Testing the price version of the Heckscher-Ohlin Theorem: thenatural experiment of Japan
Daniel M. Bernhofen
University of Nottingham and GEPandJohn C. Brown
Clark University and GEP1
December 5, 2008.
1st rough draft
Abstract:
We exploit the ‘natural experiment of Japan’ to test the general validity of the HeckscherOhlin theorem. In contrast to existing tests of the quantity version of Heckscher-Ohlin, which are
all based on restrictive assumptions about preferences and technologies, we test a price version of
the Heckscher-Ohlin theorem where the existence of positive gains from trade is the only criticalassumption. Given that our previous research on the natural experiment of Japan (Bernhofen and
Brown, 2005) provided evidence of positive gains from trade, the data environment fulfils thecritical assumption of the theory.
Our test combines factor price data in the autarky period with commodity trade data and atechnology matrix in the early free trade period. Our data on wages, rental rates of capital andland rents stem from a range of historical studies of the late Tokugawa period. Our technology
matrix is derived from a major Japanese survey of agricultural techniques during the early Meiji
period, accounts by European visitors and numerous studies by Japanese and western scholarsthat draw on village records, business accounts and other historical sources.
Our results provide strong empirical support for the price version of the Heckscher-Ohlin
theorem. Our factor content analysis reveals that Japan was a net exporter of skilled labour andcapital, which were used intensively in the major export sectors. On the factor import side, Japan
was a net importer of the factor services of land, unskilled male and female workers.

1

Addresses for Correspondence:(i) Daniel Bernhofen, School of Economics and Leverhulme Centre for Research on Globalization andEconomic Policy, University of Nottingham, University Park, Nottingham, NG7 2 RD, UK. Tel: 44 115
846 7055, Fax: 44 115 951 4159, email: daniel.bernhofen@nottingham.ac.uk.
(ii) John Brown, Department of Economics, Clark University, 950 Main Street, Worcester, MA 01610,
USA; Tel: 011 508 793 7390, Fax: 508 793 8849, jbrown@clarku.edu

11. Introduction
This paper provides the first test of the general validity of the Heckcher-Ohlin
theorem as formulated by Alan Deardorff (1982). An attractive feature of Deardorff’s
Heckscher-Ohlin formulation is that it provides a refutable hypothesis which is valid
under very general circumstances. The challenge of testing this general Heckscher-Ohlin
prediction is that it requires compatible data of a market economy operating under both
autarky and free trade. This paper exploits data on Japan’s 19th century transition from amarket economy under autarky to a market economy under free trade to test this general
Heckscher-Ohlin prediction.
The theoretical trade literature distinguishes between the quantity or Leontief
formulation and the price or Ohlin formulation of the Heckscher-Ohlin theorem. In thequantity formulation factor scarcity is measured by data on countries factor endowments;
whereas, in the price formulation factor scarcity is measured by autarky factor prices.
Since factor endowments embody less information about the economy’s underlying
fundamentals than factor prices, Heckscher-Ohlin formulations in the Leontief tradition
are based on fairly restrictive assumptions. For example, the Heckscher-Ohlin-Vanek
formulation (HOV), which has dominated the empirical Heckscher-Ohlin literature forover the last three decades, assumes that all trading economies have both identicaltechnologies and identical homothetic preferences.2
To our knowledge of the literature, we are the first to test a Heckscher-Ohlin
theorem which falls in the Ohlin tradition of measuring factor scarcity through factor
prices. This Heckscher-Ohlin formulation goes back to Deardorff (1982) who has shownthat a country’s autarky factor price vector imposes a restriction on country’s factor
content of trade with the rest of the world. It implies that a country will tend to export theservices of its abundant factor and import the services of its scarce factor. Deardorff’s
formulation is quite general in the sense of allowing a country’s factor content of trade to
be measured in different ways. However, a shortcoming of Deardorff’s formulation isthat it assumes internationally identical technologies.
In an important follow-up piece to Deardorff (1982), Neary and Schweinberger(1986) have shown that the existence of the gains from trade is a sufficient condition for2

The most prominent paper are Bowen et al (1987), Trefler (1993, 1995) and Davis and Weinstein (2001).

2

Deardorff’s Heckscher-Ohlin formulation as long as the country’s factor content of tradeis measured using the domestic technology matrix. The key advantage of Neary and
Schweinberger’s (1986) approach is that it allows for different technologies.
Given that our previous research on Japan’s 19th century opening to trade
provided evidence of positive gains from trade, the case of Japan provides a suitable
natural experiment to test the Deardorff-Neary-Schweinberger formulation of the
Heckscher-Ohlin theorem. Our test combines factor price data in the autarky period with
commodity trade data and a technology matrix in the early free trade period. Our data on
wages, rental rates of capital and land rents stem from a range of historical studies of thelate Tokugawa period. Our technology matrix is derived from a major Japanese survey ofagricultural techniques during the early Meiji period, accounts by European visitors andnumerous studies by Japanese and western scholars that draw on village records, businessaccounts and other historical sources. Applying the data to the theory, we obtain strong
empirical support for the general Heckscher-Ohlin prediction.
In section 2 we start out with an intuitive discussion of the quantity and the pricemeasures of relative factor scarcity in the two-factor case. Using a simple graphicalframework, we illustrate the inter-relationship between the gains from trade in factor
service space and the price formulation of the Heckscher-Ohlin Theorem. Building on
Neary and Schweinberger (1986), section 3 uses the concepts of factor trade utility andfactor trade expenditure functions to derive the general Heckscher-Ohlin theorem.
Section 4 discusses the empirical domain and the data sources for the constructionof the technology matrix and the autarky factor prices. Section 5 discusses the technolgoy
matrix, the observed factor content of trade and provides the first preliminary test results.

3

2. Gains from trade and the price formulation of Heckscher-Ohlin
Consider a small open economy, called home, which has the opportunity to tradewith the rest of the world (ROW). We initially restrict ourselves to the case where theeconomy produces n goods using only two factors of production, factor 1 and factor 2,
given by V=(V1,V2) in Figure 1.
Under autarky, the allocation of factors to the production of the n goods isdetermined by home’s factor supplies, the country’s technology and consumer
preferences. The autarky equilibrium is characterized by equilibrium goods and factor
prices. Since our focus is on factor service trade, we can restrict our attention to theeconomy’s equilibrium autarky factor price vector wa=(wa1,wa2). The vectors V and wa
determine home’s gross domestic product (GDP) under autarky: GDPa=wa1V1+wa2V2.
Alternatively, V and wa can be thought of defining an autarky GDP factor line, as
depicted in Figure 1. The factor line goes through the endowment point V and has a slopeof -wa1/wa2. The line’s intercept with the horizontal axis measures autarky GDP in unitsof factor 1 and its intercept with the vertical axis measures autarky GDP in units of factor
2.
Figure 1 is helpful in illustrating and contrasting the two ways of measuring
relative factor scarcity: Leontief’s quantity measure and Ohlin’s price measure.
Leontief’s quantity measure of the relative scarcity of factor 1 is given by the economy’s
relative endowment ratio V1/V2. In contrast, Ohlin’s price measure of the relative
scarcity of factor 1 is given by the equilibrium autarky factor price ratio wa1/wa2.
The key point is that since Ohlin’s price measure of relative factor scarcity embodies
more information about the economy’s underlying fundamentals than the quantity
measure. 3 Assume that the economy experiences a sudden shift in demand towards the
goods that make relatively intensive use of factor 1, ceteris paribus. Since the factor
endowments have not changed, this shift in demand does not affect the quantity measureof factor scarcity V1/V2 . However, such a shift in the relative demand of factor 1 will
increase the relative scarcity of this factor. This increase in relative factor scarcity will be
captured by an increase in the relative autarky price wa1/wa2. As a result, the new autarky

3

The fundamental insight that prices embody all relevant information about relative scarcities was firstarticulated by Hayek (1945).

