Book Review: Altered States – The United States and Japan since the Occupation

Updated: Feb 21

Book Review of Altered States – The United States and Japan since the Occupation. Image © Oxford University Press


Author: Michael Schaller (1947-)

ISBN: 978-0195069167

Publisher: Oxford University Press

(US, September 25, 1997)

‘Obstructing the Japanese opposition’ was ‘the most important thing we could do.’

‘Continued U.S. military presence in Japan, Korea, and Southeast Asia was China’s best hope for Jap-restraint.’
Ultimately, it was in America’s interest to keep Japan and China concerned about the other.’
- Kissinger

We told them [China] that if you try to keep us from protecting the Japanese, we would let them go nuclear.’
‘Without the security treaty, America would ‘have no influence’ in Tokyo.’
- Nixon

Japanese Proxy Politics: Proxy Nationalism and Proxy Leftism of CAMP JAPAN

This Michael Schaller’s book ‘Altered States – The United States and Japan since the Occupation’ (1997) is the most important book on Japan’s proxy politics of today. Although no one mentioned in the past, Ukeru Magosaki’s 2012 book ‘The Truth of the Post-War Japan History’ (『戦後史の正体』) is ‘based on’ this book. Almost all focal points in Magosaki’s book can be found in Schaller’s work. Unfortunately, this is partially due to lack of publication of Japanese translation of ‘Altered States – The United States and Japan since the Occupation’.

After thoroughly read both books several times, readers should realize several critical points below:

1. The true cause of Kishi’s planned replacement with Ikeda was not Kishi’s ‘pro-independent’ tendency (Magosaki’s interpretation of Schaller’s text) but it is due to his unpopularity after Kishi’s undemocratic procedure on the revision of the security treaty caused the controversial Anpo Protests (mobocracy) during 1959 and 1960. Magosaki’s dichotomy of the past Japanese regimes is too simple that there were only either puppets or ‘pro-independence’ prime ministers. In fact, prime ministers of the 1950s to 1970s had sought genuinely independent diplomacy within the framework of proxy politics. From Shigeru Yoshida, Ichiro Hatoyama, Tanzan Ishibashi, Nobusuke Kishi, Hayato Ikeda, Eisaku Sato to Kakuei Tanaka, those respected prime ministers were more intelligent, diligent, truly independent political players than any official Japanese ‘leftists’ who claim to be ‘pro-independence’. Moreover, those prime ministers listed here were appointed and put in power by the U.S. establishment according to the disclosed documents cited in the book. Thus, it is very dangerous and inappropriate to politically label Yoshida, Kishi, Ikeda, Sato as U.S. puppets. Schaller sees them in a more holistic view and grand context without Japanese opposition bias (the author did not use any leftist term, such as ‘imperialism’) . Readers must put focus on how those prime ministers desperately tried to deal with the U.S. demands while protecting Japan’s own independent interests in the Cold War era. This is the core of this book.

2. Japan’s politics is still proxy state’s proxy politics which is essentially composed of both proxy nationalism and proxy opposition (proxy leftism). Although Magosaki and other ‘opposition’ opinion leaders treat CIA-funded ‘Marxist’ Socialists (日本社会党 / JSP, 1945-1996) as almost individual cases like ordinally corruption matters, the whole political mechanism of proxy opposition (proxy leftism) still is today’s dominant feature and phenomenon for oppositionists. Such as interchangeability (like Ichiro Ozawa is still floating around rights and lefts) and interdependency (the major economic base of ‘opposition’, RENGO is ‘inconsistently’ and ’notoriously’ supportive of LDP right-wing policies) of both camps and its aristocratic-elitist stars (marked with nepotism, opportunism, corporatism and gerontocracy). As the U.S. government mentioned in the text, the Japanese political establishment is designed to systematically neutralize extreme rights and radical lefts as militarist Japan and Communist Japan are equally undesirable for the U.S. geopolitical interests. As a result, homogeneity of the ruling parties and main opposition parties are inevitable. From this view point, it is not difficult to understand JCP’s contradicted nationalist attitude toward China and Russia because proxy opposition is dialectically just meant to be supplement of proxy nationalism.

