Money Politics and the Transformation of the Japanese Political System Philipp A. Schuller St. Antony's College D.Phil. Social Studies (Politics) Trinity 1998 Abstract In 1994, in response to repeated scandals of political corruption, or of money politics as it was also called, the Japanese Diet passed a comprehensive package of political reform laws. By placing the focus on a change in the election system, this package suggested that money politics was primarily a problem of the incentive structures that the political system provided. This dissertation is based on the premise that political reforms and the debate that produces them are a good indicator of how the Japanese themselves evaluated money politics and what they hoped to change about it. The dissertation shows that both money politics and the political reforms designed to address it have not been a recent phenomenon but have existed more or less continuously for at least 70 years. It analyses the history of three case studies of political reforms that were aimed partly or exclusively at changing money politics: first a political education initiative, second the establishment and amendment of the law controlling political finance and fund-raising, and finally the attempted creation of a law on defining and regulating political parties. These three case studies suggest that reformers saw money politics predominantly as a function of political culture, not of the electoral system. Specifically, they placed this political culture in an evolutionary process of modernisation which sometimes did, sometimes did not resemble Westernisation. They were concerned especially about the role of organisations such as labour unions, companies and political parties as mediators in the relationship between the Japanese voters and the state. Finally, the fact that a changing coalitions of politicians, bureaucrats and independent activists supported the modernisation of the political culture suggests that this interpretation of money politics was widely shared. Money Politics and the Transformation of the Japanese Political System Philipp A. Schuller St. Antony's College D.Phil. Social Studies (Politics) Trinity 1998 Table of Contents GENERAL 1. INTRODUCTION 1 1.1. CORRUPT POLITICS IN JAPAN 1 1.2. JAPAN AND THE WEST 3 1.3. IMMOBILISM AND CHANGE 6 2. CONCEPTUAL APPROACHES 12 2.1. MODERN AND TRADITIONAL 13 2.2. PUBLIC AND PRIVATE: STATE OR SOCIETY 19 2.3. TRANSFORMATION OF POLITICAL PARTIES 28 2.4. SUMMARY: CORRUPTION IN THE PROCESS OF MODERNISATION 39 3. THE POLITICAL CULTURE OF MONEY POLITICS 40 3.1. MONEY POLITICS 40 3.2. "STRUCTURALCORRUPTION" 44 4. THESIS 47 4.1. DESIGN 50 4.2. ACTORS, OBSERVERS, AND DISCUSSANTS 52 4.3. THE HISTORY OF REFORM: THREE CASE STUDIES 54 FIRST CASE STUDY: ELECTION PURIFICATION_____________________57 1. THE IDEOLOGICAL UNDERPINNINGS OF ELECTION PURIFICATION IN TAISHO POLITICS 57 1.1. MONEY POLITICS, ELECTION REFORM, AND THE PARTIES 5 8 1.2. THE ROOTS OF ELECTION PURIFICATION 68 1.3. THE CHANGING PERCEPTION OF POLITICAL PARTIES 75 2. ELECTION PURIFICATION AS A NATIONAL MOBILISATION EFFORT UNDER MILITARISM 78 2.1. THE INSTITUTIONALISATION OF ELECTION PURIFICATION 78 2.2. THE POLITICAL ENVIRONMENT 81 2.3. THE QUICK DEMISE OF ELECTION PURIFICATION 87 2.4. AN ASSESSMENT OF THE PRE-WAR MOVEMENT 95 3. THE POST-WAR RECONSTRUCTION OF ELECTION PURIFICATION 98 3.1. THE LEADERSHIP OF THE FORMER BUREAUCRAT MAEDA TAMON 100 3.2. TRANS-WAR CONTINUITIES AND DISCONTINUITIES 110 4. THE ORGANISATION OF ELECTION PURIFICATION AND THE ROLE OF THE STATE 115 4.1. THE CHANGING ORGANISATION OF ELECTION PURIFICATION 115 4.2. CONCEIVED BY ELITES, ORGANISED BY BUREAUCRATS, RUN BY THE STATE? 123 4.3. CONSOLIDATION & RETRENCHMENT IN THE 1970s AND 1980s 127 5. CONCLUSIONS: FAILURE TO REFORM MONEY POLITICS THROUGH EDUCATION 130 SECOND CASE STUDY: POLITICAL FINANCE REGULATION___________136 1. ESTABLISHMENT OF AN ANTI-CORRUPTION LAW 136 1.1. AMERICAN INFLUENCE 13 6 1.2. WHY THE KISEIHO LACKED EFFECTIVENESS 142 1.3. THE SHIPBUILDING SCANDAL 144 2. BUREAUCRAT-LED REFORM 147 2.1. THE FIRST SHINGIKAI, 1961 147 2.2. THE CONTINUATION OF REFORM 157 3. SUPREME COURT: ARITAKE BENZABURO vs. YAWATA STEEL 168 3.1. DO ORGANISATIONS HAVE POLITICAL RIGHTS? 