4

equilibrium will be characterized by a steeper autarky GDP factor line. Now since the
new autarky GDP factor line will still go through V, its horizontal intercept shifts to theleft and its vertical intercept will shift up. This implies a decrease in GDP when measured
in units of factor 1 and an increase in GDP when measured in units of factor 2, or an
increase in the relative scarcity of factor 1.
The above discussion illustrates that Ohlin’s price measure of factor scarcity
embodies more information about an economy’s relative factor scarcity than the quantity
measure. As a result, a Heckscher-Ohlin formulation which is based on Ohlin’s pricemeasure requires fewer assumptions on the economy. In fact, we can show that the gains
from trade is a sufficient condition for a Heckscher-Ohlin factor content prediction.
The starting point for such a formulation is the specification of a balanced tradecondition of the economy with the rest of the world. In particular, the balance of trade incommodity space will imply a balanced trade condition in factor service trade. Denoting
the economy’s net factor import vector as M=(M1,M2), (where Mi>(<)0 if factor i is
imported (exported)), the balance of trade condition requires that w1fM1+w2fM2=0, wherew1f and w2f denote the prices under which factor services will be traded internationally.
Figure 1 illustrates that the economy’s trade must then occur along its factoral terms oftrade line. The factoral terms of trade line is anchored at the economy’s endowment
point V and has, in absolute value, a slope of wf1/wf2. The factoral terms of trade line
illustrates that there are only two feasible trading possibilities: export factor 1 and importfactor 2 (i.e. M1<0 and M2>0) or import factor 1 and export factor 2 (i.e. M1>0 andM2<0).
But in which direction will the economy trade? The principle that holds for tradein goods holds also for trade in factor services: the pattern of trade is governed by thegains from trade. International trade in factor services enables the economy to reach anaugmented endowment point Vf, defined as Vf=V+M. The economy will experience a
gain from international trade if the augmented endowment point Vf lies outside its
autarky GDP factor line. Since wf1/wf2 > wa1/wa2, the economy will only experience a
gain if it exports factor 1 and imports factor 2. The reason for this is that the relativevalue of factor 1 is higher in international exchange than it is domestically. In Figure 1,

5

the gains from factor service trade is illustrated by the outward shift of the autarky GDP
factor line to Vf .
Figure 1: Heckscher-Ohlin prediction in the 2-factor casefactor 2

factoral terms of trade line: slope = -wf1/wf2

autarky GDP factor line: slope= -wa1/wa2

M

Vf
V2

gains from trade measured inunits of factor 1

Vfactor 1
V1
But how can this trading pattern be explained by a comparison of relative factor
scarcities at home and in the ROW? As mentioned before, w1a/w2a measures the relative
scarcity of factor 1 at home. But what is the relative scarcity of factor 1 in the ROW? If
the trading equilibrium is characterized by factor price equalization then the economy’s
factor exchange ratio coincide with the factor prices in the rest of the world: w1f=w1ROW,w2f=w2ROW. If w1a/w2a < w1ROW/w2ROW, then home is relatively abundant in factor 1 andthe above discussion implies that the economy will export its scarce factor and import its
abundant factor. However, if the free trade equilibrium is not characterized by factor
price equalization, it is easy to show that w1f/w2f must always lie between w1a/w2a and
w1ROW/w2ROW. As a result, wa1/wa2 < w1ROW/w2ROW implies w1a/w2a< w1f/w2f and home
will export factor 1 and import factor 2. On the other hand, if home is relatively scarce infactor 1, i.e. wa1/wa2 > w1ROW/w2ROW then w1a/w2a>w1f/w2f and the gains from trade imply
that home will import its scarce factor 1 and export its abundant factor 2. This leads us to
the following 2-factor price formulation of the Heckscher-Ohlin theorem:
6

Two-factor formulation of the Heckscher-Ohlin Theorem
Assume there are gains from trade. If the economy is relatively abundant in afactor relative to the rest of the world, then the commodity pattern of trade will be suchthat the economy will export the services of its abundant factor and import the services of
its scarce factor.

3. Factor content functions and the general Heckscher-Ohlin Theorem
Consider a small open economy with n goods and l factors of production. The
economy’s vector of factor endowments is given V=(V1,…,Vl). Aggregate production
possibilities are characterized by the implicit constraint F(y,V) ≤ 0, where y=(y1,…yn), isa vector of net outputs. On the consumption side a single consumer is characterized by areal valued utility function u(x) which is assumed to be continuous, weakly increasing
and quasi-concave with regard to the consumption vector x=(x1,…xn). Following
Woodland (1980) a direct trade utility function is defined as the maximum utility
attainable when domestic production is augmented by a net import vector T=(t1,…tn).
The direct trade utility function Ud can be written as:
Ud(T,V)= max{u(x): F(x-T,V)≤0}(1)

If the country engages in trade it faces an exogenous goods price vector p=(p1,…,pn). Its
net import vector T is then constrained to satisfy the balanced trade condition:
pT=0

(2)

The market, or the social planner, can then be thought of choosing a net import vector Tthat maximizes the direct trade utility function (1) subject to the balanced trade condition(2). The equilibrium net import vector T is then a function of p and V, i.e. T=T(p,V).
Alternatively, and following the logic of Neary and Schweinberger (1986), we
can look at the trading equilibrium from a factor endowment perspective. For this we7consider the concept of a direct factor trade utility function. The direct factor trade utility
function is defined as the maximum utility attainable when the domestic endowment
vector V is augmented by a net factor import vector M=(M1,…,Ml). Domestic
technology will then be applied to the augmented endowment vector V+M, which
modifies the aggregate production possibilities constraints to F(y,V+M) ≤ 0. The direct
factor trade utility function Uf is then defined as:Uf(M,V)= max{u(x): F(x,V+M)≤0}(3)

We assume that the technology in each sector can be represented by a unit costfunction which is increasing, concave and homogeneous of degree one in the economy’s
factor prices w=(w1,…wl). The vector of unit cost functions is denoted by c(w) and thezero profit condition implies that p=c(w), which means that the equilibrium factor pricevector w is pinned down by the goods price vector p. The balance of trade condition for
trade in factor services can then be written as:
wM=0

(4)

Similar to our discussion above, the market or social planner can now be thoughtof choosing a net factor import vector M that maximizes the direct factor trade utility
function (3) subject to the balanced trade condition (4). The equilibrium net factor import
vector M is then a function of w and V, i.e. M=M(w,V).
So far we have viewed trade in factor services as a way of augmenting thecountry’s endowment vector to maximize consumer utility. Alternatively, we can fix thelevel of consumer utility u and solve for net factor import vector M that enables the
economy to attain this utility level at a minimum expenditure. This logic leads to theconcept of a factor trade expenditure function where the factor trade utility function (3)defines the constraint and the left-hand side of (4) becomes the objective. The factor trade
expenditure function gives then the minimum expenditure on factor services necessary toobtain the utility level u. Formally, it can be written as:8

e(w,u,V)= min{wM; Uf(M,V)≥u}.

