The Economic DevelopmentofJapan
The Path Traveled by Japan as a Developing Country

Kenichi Ohno

Translated from Kenichi Ohno, Tojokoku Nippon no Ayumi: Edo kara Heisei
madeno Keizai Hatten (The Path Traveled by Japan as a Developing Country:
Economic Growth from Edo to Heisei), Yuhikaku Publishing Co. Ltd., Tokyo,
2005.

Copyright © 2006 by GRIPS Development ForumGRIPS Development Forum
National Graduate Institute for Policy Studies
7-22-1 Roppongi, Minato-ku, Tokyo 106-8677, Japan
Phone: 81-3-6439-6000
Fax:

81-3-6439-6010

Email: forum@grips.ac.jp

I would like to thank my students at GRIPS for giving me theopportunity to write this book, and Ms. Azko Hayashida forcompiling the English edition.

Contents —————————————————
Preface to the English Edition
Foreword to the Japanese Edition
Chapter 1 Modernization for Latecomers ······ 1
Chapter 2 The Edo Period: Pre-conditions for Industrialization ······ 21
Chapter 3 Meiji (1): Key Goals of the New Government ······ 39
Chapter 4 Meiji (2): Importing and Absorbing Technology ······ 55
Chapter 5 Meiji (3): Development of Major Industries ······ 71
Chapter 6 Meiji (4): Budget, Finance and the Macroeconomy ······ 85
Chapter 7 World War I and the 1920s: Export-led Boom and Recession ······ 99
Chapter 8 The Showa Financial Crisis of 1927 ······ 113
Chapter 9 The 1930s and the War Economy ······ 125
Chapter 10 Postwar Recovery, 1945-49 ······ 143
Chapter 11 The High Growth Era ······ 161
Chapter 12 Economic Maturity and Slowdown ······ 183
Chapter 13 The Bubble Burst and Recession ······ 199
Final Exams ······ 217
Questions Asked by Students ······ 221
References ······ 233

Preface to the English Edition
Materials contained in this book were initially made available on the Englishlanguage website for a Master’s program at the National Graduate Institute for
Policy Studies (GRIPS) in Tokyo. They were then translated into Japanese andpublished in book form for the benefit of Japanese readers in early 2005. However, it soon became clear that the book was very much wanted by non-Japanese readers as well. I was approached by foreign students in Japan and publishers abroad for permission to translate it into other languages including Arabic,
Chinese, and Vietnamese. While the Japanese edition can serve as the original,
it would be much easier to secure good and fast translation if the book werealso available in English. Furthermore, the readership would expand greatly
with the publication of an English edition. That is why the book was translatedback into English.
This book offers an analytical tour of Japan’s socio-economic changes. It is neither a monotonous chronology nor a collection of unrelated academic papers.
Instead, it introduces the readers to the most advanced—and sometimes controversial—studies on the modern history of Japan. Internal capability generated
by frequent interactions between domestic and external forces is the connecting
thread throughout this volume. While the writing style may seem simple andwithout too much theorization, ideas presented here are the ones that haveemerged from long and serious investigation by many researchers. I believe that
this is the first book of this kind ever to have been published either in English or
in Japanese. Please enjoy.
Tokyo, February 2006
Kenichi Ohno

Foreword to the Japanese Edition
This book contains lectures on the Economic Development of Japan which wasdelivered in English by the author at the National Graduate Institute for Policy
Studies (GRIPS) in Tokyo from 1998 to 2004. The majority of my students
were young government officials from developing and transition countries who
would return to their duties after the study at GRIPS. Japan is a unique country
which rose from a backward agricultural economy in the Far East to the forefront of industrial technology. Although I am not an economic historian, I
agreed to teach this course because I was attracted by the intellectual challengeof re-telling the remarkable story of Japan’s development not as a past tale reminisced about by the Japanese themselves but as a contemporary message to foreign elites who are struggling to develop their motherlands at this very moment.
I am a practitioner of economic development. I stay in a latecomer country(Vietnam, to be more precise), advise its government on economic policy making, train young people who can replace me in the future, and offer academic
inputs to the Japanese government and other donors of that country. The topic
of this book, the history of Japan after its global re-integration in the mid-19th
century, may seem a little worn-out to Japanese scholars who have alreadyspilled a huge amount of ink on the subject. But I still take it up, in the hopethat we might see the road traveled by past Japan in a new light as shed by thestandards and common sense of today’s developing countries. I wrote this bookin Japanese to share my excitement with the Japanese readers.
We recognize ourselves by the existence of others. International comparison isabsolutely necessary to understand the characteristics of any society. My lectures were meant to be a mirror in which foreign students discovered their own
countries. At the same time, I believe that they can also serve as a mirror forJapanese people to re-discover themselves. I myself encountered numerous surprises as I prepared and delivered these lectures. Domestic research closed to
the rest of the world cannot uncover Japan’s position in the world history.

