Abstract

Keidanren, the Japan Business Federation, is the backbone of Japan’s economic structure. This article clarifies how Keidanren controls Japan’s socioeconomic and political life, and on this basis examines the characteristics and influence of Japanese culture.

Introduction

After the war, Japan’s zaibatsu were dissolved under American supervision, but before long—under the guidance of MITI bureaucrats—Japanese corporations underwent mergers even more intense than before the war, with national power further concentrated. In August 1946, Keidanren was founded to restore the Japanese economy. It was nominally a business federation but was in fact a coordinating body under the control of the economic ministries, dominating enterprises nationwide through financial and technological advantages—the nervous system of the Japanese economy. For the seventy years of the Shōwa and Heisei eras, Keidanren controlled Japanese society, shaped Japanese culture, and through constant exchange and export spread its influence across the globe.

1. The Social Structure Keidanren Shaped

1.1 Economic Industry under Zaibatsu Monopoly

Postwar Japan was in ruins and desperately short of capital. Rather than opening its markets and attracting foreign investment, Japan established the Economic Stabilization Board in 1946—later renamed the Economic Planning Agency. The Board’s Report on the Economic Reality (1947) stated: “Based on collected data and statistics, we wish to convey the current state of our economy to the people and ask them to join us in considering and solving our problems. Every citizen must think about the national economy as they think about their own household finances,” and coined the famous slogan kuni mo kigyō mo kakei mo akaji (the nation, enterprises, and households are all in the red), calling on all citizens to unite in overcoming hardship. The Board promptly announced a series of strict economic controls:

1. Material controls under the Temporary Materials Supply and Demand Adjustment Law;
2. Price controls under the Price Control Order;
3. Capital controls under the Financial Institution Fund Lending Guidelines;
4. Trade controls under the Temporary Trade Measures Law.

When the Japanese economy rapidly recovered, these coercive measures were not abolished but inherited along with the organizational structure, becoming part of the system’s competitive advantage. In 1972, seen as an economic threat to the United States, a U.S. Commerce Department report on Japan termed this model “Japan, Inc.”—treating the entire nation as a single corporation. Takahashi Masao preferred to call it “Japanese-style socialism,” as illustrated below:

Keidanren thus came into being, balancing income and expenditure and promoting Japan’s industrial development by bringing both capital-intensive basic industries and high-profit consumer industries under its umbrella. Modern Japanese industry was born under Keidanren’s nurturing. This model, of course, could not adapt well to the information age—which explains why Japan missed the internet wave in the 1990s.

Today, after various mergers, Keidanren is a colossus covering every sector of Japanese industry. Below are the organization’s key personnel:

Name	Affiliated Company
Nakanishi Hiroyuki	Chairman, Hitachi
Okamoto Kuniei	Senior Advisor, Nippon Life Insurance
Nagae Katsunori	Special Advisor, MUFG Bank
Miyanaga Shunichi	President, Mitsubishi Heavy Industries
Tokura Masakazu	President, Sumitomo Chemical
Iijima Akimi	Chairman, Mitsui & Co.
Kudo Taizō	Chairman, Nippon Yusen (NYK Line)
Okamoto Tsuyoshi	Honorary Advisor (Director), Tokyo Gas
Kobayashi Ken	Chairman, Mitsubishi Corporation
Ishizuka Kunio	Special Advisor, Isetan Mitsukoshi Holdings
Kunibe Takeshi	President, Sumitomo Mitsui Financial Group
Yamauchi Takashi	Chairman, Taisei Corporation
Shindo Kosei	President, Nippon Steel & Sumitomo Metal
Yamanishi Ken’ichirō	Honorary Advisor (Director), Mitsubishi Electric
Hayakawa Shigeru	Vice Chairman, Toyota Motor Corporation
Sumi Shūzō	Chairman, Tokio Marine Holdings
Tomita Tetsurō	Chairman, East Japan Railway (JR East)
Katanozaka Shinya	President, ANA Holdings
Sugimori Tsutomu	President, JXTG Energy
Koga Nobuyuki	Chairman, Nomura Holdings
Takahashi Yasuhei	Senior Advisor, Showa Denko
Suzuki Shigeharu	Advisor, Daiwa Securities Group
Etoh Toshiaki	Permanent Advisor, Mitsui Sumitomo Insurance
Okafuji Masahiro	Chairman, Itochu Corporation
Watanabe Kōichirō	Chairman, Dai-ichi Life Holdings
Yoshida Haruno	Chairman, BT Japan
Asano Kuniko	Chairman, Hakuichi
Izumiya Naoki	Chairman, Asahi Group Holdings
Nagae Shūsaku	Chairman, Panasonic
Nakamura Kuniharu	Chairman, Sumitomo Corporation
Sato Yasuhiro	Chairman, Mizuho Financial Group
Endo Nobuhiro	Chairman, NEC
Kobori Hideyuki	President, Asahi Kasei
Negishi Osafumi	Chairman, Sekisui Chemical
Saito Tamotsu	Chairman, IHI Corporation
Shinohara Hiromichi	Vice Chairman, NTT
Komoda Masanobu	President, Mitsui Fudosan
Hatanaka Yoshihiko	Chairman, Astellas Pharma
Isaka Ryūichi	President, Seven & i Holdings
Niinami Takeshi	President, Suntory Holdings

It should be noted that Japanese companies broadly separate ownership from management: the decision-making executives are mostly employees who have climbed from the bottom rung; ownership, to a significant degree, rests with banks and other financial capital.

