Polarization under Capitalism from Above

It is natural that where capitalism is promoted under the initiative and the guidance of the state, those enterprises that are compatible with the aims of the state should receive favourable treatment, while those which are not should be discriminated against in a variety of ways. It is important to know the actual nature of the state’s pattern of favouritism towards enterprises, and it is with that purpose in mind that I have chosen to consider here the problem of wage differentials between enterprises. In Japan the problem of wage differentials was first and foremost a problem of wage differentials between state enterprises and private sector enterprises, and not a phenomenon related to the scale of enterprises. Since the government itself established and operated industries which it regarded as essential for the nation, the extent to which state enterprises were made to flourish was very much up to the state. Initially, therefore, wages in state enterprises were considerably higher than those in private firms, due to the state’s will to keeping its prestige. In fact in 1905 the wages of male employees in state enterprises were 27 per cent higher than the wages of their counterparts in large private enterprises with more than a thousand employees. Nine years later, in 1914, the relationship between the two had been reversed. Around this time the status of state enterprises rapidly declined, and by 1920 the state enterprises were on a par with the middling private enterprises, and the differential between state and private enterprise had ceased to be regarded as a problem. The state enterprises had even ceased to hold much attraction as a destination for employment.