The delegation led by Iwakura Tomomi (1871–3), the first of many, visited the West to deal not only with diplomatic matters but also to study aspects of Western government and cultures. It found sources of inspiration in many countries. Japan imported from France fashion items, the school district system, the criminal code (the Napoleonic Code), and even the French jurist Gustave Boissonade, soon dubbed ‘the father of Japanese Law’, even though he could barely speak Japanese after twenty years in Japan. From Germany they took the civil code and the organization of the army; from Britain, the Navy, the telegraph and the railways; and from the United States, the universities.139 A Western-style peerage system was created with titles such as prince, marquis, count, viscount, and baron. Even the emperor started wearing Western-style military uniform like European monarchs.140
Modernization proceeded apace because all factions in the ruling groups agreed that the state needed to be strengthened.141 The impulse was political: the regime opted for industrial development to protect the independence of the country as a military necessity vital to avoid Japan being turned into a colony.142 Until recently Japan had been militarily weak. Without allies, without a fleet, without a modern army, and without industry it faced powerful Western nations.143 In Japan the dominant class was not a bureaucracy committed to Confucian values (as in China) but a warrior class, impressed by the superiority of Western military might.144 The process of industrialization became largely determined by military requirements and the military themselves, generals or admirals, headed governments for twenty-one of the thirty-six years between 1901 and 1937.145
The era when Japan regarded itself as singular among nations was over. Imitation became frenetic, but not for the first time in the country’s history. In the fifth century, religion (Confucianism, Buddhism), architecture, administrative practices, and writing had been imported from China, often via Korea.146 ‘One of the great traits of the Japanese character,’ wrote Manjirō Inagaki, a diplomat and scholar who had studied at Cambridge in 1888 to 1890 under John Seeley, the historian of the British Empire, ‘is that they never hesitate to adopt new systems and laws if they consider them beneficial for their country.’147 Some were less starry-eyed. The novelist Natsume Sōseki (who had lived for a couple of years in London and hated it), in his 1911 lecture ‘The Civilization of Modern-Day Japan’, pointed out that Japan’s modernization had to compress one hundred years into ten, and that as a result the Japanese, in a kind of self-colonization, felt as if they were ‘dressing up in borrowed clothing, putting up a false front’.148
The period of extreme pro-Western sentiments gave way to a more sober assessment of foreign successes, but there was never a significant reversal of policies.149 It meant combining – as the expression Wakon yōsai implies – the Japanese spirit with Western technology. Yukichi Fukuzawa, a leading pro-business liberal intellectual of the Meiji period and founder of Keio University as a school for Western studies in 1858, stressed in his influential pamphlets (An Encouragement of Learning, 1872–6, and An Outline of Theories of Civilization, 1875) that while national sovereignty was the main goal of Japan, ultimately national power depended on the level of acceptance of modern civilization and rejection of the xenophobia of the Sonnōjōi movement. ‘The more this movement of expel-the-foreigners increased,’ he wrote in his autobiography, ‘the more we would lose our national power, to say nothing of prestige.’150 The Japanese had to learn to become civilized to avoid succumbing to ‘aggressive foreigners’. That meant adopting modernity, industrialization, and independent thought.151 He exhorted the Japanese to abandon their old customs and transform Japan into ‘a new Western nation’.152
Not that Fukuzawa was uncritical of the West. A participant in Japan’s first mission to the United States in 1859, his reaction was characteristic of a Japanese first impact with a modern, wasteful consumer society that cared little for tradition and had little respect for relatives; he was surprised that no one seemed to know or care about what happened to the family of George Washington. He was shocked that no one seemed to practise traditional values such as thrift: ‘everywhere I found lying old tins, empty cans, and broken tools. This was remarkable for us, for in Yedo, after a fire, there would appear a swarm of people looking for nails in the ashes.’153
There were divisions within the reform movement. Some, such as Fukuzawa and Hironaka, were inspired by English liberalism; others, such as Katō Hiroyuki, were admirers of the Prussian autocratic model.154 All wings of the movement, however, were united in their desire to adopt Western methods to save Japan from the spectre of China’s fate. The Japanese were alarmed by the Chinese experience (Opium Wars, Taiping Rebellion) and were determined not to replicate it. Takasugi Shinsaku, a Chōshū samurai leader who sojourned in Shanghai for two months in 1862, was appalled by Chinese subservience to foreigners: ‘When British and French walk along the street, Chinese move aside and get out of their way. Shanghai is Chinese territory, but it really belongs to the British and the French … This is bound to happen to us too.’155 The inescapable conclusion was that the old policy of seclusion from the West would provide no protection.156 One could almost say that Japan was scared into capitalism by the spectacle of what had occurred to China. What was remarkable about the opening up of Japan was that it took place with relatively little civil strife.
