![Historical economic growth of Japan](https://upload.wikimedia.org/wikipedia/commons/d/dd/Historical_economic_growth_of_Japan.jpg)
The economic history of Japan is most studied for the spectacular
social and economic growth in the 1800s after the
Meiji Restoration
The , referred to at the time as the , and also known as the Meiji Renovation, Revolution, Regeneration, Reform, or Renewal, was a political event that restored practical imperial rule to Japan in 1868 under Emperor Meiji. Although there were ...
. It became the first non-Western great power, and expanded steadily until its defeat in the
Second World War
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
. When Japan recovered from devastation to become the world's
second largest economy behind the United States, and from 2010 behind China as well. Scholars have evaluated the nation's unique economic position during the
Cold War
The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
, with exports going to both U.S.- and Soviet-aligned powers, and have taken keen interest in the situation of the post-Cold War period of the
Japanese "lost decades".
Prehistoric and ancient Japan
Yayoi period
![Bronze Mirror in Ancient Japan](https://upload.wikimedia.org/wikipedia/commons/e/ea/Bronze_Mirror_in_Ancient_Japan.jpg)
The Yayoi period is generally accepted to date from 300 BCE to 300 CE.
However, radio-carbon evidence suggests a date up to 500 years earlier, between 1,000 and 800 BCE.
[Silberman et al., 154–155.][Schirokauer et al., 133–143.] During this period Japan transitioned to a settled agricultural society. As the Yayoi population increased, the society became more stratified and complex. They wove
textile
Textile is an umbrella term that includes various fiber-based materials, including fibers, yarns, filaments, threads, different fabric types, etc. At first, the word "textiles" only referred to woven fabrics. However, weaving is not the ...
s, lived in permanent farming villages, and constructed buildings with wood and stone. They also accumulated wealth through land ownership and the storage of grain. Such factors promoted the development of distinct social classes. Yayoi chiefs, in some parts of Kyūshū, appear to have sponsored, and politically manipulated, trade in bronze and other prestige objects. That was made possible by the introduction of an irrigated, wet-rice agriculture from the
Yangtze
The Yangtze or Yangzi ( or ; ) is the longest river in Asia, the third-longest in the world, and the longest in the world to flow entirely within one country. It rises at Jari Hill in the Tanggula Mountains (Tibetan Plateau) and flows ...
estuary in southern
China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
via the
Ryukyu Islands
The , also known as the or the , are a chain of Japanese islands that stretch southwest from Kyushu to Taiwan: the Ōsumi, Tokara, Amami, Okinawa, and Sakishima Islands (further divided into the Miyako and Yaeyama Islands), with Yonaguni ...
or
Korean Peninsula
Korea ( ko, 한국, or , ) is a peninsular region in East Asia. Since 1945, it has been divided at or near the 38th parallel, with North Korea (Democratic People's Republic of Korea) comprising its northern half and South Korea (Republic o ...
.
Kofun period (250–538)
![Warehouse (Kofun era) Osaka JPN 001](https://upload.wikimedia.org/wikipedia/commons/5/5f/Warehouse_%28Kofun_era%29_Osaka_JPN_001.jpg)
The Kofun period recorded Japan's earliest
political centralization
Centralisation or centralization (see spelling differences) is the process by which the activities of an organisation, particularly those regarding planning and decision-making, framing strategy and policies become concentrated within a particu ...
, when the
Yamato clan
The , also known as , was an immigrant clan active in Japan since the Kofun period (250–538), according to the history of Japan laid out in the '' Nihon Shoki''. The name ''fuhito'' comes from their occupation as scribes. They were descended fro ...
rose to power in southwestern Japan, established the
Imperial House
A dynasty is a sequence of rulers from the same family,''Oxford English Dictionary'', "dynasty, ''n''." Oxford University Press (Oxford), 1897. usually in the context of a monarchical system, but sometimes also appearing in republics. A d ...
, and helped control trade routes across the region.
[Denoon, Donald ''et al.'' (2001). ] Much of the
material culture
Material culture is the aspect of social reality grounded in the objects and architecture that surround people. It includes the usage, consumption, creation, and trade of objects as well as the behaviors, norms, and rituals that the objects creat ...
of the Kofun period demonstrates that Japan was in close political and economic contact with continental Asia (especially with the southern dynasties of China) via the Korean Peninsula; bronze mirrors cast from the same mould have been found on both sides of the
Tsushima Strait
or Eastern Channel (동수로 Dongsuro) is a channel of the Korea Strait, which lies between Korea and Japan, connecting the Sea of Japan, the Yellow Sea, and the East China Sea.
The strait is the channel to the east and southeast of Tsushima ...
.
Irrigation
Irrigation (also referred to as watering) is the practice of applying controlled amounts of water to land to help grow Crop, crops, Landscape plant, landscape plants, and Lawn, lawns. Irrigation has been a key aspect of agriculture for over 5,00 ...
,
sericulture
Sericulture, or silk farming, is the cultivation of silkworms to produce silk. Although there are several commercial species of silkworms, ''Bombyx mori'' (the caterpillar of the domestic silkmoth) is the most widely used and intensively studie ...
, and
weaving
Weaving is a method of textile production in which two distinct sets of yarns or threads are interlaced at right angles to form a fabric or cloth. Other methods are knitting, crocheting, felting, and braiding or plaiting. The longitudinal th ...
were brought to Japan by Chinese immigrants, who are mentioned in ancient Japanese histories; the Chinese Hata clan introduced sericulture and certain types of weaving.
Classical Japan
Asuka period (538–710)
![Fuhonsen Asukaike end of 7th century copper and antimony](https://upload.wikimedia.org/wikipedia/commons/9/95/Fuhonsen_Asukaike_end_of_7th_century_copper_and_antimony.jpg)
The
Yamato
was originally the area around today's Sakurai City in Nara Prefecture of Japan, which became Yamato Province and by extension a name for the whole of Japan.
Yamato is also the dynastic name of the ruling Imperial House of Japan.
Japanese his ...
polity evolved greatly during the Asuka period, which was concentrated in the Asuka region and exercised power over clans in
Kyūshū
is the third-largest island of Japan's five main islands and the most southerly of the four largest islands ( i.e. excluding Okinawa). In the past, it has been known as , and . The historical regional name referred to Kyushu and its surround ...
and
Honshū
, historically called , is the largest and most populous island of Japan. It is located south of Hokkaidō across the Tsugaru Strait, north of Shikoku across the Inland Sea, and northeast of Kyūshū across the Kanmon Straits. The island separa ...
, bestowing titles, some hereditary, on clan chieftains. The Yamato name became synonymous with all of Japan as the Yamato rulers suppressed other clans and acquired agricultural lands. Based on
Chinese
Chinese can refer to:
* Something related to China
* Chinese people, people of Chinese nationality, citizenship, and/or ethnicity
**''Zhonghua minzu'', the supra-ethnic concept of the Chinese nation
** List of ethnic groups in China, people of ...
modelhi s (including the adoption of the
Chinese written language
Written Chinese () comprises Chinese characters used to represent the Chinese language. Chinese characters do not constitute an alphabet or a compact syllabary. Rather, the writing system is roughly logosyllabic; that is, a character generally rep ...
), they developed a system of trade roads and a central administration. By the mid-seventh century, the agricultural lands had grown to a substantial public domain, subject to central policy. The basic administrative unit of the system was the county, and society was organized into occupation groups. Most people were farmers; others were fishers, weavers, potters, artisans, armorers, and ritual specialists.
In 645, the Soga clan were overthrown in
a coup launched by
Prince Naka no Ōe and
Fujiwara no Kamatari
Fujiwara no Kamatari (藤原 鎌足, 614 – November 14, 669) was a Japanese statesman, courtier and aristocrat during the Asuka period (538–710).Nussbaum, Louis-Frédéric. (2005). "Fujiwara no Tadahira" in ; Brinkley, Frank ''et al.'' (1 ...
, the founder of the
Fujiwara clan
was a powerful family of imperial regents in Japan, descending from the Nakatomi clan and, as legend held, through them their ancestral god Ame-no-Koyane. The Fujiwara prospered since the ancient times and dominated the imperial court until th ...
.
Their government devised and implemented the far-reaching
Taika Reform
The were a set of doctrines established by Emperor Kōtoku (孝徳天皇 ''Kōtoku tennō'') in the year 645. They were written shortly after the death of Prince Shōtoku and the defeat of the Soga clan (蘇我氏 ''Soga no uji''), uniting Japan ...
s. The Reform began with land reform, based on
Confucian
Confucianism, also known as Ruism or Ru classicism, is a system of thought and behavior originating in ancient China. Variously described as tradition, a philosophy, a Religious Confucianism, religion, a humanistic or rationalistic religion, ...
ideas and
philosophies
Philosophical schools of thought and philosophical movements.
