Steel and Automobiles Were Both "Gambles"

There is a highly influential theory in economics called the "law of comparative advantage." This was first explained by the British economist David Ricardo (1772-1823) using the concept of comparative advantage.
In essence, Ricardo's theory posits that it is mutually beneficial for each country to produce only those goods for which its production costs are relatively lower compared to other countries, and to import goods for which costs are higher. It advocates for specialization in advantageous goods (including services) and ceasing production of disadvantageous ones, highlighting the benefits of international division of labor. This theory remains relevant today.
Whenever trade friction has surfaced between countries, comparative advantage has been seriously re-examined for each item.
From any perspective, this seems reasonable, and one cannot help but agree. Countries should concentrate on industries where they have a comparative advantage. In this sense, theory and reality align.

Post-War Japan's Economy Shattered Comparative Advantage

So, what about Japan's post-war economy? With virtually no natural resources and over 100 million people crammed into a small landmass, Japan faced immense challenges. Furthermore, the Pacific War had severed technological exchange with overseas nations, leaving Japan significantly behind the West. According to the "law of comparative advantage," post-war Japan should have been forced to focus on labor-intensive industries like textiles and general merchandise. Embarking on industries like automobiles and steel would have been a radical departure from the "law of comparative advantage," bordering on madness.
Indeed, when Kawasaki Steel announced its ambitious plan in 1951 to establish an integrated steelworks in Chiba, Hisato Ichimada, the then-governor of the Bank of Japan, declared with conviction, "America's technology is superior, and its iron ore and coal are cheaper. From an economic standpoint, it makes no sense for Japan to pursue this. Failure is certain." He confidently predicted that "only weeds will grow."

The Nation's "Motivation"—Its Drive—Led to Success

Similar views were expressed by Diet members regarding passenger car production. They argued that Japan should abandon passenger car manufacturing, given that its factory equipment and production methods were incomparable to those of the United States. Instead, they strongly advocated for exporting textile products and using the earned revenue to import foreign cars, asserting this would align with national policy and be more rational. The outcome needs no further explanation. Japan's steel and automobile industries have surpassed those of the US and European nations to become global leaders. Both industries continue to be the driving force of the Japanese economy through exports.

In the post-war era, Japan rallied around the goal of "Enrich the Country, Strengthen the Military" and, at any cost, achieved results that would impress the Western powers. While the "Strengthen the Military" aspect disappeared, "Enrich the Country" became the sole focus, driving an intense effort to catch up with and surpass the advanced Western nations. National enrichment is, in essence, economic power. This spirit, this "motivation," swept aside economic theories like the law of comparative advantage. In short, it was the fruit of Japan's national "motivation." It can be attributed to the unified efforts of the government, industry, and labor, all striving to become a heavy industrial nation.
Finally, I must emphasize the importance of discarding plausible, easy assumptions based on past trends. I urge you to break free from conventional thinking and embrace the drive to take on challenges. Please engrave in your heart that possessing "drive" will be a decisive factor in your future endeavors.