170 3.2. PARTIES ARE IN THE PUBLIC INTEREST 172 3.3. EFFECTS OF THE YAWATA CASE 173 4. THE ERA OF PUBLIC PRESSURE LED-REFORMS 174 4.1. TANAKA KAKUEI'S MONEY POLITICS: CATALYST FOR REFORMS 174 4.2. RECRUIT: REFORMS WITHOUT THE LDP IN POWER 184 4.3. THE CONTEXT OF THE HOSOKAWA REFORMS 189 5. CONCLUSIONS AND INTERPRETATIONS 194 5.1. MONEY POLITICS AS A PROBLEM OF POLITICAL CULTURE 194 5.2. THE FIRST STRAND OF THE DEBATE: CORPORATE CONTRIBUTIONS 195 5.3. THE SECOND STRAND OF THE DEBATE: POLITICAL PARTIES 197 THIRD CASE STUDY: PARTY LAW_____________________________200 1. INTRODUCTION: PARTY SUBSIDY REQUIRES A PARTY LAW 200 2. PRE-WAR AND OCCUPATION 202 2.1. PRE-WAR HISTORY 202 2.2. PARTY PROLIFERATION AFTER THE WAR 204 2.3. BUREAUCRAT-LED INITIATIVE 205 2.4. PARTY-LED INITIATIVE 209 3. SUBSEQUENT PARTY LAW PROPOSALS 214 3.1. SHINGIKAI OF THE 1960s 215 3.2. YOSHIMURA PROPOSAL 219 3.3. POST-RECRUIT 222 4. THE INTRODUCTION OF THE PUBLIC SUBSIDY 226 4.1. SHINGIKAI MOTIVATIONS: MODERNISE PARTIES AND ELEVATE THEM 226 4.2. LDP NOT BUREAUCRATS DOMINATE REFORM PROCESS 229 4.3. LDP MOTIVATION: SECURING FINANCIAL CERTAINTY 230 4.4. LDP CRITICS: DOMINATING PARTY EXECUTIVE 232 4.5. MORE LDP CRITICS: DEPENDENCE ON THE STATE 232 4.6. LEFTIST CRITICS: DEPENDENCE ON THE STATE 233 4.7. MORE LEFTIST CRITICS: CONSTITUTIONAL FREEDOMS 235 4.8. THE ACADEMIC DEBATE: PUBLIC ROLE OF PARTIES 236 5. CONCLUSION: POLITICAL PARTIES AND THE PUBLIC SUBSIDY 238 CONCLUSIONS_________________________________________242 ASSESSMENT OF THE APPROACH 242 MODERNISATION OF POLITICAL CULTURE AS WESTERNISATION 243 INTEREST GROUPS AND POLITICAL PARTIES 245 CHANGING COALITIONS OF REFORM 247 THE SIGNIFICANCE OF THE HOSOKAWA REFORMS 248 BIBLIOGRAPHY 251 General I. Introduction 1.1. Corrupt politics in Japan The politico-economic system of Japan is inherently corrupt. The combination of capitalists, power brokers and government leaders known as 'Japan, Inc.,1 [...] cannot by its nature be anything but corrupt (William Safire quoted in MacDougall 1988, p. 193). From the Recruit scandal in 1988, until the advent of the first government in 38 years without participation of the Liberal Democratic Party (LDP) in 1993, Japan was rocked by a continuous string of political corruption scandals. The industries found to be in collusion with the political world ran the full gamut from magazine publishing and land development in Hokkaido to parcel delivery and general construction. The colourful stories included insider trading, suicides by loyal retainers, billion-Yen loans to the underworld, and stashes of gold in a senior politician's strong box. To the exasperation of press and public, the political world seemed to be ubiquitously involved. During the Recruit scandal it was difficult to find a member of the national parliament, the Diet, who had not been paid off. Public approval ratings for the government plummeted, and the disaffection with politics increased to over half of the electorate. As a consequence, while scandals unfolded government was almost immobilised. The Prime Minister was forced out of office, another was installed only to resign within a few weeks to be followed by a third, whose only asset was that he was so poorly connected that he had not been tainted by scandals; and even the fourth, two years later, could not manage the political reforms demanded by the public. Only after the LDP was pushed from power by the defection of one of its young hopefuls, Ozawa Ichiro, did political reform become a reality. In some ways, events of this kind were not unique to Japan. At about the same time, decades of corruption in Italy resulted in an almost complete exchange of the political elite. US foreign policy towards Central America appears to have been based on secret arms and money deals. The lack of transparency in British Conservative party finances and the attendant suspicion of the venality of members of parliament have compromised the British reputation for clean politics (see among others Cook 1995). Huge government spending in Germany as a result of the reunification of the country have also financed misappropriations by and kickbacks to many civil servants. Was political corruption not just the scourge of third world countries, but of the industrialised countries as well? Or did the perception of corruption in these societies have more to do with afm de siecle sentiment than with actual facts and occurrences? One is tempted to investigate the general qualities of this phenomenon in industrialised societies. Indeed, at the very same time, leaders from newly developed Asian countries were more frequently making self-assured pronouncements that the West was mired in corruption and decline. They said that the twenty-first century would be the century of Asian values. Unperturbed by events in Japan, and benignly overlooking nepotism in Indonesia and China, and the secret slush funds in Korea, Malaysia's