The U.S. military was, in fact, a major employer in Japan. On the base, Japanese found jobs as interpreters, stenographers, drivers, maids, and construction workers. Off the base, the bars and brothels did a steady business. And then there were the servicemen stationed around Asia who converged on Japan for their furloughs. Officially the program was called R&R, for rest and recuperation, but informally the men spoke of I&I: intercourse and intoxication. Whatever the letters, it meant money flying around hotels, shops, bars, and brothels.
More transformative still were the large military procurement orders, which began in 1950 with the Korean War. Goods from the U.S. mainland heading for Asia might take weeks to arrive. Those from Japan could be made cheaply and arrive in hours. And so the U.S. military began a shopping spree. From the start of the Korean War to the end of the Vietnam War, Japanese firms took in at least $300 million a year from U.S. purchase orders. At the peak of the Korean War, 1952, it was nearly $800 million.
This was huge. The president of the Bank of Japan called the procurement orders “divine aid.” Japan’s prime minister called them a “gift of the gods.” On the eve of the Korean War, the auto firm Toyota had laid off workers, cut wages, and reduced pensions by half. It was the military contracts that reversed its fortunes. They were, the firm’s president recalled, “Toyota’s salvation.” Toyota’s output swelled between three and four times its size in the six years between 1948 and 1954.