In preparing the website and lecture notes which I used to compile this book, I
tried to gather information broadly. While the core materials came from theexisting academic literature on Japanese economic history, I also added discourses on politics, culture and ideas in order to make the lectures intellectuallystimulating to my target audience. Since my time and knowledge were limited,discussions in this book might at times be less precise than experts would allow.
Concise description of issues that have been hotly debated by scholars runs therisk of oversimplification. If there are any errors in factual statements, I will be
more than happy to correct them. However, it should also be stressed that the
purpose of this book is to describe a broad stream of history with the help of aparticular vision rather than to scrutinize historical facts in detail. The presentation of a historical vision is a task that can be done relatively independently
from the clarification of minor details.
When I visited libraries and second-hand bookstores in the Kanda District ofTokyo for writing this book, I was often disappointed. In my opinion, there
have been too many studies on Japanese history that were influenced by the
Marxian ideology. Another group of studies endlessly pursue mini discoveries
and minor re-interpretations without placing them in a proper historical context.
Still others list numerous facts chronologically without structure, making themquite boring to the readers. While I respect their effort in search of truth, it isevident that competition among alternative historical visions, which can help us
to select and evaluate various facts, is lacking. Social phenomena must be
understood organically and comprehensively, but this does not mean that therigid Marxian interpretation should be the only guide.
In a modest way, this book attempts to offer one possible vision to review andproject economic development. This vision, presented more fully in Chapter 1,
states that the dynamism of Japanese society was the result of cumulative interaction between domestic and foreign systems in which internal institutional
evolution and responses to foreign elements were repeated throughout history.
This progress pattern, which was unique to Japan (and Western Europe),
strengthened the capabilities of both private enterprises and government officials, transformed social structure gradually but irreversibly, and prepared theconditions for rapid industrialization in the Meiji period and beyond. However,this fortunate pattern does not exist in today’s developing countries. For thisreason, they cannot copy Japan’s development path to grow and industrialize. I
leave the validity of this vision to the assessment of the reader.
In producing this book, Japanese studies were first summarized and translated
into English, then translated back into Japanese. In the process, some historicalterms have been replaced by more general language. Some explanations which
are totally unnecessary to Japanese readers have nonetheless been partly
retained, to convey the atmosphere of the lectures delivered to foreign students.
Additional data and photos used in classroom handouts and the lecture website
had to be mostly omitted from this edition due to the limitation of space. Quotations in archaic Japanese have been rephrased in contemporary Japanese. At theend of this book, final exam questions I gave to my students and classroom
exchanges are attached for the interested readers.
In planning and producing this book, I was deeply indebted to Ms. Yuko Fujita
of Yuhikaku Publishing Co., Ltd. Mr. Susumu Ito of Yuhikaku was also instrumental in this publication. My sincere thanks go again to both, who previously
helped me to publish another book. The rest of my gratitude is properly directed
to my students who attended the Economic Development of Japan over the past
six years. The official count of students who sat the final exam was 172, but if
the dropouts are included, over 200 students listened to my lectures. I hope thatthey will remember the path traveled by a developing country called Japan—
with its brilliant successes and dismal failures—when they formulate policies
back in their own countries.
December 2004
The Author

Modernization for Latecomers

The World Bank today, Washington, DC, USA

Newspaper illustration of the Black Ships of Commodore Perry, circa 1853.

