Economic Growth
in
Tokugawa Japan
Michael Smitka
January 2004
Economics 272 Presentation
Mid-16th Century Han
(“countries”)
Issues
• was Japan poor? -- standard of living
• was the economy static? -- growth
process versus political process
• institutional, other legacies
• Curiosity: merely understanding Edoera Japan (1600-1868)
Models
not covered in class
• economic growth :
– Solow one-sector model
– Lewis-Fei-Ranis two-sector model
• Solow model is simple production function
Y = f (K, L, N, tech) [“N” is land]
– technical change is core of Solow’s work
– capital deepening is a key factor (incl human capital)
– population growth can eat up gains
• Highlights role of demographics in a traditional,
low-investment economy
Other factors besides “hard” tech
• organizational & institutional change are
both underrated
– “Smithian” growth via specialization and trade:
“classical” growth in all senses of the word
– government provision of infrastructure, other
public goods
– development of business networks and accepted
practices in markets
Demographics
• population growth can swamp positive
factors.
• indeed, for most of human history standards
of living changed little
• how about Japan? -- and if not, why?
Basic Historical Overview
• breakdown of old Muromachi order
• continual warfare during 1500s,
– development of techniques: large, musket-using
armies made samurai obsolete and were equal to
anything the Spanish had
• spread of irrigated rice, other new crops (cotton)
• diffusion of civil engineering techniques from
China enabling much more irrigation
Geopolitical context
• 1540: arrival of Francis Xavier & diffusion
of muskets
• Legitimate fears of invasion
– Colonization of Philippines
– Weakening & Collapse of Ming China
• End of endemic war / unification under Oda
Nobunaga & Toyotomi Hideyoshi
• Trade in silver for silk: no bulk goods
enduring pacification under
Tokugawa Ieyasu (1600)
• Tokugawa shogunate organized in 1603
–
–
–
–
Tokugawa Ieyasu & allies won final battle in 1600
Only controlled 25% of country directly
Large “tozama” han (countries) never conquered
How to maintain the peace?
• Foreign affairs
• Sankin kotai - hostages, alternate attendance in Edo
• Separate samurai from farmers
Unification = ?
• multiple “kuni” (country?!)
– each headed by a semi-autonomous “daimyo” (lord)
– variations in laws, economic structure
– National cadastral survey was basis of land tax
• roughly 250 political-economic units
– Most extremely small
– Samurai moved to cities: forestalls peasant revolts
– Peasants disarmed
Growth stimulus?
• Tokugawa control system had:
– implications for macroeconomic resource flows
in a two-sector context
– implications for commercialization and
monetization of the economy
• Lewis two-sector model: forced flows?
– Attendance in Edo (Tokyo) forced development
of financial system and logistics
Government role
• the Edo “bakufu” fostered navigation
– port and lighthouse development
– maps etc. all by around 1720
• formal financial markets promoted
–
–
–
–
rice futures market in Osaka by 1720
transferring money in place of in-kind taxes
insurance markets (esp. casualty)
local (rural) finance by 1800s
Market-oriented economy
• especially intense development in several regions
– cash-crop farms around Osaka (farmers bought food!)
– large urban consumer market
• commercial elite for whom political advancement
was foreclosed (cf. English Dissenters)
• education spread.
– ukiyoe were for mass-market (wedding presents…)
– lots of agricultural handbooks - 200+ titles in print
Specialization by the “kuni”
(export products)
• Silk, cotton, salt, lumber, paper, fish
• Some regions largely industrial
• Seasonal “proto-industry” often accompanied by
regional migration
• Both men & women active in wage labor outside
the home
Technical Change
• hard to measure industrial level but
– very rapid ability to reproduce industrial revolution
technology
– clear shifts in agriculture
• diminishing returns?
– demographic evidence mixed for whole country
– but not true (??) for “advanced” regions
Standard of Living
• transformation of consumption
– various rough fibers replaced by cotton; silk worn by more than
just elite
– new (and better foods). peppers, sweet potatoes / taro, corn, etc.
– new and better housing: tatami mats off the ground
– vast increases in protein-laden soybean-related consumption (miso,
soy sauce)
• Education
– Literate society, perhaps more so than England!
– Vast outpouring of books, circulated through lending libraries
– Even nascent “western” studies, esp. in 1800s
End of Tokugawa rule
• 250 years of peace meant hard to forestall Western imperialists
• Delicate political balance made it impossible to increase revenue
– taxing goods & commerce would create big winners, politically out
– Land tax meant fixed government revenues in a growing economy
• US Adm. Perry (1854) and Russians in north forced opening of ports
– Beefing up military crucial
– Personalities ruled out restructuring Tokugawa domestic accord
• Lack of national government, lack of standing army no longer tenable
• Outside tozama han put together alliance and toppled the Tokugawa
family in a nearly-bloodless coup
• Only remaining national symbol - the Emperor - used by victors
Meiji - Taisho
• New “Meiji Restoration” set up a national govt
– Tax system
– Military
– Bureaucracy & education, modeled mainly after Continental rather
than American systems
• Samurai lost their legal status - but not a big deal, since
most were relatively poor if well-educated
• Rapid change, building upon base of Edo advances
• Luck, too: silk and rice found foreign markets at the crucial
initial juncture
Geopolitical concerns
late Meiji [1868-1911] - Taisho eras [1912-1925]
• Korea viewed as key focal point
– 1895 war with China (Taiwan as colony)
– 1905 war with Russia
– Annexation in 1910 as colony
• Boomed during WWI as non-combatant
– Textile exports, using imported cotton
• Subsequent foreign threats (Russia and US)
– Naval buildup destabilizing
– Control of Manchuria (forestalling Russia) went awry
• Ultimately military coups (1934-36) displaced a
cabinet system under elected officials
WWII
early Showa (1925-1989)
• By the start of full war in China in 1937
– Sophisticated financial system
– Large manufacturing base
– Universal primary education
• Even Nobel award winner in physics
– Railroads, other domestic infrastructure
– Professional managers in large enterprises
– Rapidly shrinking agricultural population
• Retrogression through early 1950s: 15 years to
return to prewar peak
Data
• Following slides provide select data and pictures
of technology for Edo ear
• See library for the period from 1868-1945, e.g.
