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Review of Janet Hunter, ‘Deficient in Commercial Morality’? Japan in
Global Debates on Business Ethics in the Late Nineteenth and Early
Twentieth Centuries. Palgrave Macmillan, 2016.
Patricia SIPPEL*
Keywords: commercial morality, day-to-day transactions, Western criticism,
unfair competition, national interest

Amid the general explosion of interest in
the place of morality in the global economy,
recent scholarship on Japan has examined theemergence of a distinctively Japanese modeof business ethics in the modern era. A multiyear project sponsored by the Shibusawa
Eiichi Memorial Foundation examined theefforts of the entrepreneur Shibusawa Eiichi(1840-1931) to develop a Confucian-inspired
form of ethical capitalism. It resulted in theproduction of two volumes: one in Japanesepublished in 2014 and an English version
published in 2017.1 Janet Hunter’s contribution to these volumes argued that
Shibusawa’s ideas, while drawing on Japanese sources, were also part of aninternational discourse on the norms of commercial behavior that weresparked by the nineteenth century expansion of commerce in Britain and theindustrializing West. A key concept in that broader discourse was “commercial morality,” a term used until the early twentieth century to describe what
today is more commonly referred to as business ethics. In ‘Deficient inCommercial Morality’? Japan in Global Debates on Business Ethics in the* Professor Emerita, Toyo Eiwa University
1 Patrick Fridenson and Kikkawa Takeo, eds, Gurobaru shihonshugi no naka no
Shibusawa Eiichi: Gappon kyapitarizumu to moraru (Toyo Keizai Shinposha, 2014);
Patrick Fridenson and Kikkawa Takeo, eds, Ethical Capitalism: Shibusawa Eiichiand Business Leadership in Global Perspective (University of Toronto Press, 2017).

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Journal of Cultural Interaction in East Asia Vol. 11 2020

Late Nineteenth and Early Twentieth Centuries, Hunter builds on and expands
her research conducted for the Shibusawa project. She introduces the contentand context of the nineteenth and early twentieth-century debates oncommercial morality, focusing on Western criticisms of perceived Japanese
deficiencies and on Japanese responses to that criticism. Hunter argues that anexamination of these debates both clarifies an important link in the history ofcontemporary business ethics and enhances our understanding of criticisms
directed at China and developing economies today.
This book was produced in the Palgrave Pivot series, which publishes
new research at lengths longer than journal articles but shorter than conventional monographs. The 116 pages are organized into five chapters, of whichchapters 1 and 5 form the Introduction and Conclusion respectively. In
Chapter 1, Hunter introduces the concept of commercial morality. She notes
that, in an era of expanding international commerce, attention to the ethics ofbusiness transactions was prompted by the absence of a generally accepted
global standard of business behavior, the increased possibilities for cheating
in an era of rapid economic change, and the inadequacy of legislation toenforce ethical behavior in commerce. The calls for commercial morality
reflected efforts in the economically advanced West to establish rules to guidethe conduct of everyday business transactions. As Japan increased its participation in the international economy from the late nineteenth century, it
became a particular target of Western criticism for its alleged failure toadhere to the newly articulated Western tenets or, as frequently claimed, its“deficiency” in commercial morality.
Chapter 2 examines the content of the term commercial morality as it
emerged in discussions from the early nineteenth century. Drawing oncommentary in contemporary books, newspapers, and the Economist magazine, Hunter points out that, in contrast to earlier Christian-inspired discussions of issues such as the morality of profit making, discussions ofcommercial morality focused on adherence to the more specific rules requiredin the conduct of business transactions. Such rules could be expected tocheck widely reported abuses such as breaking contracts, adulterating goods,and fraud. By the end of the nineteenth century, the debates had spread fromBritain to the industrialized economies of Western Europe and North America
and issues relating to international transactions such as credit, trust, andnational reputation became more important. It was generally believed that,
although cheating and other abuses might deliver an immediate profit, longterm success depended on honest adherence to rules. As Britain and otherindustrial nations compared their standards with the rest of the world, theyenvisaged a “global hierarchy of commercial morality” (24) which confirmed
their positions relative to newcomers such as Japan.Book Reviews

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In Chapter 3, Hunter focuses on the accusations of moral weakness leveledby Westerners at Japan. She uses contemporary accounts, including consularand diplomatic reports, by Westerners to show that, from the beginning oftreaty negotiations in the 1850s, they saw Japanese people as generally
deceitful, dishonest, and lacking in integrity. After international trade waslaunched, they accused their Japanese counterparts of breaking contracts andsupplying substandard goods, echoing criticisms addressed to an earlier
generation of British merchants. From the 1890s, when extraterritorialityended and Western people became subject to the Japanese legal system, theircriticisms of the “defective” morality of the Japanese intensified and newconcerns such as brand and trademark fraud became widespread. Throughout,the perception persisted that Japanese moral standards were particularly low,even lower than those of the Chinese. Why such harsh evaluations of Japan?
Amongst those who saw the criticisms as valid, one reason offered was therelatively low status of Japanese merchants before the modern era. Hunter
asserts that it is difficult to assess the extent to which the criticisms of Japan
were based on fact. She notes that by the mid-nineteenth century, clear views
had emerged in Britain and elsewhere on the relative levels of commercial
honesty of various countries and ethnicities and that, once acquired, reputations based on perceived cultural difference were not easily shed. However,she suggests that uneasiness in the face of Japanese competition was also afactor: “A major reason for this position of Japan at the bottom of thecommercial morality hierarchy, I would suggest, was Japan’s growing role ininternational trade and the threat that it appeared to pose to the status quo”
(53).
Japanese responses to Western assessments of its commercial morality are
the focus of Chapter 4 ‒ to me, the most fascinating section of the book.
Hunter makes use of newspaper commentaries, government statements, andacademic writing to support her argument that, at least from the 1880s,
Japanese media, business and government leaders largely accepted the factual
basis of Western claims. They, too, saw traditional negative attitudes tomerchant activity as a cause of current bad behavior, and were keen to build
a new style of entrepreneurship that was appropriate for modern Japan.
Among the examples Hunter cites, the journal Jitsugyō no Nihon, founded in1897, argued that the situation in which poorly educated merchants sold poorquality products was harmful to Japan’s international reputation; it wastherefore in the national interest to address foreign criticisms of Japanesebusiness practices. Among government leaders, Foreign Minister Katō
Takaaki noted in 1900 the unfavorable comparisons of Japan with China anddeclared improvement of commercial standards a matter of urgency. And anew generation of entrepreneurs including Masuda Takashi and Asano54

