Economic recovery in East Asia.

We have now reached a phase of the problem of postwar Japan which should be considered on a basis of what is best for the people of Asia and the world, rather than on a basis of what we may feel.

The question of whether Japan deserves to recover from the devastation of war is, of course, open to debate. Advocates of extreme penalties against Japan propose that Japan be deprived of its industries and foreign trade as a guarantee of remaining unarmed and as punishment for crimes against its neighbors. Complete elimination of such industries as iron and steel, shipbuilding and aircraft manufacture would, they point out, make it impossible for Japan to embark on a war with any chance of success for many years to come.

If the most extreme of these proposals were carried out, Japan would be reduced to an agricultural country, supporting its population by farming and handicrafts. Distributing the former Japanese overseas trade among the United Nations has also been suggested.

Those who fear Japan’s rapid recovery point to Germany’s industrial development and rearmament after the last war. This was possible only because Germany’s factories, though worn, were intact. But economists who would preserve Japanese industry reply that Japan is no second Germany. The Nazis inherited the economic heart of a continent, while Japan, deprived of its empire, will lack both the foreign exchange and the raw materials for building up a formidable war machine.

Advocates of a moderate policy agree that Japan should be completely disarmed. But they point out that widespread unemployment and perhaps even starvation of a considerable part of the Japanese people can be prevented only by permitting them to rebuild their factories and by giving them access to raw materials in Asia and the South Pacific.

Is one kind o f industry harmless?

Some students of the subject discriminate between “heavy” and “light” industries, recommending that Japan give up the machinery which turns out steel rails or guns, and keep the factories making goods that everyone buys and uses. Japan has concentrated in recent years on piling up munitions of war. Doubtless many plants built or enlarged since 1930 could be scrapped without wrecking the country’s peacetime economy. But some “heavy” industry, it is said, would be needed to support the restored “light” industries that may be turning out large quantities of consumers’ goods in Japan after the war.

Economists agree that a ruined and unproductive nation is a sore from which economic infection can spread to an, entire region. A Japan without industry and foreign trade might well retard recovery throughout East Asia. Moreover, the Atlantic Charter promises all peoples access, on equal terms, to the trade and to the raw materials of the world which are needed for their economic prosperity. At the Crimea Conference, however, British, Soviet, and American leaders declared their determination to “remove or destroy all German military equipment; eliminate or control all German industry that could be used for military production.” Whether a similar policy will be adopted toward Japan remains to be seen.

If Japan is permitted to keep its people employed and fed, through restoring at least a part of its prewar industry and commerce, some observers believe that Japan will cooperate more willingly with the victor nations. The products of Japanese shops and factories will be needed in the rebuilding of China. Past experience shows that, when they do not have Japanese bayonets at their backs, the people of Asia and Oceania welcome Japanese cheap merchandise manufactured at a price they can afford to pay.

Here is an apparent conflict between two of our purposes—economic recovery in East Asia and military security for ourselves. But it may be possible to achieve both if we can keep Japan from manufacturing the instruments of war while permitting the Japanese to redevelop peaceful industry and trade. The final decision as to what treatment Japanese industry and commerce are to receive will probably depend, to a large degree, upon what type of postwar government develops in Japan.

From EM 15: What Shall Be Done about Japan after Victory? (1945)