A
Absurdism -
Action, philosophy of -
Actual idealism -
Actualism -
Advaita Vedanta -
Aesthetic Realism -
Aesthetics -
African philosophy -
Afrocentrism -
Agential realism - ...
from
China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
. It nationalized all land in Japan, to be
distributed equally among cultivators, and ordered the compilation of a household registry as the basis for a new system of taxation. What were once called became , as the court now sought to assert its control over all of Japan and to make the people direct subjects of the throne. Land was no longer hereditary but reverted to the state at the death of the owner. Taxes were levied on harvests and on silk, cotton, cloth, thread, and other products. A
corvée
Corvée () is a form of unpaid, forced labour, that is intermittent in nature lasting for limited periods of time: typically for only a certain number of days' work each year.
Statute labour is a corvée imposed by a state for the purposes of ...
(labor) tax was established for military conscription and building public works.
is the oldest official
Japanese coinage, having been minted starting on 29 August 708 on order of
Empress Genmei
, also known as Empress Genmyō, was the 43rd monarch of Japan, Imperial Household Agency (''Kunaichō'') 元明天皇 (43) retrieved August 22, 2013. according to the traditional order of succession. Genmei's reign spanned the years 707 throug ...
. Inspired by the Chinese
Tang dynasty
The Tang dynasty (, ; zh, t= ), or Tang Empire, was an Dynasties in Chinese history, imperial dynasty of China that ruled from 618 to 907 AD, with an Zhou dynasty (690–705), interregnum between 690 and 705. It was preceded by the Sui dyn ...
coinage ''
Kaiyuan Tongbao
The Kaiyuan Tongbao (), sometimes romanised as ''Kai Yuan Tong Bao'' or using the archaic Wade-Giles spelling ''K'ai Yuan T'ung Pao'', was a Tang dynasty cash coin that was produced from 621 under the reign of Emperor Gaozu and remained in prod ...
'', the ''Wadōkaichin'' began being produced following the discovery of large copper deposits in Japan during the early
8th century
The 8th century is the period from 701 ( DCCI) through 800 ( DCCC) in accordance with the Julian Calendar. The coast of North Africa and the Iberian Peninsula quickly came under Islamic Arab domination. The westward expansion of the Umayyad Empi ...
.
Japan Currency Museum
__NOTOC__
The , formally known as the is a museum about Japanese currency located in front of the Bank of Japan building in Chūō, Tokyo.
The museum opened in November 1985.Edan CorkillBank of Japan Currency Museum invests in exhibition on wa ...
(日本貨幣博物館) permanent exhibit.
Nara period (710–794)
Before the Taihō Code was established, the capital was customarily moved after the death of an emperor because of the ancient belief that a place of death was polluted. Reforms and bureaucratization of government led to the establishment of a permanent imperial capital at Heijō-kyō, or Nara, in AD 710. The capital was moved shortly (for reasons described later in this section) to Kuni-kyō (present-day Kizugawa) in 740–744, to Naniwa-kyō (present-day Osaka) in 744–745, to Shigarakinomiya (紫香楽宮, present-day Shigaraki) in 745, and moved back to Nara in 745. Nara was Japan's first truly urban center. It soon had a population of 200,000 (representing nearly 7% of the country's population) and some 10,000 people worked in government jobs.
Economic and administrative activity increased during the Nara period. Roads linked Nara to provincial capitals, and taxes were collected more efficiently and routinely. Coins were minted, if not widely used. Outside the Nara area, however, there was little commercial activity, and in the provinces the old Shōtoku land reform systems declined. By the mid-eighth century, shōen (landed estates), one of the most important economic institutions in prehistoric Japan, began to rise as a result of the search for a more manageable form of landholding. Local administration gradually became more self-sufficient, while the breakdown of the old land distribution system and the rise of taxes led to the loss or abandonment of land by many people who became the "wave people" (furōsha). Some of these formerly "public people" were privately employed by large landholders, and "public lands" increasingly reverted to the shōen.
Factional fighting at the imperial court continued throughout the Nara period. Imperial family members, leading court families, such as the Fujiwara, and Buddhist priests all contended for influence. Earlier during this period, Prince Nagaya seized power at the court after the death of Fujiwara no Fuhito. Fuhito was succeeded by four sons, Muchimaro, Umakai, Fusasaki, and Maro. They put Emperor Shōmu, the prince by Fuhito's daughter, on the throne. In 729, they arrested Nagaya and regained control. However, as a major outbreak of smallpox spread from Kyūshū in 735, all four brothers died two years later, resulting in temporary reduction in the Fujiwara dominance. In 740, a member of the Fujiwara clan, Hirotsugu, launched a rebellion from his base in Fukuoka, Kyushu. Although defeated, it is without doubt that the Emperor was heavily shocked about these events, and he moved the palace three times in only five years from 740, until he eventually returned to Nara. In the late Nara period, financial burdens on the state increased, and the court began dismissing nonessential officials. In 792 universal conscription was abandoned, and district heads were allowed to establish private militia forces for local police work. Decentralization of authority became the rule despite the reforms of the Nara period. Eventually, to return control to imperial hands, the capital was moved in 784 to Nagaoka-kyō and in 794 to Heian-kyō (literally Capital of Peace and Tranquility), about twenty-six kilometers north of Nara. By the late eleventh century, the city was popularly called Kyoto (capital city), the name it has had ever since.
Heian period (794–1185)
While on one hand, the Heian period was an unusually long period of peace, it can also be argued that the period weakened Japan economically and led to poverty for all but a tiny few of its inhabitants. The control of rice fields provided a key source of income for families such as the Fujiwara and was a fundamental base for their power.
[Morris, I., ''The World of the Shining Prince; Court Life in Ancient Japan'' (Oxford: Oxford University Press, 1964), p. 73.] The aristocratic beneficiaries of Heian culture, the ''
Ryōmin'' (良民 "Good People") numbered about five thousand in a land of perhaps five million. One reason the
samurai
were the hereditary military nobility and officer caste of medieval and early-modern Japan from the late 12th century until their abolition in 1876. They were the well-paid retainers of the '' daimyo'' (the great feudal landholders). They h ...
were able to take power was that the ruling nobility proved incompetent at managing Japan and its provinces. By the year 1000, the government no longer knew how to issue currency and money was gradually disappearing. Instead of a fully realized system of money circulation, rice was the primary unit of exchange.
Throughout the Heian period, the power of the imperial court declined. The court became so self-absorbed with power struggles, and with the artistic pursuits of court nobles, that it neglected the administration of government outside the capital.
The nationalization of land undertaken as part of the ''
ritsuryō
, , is the historical law system based on the philosophies of Confucianism and Chinese Legalism in Japan. The political system in accord to Ritsuryō is called "Ritsuryō-sei" (律令制). ''Kyaku'' (格) are amendments of Ritsuryō, ''Shiki'' ( ...
'' state decayed as various noble families and religious orders succeeded in securing tax-exempt status for their private ''
shōen
A was a field or manor in Japan. The Japanese term comes from the Tang dynasty Chinese term "莊園" (Mandarin: ''zhuāngyuán'', Cantonese: ''zong1 jyun4'').
Shōen, from about the 8th to the late 15th century, describes any of the private, ...
'' manors
By the eleventh century, more land in Japan was controlled by ''
shōen
A was a field or manor in Japan. The Japanese term comes from the Tang dynasty Chinese term "莊園" (Mandarin: ''zhuāngyuán'', Cantonese: ''zong1 jyun4'').
Shōen, from about the 8th to the late 15th century, describes any of the private, ...
'' owners than by the central government. The imperial court was thus deprived of the tax revenue to pay for its national army. In response, the owners of the ''shōen'' set up their own armies of
samurai
were the hereditary military nobility and officer caste of medieval and early-modern Japan from the late 12th century until their abolition in 1876. They were the well-paid retainers of the '' daimyo'' (the great feudal landholders). They h ...
warriors. Two powerful noble families that had descended from branches of the imperial family, the Taira and Minamoto clans, acquired large armies and many ''shōen'' outside the capital. The central government began to use these two warrior clans to suppress rebellions and piracy. Japan's population stabilized during the late-Heian period after hundreds of years of decline.
Feudal Japan
Kamakura period (1185–1333)
The samurai armies of the whole nation were mobilized in 1274 and 1281 to confront
two full-scale invasions launched by
Kublai Khan
Kublai ; Mongolian script: ; (23 September 1215 – 18 February 1294), also known by his temple name as the Emperor Shizu of Yuan and his regnal name Setsen Khan, was the founder of the Yuan dynasty of China and the fifth khagan-emperor of th ...
of the
Mongol Empire
The Mongol Empire of the 13th and 14th centuries was the largest contiguous land empire in history. Originating in present-day Mongolia in East Asia, the Mongol Empire at its height stretched from the Sea of Japan to parts of Eastern Europe, ...
. Though outnumbered by an enemy equipped with superior weaponry, the Japanese fought the Mongols to a standstill in Kyushu on both occasions until the Mongol fleet was destroyed by typhoons called ''
kamikaze
, officially , were a part of the Japanese Special Attack Units of military aviators who flew suicide attacks for the Empire of Japan against Allied naval vessels in the closing stages of the Pacific campaign of World War II, intending to d ...
