Virginia Review of Asian Studies
Volume 16 (2014): 242-250
Ellington: Liberal Education: Economic Literacy and the Tokugawa Era
LIBERAL EDUCATION: ECONOMIC LITERACY AND THE
TOKUGAWA ERA1
LUCIEN ELLINGTON
UNIVERSITY OF TENNESSEE AT CHATTANOOGA
Four a priori assumptions undergird the essay that follows: a significant number of
readers of this journal either teach general education courses or interact with general education
instructors; many VRAS readers understand that skillfully taught general education courses help
achieve liberal education’s most cherished traditional goals-- increased knowledge and wisdom,
and learning about Japan’s Tokugawa era (1600-1867). This period is an important topic in
liberal education, but Tokugawa history is often widely misunderstood because economics is
often ignored.
Economic literacy; the ability to analyze human action using basic economic reasoning,
is indispensible for liberal education. In what follows, with English prose, not mathematical
equations, three basic economic generalizations are offered as tools that can help students think
more accurately, clearly, and wisely about the Tokugawa era. Hopefully, students will also better
both understand Japan’s role in world history and learn economic generalizations that inform
understanding of human action.
What is the problem with many introductory treatments of the Tokugawa era? Recall
what students learn in survey world, or even in some Japanese, history courses about the period.
Years ago, the inconsistencies in standard textual treatments of the Tokugawa era puzzled me. In
standard textbook treatments of the Tokugawa years, ruling shoguns allegedly closed Japan off
from the outside world and supposedly presided over a feudal system not dissimilar in many
ways to early medieval Europe. Yet, hints were present in conventional discourses that (unlike
the early European middle ages), Edo and other Japanese cities boasted rich urban cultures,
leisure industries, publishing companies, and large merchant concerns. Periods of serious
regional famines not-with-standing, the life styles of most Japanese peasants seemed to me
significantly better than their earlier European counterparts. Artisans produced ample amounts
of a variety of goods, and merchant houses prospered; Mitsui employed over 1,000 people in
Edo alone. High levels of basic education relative to most of the rest of the world existed in
Japan by the latter years of the Tokugawa period.
As someone with a background in economics as well as history, none of this made much
sense to me; polities achieve the level of economic success of Tokugawa Japan through
conquering other societies and plundering massive amounts of their resources, by developing
productive economies, or by some combination of the two. Shortly before the Tokugawa period
in the Imjin war (1592-1598), the Japanese used temporary military victories in Korea to vastly
improve pottery production through forcing leaders in the industry to move to Japan, and
campaigns against the indigenous Ainu had gained territory and resources for the Japanese, but
this limited level of plunder could not begin to create the wide-spread relative prosperity most
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Japanese enjoyed during the Tokugawa period. If the Japanese did not become affluent through
stealing vast amount of other peoples’ “stuff,” other forms of human action accounted for
Tokugawa prosperity. I knew that my own and most people’s understanding of this prosperous
society could benefit from using economic generalizations as a lens to understand human action
during the so-called age of the shoguns.
Human economic behavior can be unpredictable, and all economic generalizations are
subject to exceptions and qualifications, but the three economic “laws” that follow help explain
a great deal about Tokugawa Japan.
Incentives matter: Think of incentives as expected pay offs, positive or negative, from actions.
Secondary effects and long-term consequences of policy decisions are critical: Careful
attention to unseen and long-range consequences of an action results in deeper understanding of
economies and societies.
Trade promotes economic progress: Liberty for individuals, businesses, and nations to engage
in exchange results in general prosperity.
Application of these three generalizations as tools for understanding Tokugawa institutions and
economic activities can improve understanding of developments that profoundly shaped
Tokugawa society.