3. Opposition failure of 2021 Japanese general election was undoubtedly aftermath of proxy politics. They were designated to lose the election at the most critical moment (popularity of Shinzo Abe’s henchman, Yoshihide Suga regime declined to 28% due to his disastrous COVID policy). Historically, the never-ending defeat of opposition originated in the grand context of CIA-fund for the Socialist (‘moderate’ sectarians within the party), DSP (the ‘anti-Communist’ social democrat sector of JSP formed 民社党, 1960-1994), LDP (LDP / 自由民主党 was originally designed to maintain the alliance, 1955-) and ‘moderate’ politicians in the establishment. Besides JCP (日本共産党, 1922-), present opposition parties like JSP (社会民主党, 1996-), The Japan Innovation Party (日本維新の会, 2015-), Reiwa Shinsengumi (れいわ新選組, 2019-), CDP (立憲民主党, 2020-), DPP (国民民主党, 2018-) and the predecessor of CDP and DPP ‘DPJ’ (民主党, 1998-2016) are all offspring of the Socialist, DSP and LDP. Thus, their direct economic base is simply seen as either Keidanren (The Japan Business Federation) or RENGO (The Japanese Trade Union Confederation; consists of 48 trade union ‘federations’) or in most cases both. In general, politicians and political parties are avatars of their economic base. In this case, LDP is Keidanren, both CDP and DPP mainly represent RENGO however the recent development more clearly revealed that simplification and the dualist approach to the proxy politics is fatally wrong. On January 21, 2022, RENGO political centre bureau sent their 48 trade secretariat members (6 out of 48 trade union federations of Keidanren companies are dominating political forces, such as The Federation of Electric Power Related Industry Worker's Unions of Japan / 電力総連; Japanese Electrical Electronic & Information Union / 電機連合; Confederation of Japan Automobile Workers' Unions / 自動車総連; Japan Federation of Basic Industry Worker's Union / 基幹労連; Japanese Association of Metal, Machinery, and Manufacturing workers / JAM; The Japanese Federation of Textile, Chemical, Food, Commercial, Service and General Workers' Unions / UAゼンセン, total 700 million members, only 1 % of the Japanese workers) a secret document ‘Basic Instruction for 2022 Japanese House of Councillors election (Appendix, revision, draft)’ 第26回参議院選挙の基本方針(補強・修正 素案)」. In the document, RENGO opposed united front between CDP and JCP Communists. Instead, RENGO promotes coalition of CDP and DPP in national elections. It indicates several things below:

a. Ex-Domei (Japanese Confederation of Labour; economic base of CIA’s DSP) confederations still control RENGO.

b. Civil alliance for peace and constitutional (市民連合) and its ideologue Jiro Yamaguchi (1958-)’s so called ‘policy treaty’ (seisaku-kyoutei / 政策協定) is totally empty and deceptive while it just only means RENGO’s electoral support and votes from JCP to let CDP win national elections. In short, Civil alliance for peace and constitutional (市民連合) as a political tactic, it means ‘共産党の票をもらいながら、選挙運動は連合の力を借りるという両面作戦’ (a two-tier operation that using RENGO’s power while getting JCP votes during elections). Therefore, opposition voters were totally deceived by ‘anti-Communist’ con-artists. The policy coalition between CDP and JCP did not exist.

c. There are already known CIA connections:

CIA-KEIDANREN-LDP-DSP(merged)-Domei(merged)-RENGO-CDP-DPP-Shiminrengou - JCP - C.R.A.C.

Jiro Yamaguchi- Shiminrengou- ND(新外交イニシアティブ) - HRW - SEALDs(defunct)-VOICE (Việt Tân)-NOYDA(defunct)-NED-USAID-The State Department

SASPL (defunct) - SEALDs (defunct) - ReDEMOS (defunct) - public4future (defunct) - Blue Japan (ブルージャパン(株)) - CDP - RENGO

Apparently, JCP is essential part of the entire proxy opposition to maintain the status quo. Unlike official narrative of today, the leading Marxist party of Japan was the Socialist JSP not JCP since 1950s to 1970s. In 1978, JSP became ‘moderate’ when the Socialist Association was politically castrated to fit corporatist policy of JCTU (merged) within the party. The Socialist was genuinely revolutionary in practice during the Mao era. It was interestingly synched with policy revision of CCP.

d. The secret document proved that Yukio Edano’s remark of November 12, 2021 on the ‘Opposition Coalition’ (yatou-kyoutou / 野党共闘): 「限定的な閣外からの協力」(limited support outside of the cabinet) was reflection of RENGO’s policy behind the ‘policy treaty’ with other opposition parties. Before resignation of Edano, the newly elected RENGO president Tomoko Yoshino harshly criticized it with her anti-Communist stance on October 7, 2021: 「共産党との閣外協力はあり得ない」(even limited corporation with JCP outside of the cabinet is impossible).

e. Although it seems hopelessly irreversible or unimaginable under the present difficulties, total independence from RENGO and KEIDANREN is one of necessary conditions to change national elections and entire proxy politics for true oppositionists. Japanese opposition can never win as long as playing political games within the CIA-designated framework. When will they determine to end the vicious circle?

Electorate tactics ‘one candidate for one single-member district from the opposition coalition’ or ‘policy treaty’ itself is just purely a mechanical, mathematical and technical matter not the definitive condition for victories.

4. Leftists of the world still misunderstand China’s stance on the collapse of the Soviet Union. After Sino-Soviet split, the major national security threat had been the Soviet Union not the United States for China. Furthermore, the Nixon administration and CCP formed the anti-Soviet coalition in 1972. Thus, CCP was and still is happy with the elimination of nuclear threats from the Soviets in 1991. Schaller’s book perfectly explains this fact.