'', meaning "divine wind". In spite of the
Kamakura shogunate
The was the feudal military government of Japan during the Kamakura period from 1185 to 1333. Nussbaum, Louis-Frédéric. (2005)"''Kamakura-jidai''"in ''Japan Encyclopedia'', p. 459.
The Kamakura shogunate was established by Minamoto no Y ...
's victory, the defense so depleted its finances that it was unable to provide compensation to its vassals for their role in the victory. This had permanent negative consequences for the shogunate's relations with the samurai class. Japan nevertheless entered a period of prosperity and population growth starting around 1250.
In rural areas, the greater use of iron tools and fertilizer, improved irrigation techniques, and
double-cropping
In agriculture, multiple cropping or multicropping is the practice of growing two or more crops in the same piece of land during one year, instead of just one crop. When multiple crops are grown simultaneously, this is also known as intercropping ...
increased productivity and rural villages grew. Fewer famines and epidemics allowed cities to grow and commerce to boom.
Muromachi period (1333–1568)
![Japan-Ming Trade Ship Flag 1584](https://upload.wikimedia.org/wikipedia/commons/d/d3/Japan-Ming_Trade_Ship_Flag_1584.jpg)
In spite of the war, Japan's relative economic prosperity, which had begun in the Kamakura period, continued well into the Muromachi period. By 1450 Japan's population stood at ten million, compared to six million at the end of the thirteenth century.
[Farris, 141–142, 149.] Commerce flourished, including considerable trade with China and Korea. Because the ''daimyōs'' and other groups within Japan were minting their own coins, Japan began to transition from a barter-based to a currency-based economy. During the period, some of Japan's most representative art forms developed, including
ink wash painting
Ink wash painting ( zh, t=水墨畫, s=水墨画, p=shuǐmòhuà; ja, 水墨画, translit=suiboku-ga or ja, 墨絵, translit=sumi-e; ko, 수묵화, translit=sumukhwa) is a type of Chinese ink brush painting which uses black ink, such as tha ...
, ''
ikebana
is the Japanese art of flower arrangement. It is also known as . The tradition dates back to Heian period, when floral offerings were made at altars. Later, flower arrangements were instead used to adorn the (alcove) of a traditional Japan ...
'' flower arrangement, the
tea ceremony
An East Asian tea ceremony, or ''Chádào'' (), or ''Dado'' ( ko, 다도 (茶道)), is a ceremonially ritualized form of making tea (茶 ''cha'') practiced in East Asia by the Chinese, Japanese, and Koreans. The tea ceremony (), literally transla ...
,
Japanese garden
are traditional gardens whose designs are accompanied by Japanese aesthetics and philosophical ideas, avoid artificial ornamentation, and highlight the natural landscape. Plants and worn, aged materials are generally used by Japanese garden desig ...
ing, ''
bonsai
Bonsai ( ja, 盆栽, , tray planting, ) is the Japanese art of growing and training miniature trees in pots, developed from the traditional Chinese art form of ''penjing''. Unlike ''penjing'', which utilizes traditional techniques to produce ...
'', and ''
Noh
is a major form of classical Japanese dance-drama that has been performed since the 14th century. Developed by Kan'ami and his son Zeami, it is the oldest major theatre art that is still regularly performed today. Although the terms Noh and ' ...
'' theater. Though the eighth Ashikaga shogun,
Yoshimasa, was an ineffectual political and military leader, he played a critical role in promoting these cultural developments.
The Japanese contact with the
Ming dynasty
The Ming dynasty (), officially the Great Ming, was an Dynasties in Chinese history, imperial dynasty of China, ruling from 1368 to 1644 following the collapse of the Mongol Empire, Mongol-led Yuan dynasty. The Ming dynasty was the last ort ...
(1368–1644) began when China was renewed during the Muromachi period after the Chinese sought support in suppressing Japanese pirates in coastal areas of China. Japanese pirates of this era and region were referred to as ''
wokou
''Wokou'' (; Japanese: ''Wakō''; Korean: 왜구 ''Waegu''), which literally translates to "Japanese pirates" or "dwarf pirates", were pirates who raided the coastlines of China and Korea from the 13th century to the 16th century.[Ashikaga Yoshimitsu
was the third '' shōgun'' of the Ashikaga shogunate, ruling from 1368 to 1394 during the Muromachi period of Japan. Yoshimitsu was Ashikaga Yoshiakira's third son but the oldest son to survive, his childhood name being Haruō (). Yoshimitsu ...]
accepted a relationship with the Chinese that was to last for half a century. In 1401 he restarted the tribute system, describing himself in a letter to the Chinese Emperor as "Your subject, the King of Japan". Japanese wood, sulfur, copper ore, swords, and folding fans were traded for Chinese silk, porcelain, books, and coins, in what the Chinese considered tribute but the Japanese saw as profitable trade.
First contacts with Europe (16th century)
Renaissance
The Renaissance ( , ) , from , with the same meanings. is a period in European history marking the transition from the Middle Ages to modernity and covering the 15th and 16th centuries, characterized by an effort to revive and surpass ideas ...
Europeans were quite admiring of Japan when they reached the country in the 16th century. Japan was considered a country immensely rich in precious metals, a view that owed its conception mainly to
Marco Polo
Marco Polo (, , ; 8 January 1324) was a Venetian merchant, explorer and writer who travelled through Asia along the Silk Road between 1271 and 1295. His travels are recorded in ''The Travels of Marco Polo'' (also known as ''Book of the Marv ...
's accounts of gilded temples and palaces, but also due to the relative abundance of surface ores characteristic of a volcanic country, before large-scale deep-mining became possible in Industrial times. Japan was to become a major exporter of copper and silver during the period.
![Hasekura in Rome](https://upload.wikimedia.org/wikipedia/commons/b/b4/Hasekura_in_Rome.JPG)
Japan was also perceived as a sophisticated
feudal society with a high culture and advanced pre-industrial technology. It was densely populated and urbanized. Prominent European observers of the time seemed to agree that the Japanese ''"excel not only all the other Oriental peoples, they surpass the Europeans as well"'' (
Alessandro Valignano
Alessandro Valignano, S.J., sometimes Valignani (Chinese: 范禮安 ''Fàn Lǐ’ān''; February 1539 – January 20, 1606), was an Italian Jesuit priest and missionary born in Chieti, part of the Kingdom of Naples, who helped supervise the i ...
, 1584, "Historia del Principo y Progresso de la Compania de Jesus en las Indias Orientales).
Early European visitors were amazed by the quality of Japanese craftsmanship and metalsmithing. This stems from the fact that Japan itself is rather poor in natural resources found commonly in Europe, especially iron. Thus, the Japanese were famously frugal with their consumable resources; what little they had they used with expert skill.
Trade with Europe
The cargo of the first Portuguese ships (usually about four small ships every year) that arrived in Japan consisted almost entirely of Chinese goods (silk, porcelain). The Japanese were very much looking forward to acquiring such goods, but had been prohibited from any contacts with the Emperor of China, as a punishment for
Wakō pirate raids. The Portuguese (who were called ''Nanban'', lit. Southern Barbarians) therefore found the opportunity to act as intermediaries in Asian trade.
![NanbanCarrack](https://upload.wikimedia.org/wikipedia/commons/0/00/NanbanCarrack.jpg)
From the time of the acquisition of
Macau
Macau or Macao (; ; ; ), officially the Macao Special Administrative Region of the People's Republic of China (MSAR), is a city and special administrative region of China in the western Pearl River Delta by the South China Sea. With a pop ...
in 1557, and their formal recognition as trade partners by the Chinese, the Portuguese started to regulate trade to Japan, by selling to the highest bidder the annual "Captaincy" to Japan, in effect conferring exclusive trading rights for a single
carrack
A carrack (; ; ; ) is a three- or four- masted ocean-going sailing ship that was developed in the 14th to 15th centuries in Europe, most notably in Portugal. Evolved from the single-masted cog, the carrack was first used for European trade fr ...
bound for Japan every year. The carracks were very large ships, usually between 1000 and 1500 tons, about double or triple the size of a large
galleon
Galleons were large, multi-decked sailing ships first used as armed cargo carriers by European states from the 16th to 18th centuries during the age of sail and were the principal vessels drafted for use as warships until the Anglo-Dutch War ...
or
junk.
That trade continued with few interruptions until 1638, when it was prohibited on the ground that the ships were smuggling priests into Japan.
Portuguese trade was progressively more and more challenged by Chinese smugglers on
junks
A junk (Chinese: 船, ''chuán'') is a type of Chinese sailing ship with fully battened sails. There are two types of junk in China: northern junk, which developed from Chinese river boats, and southern junk, which developed from Austronesian ...