Chapter 1

1. Domestic society and external forces
In any country, history proceeds as an interaction between domestic
and foreign forces. In the discussion of Japanese development which follows,
this aspect of systemic interaction will be highlighted. Japan’s modernization
began with its encounter with the powerful West in the 19th century. The pathof Japanese industrialization thereafter can be interpreted as the process of various domestic actors, including the government, businesses, communities andindividuals, responding to shocks and influences coming from abroad. This perspective is very useful even today, since developing countries are now required
to develop under 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 thenames such as the market mechanism, democracy, conditionality, international
best practice, PRSP, MDGs, and so on.
A domestic society is the base into which new foreign systems are
introduced. Each society has unique characteristics reflecting its ecology andhistory. Existing institutions in that 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 usuallyslow 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 forces is resilient and appropriate,
the society will begin a new dynamic evolution. But if the response is weak or
inconsistent, the society may be destabilized or even destroyed under foreign
dominance.
In the 20th century, isolation and self-sufficiency were pursued undersocialist planning, but the effort failed miserably to produce economic
dynamism. Since the disappearance of the Soviet Union, refusal to integrate
into the world has been totally discredited as a national economic strategy.
While the policies of the WTO, IMF, and World Bank contain many shortcomings, latecomer countries have no option but to join these international organizations. Now the question is not whether to integrate but how to integrate. Inter-2Modernization for Latecomers

national 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 internally driven or externally motivated. In our age, however, it has become almost impossible toachieve sound and sustainable development without effectively coping with andintegrating into the global system. Development now carries almost the same
meaning as “catching up with industrial countries” or “modernization throughtrade, FDI, and industrialization.” From a long historical viewpoint, this is avery special type of development. But we can hardly think of any other way.
Whether desirable or not, this is the reality we face today1.
Throughout its history, Japan also experienced periods of relatively
tranquil internal evolution and periods of dynamic change under strong external
influences. 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 thethird century BC (recent evidence shows that rice cultivation may havebeen brought to Japan earlier).
Buddhismbrought from China via Korea in the sixth century AD.

Chinese culture and political system

imported vigorously from theseventh to the early tenth century AD.
First direct contact with Europeansguns and Christianity arrived in

the 16th century AD.
Modernization

the second contact with the industrialized West in the

19th century.
The Mongolians also tried to invade Japan twice in the 13th century,
but their military attempts failed. It is said that, on each occasion, a huge storm
destroyed their fleet off the coast of Kyushu Island. If the Mongolian invasion
1

Among development strategies, the promoters of endogenous development argue for restricting
external integration and letting local systems within each society become the growth engine.
This includes, for example, agricultural production for local consumption rather than commercial sales, and communal development based on traditional religion, value and customs. Thisapproach may activate communities and provide a risk sharing mechanism in a certain stage ofdevelopment. But its validity as a long-term universal development strategy is not confirmed.

3Chapter 1

Figure 1-1 Japan’s Multi-layered Identity

Pre-historic Japan
Rice cultivation
Buddhism, China
Heian & Samurai
CultureGuns & Christianity
Edo Culture
Western influence

Note: Shaded areas indicate external impacts.

had been successful, Japan would have received another big foreign impact.
Compared with the history of other countries in the non-Westernworld, 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 thepast are entirely different in their appearance. Japanese society exhibits a multilayered, onion-like structure, where old and new elements coexist flexibly anddifferent characteristics can surface depending on the circumstance (Figure 11). Meanwhile, one Chinese social scientist has remarked that China is like ahard stone ball which cannot change unless it is exploded and replaced byanother hard ball (called “revolution”), maybe of a different color.
The Japanese people happily absorb a large number of potentiallyconflicting elements and use them interchangeably as occasions require. This isa 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 devotion. In his famous book on
Japanese philosophy, Masao Maruyama (1961) lamented that the Japanese had

4Modernization for Latecomers

no tradition of thinking logically and consistently though they were full of feelings and experiences. This criticism may be legitimate from the viewpoint ofWestern rationalism. But from another aspect, the seemingly principle-less wayof the Japanese may have some value if we are to co-exist peacefully among
different ethnicities, religions and ideologies in an integrated world. At any rate,
the point we want to make here is that Japanese thinking is quite different from
Western thinking, without asserting which is superior.
This book focuses on Japan’s latest great transformation driven by an
external shock, namely the process of Westernization and industrialization
under the strong pressure of the West during the 19th and 20th centuries.

2. Translative adaptation
The idea of translative adaptation is proposed by Keiji Maegawa, an
economic anthropologist at Tsukuba University.
When a country in the periphery joins the world system, it may look
as if the country (say, Kazakhstan) is being absorbed in the dominant international order (say, the global market system). It looks as if the country is forced
to abandon its traditional culture, systems, social structure and so on, which areconsidered “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
says that the country should take initiative in deciding the terms of integration,
Figure 1-2 Integration Viewed from Outside

Existing World System
Democracy, market economy, industry,technology, life style ...

