Occupation Without Troops. Glenn Davis

      It was mostly the worst of economic times in the Japan of late 1977. The country had suffered devastating effects from the great oil shock four years before, while the yen was skyrocketing in value vis-a-vis the U.S. dollar. Prime Minister Takeo Fukuda was trying desperately to cope with problems arising from Japan's astounding economic success—including an uncontrollable torrent of exports and a snowballing surplus in the international balance of payments. November 2 was an especially busy day, yet Fukuda found space in his crowded schedule to spend some time with an American visitor totally unknown to the Japanese newsmen covering events at the prime minister's official residence. How, wondered these newsmen, could this silver-haired, aristocratic-looking foreigner simply walk into the prime minister's office seemingly without an appointment while they waited endlessly in the cold, damp halls?

      To one curious reporter, the seemingly brash visitor admitted his name was Harry Kern, and that he was the president of something called Foreign Reports —information that left the hapless newsman none the wiser. Apparently this less-than-investigative reporter held no suspicion that Kern, by manipulating people and events during the latter part of the U.S. Occupation (1945-52), had been instrumental in creating the problems that now plagued his old friend Fukuda. To put it metaphorically, the mysterious visitor, the unacknowledged progenitor of an offspring known as 'Japan Incorporated," was paying a stealthy visit to his now prosperous, but illegitimate son.

      That timely brush with the Japanese press in November 1977, however, did lead to more investigation of the silver-haired stranger in the bowler hat who was so close to the prime minister. Just over a year later, mystery man Kern was unmasked as a behind-the-scenes operator in the Grumman Aircraft Scandal, which was already threatening the new cabinet of Prime Minister Masayoshi Ohira in early 1979.¹ Suddenly, every citizen of Japan knew of Kern's existence and his special contract with Nissho-Iwai which promised the "blue-eyed fixer" a staggering forty percent of each Grumman E-2C Hawkeye early warning and reconnaissance plane sold in Japan.

      This must have created a strong sense of deja vu in Japan, since the Lockheed Scandal three years before had amply demonstrated how American secret agents for aircraft companies had succeeded in subverting and overturning government decisions for aircraft purchases.² This time, an American Securities and Exchange Commission report (SEC-8K) charged that Grumman officials had admitted to caving in to a "request" from an unnamed Japanese government official to switch sales agents from Sumitomo to Nissho-Iwai ten years earlier. The SEC report went on to state that Kern might in turn pay a portion of his commission to "one or more government officials." Kern responded by bringing a $30 million lawsuit against Grumman, loudly and emphatically proclaiming his innocence.

      Innocent or not, it became clear that former journalist Harry Kern was more than just a representative of certain American east-coast elites—he was playing a major role in what the late historian Howard Schonberger, of the University of Maine, called "the pervasive pattern of corruption that has characterized so much of Japanese business and politics since the end of the Pacific War." Schonberger also wondered why the Grumman case got very little, if any, ink in the American press at the time. "That Kern and Grumman should have their activities suddenly exposed to public view in bombshell reports out of the SEC is even more incredible," he suggested. "Whatever the explanation, the revelations so far point to the alarming conclusion that important political decisions in America, as in Japan, are made by men moved by big money and who are beyond the control of the American people."³

      The Stuff of Textbooks

      The Japanese public is no better informed than its American counterpart on such issues, however. Though Japanese textbooks, especially those dealing with the history of the Pacific War, are still carefully screened for content by the Ministry of Education,⁴ most aspects of the immediate postwar period have been well documented. Every Japanese child learns about the Allied Occupation of Japan, dominated as it was by the "blue-eyed shogun" General Douglas MacArthur, the Supreme Commander for the Allied Powers (SCAP). They learn about this American military icon who gave Japan a democratic, pacifist constitution in 1947, which is still the highest law of the land. Modern students learn of the purge and punishments meted out to the warmongers, the emperor's denial of divinity, and numerous reforms granted to his long-suffering subjects. No less famous is MacArthur's "dissolution" of the mighty zaibatsu, or large financial combines, such as Mitsubishi, Mitsui, Sumitomo, and Yasuda, which kept Japan so solidly authoritarian and plutocratic in the prewar period.⁵

      Nonetheless, the average Japanese is as unaware as his American counterpart that "... as early as 1947, American policies in Japan had shifted from emphasis on these far-reaching reforms toward restoring Japan as the economic workshop of the Far East." wrote Professor Schonberger, who was a leading authority on the often overlooked "reverse course." This reverse course was a series of events in the late 1940s which clearly reversed American policy from democratizing occupied Japan, in favor of building the country into a bastion of anti-communism in the Asian region. "Curiously, the role of non-official pressure groups... has been virtually ignored by all scholars of the Occupation. The most important group concerned specifically with Japan was the American Council on Japan (ACJ), the organizational umbrella for what may be properly termed the Japan Lobby."⁶

      This lobby, which greatly influenced American policy toward Japan between 1948 and 1953, was spawned in the struggle between American reformers and conservatives over the program for dissolving the zaibatsu by occupational decree. Harry F. Kern was the ringleader of the lobby and actual organizer of the ACJ. Displaying enormous energy and tactical shrewdness, this unimposing journalist singled out as his target the illustrious war hero General MacArthur, and within a space of two years forced the general's ignominious retreat, and the reversal of the major policies that he had sworn to defend.⁷

      In toppling Goliath, this dauntless David was obviously armed with more than just a smooth rock and a slingshot. Indeed, he enlisted the support of the only then living ex-president, several statesmen of cabinet rank, top-level officials in the National Security Council