ABSTRACT
The modern concept of social security was developed in Germany in the days of Bismarck, to meet certain hazards inherent in the evolution from an agricultural into an industrial society. Japan had copied in form the western ideas of social security using the insurance principle, thereby spreading the risk against these hazards through the institution of insurance systems, to which both worker and employer contributed, to provide against the several major hazards characteristic of the industrial age. One group of the economics and labor people in Supreme Commander for the Allied Powers (SCAP) thought that it would be wise if the big industrial corporations would reduce their payrolls. After consultation with many of our financial experts and others, author adopted a principle that had been tried and that had worked successfully in other countries which had sound social security programs, without being socialistic, and which had gone through a period of inflation.
