Abstract

 The transformation of Japan's postwar economy took place against the background of a democratization reform program promoted (along with the Allies) by the American Occupation forces. Three economic reforms were of particular importance in this phase of transformation: land reform, dissolution of the zaibatsu, and labor reform.

After the first land reform carried out in the fall of 1945, which required certain changes, at the request and support of the American Occupation forces (which was expressed in a memorandum on land reform sent to the Japanese government on December 9, 1945, and which called for more extensive changes) was realized the so-called the second land reform on October 21, 1946.  “The Law for the Special Establishment of Independent Cultivators’’   provided to purchase for all the land plots owned by absentee landlords by the government;  to limit for the land of non-cultivating resident landlords to less than one chōbu; to determine the land area of land owners-cultivators to three chōbu; and the (re)sale of land purchased by the government on tenant farmers. Because the real price of land fell sharply as a result of inflation, land reform was almost equivalent to confiscation. As a result of the reform, tenanted land was reduced to only 10 percent of agricultural land; the tenants' rent became negotiable; and tenant disputes disappeared. The farmers became more willing to work; the farming villages became more politically stable; and agriculture developed with the help of government price supports and investment in infrastructure.

In October 1945 the Occupying Forces decided to dissolve the head offices (honsha) of the zaibatsu holding companies and in April 1946 established a committee to reorganize the holding companies.  The zaibatsu's head offices may have disappeared, but the enterprises were reconcentrated into “enterprise groups’’ (keiretsu), centering on banks, through mutual stockholding and financing. Critics often referred to this as the “revival of the zaibatsu.”      The dissolution of the zaibatsu and the abolition of concentration permanently affected the economy. The concentration of production, which had been reduced by the antizaibatsu legislation, was further diluted as a result of high growth. The competition among enterprises became livelier. Industrial firms not affiliated with the prewar zaibatsu expanded into large enterprises because of opportunities for new entry and enlargement of scale.  It can be said that this competitive industrial structure developed as a result of the postwar dissolution of the zaibatsu and the abolition of concentration.  

In December 1945, according to the American Wagner Act, the Labor Union Law was published, thereby had been recognized the right of workers to organize and bargain collectively; Trade union activity was exempted from civil law and defined as unfair labor practices. The Labor Relations Adjustment Law of September 1946 was defined the limits of strike behavior and established procedures for the settlement of labor disputes, and the Labor Standards Act of April 1947 ensured improved working conditions. These three laws, but especially the Labor Union Law, stimulated labor union activity.   

The indirect effects of the Occupation and its policy on the Japanese economy were impressive, as the defeated country achieved an incredibly large economic advantage around the world.