America's Pearl

Japan's attack on Pearl Harbor supposedly ended the era of American innocence. Nothing could be further from the truth. Japan started off as an imperial power and ended up as America's prized possession in its Asian empire. Since 1945 almost every aspect of Japan's foreign, military, economic and financial policy has been determined by the U.S. There is every reason to believe that this did not happen by accident.

The U.S. cynically and ruthlessly maneuvered the hapless Japanese into a war whose outcome was always inevitable. Japan was a Johnny-come-lately among the imperial powers and was not accepted as an equal. While the U.S. could accept the European powers carving up everything outside Europe and the Americas among themselves, the same latitude would not be extended to the Japanese. From 1937 the Japanese were on a rampage through China, and the U.S. government was indignant at this violation of Chinese territorial integrity. Yet Japan's actions in China were scarcely different from those of the other European powers. When Japan took advantage of the war in Europe to seize French Indochina, the United States responded with fury. It imposed embargoes on oil and scrap metal and froze all Japanese assets in the United States. The Americans also urged the British and the Dutch, who controlled Malaysia and the Dutch East Indies, to impose a trade embargo. Japan was now in desperate straits. As a condition of the lifting of the embargo, the United States demanded that Japan withdraw from all of its Asian conquests. The Japanese thus had two options. They could withdraw from Asia with their tail between their legs. With their weakness and vulnerability so manifest, they would soon be little more than an American protectorate. Alternately, the Japanese could take possession of Europe's colonies and use their abundance of strategic resources to make sure that America would have to pay a high price to dislodge them.

On Nov. 25, 1941, Secretary of War Henry Stimson wrote in his diary that the salient issue now was "how we should maneuver them into the position of firing the first shot." The Japanese offered to withdraw from Southern Indochina. The U.S. rejected the offer. The Japanese offered to withdraw from all of Indochina and promised not to attack any Western colonial possession. Again the U.S. rejected the offer. FDR insisted that the embargo would be lifted only if Japan relinquished all conquests since 1937, including China and Indochina, and withdrew from the tripartite pact with Germany and Italy. Faced with humiliation, the Japanese decided to go for broke. Their only hope of taking possession of Europe's colonies was to neutralize U.S. naval power in the Pacific, which they were sure would be used to aid the beleaguered Europeans. Thus Pearl Harbor.

After the war, the United States stationed hundreds of thousands of troops in Japan and Okinawa. Japan became the U.S. listening post in the Far East, the forward base of the Cold War effort in Asia. In return, the United States encouraged Japan to develop its export-driven economy. The Japanese economy was entirely geared toward the U.S. consumer market. American markets were opened to Japanese products with no expectation of reciprocation. The U.S. even pressured U.S. firms to relinquish ownership rights to technologies being transferred to Japan.

By the 1960s, Japan had become a major economic power, but its form of capitalism differed markedly from that of the United States. In the U.S. version, profitability is the only measure of a company's success; in Japan, it is conquest of market share. The Japanese were encouraged by their government to save and put their money into banks, which in turn were encouraged to invest in certain key industries. Foreign investment was kept out through an elaborate system of cross-share ownership. The United States got its military bases and the Japanese got to target U.S. industries that they would supplant.

Japan built up vast trade surpluses; the United States vast trade deficits. The Japanese bought U.S. Treasuries to finance the U.S. government deficit and stocks to finance the U.S. trade deficit?a happy relationship of mutual dependence. U.S. industries were wiped out even as the stock market boomed. Thanks to the U.S.-sponsored Japanese "economic miracle," average incomes in the U.S. have scarcely risen since 1973.

Everything was going swimmingly until the 1980s, when American workers began to realize that while U.S. elites might rhapsodize about Japan's being a stalwart Cold War ally, they were getting very little out of the relationship. An anxious U.S. government pressured the Japanese to raise the value of the yen against the dollar: the famous 1985 Plaza Accord. The higher yen would supposedly make Japanese products more expensive and hence less competitive. The Japanese responded by massively increasing production with a view to driving down prices. This vast overproduction of manufactured goods for markets already saturated with cars, tv's, VCRs, walkmans and sneakers led to the Japanese stagnation of the past decade.

The Clinton administration, fearing Japanese economic collapse and hence collapse of our Asian empire, decided to allow the Japanese to lower the yen again. Between 1995 and 1997, the yen fell 60 percent against the dollar, but this had a rather unfortunate consequence: the economies of East Asia?which themselves were modeled on Japan?went into crisis, since their products were now far more expensive than those of Japan.

There is little prospect of Japan's subordination coming to an end any time soon. Today, the new Japanese prime minister, Junichiro Koizumi?widely hailed as a Japanese "nationalist"?is talking of modifying the U.S.-imposed post-1945 constitution. Japan, it seems, is soon to possess armed forces beyond what is necessary for self-defense, and there is nothing whatsoever "nationalist" about this proposal. It is just the latest policy being foisted on Japan by the United States. It is not hard to figure out why: Japan is to be our junior partner in the coming conflict with China.