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Zaibatsu (財閥,lit. 'assetclique') is aJapanese term referring to industrial and financialvertically integrated businessconglomerates in theEmpire of Japan, whose influence and size allowed control over significant parts of theJapanese economy from theMeiji period toWorld War II. A zaibatsu's general structure included a family-owned holding company on top, and a bank which financed the other, mostly industrial subsidiaries within them. Although the zaibatsu played an important role in the Japanese economy beginning in 1868, they especially increased in number and importance following theRusso-Japanese War,World War I, and Japan's subsequent attempt to conquerEast Asia and thePacific Rim during theinterwar period and World War II. After World War II, they were dissolved by theAllied occupation forces and succeeded by thekeiretsu (groups of banks, manufacturers, suppliers, and distributors). Equivalents to the zaibatsu can still be found in other countries, such as thechaebol conglomerates ofSouth Korea.
The termzaibatsu was coined in 19th century Japan from theSino-Japanese rootszai財 ('asset', 'wealth' fromMiddle Chinesedzoi) andbatsu閥 ('clique', 'group', from Middle Chinesebjot). Although zaibatsu themselves existed from the 19th century, the term was not in common use until afterWorld War I. By definition, the zaibatsu were largefamily-controlledvertical monopolies consisting of aholding company on top, with a wholly-owned banking subsidiary providing finance, and severalindustrial subsidiaries dominating specific sectors of a market, either solely or through a number of subsidiary companies.
The zaibatsu were the heart of economic and industrial activity within theEmpire of Japan, and held great influence over Japanese national and foreign policies. TheRikken Seiyūkaipolitical party was regarded as an extension of theMitsui group, which also had very strong connections with theImperial Japanese Army. Likewise, theRikken Minseitō was connected to theMitsubishi group, as was theImperial Japanese Navy.[citation needed]
The zaibatsu were viewed with suspicion by both the right and left of the political spectrum in the 1920s and 1930s. Although the world was in the throes of a worldwideeconomic depression, the zaibatsu were prospering throughcurrency speculation, maintenance of low labour costs and military procurement. Matters came to a head in theLeague of Blood Incident of March 1932, with the assassination of themanaging director of Mitsui, after which the zaibatsu attempted to improve their public image through increased charity work.[citation needed]
The zaibatsu were at the heart of economic and industrial activity within theEmpire of Japan since Japanese industrialization accelerated during theMeiji era.[1] They held great influence over Japanese national and foreign policies which only increased following the Japanese victory over Russia in theRusso-Japanese War of 1904–1905[1] and Japan's victories over Germany duringWorld War I.[2] During theinterwar period the zaibatsu aided Japanese militarism and benefited from the conquest of East Asia by receiving lucrative contracts.[1]
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When Japan emerged from the self-imposed, pre-Meiji erasakoku in 1867, Western countries already had very dominant and internationally significant companies.Standard Oil,Carnegie Steel Company,AT&T,General Electric,Western Union,Friedrich Krupp,Thyssen,Robert Bosch GmbH,Lloyd's of London,Reckitt & Sons, andEast India Company were very dominant and were the major players in international trade. TheBritish Empire, under the leadership of theBaring family, theRothschild family and theGuinness family, as well asImperial Germany and other Western countries were colonizing much of the undeveloped world, and Japanese companies realized that in order to remain sovereign, they needed to develop the same methodology and mindset of Western companies, and the zaibatsu emerged.
The "Big Four" zaibatsu (四大財閥,Yondai Zaibatsu) of, in chronological order of founding,Sumitomo,Mitsui,Mitsubishi, andYasuda were the most significant zaibatsu groups. Two of them, Sumitomo and Mitsui, had roots in theEdo period while Mitsubishi and Yasuda traced their origins to theMeiji Restoration. Throughout Meiji to Shōwa, the government employed their financial powers and expertise for various endeavors, includingtax collection, military procurement andforeign trade.
Beyond the Big Four, consensus is lacking as to which companies can be called zaibatsu, and which cannot. After the Russo-Japanese War, a number of so-called "second-tier" zaibatsu also emerged, mostly as the result of business conglomerations and the awarding of lucrative military contracts. Some more famous second-tier zaibatsu include theŌkura,Furukawa, andNakajima groups.
The early zaibatsu permitted somepublic shareholding of some subsidiary companies, but never of the top holding company or key subsidiaries.
The monopolistic business practices by the zaibatsu resulted in a closed circle of companies until Japanese industrial expansion on the Asian mainland (Manchukuo) began in the 1930s, which allowed for the rise of a number of new groups (shinko zaibatsu), includingNissan. These new zaibatsu differed from the traditional zaibatsu only in that they were not controlled by specific families, but not in terms of business practices.
The zaibatsu had been viewed with some ambivalence by theJapanese military, whichnationalized a significant portion of their production capability during World War II. Remaining assets were also highly damaged by destruction during the war.
Under theAllied occupation after thesurrender of Japan, a partially successful attempt was made to dissolve the zaibatsu. Many of the economic advisors accompanying theSCAP administration had experience with theNew Deal and were highly suspicious ofmonopolies and restrictive business practices, which they felt to be both inefficient, and to be a form ofcorporatocracy (and thus inherently anti-democratic).
During theoccupation of Japan, sixteen zaibatsu were targeted for complete dissolution, and twenty-six more for reorganization after dissolution. Among the zaibatsu that were targeted for dissolution in 1947 were Asano, Furukawa, Nakajima,Nissan, Nomura, and Okura. In addition, Yasuda dissolved itself in 1946. The controlling families' assets were seized,holding companies eliminated, and interlockingdirectorships, essential to the old system of inter-company coordination, were outlawed. TheMatsushita Electric Industrial Company (which later took the name Panasonic), while not a zaibatsu, was originally also targeted for breakup, but was saved by a petition signed by 15,000 of itsunion workers and their families.[3]
However, complete dissolution of the zaibatsu was never achieved, mostly because the U.S. government rescinded the orders in an effort to reindustrialize Japan as a bulwark againstcommunism in Asia.[4] Zaibatsu as a whole were widely considered to be beneficial to the Japanese economy and government, and the opinions of the Japanese public, of the zaibatsu workers and management, and of the entrenched bureaucracy regarding plans for zaibatsu dissolution ranged from unenthusiastic to disapproving. Additionally, the changing politics of the occupation during thereverse course served as a crippling, if not terminal, roadblock to zaibatsu elimination.
Today, the influence of the zaibatsu can still be seen in the form of financial groups, institutions, and larger companies whose origins reach back to the original zaibatsu, often sharing the same original family names (for example,Sumitomo Mitsui Banking Corporation). However, some argue[who?] that the "old mechanisms of financial and administrative control" that zaibatsu once enjoyed have been destroyed. Despite the absence of an actual sweeping change to the existence of large industrial conglomerates in Japan, thezaibatsu's previousvertically integratedchain of command, ending with a single family, has now widely been displaced by the horizontal relationships of association and coordination characteristic ofkeiretsu (系列).Keiretsu, meaning "series" or "subsidiary", could be interpreted as being suggestive of this difference.
The termzaibatsu has been used often in books, comics, games, and films to refer to large and usually sinister Japanese corporations, often involved in shady dealings or with connections to theyakuza. This may provide a plot hook, or simply provide the background for a character from an influential Japanese family.
The "big four"
Second-tier zaibatsu
Bankrupt zaibatsu
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