The Japanese Industrial Economy

Late Development and Cultural Causation

Ian Inkster

• Publisher: Routledge
• Year: 2012
• Print ISBN:
  9780415250016
• eBook ISBN:
  9781134532940
• Topic: Scienze sociali
• Subtopic: Studi sull'etnia

This book reveals that the manipulation of culture was of more importance than the character of the original cultural stock in explaining Japan's modern industrialization. Thus the features of private enterprise culture that are so often isolated as keys to the nation's historical competitiveness may have been only temporary reflections of this wider process of cultural engineering: a necessary input into the program of technology transfer and late development. This book provides a highly reliable guide to the industrial economy and history and covers a wide ground; it will be of great interest to those involved in Asian studies, Japanese studies, plus economists and professionals in business and enterprise culture.

1 Introduction

Achievements and outcomes

Modelling Japan?

Prior to those quite recent social, commercial and industrial changes in Japan which have seemed to detract from its historical trajectory of ultra-fast growth, the nation was lauded as the best case of capitalist achievement. During the 1970s and 1980s a heady economic performance in the face of global recessions ensured that Japan became a focus of non-Marxist commentary, well-expressed in the writings of Ezra Vogel and Herman Kahn (Vogel 1979, Kahn 1973). Academic experts were at all times strongly involved in informing this general enthusiasm. At one point Ichiro Nakayama claimed that, in considering the potential development of poor twentieth-century nations, ‘Japan's case is to be regarded as a model. She was able to transform herself almost overnight from her previous condition of retarded agrarian capitalism to a modern industrial country’ (Nakayama 1967: 171). Similarly adamant was the claim of Sumihito Hirai when he generalised that ‘there are universal conditions which must be satisfied in order for there to be development. Japan's situation in the early Meiji era and also the gradual process of its development may serve as one formula for getting this important task underway’ (Hirai 1978: 16). For K. M. Panikkar the acquisition by Japan of Western science and technology at an early stage provided a model for the analysis of the later economic weaknesses of India, China and South-East Asia (Panikkar 1953).

But the notion of Japan as exemplary is far from new. By the 1890s Japan had completed a first period of modern industrialisation based on textiles and was about to enter a second season of change centred on the heavier, military industries. The nation had established a somewhat more rational fiscal system, was gaining economic autonomy and, indeed, the beginnings of an empire in Asia. At just this time, previously sporadic Western accounts of Japan made way for a sharper focus on economic achievement, especially as centred on new industries, novel institutions and the use of introduced Western technologies. By this time the oyatoi, the Western experts employed in Japan to install machinery and modernise education, were returning, and added their own more certain opinions to those of writers and intellectuals whose views were often less personal but less informed. In particular, the scientific and technical journals of the West, whose editors and contributors were for ever debating the causes of supposed industrial stagnation or decline in the older industrialisers, applauded the unexpected vitality of Japan. Following the Board of Trade Journal, the Bulletin of the Department of Labour and the distinguished Consular Reports of both Britain and the USA, such eminent periodicals as The Engineer, Engineering, Chemical News and Nature were crammed with more or less informed accounts of Japanese society, culture and economic structure, including explanations as to why Japan ‘left China behind’, why the government was successful in its mining and manufacturing ventures, and why education and the institutions of scientific and technical training and diffusion were at the heart of the matter. Japan was being ‘modelled’, and from Harper's Weekly to the London Times the non-technical ‘serious’ press was informedly clamorous. For every ‘special correspondent’ who appeared in Tokyo or Yokohama there were more than two explanations of the industrial rise of Japan.

A particular feature of this early modelling of Japan was the attention given to the roles of the state and the array of associated new institutions in Meiji Japan. By 1903, with a successful war against China behind it, Japan became a model for emulation. In a highly publicised speech of September of that year, entitled ‘The Influence of Brain Power in History’, the President of the British Association for the Advancement of Science, Sir Norman Lockyer, taunted his fellow experts with the query: ‘shall we follow Japan and thoroughly prepare by “intellectual” effort for the industrial struggle that lies before us?’ (Simmons 1904: 168). By June 1905, with a Japanese war against a European nation (Tsarist Russia) fully waged and won, Nature more soberly proclaimed that the ‘lesson which our educationalists and statesmen have to learn from Japan is that the life of a modern nation requires to be organised on scientific lines in all its departments . . . it must be consciously used for the promotion of national welfare’ (Nature, 8 June 1905: 872). In this the Western scientific and intellectual journals were following the many messages of such travelling Japanese as Baron Kikuchi Dairoku, sometime Japanese Minister of Education, who in 1907 was lecturing to the Edinburgh Royal Society on the educational system as the backbone of Japan's recent economic and military successes.¹

In the later twentieth century the modelling of Japan tended to move from tales of unusual agency and institutions and towards analyses of human and physical resources, labour surplus (Fei and Ranis 1964), structural explanations of motivation and behaviour (Hagen 1964, McClelland 1969), or generalised models of escape from low-level economic and demographic traps (Nelson 1956). Although ingenious enough, the analytical precision of such refined explanations did tend to undervalue the forces of late development as stressed here, that is the peculiarity of Japan's circumstances, and the energy, creativity and costs invoked by Japan's ‘response’ to the Western powers.

