These concerns did not stop on the American shores. What did the planners assume about the Japanese economy, and did they drop the ball without thinking more about the prospect that their wartime ally China would one day challenge the United States? , edited for clarity and length. DANIEL MOSS: Describe the economic situation in your country and how it shaped Washington’s decision in 1945.
MARC GALLICCHIO: From the beginning of the year, with the imminent defeat of Germany, people began to regard the war as a thing of the past. They were not only economic leaders. The economy would not be ready for sudden peace in the United States. Manufacturers were still in wartime mode, producing products primarily for the military. There were restrictions on consumer activity, there were food rationings, and price limits were imposed. There was fear that if the war ended abruptly, all these soldiers and sailors would return home and the domestic economy would not be in a shape to absorb them into the workforce.
There was growing dissatisfaction among cadres and legislators that the military was absorbing too many men and supplies – you started to see it in the newspapers. More and more I wondered why it took so much to fight only Japan when one day we were fighting both Japan and Germany. The concern was that all these wartime jobs and contracts had ended and the business was not ready to move to domestic production.
There was a great fear of unemployment. It turned out to be less of a problem than expected, but access to consumer goods and concerns about inflation were real. It warned that without it, there would be a shortage. To that end, they needed personnel released from the reluctant military. Moving people and goods across the United States became increasingly difficult after four years. There was a lot of track maintenance that had to be done. Therefore, there were petitions for the early release of people from various occupations, but the military did not want it.
DM: Given concerns about the development of the atomic bomb and the implications of Russia’s entry into the war against Japan, what priority did Truman give to these economic pressures?
MG: Before Truman went to the war’s final summit at Potsdam in July, he sided with the military. However, Treasury Secretary Fred Vinson, in whom Truman had great confidence, opposed the Army’s position. It is not clear what Truman would have been doing had he not had the bomb.
Truman received an unusual telegram from Vinson in Potsdam that serious danger would ensue unless the United States moved more forcefully toward reconversion. Vinson begins to suggest that he is certain the army does not need all these resources. . The military opposed that view, believing it would lead to a protracted war, lose interest in the American public, and the Japanese would use it to their advantage. was an amendment to unconditional surrender. He didn’t say it outright, but that’s probably the result.
At Potsdam, Truman learned that the atomic bomb could be deployed months before the planned invasion of Japan, possibly before the Russians invaded. The first reason he used it was to result in Japan’s defeat, but he may have seen the possibility of the war being over before Russia advanced too far into Northeast Asia as a bonus.
The bomb made the invasion unnecessary. It also meant that we could deal with this slow-moving crisis in the US economy.
DM: There was a heated discussion in hopes of changing the call for unconditional surrender and persuading Japan to give up its arms. What compromises, if any, were made?
MG: The idea that the Imperial institutions would remain was not reflected in the statement issued at Potsdam. But there were liberal peace ideas that would allow the return of soldiers to Japan, re-enlist the country in the international community, and give it access to raw materials abroad. Japan will be integrated into the liberal postwar international economy. Convince the peace-loving nations of the world that they are no longer a threat so they can have governments of their own choosing. Reading between the lines, we can say that if the Emperor stops things immediately, he will be the one who can lead Japan to the state depicted in Potsdam.
DM: The fight against COVID-19 is often expressed in terms of martial arts. Did the US have the equivalent of a wartime economy at the peak of the pandemic?
MG: There was no broad regulation of the economy as a whole. Bars, restaurants and airlines were heavily restricted. There was state support, but it was not as ubiquitous in people’s lives as it was during World War II. What did not surprise me in the slightest was the enormous demand for the lifting of restrictions on social life and the economy.
We see the collective memory of World War II as a time of solidarity and willingness for everyone to make sacrifices, in contrast to later wars such as Vietnam, where there was much controversy. But by 1945, that was not the case. There was a great deal of anger and dissent, especially directed at the military.
DM: Did U.S. officials give much thought to what the Japanese economy would look like after the war?
MG: There was a clash between the New Dealers and the business-friendly planners and Truman advisors. People like Henry Stimson, Secretary of War, and Joseph Grew, Under Secretary of State, saw Japan as having done a great job of industrialization since the late 19th century. They did not see the monarchy as an inherently dangerous institution as far as the United States was concerned. All you had to do was wipe out the militarists. They feared that if you abolished the emperor and embarked on deep and far-reaching reforms, it would sow the seeds of revolution and communism.
Then there were the new dealers who saw the problem deeper. They felt that in the process of modernization, Japan had never transcended feudal structures. They believed that the position of emperor would consolidate the power of the military and big business. In order to realize a truly democratic Japan, it is necessary to abolish the emperor, abolish large trusts, and democratize Japan socially and economically. Emancipate women, allow unions to organize properly, etc.
Many critics of unconditional surrender said after the war that Truman should have told Japan he could keep the emperor. However, it is important to note that the emperor did not have the same powers as if Truman had promised to keep Hirohito on the throne after the unconditional surrender. has enabled the United States to implement many important reforms. One of the biggest reforms was a new constitution that reduced the Emperor to a symbolic figure that Grew and Stimson erroneously claimed had always been.
DM: What would they think in 1945 if they were told that China would emerge as the United States’ main rival?
MG: For quite some time, there wasn’t much hope that China would play a leading role in the Far East. That was part of the reason people like Stimson and Grew saw the urgent need to rebuild Japan to become a force for stability. I didn’t expect it to show up.
DM: Was it a mistake not to pay enough attention to what happened to China?
MG: The Chinese thing is pushed off the page. The U.S. military’s mentality was sequential in that the goal was to defeat Japan first, then look out over the horizon and see what was there. The view was, “Look, with Japan, we could keep the rest of the world out of the Pacific, and we could protect the United States no matter what happened in China.”
People wanted to take the boys home. America’s power was at a high tide, but the tide was beginning to run out. The staying power was not there.
Bloomberg Opinion Details:
• 1947, 1970s, 2008.Choose Which, Inflationist: Daniel Moss
• What the World Misunderstood About Shinzo Abe: Gearroid Lady
• World War I history is wrong and skews our view of China: Hal Brands
This column does not necessarily reflect the opinions of the editorial board or Bloomberg LP and its owners.
Daniel Moss is the Bloomberg Opinion’s Asian Economics Columnist. Previously, he was the economics editor for Bloomberg News.
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