Unit-5
Economic development of U.K, U.S.A, Russia and Japan
Meiji Restoration was the political revolution in 1868, Japan. It marked the end of the Tokugawa Shogunate, the military government that ran and controlled Japan. The revolution thus ended the period of Edo (Tokugawa), 1603–1867. The revolution brought the control of the country to direct imperial rule under Mutsuhito (the emperor Meiji).
Moreover, the Meiji Restoration of 1868 brought with it the era of major political, economic, and social change. The Meiji brought modernization and Westernization in Japan.
On January 3, 1868 a coup was planned against the ruler and the restoration event in the ancient imperial capital of Kyoto took place. Tokugawa Yoshinobu (the last shogun) became ineffective in power by late 1867 and the perpetrators behind the coup announced his ouster. The perpetrators announced Yoshinobu’s end and proclaimed a young emperor to be the ruler of the Japan. Finally, Yoshinobu invoked a serious civil war. The war ended with Yoshinobu’s surrender to the imperial forces in June 1869.
Reform and Rebellion
The leaders of the restoration mostly came from feudal sections of the Japanese society, known as HANS. They were young samurai. Most of these perpetrators hailed from Choshu (Honsu) and Satsuma (Kyushu) parts of Japan. These Hans people were historically hostile to Tokugawa’s authority. The major grievances that agitated these people were growing domestic problems and the increasing threat of foreign encroachment.
The concern of threat from foreign countries was because western countries were constantly putting efforts to “open” Japan, beginning in the 1850s after more than two centuries of near isolation. They feared that Japan might be subjected to the same imperialist pressures that they observed happening in nearby China and the rest of the world.
Hence, they intended to create a nation which is capable to firmly stand against Western powers. With this view, they adopted the slogan “Enrich the country, strengthen the army” (Fukoku kyohei).
The new government that took the lead presented its Charter Oath in April, 1868. The oath had briefly presented the goals that the country was planning to pursue in the coming years. After the end of the fighting, the old feudal regime was destroyed to a large extent. Following this, the new government started with a major change by taking the action of relocating the capital city of Japan from previous capital city of Kyoto to Shogunal(capital of Edo), which was renamed as Tokyo. By 1871, the administration underwent major reorganization. As per the changes, the older domains were officially abolished and they were replaced by a prefecture system. This new system has remained in place to the present day. Even feudal class privileges were also abolished.
In 1871, Japan formed a national army. This army was further strengthened two years later by the enactment of a universal conscription law.
The major action that the government successfully took was that they brought policies to unify the monetary and tax systems across the country. This included the famous agricultural tax reform of 1873 that provided Japan its primary source of revenue. Another revolutionary reform was the introduction of universal education in the country in 1872, which put great emphasis on Western learning.
However, these revolutionary changes carried out by restoration leaders faced increasing opposition by the mid-1870s. Many unhappy samurai started several rebellions against the government. One of the most influencing rebellions was led by SaigoTakamori of Satsuma, who formerly was a part of the restoration. Peasants and farmers were not happy with the new agrarian policies and their distrust against the regime was constantly rising. As a reaction, they also took part in revolts. These revolts raised their intensity gradually and that reached its peak in the 1880s.
In the west, liberalism started taking its root and constitutional system was encouraged. This encouraged Japanese people and they also called for the creation of a constitutional government which would provide wider participation through assemblies. As the demands and resultant revolts across countries rose, and the pressure on the government increases, the government finally in 1881 issued a statement and promised a constitution for Japan by 1890.
In 1885 a cabinet system was formed, and in 1886 work on the constitution finally began. The constitution took almost 3 years into making and finally, in 1889 the Meiji Constitution was presented as a gift from the emperor to the people and was officially promulgated altogether. The constitution established a bicameral parliament which came to be known as “The Diet”. The Diet was to be elected through voting franchise which was limited. In 1990, the first Diet was elected1890.
Along with political changes, the economy of Japan also transformed during these years. Albeit, their economy was still dependent on agriculture to a very large extent, but roots of industrialization were being laid down and government’s primary goals was to industrialize the country following the western industrialization model. These aspirants of the government directed it to develop strategies to catch up and introduce industries, transportation, and communications. As a sign of great progress, Japan got its first railroad in 1872. By 1880, all major cities were connected with the telegraph lines in Japan.
Talking about private firms, they were encouraged by government financial support. They followed a European-style banking system to aid and fund their private sector. To further industrialize the country, Japan needed western science and technology. To follow western system Japan followed the banner of “Civilization and Enlightenment”, a British idea. For even wider public engagement, Bunmeikaika promoted Western culture, like their intellectual trends, clothing and even architecture.
