Meiji Japan - Gov. Responsible for Economic Development

The Meiji government was indispensable in facilitating economic modernisation in Japan from 1868-1885, for four key reasons. One, The government provided the political stability and unity required to spur confidence in foreign investors and domestic entrepreneurs to facilitate economic development. Secondly, they provided social and political reforms necessary for development. Most crucially of all though, the government from 1868-1885 was the leader in the infrastructure development required to facilitate development. They made modernisation possible, created an educated workforce, and were the “launching pad for further growth.” Political Stability Allows for Growth Historical Background In 1868 Japan was one of the world’s most fragmented polities. ‘Japan’ was still divided into nearly 200 autonomous domains with their own treasury and army. Ikki – social unrest – was rife among the peasantry. In 1868 the new ‘government’ was a small band of insurgents without control of Japan. The four domains of Choshu, Satsuma, Hizen and Tosa which had prominent military force distrusted each other. Court nobles were independent. Demands for democracy began to arise. A feudal like social structure existed. Only ‘very vague’ (Cullen, pg. 205) notions of Japanese nationalism existed. --. Yet, a scarce three years later political stability and centralisation had been achieved. So, what caused this stability? The essential factor was the “exceptionally able” statesmen Japan had at this time. (Hane) Japan has rarely, if ever, had more able leaders than in the Meiji era (Whitney, pg. 267; Elise Tipton, pg. 36) , and as the specialist political historian Marius Jansen states “The Meiji Leaders were by any measure a remarkable assemblage.” (pg. 372) The personal diplomacy of the leaders went a ‘long way’ (Beckman, pg. 267) to dismantling the prefectural system, creating a unified ‘Japan’ and allowing economic development to occur with economies of scale and organisation. To be clear, all modern contraptions of government – be they military, the stock market, a federal reserve, ‘ministries’ etc. – did not exist on a unified scale before 1868. The Tokugawa system was insufficient to promote growth. Uniting Japan as a country was necessary for ‘Japanese economic development.’ Remember, as Marius Jansen, states in The Making of Modern Japan, political reform “took place so swiftly that the difficulties can be forgotten much too easily.”[1] What we take for granted – political stability, working government, a unified country – was not present in 1868. The Meiji gov. was responsible for change. Social / Political / Educational Reforms Foster Development The government moved swiftly to abolish Japan’s feudal style han system and limit the cost of samurai stipends. This had two extremely significant impacts. Firstly, occupational mobility was greatly increased, facilitating the development of the middle class which were responsible for over 50% of gains in real national income in the following decades. (Walthall, pg. 158) Secondly, and no less importantly, new funds for vital infrastructure development became available, driving economic growth. The government also established a national education system, which fostered the development of skilled workers in Japan. More on this below. The government was the facilitator of infrastructure; This caused development Voters – weigh infrastructure development as the most important point in this debate. Economic development requires infrastructure development. The question is who caused infrastructure to develop? Voters, the following statistic is paramount in this debate: “Every year from 1868-1885 public capital formation was greater than private capital formation.” (Sheridan, pg. 72) That is, the majority of investment spending that built Japan and facilitated economic modernisation came from the government for 17 consecutive years. What did this mean? When the government dredged harbours and built lighthouses it accommodated coastal shipping and paved the way for the growth in exports. Proof? “Between 1868 and 1893 Japanese raw silk production rose almost fivefold, from 2.3 million pounds to 10.2 million pounds. Most of this was sold overseas. Silk accounted for 42 percent of all Japanese export revenues during this quarter-century.” (Gordon, pg. 95) The expansion of exports financed imports of European technology required for industrialisation. When the government set up telegraph lines in 1869, and a postal system in 1871, it fostered communication. Institutional infrastructure (stock market, a federal reserve etc.) was also set-up. Most importantly of all, the government began building a railway network, and encouraged private enterprise to do the same. Railways were vital in facilitating the growth in domestic trade which was responsible for Japan’s economic modernisation. Railways lowered the transportation costs of raw materials, which enabled Japanese producers to lower their prices, and promoted industrial ventures such as textiles. For instance, rising agricultural productivity of between 1 and 3% annually (Gordon, pg. 95) meant that despite a ten million rise in population, the rural population declined from 1880 to 1900 (Ibid) and caloric consumption per capita increased 1% annually. (Bassino, pg. 503-520) That is, less people fed a larger population and people on average ate more! Food surpluses in agriculture freed up workers to work in other sectors, enabling future growth, and the development of a modern economy not dependent on agriculture. But what caused rising productivity? Productivity growth occurred due to paddy cultivation, which happened because declining transport costs opened larger markets for farmers, allowing economies of scale to develop, and costs to be lower, increasing productivity. (Bassino, pg. 516) Growth in railways also set off a “private company boom” in the 1880s, which led to the stock market’s creation in Japan. (Gordon, pg. 71). This was vital because it enabled investment to be more easily funnelled into industrial enterprises. These enterprises then provided goods and services in addition to employment, servicing economic development. The government also hired foreign experts to educate the Japanese workforce and set up model industrial enterprises. These played a vital role in spurring economic modernisation. In short, the government every year 1868-1885 provided the majority of infrastructure development, and this facilitated economic development. Government Creates a Skilled Workforce The government also hired foreign experts to educate the Japanese workforce and set up model industrial enterprises. These played a vital role in spurring economic modernisation because they gave lessons to entrepreneurs, and added to private sector knowledge at a time of great hesitance.. In the cotton industry, even though gov. imported the wrong technology, this informed private enterprise on how to succeed. Example 2 - It was not until government officials offered their own daughters to work in the Tomioka mill that many regarded silk-reeling as ‘safe’. (Tipton, pg. 49) Even when model factories failed, lessons were learnt. The point, as labour relations specialist Gordon stresses, is that the first generation of industrial workers – ‘a small industrial wage labour force’ – had been created. (Gordon, pg. 72) Private enterprise was hesitant to intervene initially; government had to lead the way. (Beckman, pg. 273) Conclusion The government was indispensable for uniting, reforming, building and training Japan to facilitate economic development. I will discuss, if necessary, why other factors are secondary to development in later rounds.