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Zaibatsu (, "financial clique") is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed control over significant parts of the Japanese economy from the Meiji period until the end of World War II. They were succeeded by the Keiretsu in the second half of the 20th century.
The term "zaibatsu" was coined in 19th century Japan from the Sino-Japanese roots zai ? ("wealth", from Middle Chinese dzoi) and batsu ? ("clique", "group", from Middle Chinese bjot). Although zaibatsu themselves existed from the 19th century, the term was not in common use until after World War I. By definition, the zaibatsu were large family-controlled vertical monopolies consisting of a holding company on top, with a wholly owned banking subsidiary providing finance, and several industrial subsidiaries dominating specific sectors of a market, either solely, or through a number of subsidiary companies.
The zaibatsu were the heart of economic and industrial activity within the Empire of Japan, and held great influence over Japanese national and foreign policies. The Rikken Seiy?kai political party was regarded as an extension of the Mitsui group, which also had very strong connections with the Imperial Japanese Army. Likewise, the Rikken Minseit? was connected to the Mitsubishi group, as was the Imperial Japanese Navy. By the start of World War II, the Big Four zaibatsu (Mitsubishi, Sumitomo, Yasuda and Mitsui) alone had direct control over more than 30% of Japan's mining, chemical, and metals industries and almost 50% control of the machinery and equipment market, a significant part of the foreign commercial merchant fleet and 70% of the commercial stock exchange.
The zaibatsu were viewed with suspicion by both the right and left of the political spectrum in the 1920s and 1930s. Although the world was in the throes of a worldwide economic depression, the zaibatsu were prospering through currency speculation, maintenance of low labour costs and on military procurement. Matters came to a head in the League of Blood Incident of March 1932, with the assassination of the managing director of Mitsui, after which the zaibatsu attempted to improve on their public image through increased charity work.
The "Big Four" zaibatsu (?, yondai zaibatsu) of, in chronological order of founding, Sumitomo, Mitsui, Mitsubishi, and Yasuda are the most significant zaibatsu groups. Two of them, Sumitomo and Mitsui, have roots in the Edo period while Mitsubishi and Yasuda trace their origins to the Meiji Restoration. Throughout Meiji to Sh?wa, the government employed their financial powers and expertise for various endeavors, including tax collection, military procurement and foreign trade.
Beyond the Big Four, consensus is lacking as to which companies can be called zaibatsu, and which cannot. After the Russo-Japanese War, a number of so-called "second-tier" zaibatsu also emerged, mostly as the result of business conglomerations and/or the award of lucrative military contracts. Some more famous second-tier zaibatsu included the Okura, Furukawa, and Nakajima groups, among several others.
The early zaibatsu permitted some public shareholding of some subsidiary companies, but never of the top holding company or key subsidiaries.
The monopolistic business practices by the zaibatsu resulted in a closed circle of companies until Japanese industrial expansion on the Asian mainland (Manchukuo) began in the 1930s, which allowed for the rise of a number of new groups (shinko zaibatsu), including Nissan. These new zaibatsu differed from the traditional zaibatsu only in that they were not controlled by specific families, and not in terms of business practices.
The zaibatsu had been viewed with some ambivalence by the Japanese military, which nationalized a significant portion of their production capability during World War II. Remaining assets were also highly damaged by the destruction during the war.
Under the Allied occupation after the surrender of Japan, a partially successful attempt was made to dissolve the zaibatsu. Many of the economic advisors accompanying the SCAP administration had experience with the New Deal program under the American President, Roosevelt, and were highly suspicious of monopolies and restrictive business practices, which they felt to be both inefficient, and to be a form of corporatocracy (and thus inherently anti-democratic).
During the occupation of Japan, sixteen zaibatsu were targeted for complete dissolution, and twenty-six more for reorganization after dissolution. Among the zaibatsu that were targeted for dissolution in 1947 were Asano, Furukawa, Nakajima, Nissan, Nomura, and Okura. In addition, Yasuda dissolved itself in 1946. The controlling families' assets were seized, holding companies eliminated, and interlocking directorships, essential to the old system of inter-company coordination, were outlawed. Matsushita (which later took the name Panasonic), while not a zaibatsu, was originally also targeted for breakup, but was saved by a petition signed by 15,000 of its union workers and their families.
However, complete dissolution of the zaibatsu was never achieved, mostly because the U.S. government rescinded the orders in an effort to reindustrialize Japan as a bulwark against communism in Asia.Zaibatsu as a whole were widely considered to be beneficial to the Japanese economy and government, and the opinions of the Japanese public, of the zaibatsu workers and management, and of the entrenched bureaucracy regarding plans for zaibatsu dissolution ranged from unenthusiastic to disapproving. Additionally, the changing politics of the occupation during the reverse course served as a crippling, if not terminal, roadblock to zaibatsu elimination.
Today, the influence of the zaibatsu can still be seen in the form of financial groups, institutions, and larger companies whose origins reach back to the original zaibatsu, often sharing the same original family names (for example, Sumitomo Mitsui Banking Corporation). However, some argue[who?] that the "old mechanisms of financial and administrative control" that zaibatsu once enjoyed have been destroyed. Despite the absence of an actual sweeping change to the existence of large industrial conglomerates in Japan, the zaibatsu's previous vertically integrated chain of command, ending with a single family, has now widely been displaced by the horizontal relationships of association and coordination characteristic of keiretsu (). Keiretsu, meaning "series" or "subsidiary", could be interpreted as being suggestive of this difference.
The term zaibatsu has been used often in books, comics, games, and films, referring to large and usually sinister Japanese corporations, who are often involved in shady dealings and/or have connections to the yakuza. Examples include the Mishima Zaibatsu, which is prominently featured in the Tekken series, the "Zaibatsu" criminal group in Grand Theft Auto 2, and various writings of pioneer cyberpunk author William Gibson. In other cases zaibatsu are used simply to provide the background for a character from an influential family, such as in the case of the F4 in Boys Before Flowers who are the sons and heirs of the four (fictional) biggest corporations in Japan.