Preludes to the twentieth century

The old idea of Tokugawa Japan (1603–1868) as a ‘purely feudal organisation of landed property’ (Marx 1867: 795) has given way in recent years to notions of ‘a merchant contingent’ demanding regime change, who had at hand a ‘labor force inured to long hours of disciplined work’ as well as institutions appropriate to the increase of capital formation beyond that characteristic of a stagnant ancien régime. The industrialisation of the Meiji years (1868–1912) did not result from either a spontaneous or a Western-induced generation of new forces inscribed on a tabula rasa, for ‘modern persons’ had long achieved positions of power and occupied sites of potential economic revolution (Nakamura 1981: 270, 281). Even in the sixteenth century Japan had not fulfilled all the requirements expected of a feudal system of closed social classes and immobility, rank-based distribution of goods and services, and a multiplicity of authorities with power in the hands of great lords based on their own possession of distinct landed regions and military bastions. The existence of concepts of an Emperor and of the ‘family nation’, the sometimes outstanding, centralised power of lay shogunates, and traditional ideas of the ie, or household – with its strong homage relations that might at times relegate obligations between lord and vassal to a comparatively lowly status – were all features even then that stood outside any straightforward system of feudalism.

Modern views emphasise the pervasive changes occurring throughout Japan between the sixteenth and the nineteenth centuries. For this period it is best to remain sceptical concerning exact socioeconomic quantities. Nevertheless it now appears that a population of some thirty million people were becoming increasingly urbanised and that even the most rural locations harboured an enormous variety and extent of non-agricultural by-employments, ranging from cotton dealing and retailing, dyeing and indigo trading, and silk rearing and reeling, to rice, tea and sardine dealing (the latter being important as nutrition and as fertiliser in the relative absence of livestock), cracker-making and oil-pressing, milling and shopkeeping. By the late Tokugawa era some 80 per cent or more of the population generated some 60 per cent of the nation's income in agricultural activities. This suggests that higher productivity lay with the 4 per cent or more engaged in secondary manufactures and the 10 per cent or so engaged in trade, carriage, urban infrastructures and financing. (Up to 7 per cent of the population were of samurai or aristocratic ranking, most of whom did not contribute to national output.) Despite only a very mild population growth, most of which was probably occurring prior to 1720 or 1750, demand seems to have grown sufficiently to induce a doubling of the cultivated acreage, from around 5 million acres in 1600 to 11.5 million by 1868.

As was often the case for Japan, the reaction to external forces set the scene for commercial and economic change. Prior to the seventeenth century Japanese economic history was a fraction of a regional, Asian tribute system centred on China and its fluctuating, complex satellite interrelations. From the later fifteenth century the growing turn towards silver as a means of taxation, military financing and private transaction within China led to the development of a large tribute silver trade, mostly in the hands of Asian and European intermediaries (Steensgaard 1990: 18–19). The Manchu conquest of China shifted a traditional conception of East Asian centrality, and permitted Tokugawa Japan to assume the mantle of a greater independence. Japan withdrew from China's tributary system from the 1630s, and Chinese silver was increasingly supplied by Peru and Mexico through both Atlantic and Pacific routes, just as silver assets allowed Japan to finance improved home production of a range of rural products (O'Flynn 1991, 1986, Goldstone 1991). An earlier vital relationship with China was based on exports of Japanese gold, silver and cotton in exchange for Chinese cotton goods, silk, porcelain, saltpetre, dyestuffs and sugar, and a prime motive of Tokugawa shoguns was to secure a greater isolation and independence from China through stimulation of a wider range of Japanese exports and to improve the use of labour and land in agricultural production as a substitute for imports (Latham and Kawakatsu 1994, Toby 1984). There is a real sense in which such rudimentary economic policy was merely one aspect of the overriding state project of increased internal control (Umesao and Matsubara 1989).

