in toppling the
The formation of stricter dependencies, vertically, has actually been strengthened recently. The big automobile and electronics firms tightened their hold on their subcontractors for various reasons. Labour was growing scarce and the small enterprises could not rely on the marginal labour to be content with low wages as an alternative to unemployment. Wage levels in the small firms were rising faster than in the big ones, and so were labour costs unless rationalisation was enforced. Thus the big firms started after 1953 a drive to modernise and rationalise their dependent firms, investing loan-capital to them, giving firm guidance and making quality controls stricter. Toyota started a programme of raising overall levels of performance of its vast subcontracting system of firms - managers were called on to participate in management training as matter of duty, their finances were audited, and a few years ago Toyota demanded a yearly price cut of 10 per cent from its subcontractors on the pretext that Toyota must strengthen its position vis-à-vis the impending capital liberalisation.5 But in spite of pressure from the parent firms to lower prices and rationalise, profits of the subcontractors often rose, because of larger and stable demand. The parent firms often assisted the subcontractors in obtaining investment funds by giving the needed securities required by the lending banks.