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Editor’s Introduction

The Trade Union Movement in Japan
by David Baker

(Winter 1965)

From International Socialism (1st series), No.23, Winter 1965, pp.19-20.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The article which follows describes certain features of Japanese trade-union development, but it is worth citing beforehand some of the peculiarities of general Japanese development. The following notes, necessarily impressionistic as well as schematic in the space available, are designed for this purpose.

1 – The large labour surplus throughout Japan’s development has had a number of implications: high unemployment or underemployment, very low wages and poor conditions, low efficiency in the use of labour but high in use of capital, weak unionism, and, among employed workers, a higher priority attached to security of employment than to increased pay. Employers have been able to divide the work force (as in India also, for example) into permanent employees with high job security despite relatively low pay, and temporary employees, taken on in a boom but dropped immediately the pace begins to slacken; they have also been able to avoid paying continuously a living wage – the actual wage was long ago devalued by inflation, and to it has, over the years, been added a multiplicity of ‘additional’ payments under many different headings – this makes wage bargaining extremely difficult to all except the expert (tending to put unions under the control of intellectuals who can devote all their attention to the complexities of the pay structure), increases worker mystification, and permits the employer to drop various items from pay during a recession, esepcially items explicitly linked to the employer’s ‘generosity.’

2 – The historical economy in Japan during development can be seen as divided into three sectors: (a) land, the source of unskilled labour and its retreat during unemployment; (b) small industry, sucking labour off the land during a boom and training it in industrial skills for large industry, but expelling labour back to the land during a slump; the size of units in this sector constantly encouraged workers to feel they themselves might become small owners, and the personal relations between employer and labour encourages the maintenance of continued ‘feudal’ ethics of industrial organisation; small industry kept in partial employment the temporary labour of large industry, and, in its own size as a sector, absorbed the fluctuations of the world market and thus insulated large industry from varying with these fluctuations; (c) large industry. The middle sector has historically been very important. Often crucially dependent on large industry (through providing parts or ancillary services), small industry both identified with the interests of the large monopolistic companies (zaibatsu), and resented them, so being responsive to a radical Right appeal against the zaibatsu. The erosion of small industry during slump provided a strong ‘anti-capitalist’ fervour to Japanese politics, for in an economic downturn it became clear how little the zaibatsu needed small industry. In the post-war expansion and particularly recently, with increasing labour scarcity, the zaibatsu have a positive interest in the destruction of labour-intensive small industry so that the middle sector’s labour will become available to large industry. Growth in the economy is sustained throughout recessions simply because small industry takes the strain in bankruptcies, while the large-scale investors keep up the rate of investment and the rate of inflation so that wages constantly lag behind. Necessarily, the elimination of the middle sector will make the Japanese economy less ‘flexible’ and more vulnerable to a generalised impact from recession.

3 – The lack of indigenous resources makes Japanese growth crucially dependent on world trade, on the long-distance import of raw materials and export of processed goods. With the shift of world trade to the Atlantic area, freight charges to the most expansive sector of the world market necessitate that Japanese costs be kept well below Western ones, a condition easily achieved in conditions of labour surplus by keeping wages down and starving welfare facilities. This factor concentrates Japanese attention on securing raw material supply points and markets closer to Japan, in Asia and Africa; in conditions of autarchy in the world economy, this means imperialism in East and South-East Asia. However, in the post-war period when Japan has been excluded from the Asian mainland, its attention has been forced eastwards to help the formation of a Pacific economic community, currently taking some 70 per cent of Japanese world trade: US capital is currently developing raw material sources in Australia and Canada to export the products to Japan, the processed commodities then returning to the area as Japanese exports.

4 – There was no bourgeois revolution proper in Japan. The Meiji Restoration of 1868 was the overthrow by the outer nobles of the inner feudal lords dominating the centre, with almost no role cast for the Tokugawa merchants (wealthy as they were). The coup was impelled by foreign aggression (admittedly, against a regime already very weakened), not as the natural expression of the economic supremacy of a new bourgeoisie; on the contrary, the Restoration was required to permit development. The initial drive of the new State was therefore to industrialise for military purposes, not for private profit. Briefly in the 1920s, as in Germany, the weak Japanese bourgeoisie, inflated by the World War boom and destruction of Japan’s European competitors, sought to take over the political stage, but its efforts were crushed in the 1930s by the resurgence of the military successors to the samurai. This military clique (itself internally divided) was rooted in the slump misery of the petite bourgeoisie and the peasantry, and proclaimed a programme of anti-capitalist agrarian revival and expansion in the Far East to exploit the weakened position of European imperialism, to secure raw material supply points for war potential and to complete the creation of a territorial buffer zone round Japan. The military claimed to lead a nationalist crusade against the ‘selfish’ zaibatsu, and demanded a cultural regression to romanticised feudal norms, without actually infringing the basic zaibatsu position, indeed strengthening it by massive rearmament. The inability of the Japanese bourgeoisie to attain full political power meant that the forms of Japanese society survived – the Emperor system, for example, and ‘feudal’ ethics in industry.