Latecomer countr y

Dynamism for change（＋）
Integration risks（−）

5

Chapter 1

Figure 1-3 Integration Viewed from Inside
Interaction of domestic & foreign systems
Imported from outside by:Foreign
Systems

Invasion
Migration
Trade and FDIODAInternational organizations

Conflicts andadjustments
Govornment
must manage

Base SocietyInternal systemic evolution

making sure that it can retain ownership (national autonomy), social continuity
and national identity. The country changes, but the change is managed by its
government and people and not by foreign firms or organizations. Foreign ideas
and systems are introduced not in the original form but with modifications to fit
local needs. 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 iscalled “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 inventionsin their original forms. Any item in one culture will change its meaning whentransplanted to another culture, as seen widely in ethnography around theworld. Not only cosmology, religious doctrine, rituals, but also the familysystem, the institution of exchange, and even socio-economic organizations

6Modernization for Latecomers

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 acceptanceof Western civilization under the persistent form of the existing culture. Thatis, 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 shallcall this “translative adaptation.” (Maegawa, 1998, pp.174-175)

However, international integration is a risky process and not all countries can perform translative adaptation. A developing country exposed tostrong external pressure faces a great challenge. This is a critical moment in thehistory of that country. Compared with the more predictable days of internal
evolution, the fate of the society and its people now depends critically on how
they react to this challenge. Domestic capability is still weak, while thedemands of globalization are high. Suddenly, the country is required to make agreat leap forward or fall into an abyss. It is as if an average student is told byhis 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 failmiserably. The problem is that the challenge is too big for his current ability. If
the goal is unreachable, the effort is not fruitful.
While 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 soon.
When caught in a dilemma between weak capability and the greatchallenges of globalization, some governments refuse to deal with the external
world and revert to isolation, economic control and the rejection of Westernideas. Other governments rush to embrace the imported principles of free tradeand Western democracy uncritically, without considering the effects it brings to
the domestic society. Both reaction patterns are shallow, extreme and unadvisable. Translative adaptation requires much deeper thinking by the top policy
makers. It is indeed a very difficult task.
Japan faced great challenges when it opened up to the Western world7Chapter 1

in the middle of the 19th 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.

3. Why Japan could succeed
Traditionally, we consider Japan in the 19th
century as a weak, agricultural, backward country with
low technology suddenly exposed to influences from thepowerful West. Japan struggled to industrialize andsomehow succeeded. But why did only Japan succeed
so early, among all non-Western countries? This is thebiggest question for whoever studies Japan’s modern
history. However, Dr. Tadao Umesao, a distinguishedTadao Umesao (1920-)

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, Dr. 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 andEurope undertaking anthropological fieldwork. In 1957, he proposed a new theory on Japanese history and national identity.
Dr. Umesao says that the traditional view of Japan as a backward
country is wrong. He argues that Japan and Western Europe are two very
unique societies in the world. Both are located on the periphery of the huge
Eurasian Continent. Both enjoy a temperate climate. More importantly, they are
relatively insulated from violent invasions by nomadic peoples residing in thecentral dry areas of the Eurasian Continent. He argues that these geographic andclimatic advantages are crucial for the spontaneous and continuous development of society. Japan and the United Kingdom are particularly similar in thatthey are island nations just off the continent.
Japan and Western Europe were an appropriate distance (not too far,not too close) from the great civilizations of Eurasia—namely, China, India,
and the Middle East (Islam). They could absorb the cultural achievements of8

Modernization for Latecomers

Figure 1-4 Dr. Umesao’s View of the World
Eurasian Continent

RussiaThe
Western Mediterra- Dry Area China
Japan
Europe neanandIslamic
statesIndia

Source: Compiled by the author from Umesao, 2003, 1986.

these civilizations while being invaded and destroyed much less often than societies located in the middle of the continent. This permitted both societies to
evolve cumulatively and organically. They mixed domestic culture and foreign
impact properly, without being wiped out and having to start over again fromscratch. Under these similar historical conditions, Japan and Western Europe
developed independently and in parallel—from centralized imperialism topower decentralization, establishing feudalism, then absolutism, and finallycapitalism. It is no accident that the Industrial Revolution originated in the
United Kingdom, and that the only non-Western country to industrialize as
thoroughly as the West was Japan. In no other areas did history evolve sosequentially. According to Umesao, Japan got behind the United Kingdom
because it adopted the bizarre policy of external isolation from 1639 to 1854
(chapter 2). Without this deviation, Umesao asserts, the two nations would haveachieved the Industrial Revolution at about the same time2.

