and
minimum public pensions' (Shalev, 1990: 74).
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ARTICLES

The contrastbetween capital-labourrelations in the keiretsuand those

in small- and medium-sized firms coincides with the productionpattern
that emerged on the meso-level as an alternativeto Fordist production.
In the course of the 1950s, the government restrictedforeign producers
from the Japanesemarket through an extensive system of quotas, tariffs
and import requirements.Japaneseindustry, now barely confrontedby
foreign competition, was nevertheless forced to produce more flexibly
to meet demand in the relatively small home market.In addition, MITI
stimulated inter-firm cooperation, for instance through 'obligatory
second-sourcing'to other Japanesefirms (Ruigrokand van Tulder, 1993:
114). The production pattern that gradually emerged consisted of a
limited number of core firms at the apex of a hierarchy of dependent
small- and medium-sized subcontractors.
Pioneered by the Japanese car industry, 'Toyotism' represents the
structural control of end-producers over supply (just-in-timedelivery
required from favoured suppliers), control over markets (through an
extensive network of single franchising outlets, enabling firms 'to sell
first and to produce later'), control over finances (through long-term
commitment between banks and industry and shedding financing
through open securities) and control over labour (Ruigrok and van
Tulder, 1993: 113-31).
Enterprise corporatism and network production - or what Robert
Boyer calls 'micro-corporatist'regulation of capital labour relations evolved in the absence of (Fordist)macro-regulationof Japan'spolitical
economy. Nevertheless, micro-corporatismis intrinsicallyembedded in
a 'mix' of several social and political forms of coordination.Therefore,
Boyerconsidersmicro-corporatismalmost as an 'organicinnovation'that
posits an alternative to extensive forms of macro-regulationas well as
to pure reliance on the market mechanism. Boyer claims that in international comparison:
coordinating mechanisms implementing more solidaristic or cooperative values between managers, workers, subcontractorsand
banks are more efficient in the competition on the goods market;
on the contrary, individualistic and conflict prone societies [i.e.
Canada, the US, and the UKl which rely on markets to monitor
the capital-labour relations experience very poor results in the
arena of internationalcompetition.
(Boyer 1991:7)
Ironically,a similar conclusion lies at the core of the revival of cultural
nationalismin Japan.Likekokutaiideology in the late Meijiperiod, nihonjinronunderscored the superiorityof Japaneseculture. However, unlike
kokutai,nihonjinrondid not appeal to military prowess. Instead, nihonjinron '[appealed] to the ethos of an exceptional culture in order to
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JAPAN'S REGIONAL REGULATION STRATEGIES

explain the irreducible and unique source of Japan's status as a world

"industrial power" and a global "economic giant"' (Miyoshi and
Harootunian,1989:86). Notably Chie Nakane's work on the corporation
as a social group explained the success of Japan'seconomy in terms of
the traditionalvalues that were preserved and cherishedin management
practices(Nakane, 1972).In turn, nihonjinronmade the business firm the
model for the wider socio-political order.
In contrast to kokutai,nihonjinrondid not become a state-ideology;
Japan'sstate-society complex had changed too much for that. However,
nihonjinronprovided Japan's cadre triad with a cultural frame of reference: an intellectual construct synthesizing various ideas embodied in
political practices, concepts of control and regulation.
THE THIRD PASSIVE REVOLUTION:
INTERNATIONALIZATION
While Japanese nationalism gained momentum during the 1980s,
Japan's political economy became subject to the process of internationalization which was partly externally imposed, and partly self-induced.
Gradually,the internationalizationprocess uncovered the vulnerabilities
of the system, as a consequence of majorshifts in social power relations
among its constituents, especially, as these shifts reflected structural
transformationsin Japan'seconomy. The most significantfactorhas been
the erosion of administrativeguidance (Cox, 1989;Williams, 1994). 'The
guiding role of the state bureaucracy,especially MITI, diminishes as
Japanese multinationals increasingly generate their investment capital
abroad and Japanese finance has become internationalized'(Cox, 1989:
849).
Consequently,the main vulnerabilityof Japan'shistoric bloc has been
exposed in the increased marginalization of labour. Labour-intensive
industry is being transplantedto the Asian newly industrializingcountries (NICs) and the general restructuringof productiontends to weaken
the social contractin terms of a decrease of lifetime employment jobs in
the core industries and a segmentation of the labour force in the newly
emerging service industries (Cox, 1989).In these industries,women and
temporal workers in particularhave become fully exposed to the uncertainty of the labour market. These developments are counteractedby a
reaffirmationof micro-corporatism.Wage restraintsare being negotiated
in exchange for increased social security and commitment to employment security.
Another vulnerability of Japan's historic bloc consists of the expansion of Japanese transnationalmoney capital, advocating more liberal,
outward looking policies (Helleiner, 1989;Funabashi,1989). The financial sector, notably through the increasing leverage of big security
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ARTICLES