Government:
Tokugawa Ieyasu’s (1543-1616) unification of Japan and the establishment of the Tokugawa
Shogunate in 1600 ended over a century of civil war, but Bakufu control over the country was
far from absolute. The shogun’s military forces simply were not strong enough to give the central
government absolute power. The Shogunate controlled only about 25 percent of Japan and the
central government was forced to share power with over 260 daimyo, regional lords who directly
controlled varying established areas of land or domains. The Shogunate had authority over all
domains in some matters such as taxation and domestic national security, but the majority of
Japanese lived in areas where power-sharing existed between daimyo and Shogunate. The
central government promulgated an interminable number of nanny-state regulations and
injunctions about appropriate clothing styles, the dangers of overeating and kindness to animals,
but most of these were ignored as time passed. By the end of the 17th century central government
control mechanisms such as regular domain inspection tours had by and large ceased. Power
was divided which incentivized Daimyo to promote local and regional economic freedom.
Despite theoretically Neo-Confucian rigid class divisions, samurai, peasants, and merchants
needed each other for mutual prosperity. Economic freedom that resulted in part from divided
government allowed domains, urban areas, and even regions to specialize in the production of
specific goods and services.
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Infrastructure, Bureaucracy, and Education
In order to politically control daimyo, particularly those who fought against Tokugawa
forces in the struggle to unify Japan and who were therefore suspect, the Shogunate mandated
the Sankin Kōtai or alternative attendance policy which required daimyo and retainers spend
every other year in Edo. The policy had several unintended consequences. What eventually
would be five national roadways were created for daimyo travel but also greatly facilitated trade
and national markets. Trade and national markets in turn incentivized the central government
both to continue to monetize the economy (with the notable exception of the in-kind rice tax) and
create a national legal code which helped to systematize economic exchanges.
Edo, in part due to its increased prominence as a center of government that catered to
daimyo and their entourages, grew to be arguably, the world’s largest city with an estimated
population of over one million by the early 18th century. Rising consumer demand from elites
and their more humble servants incentivized large and small entrepreneurs to cater to for a large
demand for a wide range of goods and services ranging from Noh and Kabuki Theater to apparel,
lodging, and restaurants. The end of Japan’s civil war, and the Shogunate’s policy of ending
contact with European powers with the exception of the Dutch, helped create the longest
continual period of peace in Japan’s history. The unintended consequence of “The Great Peace”
transformed many already well-educated samurai from warriors to bureaucrats although, because
well-educated commoners vied for bureaucratic jobs too, there were more samurai than
bureaucratic positions available.
The Shogunate adopted Neo-Confuciansim, with its rigid class divisions; samurai at the
top of the hierarchy were barred from commercial activities and placed on fixed retainers.
Peasants, artisans, and merchants in descending order made up other major classes. Aspects of
Neo-Confucianism mixed with policy developments incentivized all classes in ways that
promoted economic prosperity. As inflation eroded samurai income, many became much more
accomodationist to merchants and entrepreneurs in an effort to acquire more wealth; in the latter
years of the period, a growing number of samurai quietly invested in business ventures in
partnership with merchants.
Despite Neo-Confucianism’s rigidity, its strong emphasis on self-cultivation and regard
for the family had positive long-term effects on the economy. Although the Shogunate was not
particularly concerned with education for the general population, popular affinity for education
stimulated the growth of private schools; particularly Terakoya or temple schools which
imparted basic literacy, numeracy, and practical Confucian moral education to children who
were not samurai. By the end of the Tokugawa period, approximately 10,000 Terakoya existed.2
Male children of well-to-do peasants and particularly merchants also had increasing
opportunities for private education in various educational institutions that went beyond
impartation of basic literacy and numeracy. In 1727, Osaka merchant initiatives resulted in the
formal chartering by the Shogunate, of the Kaitokudo merchant academy.3 Ishida Baigan (16851744), the most famous Confucian/merchant educator of the Tokugawa period, developed and
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promulgated a merchant “Confucianism” epitomized by his assertion “To gain a [honest] profit
from a sale is the Way of the merchant. I have never heard that selling at cost is the Way.”4 By
the late Tokugawa period approximately 43 percent of boys and 10-15 percent of girls achieved
basic literacy.5 Literacy rates comparable to the UK and the US, near universal education of the
samurai, and a critical mass of educated merchants helped to make Japan prosperous by world
standards.