By the end of the century Japan possessed technicians, professors, doctors, managers, army officers. It had succeeded in forming an indigenous elite capable of leading the country towards industrialization, at a time when Turks and Chinese, Argentinians and Brazilians had not. What was particular about the Japanese elites was that they were strongly united, with few marked divisions between landed and urban interests (and Japan was ethnically far more homogeneous than its European counterparts). Theirs was a real technocracy committed to modernity. Their counterparts elsewhere often encountered opposition from important segments of the establishment: bishops and landlords in Latin America, nawabs in India, Confucian scholars in China, and mullahs in Turkey and Egypt. Japan did not have the great coal deposits that fuelled British, German, and American expansion. She did not have a particularly fertile soil. Nor did she rely on foreign loans (as did Russia and, indeed, many other European countries).157 In fact, at first the government tried to ward off foreign investors, aware that foreign loans could be the first steps to being taken over158 (as Egypt had been by the British after its debt default in 1879–81).
Japan could not afford to wait for capitalism to develop spontaneously. Japanese merchants were averse to risk taking and reluctant to invest in anything new, preferring making silk to making steel, so the Meiji government stepped in, actively constructing the Japanese bourgeois class, investing in industry by establishing and funding pilot plants to produce steam engines and machinery for mines, subsidizing industries such as cotton spinning, and encouraging the formation of banks.159
More public money was available for investment from the indemnities forced upon China after the 1895 war. Western capital flooded in only subsequently.160 Yet Japanese firms remained Japanese, under Japanese control. This was partly because the state’s share of total investment was much higher than in Europe and, like continental Europe, it devoted considerable resources to education. Once Japan was on the path to industrialization, the most valuable resource was her abundant supply of cheap, educated, hard-working labour.161 Thus ‘early Japanese capitalism may be described as of the hothouse variety, growing under the shelter of state protection and subsidy’.162
From 1896 to 1899 the government initiated heavy subsidies aimed at transforming Japanese shipbuilding into one of the most important industries in the world.163 Throughout the Meiji era (1868–1912) there was more employment in government-owned heavy industries than in private ones, even though the government began to sell major enterprises to the private sector as early as the mid-1880s.164 Almost all railway construction was undertaken by the government with very little foreign borrowing; national and municipal go
vernments undertook 85 per cent of the borrowing, foreign direct investment was a paltry 5.5 per cent.165 Only towards the 1880s, when private capital was reassured, did capitalists, foreign as well as Japanese, join in.166 Soon, the state-run conglomerates were handed out at rock-bottom prices (an early example of privatization) to a new industrial capitalist class.
The level of concentration in Japanese business was particularly high: Sumitomo, Mitsui, Mitsubishi and Yasuda, the big four zaibatsu (rather appropriately the term means ‘moneyed clique’), were all the product of the Meiji period (though some had earlier roots).167 Japanese capitalists, created by the state, remained grateful, obedient, and loyal to it. Competition played a secondary role in Japanese economic growth. In his autobiography the liberal intellectual Yukichi Fukuzawa tells us that when he was asked to translate an economics textbook from English into Japanese he could not find the equivalent for ‘competition’, so he invented the term kyōsō (literally ‘race-fight’ or contest), and he had to explain to a bemused official that such a belli-cose word better represented the Western concept.168
Contrary to the mythology of free-enterprise ideologues, state intervention worked. By the 1880s and 1890s the economy had taken off and, by the beginning of the twentieth century, Japan was one of the fastest-growing economies in the world.169 The results were startling: in the years after 1886, the years of the Japanese take-off (1868–86 had been a preparatory stage), Japanese GNP doubled. In Italy, for example, in a comparable period, GNP increased by ‘only’ 30 per cent.170
The state had played a strong role under the Tokugawa, before the Meiji restoration.171 As the historian Hattori Shiso pointed out in the 1930s, there was an embryonic capitalism as early as 1830. Two of the three largest shipyards owned and operated by the Meiji regime had been built before the Restoration.172 The isolationism of the Tokugawa, the policy of ‘national seclusion’, was actually a form of economic protectionism that facilitated the process of development.173 When events required state intervention, the pre-Meiji regime did not hesitate to intervene: during the inflation of the 1860s the shogunate issued a spate of decrees to control the price of rice, oil, timber, copper, manure, and commodity prices in general.174
There was, inevitably, a conservative backlash. Reactionaries argued, with some justification, that one could not rebuild a society as if nothing had happened before, as if customs and traditions did not matter, as if the past had all been a tragic mistake, or as if one should simply develop, ab initio, a foreign model.175 But this movement was ephemeral, and, paradoxically, Japan established a model of economic development which, in the nineteenth century, remained unequalled. Since industrialization appeared to be state-directed, it may seem that the state became stronger and more interventionist. In reality what changed was the kind of intervention. Some of the Meiji reforms of the period 1868–72 lessened controls: abolition of guilds, freedom to engage in any occupation, permission for farmers to sell crops and land without restriction.176 In other words old feudal and corporatist restrictions were lifted and pro-industrialization measures introduced.