5. Historical events:

1945 The worst year of GNP

1956 GNP exceeded the 1940s

1965 Trade surplus with US

1989 Taxation ‘reform’ : introduction of rising consumption tax followed with reducing income and corporate tax

1991 The peak of Japan’s economic development

6. Magosaki’s another misinterpretation of this book is about the political nature of Zengakuren. Unlike NED-JCP-backed SEALDs or other imperialist-paid-opposition mascots (i.e. Joshua, Greta, Guaido), anti-JCP Zengakuren was genuinely an independent revolutionary student group of Japan. Only at the near end of the Anpo protests, Zengakuren got almost bankrupt, then CIA tried to infiltrate Zengakuren via right-wing Yakuza intermediaries. Hence, Zengakuren was not a CIA student group at all.

Q&A A Summary

1. The true reason of Japanese surrender to allied forces in 1945:

Atomic bombs? Chinese military victory?

In 1945, Yoshida joined those urging the emperor to negotiate an end to the war before a Soviet invasion or leftist revolution. Although this led to his arrest by the military police, it paid a handsome dividend when the Americans exempted him from the post war purge. (1)

2. The role of Zaibatsu, monopolistic capital, the economic base, driving forces of militarism of Japan:

George Kennan portrayed the attack on the zaibatsu as a ‘vicious’ scheme to destroy the major barrier to Soviet penetration in Asia.

The general MacArthur retorted that the de-concentration program (till 1949) targeted only fifty-six families and that his reforms would prevent a ‘bloodbath of revolutionary violence.’

To prevent left-wing influence or Soviet penetration, America should ‘crank-up’ the Japanese economy and bind Tokyo to the West through a defense pact. (2)

3. Japan’s designated role for America in the 1950s:

Through Japan, the United States could apply ‘tremendous influence over our relations with all of the Orient.’ In the future, Dodge told a congressional committee early in 1950, Japan could be ‘used as a springboard for America, and a country supplying the material goods required for American aid to the Far East.’

Prohibiting Japan’s trade with China before finding an alternative would do little to injure the Communists but would make Tokyo a ‘pensioner of the United States.’

Southeast Asian customers could pay with raw materials, offering Japan an alternative to Chinese supplies. This typified proposals from State, Defense, and Treasury for financing regional trade. (3)

4. Pentagon carved the entire post war Japan proxy system:

To prevent any changes in Japan that might inhibit ‘offensive operations against the Soviets in the event of war,’ military planners promoted a scheme to allow Tokyo greater home rule while leaving Occupational forces in place.

Unsolved questions about Soviet participation in a peace conference, rearmament, and whether to establish permanent American bases in Japan proved especially contentious. (4)

5. Neutralist argument and Shigeru Yoshida’s US colony theory of the post war Japan:

In April 1950, Yoshida attempted to break the deadlock. He told American diplomat Cloyce Huston that despite the public’s support for ‘naturalism,’ he recognized the value of American protection even if it meant providing bases in the home islands. Although rightists and leftists would accuse him of bowing to Washington, the prime minister ‘humorously’ recalled his patron’s humble origin. Just as a weak America eventually dominated Great Britain, he quipped, ‘If Japan becomes a colony of the United States, it will also eventually become the stronger.’ He offered to accept ‘whatever practical arrangement the United States might consider necessary’ to end the Occupation. (5)

6. The Nature of US embargo on the Communist China from 1949 to the 1950s:

In March 1949, President Truman approved a China trade policy reflecting Acheson’s view that a total embargo would hurt American allies and drive China closer to the Soviet Union, the opposite of what Washington desired. (6)

7. Japanese Conservatives’ Fear in the World Politics:

Communists? China? North Korea?

By April 1950, Yoshida recognized that the Truman administration, Congress, and the American military establishment saw matters differently. Although the prime minister and his fellow conservatives did not fear external Communist aggression, they worried a great deal about alienating their patron and losing the economic assistance only the United States could provide. (7)

8. US defends Taiwan even without any proxy regime on Formosa:

During May and June 1950, Dulles and Rusk floated a package deal by treaty opponents. They hinted that if Jiang Jieshi were deposed on Taiwan – perhaps an American-supported coup – the State Department might then agree to defend the island. This, along with increased military aid to Indochina, Rusk and Dulles speculated, might move Secretary of Defense Johnson and the Joint Chiefs to support a Japanese settlement. Boldly ‘drawing the line’ around China would reassure those engaged in an ‘active public discussion in Japan’ about ‘who will win in the Struggle of the Pacific.’ (8)

9. Neutralist Policy during the Cold War and beyond:

Neutrality would lead to a natural accommodation between Japan and China. In case of war, it would render impossible utilizing Japan as an ‘active ally’ in efforts to ‘end Russian domination of Manchuria and China’ and roll back Communist influence in Asia. The Defense position opposed any treaty until Japan fully rearmed’ or until the world situation radically changes, ‘two conditions unlikely to occur soon.’