(5)

Recall that the factor price vector w is pinned down by the exogenously given goods
price vector p through the cost-price relationship, p=c(w). As a result, w will capture theeffects of international goods prices on the expenditures on factor services. Since thefactor trade expenditure function embodies the equilibrium relationships between utility,
factor prices and the factor content of trade it is the central tool for proving the autarky
price formulation of the Heckscher-Ohlin Theorem. A key property of the factor trade
expenditure function, similar to an expenditure function in consumer theory, is that it isincreasing in utility, i.e. e(w,u1)≥e(w,u0) for u1>u0.
Consider now a comparison of the economy in an autarky and a free tradeequilibrium. The autarky equilibrium is characterized by the autarky factor price vector
wa and the autarky utility level ua. In a free trade equilibrium the economy’s factor pricevector is given by wf and the free trade utility level is denoted by uf.
General Heckscher-Ohlin Theorem:
Assume that the economy experiences gains from trade, i.e. uf>ua. The autarky
price vector wa imposes a restriction on the factor content of net imports under free
trade, such that waM(wf,uf,V)≥0.
Proof: Since ua<uf and the factor trade expenditure function is increasing in utility, we
obtain waM(wa,ua,V)≤ waM(wa,uf,V). Since M(wa,uf,V) minimizes the expenditure ofobtaining the free trade utility level uf implies that waM(wa,uf,V)≤ waM(wf,uf,V). Under
autarky, there is no trade and M(wa,ua,V) is the zero vector. Consequently,
waM(wa,ua,V)=0. But this implies that waM(wf,uf,V)≥0.
Several comments are in order. First, waM(wf,uf,V)≥0 generalizes the two-factor
formulation from the previous section to higher dimensions. However, if there are morethan two factors, it is not possible to pinpoint which particular factor is exported orimported. Applying the balanced of trade wfM(wf,uf,V)=0 to the restriction one obtains(wa-wf) M(wf,uf,V)≥0. The latter can be interpreted that the country will, on average,9

import factor services that have a high factor price relative to its trading partners andimport factor services with a relatively low factor price.
Second, since wa imposes a restriction on the factor content of net imports M,
waM(wf,uf,V)≥0 constitutes a testable Heckscher-Ohlin hypothesis that can be refuted by
the data. This is illustrated in Figure 2 where the economy’s autarky factor price vector
wa identifies a hyperplane, defined as waM=0. As a result, the autarky price vector wa
identifies whether a particular net import vector Mi is in accord with the prediction,i.e.waM1≥0, or not, i.e. waM2<0.
Figure 2: General Heckscher-Ohlin prediction

waM=0

factor 2
imports

waM>0
M1

factor 1
imports
factor 1
exports

M2

factor 2
exports

waM<0 (rejection
region)Third, an attractive feature of this formulation is that the existence of gains fromtrade is the only critical sufficient condition for the Heckscher-Ohlin theorem to hold.
The deeper reasoning for this generality is that this formulation combines data from two
equilibria: autarky and free trade. By contrast, Heckscher-Ohlin formulations which
involve only data from a free trade equilibrium require strict symmetry assumptions ontechnologies and consumer preferences in order to generate predictions of how factor

10

endowment differences affect trading patterns. As a result, there is quite a bit at stake intesting this general Heckscher-Ohlin formulation since a refutation of the prediction
could not be accounted for by unmet assumptions on country symmetries regarding
technologies or preferences.
4. Empirical domain and data sources
The case for using Japan’s 19th century opening up as a natural experiment to testcomparative advantage trade theory has already been articulated in Bernhofen and Brown(2004, 2005). However, since the Heckscher-Ohlin framework is a specific comparativeadvantage trade model the justification for the case of Japan carries over to the test of the
Heckscher-Ohlin model. The attractive feature of applying the case of Japan to
Heckscher-Ohlin is the ability to test the theorem in the most general form, as discussed
in the previous two sections.
The data requirements for such a test are then the following: a domestic
technology A matrix in the free trade period, a vector of autarky prices wa and a vector of
net imports T, with the theoretical predictions being that waM=wa(AT) >0. Our test
combines data on net imports T , which were used in Bernhofen and Brown (2004, 2005)
with newly collected data on wa and A. Before describing the data sources for theconstruction of wa and A, we provide a short discussion of the Tokugawa economy (i.e.
autarky period) from an endowment and technology perspective.
4.1 The Tokugawa economy: an endowment perspective
The late Tokugawa economy was a well-articulated pre-modern economy withstrong trading relationships among the main economic regions and evidence ofsignificant regional specialization. At the same time, a large part of the production of
goods that would enter into trade after the opening up in 1859 were produced in rural
areas with the household as the production unit. Historians debate how successful the late
Tokugawa economy was at overcoming two fundamental constraints: land scarcity andunproductive technologies. The opening up of trade may have been fundamental inrelaxing both of these constraints. (Totman and American Council of Learned Societies.,
1995) stresses the limits that Japan’s geography placed on the resources available to it.

11

His study of the lumber industry (Totman, 1995) highlights the more general ecologicalstress of Japan’s land scarcity. Japan’s topography essentially has only three gradients. A
small percentage of the land area is flat land well-suited for rice and other crops. The
plains are typically surrounded by diluvial terraces, which give way to steep mountains.
The core traditional economic regions of Japan are at the heart of these plains (the Kinki(Osaka/Hyōgo/Kyoto), Nobi (Nagoya) and Kantō (Tokyo)). Additional outposts were
Nagasaki on the island of Kyushu and port cities and fishing villages along the coast of
the Sea of Japan and the Inland Sea. The remainder of the land area (about 80 percent) is
a series of steep mountain ranges that run up and down the spine of all four main islands.
Totman argues that by the early 18th century, land scarcity dominated the Tokugawa
economy in all resource-intensive areas of production, including agricultural, forestry andmining (Totman, 1995, ch.12). The most prominent adaptation to the scarcity of land was
the development of a sophisticated fertilizer industry, which utilized waste organic
materials from farms and the cities and drew upon sardine and herring resources available
off of the northern island of Hokkaido. High demand for lumber (particularly after
disastrous urban fires that followed in the wake of large earthquakes) led to classic
Ricardian diminishing returns, as the lumber industry was forced to go ever deeper into
the mountains to secure supplies (Totman, 1995a) and (Totman, 1995b).
The other significant feature of Tokugawa Japan that receives attention in thehistoriography is the state of technological development. On the one hand, historians
stress the ability of Japanese produces to develop and adopt new and sophisticatedmethods for production and organization. The history of innovation in the Japanesefisheries discussed in (Kalland, 1995) and (Howell, 1995), for example, points toconsiderable ingenuity in both the development of new nets and methods of organizing
fishing. On the other hand, the cultural and economic isolation of Japan before 1859—
despite the access to Dutch writings on technology—meant that its technologies wereunable to take advantage of developments in the substitution of mechanical action forhuman labor so prominent in the textile sector, advances in metallurgy or the applicationof inanimate power to drive machines and move earth.
This discussion of the construction of the resource requirement matrix (or A
matrix) for the late Tokugawa and early Meiji economies (that is, after the opening up of