5 – The ‘delayed’ revolution was executed by the American occupation – from above. Initially, the reforms introduced were radical and far-reaching, but the development of the Cold War compelled the US to seek Japan’s participation as an ally, and accordingly the reforms went into reverse gear. The switch between phases engendered much confusion and cynicism among the wide urban sections that had welcomed the reforms, but since the US seemed committed to reopening a war, the shift strengthened pro-Eastern Bloc opinion.

6 – Most recently, the very fast rate of economic growth, accelerated and exacerbated by continuous inflation, has increasingly limited the labour surplus, so giving great strength to the labour movement and to open wage pressures, stimulating capital innovations with resultant redundancies, and further tending to erode the middle sector as wage payments reach a level too high for small business and big industry itself begins to appropriate the functions of small industry; agriculture is abandoned to children and the aged, while the able-bodied adults work in the nearest towns. The pace of technological change in large industry repeats the same pattern as in Europe and America: power more dispersed between private owners (zaibatsu) and professional managers, and the generation of new large white-collar bureaucracies.

The pressure of wages, generated by labour scarcity, employers’ wage competition for labour and the tendency for wages to equalise themselves throughout similar industrialised economies, crucially threatens the margins for freight necessary for Japanese exporters. Possible solutions to this dilemma include:

  1. a rapid acceleration in the introduction of labour-saving innovations, provided sufficient capital is available. Since the Korean War, US capital has been very important in Japanese investment, but is now checked by US measures to strengthen the dollar (e.g. ‘tax equalisation’ schemes, Buy American policies, curbs on US military base expenditure, etc). The capital flow from Europe has not yet attained commensurate proportions, and is in any case threatened by the current general increase in monetary autarchy.
  2. a return to direct imperialism to establish localised raw material sources and markets in South-East and East Asia. For this to attain pre-war proportions would obviously require the complete collapse of the post-war international status quo, not at present a visible possibility. Again, the area concerned does not provide high-income markets for Japan’s modern mass-produced and relatively highly priced production. However, tentative changes are visible in relations with Korea (cf. The Notebook, IS 22), Indonesia, and South-East Asia generally.

Necessarily, the question of the political recognition of China (and implicit repudiation of the US) is the symbol of the choice between the East Asian and the Atlantic areas facing Japanese business just as it is the crucial United Front tactic for the Japanese Communist Party. The different sections of opinion favouring each alternative are partly reflected in the factions of the Liberal Democratic Party and in different groups in Japanese business:

  1. The most modern section of business tends, by reason of the technical nature of its output, to be oriented on trade with the US or the Atlantic area; its interests suggest further integration into the Atlantic area, staving off the shrinkage in margins by a capital inflow from that area, provided that both trading and monetary policies in the Atlantic area remain liberal enough to permit Japanese expansion through exports.
  2. The more backward section is in a more dominant trading position with underdeveloped countries, and has, in Asia, the freight edge on its Western rivals. The relationship between these firms and their foreign customers includes both Japanese capital exports and low income commodities, themselves under threat of competition from similar developing industries in Asia itself (e.g. textiles or light engineering products from India, or textiles from Hong Kong).

Both groups would agree on the need for a wage freeze of some sort, but the second group would be much tougher in resisting pressure and would be prepared once again to resort to some form of modified imperialism to achieve its aims – even if this was no more than gaining access to the unskilled labour (which such industry can use, unlike modern industry) of Korea, Taiwan or Indonesia. The more backward group naturally places more stress on the independence of Japan’s interests from the West, on possible independence from the US and the resumption by Japan of a position as leading foreign supplier to China. Naturally, the largest multi-product corporations span both groups (particularly where underdeveloped countries desire to purchase large-scale technologically intensive plants, as India and China do), but necessarily, given the technical nature of the most modern firms, they will tend to be in the first group. The decision one way or the other naturally turns on the rate of expansion of the world market as a whole (and the relative proportions of trade between developed and underdeveloped). Continuing past trends will continue to integrate Japan into the Atlantic area, and the longer this continues, the less is the likelihood of any reversion to integration into the East Asian area. Currently, the Japanese economy is continuing to dismantle its protectionist barriers as a quid pro quo for access into the markets of other developed economies: the Yen became convertible in April last year, and by December, some 92 per cent of imports (whether by value, by volume or by number of items was not specified) were liberalised. This exposes the economy to tougher competition and to stronger world economy discipline compelling Japan to conform in technology to the other developed countries, this in its turn eroding the middle sector and strengthening the integration of Japan with the Atlantic area. Whatever the case, the precise juncture of the Japanese economy has certain decisive implications for the Japanese class struggle and the immediate perspective for Japan’s trade unions.

The Trade Union Movement in Japan
by David Baker

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Last updated: 14 April 2010