In October 1950, presumably as a bargaining ploy, Yoshida revived the old idea of leasing military bases on the Bonin [Ogasawara] and Ryukyu Islands, rather than in Japan proper. Although the prime minister knew this was unacceptable, he may have raised the idea only to give in and then bargain for slower rearmament. (9)

10. The True Function of USFJ:

The two parties decided that Yoshida would ‘request’ the United States to maintain ‘land, air and sea forces in and about Japan’ for use anywhere in the Far East. These forces were not required to defend Japan, could be withdrawn at any time or used to suppress internal disturbances. Without setting specific targets, Japan pledged to assume ‘increasing responsibility for the defense of its homeland against direct and indirect aggression.’ (10)

11. ‘Separation of Politics and Economy’ Businessmen as a ‘fifth column for democracy’:

Dulles found the prime minister’s remarks about Japan’s ‘long-standing necessity’ for trade with China (‘war is war’ but ‘trade is trade’) along with his opinion that Japanese businessmen could serve as a ‘fifth column for democracy against the Communists’ especially vexing. (11)

12. Rearmament of Japan and Japanese forces in the Korean War:

During the Korean War, Japanese military personnel assisted American forces. Minesweepers of the Maritime Safety Force helped clear harbors along the Korean coast. The U.S. /UN command secretly employed Japanese shipping and railroad experts with past service on the Korean peninsula. Without them, Ambassador Murphy asserted, ‘allied forces would have had difficulty remaining in Korea.’

The Japanese public tolerated but had little enthusiasm for rearmament. (The Supreme Court refused to decide whether the NPR violated the constitution.) After visiting Japan at the end of 1951, Newsweek editor Harry Kern complained to Dulles that except for a ‘tiny minority,’ Japanese ‘feared the comeback of the military caste’ more than communism and regarded the NPR as ‘American mercenaries.’ (12)

13. US on Japan and the Communist China Trade Policy Relaxation after the Korean War:

In fact, with American consent, in July 1954 COCOM expanded the list of items approved for sale to the Soviet Union. Although this action did not eliminate the China differential, Eisenhower partially appeased Tokyo. In April 1954, he released Japan from the higher level of trade restrictions stipulated in the 1952 bilateral agreement. The State Department notified Tokyo that so long as it did so gradually and quietly, Japan could begin sales to China of most of the 400 items it alone was forbidden to export (1951). This left in place the China differential, but it at least applied the same standard to European and Japanese trade with China. (13)

14. Resurgence of Japan’s Military-Industrial-Complex and Formation of ‘Keidanren’ Crony Capitalism:

Following the San Francisco peace conference, business groups established councils to work with government agencies in planning for post Occupation economic cooperation with the United States. The councils advocated procurement contracts that encouraged broad economic growth, rather than production of military end items. The powerful Federation of Economic Organizations (Keidanren) urged SCAP to return confiscated munitions facilities to their former owners. During SCAP’s final days of authority, Ridgway responded by transferring to the Japanese government control of 1,000 confiscated munitions plants and permitting Japan to resume production of aircraft and weapons.

When the peace treaty came into effect, the Federation of Economic Organizations established an Economic Cooperation Council whose sub-committees dealt with general policy, Asian development, and defense production. A prominent industrialist led each group, with Kiyoshi Goko, head Mitsubishi Heavy Industries, in charge of the defense subcommittee. Big business worked closely with government organs, such as the Ministry of International Trade and Industry (MITI) and the Supreme Economic Cooperation Conference, to shape procurement policies.

The Diet assisted large enterprises engaged in military production by relaxing the de-concentration laws during the summer of 1952. (14)

15. Trade as Economic Warfare (the most successful regime change campaign) against the Communist China:

Many State Department planners concluded that Western governments should lower tariffs and accept more Japanese goods despite opposition from domestic producers. Even this would probably fall short of meeting Japan’s needs. Washington would have to take ‘extraordinary measures,’ such as special ‘system of Japanese trade controls…tailored to the economic relations between Japan and the Chinese mainland.’

A limited opening to China appeared the only way to ‘keep Japan completely on our side.’ Such trade might become ‘a lever to some utility in our efforts to bring changes within Communist China.’ (15)

16. British Government on the Post War US Policy toward Japan:

Although he sympathized with Washington’s desire to retain bases in Japan, MacDonald, like other British diplomats, criticized American actions in Japan as ‘classic examples of doing the wholly right thing in the completely wrong way.’ MacDonald hoped to tutor the Americans to act ‘more subtle’ with Asians. A colleague observed that there were only ‘two ways of dealing with the Japanese, either through friendship or hitting them with a big stick.’

Since the Americans possessed a big stick and were committed to Japanese recovery, Britain had no choice but to follow that lead if it hoped to ‘keep Japan out of the Communist camp.’ (16)

17. The Political Context of the Post War Japanese Politics - US on the political orientations of Japanese right-wings (LP) and leftists (the Socialists):

Yoshida and the Socialists formed a de facto bloc against constitutional revision and what it implied. The prime minister highly valued the ‘cover’ for limited rearmament provided by Article 9. The security treaty, whatever its dignities, offered protection at bargain rates. The Socialists, for their part, opposed even limited rearmament and feared that constitutional change would revive militarism and domestic oppression. Yoshida’s Liberal Party supporters and the Socialists tacitly agreed to blunt the revisionist agenda.