, Japanese
Red Seal Ships
were Japanese armed merchant sailing ships bound for Southeast Asia, Southeast Asian ports with red-sealed letters patent issued by the early Tokugawa shogunate in the first half of the 17th century. Between 1600 and 1635, more than 350 Japa ...
from around 1592 (about ten ships per year), Spanish ships from
Manila
Manila ( , ; fil, Maynila, ), officially the City of Manila ( fil, Lungsod ng Maynila, ), is the capital of the Philippines, and its second-most populous city. It is highly urbanized and, as of 2019, was the world's most densely populate ...
from around 1600 (about one ship per year), the Dutch from 1609, and the English from 1613 (about one ship per year).
The Dutch, who, rather than "Nanban" were called "Kōmō" (Jp:紅毛, lit. "Red Hair") by the Japanese, first arrived in Japan in 1600, on board the ''Liefde''. Their pilot was
William Adams, the first Englishman to reach Japan. In 1605, two of the ''Liefdes crew were sent to
Pattani by Tokugawa Ieyasu, to invite Dutch trade to Japan. The head of the Pattani Dutch trading post, Victor Sprinckel, refused on the ground that he was too busy dealing with Portuguese opposition in Southeast Asia. In 1609 however, the Dutch
Jacques Specx
Jacques Specx (; 1585 – 22 July 1652) was a Dutch merchant, who founded the trade on Japan and Korea in 1609. Jacques Specx received the support of William Adams to obtain extensive trading rights from Tokugawa Ieyasu, the ''shōgun'' emeritu ...
arrived with two ships in Hirado, and through Adams obtained trading privileges from Ieyasu.
The Dutch also engaged in piracy and naval combat to weaken Portuguese and Spanish shipping in the Pacific, and ultimately became the only westerners to be allowed access to Japan from the small enclave of
Dejima
, in the 17th century also called Tsukishima ( 築島, "built island"), was an artificial island off Nagasaki, Japan that served as a trading post for the Portuguese (1570–1639) and subsequently the Dutch (1641–1854). For 220 years, it ...
after 1638 and for the next two centuries.
Edo period
Economic development during the Edo period included urbanization, increased shipping of commodities, a significant expansion of domestic and, initially, foreign commerce, and a diffusion of trade and handicraft industries. The construction trades flourished, along with banking facilities and
merchant association
A trade association, also known as an industry trade group, business association, sector association or industry body, is an organization founded and funded by businesses that operate in a specific Industry (economics), industry. An industry tra ...
s. Increasingly,
''han'' authorities oversaw the rising agricultural production and the spread of rural handicrafts. By the mid-18th century, Edo had a population of more than 1 million and
Osaka
is a designated city in the Kansai region of Honshu in Japan. It is the capital of and most populous city in Osaka Prefecture, and the third most populous city in Japan, following Special wards of Tokyo and Yokohama. With a population of 2. ...
and
Kyoto
Kyoto (; Japanese: , ''Kyōto'' ), officially , is the capital city of Kyoto Prefecture in Japan. Located in the Kansai region on the island of Honshu, Kyoto forms a part of the Keihanshin metropolitan area along with Osaka and Kobe. , the ci ...
each had more than 400,000 inhabitants. Many other
castle town
A castle town is a settlement built adjacent to or surrounding a castle. Castle towns were common in Medieval Europe. Some examples include small towns like Alnwick and Arundel, which are still dominated by their castles. In Western Europe, ...
s grew as well. Osaka and Kyoto became busy trading and handicraft production centers, while Edo was the center for the supply of food and essential urban consumer goods. Rice was the base of the economy, as the daimyō collected the taxes from the peasants in the form of rice. Taxes were high, about 40% of the harvest. The rice was sold at the ''
fudasashi
Rice brokers, which rose to power and significance in Osaka and Edo in the Edo period (1603-1867) of Japanese history, were the forerunners to Japan's banking system. The concept actually originally arose in Kyoto several hundred years earlier; ...
'' market in
Edo. To raise money, the daimyō used
forward contract
In finance, a forward contract or simply a forward is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed on at the time of conclusion of the contract, making it a type of deriva ...
s to sell rice that was not yet harvested. These contracts were similar to modern
futures trading
In finance, a futures contract (sometimes called a futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset ...
.
The beginning of the
Edo period
The or is the period between 1603 and 1867 in the history of Japan, when Japan was under the rule of the Tokugawa shogunate and the country's 300 regional '' daimyo''. Emerging from the chaos of the Sengoku period, the Edo period was characteriz ...
coincides with the last decades of the
Nanban trade period
or the , was a period in the history of Japan from the arrival of Europeans in 1543 to the first ''Sakoku'' Seclusion Edicts of isolationism in 1614. Nanban (南蛮 Lit. "Southern barbarian") is a Japanese word which had been used to designate ...
, during which intense interaction with European powers, on the economic and religious plane, took place. At the beginning of the Edo period, Japan built her first ocean-going Western-style warships, such as the
''San Juan Bautista'', a 500-ton
galleon
Galleons were large, multi-decked sailing ships first used as armed cargo carriers by European states from the 16th to 18th centuries during the age of sail and were the principal vessels drafted for use as warships until the Anglo-Dutch War ...
-type ship that transported a Japanese embassy headed by
Hasekura Tsunenaga
was a kirishitan Japanese samurai and retainer of Date Masamune, the daimyō of Sendai. He was of Japanese imperial descent with ancestral ties to Emperor Kanmu. Other names include Philip Francis Faxicura, Felipe Francisco Faxicura, and Phi ...
to the Americas, and then continued to Europe. Also during that period, the ''bakufu'' commissioned around 350
Red Seal Ships
were Japanese armed merchant sailing ships bound for Southeast Asia, Southeast Asian ports with red-sealed letters patent issued by the early Tokugawa shogunate in the first half of the 17th century. Between 1600 and 1635, more than 350 Japa ...
, three-masted and armed trade ships, for intra-Asian commerce. Japanese adventurers, such as
Yamada Nagamasa
was a Japanese adventurer who gained considerable influence in the Ayutthaya Kingdom at the beginning of the 17th century and became the governor of Nakhon Si Thammarat province, which is on the Malay Peninsula in present-day Southern Thailand.
...
, were active throughout Asia.
In order to eradicate the influence of Christianization, Japan entered in a period of isolation called
sakoku
was the Isolationism, isolationist Foreign policy of Japan, foreign policy of the Japanese Tokugawa shogunate under which, for a period of 265 years during the Edo period (from 1603 to 1868), relations and trade between Japan and other countri ...
, during which its economy enjoyed stability and mild progress. But not long after, in the 1650s, the production of
Japanese export porcelain
Japanese export porcelain includes a wide range of porcelain that was made and decorated in Japan primarily for export to Europe and later to North America, with significant quantities going to south and southeastern Asian markets. Production for ...
increased greatly when civil war put the main Chinese center of porcelain production,
in Jingdezhen, out of action for several decades. For the rest of the 17th century most
Japanese porcelain
, is one of the oldest Japanese crafts and art forms, dating back to the Neolithic period. Kilns have produced earthenware, pottery, stoneware, glazed pottery, glazed stoneware, porcelain, and blue-and-white ware. Japan has an exceptionally ...
production was in
Kyushu
is the third-largest island of Japan's five main islands and the most southerly of the four largest islands ( i.e. excluding Okinawa). In the past, it has been known as , and . The historical regional name referred to Kyushu and its surroun ...
for export through the Chinese and Dutch. The trade dwindled under renewed Chinese competition by the 1740s, before resuming after the opening of Japan in the mid-19th century.
During the period, Japan progressively studied Western sciences and techniques (called ''
rangaku
''Rangaku'' (Kyūjitai: /Shinjitai: , literally "Dutch learning", and by extension "Western learning") is a body of knowledge developed by Japan through its contacts with the Dutch enclave of Dejima, which allowed Japan to keep abreast of Wester ...
'', literally "Dutch studies") through the information and books received through the Dutch traders in
Dejima
, in the 17th century also called Tsukishima ( 築島, "built island"), was an artificial island off Nagasaki, Japan that served as a trading post for the Portuguese (1570–1639) and subsequently the Dutch (1641–1854). For 220 years, it ...
. The main areas that were studied included geography, medicine, natural sciences, astronomy, art, languages, physical sciences such as the study of electrical phenomena, and mechanical sciences as exemplified by the development of Japanese clockwatches, or
wadokei
A is a mechanical clock that has been made to tell traditional Japanese time, a system in which daytime and nighttime are always divided into six periods whose lengths consequently change with the season. Mechanical clocks were introduced into ...
, inspired from Western techniques.
Meiji period
After 1854, when the
Tokugawa shogunate
The Tokugawa shogunate (, Japanese 徳川幕府 ''Tokugawa bakufu''), also known as the , was the military government of Japan during the Edo period from 1603 to 1868. Nussbaum, Louis-Frédéric. (2005)"''Tokugawa-jidai''"in ''Japan Encyclopedia ...
first opened the country to Western commerce and influence (
Bakumatsu
was the final years of the Edo period when the Tokugawa shogunate ended. Between 1853 and 1867, Japan ended its isolationist foreign policy known as and changed from a feudal Tokugawa shogunate to the modern empire of the Meiji government ...