A Successful Pre-Industrial Rural Economy
Tokugawa prosperity rested on more than government, infrastructure, and education.
Despite intermittent localized famines and one larger famine, the Tenmei period (1781-1789)
that affected much of the country , peasants for the majority of the period consistently created
food surpluses in cereal grains and other agricultural products. Between 1600 and 1721,Japan’s
population approximately doubled from 15 to a bit less than 30 million, in part because of
agricultural productivity, but only grew by 3.1 million between 1721-1872. Evidence indicates
that rising educational levels were causing families to limit children.6 The peasant population
included relatively affluent families who farmed significant land-holdings. The Shogunate and
Daimyo were incentivized to collect taxes from the peasants but keep them low enough to
encourage productivity and the existence of a national transportation system meant that farmers
could engage in commercial agriculture. For various reasons including the unintended
consequences of government attempts to tax and regulate manufacturing in some urban areas,
the scarcity of fertile land for rice cultivation within a number of domains, and samurai need for
income, daimyo, merchants, and samurai invested in small manufacturing enterprises in rural
areas. In the latter part of the Tokugawa period, a wide array of products including sake, soy
sauce, silk, paper, and even iron and metal production took were manufactured in rural areas.
Some peasant families were earning over half their income from non-commercial activities. In
important respects some seeds of later Japanese industrial capitalism of the Meiji period (18681912) and beyond were already taking root in the Tokugawa period. By the end of the
Tokugawa period, significant numbers of rural residents (as well as urban dwellers, particularly
in Osaka, a manufacturing center during the Tokugawa period) had already learned time
management skills that were not just based upon agricultural cycles.
Vibrant Urban economies
Although the majority of Japanese lived in rural areas, the combination of local lords
building castle towns in the late 16th century that became towns and cities, Edo’s establishment
as the national capital in the early 17th century, national land and sea transportation routes, and
an increasingly robust and monetized economy fueled commerce and trade. Trade promoted
economic progress throughout Tokugawa Japan, but especially in cities as populations grew,
thereby increasing demand for a wider and wider array of goods and services. Urbanization
during the Tokugawa era proceeded at a dizzying pace; especially in the first two centuries. Edo
was a swampy village with only a few hundred residents in 1590, but by 1610 it had a
population of about 150,000; by 1657 approximately 500,000, and by 1720 Edo’s population was
well over 1 million making it one of the world’s largest cities (if not the largest), at that time. In
less than a century (1610-1700) Osaka’s population mushroomed from 200,000 to 360,000
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people and by the end of the 18thcentury half a million people lived in Japan’s second largest
city. Between 1580 and 1710 Kanazawa grew from 5,000 to 120,000 people.7 Kyoto had a
population of at least 350,000 in the latter Tokugawa years and even higher numbers earlier in
the Tokugawa era. By 1720, a higher percentage of Japanese (5-7 percent) lived in cities of over
100,000 residents than did Europeans (2 percent).8
Government officials granted monopolies in certain industries such as lumber and tried to
regulate craft production through approval of guilds. However, Shogunate bureaucrats
understood how to effectively tax rural areas but their ignorance of business kept them from ever
systematically taxing merchants. This positive unintended consequence of Neo-Confucian
officials’ agronomy-orientation in conceptualizing the economy created de facto economy liberty
in towns and cities that served to incentivize entrepreneurship, work, and production; the adage
the more one can keep of earnings the harder a person usually works is usually true. Local
markets were transformed into national ones for clothing, furniture, metal objects, and swords.
