Strategic Industries Consolidation Law (1920)

The Strategic Industries Consolidation Law (戦略的産業統合法) was a law issued by the Yamataian military government on 8 December, 1920, after the outbreak of the First Escar-Varunan War. The law was issued in an official proclamation from the Imperial Grand Marshal's office and came into effect at midnight before 9 December.

Following the outbreak of war, the Imperial High Council recognised the need to ramp up national production of strategic materials and industries, and were concerned that some zaibatsu would not cooperate with the military's demands. The decision was made to forcibly nationalise various key industries and place them directly under the control of the military branches. Strategic industries initially identified for nationalisation included resource extraction, heavy manufacturing, weapons manufacturing, shipbuilding, electronics, chemicals, and any other industry that produced goods purchased directly by the military. In April 1921, after Chisei invaded Yamataian Nanyokuni, the list of strategic industries was expanded to the point that the military was essentially able to nationalise any private company it wished.

The Strategic Industries Consolidation Law resulted in the destruction of numerous zaibatsu that had previously maintained a stable oligopoly over the Yamataian economy, with most zaibatsu reduced to controlling what had been minor subsidiaries. Some of the former zaibatsu subsidiaries retained their names even under military control, such as Mitushishi Heavy Industries and the Mitsuhishi Aircraft Company, though the vast majority of companies taken over by the government were given generic or patriotic names in an effort reduce the association to the former owners. Only a handful of major zaibatsu, such as Shinomiya and Akasaka, were able to survive the Strategic Industries Consolidation Law, typically due to various ties the controlling families had with high-ranking military officials.

Following the Second Escar-Varunan War, Okabe Nariakira began a campaign to privatise all of the military-owned companies in the 1950s. The often haphazard privatisation efforts resulted in a massive number of small companies emerging in a short time. Many of the surviving zaibatsu moved to reacquire their former assets, with varying levels of success. In the face of the aggressive efforts by the zaibatsu, some of the newly-established companies banded together to form new largely public-owned conglomerates known as keiretsu to compete with the traditional zaibatsu, such as the Mitsuhishi Group and the Sukimoto Group.