The myth of the zaibatsu and keiretsu


When talking about the Japanese economy, it is inevitable to talk about the large Japanese companies that exist today. Many of them had their heyday in the Meiji Restoration and survived the Second World War. They were said to belong to a single family that encompassed the entire production line, concentrating all the power of the company in a single family. They were nicknamed zaibatsu (財閥, “wealthy group”). From the mines to an export company, through all the industries that carried out the production process and banks, everything was in the hands of a few families.

However, with the end of World War II the constitution was amended to prohibit concentration of these businesses in a single family. Many of those companies passed into the hands of other owners, but a few managed to evade the law and remained standing. These companies were known as keiretsu (系列, literally “sequence”. It refers to the control of the production chain). Companies like Mitsui, Mitsubishi, Dai Ichi, Kangyo, Sumitomo, Kanwa or Fuyo they are said to operate under this system.

The zaibatsu They existed before World War II, and they were organizations that blackmailed the government to obtain concessions, thus managing to make large family banks. Later they used the banks to build great business empires. Firms looking for a loan had to go to one of these banks, which belonged to one of the large families, and the latter would lend them money at a very high interest, while family members would be given facilities.

Dismantling of the zaibatsu

According to rumor, keiretsu they are everywhere. Turning on the television, buying a newspaper, eating at a fast food chain, or even at work. These companies continue to operate today, excluding foreign companies, monopolizing the Japanese economy. Virtually all economic activities belong to a keiretsu, Y more than 31 million people in Japan they were related in one way or another to these great companies. As the family owns the banks, they grant loans to their own companies, receive strategic business advice and help in times of crisis, obtaining insurance even in high-risk companies. Even the shares are bought from each other, to prevent them from going to the market and maintain a control of the price of the products.

As fascinating as this story sounds, it is fortunately a myth. In a book titled “The fable of Keiretsu “, the researchers Yoshiro Miwa and J. Mark Ramseyer reveal some truths about zaibatsu and the keiretsu. Despite the fact that both corporate models did exist, there are many rumors that are said about them in the West. For example, it is a myth that large companies had a central bank within the zaibatsu. Instead, they issued stocks, sold bonds, and held the proceeds. Banks played a very small role in financing these companies. Even large companies like Suzuki did not resort to bank loans, and did not belong to any zaibatsu.


Regarding the keiretsu actually consist of lunch meetings of corporations that until before World War II had been in a zaibatsu. However, many of these companies were weakened after being separated from the zaibatsu, so its power was minimal. Many of these companies changed their name upon separation from zaibatsu, but for reasons of prestige they took it up again. Thus we see companies such as Sumitomo Metals, Sumitomo Chemicals, Mitsubishi Chemicals and Mitsubishi Petrochemicals, which belonged to the groupings of Sumitomo and Mitsubishi respectively, but they acted independently, making their own decisions. Today the meetings are still taking place, but the number of attendees is small, and instead of the director attending, a manager attends Public relations. This does not mean that it has stopped importing, but it has gone to the background.

Researchers Miwa and Ramseyer conclude in their research that those attending these meetings are not as many as was thought in previous speculation, in addition that many of these companies do not trade with each other. The average percentage of trade within the group is 2.38%, and the same companies acquired materials within the group in just one 6.71%. This debunks the rumor that companies trade with each other for mutual benefit. Even the companies do not own many shares of other companies within the same group.

In conclusion, although large family businesses did exist before World War II, their power was not unlimited, and they did not have a central bank to provide them with advantageous credits against other companies. Despite the fact that at the end of the war, with the new constitution of 1947, many of these companies passed into other hands outside the familyDespite this, they continued to meet at lunches to discuss various topics (both researchers point out that they spoke most of the time about trivial topics such as traveling in Europe and rarely about business). Our vision of Japan is a combination of Orientalism with Confucian ideas family support with the economic structure of a country, when in reality the homo economicus is the norm. Myths similar to the keiretsu What persist today are, for example, that the Japanese work overtime to signal a strike, or that eight Japanese athletes died trying too hard in a 1964 rowing competition to show that Japan was a developed country. Urban myths that are created from a distant country, but that socially operates with too much similarity to the countries of the West.