"Guns" and "Butter" in Japan

Abstract

THE problem of Japan's strength formed a favorite topic of Japanese economists during the years I938 and I939. Subsequently, it lost its attractiveness. This literary development reflects rather faithfully a course of economic events which has not as yet formed the subject of extensive analysis in Japan or abroad. One of the reasons for this omission is a growing scarcity of economic data. A thickening fog of secretiveness has descended upon the world's and Japan's store of official and private statistics. Accordingly, the economic analyst is now forced to rely, to an ever increasing extent, upon symptoms of the Japanese economic process rather than upon the customary series of statistical data. This requires interpretation which, since it must necessarily be based on hypothesis, can only be proven conclusively by the future course of events. The customary interpretation of Japanese economic developments since the fateful July i937, contemplates recent Japanese history as a continuation of pre-war developments. Yet, there can be no doubt that during the first year of the Sino-Japanese war decisive changes occurred in Japan's social life, changes which constituted a break in rather than a continuation of the previous economic history of Japan. All these changes pointed in one direction-Japan attempted to substitute for butter. In this respect, Japanese war economy did not differ from the war or defense economy of other nations. However, under the peculiar conditions of Japan, and owing to the relatively long duration of the Japanese war effort, certain aspects of the guns-for-butter economy have become more apparent in the Far Eastern island empire than in other areas of the world. In Japan, as elsewhere, the problem of for butter arose only after full employment had been reached. But Japan differed from other countries in that her economy was in a state of virtually full employment at the very time that the Sino-Japanese war began. Therefore, the newly-emphasized preference for guns could be translated into economic reality in i937