), Japan went through two periods of economic development. When the Tokugawa shogunate was overthrown in 1868 and the
Meiji government
The was the government that was formed by politicians of the Satsuma Domain and Chōshū Domain in the 1860s. The Meiji government was the early government of the Empire of Japan.
Politicians of the Meiji government were known as the Meiji o ...
was founded, Japanese
Westernization
Westernization (or Westernisation), also Europeanisation or occidentalization (from the ''Occident''), is a process whereby societies come under or adopt Western culture in areas such as industry, technology, science, education, politics, economi ...
began completely. The first term is during
Pre-war Japan, the second term is
Post-war Japan
Post-occupation Japan is the period in postwar Japanese history which started when the Allied occupation of Japan ended in 1952 and lasted to the end of the Showa era in 1989. Despite the massive devastation it suffered in the Second World War, ...
.
In the first half of the
Meiji period
The is an era of Japanese history that extended from October 23, 1868 to July 30, 1912.
The Meiji era was the first half of the Empire of Japan, when the Japanese people moved from being an isolated feudal society at risk of colonization ...
, most
labour disputes occurred in the
mining
Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the economic via ...
and
textile industries
The textile industry is primarily concerned with the design, production and distribution of yarn, cloth and clothing. The raw material may be natural, or synthetic using products of the chemical industry.
Industry process
Cotton manufactur ...
and took the form of small-scale
strikes and spontaneous
riot
A riot is a form of civil disorder commonly characterized by a group lashing out in a violent public disturbance against authority, property, or people.
Riots typically involve destruction of property, public or private. The property targete ...
s. The second half of the period witnessed rapid
industrialization
Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
, the development of a
capitalist economy
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private pr ...
, and the transformation of many
feudal
Feudalism, also known as the feudal system, was the combination of the legal, economic, military, cultural and political customs that flourished in Middle Ages, medieval Europe between the 9th and 15th centuries. Broadly defined, it was a wa ...
workers to
wage labour
Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under ...
. The use of strike action increased, and 1897, with the establishment of a union for metalworkers, saw the beginnings of the modern
Japanese trade-union movement.
The industrial revolution first appeared in textiles, including cotton and especially silk, which was based in home workshops in rural areas. By the 1890s, Japanese textiles dominated the home markets and competed successfully with British products in China and India, as well. Japanese shippers were competing with European traders to carry these goods across Asia and even to Europe. As in the West, the textile mills employed mainly women, half of them under age twenty. They were sent there by their fathers, and they turned over their wages to their fathers. Japan largely skipped water power and moved straight to steam powered mills, which were more productive, and which created a demand for coal.
1907 saw the greatest number of disputes in a decade, with large-scale riots at Japan's two leading copper mines,
Ashio and Besshi, which were only suppressed by the use of troops. None of these early unions were large (the metalworkers union had 3,000 members, only 5% of workers employed in the industry), or lasted longer than three or four years, largely due to strong opposition from employers and the government's
anti-union
Union busting is a range of activities undertaken to disrupt or prevent the formation of trade unions or their attempts to grow their membership in a workplace.
Union busting tactics can refer to both legal and illegal activities, and can range ...
policies, notably the Public Order and Police Provisions Law (1900).
One of the biggest impacts on the economy that the Meiji period brought was the end of the feudal system. With a relatively loose social structure, the Japanese people were able to advance through the ranks of society more easily than before. They were able to do this by inventing and selling their own wares. More important was the fact that the Japanese people now had the ability to become more educated. With a more educated population, Japan's industrial sector grew significantly. Implementing the Western ideal of capitalism into the development of technology and applying it to their military helped make Japan into both a militaristic and economic powerhouse by the beginning of the 20th century.
In the Meiji period, leaders inaugurated a new Western-based education system for all young people, sent thousands of students to the United States and Europe, and hired more than 3,000 Westerners to teach modern science, mathematics, technology, and foreign languages in Japan (
O-yatoi gaikokujin
The foreign employees in Meiji Japan, known in Japanese as ''O-yatoi Gaikokujin'' ( Kyūjitai: , Shinjitai: , "hired foreigners"), were hired by the Japanese government and municipalities for their specialized knowledge and skill to assist in the ...
). The government also built railroads, improved roads, and inaugurated a land reform program to prepare the country for further development.
To promote industrialization, the government decided that, while it should help private business to allocate resources and to plan, the private sector was best equipped to stimulate economic growth. The greatest role of government was to help provide the economic conditions in which business could flourish. In short, government was to be the guide, and business the producer. In the early Meiji period, the government built factories and shipyards that were sold to entrepreneurs at a fraction of their value. Many of these businesses grew rapidly into the larger
conglomerates. Government emerged as chief promoter of
private enterprise
A privately held company (or simply a private company) is a company whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets, but rather the company's stock is ...
, enacting a series of pro-business policies.
Banking
The development of banking and reliance on bank funding have been at the centre of Japanese economic development since the Meiji era. Before 1868 the feudal fiefs all issued their own money, ''
called hansatsu'', in an array of incompatible denominations. The government sent observers to the United States, and at first copied the decentralized American system with no central bank. The ''New Currency Act'' of Meiji 4 (1871) did away with local currencies and established the
yen
The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar (US$) and the euro. It is also widely used as a third reserve currency after the US dollar and the e ...
as the new decimal currency. It had parity with the Mexican silver dollar. The former
han
Han may refer to:
Ethnic groups
* Han Chinese, or Han People (): the name for the largest ethnic group in China, which also constitutes the world's largest ethnic group.
** Han Taiwanese (): the name for the ethnic group of the Taiwanese p ...
(fiefs) became
prefecture
A prefecture (from the Latin ''Praefectura'') is an administrative jurisdiction traditionally governed by an appointed prefect. This can be a regional or local government subdivision in various countries, or a subdivision in certain international ...
s and their mints became private chartered banks. Initially they retained the right to print money. For a time both the central government and these so-called "national" banks issued money. That period ended when central bank—the
Bank of Japan
The is the central bank of Japan.Louis Frédéric, Nussbaum, Louis Frédéric. (2005). "Nihon Ginkō" in The bank is often called for short. It has its headquarters in Chūō, Tokyo, Chūō, Tokyo.
History
Like most modern Japanese instituti ...
—was founded in 1882, after the Belgian model. It has since been partly privately owned (its stock is traded over the counter, hence the stock number). The national Bank was given a monopoly on controlling the
money supply
In macroeconomics, the money supply (or money stock) refers to the total volume of currency held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include Circulation (curren ...
in 1884, and by 1904 the previously issued notes were all retired. The Bank started out on the silver standard, but adopted the gold standard in 1897. The gold standard was suspended in 1917 and dropped in 1931. In 1973 flexible exchange rates were adopted.
Railways
After 1868 the new Meiji regime strongly encouraged railroad construction. This modernizing move had multiple objectives. It would weaken feudalistic institutions. Railroads would enable rapid military responses to invasion threats, as by Russia The movement of rice would become cheaper and foreign trade would grow. In a broader sense, modernized transportation would inspire the people and facilitate growth. The government made the final decision to build the system in 1870, using a million-pound sterling loan from Britain and British engineers. The Japanese Public Works Ministry handled the actual construction.
In 1868
Thomas Blake Glover
Thomas Blake Glover (6 June 1838 – 16 December 1911) was a Scottish merchant in the Bakumatsu and Meiji period in Japan.
Early life (1838–1858)
Thomas Blake Glover was born at 15 Commerce Street, Fraserburgh, Aberdeenshire (council area), ...
, a Scottish merchant, was responsible for bringing the first steam
locomotive
A locomotive or engine is a rail transport vehicle that provides the Power (physics), motive power for a train. If a locomotive is capable of carrying a payload, it is usually rather referred to as a multiple unit, Motor coach (rail), motor ...
, "Iron Duke", to Japan, which he demonstrated on an 8-mile track in the Ōura district of Nagasaki.
However, after centuries of a culture of 'distrust of foreigners', construction of the premier railway built by non-Japanese was considered politically unacceptable to the new Japanese regime. Therefore, the government of Japan decided to build a railway from the major port of Yokohama to Tokyo using British financing and 300 British and European technical advisors: civil engineers, general managers, locomotive builders and drivers. In order to undertake its construction, foreign experts were contracted, with the specific intent that such experts would educate Japanese co-workers so that Japan could become self-sufficient in railway construction expertise, at which time the foreign contractors were expected to leave the country. In late 1872, the first railway, between
Shimbashi
, sometimes transliterated Shimbashi, is a district of Minato, Tokyo, Japan.
Name
Read literally, the characters in Shinbashi mean "new bridge".
History
The area was the site of a bridge built across the Shiodome River in 1604. The river was l ...
(later
Shiodome
is an area in Minato, Tokyo, Japan, located adjacent to Shinbashi and Ginza, near Tokyo Bay and the Hamarikyu Gardens. Formerly a railway terminal, Shiodome has been transformed into one of Tokyo's most modern areas. It is a collection of 11 ti ...
