Japan's Government investment (flow) and social overhead capital (stock) have long been regarded as underdeveloped, both in relation to internal growth of GNP and to that of other countries. E. g. , this was analysed in detail by Simonis in this journal 10 years ago (1972, p. 415-440 ). However, during the 1970s Japan's performance has improved substantially, also when compared with the USA , the FRG and even Sweden. Between 1969 and 1979 Japan had by far the highest real Government investment (as % of GNP) in the world, and the gap in social overhead capital per capita between Japan and the FRG has now nearly been closed. This Japanese development took place in close connection with the overall economic planning in Japan and it can be expected that the - still not totally satisfying - situation will further improve with the current 7-year-plan up to 1985. One main source of finance for this improvement in Japan is indicated by the continually (relatively) small amounts being wasted for rearmament.