EIGHT MIDC's Downfall and Ayukawa's Activities During the Pacific War

On January 18, 1939, with an eye on the growing support for economic regu~ lation (toseishugi) and totalitarianism, Ayukawa told Japanese college stu~ dents enrolled in engineering programs and interested in finding a job in Manchukuo (where Japanese civilians and bureaucrats generally earned more than their counterparts in Japan) that Manchukuo espoused totali~ tarianism-"the regulation of the whole [system]" (zentai no tosei)-as a goal. For Ayukawa, totalitarianism was a system in which the economy and individualism were regulated for the well~being of the entire society. Ayu~ kawa indicated that he disliked the autarkic aspects of this trend, but he told the students that whether the trend was good or bad, Japan would increas~ ingly resemble Manchukuo. He also said, however, that totalitarianism might lead to bankruptcy some day. In the meantime, his managerial experi~ ence had only very limited applicability to Manchukuo's economy. The les~ sons of what he described "as the previous period of individualism and eco~ nomic liberalism" were no longer useful in Manchukuo. Students interested in building a career in Manchukuo had to prepare themselves psychologi~ cally for the fact that the individualism and economic liberalism that they had learned in school did not exist in Manchukuo. If they wanted to base 172 MIDC and Ayukawa During the Pacific War their careers on these outmoded ideas, they should remain m Japan and cling to what Ayukawa described as the segment in that society that still had them.1 This chapter examines Ayukawa's fruitless battles between 1938 and 1945 to limit state intervention in the economy and to maintain MIDC's central role in Manchukuo as well as the failure of Manchukuo's economic pro~ grams as illustrated by the attempts to establish automobile and aircraft in~ dustries. Until the end of World War II, Ayukawa continued to argue for a business~led approach to running the economies of Manchukuo and Japan.

Changing Tides in Manchukuo's Economy

In the late 1930s, both Japan and Manchukuo pursued conflicting economic policies toward each other and toward the United States. They wanted more economic interdependence within the Japanese empire, as well as stronger relations with the United States, ideas espoused by Ayukawa. These ideas increasingly fell out of favor, however, and wartime imperatives bolstered economic regulation. Ayukawa's activities and both the original and the revised Five~ Year Plan for Manchukuo assumed (erroneously) that the new state could easily ac~ quire material resources, capital, labor, and technology from Japan and the West. Furthermore, the original plan, despite its goal of creating a self~ sufficient military industry in Manchukuo, did not include a section on building a machine tools industry. In fact, the two plans incorporated Ayu~ kawa's major assumption that machine tools would be imported from Japan and Western countries, mainly America and Germany. (Although there~ vised plan did include a section on establishing a machine tools industry, it was not considered seriously until after the outbreak of the Pacific War.) Both Japan and Manchukuo depended heavily on sophisticated techno!~ ogy, including machine tools, from Europe and the United States, and Ja~ pan's imports of machine tools from Western countries, mainly Germany and America, increased steadily after 1931, jumping from ¥153.1 million in 1936 to ¥242.2 million in 1937, and remained high until 1940. Japan depended more on American, rather than German, machine tools. Its imports of German machine tools dropped significantly after 1939 because of the war in Europe, and, of course, its imports of American machine tools ceased in 1941 with the