The Rise and Fall of the Zaibatsu Research Paper

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Introduction

Japan and the United States are both leading countries with a strong economy. Various factors contributed to the development of such nations, and each of them faces its threats and challenges. Analyzing policing in the United States and Japan allows one to find similarities and differences, which gives a better understanding of the way systems work and will enable one to analyze the impact of criminal organizations.

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There are two systems by which the country can be defined: the honor-based and contract-based social systems. The main difference is the principle that drives each of the systems. For instance, the desire for wealth and power characterizes the honor-based system, which can be classified into two categories. The research that classifies honor-based societies distinguishes loud and quiet honor-based social communities (Herrman 5).

Honor-based societies can be classified as “quiet,” “intermediate,” and “loud,” where those terms describe the conditions of dignity to a particular extent. (p.5) The researcher finds an indirect correlation between dignity and loudness, stating that the louder the expression of the society, the less pride it possesses due to the more significant declaration and definition.

However, scholars argue that “all dignity is quiet dignity,” demanding the justification for the loud one (Herrman 6). Quiet cultures tend to avoid risks and conflicts, promote collective honor, rely on mutual respect and help, and understand the dependence of each participant in the group on the whole. Success and achievements are more predominant for loud traits; therefore, they possess competitive characteristics.

According to such distinguishment, Japan relates to the mixed group, as it promotes both cooperative and competitive traits, where the American expression is described as exaggerated and over-dramatic. Such separation allows one to better understand the necessity of both countries to make aggressive economic moves and have well-developed systems.

Main body

The other system is a contract-based system that has the purpose of establishing peace and security. This model implies that “citizens give up some of their freedoms and submit to the authority of the state in exchange for protection of remaining rights” (Schuck 70). In American politics, social arrangements have a significant historical impact. This advances the notion of serving people by protecting them. Such studies originate from Plato’s early studies, even though Thomas Hobbes was the first person who expanded the term. One of the principles is popular sovereignty as it promotes the idea of power within the population, which states that the government must be based on such a policy or not exist at all.

An honor-based system fosters cooperation and competition, which is different from the contract-based system as it is more oriented to providing benefits to society relying on ethics and human rights. However, both systems serve the community, whether by establishing cooperation or setting the protection by the government.

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The reason for such communities to exist is similar for both Japan and the United States, as criminal organizations are mainly concerned with power and financial gain. It contradicts the social system that is based on dignity and ethical codes. Organizations in both countries cause a threat to society, mainly to the law, but also help to benefit particular individuals and structures.

Even though beneficial terms may remain, such organizations still encourage violence, corruption, and national boundaries exploiting. FBI is also concerned with the rise of advanced technologies as it is more challenging to trace and to influence such communities due to their ability to commit cybercrimes. Therefore, it causes a threat to national and international security. That is why the FBI focuses on the eradication of not only individuals but also organizations promoting and implementing this.

Due to the highly competitive educational system, Yakuza helps to stabilize an economic system due to the ability to provide help to misfits who cannot handle educational and career competition. Even though such communities receive most of the income illegally, and they are known to make easy money, they are subjected to strict discipline. People who become involved in such business begin with unpleasant chores, and only after years of completing such duties, they have an opportunity to earn income and move to the middle or senior leadership positions.

Hence, such an approach promotes discipline in society, which is beneficial for the economy for two reasons. The first reason is the absence of necessity to take care of people who do not fit in society and provide jobs to them. Secondly, they emphasize discipline, which is beneficial for the community as it decreases the risk of vandalism.

The Yakuza impacts the economic and political world due to the operations it performs. According to Hoshino and Kamada, the main sources of income for Yakuza are mostly illegal, coming from extortion, drug trafficking, protection rackets, and civil disputes interference (2). Considering the socio-political relationship, one can conclude the relationship between politicians and participants of the community is mutually beneficial. It can be explained due to the services that Yazuka members have to offer. As politicians seek protection, Yazuka may serve as bodyguards, protect them from journalists, and provide strong-armed business services.

The members receive protection in return as politicians can reduce the influence of the police and tax authorities, which makes them benefit and proceed to perform illicit businesses. However, such a relationship cannot be applied to senior politicians as it is seen as an embarrassment. Therefore, there are positive and negative effects on the economy due to the performance of criminal organizations in both counties, and whether such communities have their right to exist requires further investigation.

The Meiji Restoration caused a significant change as it allowed the most prominent industrial conglomerates to develop and grow. The Zaibatsu influence resulted in controlling the major part of Japan’s economy in the twentieth century. Even though the conglomerates had a major impact on economic development, and helped Japan to rise, they faced a series of challenges and had to change their form and style due to historical events.

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The Meiji Restoration caused a series of reforms and actions that led to the revolution, which made a shift from an agricultural society ruled by samurai warriors to industrial power, which implied the capitalist economy and hence, allowed conglomerates to develop. The main reason for Zaibatsu to emerge was the eradication of the Samurai Class. The Maji men started to privatize the industry as the Maji government sold the small enterprises that used to be a property of Samurai.