houses, has tried to gain influence in Japan's corporate establishment.

The 1989 Recruit scandal, for example, 'was precipitated by a nouveau
riche firm in [this] expanding industry trying to buy its way into the
elite golden circle dominated by heavy industry and banking' (Williams,
1994: 47). Thus, the activities of the financial sector have certainly
contributed to reshuffles within the system and have stood at the
basis of the present crisis of Japanese politics. However, in Japan,
'the revolt of the rentier' (van der Pijl, 1992) has not been able to tilt the
political and economic agenda in favour of neo-liberal policies based on
deregulation. Domestic interest groups, such as agricultural federations
and small-business-dominated regional chambers of commerce, remain
powerful and dominate the 'clientelistic relationships with bureaucrats
and politicians' (Calder, 1988: 530). In addition, the 'logic' of Japan's
network-economy impedes the pre-eminence of, what has been called
'the ideological orientation of money capital' (van der Pijl, 1989). That
is, in so far as money capital would assert itself in institutional form by
the disruption of ties between the financial sector and industry.
Indeed, given the keiretsu ties and cross shareholdings, financial institutions remain loyal to the grouping of companies they belong to (van
Wolferen, 1990: 391-3). In Japan, the liberalization of capital markets
proceeds slowly and has not disrupted the relation between banks and
industry, as is the case in the US and the UK (Ruigrok and van Tulder,
1993: 94). This is related to the low saving rates in those countries which
can only be compensated for by a high international mobility of capital.
'Thus, the neo-liberal policies in the US and the UK to liberalize the
international flow of capital aim to attract money capital from more
successful economies' (Ruigrok and van Tulder, 1993: 94). In Japan, the
saving rate is considerably higher, not least due to the Postal Savings
system, established by the government in the 1950s. In addition, the
average returns on assets and equity of the six major Japanese banks6
are dropping, to a large extent because of the unprofitability of overseas
operations (notably in Europe and the US). This has depressed the profit
margins in the financial sector, shifting the international orientation of
Japanese financial institutions in favour of a regional focus (especially
on the ASEAN countries) and the domestic economy (Far Eastern
Economic Review, 8 April 1993: 70-4).
It is necessary to emphasize here that the reassertion of money capital
may also be expressed in institutional form by the further integration of
circuits of capital within one single transnational corporation (Overbeek,
1988: 285). From this standpoint, the neo-liberal programme of global
deregulation can be seen to be propelled by the single process of transnationalization of capital. In this process, the relative mobility of
money-capital over productive capital has been the progressive determinant.
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JAPAN'S REGIONAL REGULATION STRATEGIES

