Black Market Empire: The Illicit Sale of American Goods, Combat Supplies, and Drugs in Japan and America’s Underground Lake, 1945-1975

Abstract

After World War II, the United States military embarked on a project of turning the Pacific Ocean into an “American lake” by constructing military bases on island groups taken from the Japanese during the Asia-Pacific War. Many U.S. military officials also started viewing Japan as an important strategic location in America’s “island frontier.” Empire building in the Asia-Pacific region, however, had unintended consequences. In Japan, a thriving black market centered on U.S. military goods and the formation of illicit networks connecting the defeated nation to its former empire and the U.S. were examples of problems caused by U.S. intervention in Asia. These trends eventually transformed the America’s military empire into a “black market empire.” In this dissertation I argue that the black market empire emerged from the chaos caused by the collapse of the Japanese empire and the drawing of new borders in Asia. These borders included new geopolitical borders and internal borders created by the U.S. military in occupied Japan. American military bases, Post Exchanges (PX; shops for the exclusive use of the U.S. military), and officer’s clubs were borders between the U.S. military and local civilian population. Smugglers and black marketeers constantly challenged these borders throughout the Occupation of Japan (1945-1952). They found ingenious ways to sneak American goods from U.S. bases and sell them on the black market or smuggle contraband into occupied Japan. This study is therefore also an examination of American power in Japan and the limits of U.S. border-making. It also provides a new perspective on the history of black markets in Japan by highlighting the transnational nature of Japan’s underground economy. Many of the goods sold at black market stalls arrived in Japan through various smuggling routes. The movement of troops within the American lake also led to the formation of illicit networks connecting Japan to other parts of America’s empire. Servicemen purchased narcotics in major Japanese port cities and smuggled them back to the U.S. These routes show how Japan was part of a larger underground economy spanning the Pacific Ocean. During the Korean War, civilians smuggled strategic materials from U.S. bases in Okinawa to Hong Kong. Groups of smugglers then transported those items into mainland China for the Chinese Communist Party’s war efforts in Korea. Because these illicit networks were the result of America’s plan of turning the Pacific into an American lake and Japan’s underground economy involved maritime smuggling routes, I refer to the “American lake” as “America’s Underground Lake.” The final section of this dissertation examines Japan’s “long black market era,” which lasted until the mid-1970s. Although black markets had mostly disappeared from postwar society in Japan, black-market activity—especially the illicit sale of American cigarettes from U.S. bases—was still a serious issue for the Japanese government. In addition, drug abuse near bases led to fears that Japan was undergoing another narcotics crisis during the 1960s and 1970s. The final chapter is about Japan’s impact on illicit economies in Southeast Asia during the Vietnam War. Japan became a major supplier for the U.S. military during the war, and large quantities of Japanese electronics were diverted into black markets in South Vietnam.