It is good to see Prof. Sachs draw attention to the importance of Development as an alternative to terrorism. Remember Pol Pot!

LEARNING FROM THE ORIGIN OF THE EAST ASIA ECONOMIC MIRACLE

A New Archive of Papers from General MacArthur’s “Civil Communications Section”.

Let me draw attention to an important addition to the Drucker Institute archives and website in Claremont, CA that goes a long way to explaining the origin of the postwar WWII Asian Economic Miracle in Occupation Japan.

The early months that followed the Sept. 2nd 1945 signing of the Instrument of Surrender on the battleship Missouri, gave rise to optimism in Washington and Japan. Japan’s first postwar election on April 10th, 1946 saw crowds outside the Dai Ichi building, MacArthur’s Headquarters, applauding him. Two years later, the winter of 1948/49 told a different story with the Japanese disappointed and Washington very concerned at developments in Japan and elsewhere. East Europe had been taken over by Soviet Russia and Mao was consolidating his power in China. A General Strike was avoided only by MacArthur putting his personal authority on the line. Trouble through industry was accompanied by acts of sabotage on the Japanese railways counted by the thousand. Passengers were killed and the body of its president was found on the line. Events did not promise the happy Japan or the smooth running Japanese railways we now know!

Washington had come to realize how much investment was needed at home making it impossible to provide a Marshall Plan for Japan: President Truman instead offered the famous Point 4 of his Inaugural speech on January, 20th 1949:

"We must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth … The material resources which we can afford to use for assistance of other(s) (are) limited. But our imponderable resources in technical knowledge are constantly growing and are inexhaustible.”

What then happened has been well reported in the worlds of industry and manufacturing but not elsewhere. The need to communicate with the Japanese required the early establishment of a highly competent Civil Communications Section (CCS), in MacArthur’s Tokyo Head Quarters with an outstanding team of US Electrical Communications engineers, mostly from ATT/Bell Labs. They could not have been spared before the end of the War. Young Homer Sarasohn was a member of the brilliant Rad Lab at MIT. Charles Protzman (“Uncle Charlie”) had run Western Electric’s largest cable factories (and unlike his wartime Japanese counterparts, was noted for the quality of his product!) while Frank Polkinghorn had been world wide head of the never cracked, US Army secret coding system, so secret that even its name could not be mentioned till 1976.

Sarasohn told me that as Head of CCS Industrial Division he sent word to MacArthur that the engineers had between them “the imponderable resources” promised by Truman and should share them. There was opposition from economists on MacArthur’s staff that the US would be giving away too much. Faced with such high level disagreement, MacArthur organized what was called a “floor show” outside his sixth floor office where each side had 20 minutes to present their case. Sarasohn never forgot MacArthur sitting silent and expressionless through both presentations, walking to the door, still in silence, turning, pointing the stem of his corn-cob at him and saying, “Go! Do it!”. We all know they did: the companies they worked with became the Japanese Electronics Industry! Fortunately, the CCS engineers had been made temporary US Civil Servants and all important decisions were recorded on multiple layers of onion skin. They gave copies to me and I am pleased to report, the Drucker Institute has done a fine job setting them up in an independent archive with much now on the Web. Groups interested in economic development should now work to draw lessons for hopeful regions in the world including the Middle East. They will find a substantial literature now exists on CCS in Japanese and English.