The next generation took over developing businesses, which allowed not only to expand them but also to create “a network of family-controlled, fiercely prideful businesses that frequently collaborated with the new government” (Addicott 11). Such companies built a close relationship with Zaibatsu due to the need for financial planning, which allowed Zaibatsu to develop and receive increased protection. Hence, Zaibatsu had an opportunity to grow due to high demand and cheap sources of labor and materials.

The impact on the economy was significant as the conglomerates were able to take different spheres of the industry under control. Due to economic modernization, financial activity took place, and political merchants that developed into major Zaibatsu were divided into three main groups based on the services they provided for the government. Mitsui and Yasuda constituted the first group that was responsible for handling tax revenues. The second group was responsible for supplying goods. The third group, Mitsubishi, initially invested in shipping. Collinson states that at some point, 24% of all country’s industry belonged to four leading Zaibatsu, not including smaller groups (1).

Therefore, the Zaibatsu had a noteworthy impact on the economy due to the wide range of services they provided, as their companies were leading finances, heavy industry, and shipping services, controlling a significant portion of Japanese trade and commerce.

The Great Depression caused major harm to Zaibatsu due to the economic and political crisis that society faced, accompanied by the previous banking crisis in the second half of the twentieth century. Therefore, smaller companies went bankrupt, such as Nakazawa and Mogi, while others had to rearrange their structure and change management. This influenced the overall functioning capabilities of the conglomerates, not allowing them to perform in the same manner.

Despite the challenges faced, the conglomerates still had a significant economic effect, which allowed them to influence the economy during the war, having an impact on the military. The Zaibatsu were able to operate for some time; however, the government had a need to democratize post-war Japan’s economy, and the Potsdam Declaration, signed in 1945, eradicated Zaibatsu.

The disappearance of the conglomerates also impacted society, leading to the establishment of a new Keiretsu system. The companies that were included as the conglomerates lost their shareholders; hence, they were not able to sponsor their activity on stock markets, which forced them to use loans and bank credits. The Zaibatsu dissolution established the Japanese-style mixed economy as individual investors took the place of “large prewar merchant families in the structure of big corporations” (Addicott 14). Such bank-centered funding was a new form of paternal employment relations. Therefore, companies were dependent on city banks as they required indirect financing due to the shortage of capital and the dissolution of large Zaibatsu conglomerates.

The new group that arose was different from what was known as Zaibatsu, and that is why the need for new terminology emerged. Keiretsu exist presently and can be characterized by horizontal and vertical company relationships. The large corporations, such as Toyota, Nissan, and Mazda, used vertically organized pyramids of suppliers, which allowed expansion in the chemical, electrical, and steel industry and contributed to the gain of financial and tax privileges and development of new technologies. The other difference is that Keiretsu established a new way of financial risk reduction and caused the structural change, moving to the bank-centered system. They were independent of stockholders as they owned large amounts of other shares, thus did not care about short-term profitability.

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Conclusion

Due to the facts provided, the Keiretsu contributed to the Ushinawareta Ni-junen, the “lost decade,” a period of economic stagnation during the 1990s in Japan. The “the zombie business” corporations used to promote contributed to the development of the lost decade, as loans were provided to unprofitable corporations even though such companies did not have potential.

Even though the Zaibatsu has been dissolved, it impacted the economy from the Meiji Revolution until the end of World War II. Such conglomerates helped in the development of a country with a strong economic position. The way the system works was slightly altered after 1954; however, the main implication remains and continues to affect society.

Works Cited

Addicott, David A. “The Rise and Fall of the Zaibatsu: Japan ‘s Industrial and Economic Modernization.” Global Tides, vol. 11, 2017. Web.

Collinson, Simon. “Zaibatsu Structures.” Wiley Encyclopedia of Management, 2015, pp. 1–1. Web.

Herrman, Charles. “The Classification of Honor-based Societies.” ResearchGate, 2017. Web.

Hoshino, Tetsuya, and Takuma Kamada. “Third-Party Policing on Organized Crime: Evidence from the Yakuza.” 2019. Web.

Schuck, Amie M. “Political Authority, Social Control and Public Policy.” Community Policing, Coproduction, and Social Control: Restoring Police Legitimacy, edited by Cara E. Rabe-Hemp and Nancy S. Lind, Emerald Publishing, 2019, pp. 63-77.

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IvyPanda. 2021. "The Rise and Fall of the Zaibatsu." June 25, 2021. https://ivypanda.com/essays/the-rise-and-fall-of-the-zaibatsu/.

1. IvyPanda. "The Rise and Fall of the Zaibatsu." June 25, 2021. https://ivypanda.com/essays/the-rise-and-fall-of-the-zaibatsu/.


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