Corporatist Governance and Path Dependence in the Making of Industrial Peace a Historical Review on Japanese Corporatism

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Corporatist Governance and Path Dependence in the Making of Industrial Peace a Historical Review on Japanese Corporatism CORPORATIST GOVERNANCE AND PATH DEPENDENCE IN THE MAKING OF INDUSTRIAL PEACE A HISTORICAL REVIEW ON JAPANESE CORPORATISM by Taekyoon Kim A dissertatin submitted to Johns Hopkins University in conformity with the requirements for the degree of Doctor of Philosophy Baltimore, Maryland November, 2015 © 2015 Taekyoon Kim All Rights Reserved Abstract This thesis analyzes the historical development of the political economy of industrial peace formations in the context of modern Japan by taking the path-dependence perspective as a main analytical framework. The overall pattern of making industrial peace in modern Japan is described as a historical and social construct of path-dependent sequences embedded primarily in economic concessions at the enterprise level. The overriding path of Japanese labor-management relations has been shaped and reshaped centering on micro-corporatism by which labor’s purposive interests on fronts of job security and occupational welfare are reconciled in return for its cooperation with employers at the plant level. The Japanese pattern of corporatist governance can be identified as the ‘trodden path’ that takes shape through the increasing returns to the elongation of company unionism, which has been repeated by other actors of that spontaneously chosen path. Nevertheless, such a trodden trail has been transformed into the ‘branching pathway’ meaning that the path of corporatist governance has been moving beyond micro-corporatism and shaping alternative paths along with the power balance among actors at historical junctures. At the center of such a peaceful management of industrial relations is the persistent presence of economic concessions characterized by the three modes of Japan’s employment security at the enterprise level: lifetime employment, wages with seniority, and enterprise unionism. Such a conventional three pillars interpretation leaves us the following three puzzling inquiries which have not been hitherto seriously investigated: (i) ii what are the social origins of the Japanese corporatism and to what extent did its initial sets influence the later path formation of corporatist governance?; (ii) why and how have increasing returns been emerging constantly in the form of economic concessions which generate enterprise-level stability in labor-management relations?; and (iii) how can we understand the role of labor, other than strong presence of capital or its coalition with government, in maintaining industrial peace? Answering these questions lies in a more comprehensive attempt to uncover the secrecy of Japanese labor-management relations and its underlying mechanism of corporatist governance beyond the traditional blind belief in harmonious and paternalistic relations between labor and capital. Readers: Prof. Charles Doran, Prof. Carla Park Freeman, Prof. Eunjung Lim, Prof. Jae-Jung Suh Advisor: Prof. Kent E. Calder iii Acknowdgement Over the seven years that I have been writing this thesis in earnest, my debts for intellectual stimulation and guidance are legion. At the top of the list stands my most sincere gratitude to my academic supervisor, Professor Kent Calder, who taught me how to interpret and describe the political economy facts in a heuristic manner. Without his teaching, patience and encouragement, I could not have completed all this hard work. It was my great honor for me to have such a great mentor at SAIS. I am also grateful to Professor Francis Fukuyama, Professor Charles Doran, Professor Carla Park Freeman, Professor Jae-Jung Suh, Professor Bruce Parrott, and Dr. Eunjung Lim at SAIS. Their valuable comments and guidance were a great stimulant to my work. I hope their comments have been realized in this piece of work. Most of all, Professor Fukuyama (now at Stanford University) gave me great scholarly influences and kind advices for not only polishing my work at the initial stage of the thesis but also providing a great opportunity to publish my article to Journal of Democracy in 2011. My great acknowledgements are also due to Professor Stein Ringen at Oxford University, and Professor Lim Hyun-Chin, Professor Paik Jin-Hyun at Seoul National University for their teaching of sociological and political studies which were fundamental foundations for building new blocks at SAIS. My study in SAIS was financially supported by the Fulbright Scholarship for two years, and US-Korea Initiative Scholarship for another three years. My special thanks for their generosity are due to the late Professor Don Oberdorfer. None of this thesis would have been possible were it not for their financial support. Indeed, SAIS gave me incredible privileges of