ABSTRACT
In 1974 Japan was plunged into an economic crisis precipitated by the oil shock of the previous October. Even after the initial impact of soaring energy costs was absorbed and the threat to oil supplies was circumvented, Japanese companies remained haunted throughout the rest of the 1970s by a sense of their vulnerability to external economic forces over which they had no control. This perceived exposure to the swirling currents of world capitalism was aggravated by the further major rise in oil prices which accompanied the Iranian Revolution in 1979. Naturally, these problems of Japanese capitalism were transmitted to the population at large. The number of unemployed rose and many more workers than were actually dismissed felt the threat of job insecurity as manning levels were reduced in order to recoup profits. In addition, consumers were faced with an unprecedented surge of inflation, which in turn provoked panic buying and empty shelves. Paradoxically, in the midst of this period of first crisis and then protracted uncertainty for Japanese capitalism, circumstances worked to Nikkeiren’s advantage. The threat to jobs and livelihoods provided the leverage needed to tighten labour discipline and to drive down wage increases to levels more in tune with the previously formulated productivity standard principle. For similar reasons, many unions were induced to move even further down the road of cooperation with the companies in which they were implanted. In a lecture delivered for Nikkeiren in 1991, the Personnel Director of Ishikawajima Harima Heavy Industries recalled how the difficult situation created by the oil shock was resolved by Japanese companies:
It was tough for the companies, too, but since the unions were also enterprise unions, they could not avoid taking into account the future of the enterprise and the future of the industry. From that standpoint, they cooperated with us, even while shedding tears over the managing of workforce reduction.
