Occupation Without Troops. Glenn Davis

      When General MacArthur arrived in Japan on August 30, 1945, there was little disagreement—audible, at least—about the tasks assigned to the Occupation force he headed. According to instructions from President Truman, SCAP was to take control of the defeated nation, which was to be disarmed and demilitarized forthwith. Japan's overseas empire was to be liquidated. Its authoritarian establishment, dominated by interlocking military, financial and bureaucratic cliques, was to be supplanted by a democratic society. The new Japan was to be sustained by a free economy adequate for a peaceful existence, and within weeks the U.S. president ordered MacArthur, his proconsul, to prepare the ground for such an economy. "To this end, it shall be the policy of the Supreme Commander... to favor a program for the dissolution of the large industrial and banking combinations which have exercised control of a great part of Japan's trade and industry."¹

      By the time the Occupation was six weeks old, SCAP had suspended all laws restricting freedom of speech, press, and assembly. Among them was the draconian Peace Preservation Law, which had been revised in 1941 to impose penalties as severe as death or life imprisonment for participating in any group opposing capitalism or the emperor system. The military police, national police, and thought-control police were disbanded. Thousands of political prisoners were released, who then proceeded to democratize the country in their own ways. But other individuals, arrested on suspicion of war crimes, took their places in prison to await trial by an international military tribunal. Indeed, there was strong pressure from some Allied quarters to put the emperor himself on trial.

      Before the year was out, female suffrage was granted, labor unions and radical political parties were rapidly gathering support; while land reform, a democratic system of education, and the new constitution renouncing war were in gestation. To protect these fledgling freedoms, the Japanese government was ordered by SCAP to purge from public life those militarists and nationalists who were considered a threat to peace and democracy.

      The Occupation program was formulated and executed largely by the American military and civilian authorities in accordance with war aims overwhelmingly supported by the American people. General MacArthur, in spite of his title Supreme Commander for the Allied Powers, made no pretense of sharing his authority with the other victorious nations, whose representation on the Allied Council for Japan in Tokyo and the Far East Commission in Washington conferred no real authority. Nevertheless, the Allied governments and their peoples fully supported the initial objectives of SCAP.

      Douglas MacArthur was no social reformer, nor was he prejudiced against wealth per se. His first wife was the stepdaughter of Edward T. Stotesbury, the Philadelphia senior partner in J. P. Morgan & Co., headquarters of the foremost zaibatsu of the Western world.² But his associations with the super-rich had not disposed MacArthur favorably toward the Japanese zaibatsu chieftains whom he condemned for their role in fostering military aggression, economic exploitation, and political tyranny. Carrying out the commander in chief's orders to liquidate Japan's financial combines, MacArthur's Economic and Scientific Section ordered the four largest family holding companies—Mitsui, Mitsubishi, Sumitomo, and Yasuda—to draw up plans immediately for their own dissolution. By November, the big four holding companies existed only as caretakers to wind up their affairs, and plans were afoot to dissolve remaining monopolistic business, as well as to enact antimonopoly laws under which a more democratic economy could be molded.

      To prevent a resurgence of the old guard, zaibatsu family members were forced to resign from all positions with companies they formerly controlled, and to turn over all their shares in such companies to the Holding Company Liquidation Commission (HCLC) in exchange for ten-year bonds. Even more drastic was an order from Washington that all those who had actively supported militarism and aggression be purged from business positions. Among those suspended indefinitely were many of Japan's most important business leaders, and there was no assurance that some of the "feudal overlords," as MacArthur called the zaibatsu chieftains, would not be indicted as war criminals.³

      This brings us to one of the major contradictions of modern history. After a vigorous and unified start, strengthened by a number of outstanding achievements already made, the campaign to democratize the Japanese economy came under relentless attack in the American press. Thereafter it fell into disarray, and soon it was decisively reversed. Eventually, the former zaibatsu enterprises, in ever-closer alliance with American and multinational corporations, not only re-established their pre-war strength but actually augmented their shares of both the national and international economies. The benefits that the vanquished nation gained from this turn of events were far greater than those that could reasonably have been expected from victory. For Japan was later granted a free hand, economically, in large portions of the Greater East Asia Co-Prosperity Sphere it had conquered and lost before and during World War II, while enjoying unhindered access to the American market as well as to raw materials in most of the noncommunist world.

      Why did the government of the United States take this "reverse course"—a set of decisions that caused suspicion and animosity among friends and adversaries alike and polarized the newly liberated countries of Asia into warring camps in the name of peace and stability in the Far East? And whose decision was it to resurrect defeated Japan, a nation that so recently had wrought economic and military havoc on the world?

      Commonly, the 180-degree turnabout has been explained as resulting from the Cold War. This is an evasion, and it ignores the probability that the American rehabilitation of the monopolistic economies of West Germany and Japan, largely under pre-war leadership, was a cause, not a result, of the Cold War. Their rehabilitation was a vital part of American capitalism's strategy in its all-out vendetta against communism.

      In rejecting the conventional rationale of the reverse course, we shall put forward a hypothesis that is less grandiose, even a bit grubby, but more susceptible to factual elucidation. The information available to us indicates clearly that the reversal of Allied economic policy—executed unilaterally by the United States— represents the use of inordinate political power by a small faction within the American establishment. Without formal mandate, this faction was able to refute the national consensus, to manipulate a supposedly democratic government, and finally to impose its private will upon that government and win its acceptance as official, long-range policy.

      In the case of occupied Japan, the first step was to overrule the supreme commander and his partisans, who clung obstinately to outmoded wartime ideals, while either winning over or isolating those in authority who obstructed the integration of Japan into the cold war structure. In so doing, the anti-reform faction changed the course of history, abruptly and with consequences yet to be fully evaluated.

      The Japan Lobby

      The existence of such a pressure group has been scarcely touched upon by orthodox Japanologists, who tend to be uncomfortable discussing the political machinations of real, identifiable people, especially prominent ones who display the baser human