12

trade in 1859) will focus first on a describing the kinds of sources that are available. It
will then turn to the identification of the five main fundamental resources of thiseconomy and two key intermediate goods: fertilizers and charcoal. The integration of theTokugawa and early Meiji economies meant that production relationships (upstream anddownstream) could be quite sophisticated, despite the fact that this was a pre-industrial
economy closed off to significant international trade.
Japan’s pattern of specialization after the opening up of trade enables readycalculation of the bulk of its factor exports. The pattern of imports is much more diverse,
but significant progress can be made by focusing on two major foodstuffs (rice andbeans), cotton and manufactures made of cotton and metals.
4.2 Sources for the A matrix
An initial look at the available sources would suggest some pessimism about theability to reconstruct the factor requirements of a major set of products during the earlyyears of international trade (1859 to 1875). The first survey of industrial production in
Japan only took place in Meiji 7 (1874), and the first comprehensive census—whichforms of the basis of reconstructions of Japan’s national accounts—only took place in
1885. Nonetheless, a numerous sources exist that allow for a reasonable approximation toresource requirements. Most important, for much of the nineteenth century after 1859
(the opening up), the rapid diffusion of new technologies into the Japanese economy was
limited to a few readily identifiable sectors. Partly because they were so remarkable, thediffusion is well documented. Through the late 1880s, most of the economy operated
with essentially the same technologies that were in use during the late Tokugawa era. For
those sectors that experienced rapid technological change, contemporary documents andthe reports of foreign visitors allow a ready assessment of the differences between themodern and traditional technologies, which accounted for virtually all of the production
during the first fifteen years or so of open trade.
We know less about the substitution of factors that may have occurred after the
opening up, which may make data from traditional technologies that were in use after the
opening up suspect. For the most prominent cases, such as the establishment of largerscale tea refining operations or businesses that specialized in the raising of cocoons, it

13

appears that when factor substitution did take place, it also involved new forms ofbusiness organization. Fortunately, it is possible to check the results reached using
technological data from the early Meiji period against sources that document actual factor
requirements during the Tokugawa period. The discussion of the robustness of theestimates presented here includes this check where possible.
The most important source for this study is the massive Nouji Chosa, a series ofsurveys of agricultural production statistics in Japanese prefectures. The survey took
place during the late 1880s, and was reprinted in Chō, et. al. (1979) as a multi-volume
set. The basis of the coverage is uneven. Some of the data cover particular villages andother cover counties of prefectures. Some are differentiated according to landlords or
tenants. A majority of prefectures did not supply data.4 An important advantage of thissource is its inclusion of all tradable agricultural products (with the exception ofvegetable wax) and the astounding detail provided about inputs. Detail is available for all
major productive tasks according to the days of labor needed, usually broken down by
sex and always including the total cost of labor (from which sex can very often be
inferred). For example, the data on tea production includes cultivating, fertilizing, picking
and processing. The source provides detail on the weight and type of fertilizer for about
twenty kinds of fertilizer. Information is provided on the amount of fixed and working
capital used (often with an estimated rate of depreciation) and often on the types ofcapital used. Other inputs are also reproduced. Finally, the common practice was torecord information on inputs per tan, a unit of areal measure equal to 300 tsubo or about
one-tenth of a hectare. This source provided the starting point for all of the agriculturalcommodities found in the A matrix.
The second important source for this study are the observations of individual
travelers and experts hired by the Japanese. The most famous of these is thememorandum written by the French mining engineer, Francisque Coignet, Note sur larichesse minerale du Japon (Coignet, et al., 1957), which provides detailed comparisonsof the input requirements for all six stages of traditional copper mining, smelting andrefining technologies. Three other examples include the reports by the American mining

4

Usable data from only 19 out of 47 prefectures is available. These are scattered around the country, but
are most heavily concentrated in the western part of the country.

14

engineers Pumpelly and Lyman (Lyman, 1879, Pumpelly, 1866) and the summary ofconditions by the German engineer Netto (Netto, 1879).5 Several foreigner visitors andexperts provided detailed reportage on the other main Japanese export industries. One
example is (de Bavier, 1874). De Bavier was the representative in Yokohama for one of
the most important French importers of Japanese silks. American, British and Austrianobservers also offered detailed accounting of production conditions in silk and tea overthe late 1860s to the early 1880s.6 Not all foreign observers had the detailed knowledgeof de Bavier or Coignet, but they were accustomed to describing production conditions interms of inputs used and outputs gained.
Japanese economic and business historians are primarily responsible for the final
source for information on technologies and factor usage. Buried away in communal andother governmental archives and business and family papers are detailed accounts ofproduction conditions for a range of industries. Historians have brought these materials
together to provide a rich picture of the economic and commercial life of late Tokugawa
and early Meiji Japan. Historians have also made use of a few of the han surveys of the
middle 19th century, which can also help to sort out the basic production conditions.7
A review of all of these materials suggests that as a first approximation,technologies of the late Tokugawa economy utilized five basic inputs: skilled male labor,
unskilled male labor and female labor. Primarily found in urban areas, skilled labor was
found in the traditional crafts and in some industries such as soy brewing. Satio (2005)
provides estimates for evolution of skill premium, which was on the order of three or four
to one during this period. Male unskilled labor was found in urban and rural areas. The A
matrix developed here assigns most rural farm labor to the unskilled category, althoughcertain activities in areas such as silk reeling would perhaps be best categorized as
skilled.8 As Japanese economic historians have long recognized, much of rural
production was carried out on a by-employment basis (for example, the spinning and5

Yoshiki (1979) provides an extended discussion of the reports of the activities of numerous westernmining engineers employed to upgrade the technologies used in the Japanese mining industry.
6
See (Adams, 1870, Gribble, 1883, Scherzer, 1872, Syrski, 1872, Watson, 1873).
7
See, for example, the survey of the Chōsū han conducted in the early- to mid-1840s (Yamaguchi-ken
Monjokan, 1960).
8
See (Narita, et al., 1978) for a contemporary discussion of the skill requirements for raising silk. He
argued that proper reeling required in excess of twenty to twenty-five years to fully master the skills
required for this task.

15

weaving of yarn). Although this organization of production allowed the full employmentof labor throughout the year, it may have diminished some of the gains accruing to
specialization and mastering particular tasks.9 The final category of labor, female labor,
most likely encompassed skilled and unskilled work. It also includes the work of young
girls as well as women. As we will see, whether or not the work was primarily performed
by women appears to be an important influence on the pattern of trade in factors of
production.
The final two factors, land and capital, are treated in this study as homogenous
inputs as a first approximation. Land is measured in terms of tan (about one-tenth of ahectare). Measuring of the input land does not distinguish between uplands and plains.
Compared with other factors of production the measurement of capital is subject togreater measurement error. At the current state of our knowledge, it is missing for some
activities (including smelting and refining activities of metals and some mining).
Measurement also posed challenges, but the agricultural survey of the mid-1880s
provides a great deal of detail on charges for maintenance of capital. Many other sources
also provide either the charges to capital or the initial set-up costs (with implicit rates ofdepreciation) (Howell, 1995). The measured charges from this source have used the rateof depreciation prevailing in the 1870s and early 1880s, but have adjusted the implicit
rate of interest upwards to reflect the higher cost of credit for rural industries.10 In any
event, capital charges have all been converted to the buying power of the ryō of 18511853. (See the discussion of factor prices).
The technologies of the period involved two important intermediate inputs:
fertilizer and charcoal. Most of the attention in this study has been devoted to fertilizer,
which by the early nineteenth century included a supply chain that reached from
Hokkaido through the Sea of Japan all the way to the Kinai region, which was the centerof cotton production. Although the agricultural survey of the mid-1880s counted overtwenty kinds of fertilizer, there were essentially four varieties used in Japan. The variety
with a truly national market was fish fertilizer. Fish fertilizer made of sardines had been
9

For a full exploration of this question, a comparison with the silk weaving industry may be in order.
Reported rates of depreciation ranged form three or four percent to much higher amounts, depending
upon the capital good. The standard interest charge appears to have been 10 percent. This has been adjusted
upward to 12 percent.

