Land of the rising sophisticates

The Origins of Japanese Trade Supremacy
January 24, 1997

While the history of Japan's postwar economic miracle is served by an ever widening range of broad-based perspectives and comparative case studies, the still longer and as important prewar history of the country's economy remains somewhat underexplored. Books that investigate this subject without an overt eye on explaining the Japanese economic miracle must be welcome; and this appears to be one of Christopher Howe's key aims. Indeed the title is a little misleading as the preface reveals Howe's more limited ambition to produce an introductory textbook to end the dependence on G. C. Allen's A Short Economic History of Modern Japan. This has been admirably achieved through the avoidance of a dry nonquantitive or theory-strapped approach in which points are illustrated with a wealth of specific examples which conveys the magnitude of the task facing Japanese officials and business elites from the mid-19th century. The degree of enthusiasm and openness displayed towards the subject matter should make the book accessible to a wide audience: undergraduates, non-Japan specialists, and even the general public. However, for undergraduates the indiscriminate presentation of material, much of it buried in footnotes, may lead to confusion as they attempt to assess the relative importance of 15th-century Portuguese maritime expansion to Japan's post-Meiji economic development. Howe's enthusiasm for these details should have been curtailed, since it renders the book less straightforward than other recent introductory texts that consider the prewar history of Japan's economic development.

The core argument about the transformation of Japan's economy, because of the integration of new technology with innovative commercial techniques, is simple enough, and yet given the scale of this transformation, it offers a massive canvas on which to develop this theme. This transformation was the result of "Japan's successive rise to competitiveness in one industry after another", and Howe is correct in stressing competitiveness as the key element. However, this is not an arid study of factors of production or a Japan-only endeavour, as Howe is at pains to place the creation of a competitive environment in a more comprehensive domestic and international context, the aim being to place Japan's economic trajectory within an Asian context. Furthermore the economic ramifications of international politics are not ignored, especially those of western imperialism and Japan's subsequent empire-building in East Asia. However, when detailing these activities, the focus is on how the debates and policies of foreign powers affected Japan: unfortunately domestic policy formation rarely travels beyond the well-trodden path of indicating the roles of political or institutional leaders, the bureaucracy, and specific industries. In general, the wider domestic political scene remains uncharted.

The first part of the book deals with Japan and the outside world prior to her formal opening up in 1853, and covers ground which appears peripheral or is not integrated into any context. In the first chapter one has to dig deep to discover amid the wealth of information that, if in a bookish fashion, Dutch learning allowed the Japanese to keep pace with western scientific developments. The presentation of Tokugawan economic dynamism is far better, but still hampered by a tendency to see economic sophistication in institutional terms. Howe simultaneously argues that the economic systems of the decentralised han and the centralised Bakufu (the sankin kotai and tenryo) both facilitated economic development. A possible escape from this dilemma would be to argue that an already economically sophisticated population could deal with the institutional vagaries of the Tokugawa era; human and social skills being far more important than institutional practice.

Since trade expansion and manufacturing growth are the core of the analysis, Howe takes great pains to prove this linkage in part two of the book. Although his data and observations are not original, even the most casual reader cannot be left in any doubt that Japan's trade expansion was an established fact before the Pacific war. Domestic growth generated imports (raw materials, capital and consumer goods), that were paid for by exports.

This virtuous circle was only achievable to the extent that there was a strong bias in domestic growth towards exportable goods such as textiles, and that this potential was realised in competitiveness by trade and exchange-rate policies as well as long-run industrial performance.

However, too much of the discussion of public policy and the expansion of the cotton textile industry is driven either by Howe's interests or available secondary sources. Exchange-rate questions dominate public policy while the cotton discussion centres on Anglo-Japanese competition, avoiding the far more appropriate comparison between the Japanese, Indian, and Chinese cotton industries.

The other key element in Japan's economic development, the acquisition and use of technology, is explored in part three. Howe provides a strong conceptual framework for addressing the technology question, and is at his best in relating international developments to Japan's situation, and detailing the obsessive public and private pursuit of technological development. Furthermore, this robust view of technological complexity allows Howe to stress Japan's advantages. While the technological gap may have appeared insurmountable to Meiji leaders, in reality many breakthrough technologies were in their infancy and "were often the products of men who were brilliantly imaginative but grounded in practice rather than theoretical science". For a catch-up nation like Japan, lack of theoretical expertise was more than compensated for by a society at ease with product development and hands-on solutions to technical questions.

The final part addresses two questions: the role of the empire in Japan's economic development; and the role of economic factors in Japanese imperialism. Howe is to be congratulated for not ignoring the relationship between Japanese imperialism and economic development. In the case of Taiwan, Howe points out the positive impact of Japanese colonisation which benefited not only Japan but also the Taiwanese before and after the second world war. The case of Manchuria is more difficult: Japanese successes in establishing heavy industry were outweighed by the failure to instil economic skills in the Chinese population, or turn the region into a strategic and economic bastion. However, despite this failure it is clear that strategic economic concerns were the key factor in Japan's imperial advance.

Perhaps the real problem in writing about Japan is the continued search for the defining moment in its economic rise. In stressing the importance of the pre-1945 period, one has to argue as to when Japan became economically sophisticated: post-Meiji unlikely, the Tokugawa era undoubtedly. However, when penning broad histories of Japan's economic development, would it not save a lot of time by simply stating that despite the institutional and cultural distortions of the Tokugawa system, and accepting the need for an adjustment period, the Japanese were sufficiently sophisticated, both economically and commercially, to participate in the international economy? All that was required was for areas of the economy to become internationally competitive, as the necessary service industries and institutional backups would have emerged to meet the needs of this dynamism. Indeed the question would not be whether Japan-based industries could compete but whether Japan could survive as a sovereign state in the short- or long-term.

John Sharkey is British Academy postdoctoral fellow, School of Oriental and African Studies, London.

The Origins of Japanese Trade Supremacy: Development and Technology in Asia from 1540 to the Pacific War

Author - Christopher Howe
ISBN - 1 85065 221 X
Publisher - Hurst
Price - £39.50
Pages - 471

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