Industries such as raw silk, textiles, paper, and lanterns were not regulated and could be
purchased throughout Japan. Large financial houses were incentivized to establish branches
throughout Japan to facilitate trade through providing bills of sales, promissory notes, and
various credit instruments. Osaka in western Japan was home to an array of products including
processed foods, cotton textiles, metal products, pressed oils, pharmaceuticals, and other
consumer goods. Osaka also boasted a rice futures exchange which helped determine national
prices for the most important national food commodity. Osaka and Edo became national
distribution points and because of low costs relative to land transport, shipping routes along the
Sea of Japan and the Pacific coast brought bulk goods to each city.9
Strong economies with significant levels of education mean large numbers of people have
disposable income for luxury and recreational goods and services. A flourishing book publishing
industry existed in major urban areas. By the end of the 17th century there were an estimated
7,000 titles in print and during the latter part of the Tokugawa era five to six times that number.10
Books on law, political economy, and other professional and scientific/technical works helped
commoners increase their human capital and rise to important positions in business, education,
and other fields. Illustrated fiction and poetry was popular as well as primers, encyclopedias,
maps, and travel guides. The latter two publications helped facilitate a tourist industry of
“pilgrims” (think of the typical “pilgrim” in The Canterbury Tales) who had a socially
acceptable reason to take a vacation to famous religious sites such as the Ise and Kamo Shrines;
special shrine festivals conducted after intervals of multiple decades, attracted millions of
visitors and by the 18th century, over a half million pilgrims were visiting Ise annually.11 Popular
culture generated mass consumption of performance and sports mediums as well ranging from
kabuki and bunraku to sumo and, for those who could afford it, patronage of geisha.
Tokugawa Japan: Not Hermetically Sealed Off From the World
The mistaken stereotype that Japan was cut off from the rest of the world for almost all of
the Tokugawa era is one that almost all scholars of the period, particularly economic historians,
have understood for over two decades to be an impediment in learning about Japan’s role in
regional and world history. However, in general treatments of Tokugawa Japan, the stereotype
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that shogunate-mandated seclusion(sakoku) policies of the 1630s cut the archipelago almost
completely off from international trade persist in introductory survey courses and textbooks. The
first step in a more nuanced understanding of the seclusion policies is an understanding that they
applied much more to Europe than Asia. The Shogunate feared European domination and, with
the exception of the Dutch, cut Japan off from contact with that part of the world, but allowed
various trade with China, Korea, and Southeast Asia, particularly throughout almost all of the
17th century. From the 1500s until the latter part of the 17th Century, Japan was the world’s
second largest supplier of silver and a major supplier of copper. China, Korea, Southeast Asia,
and the Netherlands traded for these metals with Asian countries purchasing the great majority of
gold and copper. International trade was promoting regional economic progress. In turn, in the
early Tokugawa years, Japan imported a wide-range of Asian goods including wood, spices, cow
hides, perfumes, medicines, silk, sugar, and dyes. The Japanese also exported tin, brass, sulfur,
and artisan products such fans and swords.
Nagasaki was Japan’s major port. From 1647-1692, 1,549 Chinese and 755 Southeast
Asian ships from various countries were documented as entering Nagasaki harbor.12 The word
“documented” is of interest because the Tokugawa government was unable to completely
prevent illicit regional trade that occurred throughout the entire period.
So much silver was pouring out of Japan, an estimated 30-45 percent of the world’s
supply in the first few decades of the 17th century, that beginning in the late 1680s the shogunate
restricted silver exports. Later, the government also restricted copper exports, but by the mid18th century precious metal exports returned to 16th century levels. Daimyo in Tsushima and
Satsuma continued to ignore the Shogunate restrictions and supplied their trading partners,
including China and Korea, with silver until the 1750s when the shogunate was apparently
successful in stopping the outflow.13 Although foreign trade significantly declined in the latter
18th and first half of the 19th centuries, some officially-sanctioned trade with China, Korea, and
the Netherlands continued.
