The History of Japanese Economic Development

Origins of Private Dynamism and Policy Competence

Kenichi Ohno

• Verlag: Routledge
• Jahr: 2017
• ISBN:
  9781315444024
• Auflage: 1
• Thema: Volkswirtschaftslehre
• Thema: Wirtschaftstheorie

This is an easy-to-read book that explains how and why Japan industrialized rapidly. It traces historical development from the feudal Edo period to high income and technology in the current period. Catch-up industrialization is analyzed from a broad perspective including social, economic and political aspects. Historical data, research and contesting arguments are amply supplied. Japan's unique experience is contrasted with the practices of today's developing countries. Negative aspects such as social ills, policy failures, military movements and war years are also covered.

Nineteenth-century Japan already had a happy combination of strong entrepreneurship and relatively wise government, which was the result of Japan's long evolutionary history. Measured contacts with high civilizations of China, India and the West allowed cumulative growth without being destroyed by them. Imported ideas and technology were absorbed with adjustments to fit the local context.

The book grew out of a graduate course for government officials from developing countries. It offers a comprehensive look and new insights at Japan's industrial paththat are often missing in standard historical chronicles. Written in an accessible and lively form, the book engages scholars as well as novices with no prior knowledge of Japan.

1 AN OVERVIEW Evolutionary history and translative adaptation

DOI: 10.4324/9781315444048-2

Domestic society and external forces

In any country, history proceeds as an interaction between domestic and foreign forces. In the discussion of Japanese development that follows, this aspect of systemic interaction will be highlighted. Japan’s modernization began with its encounter with the powerful West in the nineteenth century. The path of Japanese industrialization thereafter can be interpreted as the process of various domestic actors, including the government, businesses, communities and individuals, responding to shocks and influences coming from abroad. This perspective is very useful even today, since developing countries are now required to develop in the strong presence of globalizing pressure. The development process of such countries can also be understood as two systems, local and foreign, in dynamic interaction. Today, new ideas and systems often come with such names as the market mechanism, democracy, conditionality, international best practice, MDGs and SDGs, bilateral and regional free trade agreements, and so on.

Domestic society is the base into which new foreign systems are introduced. Each society has unique characteristics reflecting its geography, ecology and history. Existing institutions in any society are mutually dependent and form a coherent whole (this is called “institutional complementarity”). Domestic societies have their own logic and mechanisms of internal evolution and, for certain periods, can evolve mainly through internal forces. This evolution is usually slow and continuous. But when exposed to strong foreign impacts, social equilibrium is suddenly disturbed and the country is dislodged from its previous course. If the domestic response to foreign elements is resilient and appropriate, the society will begin a new dynamic path of evolution. But if the response is weak or inconsistent, the society may be destabilized or even destroyed under foreign dominance.

In the twentieth century, isolation and self-sufficiency were pursued under socialist planning in some countries, but the effort failed miserably to produce economic dynamism. Since the disappearance of the Soviet Union, refusal to integrate into the global economy has been totally discredited as a national development strategy. While the policies of the World Trade Organization (WTO), the International Monetary Fund (IMF) and the World Bank contain many shortcomings, latecomer countries have no option but to join these international organizations and receive their policy advice. Now the question is not whether to integrate but how to integrate better. International integration is the necessary condition for development, but it is not sufficient (UNCTAD, 2004).

The term development does not necessarily imply the existence of external influence. Theoretically, development can be either internally motivated or externally driven. In our age, however, it has become almost impossible to achieve sound and sustainable development without effectively coping with and integrating into the global system. Development now carries almost the same meaning as “catching up with industrial countries” or “modernization through trade, FDI, and industrialization.” From a long historical viewpoint, this is a very special type of development. But we can hardly think of any other way. Whether desirable or not, this is the reality we face today.¹

Throughout its history, Japan also experienced periods of relatively tranquil internal evolution and periods of dynamic change under strong external influence. These periods alternated to create Japanese society in a multi-layered fashion (Figure 1.1). Major external impacts on Japan included the following:

• Rice cultivation—introduced from the Eurasian Continent around the third century BC (recent evidence shows that arrival of rice cultivation may have been earlier).
• Buddhism—brought from China via Korean Peninsula in the sixth century AD.
• Chinese culture and political system—imported vigorously from the seventh to the early tenth century AD.
• First direct contact with Europeans (Spaniards and Portuguese)—guns and Christianity arrived in the sixteenth century AD.
• Modernization—second contact with the industrialized West in the nineteenth century.
• Post-WW2 reforms—under US occupation, defeated Japan was transformed into a non-warring capitalist nation.

Figure 1.1 Japan’s multi-layered identity

Note: shaded areas indicate external impacts.

The Mongolians also tried to invade Japan twice in the thirteenth century, but their military attempts failed. On each occasion, Japanese resistance, combined with a huge storm, destroyed their fleet off the coast of Kyushu Island. Had the Mongolian invasion been successful, Japan would have received another big foreign impact.

Compared with the history of other countries in the non-Western world, it can be said that Japan absorbed successive external shocks rather well, and used them positively for change and new growth. Japan also retained its national identity throughout this process, although Japan today and Japan in the past look entirely different in their appearance. Japanese society exhibits a multi-layered, onion-like structure as shown above, where old and new elements coexist flexibly and different characteristics can surface depending on the circumstance. Meanwhile, one Chinese social scientist has remarked that China is like a hard stone ball that cannot change unless it is exploded and replaced by another hard ball (called “revolution”), maybe of a different color.