) and
Yokohama
is the second-largest city in Japan by population and the most populous municipality of Japan. It is the capital city and the most populous city in Kanagawa Prefecture, with a 2020 population of 3.8 million. It lies on Tokyo Bay, south of To ...
(present
Sakuragichō) opened. A one-way trip took 53 minutes in comparison to 40 minutes for a modern electric train. Service started with nine round trips daily.
[Naotaka Hirota ''Steam Locomotives of Japan'' (1972) Kodansha International Ltd. pp.22–25,34–38,44–46&52–54.}]
British engineer
Edmund Morel (1841–1871) supervised construction of the first railway on
Honshu
, historically called , is the largest and most populous island of Japan. It is located south of Hokkaidō across the Tsugaru Strait, north of Shikoku across the Inland Sea, and northeast of Kyūshū across the Kanmon Straits. The island separ ...
. American engineer Joseph U. Crowford (1842–1942) supervised construction of a coal mine railway on
Hokkaidō
is Japan's second largest island and comprises the largest and northernmost prefecture, making up its own region. The Tsugaru Strait separates Hokkaidō from Honshu; the two islands are connected by the undersea railway Seikan Tunnel.
The la ...
in 1880, and German engineer Herrmann Rumschottel (1844–1918) supervised railway construction on
Kyushu
is the third-largest island of Japan's five main islands and the most southerly of the four largest islands ( i.e. excluding Okinawa). In the past, it has been known as , and . The historical regional name referred to Kyushu and its surroun ...
beginning in 1887. All three trained Japanese engineers to undertake railway projects. Two men trained by Crowford later became presidents of Japan National Railways.
The precise reason why a
track gauge
In rail transport, track gauge (in American English, alternatively track gage) is the distance between the two rails of a railway track. All vehicles on a rail network must have wheelsets that are compatible with the track gauge. Since many d ...
of (also known as "Cape gauge") came to be selected remains uncertain. It could be because was supposed to be cheaper to build than the internationally more widely used "Stephenson gauge" of , or because the first British agent, whose contract was later cancelled, ordered iron sleepers made for the narrower gauge. It seems most likely, however, that Morel's previous experience building Cape gauge railways in similar New Zealand terrain was a significant influence, and Cape gauge became the ''de facto'' standard.
Network expansion
The next line constructed was from another port, Kobe, to the major commercial city of Osaka (opening in 1874), and then to Kyoto (1877) and Otsu (1880) at the southern end of
Lake Biwa
is the largest freshwater lake in Japan, located entirely within Shiga Prefecture (west-central Honshu), northeast of the former capital city of Kyoto. Lake Biwa is an ancient lake, over 4 million years old. It is estimated to be the 13th ol ...
. A line was constructed from Tsuruga, on the Sea of Japan, to Ogaki (connecting to a canal to Nagoya) via Nagahama on the northern end of Lake Biwa, opening in 1884 and utilizing trans-shipment onto water-going vessels to connect the Sea of Japan to Osaka, Kyoto and Nagoya.
Linking Tokyo to Nagoya and Kyoto became the next priority. Initially the proposed route was inland, from Tokyo north to Takasaki, then west through the
Usui Pass
The is a mountain pass that lies between Nagano and Gunma prefecture in Japan. It has served as one of the major transportation routes in central Japan since at least the eighth century.
Road
The pass on the ancient Tōsandō highway was des ...
to Karuizawa and the Kiso River valley. At this time the Nippon Railway Co. (NRC) became the first to be granted a concession to operate what became the
Tohoku Main Line from Ueno to Aomori, with a branch line from Omiya to Takasaki. Construction of both lines was undertaken by the Government at the company's expense, with the government having running rights on the Takasaki-Ueno section. The line to Takasaki opened in 1884, as did the Tohoku line as far as Utsunomiya.
The NRC also financed a new line linking to the Yokohama line which was built from Akabane via Shinjuku to Shinagawa (with the NRC gaining track usage rights at the government station at Shinagawa). This was the first section of what has become the
Yamanote Line
The Yamanote Line ( ja, 山手線, Yamanote-sen) is a loop service in Tokyo, Japan, operated by the East Japan Railway Company (JR East). It is one of Tokyo's busiest and most important lines, connecting most of Tokyo's major stations and urban ...
, and opened in 1885.
The government funded line from Takasaki reached Yokokawa at the base of the Usui Pass in 1885, and initial surveys indicated a ruling grade of 10% (later improved to 6.67%) and extensive tunneling was required to reach Karuizawa.
Construction also started on another line from the Sea of Japan, commencing at Naoetsu and opening to Karuizawa via Nagano in 1888.
As the costs of construction through the mountainous interior of Japan became apparent, in 1886 the construction of what became the
Tokaido line was approved, approximately paralleling the southern coastline (and Tokaido road) as far as Nagoya. Although ~238 km longer, it was projected to cost 13% less, this saving then being allocated to construct a line from Otsu along the eastern side of Lake Biwa to Nagahama to remove the need for trans-shipment, which opened in 1889, as did the final section of the Tokaido Line via Gotemba. Until the opening of the
Tokaido Shinkansen
The is a Japanese high-speed rail line that is part of the nationwide Shinkansen network. Along with the Sanyo Shinkansen, it forms a continuous high-speed railway through the Taiheiyō Belt, also known as the Tokaido corridor. Opened in 1964, ...
in 1964, this was the most important main line in Japan.
Consolidating the network
In 1888 the San'yō Railway Co. (SRC) was granted a charter to build the
San'yō Main Line from Kobe west to Shimonoseki, a port providing a connection to the port of Moji on Kyushu, from which the Kyushu Railway Co (KRC) built its line to Hakata and Kumamoto opening between 1889 and 1891, extended to Yatsushiro in 1896. The SRC line reached Hiroshima in 1894, and Shimonoseki in 1901. Other private endeavors included the Mito Railway, which opened the first section of the
Joban Line in 1889 and was acquired by the NRC in 1892 which extended to Sendai via an east coastal route in 1905 and the
Bantan Railway, which built a 52 km line north from Himeji between 1894 and 1901, and was acquired by the SRC in 1903.
The success of the Nippon Railway Co and other private companies led to a Japanese situation akin to the UK
Railway Mania
Railway Mania was an instance of a stock market bubble in the United Kingdom of Great Britain and Ireland in the 1840s. It followed a common pattern: as the price of railway shares increased, speculators invested more money, which further incre ...
. From the mid 1880s until 1891 new railway companies had little difficulty in attracting funding, usually through issuing shares. However, in 1891 the failure of a company proposing to build a line from Gotenba to Matsumoto ended the 'mania', and the Government realized a more planned approach to the network expansion it desired was required.
Evolving policy
In 1887 the Japanese Army proposed building its own lines to ensure routes of military significance were given priority. The Railway Department deflected that proposal by commencing development of a policy for a comprehensive national network. The Japanese Government became increasingly interested in the policy formulation following the completion of the
Tokaido Main Line in 1889, the creation of the
National Diet
The is the national legislature of Japan. It is composed of a lower house, called the House of Representatives (Japan), House of Representatives (, ''Shūgiin''), and an upper house, the House of Councillors (Japan), House of Councillors (, ...
in 1890 and the financial panic of 1891. The 1892 Railway Construction Act (RCA) listed a series of priority routes on Honshu, Kyushu and Shikoku (Hokkaido was covered separately in 1896 legislation), with the specific policy that private construction of such routes would be encouraged, with the Japanese Government only funding routes not able to be privately constructed. By that year the privately owned network was ~2,124 km compared to the government owned sections totaling ~887 km. While this figure seemed to indicate the potential for further private funding of railway construction (notwithstanding the routes already targeted by private companies), subsequent events demonstrated otherwise.
A two-phase approach was adopted in the RCA, with 40 routes totaling ~3,000 km included in the "phase one" 12-year program, with phase 2 covering another ~4,000 km of proposed lines, the priorities being set on the basis of economic development and/or military strategic importance.
A specific outcome of the RCA was that every prefecture would be served by railway communication. The major routes proposed under the act for government construction included;
* The
Chuo line, an inland connection from Tokyo to Nagoya favored by the military (detailed below);
* The
Ou line
OU or Ou or ou may stand for:
Universities United States
* Oakland University in Oakland County, Michigan
* Oakwood University in Huntsville, Alabama
* Oglethorpe University in Atlanta, Georgia
* Ohio University in Athens, Ohio
* Olivet Univers ...
, also detailed below;
* Extension of the line from Tsuruga to Kanazawa and Toyama (
Hokuriku Main Line
The Hokuriku Main Line ( ja, 北陸本線, ) is a 176.6 kilometer railway line owned by the West Japan Railway Company (JR West) connecting the Maibara Station in Maibara, Shiga, with the Naoetsu Station in Joetsu, Niigata. The section betwe ...