However, transnational companies do not by definition rely on global

deregulation. In contrast to 'globalization' strategies which aim for a
worldwide division of labour, companies that have adopted Toyotism
follow a pattern of 'glocalization'. Glocalization displays a global pattern
of 'geographically concentrated inter-firm division of labour' (Ruigrok
and van Tulder, 1993: 10). Domestic financing and glocalization enable
these corporations to maintain a strong vertical cohesiveness within the
production network. Such production networks are also able to circumvent trade barriers and the political sensitivities of the 'host-countries'
or trade blocs that are penetrated. As such, Toyotist firms do not necessarily advocate global free markets, for the local (subcontractor)
networks establish relatively independent and autonomous production
units in different regional markets.
In the Asian region, glocalization has ceased to be merely an internationalization strategy of a particular firm. It may be considered a concept
that now refers to the regionalization of the Japanese economy. Japanese
capital controls a complete regional production regime, increasingly
without any ownership relationship, but through hierarchical production
networks. The Japanese core companies rely on their technological advantage, captive imports and exports, the control of marketing and access to
(domestic) financing. The regional production networks are carefully
coordinated with host governments and Tokyo planners. As such the
emerging economic pattern is complemented by what may be coined the
regionalization of the Japanese state. Coherent strategic plans organized
and administered by Japanese bureaucracies such as MITI target investments by country, industry and product. For example, Malaysia has been
targeted for word processors and fax machines, Indonesia for textiles and
plastics (Tabb, 1994: 32). Foreign aid is also an integral part of Japan's economic policy and attuned to corporate strategies. 'As in the case of
domestic industrial policy coordination, the government "plans" markets
in ways consistent with promoting the long term success of [Japanese]
corporations' (Tabb, 1994: 33).
The complementary involvement of Japanese capital and its government in the Asian region has put Japanese concepts of regulation for
the first time on a transnational plane and beyond the micro/mesolevels. In an organic fashion, management practices, financial flows and
production patterns interact with Japan's foreign economic policy,
regional diplomacy and bureaucratic planning. The regionalization of
Japan's state and economy is further consciously promoted in a 'regional
ideology'. Carefully wrapped in an elegant metaphor invented by
ex-prime minister Nakasone - so as to avoid the painful reminders of
the 'Co-Prosperity Sphere' - Asian economies are presented as 'flying
geese'. Neither as subordinates, nor as equals, the Asian countries follow
the leading goose Japan in V-formation. The idea is that the geese 'that
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ARTICLES

go off later' can learn from the 'forerunners'experiences to 'shortenthe

time required to catch up' (SaburoOkita, in Tabb, 1994: 31). As far as
the leading goose is concerned, the teaching materialsconsist of a capitalist reading of Confucius: trust, loyalty and commitment to the flock
will bring economic progress;not the rules of the market place.
JAPAN'S

HISTORIC

BLOC IN THE LONGUE

DUREE

Likethe Meijirevolutionand the 'reversecourse',the presentregionalization of Japan'spoliticaleconomy involves a process of economic,political

and ideological responses to structural change in the world order. The
concept of the passive revolution captures the process as successive
'differential moments' of capitalist development in this site of global transformation. Indeed, each moment produces new configurations of social
ideas, political relations and economic structures. At the same time, each
moment reproduces pre-existing historical structures of social relations.
In these terms, the internationalization of Japan's political economy
cannot be presumed a priori to 'follow' a global strategy. Indeed, Japan's
internationalization process has its own 'logic'. In economic terms, this
logic rests on the projection of domestic micro-corporatism and network
production on a regional scale. These economic patterns were partly
based on late-Meiji experiences, and emerged as alternatives to Fordist
production after the Second World War. In political terms, the logic rests
on Japan's experience with state-led capitalist development or administrative guidance. Although the guiding role of the state has diminished
domestically, bureaucracies have shifted their attention to regional

articulationof long-term economic goals, institutionaldesign and cooperation. In ideological terms, the logic rests on the reconstructionof a
frame of reference proliferating patterns of social differentiation
embedded in networks, associations and hierarchies. This cultural frame
of reference has served different purposes in different historical periods,