These divisions presented American policymakers with a dilemma. Yoshida’s stalling often frustrated Washington, but he was far preferable to the Socialists and their vision of neutrality. Some aspects of the revisionist agenda, including constitutional change and rearmament, appeared to Dulles and other senior members of the Eisenhower administration. At the same time, Americans reacted warily to the revisionists’ call for an independent military and normal relations with Moscow and Beijing. As a result, the Eisenhower administration hesitated to encourage Yoshida’s conservative critics. They urged instead, organization of a single conservative party committed to the alliance with America, favoring rearmament, and implacably opposed to the Socialists. (18)

18. The true Political Aspect of the Lucky Dragon #5 Incident (a.k.a. the Bikini incident):

The U.S. Atomic Energy Commission (AEC) was so concerned with maintaining secrecy about the hydrogen bomb’s technical characteristics that its behaviour transformed a human tragedy into a crisis in the Pacific alliance.

Although AEC chairman Louise Strauss assured Eisenhower that his agency could handle any problem, it made a bad situation worse. Strauss initially believed the Lucky Dragon ‘was a Red spy outfit,’ commanded by a Soviet agent who intentionally exposed his crew and catch of fish to radiation to embarrass the United States and ferret out nuclear secrets. Furious at this alleged setup by ‘Russian espionage,’ Strauss opposed revealing data to Japanese medical personnel on the chemical composition of the radioactive ash since it might disclose details of the bomb’s construction.

Secretary of State Dulles issued a bland statement of regret and instructed Ambassador Allison to press the Japanese government to place the Lucky Dragon under de facto control of the U.S. Navy. The AEC dispatched two medical scientists to Japan, with their primary intent to limit public disclosure and monitor the effects of radiation poisoning, not to treat the ailing crewmen. (18)

19. ‘Switching Channel’, the Regime Change Attempt on Yoshida and LDP as the US-designed Japanese Conservative Coalition:

Allison and Dulles objected less to the money Yoshida demanded than to his inability to control the bureaucracy or public opinion. By October 1954, they guessed he would soon be out of office and decided to delay a settlement until a successor was chosen. When Foreign Minister Okazaki came to Washington in October to discuss Yoshida’s impending visit, and warned that payment of less than $2 million might ‘end the Yoshida government, his threat carried no weight. Dulles put him off by saying that Congress must approve a large settlement and this risked ‘bad reactions’ among the public. On December 29, shortly after Yoshida’s resignation, Dulles approved a $2 million in compensation (paid form MSA funds) to settle claims arising from the Lucky Dragon affaire. The new prime minister, Hatoyama Ichiro, and foreign minister, Shigemitsu Mamoru, portrayed it as evidence of Washington’s support for their leadership. Eisenhower and Dulles welcomed resolution of the dispute as an inexpensive way to curtail anti-nuclear and anti-alliance sentiment within Japan.

Yoshida’s failure to win additional economic or political support in Washington sealed his political fate. By the end of November his support within the Liberal Party disappeared. The three top contenders to succeed him – Kishi Nobusuke, Hatoyama Ichiro, and Shigemitsu Mamoru – were all former purgees. Kishi, wartime head of the munitions ministry, had spent three years in Sugamo Prison under investigation for war crimes. Nevertheless, Ambassador Allison threw his support behind Kishi who, as we will see, became American favorite after his release from prison. Kishi advocated merging the main conservative groups into a unified party (achieved in 1955) and inspired confidence by telling embassy staff that ‘for the next twenty-five years it would be in Japan’s best interests to cooperate closely with the United States.’

Yoshida received a no-confidence vote in the Diet on December 6, 1954, and resigned the following day. The conservative coalition disappointed Washington by selecting Hatoyama, rather than Kishi, as prime minister. Although Hatoyama’s past support for rearmament had pleased Washington, his interest in forging closer ties with the Soviet Union and China spelled trouble. (19)

20. Trade Liberalization with Soviet bloc after 1953, the Methodological Concept of Manufacturing Revolt & US ‘Wedge Strategy’ to fracture the Sino-Soviet Alliance (IMPORTANT):

The Eisenhower administration considered trade a critical component of the ‘wedge strategy’ designed to fracture the Sino-Soviet alliance.

The wedge, however had both ‘hard’ and ‘soft’ components. Officials such as Secretary of State John Foster Dulles, Assistant Secretary of State Walter Robertson, Treasury Secretary George Humphrey, Joint Chiefs of Staff Chairman Admiral Arthur Radford, and Joseph Dodge (who now chaired the Council on Foreign Economic Policy) held that stringent export controls would make China completely reliant on a Soviet patron unable to meet its economic needs. Forced to its knees – and senses – China would break with the Soviet Union and return to the Western fold.

Proponents of a ‘soft’ wedge, most notably President Dwight D. Eisenhower, considered it ‘hopeless to imagine that we could break China away from the Soviets and from Communism short of some great cataclysm.’ Flexibility, not hostility, he believed, held out a better chance to induce Beijing to cast off the Soviet embrace.

‘History,’ the president remarked in 1954, indicated that ‘revolutions rarely arose in societies that were completely ground down by poverty and hunger.’ But when ‘they got a taste of better things of life [the issue at hand involved the sale of surplus butter!] their discontent with their lot flamed into revolt.’