mingling myself with fellows and students from all over the world. In particular, I owe much to Dooshik Shin, Bo Kong, Sai Ma, Ceng-Chwee Kuik, Booseung Chang, Shin Shoji, Tomicah Tillemann, Levi Tillemann-Dick, Gary Sharkey, Brian Kim, Professor Gregg Brazinsky, James Person, Jacob Kirkegaard, Ellen Psychas, and Ana Lazara Besarabic for their friendship and intellectual exchanges of different ideas. I am also grateful to Jon Youngs for his wonderful administrative supports and timely reminders regarding the process of my thesis. As always, my wholehearted thanks are given to my lovely wife, Hye Jung Hwang and my two adorable sons, who have never stopped encouraging and bringing cheers to me from the first to the last moments of my long thesis journey. I am deeply indebted to their thoughtful care and support for my work in every aspect. Finally, I dedicate this thesis to my mother and late father whom I always respect and love. iv Table of Contents CHAPTER 1. INTRODUCTION: THE POINT OF DEPARTURE ------------------- 1 1.1. Three Pillars for Explaining the Formation of Industrial Peace in Japan -------------- 1 1.2. Gaps in Existing Explanations ------------------------------------------------------------- 19 1.2.1. Cultural Thesis ---------------------------------------------------------------------- 20 1.2.2. Statist Thesis ------------------------------------------------------------------------ 21 1.2.3. Power Coalition Thesis ------------------------------------------------------------ 23 1.2.4. Corporatist Thesis ------------------------------------------------------------------ 24 1.3. Comparative Corporatism: Three Principal Focuses ------------------------------------ 26 CHAPTER 2. RELATING HISTORY AND LABOR POLITICS: ANALYTICAL FRAMEWORK ---------------------------------------------------------------------------------- 31 2.1. Historical Relations of Corporatist Governance: Path-Dependent or Path-Shaping 31 2.2. Structural Relations of Corporatist Governance ----------------------------------------- 40 2.2.1. Sectoral Relations of Corporatist Governance ---------------------------------- 41 2.2.2. Levels of Corporatism: Micro-, Meso-, and Macro-corporatism ------------- 50 2.3. Analytical Frameworks ---------------------------------------------------------------------- 58 CHAPTER 3. STAGE I: ANTECEDENT CONDITIONS – JAPAN IN REVOLUTION AND WARS ------------------------------------------------------------------ 65 3.1. Three Historical Phases of Antecedent Conditions -------------------------------------- 68 3.1.1. The Meiji Restoration -------------------------------------------------------------- 69 3.1.2. Taisho Democracy ------------------------------------------------------------------ 72 3.1.3. Military Fascism -------------------------------------------------------------------- 76 3.2. Constructing the Social Origins of State Corporatism ---------------------------------- 79 3.2.1. The State: Tradition-Inventor for Industrial Peace ----------------------------- 80 3.2.2. Management: A Shadow Collaborator ------------------------------------------- 89 3.2.3. Labor: In Search of Realistic Adaptations --------------------------------------- 94 3.3. The Characteristics of Japan’s State Corporatism -------------------------------------- 103 3.3.1. The State as the Core of Corporatist Governance ----------------------------- 104 3.3.2. Institutionalizing Foundations for Self-enforcing Returns ------------------- 105 3.3.3. The Level of Corporatism: Varieties of Micro-Corporatism ----------------- 109 CHAPTER 4. STAGE II: DEMOCRATIZATION-FROM-ABOVE, ECONOMIC AFFLUENCES, AND EXTERNAL SHOCKS ------------------------------------------- 113 v 4.1. Historical Development of Critical Junctures ------------------------------------------ 117 4.1.1. The American Occupation and the Rollback of Democratization ---------- 117 4.1.2. The High-Growth Period and the Developmental State ---------------------- 123 4.1.3. The Two Oil Crises ---------------------------------------------------------------- 128 4.2. Entrenching Micro-Corporatism as a Linchpin for Industrial Peace ---------------- 134 4.2.1. The State: Dual Strategy for Downscaling Labor Negotiations to the Enterprise Level ---------------------------------------------------------------------------- 135 4.2.2. Management: Stakeholderism, Lean Production, and Institutional Complementarity --------------------------------------------------------------------------- 145 4.2.3. Labor: From Confrontation to Compromise ----------------------------------- 157 4.3. The Path of Corporatism in Postwar Japan: Mainstreaming Micro- Corporatism - 172 4.3.1. The Corporate Governance Structure and Lifetime Employment ---------- 173 4.3.2. Enterprise Unionism as the Institutional Underpinning of Corporatist Governance ----------------------------------------------------------------------------------
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