ABSTRACT

From 1955 when the Liberal Democratic Party was formed until 1993 when it split, Japan was perhaps the most extreme example of the industrial world’s limited number of “uncommon democracies” (Pempel 1990). Analogous to Sweden under the SAP, Italy under DC and Israel under Labor, but with even greater electoral dominance by the LDP, Japan had all the formal institutions of democracy, yet a single political party enjoyed decades of uninterrupted and relatively unchallenged control over government offices and public policymaking. For 38 years the LDP sustained roughly 2:1 majorities over the largest opposition party, allowing it to control virtually all cabinet posts and giving it virtually unprecedented influence in shaping national and most local policies. Conservative political power was effectively unshakable. Such long-term dominance was unusual to say the least in comparison to most other industrial democracies. But it was accompanied by, and inexorably aligned to, the fact that over the same period, Japan enjoyed exceptional levels of economic productivity. Japan’s GNP grew at rates that were typically double that of the other OECD countries. This fusion of conservative political dominance and high levels of economic productivity put in place a powerful and unusual productivity regime which continued unabated until the economic downturn that started in 1990-1991. The political economy that prevailed from roughly 1955 until 1990 was mutually reinforcing – political control by the LDP fostered socioeconomic policies beneficial to growth and productivity (as opposed to consumption and social programs). Sustained economic growth in turn bolstered the electoral fortunes of the LDP. It was a rather distinctive Japanese combination of politics and capitalism when seen in light of the systems in place within other industrial democracies. Most critically, the socioeconomic coalition undergirding the system provided a historically unusual alliance among big business, small business and agriculture, while simultaneously excluding organized labor. Most other industrial democracies saw some overt collaboration or tacit accommodation at the macro-level between big business and organized labor that led to a substantial liberalization of trade and, in the words of Ron Rogowski (1989: 99) “even while providing generous death benefits, presided over agriculture’s demise.” The major exceptions to this

pattern were the Scandinavian democracies built on long-standing alliances between labor and agriculture and the few land-rich countries such as Australia, Canada, the United States or New Zealand where export-oriented farmers frequently aligned themselves with globally oriented business (e.g., Albert 1993; Dore 2000; Esping-Andersen 1999; Gourevitch 1986; Pempel and Tsunekawa 1979; Rogowski 1989; Yamamura and Streeck 2002). Japan’s unusual political economy however proved a stunning and reinforcing success for roughly four decades. The country’s positive sum fusion of economic growth and conservative political control came to a crushing end with the sudden bursting of Japan’s economic bubble in 1990 and the subsequent fracturing within the LDP in 1993. Since then the Japanese political economy has been incapable of returning to, or to reconstituting, the previous productivity regime with its reinforcing mixture of conservative political power and economic productivity. Particularly problematic has been the return to decent levels of economic productivity. The LDP did manage to regain political power, first in coalition with its longtime bête noire, the Social Democratic Party of Japan (previously the Japan Socialist Party), and later in collaboration with New Komeito (Clean Government Party). It was the pre-eminent party in government from 1994 to 2009 although always with more fetters than during the period of its unchallenged dominance from 1955-1993. However, with its stunning Lower House electoral victory in September, 2005, coming as it did in a wave of economic reforms, the party gained a more dominant Lower House majority than it ever enjoyed during its earlier reign of power and seemed as if it could oversee a return to a highly productive economy. Yet, the LDP’s crushing defeat in the 2007 Upper House elections again realigned the political balance by giving the opposition the power to block legislation and to hold hearings that could challenge government actions while the brief glimmer of economic productivity flickered and faded. Lower House elections in spring 2009 saw the LDP forced out of government completely. Throughout the decade of the 1990s, Japan’s GNP grew at an anemic 0 to 1 percent for most years. Since the turn of the century, there have been hints of a return to productivity, and indeed starting in February 2002 Japan began its longest postwar period of economic growth; it continued until late in 2007. That expansion beat past booms in length though hardly in underlying momentum: growth averaged about 2.4 percent per year, far below the 11.5 percent seen from November 1965 until July 1970 or the 5.4 percent from December 1986 until February 1991 (Nikkei Weekly, November 29, 2006: 1). And the current global economic depression has sucked Japan along with most other countries into its vortex leaving current economic projections ranging between dismal and despairing. This mixture of substantial but constrained political control plus limited economic productivity poses the central puzzle of this chapter: how were political power and economic productivity linked during the so-called “1955 system?”