Even though international trade in the later Tokugawa years was significantly less than
the much more robust 16th and early 17th century international exchange, it is important to
understand that the decline incentivized artisans and producers throughout Japan to engage in a
form of import substitution in the creation of their own versions of foreign products. In the case
of sugar and silk, Japanese used imported technology procured from China when international
trade was more common, to build viable national sugar and silk industries.14
Conclusion: Why does all this matter?
Why, in teaching about Tokugawa Japan, is an understanding and application of
economic generalizations important? There are at least three critical reasons. Partial seclusion
from parts of the world not-with-standing, Tokugawa was one of the most successful preindustrial economies in world history. Economic historian Eric Jones ranks Tokugawa Japan,
early modern Western Europe, and Song China as the only documented cases in world history
where national populations realized significant growth in a long-term rise in average per capita
real income. This growth phenomenon is normally associated with industrialization.15 To put it
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another way, Tokugawa became considerably more affluent on average as time progressed
through creativity and productivity and not plunder; an impressive social accomplishment.
Currently, far too many students learn about the justifiably admirable visual and performing arts
and rich literary culture of the Tokugawa period and never critically examine the economic
foundations of the era; this means they do not fully understand Tokugawa society. Finally,
simply to examine the Tokugawa period utilizing three economic generalizations, or“rules” that
profoundly influence human action and are enormously applicable to any society, is a significant
step toward meaningful economic literacy.16
NOTES
__________________________________________________________________________________
1
Portions of the content in this article appeared in Lucien Ellington’s “Tokugawa Japan and Industrial
Revolution Britain: Two Misunderstood Societies” Social Education (vol.77, no. 2) March/April 2013 and
Lucien Ellington and M.A. McCoy’s “ Economics in World History: Two Success Stories” Social Studies
Research and Practice ( vol.7, no.1) Spring 2012 www.soctrp.org online journal. However, significant
portions of the article are original and the organization and intended audiences are different.
2
Marius Jansen, The Making of Modern Japan ( Belknap Press of Harvard University Press,2000), 190.
3
Tetsuo Najita in Wm. Theodore De Bary Ed., Volume Two: Sources of Asian Tradition (New York:
Columbia University Press,2008), 220.
4
Janine Sawada in De Bary, 236.
5
Constantine Nomikos Vaporis, Voices of Early Modern Japan: Contemporary Accounts of Daily Life
during the Age of the Shoguns (Santa Barbara CA:, Greenwood, 2012), xviii.
6
John W. Hall in Gen Itsaka Ed., Kodansha History of Japan Volume 3, (Tokyo and New York:
Kodansha,1983), 189-190.
7
Marcia Yonemoto, “Tokugawa Japan: An Introductory Essay.” (Boulder: Program for Teaching East Asia,
Center for Asian Studies, University of Colorado,2010).
www.colorado.edu/tea/curriculum/imaging-japanese/history/tokugawa/es
8
Vaporis, xxv.
9
Ellington and McCoy, 2012, 89-90.
10
Jansen, 163-165.
11
Jansen, 140, 218-219.
12
David C. Kang, East Asia Before The West: Five Centuries of Trade and Tribute (New York: Columbia
University Press, 2010), 127-130.
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13
John Lee, “Trade and Economy in Preindustrial East Asia: 1500-1800. Journal of Asian Studies (vol.58,
no. 1.) February 1999, 9.,and Kang, 121-130.
14
Lee, 9-10.
15
Ibid, 5.
16
Hopefully, some readers of this article who have been intimidated by economics because of a
misperception that economic literacy can only be attained if one has ample mathematical skills will be
incentivized to further explore the discipline. Common Sense Economics: What Everyone Should Know
About Wealth and Prosperity (Revised Edition) by James Gwartney, Richard Stroup, Dwight Lee, and
Tawni Ferrarini, (New York: St. Martin’s Press: 2010) is an excellent place to start. The book is in highly
accessible English prose and most of my students who read it assert they learned more in this single
volume than in their introductory economics courses.
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