2

In the historical discourse of Dr. Umesao, the most shocking passage to the author was his view
on Japan’s invasion of other East Asian countries from the late 19th century to 1945. He argues
that, without the strange isolationism, Japan would have reached the Southeast Asia much sooner and fought the British and French forces there. In his words, “Japan’s role in international
power politics was similar to that of Britain, France and the Netherlands. Japan’s later behavior
as a regional power was not solely the result of a surge of militarism after the Meiji Restoration(1868). It grew from the gap between Japan and Southeast Asia in terms of their situation in thehistory of civilization, and from the similarity of circumstances between Japan and Western
Europe” (Umesao, 2003, p.110).

9Chapter 1

Chinese, Indian and Islamic civilizations produced great culturalachievements, but their social structures were static; only empire and dictatorship (and later, colonialism) ruled. From one dynasty to another, there was noclear progress from the viewpoint of social and political evolution. For thousands of years, emperors and kings were basically the same. According to Umesao, only Western Europe and Japan satisfy the historical conditions necessary
to industrialize. Japan did not imitate the West; the two areas developed spontaneously and independently (North America can be regarded as part of Western
Europe). He is very pessimistic about the possibility of industrialization in therest of the world, including all the developing countries today.
This chapter has introduced Dr. Umesao’s view not because theauthor agrees with him completely, but because it is interesting and stimulating.
His interpretation of Japanese history is unique and in the minority. In fact, hisview is not very well known even among Japanese. Personally, I think the ideathat industrialization will take place only under certain rigid historical conditions and nowhere else is too simplistic and deterministic. If the path to industrialization cannot be built but only inherited, ODA, FDI, development economics, World Bank and UNDP policies, and all courses in our campus (including
this lecture) are all in vain. Can we really say that China will never become anindustrialized country? Does Africa have no hope?
The present author believes that industrialization is more dynamic
and transferable today. Dr. Umesao’s explanation may be valid up to the recent
past. However, we are now living in the age of internet, air travel and global
exchange of information. Physical distance from the center country should nolonger matter very much. Even though history is ingrained deeply in the characteristics of each people, ethnic traits are also dynamic and changeable. With
great leadership and ideas, a new way of development suitable for each country
should be found. Moreover, there should be more than one path to development
in response to different initial conditions and shifting historical circumstances.
Additionally, Dr. Umesao does not discuss the role of technology, capital andinvestment very much. As a specialist in comparative civilization, he emphasizes the evolution of social structure rather than the physical aspects of industrialization. But the latter are also crucial in determining the success or failureof development.

10Modernization for Latecomers

Having said this, however, Dr. Umesao may be quite right in certain
areas. In particular, his theory can explain why Japan had a unique social structure suitable for industrialization, which is not observable in other countries,
even before its encounter with the West. This was the result of the uninterrupted
organic evolution of the Japanese society over the two millennia. It permitted
Japan to absorb new foreign influences flexibly in a multi-layered fashion andsucceed in the translative adaptation of Western thought and technology. This,at least partly, should be an answer to the question of why Japan was able toachieve success so early.
The next chapter will present the concrete conditions prevailing inJapan during the Edo period which enabled it to achieve a rapid catching up in
the late 19th and 20th centuries.

4. A brief history of Japan
While this book focuses on modern Japan, it is useful to take a brieflook at the entire Japanese history at the outset. The summary given below is
not meant to be an academically respectable discourse but a very rough sketch
for those who know little about Japanese history. For beginners, Japanese history can be divided into four major periods: (1) the period in which emperors held
real power, (2) the period of samurai governments, (3) the period of modernization and military invasion, and (4) the period of post WW2 growth.

<Period 1:

The rise and fall of the emperor>

In the pre-historic period, the Japanese people (whose origin is still
debated) were hunter-gatherers with limited agricultural activity. They lived
separately in small villages but were connected by long-distance maritime
trade. They lived relatively peacefully.
When rice cultivation was introduced from the continent (third century BC or before), life changed significantly. Rice cultivation required collective
effort beyond family units under effective leadership. Village size grew andsocial order was established. Religious and military leaders began to form ministates. Wars between mini states became common, and after a few centuries of11

Chapter 1

fighting (details of which is not known due to the shortage of evidence), Japan
was politically unified for the first time.
After a few more centuries, the imperial family took real power andsubordinated other influential clans (Reform of Taika, 645AD). Under a strongemperor, a centralized government with Chinese-style bureaucracy and tax system was created. Many capital cities were built and abandoned one after another (consider how much resource was wasted in doing this!), but finally in 794
the nation’s capital was settled permanently in Kyoto3. Military conquest ofminority peoples was conducted. Buddhism was used for the political purposeof demonstrating the emperor's power and ruling the country. This is the only
period in Japanese history in which the emperor had real political power.