1.2 Political Structure under the Zaibatsu Monopoly

Japan’s political landscape is famously static. Although in recent years new faces have appeared on the political stage—with a woman becoming Governor of Tokyo, which must be called a form of progress—by and large the Liberal Democratic Party has long controlled parliament; and that, of course, is the result of Keidanren’s backing.

As a nominally parliamentary democratic nation, Japan once had very lax oversight of political donations. Keidanren tied itself firmly to the LDP through political donations. In 1991 the Soviet Union collapsed, the Cold War ended, and the long-championed argument that “political donations are the guardian angel of the free world” lost its footing. Combined with a string of donation scandals, Keidanren was forced in 1993 to halt organized cash donations. The LDP lost power in 1993, and the 1955 System collapsed. From 1996, Keidanren began providing financial support through bank loans to political parties, and diversified its approach to include not just the LDP but also the Liberal Party and the Democratic Party, thereby regaining control of government.

Distinctively, Keidanren’s political donation funds are openly apportioned, with parties rated and donations calibrated accordingly. The chart below shows the 2003 party score table:

Although legislation and cabinet decisions have been largely captured by the financial conglomerates, the enormous benefits and symbolic significance that Diet membership confers still attract all manner of factions. In particular, the bureaucratic bloc and certain special-interest groups prefer to hold voting rights directly rather than influencing politics indirectly through bribery. This gives rise to Japan’s distinctive “tribal Diet members” (zoku-giin) phenomenon. These politicians do not necessarily represent family clans, but reliably represent specific interest groups: the transport tribe represents some small auto-repair business owners and some MLIT bureaucrats opposed to abolishing vehicle inspections; the health-care tribe directly represents the Japan Medical Association in defending physicians’ preferential tax treatment, and so on. Within their deference to the major conglomerates, these tribal Diet members use their legitimate powers and social standing to extract benefits for their own “tribal clusters.”

MITI, as the direct government ministry affecting economic and industrial policy, is renowned as “the ministry that knows how to argue.” In politics, the ability to make one’s voice heard is power. Counterpart to the MITI bureaucrats are Keidanren’s so-called “civilian bureaucrats”—technocrats. In practice the two are two sides of the same coin, sharing not only common goals but also closely cooperating in methods.

2. Civic Culture under Keidanren Control

2.1 The Conservative Order of the 100-Million-Strong Middle Class

As a colossus, Keidanren provides its employees with generous treatment. Through a series of income distribution and price adjustment mechanisms, it produced a vast Japanese middle class—the “100 million all middle class.” Japan’s middle class played a positive role in maintaining social stability, developing the economy, and building consensus. Starting from the era of high economic growth in the 1960s, “middle-class consciousness” gradually spread to ordinary citizens and by the 1970s took root deeply in the national psyche. Within Keidanren, since it relies on monopoly rather than competition and employs people for life, there is no pressure for technological breakthroughs—instead, steady incremental improvement and promotion by seniority alone. Under this value orientation, a Japanese salaryman’s life consists of working half-heartedly during the day and drinking with superiors or clients at night. The social atmosphere thus tends toward conservatism with no pursuit of change.

As a defeated nation, the Japanese government itself lacked the standing to stir up grand narratives. With the retreat of the international communist movement, the once-fiery Red Army factions also disintegrated of their own accord. The American presence also served as a great Other, helping to maintain Japan’s social norms.

Japanese traditional culture also places great weight on hierarchy. In the workplace this manifests as seniority-based promotion; in society, as age-based deference. Within the family, the typical Japanese household is the housewife model, with women bearing responsibility for the home. Although growing economic pressures have brought more women into the workforce, overall the pressures on women remain heavier.

Since the 1990s, due to the rigidity of the Keidanren system and economic decline—expanding deficits, rising unemployment—Japan’s social instability has increased. But because of the social culture of not troubling others and the still-adequate social welfare, even as class stratification deepens and more of the middle class falls into the lower stratum, they tend toward resignation rather than seeking change. This is why the conservative social atmosphere has persisted through the last three decades.

2.2 ACGN Culture as Value Export

Japan’s ACGN (Animation, Comic, Game, Novel) culture and otaku culture, though overlapping in demographics, are essentially distinct; otaku is almost synonymous with failure in Japan’s highly social-ability-focused environment.

The ACGN production committee system is in some sense an imitation of the Keidanren model, with production parties jointly sharing risk. As noted above, MITI’s strategy was to set industry standards, elevate industry benchmarks, and support monopoly enterprises. MITI attached enormous importance to the ACGN cultural industry. Since Ohira Masayoshi proposed “cultural nationhood” in 1979, successive governments have strongly supported the content industry. Prime Minister Takeshita Noboru in May 1988 was the first to propose a “cultural diplomacy strategy.” The 2001 Basic Law for the Promotion of Cultural Arts established concrete measures. The 2016 METI Content Industry Report highlighted the important role of the ACGN industry in cultural exports and overseas revenue, and proposed the “Cool Japan” strategy to encourage ACGN culture to go global.

In fact, since the 1990s Japan’s ACGN culture has continuously exerted influence abroad, beyond mere economic returns. Even on today’s Ukrainian battlefields, with both sides fighting for their lives, many soldiers display anime characters as spiritual symbols, sticking character stickers on their weapons. As former Japanese Prime Minister Aso Taro said in praise of the anime industry’s creators: “Your work has brilliantly captured the hearts of young people in many countries including China—something our foreign ministry could never achieve.”

Conclusion

Japan’s social structure bears similarities to China’s in the close cooperation between the state and enterprises and in the control of society. However, due to differences in value orientation, the two have produced different outcomes in cultural products. By studying how Keidanren shaped Japanese culture, the Chinese government can better help Chinese cultural enterprises export their cultural products.

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