Eisenhower also stressed the need to accommodate allies such as Great Britain and Japan. If ‘all trade between the free world and the Soviet bloc is completely cut off,’ he wondered ‘how much will the United States then do to help those free world countries which depend on trade, such as Japan?’ Was the United States prepared to subsidize Tokyo or to risk its economic collapse?

A total embargo on China ‘simply slammed the door in Japan’s face.’ (20)

21. Sino-Japanese Trade Relaxation (1952-1958) in the midst of the Cold War Rhetoric and ‘Free from China Differential’ Independent China Policy sought by Japan:

Between 1952 and 1958, Japan concluded four ‘private sector’ commercial agreements with China using intellectuals, business organizations, labour unions, and Diet members as negotiators. Private groups such as the China-Japan Trade Promotion Association, Dietman’s League for the Promotion of Japan-China Trade, Japan-China Friendship Association, Japan Association for the Promotion of International Trade, and the Japan-China Importers and Exporters Association arranged trade, tourism, and cultural exchange.

Ironically, the fruits of Japan’s trade victory slipped away at the very moment Washington removed its political impediments. In 1956, Sino-Japanese trade reached $151 million. Even the staunchly anti-Communist Kishi, who became prime minister early in 1957, hoped to expand commerce with Beijing. He informed American visitors that although they could ‘not fully understand,’ trade with China had an importance to Japan that beyond its dollar value. At the same time, he reassured Washington that Japan would not unilaterally establish diplomatic ties with the PRC.

Kishi’s continued effort to separate trade and politics played poorly in Beijing. After a brief period of domestic liberalization, Mao Zedong pushed the Chinese Communist Party in more radical directions. During 1957-58, so-called rightists were purged from party ranks and Mao initiated a shock program called the ‘Great Leap Forward’ to speed agricultural and industrial production. Kishi also provoked Chinese ire during a May 1957 tour of Southeast Asia and Taiwan. Standing beside Jiang Jieshi, Kishi endorsed the Nationalist’s plan for ‘recovery of freedom on the mainland.’


During trade talks in Beijing in the fall of 1957 and spring of 1958, Japanese negotiators followed government guidelines as de facto official representatives. They were willing to allow a small Chinese trade delegation to reside in Tokyo but not a large group enjoying quasi-diplomatic status. The Chinese also demanded the right to fly their national flag in Japan, exemption from the requirement that foreigners submit to fingerprinting, and official endorsement of the trade pact. Japanese negotiators exceeded their instructions by incorporating these terms into the agreement signed on March 5, 1958, an action strongly criticized by Washington and the Chinese Nationalist government.

Buffered by protests from the United States, Taiwan, and many fellow conservatives, Kishi declined to endorse the pact or permit the official display of the PRC flag by Chinese representatives. China responded by refusing to implement the trade agreement until Japan observed all its provisions. It denounced Kishi for trying to recreate the Co-Prosperity Sphere by relying on U.S. military power. Tension peaked on May 2 when a Japanese rightist tore down a Chinese flag displayed at a Nagasaki trade exhibition. Beijing used Kishi’s refusal to prosecute the culprit as a pretext to suspend virtually all trade and cultural exchanges with Japan.

China may have intended the suspension of trade, fishing privileges in its coastal waters, and cultural exchanges to either force Kishi to back down or damage conservative chances in the Diet election at the end of May. If so, the tactic failed, and the conservatives retained a large margin in the Diet. After this setback, Beijing demanded that Tokyo reject efforts to create ‘two Chinas.’ A few months later, China began shelling Nationalist-held islands off the southern coast, precipitating the second Taiwan Strait crisis.

Despite the enthusiasm among Japanese business and political leaders for trade with China, they had no intention of endangering their primary economic and political relationships with the United States.

Sino-Japanese contacts lay dormant until 1960. (21)

22. US planned to nuke Vietnamese Communists in 1954:

By April, as the Vietminh tightened their grip around Dien Bien Phu, Eisenhower and Dulles tried to rally Congress and the NATO allies behind intervention in Vietnam. Dulles spoke cryptically of ‘united action’ to protect Southeast Asia. The president also perceived significant stakes in the region but hesitated to commit ground forces to another Korea-style war. In contrast, Admiral Arthur Radford, chairman of the Joint Chiefs and the most bellicose of Eisenhower’s top advisers, proposed conventional or even atomic air strikes against the Vietminh.

Eisenhower and Dulles opposed intervention solely to save Dien Bien Phu or salvage ‘French prestige.’ (22)

23. Ikeda Hayato’s Independent Policy on US and China:

Conservative politicians in Japan, such as Liberal Party Secretary general Ikeda Hayato, called attention to events in Indochina. On August 10, 1954, he reportedly told party leaders that the American ‘roll-back policy’ in Indochina had failed and that China had seized the initiative in Asia. Consequently, Japan should reduce its dependence on the United States and adopt a more flexible ‘foreign and economic policy.’ Ikeda suggested ‘drastic revision’ of current trade practices – code for expanding sales to China. (23)