The peasantry was taken by surprise by the speed of change – a change that did not benefit them.177 There was some peasant unrest, especially in the first years after the Restoration, and some was even violent, but the speed of the transition, the autocratic manner in which it was accomplished, the fact that it did not begin as a response to popular demands, the high degree of unity within the ruling class, the fact that the army (the samurai class) thought they would benefit (in contrast to China where the bureaucracy knew they would lose from any change), meant that Japan moved from something one could call feudalism to something one could call capitalism in a relatively peaceful and smooth way.178 The military-caste samurai, though soon deprived of their right to be the only armed force, began to do business, or at least some of them did.179 The entrepreneurs of the first half of the Meiji period included adventurers who had made some money when the ports were opened up as well as seishō (merchants by the grace of political connections) who benefited from the privatization of government enterprises after 1881.180
The old merchant classes, however, proved to be a disappointment; they were unwilling to take chances, to trade abroad, or to risk capital in untried projects. So the government had to do it for them. This is why the Ministry of Industry, set up in 1870, created the pilot enterprises that became a model for the private sector, absorbing unavoidable start-up costs and attracting foreign technicians. The old money changers of the feudal times, like the merchants, proved to be unsuitable for the new order. The creation of a modern banking system was an urgent necessity. That too was constructed by the Meiji state with the Banking Act of 1872 (modelled on the American Banking Act of 1863).181
Japan had been an ‘urban’ society for a long time. As early as 1700 it was one of the most urbanized societies in the world (though a considerable proportion of the urban lower classes were, in fact, servants).182 In 1731, Edo (Tokyo) was one of the largest cities in the world. Human capital formation and educational resources were already advanced in the first half of the nineteenth century.183 There was a high rate of literacy.184 The West too seemed aware of Japanese potential even before the Meiji ‘Restoration’. In August 1860, Harper’s Monthly declared that the Japanese ‘seemed to have an aptitude for acquiring the civilization of the West to which no other Oriental race can lay claim’. China, on the other hand, was regarded as ‘so corrupt, so wretchedly degraded, and so enfeebled by misgovernment, as to be already more than half sunk in decay’.185
The Japanese state funded the industrial economy largely out of the proceedings of a land tax. At the turn of the century other sources of tax revenue materialized but they were mainly agriculturally based (taxes on sugar, alcoholic drinks, textiles, soya, and tobacco). And the countryside suffered in other ways, as young women from the rural sector were drafted into the rapidly developing light industry, particularly in textiles.186 In fact, quite unlike the West, 80 per cent of the industrial workforce, heavily concentrated in textiles, consisted of female labour. In 1901 in the Nagano region 91 per cent of the workers in the top 205 textile factories were women, usually the daughters of impoverished peasants, recruited from the countryside to work in the spinning mills.187
Even so, by 1914, the Japanese economy was still overwhelmingly agrarian and its main exports largely primary products such as tea, cotton yarn, and raw silk.188 Raw silk indeed dominated Japan’s exports, though, as the country developed, its share declined from 60 per cent in 1868 to 46 per cent in the early 1920s. Lacking the natural energy resources for an industry-based economic growth, the Japanese state helped the national economy by establishing (by 1910) formal control over Taiwan, Korea, southern Sakhalin, and other islands, thus obtaining raw materials that were in scarce supply in Japan.189
Although there was no outright protectionism, the government deliberately favoured national products, and laws and regulations encouraged Japanese citizens to purchase the products and services of native industries, while discouraging Westerners from setting up factories in Japan. In Japan, more than anywhere else in the nineteenth century, without the state there would have been no capitalism. Of the many causes for the diverging paths of Japan and China, the most important one was the difference in the strength, organization, and direction of the state.
The Chinese reform movement of the 1890s had not been able to transform the state into an effective machine to mobilize resources for industrialization.190 In fact, before the Sino-Japanese War of 1894–5, the little industrial investment there was in China had to come from the Qing administration.191 Japan succeeded where China failed because it had been able to construct a strong central authority that could impress its will on the periphery. China, behind the pomp of the Imperial Court, was fragmented into semi-autonomous provincial authorities whose power had grown at the expense of the centre.
In Europe, private initiative was essential but on its own would have led, at best, to
the industrialization of very few countries: probably Britain, perhaps Belgium and Switzerland. In Asia, to be like the West it was necessary to have a strong state building capitalism from above. In Japan this was understood as early as 1868. It took over a century for China to master this lesson. Once she had done so, she appeared unstoppable, poised to overtake the West in a global race for economic dominance. The outcome, as is always the case in history, is uncertain since all things are impermanent. In the words of the Ming Dynasty poet Yang Shen (1488–1559) in ‘The Immortals by the River’: ‘The gushing waters of the Yangzi River pour and disappear into the East, washing away past heroes: their triumphs and failures, all vanish into nothingness in an instant.’
4
The Allure of Industry
Industrialization progressed around the globe with varying degrees of success, in ways that were patchy, unpredictable, and not predetermined. While Japan and China were in ferment, the Ottoman Empire was too. In 1839 the proponents of ‘reorganization’ (Tanzimat), led by Sultan Mahmud II (1785–1839), decided that modernization from above was necessary in order to halt the constant decline of the empire. Resistance within the elites, however, was greater here than in Japan and the reforms were essentially concerned with the social and legal aspects of Westernization, rather than the economy. In fact, the Ottoman Empire had no real economic policies and, until the 1860s, little conception that one of the hallmarks of modernity was government responsibility for the economy.1
The Anxious Triumph Page 19
