What Eating the Rich did for Japan: a useful introduction to Japan’s modern economic history

“What Eating the Rich did for Japan” (Asianometry, October 2021)

In this mini-documentary on the Asianometry Youtube channel, the history of the zaibatsu – the huge industrial conglomerates owned by a small number of family clans in Japan from the late 19th century well into the mid-20th century – and their growth, leading to their eventual demise and break-up, is examined. The origins of the zaibatsu lie in the Meiji Restoration, when Japan abolished the Shogunate in 1867 and began to Westernise its politics, economy and society to avoid Western colonisation. Initially economic reforms and the building of infrastructure were bankrolled by the government but when these proved to be hugely expensive and bankruptcy threatened, the government privatised many of its more lucrative enterprises including the Miike Coal Mine. These were bought up by merchant families, some of which were descended from samurai, and the profits earned from their acquisitions enabled the families to accumulate fortunes that allowed them to buy more assets. The zaibatsu developed through vertical integration in the industries in which they had bought their original assets: for example, owning a coal mine might lead to owning the industries that depended on coal for fuel; or owning a factory making steel might lead to owning the minerals and other raw materials – and the mines from which these were obtained – needed for manufacturing steel. Manufacturing steel led the zaibatsu to make products that used iron and steel as their major materials: ships, trains, railway lines, motor vehicles, various household goods such as whitegoods. All these activities required financing so the zaibatsu also established banks and insurance companies to cover their costs and the risks involved in their financing.

As they grew, the zaibatsu took on government contracts to produce needed manufactures, especially for Japan’s armed forces. Through the early 20th century, the zaibatsu came to dominate Japan’s economy and supported the Japanese government’s imperialist drives in eastern Asia and beyond in the 1930s and 1940s. After the Second World War, the zaibatsu were broken up and dissolved, and the zaibatsu families’ wealth was reduced through various reforms such as reforms in the financial sector that limited the families’ ability to own controlling shares in public companies, land reforms and nationalisation of particular industries.

The documentary is lavishly illustrated with colourful photographs, film stills and archival visual materials, all presided over by a voice-over narration that details the rise and fall of Japan’s zaibatsu and the families that owned and controlled these conglomerates. The narration is rather fast and viewers might need to re-watch the documentary to catch some details.

The major problem with this documentary is that it more or less ignores the wider political context in which the zaibatsu grew: there is little mention of Japan’s decision to pursue imperialist adventures in northeast Asia and in the rest of China and in Southeast Asia, and how the zaibatsu eagerly responded to the demands of imperialism and then of war. The documentary also does not say that after the Second World War, much of the impetus to break up the zaibatsu and distribute their wealth more fairly among the Japanese people came from the occupying US administration. Additionally there is not much information given as to how much the Japanese people really benefited from the limited break-up of the zaibatsu.

The Korean War and the ensuing Cold War put a stop to total dissolution of the zaibatsu, and new forms of corporate growth such as manufacturing for export and informal links forming between companies (usually by buying shares in one another) leading to their becoming incorporated into a bigger corporation, though in a much looser way, enabled some old zaibatsu corporations like Mitsui and Mitsubishi to recover their fortunes. Yet there is little mention of how a revival of the zaibatsu corporations’ fortunes depended a great deal on Japan’s new role in the Cold War as an economic bulwark against Communism in the Soviet Union and China.

At the very least the documentary serves as a useful introduction into the modern history of Japan since the late 1800s when the country switched abruptly from pursuing a policy of almost total isolation from the rest of the world, to following a policy that in the space of less than 80 years would take Japan from an economic backwater to a power that could defeat the British empire.

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