24. Neutralism - America’s ‘Great Pacific Nightmare’:

Unless the United States bolstered the fledging Diem regime in Vietnam and promoted Japan’s penetration of Southeast Asia, neutralism would sweep Japan and force the closure of American bases. This would usher in the ‘great Pacific nightmare’ : ‘Japan’s industrial potential…automatically…available to Communist China.’ Asia, Alsop concluded, was a ‘seamless web’ that, ‘if torn anywhere,’ would ‘unravel everywhere. And it is tearing now.’ (24)

25. Nobusuke Kishi, Douglas MacArthur II and Synthesis of the Greater East Asia Co-Prosperity Sphere (1957):

The new ambassador in Tokyo, Douglas MacArthur II, encouraged speculation that Washington would cooperate with Japan on regional development. Talking with Kishi’s ally, Kono Ichiro, MacArthur stressed that while Japan’s immediate prospects in Southeast Asia were limited, it was ‘necessary to get started without delay in developing the resources…so that in time, when they will be even more needed by Japan, Southeast Asia will be a valuable market and source of raw materials.’

Nothing, the ambassador stressed, was ‘wrong with the principle and the overall objective of the Greater East Asia Co-Prosperity Sphere, just as there was nothing wrong with the idea of European unification.’

Washington only opposed ‘the methods which Hitler and the Japanese militarists employed.’

Kishi followed up on these ideas in a meeting he held with MacArthur in April. The prime minister noted that European and American resistance to Japanese exports left Tokyo with only two alternative outlets, China and Southeast Asia. Although Japan preferred to steer its trade toward Southeast Asia, the region lacked the capital and technical expertise to develop its vast resources, while its consumers remained too poor to purchase many manufactured goods. In an early version of what he later called the ‘Kishi Plan,’ the prime minister proposed that Japan supply the ‘know-how’ and the United States the money ‘so that Japan’s technological and industrial capabilities may be fully utilized to accelerate the economic development of Southeast Asia.’ (25)

26. Background of Japanese Economic Miracle of the Post War Era (1950s to 1960s) : US Military Procurement, the Korean War, the Vietnam War and GATT:

…Half of the thirty-three GATT members, including the European and British Commonwealth states, invoked escape clauses and imposed high tariffs against Japanese textiles and manufactured goods until the early 1960s. This left the United States as the one industrial nation willing to absorb higher levels of Japanese exports.

While the Japanese feared a steep decline in military procurement after the Korean armistice, purchases continued at a high level. Between 1952 and 1962, it totalled some $6 billion, averaging over $500 million per year. Procurement earnings did not drop below $400 million until 1962, only to increase with the escalation of the war in Vietnam. In addition to procurement and aid funds, about $1 billion in private American capital flowed into Japan during the 1950s. These sources provided enough dollars to balance Tokyo’s trade deficit with America and permit Japan to purchase goods and make investments of about $1 billion in third world countries.

To the relief of many – and to the distress of others – trade between Japan and the United States surged after 1955. That year Japan exported goods with worth $449 million to the United States. By 1960, helped by tariff reductions from entry into GATT, exports more than doubled, to almost $1.1. billion. Japanese imports of American goods and raw materials increased from $772 million to $1.54 billion. This trade expansion contributed to Japan’s accelerating growth, with its GNP rising at least 12 percent in 1958, 1959, and 1960. (26)

27. ‘WAR ON TEXTILES’ US-Japanese Trade War of the 1950s, 1960s and 1970s:

Japanese exports of cotton textiles, women’s blouses, pottery, and consumer electronics, including transistor radios, made especially dramatic gains. During 1955 alone, for example, Japan’s share of the so-called dollar blouse market in the United States rose from 3 percent to 28 percent.

Although imports from Japan amounted to less than 2 percent of the total American textile market, domestic textile and apparel manufactures demanded protection, charging that Japan’s low wage rates (averaging 29 cents per hour, as compared to $2.29 for American textile workers), access to subsidized surplus American cotton (sold to foreign mills for up to 25 percent less than domestic prices), and predatory export promotion schemes represented a form of unfair trade.

Textile World, a trade journal, complained that the Eisenhower administration compensated for the loss of China to Communism by ‘giving part of the United States textile market to Japan to oil the hinge’ of the containment barrier around China. It charged that policymakers in Washington treated domestic manufactures like a ‘sacrificial goat.’

Senator Johnson of South Carolina predicted that textile workers would recall the day GATT’s reduced tariffs on Japanese goods came into effect as a disaster as great as the attack on Pearl Harbor. (27)

28. Conditions of a stable Alliance between US and Japan :

From the mid-1950s on, economic planners in Washington recognized that a stable alliance with Japan depended on sustained economic growth.

This, in turn, required access to Southeast Asian and American markets. Protectionism in the United States or Communist expansion in Southeast Asia might drive a wedge between the allies and push Japan toward China. At the same time, Japan’s search for wider trade options, along with rekindled Nationalist sentiment, encouraged movement away from the American orbit.

Efforts by Yoshida’s three immediate successors from 1955 to 1960 to expand trade with China, make peace with the Soviet Union, and revise the security pact increased these tensions. (28)

29. ‘Legal Ground’ for the Kuriles Dispute and a Wedge between Japan and Russia:

Washington insisted that the 1951 peace treaty with Japan suspended the Yalta accords of 1945. (At San Francisco, Yoshida argued that the four disputed islands were not part of the Kuriles and should be returned to Japan. However, during Diet discussion of the peace treaty in 1951, Japanese officials conceded that two of the disputed islands, Etorofu and Kunashiri, were part of the Kuriles.)

