Japanese Economy A 2011 Fall

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Transcript Japanese Economy A 2011 Fall

Japanese Economy A

2012 Fall

Seinan Gakuin University

Noriaki EZOE

Professor Ph.D

Economics Department Seinan Gakuin University Japan Mail address: [email protected]

Homepage address: https://w3.seinan-gu.ac.jp/~ezoe/ 1

Chapter 2 Economic History, Part1: Edo Period and Meiji Era

What you will learn in this Chapter

1 History in Japanese development :Overview.

2 Edo period : Shogun system and seclusion. 3 Meiji Era : What Meiji revolution had achieved?

1 History in Japanese development : Overview.

Japanese history can be divided into four major periods: (following chart).

1.1 the period 1: The rise and fall of the emperor

- 300 BC

Jomon

: The early Japanese were gatherers, hunters and fishers. Continental Asian influence was a very important. Modern Japanese may well be the descendants of continental Asian tribes. These tribes came to Japan in waves, one after the other. 300 BC - 300 AD

Yayoi

: The rice agriculture begins. The development of a social hierarchy and small countries started to unify into larger countries. 300 – 710

Yamato

6 th : Japan is for the first time united. Large tombs (kofun) were built.

century Buddhism first came . The emperor family took the power (AD 645) 710 - 794

Nara :

Nara becomes the first permanent capital. 752 The great Buddha created.

794 - 1185

Heian :

The capital moves to Heian (Kyoto). "Japanization" of foreign culture. The Tale of Genji (11 th century).

I. Emperor’s Rule NARA Centraliz ation Jinshin War

671 Taika Reform

645 Clan fights Hunting & gathering HEIAN Nobles, Decentral ization xxxx II. Samurai’s Rule 1603 X 1867 III. Modern -ization KAMAKURA MUROMACHI SENGOKU Internal wars, dynamic & fluid society EDO Tokugawa Shogunate Peace, isolation, conservat ive class society PP.16-17 IV. Postwar MEIJI Westerniza tion, industrializ ation, militarilizat ion WAR Rapid recovery and growth xxxx xxx Rice Buddhism Chinese culture & political system WEST: guns & Christianity WEST!!!

US occupation 1945-52

1.2 the period 2:

The age of Samurai ( Feudal era )

• • • • • • • • Power centralization declined.

Local landlord and temples became independent. To protect their land, warrior class (samurai) emerged.

1185, samurai leaders formed the government.

Kamakura Shogunate repelled Mongol invasion(1274, 1281). After this, the shogunate fall, internal fights among daimyo(samurai leaders ) ensued.

Sengoku era : century-long civil war.

16 th century, the European influences prevailed.

Finally, Tokugawa won the battle, established military government of Edo.(1603 - 1867) 18- 19 th century , government power declined.

• • • • • •

1.3 the period 3:

Meiji modernization

After the resignation of the shogun, a centralized state established under the Emperor .

Adopted Western political, judicial and military institutions.

The Meiji Restoration transformed the Empire of Japan into an industrialized world power that pursued military conflict to expand its sphere of influence. "Taishō democracy“: early 20th century the political power shifted from the Meiji oligarchic clique to the parliament and the democratic parties. 1930s, world economy collapsed. The rise of fascism and militarism. Long war ( １９３７－ 1945 ） 6

• • • • •

1.4 the period 4:

Post war growth

Japan was defeated in 1945.

US occupation(1945 － 1952).

Japan achieved rapid growth to become the second-largest economy in the world. This ended in the mid-1990s when Japan suffered a major recession. In the beginning of the 21st century, positive growth has signaled a gradual economic recovery.

On March 11, 2011, Japan suffered the strongest earthquake; this triggered the Fukushima I nuclear accidents, one of the worst disasters.

• • •

2 Economic History: Edo Period

2.1

Transition from Sengoku to Edo

The sengoku period, 12c to 16c

Internal fights for dominance continued.

Religion for self discipline, pragmatism and coping with life or-death situation emerged (Zen Buddhism).

Society was dynamic and fluid. Power, not family name, mattered.

Tokugawa Ieyasu (1542 - 1616)

Daimyo’s direct rule of land and farmers was established (removal of middle powers such as influential temples, manors, landlords).

Rigid separation of samurai and farmers --Kenchi 検地 (land survey and registration)  creation of family farms.

--Katanagari 刀狩 (confiscation of all arms from non-samurai classes)--All samurai required to live in castle town, receive rice salary--All farmers required to live in villages, till allotted land, and pay rice tax 8

2.2 Tokugawa Period (1603~1868) :The baku-han system

(1) Features of the Bakufu-Han System

Bakuhu(Government)controls Hans(Daimyo).