Prime Minister Mahatir Mohammad, for example, ridiculed the West's "decadence and corruption" and emphasised the need for Asia to withstand such temptations. His exhortations struck a chord with the Western media. The supposed inferiority of Western individualism to Asian family and group orientation was in Europe more so than in the US the subject of more than a few articles. Unfortunately, these generalisations leave the student of Japan in a difficult position. Should Japan and its political system be judged in the context of Western industrialised societies or in the context of an "Asian cultural sphere"? Today, this issue is made more complex by the hypothesis that all cultural distinctions are becoming less meaningful in a world that is ever more global. Globalisation has made economic practices and standards, from production methods to trade rules, increasingly universal at the same time as the waning power of ideologies has made these economic factors more critical in political terms. However, the relevance of globalisation to aspects of social organisation in different parts of the world has been questioned. Perhaps the most vocal of these "revisionists" of globalisation is Samuel Huntington, whose Clash of Civilisations foresees an era when greater economic power around the world leads not to social and political convergence but on the contrary to a greater divergence between the individualism of the West and the more communal patterns of organisation, such as those apparent in Confucian Asia (1996). This is one reason why corruption in Japan is an interesting subject for investigation: 1.2. Japan and the West Whether Japan is destined for convergence with the West, is a question that has not only dogged nearly all social science research on Japan, but also, for over a century the Japanese themselves. Japan is unusual because it has been successful in combining traditional cultural, and especially social, elements with Western technology and science, a combination that has tended to lead to contradictions in late imperial China or in the Islamic world. According to Robert Ward, "[T]he history of the modernisation of Japan [...] demonstrates in many ways not only the ability of'modern1 institutions and practices to coexist with 'traditional' ones for substantial periods of time, but also the manner in which 'traditional' attitudes and practices can be of great positive value to the modernisation process," (Ward 1963, p. 579). The slogan wakonyosai (meaning Japanese morals and western technology, or more loosely Japanese culture and Western technology) was coined by the late Tokugawa philosopher Sakuma Shozan to describe a synthesis between the two. This synthesis was not without problems. Kawamura Nozomu doubted that Japanese culture could prove resilient in the face of the Western values; according to him modernisation must contain universal values. Wakon yosai would ultimately lead to yokon yosai where Western technology also determines the culture (1988, p. 271). Japan has repeatedly oscillated between learning from and identifying with the West and returning to its own "traditions". Fukuzawa Yukichi, the great Meiji intellectual and populariser of Western thought in Japan thought that Japan should learn from the West. The initial enthusiasm for all things Western turned into the embrace of a Japanese identity, exemplified by the slogan fukoku kyohei ("rich country, strong army"). Modernisation generally had positive overtones while Westernisation was received with some ambivalence. Thus the 1942 conference kindai no chokoku ("Overcoming the Modern") at the height of the Pacific War was really about overcoming the West because, after all, the military mobilisation of the entire nation during the 1930s was a modernisation project without equal. Ruth Benedict, the American anthropologist who authored the famous Chrysanthemum and the Sword, was used as support for the claim that defeat in war was a great benefit for Japan because it opened the way to democracy (Lummis 1982, p. 77). This logic was not universally accepted. Not all wished to be placed in the dilemma created by the stipulation "that those who seriously seek freedom and democracy must turn away from the national tradition and look to the West, and particularly to the US; whereas those who seriously seek to preserve Japan's national tradition and identity must adopt the anti-democratic ideology of the militaristic period," (ibid.). After the war modernisation was often interpreted as the faithful application of the precepts of democracy and