The Japanese people happily absorb a large number of potentially conflicting elements and use them interchangeably as occasions require. This is a unique feature of the Japanese people not often seen in other societies. To put it positively, the Japanese are flexible, generous and pragmatic. But to put it critically, they are without principle, fidelity or consistency. In his book Japanese Thought (1961), Maruyama Masao lamented that the Japanese had no tradition of thinking logically though they were full of emotion and experience. This criticism may be legitimate from the viewpoint of Western rationalism. But from another aspect, the seemingly principle-less way of the Japanese may have value if we are to coexist peacefully among different ethnicities, religions and ideologies in an integrated world. At any rate, the point to be stressed here is that Japanese attitude is quite different from Western attitude, without asserting which is superior.

This book focuses on Japan’s last great transformations driven by external shocks, namely the process of Westernization and industrialization under the strong pressure of the West during the nineteenth and twentieth centuries.

Translative adaptation

The idea of translative adaptation is proposed by Maegawa Keiji (1998), an economic anthropologist at Tsukuba University.

When a country in the periphery joins the world system, it may look as if the country (say, Ethiopia) is being absorbed in the dominant international order (say, the global trade system). It looks as if the country is forced to abandon its traditional culture, systems, social structure and so on, which are considered “backward,” in order to embrace the “international best practice.” Viewed from inside the country in the process of “being absorbed,” however, the situation is not always passive. In a proper integration process, Maegawa argues that the country should take initiative in deciding the scope and speed of integration, making sure that it can retain ownership (national autonomy), social continuity and national identity. The country surely changes, but the change is managed by its government and people and not by foreign firms or international organizations. Foreign ideas and systems are introduced not in the original form but with modifications to fit local needs and context. If this is achieved, the transformed country is not really so weak or passive. It is taking advantage of external stimuli to change and grow. This is called “translative adaptation.” Maegawa says that Japan since the Meiji period did just that.

When a non-Western society encounters a powerful representative of Western civilization, it is hardly possible to escape from its influences. Some ethnic groups have been eradicated in short periods after contact with the West. At the same time, many nations and societies have adopted Western institutions and objects from without in order to survive (or by their own choice). However, it is important to recognize that they did not accept Western inventions in their original forms. Any item in one culture will change its meaning when transplanted to another culture, as seen widely in ethnography around the world. Not only cosmology, religious doctrine, rituals, but also the family system, the institution of exchange, and even socio-economic organizations like the firm exhibit the property of adapting to external institutions and principles with the existing cultural system maintaining its form of structure. The essence of what has been called “modernization” is the adaptive acceptance of Western civilization under the persistent form of the existing culture. That is, actors in the existing system have adapted to the new system by reinterpreting each element of Western culture (i.e. “civilization”) in their own value structure, modifying yet maintaining the existing institutions. I shall call this “translative adaptation.”

(Maegawa, 1998, pp. 174–175)

Figure 1.2 Integration viewed from outside

Figure 1.3 Integration viewed from inside

However, international integration is a risky process and not all countries can perform translative adaptation successfully. A developing country exposed to strong external pressure faces a great challenge. This is a critical moment in the history of that country. Compared with the more predictable days of internal evolution, the fate of the society and its people now hinges critically on how they react to this challenge. Domestic capability is still weak, while the demands of globalization are high. Suddenly, the country is required to make a great leap forward or fall into an abyss. It is as if an average student is told by his teacher to participate in an international math competition. With enormous effort, he may improve his skill and win. But it is more likely that he will fail miserably. The problem is that the challenge is too big for his current ability. If the goal is unreachable, the effort is not fruitful.

While there is no doubt that the effort of domestic businesses and communities is important, the most crucial response to globalization must come from the policies of the central government. If the government loses control of the integration process, dire consequences may occur, such as macroeconomic instability, social disintegration, political crises, ethnic conflict, foreign dominance, and so on.

When caught in a dilemma between weak capability and the great challenges of globalization, some governments refuse to deal with the external world and revert to isolation, economic control and the rejection of Western ideas. Other governments rush to embrace the imported principles of free trade and Western democracy uncritically, without considering the effects this brings to the domestic society. Both reaction patterns are shallow, extreme and unadvisable. Translative adaptation requires much deeper knowledge of the top policy makers. It is indeed a very difficult task.

Japan too faced great challenges when it opened up to the Western world in the middle of the nineteenth century. It also experienced similar hardship after the war defeat of 1945. In both cases, Japan eventually emerged as a brilliantly successful latecomer, at least economically.

Why Japan could succeed

Traditionally, we consider Japan in the nineteenth century as a weak, agricultural and backward country with low technology suddenly exposed to influences from the powerful West. Japan struggled to industrialize and somehow succeeded. But why did only Japan succeed so early, among all non-Western countries? This is the biggest question for whoever studies Japan’s modern history. However, Umesao Tadao, a distinguished scholar in comparative civilization, says that there is no mystery here. According to him, Japan emerged as a non-Western industrial country very naturally.

Until 1993, Umesao was the director general of the National Museum of Ethnology in Osaka, which he founded in 1974. In his earlier days, he traveled extensively in Mongolia, Afghanistan, Southeast Asia, Africa and Europe undertaking anthropological fieldwork. In 1957, he proposed a new theory of Japanese history and national identity.

Umesao (1986, 2003) says that the traditional view of Japan as a backward c...