) opened 1896–1899;
* A connection from the Chuo line at Shiojiri to Matsuyama and Nagano (
Shinonoi Line) opened 1900–1902; and
* The original inland line from Kagoshima to Yatsushiro (now the
Nippo Main Line Nippo may refer to:
Companies and organizations
* Nippo, colloquial name for
* Nippo Batteries, an Indian battery manufacturer
* Nippo Corporation, a Japanese construction company and sponsor of cycling teams
** EF Education–Nippo, a cycling tea ...
and
Hisatsu Line
The is a railway line in Kyushu, Japan, operated by the Kyushu Railway Company (JR Kyushu). It connects Yatsushiro on the Kagoshima Main Line to Hayato station, Kirishima on the Nippo Main Line. From 1909 the line was the original rail conne ...
) opened 1901–1909
The Chuo line, the route of which approximated the initial proposed inland line between Tokyo and Nagoya, was favored by the military as its inland alignment protected it from perceived risk of bombardment by enemy vessels. A privately built line from Shinjuku to the silk industry centre of Hachioji had opened 1889, and this became the starting point for government construction.
The newly determined route was via Kofu (through the 4,657 m Sasago tunnel, which was the longest in Japan until the
Shimizu Tunnel
is a railroad tunnel in Gunma and Niigata Prefectures of Japan, operated by JR East Jōetsu Line. The name originates from the Shimizu mountain pass nearby. There are three tunnels near each other, which are the Shimizu Tunnel, the Shin-Shimizu ...
opened in 1931), Shiojiri and then via the Kiso River valley to Nagoya. Construction was undertaken from both ends, with sections opening sequentially from 1900 until the lines were connected in 1911.
The Ou line from Fukushima to Yamagata, Akita and Aomori, serving the poorer northern Sea of Japan coastal prefectures, was seen as a priority for national development that was commercially unattractive. The government commenced construction from Aomori towards Hirosaki in 1894, and at the southern end from Fukushima in 1899, the lines connecting in 1905. Most of the major routes proposed under the act for private construction were not so funded and were ultimately constructed by the government.
The Japanese National Railways was formed by the nationalization of 17 private railways in 1907. It actively promoted uniformity and scientific management.,
Early 20th century
From 1918 to 1921, a wave of major industrial disputes marked the peak of organized labour power. A prolonged
economic slump that followed brought cutbacks in employment in
heavy industry
Heavy industry is an industry that involves one or more characteristics such as large and heavy products; large and heavy equipment and facilities (such as heavy equipment, large machine tools, huge buildings and large-scale infrastructure); o ...
. By 1928, the GNP of Japan at current prices peaked at ¥16,506 million. In the mid-1930s, the Japanese nominal wage rates were a tenth of those in the United States (based on mid-1930s exchange rates), while the price level is estimated to have been about 44% that of the US.
Comparison of GDP per capita (US Dollars) between East-Asian Nations and the US in 1935:
Militarism
Before
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, Japan built an extensive empire that included
Ryukyu
The , also known as the or the , are a chain of Japanese islands that stretch southwest from Kyushu to Taiwan: the Ōsumi, Tokara, Amami, Okinawa, and Sakishima Islands (further divided into the Miyako and Yaeyama Islands), with Yonaguni ...
,
Taiwan
Taiwan, officially the Republic of China (ROC), is a country in East Asia, at the junction of the East and South China Seas in the northwestern Pacific Ocean, with the People's Republic of China (PRC) to the northwest, Japan to the nort ...
,
Korea
Korea ( ko, 한국, or , ) is a peninsular region in East Asia. Since 1945, it has been divided at or near the 38th parallel, with North Korea (Democratic People's Republic of Korea) comprising its northern half and South Korea (Republic o ...
,
Manchuria
Manchuria is an exonym (derived from the endo demonym " Manchu") for a historical and geographic region in Northeast Asia encompassing the entirety of present-day Northeast China (Inner Manchuria) and parts of the Russian Far East (Outer Manc ...
, and parts of northern China. The Japanese regarded this sphere of influence as a political and economic necessity, preventing foreign states from strangling Japan by blocking its access to raw materials and crucial sea-lanes, as Japan possessed very few natural and mining resources of its own, although it imported large amounts of coal from
Korea
Korea ( ko, 한국, or , ) is a peninsular region in East Asia. Since 1945, it has been divided at or near the 38th parallel, with North Korea (Democratic People's Republic of Korea) comprising its northern half and South Korea (Republic o ...
,
Manchukuo
Manchukuo, officially the State of Manchuria prior to 1934 and the Empire of (Great) Manchuria after 1934, was a puppet state of the Empire of Japan in Northeast China, Manchuria from 1932 until 1945. It was founded as a republic in 1932 afte ...
, and some regions of occupied China. Japan's large military force was regarded as essential to the empire's defense.
Rapid growth and structural change characterized Japan's two periods of economic development since 1868. In the first period, the economy grew only moderately at first and relied heavily on traditional agriculture to finance modern industrial infrastructure. When the
Russo-Japanese War
The Russo-Japanese War ( ja, 日露戦争, Nichiro sensō, Japanese-Russian War; russian: Ру́сско-япóнская войнá, Rússko-yapónskaya voyná) was fought between the Empire of Japan and the Russian Empire during 1904 and 1 ...
began in 1904, 65% of employment and 38% of the gross domestic product (GDP) was still based on agriculture but the modern industry had begun to expand substantially. During
World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
, Japan used the absence of the war-torn European competitors on the world market to advance its economy, generating a
trade surplus
The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...
for the first time since the isolation in the
Edo period
The or is the period between 1603 and 1867 in the history of Japan, when Japan was under the rule of the Tokugawa shogunate and the country's 300 regional '' daimyo''. Emerging from the chaos of the Sengoku period, the Edo period was characteriz ...
. By the late 1920s, manufacturing and mining contributed 23% of GDP, compared with 21% for all of agriculture. Transportation and
communications
Communication (from la, communicare, meaning "to share" or "to be in relation with") is usually defined as the transmission of information. The term may also refer to the message communicated through such transmissions or the field of inquir ...
had developed to sustain heavy industrial development.
In the 1930s, the Japanese economy suffered less from the
Great Depression
The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
than most industrialized nations, its GDP expanding at a rapid rate of 5% per year. Manufacturing and mining came to account for more than 30% of GDP, more than twice the value for the agricultural sector. Most industrial growth, however, was geared toward expanding the nation's military power.
Beginning in 1937 with significant land seizures in China, and to a greater extent after 1941, when annexations and invasions across Southeast Asia and the Pacific created the
Greater East Asia Co-Prosperity Sphere
The , also known as the GEACPS, was a concept that was developed in the Empire of Japan and propagated to Asian populations which were occupied by it from 1931 to 1945, and which officially aimed at creating a self-sufficient bloc of Asian peo ...
, the Japanese government sought to acquire and develop critical natural resources in order to secure economic independence. Among the natural resources that Japan seized and developed were: coal in China, sugarcane in the
Philippines
The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no),
* bik, Republika kan Filipinas
* ceb, Republika sa Pilipinas
* cbk, República de Filipinas
* hil, Republ ...
, petroleum from the
Dutch East Indies
The Dutch East Indies, also known as the Netherlands East Indies ( nl, Nederlands(ch)-Indië; ), was a Dutch colony consisting of what is now Indonesia. It was formed from the nationalised trading posts of the Dutch East India Company, which ...
and
Burma
Myanmar, ; UK pronunciations: US pronunciations incl. . Note: Wikipedia's IPA conventions require indicating /r/ even in British English although only some British English speakers pronounce r at the end of syllables. As John Wells explai ...
, and tin and
bauxite
Bauxite is a sedimentary rock with a relatively high aluminium content. It is the world's main source of aluminium and gallium. Bauxite consists mostly of the aluminium minerals gibbsite (Al(OH)3), boehmite (γ-AlO(OH)) and diaspore (α-AlO(O ...
from the Dutch East Indies and
Malaya. Japan also purchased the rice production of
Thailand
Thailand ( ), historically known as Siam () and officially the Kingdom of Thailand, is a country in Southeast Asia, located at the centre of the Indochinese Peninsula, spanning , with a population of almost 70 million. The country is bo ...
, Burma, and
Cochinchina
Cochinchina or Cochin-China (, ; vi, Đàng Trong (17th century - 18th century, Việt Nam (1802-1831), Đại Nam (1831-1862), Nam Kỳ (1862-1945); km, កូសាំងស៊ីន, Kosăngsin; french: Cochinchine; ) is a historical exony ...
.
During the early stages of Japan's expansion, the Japanese economy expanded considerably. Steel production rose from 6,442,000 tons to 8,838,000 tons over the same time period. In 1941 Japanese aircraft industries had the capacity to manufacture 10,000 aircraft per year. Much of this economic expansion benefited the "
zaibatsu
is a Japanese language, Japanese term referring to industrial and financial vertical integration, vertically integrated business conglomerate (company), conglomerates in the Empire of Japan, whose influence and size allowed control over signi ...
", large industrial conglomerates.
Over the course of the
Pacific War
The Pacific War, sometimes called the Asia–Pacific War, was the theater of World War II that was fought in Asia, the Pacific Ocean, the Indian Ocean, and Oceania. It was geographically the largest theater of the war, including the vast ...