10

16

used substantially up through the 18th century, but the opening of the southern part of thenorthern island of Hokkaido (and its settlement by the Matsumae clan) led to thedevelopment of a seasonal herring fishery.11 Herring was used both as a foodstuff andwas also processed into fish fertilizer, which was then transported primarily to westernJapan (the Kantō region relied much less on herring fertilizer). A second important sourceof fertilizer was human waste, which was primarily available near large cities. Wastes
from soybean oil, sake and rapeseed oil production constituted a third source that wasavailable locally. Finally, Japanese farmers relied upon composted leaves from common
forest land, rice husks, and other materials. To summarize the resources embodied inthese diverse fertilizers, equivalents per kan (equal to about 8.28 lbs.) were establishedusing the relative price information available in the Nouji Chosa.
Ascertaining the resource requirements for the production of charcoal, which wasused in alternation with wood for all smelting and refining of ores, has proven moredifficult. The cost varied substantially depending upon the extent to which forests
surrounding sites with ore had been depleted. This part of the input requirement matrix
will be filled in using additional data on the charcoal and lumber industries.
4.3 Sources for autarky factor price vector wa
Japanese and western economic historians (and contemporary observers) haveprovided a rich documentation of the prices for different kinds of labor. This paper relies
heavily upon the work of Saito, which is summarized in his book, several journal articles
and book chapters (Saito, 1998, Saito, 1998, Saito, 2005, Saito, 1991). Saito has beenable to document the rate of pay for male and female agricultural workers in both the
Kinai and the Kantō regions. The rates of pay for urban unskilled workers are available
for longer time periods from both Edo (Tokyo) and Osaka/Kyoto. The wages of skilledworkers can be inferred from various construction trades and other craft occupations,such as the sewing of tatami mats. For the initial calculations used in this paper, thewages for agricultural workers compiled from the records of landlords from near Osaka
found in (Saito, 1973,Table 1) are used for male unskilled and female unskilled labor.

11

See (Howell, 1995, Nakanishi and 中西聡, 1998).

17

The year used is 1856-1860.12 Most of the export and import-competing industries werebased in rural areas, so that these wage series offer the best first approximation to wage
costs. For skilled workers, the wage series of Osaka carpenters relative to wages for day
laborers in Kyoto provides a good approximation of the skill premium. That was up to
four to six times the rate paid unskilled labor.
The valuation of land used two sources: the report of Syrski on the valuation ofland around Nagasaki and the report of Gribble on land used for tea shrubs near
Shuzuoka.13 In addition, (Henderson, 1975, pp. 64-65) provides a valuation of a rice fieldin Shiga Prefecture ca. 1821. These reports resulted in a median of 0.11 ryō in ryō of
1851-1853 using the index of the price of non-tradables found in Shinbo(1978, Table 510). The Henderson data for transfer of a rice field yields a an upper bound measure ofabout 0.14, which provides some assurance that the estimate for the early 1850s is not too
far off of the mark.
The price of capital is the relevant interest rate plus depreciation. For most of theindustries discussed above, the relevant cost of capital was often (but not always)
included a rate of depreciation and an interest rate. From the data for agricultural-basedindustries, the usual charge appears to have been listed as depreciation or interest. Thesecharges ranged from two percent for rice to up to 8 to 10 percent for the export products,
silk and tea. As a first approximation, the results presented here assume that the rural
producers of all of these commodities faced an annual interest rate of twelve percent. As
Toby and Saito note (Saito and Settsu, 2006, Toby, 2004), actual interest rates paid bysmall-time producers varied according to a number of characteristics that the data at hand
can not identify. Saito (2006, p. 10) cites the studies of Uemura and Nakmura that,
despite showing diverging trends in the 1860s and later, are consistent with Toby’s
finding of 12-15 percent in the 1840s for a village near Nagoya (in western Japan).14 The
resulting charges for capital used in this study were up to 15 or 16 percent for industries
such as silk and tea, where the reported maintenance charges were relatively high.
12

The wage rates for women are similar to rates for women in the Lake Suwa region of the Nagano
prefecture in eastern Japan in 1850 and 1854, but comparable rates for men are not available.
13
See (Gribble, 1883, p. 10, Syrski, 1872, p. 199). The valuations are reported estimates for 1860, the firstyear of open trade.
14
All of these studies deal with provinces in western Japan. I am not aware of studies of rural interest rates
that provide insight into rates in the rural Kantō.

18

5. Empirical results
5.1. Technology matrix
A brief review of the elements of the A matrix (presented in Table 1) illustrates
the net resource requirements of most of Japan’s most important tradable goods. Notefirst of all that the matrix includes all intermediate input-output relationships reduced totheir fundamental resource requirements. For some goods, these relationships could berather intricate. Silk production required purchase or raising of cocoons, which in turnwere raised from silkworm eggs usually purchased from an independent vendor. The
raising of cocoons required mulberry leaves, which were in turn produced by specialized
growers. The calculation of the final input requirements for silk required information
about the productivity of silkworm eggs in terms of cocoons that could be raised, therequired amount of mulberry leaves for raising cocoons and the productivity of cocoons
in terms of reeled silk. The final production of some metals such as lead required
knowledge of the resource requirements in the production of pig iron.
The relative importance of particular resources (such as female labor) could in theend depend upon substantial intensity in the production of an intermediate product.
Cotton cloth production required yarns that were typically spun by female labor. The useof primarily female labor for the time-consuming task of picking cotton created a bias
towards female labor that was present even before the cotton was ginned and sent to themarket. Male miners dug out ore from the cramped tunnels or galleries typical ofJapanese mines of the 1860s and early 1870s, but women were usually employed to washthe ores and break them (by hand) into small pieces for further processing.
The A matrix reveals the diversity of input usage for traded goods. The input
usage reflects both the organization of production and assigning of tasks by sex (as well
as skill level). Virtually of the goods of an agricultural origin or using raw materials
produced in agriculture were produced by peasant households or medium-sized farmers.15
The raising of silk cocoons was a time-intensive task that took place over a few shortweeks. It required the labor of the entire family, which could result in relatively balanced
15

One exception may be the refining of sugarcane, which required more in capital equipment than would
be typical for a peasant household. However, it should be noted that the fishing enterprises that suppliedmuch of the fertilizer industry were essentially small businesses with access to credit markets.

19

use of male and female labor. Some tasks within the household were specialized by sex,
including field tasks such as picking cotton or tea, the spinning of cotton yarn and often
the weaving of cotton cloth. More often than not, products that heavily used female labor
would be produced in the home.16
As the A matrix illustrates, skilled labor was much more likely to be found in themining and metallurgy sector, although skilled male labor was also critical for sorting tea
prior to sale. Mines and smelting or refining operations were typically operated as afamily firm or a government enterprise. Those in the private sector relied upon teams led
by skilled miners, who were identifiable by either their wage or the description provided
by the sources.17 It is also noticeable that if we recognize that 100 catties equal one picul,
the resource requirements for soybeans were actually a bit higher than rice. Partly
because of the use of fertilizer, cotton and tea required even more resources.
Table 1: The A matrix for Japan ca. 1865/1870

Net Exports
Silkworm Eggs per
sheet
Silk
Tea
CopperCoal per ton
Net Imports
Rice per picul
SoybeanLead
Tin
Pig iron
Refined iron
Brown sugar
White sugar
Raw ginned cotton
Yarn
Unfinished cloth

Male skilledlabor (days)

Male unskilledlabor (days)

Female labor(days)

Capital
(ryō)

0.035
0.409
0.248
0.129
0.008

0.848
7.724
0.277
0.035
0.008

0.160
10.014
0.126
0.002
0.000

0.065
1.701
0.088
0.000
0.000

0.015
0.236
0.014
0.000
0.000

0.000
0.000
0.654
1.523
0.004
0.021
0.000
0.000
0.000
0.000
0.000

6.594
0.058
0.565
0.841
0.050
0.071
0.175
0.378
0.511
0.538
0.031

1.038
0.015
0.663
0.000
0.000
0.000
0.050
0.109
0.526
3.757
0.399

0.163
0.003
0.065
0.000
0.035
0.083
0.007
0.013
0.038
0.040
0.016

0.256
0.005
0.000
0.000
0.000
0.000
0.003
0.005
0.015
0.016
0.010

16

Land
(tan)

This comment excludes tea firing establishments, which were staffed almost entirely by women. It is also
noteworthy that the emergence of many larger-scale production activities (for example, machine reeling
establishments, cocoon raising firms or machine spinning) that were carried on outside of the home alsorelied heavily on child labor.
17
By the mid-1880s, the standard was in excess of 15 sen per day.