- The daimyo were divided into distinct groups. The shinpan, The fudai ,Tozama daimyo--- The daimyo were not required to remit taxes to the bakufu but were occasionally called upon to assist in the building of public works and were also expected to supply guard contingents to imperial and bakufu facilities.

(2) Class society:The caste system (shi-no-ko-sho)

All people were classified as four groups: samurai( 士 ), farmer( 農 ), artisan( 工 ), and merchant （商） Assignment to a particular caste was according to birth.

- The percentage of the population that comprised the samurai class was probably only about 7 percent. The great majority of people, 80 percent, were farmers, followed by 13 percent artisans and merchants.

Japanese Economy 9

How to keep daimyos obedient:

--Seppuku & termination of family --Limits on military capability (e.g. one castle) --Relocation & downsizing of hans at will --Sankin kotai (bi-annual residence in Edo) --Assignment of charges and public works

Ohno PP.23-25

Bakuhan Taisei

(Bakufu-Han System)

幕藩体制 --“Feudalism” --Class society

Separation of rulers and ruled

士農工商

(3)Alternate attendance (sankin kotai)

• the daimyo spend half their time in Edo and that their families reside there year round.

The economic effects

- Edo became a major consumption center - Osaka had become the city of merchants - development of roads and coastal waterways •

(4)The seclusion policy

(sakoku) -

Only Dutch and Chinese were allowed to trade through the southern port at Nagasaki. Reasons : to prevent military alliances between the European countries and the daimyo. Suppression of Christianity.

to reserve for the Tokugawa a quasi monopoly of imports 11

Ohno P.23

2.3 Pre-conditions for Industrial Take-off

• Political unity and stability • Agricultural development and commercialization • Development of transportation and nationally unified markets • Rise of commerce, finance and wealthy merchant class • Rise of pre-modern manufacturing • Industrial promotion by local governments • High level of education

Samurai police and merchants City girls Daimyo in his castle

Ohno PP.25-28 Agriculture: Positive vs Negative Aspects

• • • • • • Village autonomy and family farming Acreage rose then stabilized, productivity rose continuously Technology and knowledge improved over time As commercial crops increased, rich farmers emerged Farmers were tied to land and had to pay heavy (?) tax Famine, discontent with policy/officials led to ikki (farmers’ rebellion) Koku/cho 20 Output/land (left scale) 15 Million cho (=ha) 8 6 10 4 5 0 1600 1650 1700 Source: Hayami & Miyamoto, 1988.

2 Farmland (right scale) 1750 1800 1850 1872 0

**Rich Merchants in Edo Period (Gosho)**

Mitsui Family

-17c From Matsuzaka -Kimono trade & money exchange in Edo, Kyoto, Osaka – huge success

Manager: Minomura Rizaemon

-Cope with bakufu policy to protect Mitsui business -Support and work with new government -Internal reform: from gosho to zaibatsu -1876 Establish Mitsui Bank & Mitsui Trading Company

Ohno Sumitomo Family

-16c Adopt Western copper refining, copper trade (Kyoto) -17c Move to Osaka -Besshi Copper Mine (under Bakufu’s commission)

Manager: Hirose Saihei

-Avoiding gov’t confiscation -Introducing Western mining technology to renovate Besshi -Business diversification

Onogumi? Tennojiya? Hiranoya? Shimadagumi? Kashimaya?

Konoike

-Sake making, trading, loans to daimyo -No serious internal reform in Meiji -Failed to form zaibatsu (Sanwa Bank)

High level of education

Ohno PP.33-34 Official Teaching Private teaching Bakufu Schools and Han Schools

The core curriculum was ancient Chinese philosophy, especially Confucianism (6-5c BC).

-Confucianism emphasized social order, respect for superiors and elders, the role and duties of the ruler, and rituals and ceremonies (legitimacy for class society).

-Study consisted of reading old Chinese literature in Japanese way, memorizing, and interpret the meaning.

