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c h a p t e r t h r e e The MIDAs-Steel-Ships Nexus In this chapter, we first describe the position of Japan materially and sociopolitically after World War II. We highlight Japan’s depleted domestic raw materials supplies , its poverty, the opposition of Japan’s neighbors to reestablishing trade relations with Japan, and the development of the existing hegemon’s need to support the redevelopment of Japan as a linchpin of U.S. Cold War strategies in Asia. We then analyze how Japanese firms and the Japanese state, supported by U.S. and World Bank financial and technical assistance, fought and cooperated to create a new model of domestic development based in the steel, shipbuilding, and shipping industries. The Ministry of International Trade and Industry (MITI), established in 1952, developed its capacity and role in Japan’s development in relation to the Japanese steel firms and their needs domestically and internationally, supporting the development of increasingly large-scale and tightly integrated blast furnaces and steel mills. The Maritime Industrial Development Area (MIDA) program, also begun in the 1950s, coordinated firm and state investment in new greenfield ports and steel plants utilizing the latest technological advances developed in Japan and imported from other nations to reduce costs and increase Japanese economic competitiveness in steel,shipbuilding,and all other sectors that used steel and the steel-based transport infrastructure. The same system of financial and technical innovations drove the rapid expansion of scale increases of the Japanese shipbuilding industry that provided increasingly large ships needed to import rapidly growing quantities of coal, iron ore, and other raw materials from distant raw materials peripheries. We analyze the tight linkage of the steel and shipbuilding industries by building and integrating state,sector,firm,and financial organizations across domestic and external spheres. The analysis integrates material and spatial processes with technological , financial, and political processes to explain what drove Japan’s rapid economic ascent. By outlining how the generative sectors in steel, shipbuilding, and shipping propelled this era of rapid growth from the 1950s through the early 1970s and how the steel industry maintained this role through the renewed period of growth in the 1980s, until its stagnation in the early 1990s, this chapter also sets the stage for questions raised in subsequent chapters. The Japanese Economy in the Aftermath of World War II Efforts to deepen industrialization in Japan took place during the first third of the twentieth century, most notably through expanding the steel, copper, and shipbuilding industries and through the creation of a domestic aluminum industry.All of these efforts involved the development of close state-sector-firm coordination in which the state played a central role. The first modern ironworks in Japan utilized locally mined iron ore and charcoal (Fujimori 1980:100). The Japanese steel industry began with the Yawata steel mill in Fukuoka prefecture in the northern Kyushu coal-producing region . The mill was built on the Japan Sea to allow imports of iron ore from China. The Japanese government built the mill and the Ministry of Agriculture and Commerce (the predecessor to the MCI and MITI) operated it as a development strategy for both economic and military purposes. This created a very close relationship between Yawata and its successor firms (New Japan Steel and then Nippon Steel) and MITI, the eventual successor to the MAC. Privately owned Kobe Steel and Nippon Kokan entered the steel industry in 1911–12, and Sumitomo entered in 1937 (Fujimori 1980:100–101; Johnson 1982:86–87; Murata 1980:26; Yamamoto and Murakami 1980: 139–41). During the 1930s and 1940s, the Japanese state sought to take over the private steel firms as part of the military-driven government, but the private firms successfully resisted this effort.As a result,the Japanese state worked through the Iron and Steel ControlAssociation ,the predecessor to the postwar steel industry association,in its efforts to control the industry and to promote the expansion of steel production, including in its colony in Manchuria. This pattern of state-sector-firm relations formed the basis for the postwar system in the steel industry (Yonekura 1999:185–98) and helped move Japan into a competitive position with the world’s leading powers in both steel and the tightly linked shipbuilding industry (see table 3.1). The industrialization drive from the late 1800s through the end of World War II depleted Japan’s limited coal, iron ore, and copper reserves. To overcome...

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