Journal of Cultural Interaction in East Asia Vol. 11 2020

Sōichirō worked to build an ethical business culture that would be followed
at home and respected overseas. Concrete measures included commercial
education, legislation against patent and trademark fraud, and businessmissions abroad. Most Japanese elite recognized that Japan had to play byWestern rules and believed that commercial morality would improve as Japan
approached Western levels of civilization. However, concerns about invidiouscomparisons with China and other countries persisted.
In Chapter 5, Hunter briefly sets out her two main conclusions. First, shedistinguishes the concern with commercial morality - which she sees as
directing a “micro-level” focus on day-to-day business transactions – frombroader “macro-level” discussions of profit making and morality, often
founded on religious traditions and found across cultures and through thecenturies; Shibusawa Eiichi’s efforts to develop ethical capitalism exemplified
this broader stream of thought. Hunter argues that, in its concern with strict
rules or “business habits” developed to curb abuses, develop trust, and ensure
product quality, the commercial morality of the nineteenth and early twentiethcenturies was an important, though often overlooked, antecedent of contemporary business ethics. Second, Hunter draws a parallel between the circumstances of Japan’s expanded participation in the world economy of the nineteenth and early twentieth centuries and those surrounding new global
economic competitors today. In particular, she sees the recent criticism ofChinese commercial practices, including sub-standard production and violations of intellectual property rights, as reminiscent of the charges of commercial immorality once directed at Japan. Japan’s experience as the first nonWestern nation to emerge as a genuine competitor in the global economy
indicates the challenges that can be expected both for new participants having
divergent or unclear codes of business practice and for their international
trading competitors.
‘Deficient in Commercial Morality’? is a thoughtful and thoughtprovoking study that offers insights into issues of business ethics and into
Japan’s emergence as a modern economic player. The argument is clearly
expressed, is supported by a wide variety of Western and Japanese documentation, and is made accessible through chapter abstracts, keywords, andheadings. There are at least three ways in which this book expands ourunderstanding of modern Japan. First, in an era of growing nationalism andnational self-confidence, the response of Japanese government and businessleaders in addressing rather than simply refuting foreign criticism shows apragmatism and a global awareness that help to explain Japan’s continuing
2See, for instance, essays in Masayuki Tanimoto, ed., The Role of Tradition in Japan’sIndustrialization: Another Path to Industrialization (Oxford University Press, 2006).

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successes in the international economy. Second, the concern with commercial
morality in Japan and abroad provides context to the continued efforts of tradeassociations and other groups in small, traditional (zairai) industries such as
silk-reeling, weaving, and pottery to conduct product inspections, branddevelopment, and other measures aimed at raising the quality of their products for the domestic or international markets.2 Finally, by including a
discussion of Western evaluations of Chinese commercial morality andJapanese responses to their apparently lower evaluation, Hunter broadens ourunderstanding of Japan’s modern transformation beyond the simple “Japanand the West” axis.
The book also raises issues for further consideration. First, a study ofperceptions raises the question of how firmly they were grounded in reality.
Hunter’s objective, as stated in Chapter 1, is to answer three questions: whereforeign accusations against Japan came from, what evidence they were based
on, and how the Japanese people responded (2). While she offers detailed
answers to her first and third questions, Hunter’s response to the second isless conclusive. She notes that Japanese merchants engaged in “badbehavior,” but argues that the earlier charges of morality, “whether justified ornot,” and the later, “more substantive” charges of dumping were inspired byfear of Japanese competition (52-53). The book’s three tables are offered toshow Japan’s growing importance in world trade rather than its infringementsof business ethics. It is hoped that further research might uncover the level ofactual indications both of Japanese malpractice compared with China andother countries and of changes in Japanese business ethics over time.
The issue of change raises a further question regarding twentieth century
shifts in foreign criticisms of Japan and Japanese responses to foreign criticism. Hunter’s examples are drawn primarily from the mid-nineteenth century
into the 1920s, years in which Japan’s growing success in international tradeoffered incentives for it to comply with the rules of business ethics created by
the West. She asserts that complaints about Japan receded, but did not disappear in the early 20th century, ready to resurface in the early postwar years.
About the intervening 1930s the book says little. Hunter reports that Western
complaints focused on cheap labor, dumping, and unfair competition but she
does not describe Japanese responses in an environment when the rewards ofcompliance were by no means guaranteed. Though outside the scope of thisbook, analysis of the discourse on business ethics in an era of international
mistrust may be relevant to the discussions of the contemporary world withwhich Hunter concludes the book.
‘Deficient in Commercial Morality’? is a small book that carries substantial messages and raises important questions. It is valuable reading for thoseinterested in business ethics past and present, in Japan and the world.