<Period 2:

The age of the samurai>

But power concentration did not last very long. Soon, local landlords
and temples became more independent from the central government andstopped paying taxes or obeying official orders. They established shoen(manors) and employed people to cultivate it. To protect their land, the warrior
class (samurai) emerged. For samurais, land was the most precious asset to be
defended with their lives. Meanwhile, the political power of the noble class
gradually declined. They composed poems, conducted ceremonies, and played
kemari (garden football) in Kyoto.
From the end of the 12th century onward, samurai leaders formed thegovernment4. The first samurai government was established in Kamakura, 350
km east of Kyoto, in 1192 (Kyoto was still the capital—where the emperor
resided—but real power rested with samurais in Kamakura). The top samurai
was called shogun. The Kamakura government guaranteed samurais’ right toKyoto literally means capital city. If the capital is defined to be the location of the emperor’s
official residence, Kyoto remained the capital of Japan until 1868.
4
Even after the emperor lost real power, samurai leaders still sought an imperial approval to set
up a new government and legitimize their power. All subsequent governments (even today)
have used the symbolic authority of the emperor instead of terminating the imperial family andthemselves establishing a new kingdom or dynasty. The benefit of receiving an imperial sanction to rule must have been greater than the cost of keeping the emperor who rarely intervenedin politics. Once this practice was established, deviation from it became politically too costly as
it would surely invite a severe accusation of demeaning the divine family.
3

12

Modernization for Latecomers

own land and also distributed new land to those with distinguished service inwar. However, Japan was greatly shaken by two invasion attempts by the Mongolians in 1274 and 1281. Each time, the great Mongolian fleet attacked thecoast of Kyushu but was repelled by a combination of Japanese resistance and ahuge storm. While unsuccessful, the Mongolian attacks led to the eventual collapse of the Kamakura government. It ran out of land to distribute to samurais
who bravely fought Mongolians.
After this, long internal fights among daimyo (samurai leaders)ensued. Finally, Ieyasu Tokugawa, one of the daimyos, reunified Japan andestablished the Edo government in 1603 (in what is now called Tokyo). The
Sengoku Jidai (Warring Age) came to an end and Japan finally began to enjoy
internal stability.
The Edo government was politically conservative and highly bureaucratic. It imposed rigid social order and banned foreign contact and trade (witha few exceptions). Peace was restored under a strict bureaucratic rule. However,in recent historical research, the Edo period is viewed as a dynamically evolving period rather than a stagnant dark age. Under international isolation whichlasted more than two centuries (1639-1854), agricultural productivity graduallyrose, and commercial crops, trade, finance and industry grew. Japan’s uniqueculture developed. Conditions for industrialization were ripe.

<Period 3:

Meiji modernization, industrialization and wars>

Several Western powers wanted to open up Japan from its selfimposed isolation. First, the Russians came. Then other Europeans arrived. But
the Edo government refused to deal with them. Finally, in 1853, the American
troops led by Commodore Perry came with four “black ships” loaded with powerful guns to force Japan into concession. The Edo government—and the entire
nation—was thrown into confusion. A strong anti-foreigner movement emerged
all over Japan. In the following year, the government yielded to the Americanpressure and signed the Japan-US Friendship Treaty. Other Western powers followed the American move. The Americans further demanded a full commercial
treaty with Japan. In 1858, in the midst of a heated national debate, the government suppressed the opposition and concluded commercial treaties with the13Chapter 1

