Volume XXIII — Number 1
Edward J. Lincoln
Abstract: Defeat in World War 2 forced Japan to reconsider its position in the international community. Before the militaristic expansion of the Japanese empire in the 1930s, Japan was highly insular. Japanese political energy was focused almost exclusively domestically, as Japanese society was split between support for a stronger monarchy with a centralized government and support for the traditional feudalist system structured around clan loyalty to a regent-like Shogun. The Meiji restoration in the mid-19th century resolved the issue of politial organization in favor of the monarchy, and Japan began a period of political consolidation and expansion. The central tenet of Japanese identity was Nihonjinron, the belief that Japanese culture is superior and that outsiders cannot understand Japanese culture, language, or society. The ideas of Nihonjinron were cemented in the foreign policy of the aggressively expansionist Japanese empire, and although the empire was dismantled after World War 2, isolationist sentiment remained. The post-war Japanese economy initially was strongly dependent on the United States. As Japanese industrialization grew and Japan caught up to the developed world by the 1980s, economic growth stagnated, forcing the Japanese government to look abroad for investment opportunities. Japan quickly became the world’s largest creditor. The implications of Japan’s status as dominant international creditor cannot be overstated. Japan can no longer passively watch the international community while primarily concerning itself with domestic improvement. Now, the safety of Japanese investments abroad (and therefore the health of the Japanese economy) depends on the strength of other global economies.
Keywords: Japan, economics, Japanese nationalism, World War 2, Contemporary Economics