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of a left-of-center coalition government in its place. SCAP intervened Capitalist Efficiency Firsl-Reversing the Democratic Reforms of democracy of Japan's political and social instability, and had blocked of the lagging economic recovery, not the zaiba-

again at the last moment to prohibit the general strike scheduled for 1 February 1947 that seemed likely to bring Yoshida down. But when the elections in April gave the Socialist Party the most seats of any party in the Diet, the Yoshida conservatives on the far right were forced to step aside anyway for a coalition government headed by a socialist premier, Katayama Tetsu.

The conjuncture of many factors in 1947-1948 within Japan and abroad undermined the JSP during its moment in government, the most important being an inflation brought on by red-ink ftnancing of economic recovery and the launching of the cold war. The economic problem was almost intractable and due above all to a continuing major cutback in production by the zaibatsu that was impossible to overcome short of nationalization of critical industries. In the end, the socialist government that had been the focus of so many hopes became the target of popular anger for its inability to overcome inflation and shortages, though in retrospect it is clear that the recovery plan was working. At the same time, the deteriorating situation of the Nationalist regime in China and the intensifying cold war in Europe stimulated a U.S. reassessment of its Asian policy. In the new grand design that was fleshed out in 1948, Japan was to assume China's role as the anti-communist bastion in Asia and to act as the lever for regional recovery by becoming the workshop of Asia.