– Economic growth in prewar Japan / Takafusa Nakamura ; translated by
Robert A. Feldman,Yale University Press 1983 HC462.8 .N25513 1983
– Cambridge History of Japan, various entries, DS835 .C36 1988
– The interwar economy of Japan : colonialism, depression, and recovery,
1910-1940 / edited with introductions by Michael Smitka. Garland Pub.,
1998 HC462.7 .I584 1998
– Japanese prewar growth : lessons for development theory? / edited with
introductions by Michael Smitka Garland Pub., 1998 HC462.7 .J385 1998
Shipping Routes after 1720
Area of
Indica
(short-grain)
Rice
Cultivation
–
early 1700s
–
darker hatching
indicates greater
cultivation of
indica rice
–
Kawaguchi Ironware
Zaguri
(silk weaving
machine)
Loom (karabikibata)
c. 1770
Spinning
Silk
Whale
Processing
Factory
Population Growth Rates
Region
Kinki
Tokai
Kanto
Tohoku
Tozan
Hokuriku105.3
San'in
San'yo
Shikoku
Kyushu
1798
93.5
100.1
85
86
106.1
118.8
106.8
111.7
105.3
1804
120
109.9
114.9
107.3
1828
129.9
119.8
123.8
111.3
1721 = 100
Kinki, Tokai, Kanto, Tohoku, Tozan all fell.
Hokuriku slow growth
old data
1834
-1834
132.7
121.8
126.1
112.2
1798
117.6
11.7%
14.0%
12.9%
6.6%
1846
93.5
106.6
86.6
88.7
110.1
11.7%
124.8
120.2
126.8
113.8
‘98-’46
0.0%
6.5%
1.9%
3.1%
3.8%
4.0%
9.4%
10.4%
6.1%
48 years
selected regions,
Agriculture Outgrows Population
Tokugawa Population & Agriculture
50.00
46.00
42.00
38.00
34.00
30.00
26.00
22.00
18.00
14.00
10.00
1600
1650
Population (millions)
1700
1720
1730
1750
Arable Land (100,000 í¨)
1800
1850
1872
Agricultural Output
Tokugawa Population &
Agriculture
Year
1600
1650
1700
1720
1730
1750
1800
1850
1872
Pop
(mil)
12.0
17.2
27.7
31.3
32.1
31.1
30.7
32.3
33.1
Arable Farm
Land Output
20.7
23.5
28.4
29.3
29.7
29.9
30.3
31.7
32.3
Area
per per
Pop Pop
19.7 17.25
23.1 13.66
30.6 10.25
32.0 9.36
32.7 9.25
34.1 9.61
37.7 9.87
41.2 9.81
46.8 9.76
Yield
per
Area
1.64
1.34
1.10
1.02
1.02
1.10
1.23
1.28
1.41
Yield
0.095
0.098
0.108
0.109
0.110
0.114
0.124
0.130
0.145
Specialization in Agriculture
Cotton Production
Koga county, Harima han
near modern Kobe
Year
Irrigated
fields
Dryland
Reclaimed
Total
1801
1807
1813
1822
1832
1842
1847
0.4%
0.6
3.0
4.3
0.5
2.2
1.5
13.7%
15.1
41.5
38.6
34.5
38.6
35.2
28.5%
25.2
36.9
36.8
34.8
36.9
35.2
8.2%
8.2
17.3
17.4
13.4
16.2
14.5
Note: I find it surprising that any irrigated fields were used for cotton instead of rice!
In the 1880s imports led to a sharp drop in domestic output, and production ceased by 1900.
Shifts in Family Structure
Average for Selected villages
Suwa Region, modern Nagano Prefecture
Year
Avg. Household Size
Nishiko
Yamaura
Avg Couples per Household
Nishiko
Yamaura
1671-1700
1701-1750
1751-1800
1801-1850
1851-1870
7.87
6.14
4.66
4.22
4.31
1.97
1.41
1.32
1.25
1.20
8.55
9.93
6.94
4.73
4.48
1.83
2.34
2.05
1.37
1.30
Osaka as an Entrepot (1714)
Principal non-Rice Imports / Exports
Imports
Marine products
Agricultural items
Clothing & textiles
Oilseed
Mining products
Fertilizer
Wood products
Misc Imports
Tea & tobacco
Tatami
Kyoto crafts
Total (Ag value)
20.2%
19.5
15.4
12.9
7.5
6.4
5.9
4.1
2.8
2.0
0.9
286,561 kan
Exports
Oil & beeswax
36.4%
Clothing & textiles
25.2
Misc tools
7.5
Misc exports
7.3
Processed food
6.1
Accessories & decorations 5.8
Lacquerware & pottery 4.6
Seedcake (fertilizer)
3.4
Furniture
0.5
Weapons
0.5
Arts & crafts
0.4%
Total
95,800 kan
Extent of Cotton Cultivation
Japan remained able to shift land out of food crops
Growth of a National Market
Rice Price Movements Converged in the 17th Century
Structure of
National Output
– 1874 –
• shortly after “opening” to
the West
• before significant
structural change from
– new technologies
– convergence of domestic &
international prices