enlightenment. Social reformers and American occupiers who were searching for democratic, rather than just modern, traditions in Japan's history found them in the civil rights movements of the 1870s and 1880s as well as in the period of the Taisho Democracy (Gluck 1996, p. 70). However, since even these traditions can still be traced to a contact with the West, historians in particular have taken up the challenge to show that the West was not the only source of modernisation. They have convincingly argued that the modernisation of the Meiji Period was not entirely exogenous but relied in good measure on technological and social developments that had already begun during the Tokugawa regime and that were almost entirely closed to influence from the West (See Arnason 1995, p. 19). At least from the 1970s onwards, the Japanese economic miracle started to cause two- way traffic on what had previously been a one-way road. Ronald Dore and Ezra Vogel are two prominent proponents of the argument that the West, too, could learn from Japan. Initially the influences from Japan came in the areas of art, design, and Zen, but from the 1970s, greater attention was given to production methods, management practices and industrial policy. "On several key fronts, it is Western nations that must follow in [Japan's] wake, not the other way around," (Williams 1996, p. 110). After more than a century of modernising primarily by modelling itself on the Western European example or being modelled on the American example, Japan finally reached the point where it had apparently overcome the model, having leapfrogged out in front and become the social system that newcomers would emulate. "Japan has come to be seen as the most modern society on earth, and as a beacon lighting the path which others are destined to follow. In a remarkable paradigm shift the scholarly consensus has moved from seeing Japan as backward, semi-feudal and undemocratic to seeing it as post-industrial, super-efficient and 'more Western than the West'," (McCormack & Sugimoto 1988, p. 1). After over a hundred years spent catching up with the West, this new status as the first post-modern society was soon used for political purposes. From the 1980s onwards, academics and political commentators declared that Japan was throwing off the Western yoke of modernisation. Prime Minister Ohira convened a study group that concluded: "Post-Meiji Japan has defined itself as being backward and underdeveloped in all respects and made every attempt to westernise, modernise and industrialise by patterning itself on Western advanced industrialised countries. [...] However, new demands (i.e. 'demands for culture') are now being called for in pursuit of better conditions in the future," (Bunka no Jidai Kenkyu Gurupu 1980, p. 5). OA hira's study group's transcendence of modernity was an expression of "a deep-seated Japanese desire to define historical progress in ways that reduce its Western and European focus," (McCormack, Sugimoto 1988, p. 13).1 Thus political corruption is one aspect of a larger debate that has continued in Japan and about Japan for a long time and which has framed nearly all aspects of its political system. The first dimension of this debate, discussed above, is the ambivalence about whether to emulate or overcome the example of Western nations. The second dimension of this debate, to be discussed next, is the conflict between the immobilism of political culture created by tradition and institutions and the desire to effect change in politics through creating new structural incentives. Both dimensions are related in that they are often associated with one anther. In the majority of instances, the emulation of Western models has been seen as a change from the "Japanese" way of doing things. Immobilism was thus associated with traditional values. Because so many political institutions had been adopted from Europe and the United States since the Meiji Restoration, the opposite could sometimes also be the case. Change in these cases was the return to Japanese values and the rejection of Western imports. 1 The "Japan is postmodern" thesis has met with a variety of reactions."[...] the Right is sympathetic to postmodern discourse because it suggests the unity of the past and present, the centre tolerates it because it is compatible with and in fact promotes hedonistic consumerism, while the Left opposes it for much the same reasons as Habermas opposes it that it deflects attention from the fact that Japanese society has indeed not yet achieved modernity," (Clammer 1995, p. 27). 8