West which later turned out to be defective (chapter 3). Criticism against the
government rose sharply and internal political fights ensued, finally toppling
the Edo government in 1867.
The new Meiji government restored the emperor (who for a long time
had no real power) as a supreme ruler and adopted a policy of rapid Westernization, modernization and militarization. In the political area, the first national
constitution was promulgated in 1889 and parliamentary politics was established. In the economic area, the absorption of Western technology and the creation of modern industries were the primary national goals. The textile industry
gradually emerged as an internationally competitive industry. In the militaryarea, Japan won a war against China (Qing Dynasty) in 1894-95 and began toinvade Korea (it was later colonized in 1910). Japan also fought a victorious
war with the Russian Empire in 1904-05.
The Japanese economy experienced an enormous export-led boom
during WW1. During the 1920s, industrialization continued despite frequentrecessions, the Great Kanto Earthquake, and banking crises. The party cabinet
system and the diplomacy based on international cooperation (especially with
the US) were implemented during most of the 1920s. But in the 1930s Japan
turned decisively to militarism. In the 1931 Manchurian Incident, Northeast
China was occupied. A full-scale war with China was initiated in 1937 and thePacific War began in 1941. Wartime economic planning was adopted.

<Period 4:

Postwar growth>

Japan was defeated in 1945 and the country’s economic base wasdestroyed. Under the US occupation, a recovery strategy under material planning was successfully conducted in 1947-48 and postwar inflation was terminated in 1949. From the mid 1950s through the early 1970s, Japan enjoyed very
rapid growth and industrialization. The manufacturing sector expanded strongly
and Japan became the second largest economy in the world (after the US) by
the end of the 1960s. National security under the US military umbrella, global
trade expansion, and a stable exchange rate contributed to the miracle growth.
As the Japanese economy matured, growth slowed down. In the
1970s, oil shocks and floating exchange rates reduced Japan’s growth to about

14Modernization for Latecomers

4 percent. An asset bubble in land and stocks occurred in the late 1980s whichburst in 1990-91. Since the early 1990s and even to this day, the Japanese economy has virtually stopped growing.

15

Chapter 1

The Age of Samurai

Rise and Fall of Emperor

Table 1-1 Outline of Japanese History
PeriodDomestic Events

External Events

Jomon (-3c. BC)

Hunting and gathering, some agriculture

Yayoi / Kofun(3c. BC-5c. AD)

Internal wars → Unification of Ja- ←Rice production introduced→Diplomacy with China (tributary)pan→Intervention in Korea

Asuka / Hakuho(5-7c. AD)←Buddhism introduced (via Korea)
Clan politics
Tenno (emperor) consolidates power

Nara (710-794)
Capital: Nara

Ritsuryo System―Emperor s di- ←Chinese political system imported
rect rule based on laws & centralized government; Buddhism promoted as state religion

Heian (794-1192)
Capital: Kyoto

Court politics by nobles
Manorial system (power decentrali- ×Diplomacy with China terminatedzation)Rise of samurai (warrior) class

Kamakura(1192-1333)
Cap: KamakuraFirst samurai government
New Buddhist sects emerge

Muromachi(1338-1573)
Capital: Kyoto

Samurai government
Two emperors compete (north vs. →Trade with China resumes→Japanese pirates attack Chinese coast
south)→Active trade with Southeast Asia
Internal wars and rebellions

Sengoku (-1603)

Internal wars among daimyo (sa- ←First contact with Europeans
Guns & Christianity introduced
murai warlords)→Unification by Ieyasu Tokugawa

Edo (1603-1867)
Cap: Edo (Tokyo)

Tokugawa Shogun Government (samurai rule, agricultural tax, class system)
・ Stability under strong government
・ Han s promotion of local industries
・ Agriculture & handicraft develop
・ Transportation, finance, commerce,
education upgraded, unified national
market・ Merchants economic power increases
・ Unique popular culture develops←Two Mongolian invasions (failed)

×Closed door policy―No diplomacy & trade allowed (except China,
Holland, Korea, Ryukyu); Christianity
bannedDebate over open door policy vs. anti- ←America opens Japan by military
threat (1853-54)
foreigner military campaign
Han samurais topple Shogun Government Danger of colonization by West16

Modernization for Latecomers

PeriodDomestic Events

External Events

Modernization

Strong government under emperor Need to catch up with West
Meiji(1868-1912)(Capital: Tokyo to adopts open door policy and rapid
Westernization
present)

Taisho (1912-26)

Early Showa(1926-45)

Postwar

Late Showa(1945-88)