By refusing to sign the San Francisco peace treaty, American legal experts contended, the Soviets had forfeited their claim to all the Kurils.

By questioning Moscow’s claim to the Kuriles, as well as to the northern territories, Washington hoped to stir discord between Japan and the Soviet Union.

In fact, as early as 1947, George Kennan and members of his Policy Planning Staff had discussed the advantages of provoking a territorial dispute.

With luck, they remarked, conflict over the northern territories might embitter Soviet-Japanese relations for years. A half century later, the issue still divided Russia and Japan.

If Japanese-Soviet rapprochement further diminished Tokyo’s willingness to shoulder military burdens, it would constitute ‘a grave loss of advantage to the United States.’(29)

30. Formation of Japanese Domestic Politics and Proxy Leftists :

In fact, Japanese domestic politics proved less malleable than Dulles anticipated. In October 1955, the left and right Socialist factions merged (they split again in 1959). Adopting a more nationalistic stance than many conservatives, the Japan Socialist Party (JSP) demanded Soviet return of all disputed islands, including the Kuriles and southern Sakhalin.

In November, the main conservative groups merged to form the Liberal Democratic Party (LDP), a move celebrated by American diplomats. The party destined to govern Japan for nearly four decades was less a cohesive political organization than an amalgam of interest groups and personalities unified by opposition to the Socialists, financed by big business, and committed to the alliance with the United States. Party barons riven by personal feuds and loyalties divided along multiple fault lines on the questions of constitutional revision, the Soviet treaty, China policy, and revising the security treaty.

At any given time after 1955, the party leadership consisted of eight or more fractions, each linked to an individual and his followers in the Diet. Liberal Democratic rules specified that every two years LDP Diet members and a small number of party officials from the prefectures were to elect a party president. Given LDP control of parliament, he became prime minister.

Japanese voters had no direct input into the process; individual LDP Diet members had only slightly more influence. In theory, each Diet member cast a single, secret ballot. In practice, faction leaders bargained among themselves to select a party president and generally controlled the votes of their members.

As part of the process, the party leader / prime minister (Hatoyama was chosen as the first LDP president in 1956) appointed a cabinet of faction leaders or their designees. This limited a prime minister’s authority and led most to avoid contentious issues.

Both by default and by tradition, the permanent bureaucracy exercised a large measure of control over domestic and foreign policies, further insulating the government from voter input. The Japanese citizen, one scholar remarked, viewed political parties as ‘the bauble of the Dietman, not an integral party of the democratic system in which he must participate fully.’ (30)

31. Japan and Russia have not been in status of war since October 19, 1956:

The Soviets offered to return the Habomais and Shikotan – and nothing else – but only if Japan agreed to a comprehensive peace treaty. Since Hatoyama could not accept Moscow’s terms, the two sides settled for a minimal agreement. In a joint declaration issued on October 19, 1956 the Soviet Union and Japan announced an interim settlement terminating their status of war, exchanging ambassadors, returning POWs, restoring fishing rights, and endorsing Japan’s admission to the United Nations.

The United States scarcely commented on the agreement other than to note its disappointment at Moscow’s rejection of Japan’s ‘just claim to sovereignty over Etorofu and Kunashiri, the two southernmost Kurile islands.’

(This after Dulles had denied they were part of the Kuriles!)

In fact, the Eisenhower administration must have heaved a collective sigh of relief at having contained Japan’s reproachment with the Soviet Union. Dulles had blocked Hatoyama’s attempt to forge a more independent foreign policy and preserved the security treaty. (31)

32. ‘Government Officials Sabotaging the Cabinet’ US Agent Kishi and a Regime Change Op against Prime Minister Tanzan Ishibashi:

Ishibashi’s victory sent shivers through diplomatic circles. For example, Howard Parsons, the director of the State Department’s Office of Northeast Asian Affairs, told a British diplomat that the Americans ‘had put their money on Kishi’ and were shaken when the wrong horse won. They hoped that by serving as foreign minister Kishi would ‘put some brake on Ishibashi.’ ‘If we are lucky,’ Parsons added, ‘Ishibashi may not last too long.’


Concern over events in Tokyo prompted the NSC’s Operations Coordination Board to expand efforts to influence Japanese opinion by placing ‘favourable news and features in the Japanese press, periodicals, radio, and television’ that stressed the importance of close ties with the United States. However, Parsons’s hope that the new prime minister ‘may not last too long’ proved prescient. Less than two months after he took office, Ishibashi’s declining health forced his resignation.

In February 1957, LDP Diet members voted, to Washington’s relief, to select Kishi Nobusuke as prime minister. (32)

33. The most troublesome Thing for Japan:

As Kishi observed, the ‘most troublesome thing in Japan in connection to the Security Treaty was the fear that Japan could be gotten into a state of war involuntarily’ through action taken by U.S. forces in Japan. (33)