The search for the internal dynamic should begin with urbanism and that peculiar institution of sociopolitical control, sankin kotai (alternate residence). This was the law enacted in 1634 by the Tokugawa Shogun that obliged all the daimyo (feudal lords, of whom there were around three hundred) or their close family members to reside alternately in their domains and in the government capital Edo (Tokyo), and to leave their wives and children as hostages in that city. This system, which was replicated throughout Japan by the daimyo themselves in an effort to control their own domain retainers, not only led to a vast improvement in transport and communications but also encouraged one of the great building booms in premodern history (Hall 1955–6, Smith 1960, Nakamura 1981). The redivision of lands consequent upon Tokugawa victory after the long civil-war period had meant that older military or commercial centres had become badly placed, and the years from 1580 to 1610 had seen the massive growth of Osaka, Kochi, Hiroshima, Edo, Kofu, Sendai, Hikone and Nagoya. An edict of 1615 abolished the right to have more than one castle town in each province, and sankin kotai merely hastened and concentrated a move towards the construction of large castle towns in the middle of the new territorial divisions. Competition amongst the lords ensured that cities, residences (including those of the hostages in Edo), hostelries and travelling courts would be superbly ostentatious, this dragging many lords into debt with the larger merchant groupings.

The level of urbanisation was extraordinary. During the Tokugawa years, Edo (Tokyo) was one of the largest cities in world history, with a population at times of well over one million, mostly composed of administrative and aristocratic consumers of goods. Nor was Edo's relationship to Japan like that of London's to England. The new Japanese capital was surrounded by a network of other large (over sixty thousand) administrative, commercial and cultural centres, such as Kobe, Osaka, Kyoto, Nagasaki and Nagoya, and was endowed with a serviceable port in the expanding city of Yokohama. In Britain, the level of urbanisation (using a benchmark of those living in concentrations of five thousand or more) was no more than 13 per cent in the early eighteenth century, perhaps 15 per cent by mid-century and 25 per cent by 1801, by which time the first industrial revolution was well under way. In the later eighteenth century London was the home of perhaps three-quarters of the residents of large towns in Britain. By comparison, the urban population of Japan by the mid-eighteenth century was possibly 22 per cent or more, including thirty or forty castle towns with populations of over ten thousand each. The contrast in urbanism is no measure of degrees of industrialisation. This is not the point of the comparison. Rather, we would emphasise that in Japan such huge urban centres generated a consumer demand of increasing volume and sophistication, ensuring that modern manufacturing technique from the West could potentially exploit large new markets. Urbanism of this sort meant that Japan benefited from yet another distinct spatial force, the so-called ‘neighbourhood effect’. Within a neighbourhood of productive enterprise, pressure on laggards builds up as the number of innovative adopters grows. Such neighbourhood effects eased the passage of information, new cultural forms and novel techniques. More problematically, the city may well have generated some homogeneity of culture and institutions, some innovative social milling, side-effects which might well have eventually assisted the Meiji authorities in their efforts towards industrial modernisation.

Such new cities were often dominated by samurai populations, newly divorced from the land and with little military function during the long years of internal peace and external isolation. Within such places literacy and talent might now be rewarded, and many middling and upper samurai solved the problems of service and income by adopting administrative and logistic functions. But centres of conspicuous consumption must be satisfied, and around the cities soon radiated a great system of supply. Merchant groups became the bridges that allowed arms and foodstuffs to pass into urbanism from ruralism. Merchants and artisans moved from older centres into the castle towns, and merchants often stood in close alliance with lords and retainers, for within the town they were protected and patronised, and from this base they became the moneylenders, the bankers and the adopted sons of their betters. Just as the upper classes of Tokugawa society became somewhat more divorced from the land, so too did transport improve, cities unify an emergent middle-class culture, and agriculture and artisanry respond to greater opportunities. Since the reforms of Toyotomi Hideyoshi (1536–98) during 1583–98, rice was the currency of extraction, the means whereby daimyo and retainers gleaned from agricultural producers up to 50 or 60 per cent of their rice output by the mid-eighteenth century.

One hope for the peasant farmer was to diversify away from traditional crops in order to escape feudal taxation partially, and this was rendered more likely in regions proximate to the large urban centres or with good transport facilities. Perhaps this great move to by-employments permitted increased output in the absence of fast population growth, as an identifiable industrial base could be constructed by redeploying throughout the year an existing rural labour force. So there was less need than in Europe for any full-time movement of labour from agriculture to industry whether by attraction or by oppression. More certainly perhaps, in more prosperous by-employment areas many peasants were no longer under conditions of personal bondage but in effect became taxpaying tenants of the daimyo, a position more likely to generate ambition and mobility when the opportunity arose. At the same time tenancy and local markets together measured the spread of a money economy, opportunities for profit and savings in many niches of the nation, and rising frustrations amongst those who partook of improvement but were impatient of the political centralisation that at least nominally constrained their actions.

