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The Role Of Zaibatsu.

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Introduction

The Role Of Zaibatsu Zaibatsu, known as the 'money clique', played an important role in the economic modernization of the Japan. The zaibatsu were a group of certain Japanese business houses with extremely widespread interests. The top four are always listed, in order of their size, as Mitsui, Mitsubishi, Sumitomo and Yasuda. In addition, Kawasaki, Asano, Okura, Shibusawa, were also great zaibatsu. The scarcity of capital in early Meiji Japan, the government's willingness to give financial aid and extraordinary privileges to entrepreneurs who gave promise of building up the economy and the sale in the 1880s of government industries to the few in cheap prices- all these factors contributed to enable a relatively small group of business leaders to gain control over a large population of Japan's new industrial economy. The zaibatsu were a group of men with exceptional talent, flexibility, and daring to have emerged so successfully from the economic confusion of the preceding years. ...read more.

Middle

The zaibatsu were a group of business enterprises rather than a single great company. The combine could be a horizontal one and a vertical one. Horizontally, it spread through a variety of manufacturing or mining industries. Vertically, it spread through the different stages of activity concerned with a product. The rise of the zaibatsu was mainly due to their abundant financial resources. They provided capital and they were able to hire skilled labour and acquire technical knowledge. Moreover, they also got the government selling enterprises to them at a very low price. The government's willingness to give financial aid and extraordinary privileges, e.g subsidies and contracts also helped them a lot. The zaibatsu dominated economic development after 1881. As the new Meiji governments turned to these families for financial help and commercial operations, the zaibatsu became agents for the execution of the government's economic policy. The zaibatsu played an important part in financing the foreign wars in which Japan was engaged and in the development of the colonies. ...read more.

Conclusion

If ownership of the zaibatsu firms had been spread among a wide segment of the population, their profits might have been largely absorbed in modest rises in living standards for a large number of families. Therefore the bulk of the profit was reinvested in the expansion of the combines and could be used as risk capital to pioneer new fields. On the other hand, the zaibatsu system offers career open to talent. The zaibatsu were marked by hierarchy, authority and unquestioning personal loyalties. However, within their business framework, ability, efficiency and education counted for a great deal. Therefore they probably offered a career more open to talent than any other part of the Japanese society. As the zaibatsu promoted rapid economic growth, his growth in turn strengthened the middle class. As a whole, the zaibatsu actually played an important role in economic modernization. The flourishing strategic and light industry showed the success of zaibatsu in further developing in these areas. The whole economic history of Japan down to World War two proves that the zaibatsu system must have worked with considerable economic efficiency. ...read more.

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