In the education sector, enactment of the Imperial Re-script on Education was a defining move as showed that even the development of a modern educational system was largely influenced by Western theory and practice, but it still kept the traditional values of samurai loyalty and social harmony inherited in it. The same was the case in art and literature, where blending of Western and Japanese tastes was achieved.
By the early 20th century, the goals of the Meiji Restoration had been largely accomplished. Japan was establishing itself as a modern industrialized superpower. Many west dominating treaties that had granted foreign countries judicial and economic privileges over Japanese territories were largely terminated. Japan gained respect in the eyes of the Western world after the Anglo-Japanese Alliance of 1902 as it won two wars against China in 1894 and Russia in 1904. The death of the emperor Meiji in 1912 marked the end of the period. However, several Meiji leaders carried on the regime for few more years.
Japan achieved sustained growth in per capita income between the 1880s and 1970 through industrialization.
Indeed Western Europe, Canada, Australia and the United States all attained high levels of income per capita by shifting from agrarian-based production to manufacturing and technologically sophisticated service sector activity.
Japan’s agricultural productivity was high enough to sustain substantial craft production in both rural and urban areas of the country before industrialization came in.
Domestic investment in industry and infrastructure was the main reason behind growth in Japanese overall growth in output. Both private and public sectors invested in infrastructure. To accommodate and regulate the infrastructure, national and local governments served as coordinating agents for the building up of infrastructure. Moreover, Investment in manufacturing capacity was completely under private sector’s control. The resultant rise in domestic savings increased their overall capital. Therefore, Japanese growth was completely investment led, and export had very little contribution into it. Furthermore, most of the capital intensive sector had high capital with respect to labour. Hence, they paid relatively high wages as compared to labour intensive sector.
Reduction in per unit costs of manufacturing due to increased levels of output largely contributed to total factor productivity growth. Many scale economies existed due to various important reasons like geographic concentration and growth of the national economy including individual companies. Also, their cumulative output rose coupled with a rise in demand for their product.
Investment in human capital like education of children improved social capability of the society as a whole. The most amazing was their regulation of industries that had bound both firms and workers to each other so as to facilitate adaption to new technology which further improved social capability.
At the government level, industrial policy that reduced the cost to private firms of securing foreign technology enhanced social capacity. Japan turned their low-productivity agriculture into high productivity manufacturing, mining, and construction.
In large firms, steam power needed large central steam engines to drive a large number of machines power looms, for example in a spinning plant. However, small enterprises could not mechanize in the steam era. But, introduction to electrical machinery production during the 1920s had a huge impact on the manufacturing sector. Electrification helped spread of mechanization. Each machine could now be powered up independently of one another. Therefore, mechanization spread rapidly even to the smallest factory.
Emergence of the dualistic economy
Industrialization soared demand for heavy industries like chemicals, iron and steel, machinery and therefore the demand for skilled labour was on rise. Many large firms in these industries offered high wages and in many cases guarantees of employment was also offered. Hence, a dualistic economy emerged during the 1910s where small firms, light industry and agriculture offered relatively low wages but large industries offered high wages. As a result a gap between people from cities and from the rural Japan emerged. Income was far higher in the great industrial centres than in the rural areas.
Post the war, revamped international economic order enabled importing/exporting of foreign technology. The instability of the 1920s and 1930s was replaced with a relatively predictable bipolar world in which the United States and the Soviet Union opposed each other. The United States played a leading role in world affairs and designed the geopolitics in such a way so as to encourage trade through its sponsorship of the United Nations, the World Bank, the International Monetary Fund and the General Agreement on Tariffs and Trade.
American companies were encouraged to share technology with Japanese companies to counter soviet influence. Further, Japan’s infrastructure evolved through many successful reforms. Also, its capacity to import and export improved as the new international economic order was more globalized. Access to American technology gave Japan the dramatic “Miracle Growth” between 1953 and the early 1970s. Miracle Growth period showed exponential increase in the rate of domestic fixed capital formation along with the rise in the investment supported by a rising savings rate, especially by private households.
Reports suggest that Japan continued to close the gap in income per capita between with the US after the early 1970s, but many believe that large Japanese manufacturing enterprises already became competitive by the early 1970s.
Miracle growth was no miracle in reality as it was the completion of a well-designed historical process that had been developing the human capital along with massive generation of physical capital including infrastructure and private manufacturing capacity. Further, the importation and adaptation of foreign technology, and the creation of scale economies backed the large industries as well as increase in overall per capita income. The miracle period was actually the reaping of the harvest whose seeds were planted between 1880 and 1938. Between the years 1880s and 1970, Japan accumulated an empire. It developed its trade and geopolitical position during these years. Japan perfectly utilized the global environment which helped it realize its industrial destiny.
References
The Japanese Economy by Takatoshi Ito
Denison, Edward and William Chung “Economic Growth and Its Sources.”
In Asia’s Next Giant: How the Japanese Economy Works.