In particular, long-time residence in the castle towns combined with internal peace to divorce many retainers from the land at the same time as their stipends were minimised by lords facing the pressures of forced conspicuous consumption. The decline of personal ties of loyalty was surely hastened amongst that minority exposed to rangaku or Dutch learning, which in embellished forms filtered through the communication systems of and between major centres. Such samurai groups provided social fodder for the late-Tokugawa dissidents, just as they were amongst those who would take industrial advantage of the commutation of stipends into lump sums after the Restoration of 1868.

From all this we may paint a fairly colourful picture of change. By the end of the era, there was an escalation of political rebellion against the central regime, and this has been seen as evidence of a trapped modernity. Certainly Chosu and Satsuma were both leading areas of disaffection as well as foremost regions of commercial progress, the lord of Satsuma himself being a leading entrepreneur in pottery, in cannons and in the cotton spinning mill established in 1861 at Kagoshima on the basis of imported Lancashire machinery.²

With all this sketched out, we would not go on to argue that such changes in themselves were sufficient to generate the industrial revolution of the Meiji era. Certainly the Meiji modernisers inherited from Tokugawa a high level of literacy, a sturdy revenue base of around 25 per cent of national income, a balanced external trade (with annual exports of silk and silkworm eggs, tea, cotton and seafoods amounting to some $10 million), an agricultural population increasingly converted to tenancy (to perhaps 30 per cent of the total) in a sector that now marketed up to 50 per cent of the total product. But for every ‘modern’ merchant in late Tokugawa Japan there were several others who happily depended on usury, patronage and adoption into the upper classes and who were thus hardly apposite agents of either political or industrial revolution. The most intelligent of the commoners were usually immersed in the traditional land-based commerce of rice sales and guild organisation, as treasurers of domains and in the extension of credit to the shogunate and daimyo, rather than engaged in new industries. Amongst such groups had arisen a strong ideology that justified commercial profit in terms of service to the whole nation – this reflecting a samurai mode of legitimation – and had little to say about profits from industry. Again, for every region benefiting from proximity to new forms of demand, there were regions whose modes of supply had not altered in generations and whose inhabitants spoke a language and saw a world map entirely other than that of their urban compatriots. Nor was the search for new avenues of wealth and expression as great as the fear of China, Russia and Western Europe, particularly after the British wars against great China in the early nineteenth century. In all, we must beware confusing some seemingly necessary inputs into industrial modernisation with an argument about sufficient causation. The timing and character of the Meiji Restoration of 1868 and the subsequent industrialisation process was some complex compound of long-term internal changes and relatively short-term factors stemming from an enormous escalation in the interaction with other nations and their products, technologies, institutions and ideologies. It is in this conjunction of forces that we might discover some explanation of early Japanese industrialisation.

Our major clue into the workings of this conjuncture lies in the scale of things. In 1868 Japan was exceedingly large by world standards; compared to its thirty-odd millions of people, the population of Britain stood at around twenty-four million.³ It is highly unlikely that the system was effectively mobilised in its entirety as a prerequisite of interaction with the Western world. The story of industrialisation is more likely to lie with particular sites and agencies, the effective compulsions of those modernisers in government, bureaucracy, industry and commerce who together saw the need to meet the coming Western impact fully, rather than to allow an insidious, powerful foreign influence to end in system corruption, perhaps colonialism and subjugation. Those historians who might see such an imperative as merely the delaying of the logic of interaction to the awfulness of 1937–45 should not forget that in the interim years Japan joined the ranks of the industrialised nations of the earth. It was the only large independent nation to do so.

Spatial factors may well have partially determined Japan's political position within the economy of nations. Late Tokugawa, Meiji and early twentieth-century industrialisation was to be forged within a world of aggressive competition, vicious commercial cycles, imperialism and war. But Japan was tucked in nicely behind China. By the time that the early Western religious, military and commercial agents arrived there...

Table of contents

• Front Cover
• The Japanese Industrial Economy
• Also by Routledge
• Title Page
• Copyright
• Contents
• Illustrations
• Preface and acknowledgements
• 1 Introduction: achievements and outcomes
• 2 Interpretations of Japan
• 3 Maturity: social problems of Japanese capitalism
• 4 Forging explanations: technology
• 5 Cultural engineering
• 6 The institutions of late development: private enterprise
• 7 Nationalism and globalism: Japan in world context
• Notes
• Bibliography
• Index