20

Finished cloth

0.126

0.031

0.399

0.016

0.001

Notes: All resource requirements are per catty (1.33 lbs.) unless otherwise specified. A
picul was equal to 133.33 lbs. The ryō was the gold-based currency of the Tokugawa
Japan. One tan is about one-tent of an acre.
Sources: For a detailed discussion of the sources, please see the Data Appendix.
5.2. Trade in factor services
Table 2 applies the the technology matrix to commodity exports and imports foreach year of 1868-1875. The choice of 1868 reflects the higher reliabitity of thecommodity trade data at the beginning of the Meiji period compared. The reason ofending in 1875 reflects the comparability with the autarky period with regard to thedomain of importables. Although there is some variation across the period, the results arequite consistent regarding the pattern of factor service trade. Regarding the volume offactor service flows, a striking feature in the labor category is the high magnitude offemale labour days embodied in both exports and imports. With the exception of 1868,
Japan was a net exporter of skilled labour, reflecting the relative skill intensity of silk
production which was the main export sector.18 On the import side, Japan was a net
importer of female workers and land in each trading year. As mentioned before, the net
imports of land is quite obvious. The large volume of net imports of female workers
suggests that international trade relieved some of the pressure on the domestic female
labor supply. (More discussion….)
Table 2: Japan’s Net Factor Imports: 1868-1875 (AT)Exports
1868
Labor male skilled (days)
Labor male unskilled(days)
Labor female (days)
Capital (ryo)Land (tan)1869
Labor male skilled (days)
Labor male (days)
Labor female (days)

Imports

Net factor imports

2.39

1.62

-0.77

12.36
12.50
2.69
0.40

12.21
31.45
1.43
0.53

-0.14
18.95
-1.26
0.13

2.02
8.58
8.30

1.83
27.34
41.89

-0.20
18.77
33.58

21

Capital (ryo)Land (tan)1870
Labor male skilled (days)
Labor male (days)
Labor female (days)
Capital (ryo)Land (tan)1871
Labor male skilled (days)
Labor male (days)
Labor female (days)
Capital (ryo)Land (tan)1872
Labor male skilled (days)
Labor male (days)
Labor female (days)
Capital (ryo)Land (tan)1873
Labor male skilled (days)
Labor male (days)
Labor female (days)
Capital (ryo)Land (tan)1874
Labor male skilled (days)
Labor male (days)
Labor female (days)
Capital (ryo)Land (tan)1875
Labor male skilled (days)
Labor male (days)
Labor female (days)
Capital (ryo)Land (tan)

1.89
0.28

2.10
1.17

0.21
0.89

3.17
9.50
8.43
2.20
0.33

1.37
59.03
59.27
2.93
2.20

-1.80
49.53
50.84
0.73
1.86

4.44
15.16
15.14
3.47
0.51

0.73
48.01
52.06
2.69
1.76

-3.71
32.85
36.92
-0.78
1.25

4.63
11.83
10.80
2.73
0.41

0.98
18.99
76.83
2.60
0.91

-3.65
7.16
66.04
-0.13
0.50

3.35
11.45
11.44
2.64
0.39

0.03
16.68
59.54
2.67
0.75

-3.32
5.23
48.11
0.02
0.36

5.80
14.05
12.49
3.49
0.52

1.41
23.96
69.69
3.58
0.96

-4.40
9.91
57.20
0.10
0.44

5.59
13.92
12.64
3.50
0.52

2.18
28.27
87.36
4.29
1.18

-3.41
14.36
74.72
0.79
0.66

Notes: The net factor trade is AT, where T=(imp-exp). All values are expressed inmillions.
Source: Trade data from the Meiji trade statistics. See the data appendix for the sourcesof data for the A matrix.
5.3 Test results

22

Table 3 contains the autarky price values of Japan’s exports, imports and net
imports for each of the trading years 1868-1875. The main results, i.e. the sign of theinner product waAT, are reported in the last row of this Table. With the exception of
1868, the sign is positive for each of the trading years. So far, the findings provide strong
evidence for the Heckscher-Ohlin hypothesis. However, the following robustness
exercises are still awaiting further execution: (i) use of alternative autarky factor pricemeasures, (ii) completion of technology matrix for some “minor” export and import
goods (i.e. those with small trading quantities) and (iii) robustness regarding trade deficits(Note: a trade deficit biases the inner product towards a positive sign).
Table 3: The value of Japan’s Factor Trade in the Early Years of Open Trade (inthousands of gold ryō (waAT))
Price ca.
1853-1856(In gold ryō)
Exports
Labor maleskilledLabor maleLabor female
Capital (per unit)
Land (per tan)
Total (waAX)
Imports
Labor maleskilledLabor maleLabor female
Capital (per unit)
Land (per tan)
Total (waAM)
Imports-Exports
Labor maleskilledLabor maleLabor female
Capital (per unit)
Land (per tan)
Total Net (waAT)

1868

1869

1870

1871

1872

1873

1874

1875

0.16
0.03
0.02
0.24
0.11

388
334
225
655
44
1645

328
232
149
460
31
1199

513
256
152
536
36
1493

720
409
272
844
56
2302

750
319
194
664
45
1972

542
309
206
643
43
1701

940
379
225
848
57
2393

905
376
228
852
58
2360

0.16
0.03
0.02
0.24
0.11

262
330
566
347
58
1564

296
738
754
512
128
2428

222
1594
1067
713
241
3837

119
1296
937
655
193
3201

159
513
1383
632
100
2786

5
450
1072
649
82
2259

228
647
1254
872
106
3107

353
763
1573
1045
130
3863

0.16
0.03
0.02
0.24
0.11

-125
-4
341
-308
15
-81

-32
507
605
52
97
1229

-291
1337
915
177
205
2343

23

-601
887
665
-189
137
899

-591
193
1189
-33
55
813

-537
141
866
6
40
558

-712
267
1030
24
48
714

-552
388
1345
193
73
1503

Notes: The value in each row is the net valuation of the trade in that factor at factor prices
prevailing under the last years of aut1rky (1853-1856). For a discussion of the valuationof factors of production, please see the text.

24

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27

Data Appendix for construction of the A matrix
This discussion of the data sources for the A matrix is divided according to eachproduct. The discussion is broken down according to agricultural products (materials),
agricultural products (food) and mineral products. The first category includes sericulture
and related products and raw cotton and cotton textiles. The second category includes tea,
rice, soybeans, brown sugar and white sugar. The final category includes coal, lead, tin,copper (refined), pig iron and iron manufactures.
Sericulture
Sericulture involves four separate products: mulberry leaves, silkworm eggs,
cocoons and raw silk (reeled from cocoons). Several sources provide details about theinterrelationship among these products and some information on resource use.19 By theend of the Tokugawa era, the raising of mulberry leaves and of silkworm eggs had
become separate enterprises with some degree of regional specialization. During the early
trade period, cocoons were raised by individual households within the home using
household labor. There were only a few of the larger-scale cocoon-raising establishments,
which seem to have become more widespread during the 1880s and later. Where thecocoons were raised had important implications for the division of labor. Within thehousehold, it would be a mix of male and female labor. In specialized cocoon-raisingestablishments, the labor was primarily younger women with an overseer. The
technology matrix used here assumes that cocoons were raised by peasant households.
Finally, during the early trade period, silk reeling using hand methods continued todominate.
Chō, et al. (1979) provides the most detail on resource use in multiple volumes
dedicated to the results of surveys carried out by prefecture (or by county, or gun). Not all
prefectures were important sources of silk production and by no means is the coverage ofthe agricultural survey complete. Based upon the discussion of de Bavier (1874), theprefectures for which data were available and which are also more important for silk
production were included in the analysis. They included Aomori, Akita, Yamagata andYamanashi prefectures for mulberry leaves, cocoon raising and the production of
19

Adams (1870), Bavier (1874), Syrski (1872).

