Douglas MacArthur and his superiors in Washington unwittingly opened the door to creating a major economic rival.
Douglas MacArthur’s ideal for Japan was land reform to create a class of yeomen farmers, a free market economy based on small and medium-size producers, along with a welfare state, labor unions and women’s suffrage—policies that William Jennings Bryan and many Progressives and even New Dealers would have approved heartily. He thought Japan was “feudal”, and the New Dealer Theodore Cohen had the general pegged correctly as a 19th Century populist in the Jefferson-Jackson tradition who would have re-run Japan’s modernization process along democratic lines. His mother was from Virginia and his father from Wisconsin, and he grew up on the Western frontier, all of which seems to have given him a lifelong aversion to Wall Street, monopolies and big cities, as well as a considerable degree of anti-Semitism.
Having lost the war so disastrously, the Japanese were not at all averse to trying new directions, and they actually administered most of MacArthur’s reforms themselves, provided that the Emperor was left in place. Hirohito was not prosecuted for war crimes and remained in power until his death in 1989, “masquerading as a meek marine biologist. Nothing could have been further from the truth, but at the Tokyo war crimes trials, the defendants “colluded” with the prosecution to protect him, and General Tojo and other war criminals went to the gallows satisfied that they had done their duty for the emperor.[1]
As the Cold War deepened, Washington pushed the General to a reverse his policy, one that had long-lasting effects few would have imagined at the time. Businessmen and bankers like William Draper and Joseph Dodge thought that MacArthur’s reforms were not likely to make Japan the efficient bulwark against Communism that the U.S. government desired, and in this important officials and Wall Streeters like John J. McCloy, Averill Harriman, and James Forrestal seconded them. NSC 13 in October 1948 ordered MacArthur to revive heavy industry in Japan and increase exports, while reducing consumption, social welfare and government spending. This was fully consistent with conservative principles in both countries, and the Japanese duly noted that it was not so different from the “Greater East Asia Co-Prosperity Sphere” that had so recently seemed defunct.
MacArthur resisted this shift to the Cold War, which he thought (correctly) would undermine many of his democratic reforms in Japan and return the old elite to power. He defended his own program as “a middle ground between socialism and reactionary capitalism”, implying that the latter would take power in Japan again, with American encouragement. As always with MacArthur, political ambition played a part of these public protests against “American tycoons” like Harriman and Forrestal, for he intended to run for the White House as a reformer and Modern Republican, as his old rival Eisenhower did in 1952. He failed in this, as well as his desire to remake Japan, and the Liberal Democrats that ran the country for decades were neither liberal nor particularly democratic.[2]
[1] Schaller, Douglas MacArthur, 125, 275-81; Robertson, 222-26
[2] Schaller, 150, 275-81