Fukoku kyohei (strong economy &army)
Industrialization (strong private
sector supported by government)→War with China (Qing Dynasty, 1894)→War with Russia (1904)→Annexation of Korea (1910)
Democracy movement (short-lived) →Pursuit of Chinese interest
Recessions & economic crises →Invasion of Manchuria (NE China,(1920s-30s)
1931)
Military takes over government→Full-scale war with China (1937)
Mobilization of people & resources →Pacific War (1941) Invasion of SEA
for war
Democratization & demilitarization War defeat (1945)
Economic recovery from postwar ←U.S. occupation (1945-51)
crisisPriority production system
Rapid industrialization (1950s-60s) Multilateral open door policy
Strong private initiative
Joins IMF, World Bank, OECDMITI s industrial policy
Economic slowdown (1970s-)

Heisei (1988-)

Becomes No.2 economy (around1970)

Bubble burst, economic stagnation Becomes top ODA donor (1990-99)(1990s-)17

Chapter 1

The gap between economic and social achievements
In the book entitled Japan’s Modernization and Social Change, sociologist
Kenichi Tominaga proposes a general framework to understand the various aspects ofJapan’s modernization and industrialization. Traditionally, there have been two
opposing interpretations of Japan’s modern history. The first view positively considers Japan’s economic performance, especially its brilliant success as a latecomer. The
second view castigates past Japan as the oppressor of its own people and a military
invader of the neighboring countries. Is Japan a model for all developing countries, ora negative case to be avoided at all cost? Tominaga cautions that a debate over such asimplistic dualism yields little result. According to him, modernization is a complex
phenomenon that must be analyzed with scientific concepts and models.
Tominaga first emphasizes that the modernization process of a non-Westerncountry does not trace the same path as it does in the West.
To be successful, the modernization of a non-Western country must be a creative
process in which a comparison between indigenous and foreign cultures is made, thesuperior aspects of the latter are selectively introduced, the imported and indigenous elements are combined to breed something new, and conflict between the two is mitigated.
Japan’s modernization was precisely such a process. Modernization currently proceeding in the societies of the Asian NIEs also conforms to this description. (Tominaga,
1990, pp.38-39)

This idea is essentially the same as Maegawa’s translative adaptation discussed
in the main text. From this realization, Tominaga’s method proposes to divide society
into the following four subsystems and describe the evolution of each in detail.
Economic modernization (economic growth through industrialization)
Political modernization (democratization)
Social modernization in the narrow sense (transition from gemeinschaft[land- and lineage-based groups] to gesellschaft [functional groups] aswell as a shift from closed rural communities to open urban communities)
Cultural modernization in the narrow sense (transition from superstition
and irrational customs to scientific and rational thinking)Tominaga’s main argument can be summarized as follows. The modernization ofEurope started with the internal development of political and social subsystems fol-18

Modernization for Latecomers

lowed by the Industrial Revolution. But latecomer countries cannot follow thissequence. For them, economic modernization is “easier” than political modernization.
Social and cultural modernization is even harder. This is because much more time andenergy are required to transform a structure which dominates and permeates every
detail of people’s life than to copy new technology and industries. This naturally leads
to a gap between fast economic growth and slow progress in all other aspects. However, since the economic subsystem and the non-economic subsystems are interdependent, this gap generates tension and conflict which distorts the modernization processof that country. Prewar Japan, which boasted high technology and modern industries
on the one hand and imposed the concept of the holy nation derived from ancientemperor worship and the feudal family system on the other, is a typical example.
While expressed sociologically, Tominaga’s assertion in fact belongs to one of thevery popular views on the merits and demerits of Japan’s modernization process.
Tominaga also argues thus:
Before the Edo period, Japan did not generate any ideas or systems that
could support modernization. For this reason, modernization beginningfrom the subsequent Meiji period called for a total negation of traditional systems and a switch to foreign systems.
Modernization cannot succeed in a society where gemeinschaft, closed ruralcommunities and irrational thinking remain. If modernization is pursued in
the presence of these elements, dilemma and friction become inevitable.
The serious modernization gap in the prewar Japan was largely removed asa result of bold postwar reforms, but some traditional elements still
remain even today. Japan’s modernization will not be complete unlessthese remaining elements are finally eliminated.
It is clear that Tominaga views Japan’s indigenous elements very negatively. He
regards them as nothing but obstacles to modernization rather than a basis on which
imported elements are to be grafted. This is in sharp contrast to Umesao’s high evaluation of the continuity of Japanese history which prompts him to say that Japan, as
Britain, evolved naturally and autonomously as a modern nation. It is also at odds
with Maegawa’s translative adaptation and his assertion that Japan successfully
mixed domestic systems with foreign ones with the former serving as the more fundamental base. Which interpretation is more reasonable? I leave it to the reader todecide.

19