but has always appealed to intellectuals who occupied key roles in the
socialization of Japan'sstate and economy.
The resulting historical modes of regulation have always eschewed
both political and economic forms of liberalism. The samurai bureaucrats
challenged the ascendency of bourgeois liberalism to secure the political and cultural hegemony of the aristocracy in the new nation state.
Their successors - the bureaucrats and managers of the late Meiji period
- relied on the consensual potency of kokutaito cope with the increasing
complexity of Japan's society. Even Taisho 'liberals' articulated their
social concerns in terms of appeals to the organic state rather than in
terms of a social contract in the realm of civil society. Again, after the
Second World War, the 'reverse course' rejected the liberal economic
and political reforms imposed upon Japan's state and society by the
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JAPAN'S REGIONAL REGULATION STRATEGIES

SCAP.The postwar cadre triad rejuvenateda political culture that channelled political bargaining and social coordination outside the public
realm of civil society. In the mean time, they experimented with regulation concepts and institutional forms more closely related to the
organization of production and the guidance of economic expansion.
The present 'glasnost'of Japan'spolitical culture,providing lip service
to both political as well as economic reforms, may very well indicate
the erosion of the system. Nevertheless, to assume that, because of this,
Japan's political economy has no alternative left than to embrace the
neo-liberalproject,dismisses the historicallogic of currentdevelopments.
In light of its historical roots, the regionalization of Japan's state and
society may challenge visions of an emerging global liberal order. The
recognitionof this 'JapanProblem'may serve as an antidote to IPEtheories that fail to address differentiatedprocesses of capitalistdevelopment
in different sites of global transformation.
NOTES
This articleis based on my graduatework at the Departmentof PoliticalScience
of York University and the Department of International Relations of the
University of Amsterdam. I am grateful to Robert Cox, Johan Kaufmannand
my supervisor Henk Overbeek for their critical reviews of earlier versions of
this paper.I would also like to thankGina Castilloand the anonymousreviewers
of this Journalfor their helpful comments and advice.
1 For instance, by monetarypolicies (the Nixon shocks), exchange rate agreements (the Plaza Accord of 1985 resulting in the revaluationof the yen) and
political pressure to liberalize the Japanese economy (resulting in the
Maekawa Reports of 1986 and 1987 reflecting Prime Minister Nakasone's
commitment to macro-economicreform).
2 Nakasone's turn in office (1982-8), appealing to LDP-supporters'with more
emphasis on the liberal and internationally minded metropolitan
constituents' (Funabashi, 1989: 93), raised internationalexpectations with
regard to Japaneseforeign economic policy initiatives and domestic reform.
However, the aforementionedMaekawareports, presented by Nakasone to
prove Japan'scommitmentto liberalizationand internationalizationdid not
crystallize into any solid strategy or set of economic policies.
3 The process of socialization consists of the dialectical interactionbetween,
on one hand, the development of patternsof accumulationand the division
of labour, and on the other hand, the development of ideological patterns
and political forms (Habermas,1973).
4 To avoid possible confusion with regard to the usage of the term 'class', the
authorwill only adopt the notion of an emerging 'cadrehabitus'.This habitus
will be associated with the emergence of 'organic intellectuals' (Gramsci,
1971) who come to identify themselves with the projectof social regulation
rather than with their original class background.
5 Only Dutch merchantswere allowed to keep a trading post at the island of
Deshima afterthe Portuguesehad been expelled for the attemptsby missionaries to convert the population to Christianity.
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6 The six major banks are: Sumitomo, Sanwa, Fuiji, Dai'ichi, Kangyo and
Mitsubishi.

Editors' note: This paper is drawn from Maarten van den Berg's thesis which
won the Prize for the Best Master's Thesis in International Relations presented
at a Dutch University in 1994. The Prize is awarded each year by a Jury appointed
by the Dutch Society for International Affairs. This paper was previously
presented at an international workshop in October 1994 sponsored by the MUNS
programme of the United Nations University, which took place at the University
of Amsterdam.

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