28

silkworm eggs. The reeling of silk also took place for the most part within peasanthouseholds using hand methods during the early period of open trade.20 By the mid-1880s(the period of the agricultural surveys), machine reeling was diffusing rapidly, althoughmost Japanese silk was still reeled using hand methods. These calculations used only datafrom respondents to the survey who explicitly stated they were using hand methods. Thisconsideration necessarily broadened the scope of included prefectures; for silk reeling,
the study included Osaka, Hyōgo, Tottori, Ehime, Oita, Nagaski and Aomori prefectures.
Most of these prefectures lie outside of the classic central silk producing region, but datafrom these areas would be more likely to capture the productivity of reeling using hand
methods.
Cotton and cotton textiles
The main source for cotton production was Chō, et al. (1979). The prefectures
included for the study are from the western part of Japan, which was the main cotton
producing area. The prefectures included in the analysis were Ehime, Hiroshima, Tottori
and Yamaguchi. Fortunately, the average productivity per tan was similar to the average
productivity found for the cotton-growing areas of the Kinai, which was the center of
production for the best-known cottons during Tokugawa Japan Hauser (1974,Table 14 on
p. 124). Hauser (1974, pp. 130-131) also provided estimates of fish fertilizer in kan pertan, which were used in placed of the data found in the survey. Japanese cotton competedwith the ginned imported cotton. For that reason, the estimates for Japan include the labor
cost of ginning. Hauser (1974, p. 131) argues that one kan of seed cotton yielded 390
momme (or 39 percent) of ginned cotton. Cotton was typically ginned on the farm using
hand methods. The estimates here assume that one-half day of labor was needed to gin
one kan of cotton.21
Cotton yarn was a significant import during the early years of trading. Yarn was
produced in the household using primarily female labor.22 There are a range of estimates
20

The preliminary estimation of the factor content of trade excluded the small amount of cocoons (waste
and pierced) and noshi and floss silk that was also exported. These products were essentially joint productsof the main output. To account for these products in the resource usage of silk producers, the quantity ofoutput has been adjusted upwards by the ratio of the total value of output to the value of output for firstquality silk products.
21
One kan is 8.27 lbs. or 3.75 kg. The estimate is from Hauser (1974, Table 28 on p. 163).
22
See Itoh and Tanimoto (1998) for an extended discussion of the structure of the cotton textile industry
during the late Tokugawa and early open trade periods.

29

of productivity found in Hauser (1974, Tanimoto (1992, Uchida (1988). The productivity
did depend to some extent on the weight of the yarn. Productivity estimates in thesesources range from 0.03 to 0.15 kan of yarn per day. The estimates used here are from
Tanimoto (1992, p. 40), where it was estimated that a spinner could spin about 100
momme of yarn in about two days.23
Weaving requires both preparation of the warp as well actual time for weaving.
The same sources listed above provide some estimates of weaving productivity, although
it should be noted that since Uchida’s study was of domestic cotton striped cloth—which
tended to be much heavier than the bulk of imported cloths (shirtings)—mayunderestimate the relevant productivity. Here there is much more agreement between
Hauser and Tanimoto.24 The estimates used here assume one day per tan and another day
for preparation.
Finally, data on finishing cloth (including the cost of dyes and other materials) ismuch more difficult to come by. We know that dyers tended to be specialized in that
activity rather work at it as a by-employment, which was the case with spinners andweavers. Uchida (1988, p. 162) estimates the contribution the costs of dyeing yarn to thecost of cotton striped cloth at about 6.8 momme. At an estimated wage of 2 momme perday, that would yield a daily productivity of 0.3 tan. Evidence from the villages in the
Chōshu Han would suggest a daily productivity of 0.73 tan. This higher productivity was
assumed to apply to the labor component of all finished cloth.25
Tea
Tea was Japan’s second most important export after the products of sericulture.
Contemporary discussion by foreign observers of the Japanese tea industry included
Syrski (1872) and Gribble (1883, Watson (1873). All three sources provide substantial
detail about the steps involved in the growing and preparation of Japanese tea for export.
In addition, the data fromChō, et al. (1979) are very useful. Tea is a heterogenous
23

Given the wide variation in estimated productivities (and also for different cloths that were woven), thisissue requires further research.
24
Hauser (1974, p. 138) estimates that a weaver could produce up to one tan of cloth per day. Tanimoto(1992, pp. 40 and 45) suggests about one tan per day for a weaver in the Toyama and Nagano prefecturesand from 1-2 tan per day depending upon the skill level for a weaver in the district of Izumi (near Osaka).
25
The ample evidence on the indigo and other dyestuffs industries should allow some refinement of theserough estimates. Finished cloth was a little above one-tenth the yardage of all imported cotton cloth during
the period of analysis.

30commodity, with widely varying resource requirements depending upon the quality of the
final product. Most exported Japanese tea was green tea, which was dried in the
countryside and then received some drying in the export port (Nagasaki or Yokohoma)
prior to packaging and shipment. Based upon the per unit value from the export statistics,
data from Hyōgo, Hiroshima, Oita and Sagea prefectures was used along with Gribble(1883). The labor requirements for fertilizing and cultivating came from the agricultural
survey evidence, as did the data on capital, land and fertilizers. Gribble (1883, p. 8)
provides a helpful breakdown of the productivity of (female) labor in picking tea and inthe (skilled) labor used in the sorting and refining processes. Watson (1873, pp. 11-13
and 19) provides data on the labor requirements for the tea firing establishments in theport cities.26
Rice
As the staple Japanese grain, data on rice production was available from fourteenof the prefectures covered by Chō, et al. (1979). Surprisingly, production conditions wererelatively reasonably uniform across the country. The coefficient of variation of land
productivity was, for example, only 0.22. The coefficient of variation of male labor
requirements was only a bit more. To convert the production data, which was by volume(koku), into the weight equivalent, Atkinson (1881) provided reasonable equivalents.27
These estimates did not assume double-cropping in a year.
Soy BeanLegumes constituted an important import during some of the early years of Meiji.
Since the export data do not distinguish among legumes, soybeans were chosen to standin for all field beans in terms of determining the amount of resources embodied inimports. Chō, et al. (1979) provides data on soybean production for nine prefectures,
which were used to construct the elements of the A matrix pertaining to legumes. The
United States Department of Agriculture’s conversion of volume to weight suggest that

26

Chō, et al. (1979) also includes data on the production of bancha (coarse) tea. Japan’s exports of bancha
tea were about one-tenth of the exports of higher quality green teas.
27
The measure of rice used in export statistics was by weight (picul, or 133.33 lbs.).

