In 1950–1971, the international economic order helped the Japanese economic system to maintain stability by allowing it to develop its own model of a welfare society. In this system, the size of government was minimized and the social welfare function was performed by private institutions. As outlined in Chapter 2, the core of this model was a total employment strategy, which in turn was sustained by three pillars. First, big corporations institutionalized a permanent employment system, providing job security to their employees; second, medium-size and small companies, with support from the state, organized numerous cartels to avoid bankruptcy and keep everyone in business; and third, family-owned mini shops were protected by heavy government regulations. All these measures served to reduce pressure on public spending for unemployment assistance. Although these three categories were separated by significant differences in income distribution, Japan managed to achieve a high level of egalitarian distribution (measured by the Gini index) in terms of household income. The reason for this was that Japanese women played the role of a marginal labor force. Depending on the kind of company her husband worked in, a married Japanese woman became either a full-time housewife or a part-time worker. The incomes of part-time female workers supplemented their husbands' incomes, proportionately equalizing income distribution (Nomura 1998).

This social welfare system was not a strategic choice but rather was a byproduct of Japan's developmental program of promoting exports, a program that was created under historical conditions defined by the Bretton Woods and GATT systems.