By Alexei T. Kral

Is there a way to reconstruct a devastated economy and simultaneously foster democratic governance? While analysts are still pondering this question in the year 2000, a group of Japanese economists had an answer ready immediately after World War II: statistics were what Japan needed. This provocative argument highlighted a lunchtime discussion featuring Laura Hein, Woodrow Wilson Center Fellow and Associate Professor of History at Northwestern University.

Hein's presentation to two dozen Washington Japan-watchers focused on six leading Japanese economists who were active from the 1920s to the 1980s. The strong political impulse that lay behind their economic approach, Hein noted, has now been largely forgotten. This "huge social act of forgetfulness" has contributed to the misperception that Japan is an apolitical place where economics are a matter of technical achievement and have little to do with debate over social issues and concerns.

Hein asserted that the story of these leading economists is important for understanding Japan's postwar development because it reveals the deep political motivations at play in Japan's economic reconstruction. During the war years, Hyoe Ouchi (1888-1980), Yoshitaro Omori (1898-1940), Hiromi Arisawa (1896-1988), Yoshitaro Wakimura (1900-1996), Masao Takahashi (1901-1995), and Ryokichi Minobe (1904-1984, Governor of Tokyo 1967-1979) were fired from their university jobs and imprisoned for their leftist ideas. They returned to prominence immediately after the war and worked closely with the American Occupation authorities, who shared their goal of making rational administration a foundation of postwar Japanese society. The five surviving economists were offered jobs in the bureaucracy and embraced the task of rebuilding the statistics bureau. They "saw the establishment of social scientific assumptions and techniques as the most important political act they could accomplish," Hein noted.

These leading economists viewed statistics as the basis for economic reconstruction in post-WWII Japan. They were convinced that the best way to make the government more honest was to make it more rational through the utilization of statistics, Hein explained. They believed statistics would make data for policymaking more reliable and would assure that the authorities were more responsive to the citizens. In their view, statistics would provide checks and balances, thereby countering irrational leadership like that of the WWII leaders who claimed Japan could overcome its resource shortage and prevail through its Yamato spirit (patriotic Japanese spirit of self-sacrifice). Hein observed that these economists thought statistics could provide a head for what some postwar Japanese intellectuals had characterized as the "headless" Japanese government of the 1930s and early 1940s. Believing that statistics should be taken out of the hands of the various government ministries, these economists sought to centralize statistical analysis and succeeded in moving statistical collection and analysis to the Prime Minister's office.

These leading Japanese economists wanted to create an "economically literate population" and, in Hein's judgment, succeeded to a great extent. Hein observed that the Japanese are much more familiar with economic and statistical concepts than is the average American. However, these economists were wrong in assuming that a statistically literate population would lead to a more democratic and egalitarian society. Hein argued these economists were trapped by "the assumption that rationality always served democracy." They failed to develop a way to evaluate the democratic potential of a policy beyond its economic rationality. In addition, they highly valued expertise and were not fully content with majority rule, particularly when the majority's ideas did not coincide with their vision of economic rationality.

The economists' failure to achieve their political goals while rebuilding Japan's statistical infrastructure is one reason Japan's economic growth is today primarily regarded as a story of technical achievement. Hein concluded that the political ideas underlying the economists' efforts have been "edited out," which obscures the full story of how today's Japan developed out of frequently politicized debate and social disagreement over the years.