31

there are 0.772 kilograms of soybeans to one liter. This implies about 23 catties per to,which is the conversion factor used in the analysis of the agricultural survey data.
Brown and White Sugar
Japan’s sugar production was confined to the eastern and southernmost areas of
the archipelago. Two sources are available for estimating the resource requirements for
raw cane production and the refining of sugar cane into brown and white sugar. The datafrom the agricultural survey Chō, et al. (1979) for Ehime, Nagasaki and Osaka were used
to calculate resource requirements for sugar cane. Data from the Sanuki Han (onShikoku) from Meiji 4 offer detail on the costs of refining sugar cane into brown sugar
Oka, et al. (1983). The process for grinding sugar can used power from a cow or otheranimal to power a mill; the boiling of the cane used firewood and charcoal. Refining
brown sugar into white sugar required additional firewood and more labor for bleaching.
The source for these added resource requirements is Uemura).
Mineral Products
Estimating the resource requirements of mineral products presents its own
challenges. Japan possessed relatively abundant deposits of copper and silver ore, whichwere heavily mined during the Tokugawa period. Japanese mining technology andmetallurgy posed significant barriers for taking full advantage of these deposits (seeNetto (1879) for a classic statement of the deficiencies from the perspective of a Germanmining engineer). By the end of the Tokugawa era, the constraints of Japanese mining
techniques meant that most productive deposits of ores bearing copper, silver and gold
had already been heavily mined and output was quite limited. This came about for several
reasons. Areas with mineral deposits were not mined by one firm. Instead, individual
miners received contracts to mine subareas of a deposit. Mining technology did not use
powder (not to speak of steam power) to excavate mine shafts, so that the dimensions ofmine shafts were often very narrow with low ceilings. Japanese pumping technology wasfor the most part limited to hand pumps, which would require a large area as well as
massive amounts of labor to pump areas prone to flooding. These technologicalconstraints meant that mined areas were typically confined to veins that were close to thesurface. The scale of mining was thus quite limited. Western engineers visiting Japanremarked on the honeycombed appearance of what had once been productive mining

32

deposits. The dressing of ores occasionally used water power, but most often female
labor without any inanimate power. The transport of ores was usually by coolie labor andonly occasionally by horses. Perhaps because many mines cam under direct government
ownership after the Meiji Restoration, mining experienced some of the earliest
technological improvements using western methods of any Japanese industry. The
1870s—the second part of the early trade period—were at the beginning of a period oftransition, and accounts of mines from time reveal improvements in some parts of theoperation (more often than not, gathering ores) and traditional Japanese technologies inothers. For the data used in the A matrix, mining, smelting and refining operations havebeen chosen that continued to adhere to traditional technology.
Traditional Japanese metallurgy also was not as efficient in using existing ores as
western methods Japan. Rinji Hakurankai Jimukyoku (Chicago Exposition 1893).
(1975)). The processes used large amounts of charcoal (which led to deforestation inneighboring areas) and were conducted in small batches in specially constructed furnaces,
which would be broken up after several charges. Metallurgy was also quite diverse inpractice, since it needed to adjust to the variety of ores found across Japan. For thatreason, contemporary reports of production conditions Lyman (1879) and Pumpelly(1866) suggest quite a range of both scale and productivity. Throughout the 1870s,
most—but not all—smaller mines in Japan adhered to traditional methods of both mining
and metallurgy. The upsurge in copper exports notable after the early 1870s reflects
primarily the application of western methods to mining (the use of explosives to build
mine shafts, conveyance by small trucks on tracks and steam pumps) and to metallurgy.
The development of the resource requirements for the A matrix for mineral products usedthe data on relatively productive sources. One challenge that further research must
resolve is providing valuation for the capital invested in mines and metal processing
facilities.
CopperJapan possessed a sophisticated and at one time highly productive copperindustry. During the period of very limited trade through Nagasaki, Japan exported
primarily copper in exchange for goods imported by the Dutch and Chinese. The twolargest minds of the early open trade era—the Bekko mine and the Kusakura mine—33were analyzed by Coignet, et al. (1957) and other observers (see Lyman (1879, pp. 230236)). According to these accounts, significant differences existed in the productivity ofthese mines, particularly at the gathering and washing stage of the operation (prior tosmelting). The data from the Bekko mine found in Coignet, et. al. (1957, p. 81) were usedin the A matrix for the copper industry, but other mines would yield much lessproductivity.28 The remaining input requirements were also taken from the Bekko mine,
which are found in Coignet, et. al. (1957, p. 130). As is the case with other mines, there is
not any reporting of capital for the four stages of processing and the one stage ofsmelting.
Iron
The next most important metals industry in Japan was the iron industry. A nicetreatment of the early years of the industry is found in Takeda (1987), who also outlines
some of the main steps towards upgrading mining and processing of iron ore. Pig ironand iron manufactures were an important import during the early trade years. Japan’s ironindustry relied almost entirely upon the smelting of iron from sand iron. Wada (1893,pp.
227-229) describes the Neu iron sand mine and processing operation. At this mine, local
farmers gathered iron sands during the off-season. Given a daily wage of about 12 sen,the estimated labor requirement is about 0.5 days per kan (or 3.75 kg.). For the remaining
steps of processing, Coignet, et al. (1957, pp. 37, 40-41) provides a useful summary of
resource requirements. His data can be checked against the account of Ichiro (1995),
which describes some of the variety of production methods for iron, steel and wroughtiron.29 As with the processing of copper, the resource for which more research is requiredis the large amounts of wood that was burned either directly or as charcoal, which would
often be processed on the spot.
Lead
Japan was a net importer of lead, except during the period 1872-1874. Lead mines
shared the fate of other metal mines during the Tokugawa era. Once easily-accessibleores had been worked, the cost of extracting ore (and then processing it) required rising28

For example, Lyman (1879, pp. 230-236) reports that from 0.25 to 0.5 person-days per kan were needed
to mine and wash the ores at the Kusakura Mine. The requirement was about 0.1 at the (unprofitable)
Nameradiki. The Bekko and Kusakura mines supplied much of Japan’s copper production during the early
trade period. The yield at the Bekko mine was about seven percent of copper ore by weight.
29
See also Lyman (1879), who visited several iron processing facilities.

34

amounts of labor. One lead mine that was visited in the early 1860s in Hakodate does
provide data on resource requirements. The American mining engineer visited the leadmine at Ichinowatari in Hakodate in 1862 when he was employed by the Bakufu. His
report serves as the basis for the estimated resource requirements for lead mining andsmelting Pumpelly (1866, p. 81). Unfortunately, Pumpelly’s account also lacks any
discussion of capital needs, although fuel requirements are well documented.
Tin
Japan imported tin for use in the packaging of tea and other purposes. During theearly period of open trade, it had only one tin mine. Fortunately, this mine was also on
the itinerary of Lyman’s year-long tour of Japanese mines. His report is used for theevaluation of resource requirements in tin Lyman (1879, pp. 169-172). The high labor
requirements for both tin and lead reflect the relatively poor quality of the deposits thenbeing worked.
Coal
The final mineral product traded by Japan during the early years of trade wascoal. Japan had long had a coal mining industry that served the domestic needs primarilyof the salt processing industry. Output was limited because of the circumstancesprevailing in other types of mining operations. After the opening up of trade, interest
grew in the deposits at Takashima and Miike. Deposits in Hokkaido also attracted
attention. One complication in assessing resource requirements for Japanese coal mines isthe extensive use of convict labor; some prisons were relocated to be in close proximity
to the coal mines Wada (1893, p. 239). As with other mining operations, the resource
requirements for coal mining varied widely among mines depending upon the thicknessof the seam and its proximity to the surface. For assessing the resource requirements forcoal, data from the late 1860s in Hokkaido were used Kasuga (1982). As is the case withother mineral industries, there was no information on the size of the capital investment inthis mine (the Kayanuma Coal mine).

35