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Worldwide, economies spiraled downward. Given the panoply of policy choices available in times of economic downturn, one is stunned to find that virtually every country in the world chose the wrong ones in the early 1930s. Rather than increasing spending, governments raised taxes and balanced budgets, which drove their economies more deeply into deflation and depression. To protect employment at home, nations raised tariffs and quotas to keep foreign goods out. This led to retaliation and the destruction of their own export industries. Autarky, that is, economic self-reliance, became the order of the day. The United States passed the Smoot-Hawley Tariff Act in 1930 and Britain gave preferential treatment within its empire to the various members. Takahashi, Inoue, Shidehara, and other advocates of cooperation were gradually discredited. Their opponents attacked them for relying on untrustworthy foreigners and advocated diplomatic autonomy and economic autarky.
The most powerful segment of the autarky group, or to use James Crowley's term, the people who led "Japan's quest for autonomy" were the military. They invaded Manchuria in September 1931 to thundering public applause. The mass society that they had brought Japan democracy in the 1920s helped bring it something else in the 1930s. The various portents discussed above: latent nationalism, resentment over America's treatment of Japanese immigrants, the increasingly unified British and American resistance to Japanese actions in China, and the suffering of many Japanese during the depression came together to create a climate of support for the military-the men on horseback, the men who had the easy answers, the men who advocated direct action, not weak-kneed democratic compromise. From 1931 until 1936, various segments of the military instigated overseas aggression, coup d'état attempts at home, and assassinations that changed the nature of Japan's government and foreign policy. The military killed or silenced the people who advocated cooperation. The threat of assassination was a powerful weapon for keeping opponents in line.
Students of Japan have commented on the few voices of opposition to the rise of militarism, or fascism if you want to use that word, in Japan in the 1930s. Many of Japan's leaders (including important members of the mainstream and left-wing political parties) shared their right-wing countrymen's resentments toward the United States and the United Kingdom and segued from the cooperation to the autonomy camp. The socialists in the Diet, for example, supported Japan's road to war and war effort. Many who did not move to autonomy/autarky were murdered. For instance, Prime Minister Hamaguchi was assassinated in 1930; his Finance Minister, Inoue Junnoske, Prime Minister Inukai Tsuyoshi, and the head of the Mitsui Corporation, Baron Dan, in 1932; former Prime Minister Saitō Makoto and Finance Minister Takahashi in 1936. It was with this in mind that the New York Times correspondent, Hugh Byas, entitled his book on the 1930s, Government by Assassination. Right wing or military youths murdered three of five prime ministers, and a fourth escaped only when young officers shot his brother-in-law by mistake. Two of three finance ministers were killed, and the third died prematurely from ill health. Takahashi, who served as Japan's pre-Keynesian, Keynesian-style finance minister from 1931 to 1936, fought the military constantly, both at budget-making time and in between, because he thought that the military's quest for political autonomy and economic autarky courted disaster. He was convinced that such politics would lead to economic stagnation, inflation, and worst of all, war with the United States.
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