Kobayashi later dabbled in politics. In 1940, he became the first private citizen appointed as minister of commerce and industry when he joined the cabinet of Konoe Fumimaro. However, disagreements with future Prime Minister Kishi Nobusuke led to his resignation after less than a year. Following the end of World War II, in 1945 he was appointed minister of state and president of the War Damage Rehabilitation Board, but he was quickly purged from this position. 