Japan, 1951
On September 8th, 1951, representatives from Japan and the United States signed the Security Treaty Between the United States and Japan in San Francisco, California. In five articles, the Treaty dictated the future of American involvement in and around Japan. The treaty, which established a long history of military cooperation between the United states and Japan was negotiated by John Foster Dulles and signed by Japanese Prime Minister Shigeru Yoshida.
Immediately after World War II, General Douglas MacArthur and the Allied Powers were largely concerned with Japanese rearmament. In pursuit of this goal, the Allied Powers mandated Japan relinquish its military upon surrender in 1945 and all but forced the Japanese government to add Article 9 to its constitution in 1947 which prevented them from maintaining any land, sea, air, or any other war potential. When the Korean War broke out in 1950, the Allied Powers radically changed their East-Asian policies. The goal of stopping Japan’s remilitarization became subordinate to the goals of containing communism, and Japan was allowed to create the National Police Reserve, a lightly armed, 75,000-strong paramilitary, “peacekeeping” force on the Island of Japan. Over the next year, the United States approved the creation of two more peacekeeping agencies that armed more than 115,000 additional Japanese soldiers. In 1951, the Security Treaty Between the United States and Japan codified the arrangements made in 1950. Japan was now responsible for preserving peace and security within its borders. Allowing Japan to rebuild its military power came with strict restrictions, however. Japan lost control of Okinawa, gave the U.S. complete control of bases in East Asia, and lost the privilege to grant military privileges to other nations without American consent. In return, the United States pledged to defend Japan against foreign aggressors.
As with most political debates, options on how the U.S. should manage Japanese relations greatly differed in the early 1950s. In his 1952 article Rearming Japan Queried, published in the New York Times, J. Passmore Elkinton questions the United States’ support of rearmament. His opinion, however, is based not on fear of future Japanese aggression, but rather the concern of a communist revolution. Elkinton argues that if the United States pressures Japan to use its limited resources to buy weapons rather than to repair its crumbled infrastructure, the people will become “more resentful towards the West and [Japan’s] poverty will increase the advocates of communism.” The Japanese, Elkinton argues, will then turn its weapons in support of a Marxist agenda. Others paraded the Treaty as a great victory for America in the East. In the anonymous article For Japan’s Defense the author argues that a power vacuum was created in East Asia when Japan was defeated and “communist imperialist expansion would naturally move toward such a vacuum.” Arming Japan, the article argues, is the only way in ensuring effective cooperation with the free world against “the slave world.”
While opinion differed on the correct means of involvement in Japan in 1951, the Security Treaty provided the base for one of America’s strongest allies. Japan would later go on to join the United Nations in 1956 and has since used its Self-Defense forces in numerous UN missions around the world. Furthermore, Japan remains one of the most peaceful nations in the world 70 years after the War.
Works Cited
Guthrie-Shimizu, Sayuri. “Japan, the United States, and the Cold War, 1945–1960,” In The Cambridge History of the Cold War, eds. Melvyn P. Leffler and Odd Arne Westad,:.. Cambridge: Cambridge University Press, 2010: 244–265
Passmore Elkinton, J. 2. “Rearming Japan Queried: Giving Her Real Independence and Withdrawing Troops Recommended.” New York Times, Nov 8. 1952: 16
“For Japan’s Defense”. New York Times , Sep 10, 1951: 20
Japan, 1971
After World War II, Japan’s economy grew at an unprecedented rate, becoming the world’s second-largest economy by the end of the Cold War. A long history of well-informed decisions by the Japanese and United States drove this change. Perhaps the most revolutionary change, however, was the decision to move the Yen to a floating exchange rate on August 15th, 1971. The Yen switch to a floating exchange is an economic decision that was entirely dependent on Cold War events such as the Bretton Woods conference and the Vietnam War.
In July 1944, delegates from 44 countries met in Bretton Woods, New Hampshire. They agreed on the Bretton Woods system which established an adjustable pegged system, based on gold, to value international currencies. The Japanese Yen for instance was pegged at a set rate of 360 per $1. The deal reflected the United State’s economic global dominance after the war. Nations used the U.S. dollar as a reserve currency rather than scarce gold and the value of the dollar single-handedly moved world economies. As long as the United States. was able to maintain price stability, the adjustable peg system worked. The Vietnam War made this impossible, however. As government spending under the Johnson and Nixon Administrations skyrocketed, so did inflation, and the U.S. dollar became overvalued compared to gold. By the 1970s, foreign nationals held billions of dollars and began redeeming them for American gold. In August of 1971, Nixon instituted the first price controls since World War II and closed the gold window, stopping the exchange of dollars for gold. Two years later the fixed exchange rate system ended and was replaced with a floating exchange rate system.
For decades, Japan was a passive acceptor of the Bretton Woods system, but in 1971, currencies like the Yen followed the dollar and became undervalued as well. Japan’s imports were far too expensive, and their exports were too cheap. Without a fundamental change to the FOREX market, Japan faced crippling deficits putting 30 years of economic growth at risk. In August of 1971, President Nixon announced the end of the classical gold standard at Camp David, effectively making the Yen, and other world currencies, floating. The shift to a floating exchange rate propelled Japan to a new level of international relevance. The internationalization of the Yen essentially forced Japan to integrate its capital markets with the world economy, thus establishing itself as a major player on the world stage. In 1975, Japan’s influence became clear when it joined the Group of Seven.
It was widely recognized that having a floating exchange rate allowed nations like Japan to grow their status in the world economy. In his November 1971 article Japan in Europe, Clyde Farnsworth notes that Japan “has acquired such dimensions that its influence in the world economy is anything but negligible.” Farnsworth’s article proved to be correct. Japan has continued to integrate into the world economy, and brands like Sony and Toyota dominate their respective global markets.
Bibliography
Bordo, M. D. (2020). The imbalances of the bretton woods system 1965 to 1973: U.S. inflation, the elephant in the room. Open Economies Review, 31(1), 195-211. doi:http://dx.doi.org/10.1007/s11079-019-09574-2
Belke, Ansgar, and Ulrich Volz. “The Yen Exchange Rate and the Hollowing Out of the Japanese Industry.” Open economies review 31, no. 2 (2020): 371–406.
Frances McCall Rosenbluth, and James Sundquist. “Japan and the Collapse of Bretton Woods.” In Bretton Woods Agreements, 236. Yale University Press, 2019.
By CLYDE H. FARNSWORTH. (1971, Nov 28). Japan in europe: Export efforts progress slowly in Europe. New York Times (1923-Current File) Retrieved from http://newman.richmond.edu:2048/login?url=https://www.proquest.com/historical-newspapers/japan-europe/docview/119146451/se-2?accountid=14731