Shokason Juku

by Yoshida Shoin (1830-59 ) • Produced many political leaders Ito Hirobumi (Prime Minister) Yamagata Aritomo (Prime Minister) Kusaka Genzui (anti-bakufu fighter)

Kangi-en

by Hirose Tanso (1782-1856) Largest private school in Edo period, attracting over 4,000 students -Main courses: ancient Chinese literature and philosophy 15

Ohno P.35

Terakoya

(Private Primary Schools)

• • • Private teaching (3Rs:read, write, abacus) at teacher’s house, all over Japan (20,000+)—contributing greatly to literacy Any intelligent person can be a teacher, any child can study (ages about 7-13) Individual teaching, with flexible time and flexible fee

8-12am Writing (brush & ink) 12-1pm Lunch at home 1-2pm Arithmetic, moral 2pm Go home

Monthly exams Year-end final exam Writing exhibitions, Apr & Aug

3 days/month, plus others

2.3 Fall of Bakuhu

Decline of the feudal system

• • • •

(1) Rice-based system----chronic

fiscal crisis

Economy shifted from rice to cash crop, agro-processing and commerce, but revenue continued to be based on rice tax Bakufu and han governments launched reforms and industrial promotion to cope with budget crisis (only some succeeded) Inflation accelerated in late Edo period due to (i) debasement of gold, (iii) foreign trade, and (iii) famine (entire period)

Higher taxes and inflation led to farmer`s riots

Output & Tax on Bakufu Land 17

(2) The social hierarchy began to break down

as the merchant class grew increasingly powerful while some samurai became financially dependent of them. (3) External pressure Commodore Perry in 1853 and 1854: --military threat to open up Japan.

• • Trade with West began under unequal treaties (1858: no tariff right, no court right), which brought social and economic changes Fights over pro- and anti-foreigner forces, and pro- and anti-Bakufu forces began, eventually toppling Bakufu (1867) 18

Ohno P.43

3 Economic History: Meiji Era

(1868-1912)

3.1 Meiji Government: Radical Reformist

Initially, avoid colonization by the West



Rapid modernization and Westernization



Become “first-class” nation on a par with West

• • • Political goal - abolish feudalism and class society; introduce Western style constitution and parliament Economic goal - industrialization based on rapid adoption of Western technology External goals - (1) revise unequal treaties as soon as possible; (2) modernize army & navy, establish “sphere of influence” around Japan Fukoku Kyohei ( 富国強兵 ) - Enrich the country, strengthen the military

Shokusan Kogyo

（殖産興業） - Increase production, encourage industry

3.2 Early steps of the new government

• Capital move to Tokyo.

• Han abolished, replaced Prefecture • Land tax reform • Dispossession of the samurai •

Iwakuma mission (Dec.1871-Sep.1873)

Half the cabinet - Iwakura (leader), Okubo, Ito, Kido, Yamaguchi, and other high officials (46); attendants (12), students (49); total 107 members

Purpose 1

: Start renegotiating unequal treaties (failed)

Purpose 2

: Inspect Western systems and technology Official report with illustrations by Kunitake Kume (scholar) (1) Valuable inputs for policy making (2) Conflicts with “home-keeping” gov’t (leaders who stayed home) ---- Civil war (1878): Seinan War 20

Ohno PP.41-42 Fake color photos of early Yokohama

• • • • •

3.3 Resumed International Trade

Open ports: Yokohama, Nagasaki, Hakodate, Hyogo, Niigata E xpo rt 0% Unequal treaties with West vs. no travel rights for foreigners Rise of Yokohama merchants Im po rt Rapid westernization and technology import begin Inflation, relative price changes, rise and fall of industries 20%

To US Trade 1876-80

40% 60% 80% 100% Silk C otton yarn C otton fabrics

From UK

Tea W oolen goods

Case Study; Early Meiji trades

After a opening the economy, Japanese tariff rate had been very low. - --Reason: 1865: by the unequal treaty with Western Powers Japan was forced to take a low tariff rate (5%). --Those figures show that the early Japanese economy faced with a free trade.

Review (Economics)

Gains from Trades: 1 Comparative advantage theory : trade between two countries makes both countries better off than they would be in autarky—that is, there are gains from trade.

2 The main sources of comparative advantage are:

International differences in climate Differences in technology Factor endowments Japanese Economy 22

3 International trade increases the demand for factors that are abundant in the country compared with other countries, and to decrease the demand for factors that are scarce in the country compared with other countries. 4 International trade leads to expansion in exporting industries and contraction in import-competing industries. 5 Compensation principle Trades may result some groups worse off. Lump-sum transfers from gainers to losers would necessary.

Japanese Economy 23

(1) The Effects of Exports (Raw silk, tea ) The world price is higher than the autarky price

trade

leads to exports and a rise in the domestic price compared to the world price.

There are

overall gains

from trade because producer gains exceed the consumer losses Figure Japanese Economy 24

Japanese Economy 25

(2)

The Effects of Imports

• When a market is opened to trade, competition among importers or exporters drives the domestic price to equality with the world price. • If the world price is lower than the autarky price, trade leads to imports and a fall in the domestic price compared to the world price. • There are