, the economies of Japan and its occupied territories all suffered severely. Inflation was rampant; the Japanese heavy industry, forced to devote nearly all its production to meet military needs, was unable to meet the commercial requirements of Japan (which had previously relied on trade with Western countries for their manufactured goods). Local industries were unable to produce at high enough levels to avoid severe shortfalls. Furthermore, maritime trade, upon which the Empire depended greatly, was sharply curtailed by damage to the Japanese merchant fleet over the course of the war.
By the end of the war, what remained of the Japanese Empire was wracked by shortages, inflation, and currency devaluation. Transport was nearly impossible, and industrial production in Japan's shattered cities ground to a halt. The destruction wrought by the war eventually brought the Japanese economy to a virtual standstill.
According to a 2020 study, Japan used its imperial power to boost its industrialization.
Post-World War II
The war wiped out many of the gains which Japan had made since 1868. About 40% of the nation's industrial plants and infrastructure were destroyed, and production reverted to levels of about fifteen years earlier. The people were shocked by the devastation and swung into action. New factories were equipped with the best modern machines, giving Japan an initial competitive advantage over the victor states, who now had older factories. As Japan's second period of economic development began, millions of former soldiers joined a well-disciplined and highly educated work force to rebuild Japan. Japan's colonies were lost as a result of World War II, but since then the Japanese had extended their economic influence throughout Asia and beyond.
Occupation
After the
Japanese surrender
The surrender of the Empire of Japan in World War II was announced by Emperor Hirohito on 15 August and formally signed on 2 September 1945, bringing the war's hostilities to a close. By the end of July 1945, the Imperial Japanese Navy ...
on 15 August 1945, allied forces, mostly American, rapidly began arriving in Japan. Almost immediately, the occupiers began an intensive program of legal changes designed to democratize Japan. One action was to ensure the creation of a Trade Union law to allow for the first time workers to organize, strike, and bargain collectively, which was passed by the Diet of Japan on 22 December 1945. While the law was created while Japan was under occupation, the law itself was largely a Japanese work. It was put together by a large legal advisory commission headed by the legal scholar Suehiro Izutaro. The commission was quite large, consisting of "three Welfare ministry bureaucrats and two scholars, a steering committee of 30 members (including the communist firebrand
Kyuichi Tokuda
was a Japanese politician and first chairman of the Japanese Communist Party from 1945 until his death in 1953.
Biography
Kyuichi Tokuda was born in 1894 in Okinawa and became a lawyer following graduation from Nihon University in 1920. He joi ...
), and an overall membership of more than 130 members representing universities, corporations, political parties, the bureaucracy, social workers, and labor." US assistance totaled about US$1.9 billion during the occupation, or about 15% of the nation's imports and 4% of GNP in that period. About 59% of this aid was in the form of food, 15% in industrial materials, and 12% in transportation equipment. US grant assistance, however, tapered off quickly in the mid-1950s. US military procurement from Japan peaked at a level equivalent to 7% of Japan's GNP in 1953 and fell below 1% after 1960. A variety of United States-sponsored measures during the occupation, such as land reform, contributed to the economy's later performance by increasing competition. In particular, the post-war purge of industrial leaders allowed new talent to rise in the management of the nation's rebuilt industries. Finally, the economy benefited from foreign trade because it was able to expand exports rapidly enough to pay for imports of equipment and technology without falling into debt, as had a number of developing nations in the 1980s.
A 2018 study, using the
synthetic control method The synthetic control method is a statistical method used to evaluate the effect of an intervention in comparative case studies. It involves the construction of a weighted combination of groups used as controls, to which the treatment group is comp ...
whereby Japan is compared to "synthetic Japan" (a combination of which are similar to Japan but without the US alliance), found that the US alliance allowed Japan's GDP to "grow much faster" from 1958 to 1968.
"Gifts From Heaven"
In the wake of WWII, the Japanese citizenry was suffering from widespread exhaustion and despair from the war, known as "
kyodatsu," causing large-scale dejection and despondency. The term "gifts from Heaven" was coined by cartoonist Kato Etsuro in his first illustrations under US military occupation. These gifts referred to the bloodless democratic revolution from above ushered in by US forces that put an end to a socially debilitating war. Of the many aspects of the revolution from above, the reforms extending the right to vote to women, strengthening labor unionization, and liberalizing the economy were some of the most enduring changes that stand to this day.
Following the
1947 elections, in which the
Japan Socialist Party
The was a socialist and progressive political party in Japan that existed from 1945 to 1996. The party was founded as the Social Democratic Party of Japan by members of several proletarian parties that existed before World War II, including ...
came in first,
Prime Minister
A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister is not ...
Tetsu Katayama
was a Japanese politician who was Prime Minister of Japan from 1947 to 1948. He bears the distinction of having been the first socialist to serve as Prime Minister of Japan.
Early life
He was born in Tanabe, Wakayama Prefecture on 28 July ...
formed a coalition government with the
Democratic Party Democratic Party most often refers to:
*Democratic Party (United States)
Democratic Party and similar terms may also refer to:
Active parties Africa
*Botswana Democratic Party
*Democratic Party of Equatorial Guinea
*Gabonese Democratic Party
*Demo ...
and the
National Cooperative Party
The was a centrist political party in Japan.
History
The party was established on 8 March 1947 as a merger of the Cooperative Democratic Party and the National Party following seven months of talks.Haruhiro Fukui (1985) ''Political parties of ...
. One of the first and most significant economic reforms was the division and distribution of rural land to Japanese tenant farmers. Previously, property belonged to landlords and farmers worked on it in a feudal type system. Modern capitalist theory held that this feudal practice did not incentivize growth and the rural landlord class was dissolved. In addition to the dissolution of the landlord class, the massive business conglomerates known as "
Zaibatsu
is a Japanese language, Japanese term referring to industrial and financial vertical integration, vertically integrated business conglomerate (company), conglomerates in the Empire of Japan, whose influence and size allowed control over signi ...
" that had effectively controlled the Japanese economy for almost 100 years were also broken up and faced market competition. The Law for the Elimination of Excessive Economic Concentration (passed in December 1947) provided for the dissolution of any company considered to be monopolistic, while the "law on the expulsion of Zaibatsu-affiliated controls" of January 1948 enforced the resignation of Zaibatsu board members who were related closely to Zaibatsu families, while a measure was taken to ban on holding the concurrent board posts of their affiliated companies. In addition, a government employees law was enacted, the first group of Japanese Supreme Court justices was appointed, local government and the police were reorganised, the Ministries of Home Affairs, Navy, and War were abolished, extensive revisions were made to criminal law, and progress was made on land reform. Finally, the unionization of Japanese workers was encouraged by US occupying forces that forced companies to compete on technology and innovation.
Rebuilding
The early post-war years were devoted to rebuilding lost industrial capacity: major investments were made in electric power, coal, steel, and chemicals. By the mid-1950s, production matched prewar levels. Released from the demands of military-dominated government, the economy not only recovered its lost momentum but also surpassed the growth rates of earlier periods. Between 1953 and 1965, GDP expanded by more than 9% per year, manufacturing and mining by 13%, construction by 11%, and infrastructure by 12%. In 1965 these sectors employed more than 41% of the labor force, whereas only 26% remained in agriculture.
Japan's highly acclaimed post-war
education system
The educational system generally refers to the structure of all institutions and the opportunities for obtaining education within a country. It includes all pre-school institutions, starting from family education, and/or early childhood education ...
contributed strongly to the modernizing process. The world's highest literacy rate and high education standards were major reasons for Japan's success in achieving a technologically advanced economy. Japanese schools also encouraged discipline, another benefit in forming an effective work force.
The mid-1960s ushered in a new type of industrial development as the economy opened itself to international competition in some industries and developed heavy and chemical manufactures. Whereas textiles and light manufactures maintained their profitability internationally, other products, such as automobiles, electronics, ships, and machine tools assumed new importance. The value added to manufacturing and mining grew at the rate of 17% per year between 1965 and 1970. Growth rates moderated to about 8% and evened out between the industrial and service sectors between 1970 and 1973, as retail trade, finance, real estate, information technology, and other service industries streamlined their operations.
Japanese consumerism continued to grow throughout the 1960s, giving rise to a well-known saying that the "
three treasures" which all Japanese families needed to have was a
refrigerator
A refrigerator, colloquially fridge, is a commercial and home appliance consisting of a thermally insulated compartment and a heat pump (mechanical, electronic or chemical) that transfers heat from its inside to its external environment so th ...
, a
washing machine
A washing machine (laundry machine, clothes washer, washer, or simply wash) is a home appliance used to wash laundry. The term is mostly applied to machines that use water as opposed to dry cleaning (which uses alternative cleaning fluids and ...
, and a
television set
A television set or television receiver, more commonly called the television, TV, TV set, telly, tele, or tube, is a device that combines a tuner, display, and loudspeakers, for the purpose of viewing and hearing television broadcasts, or using ...
. By 1962, it was estimated that 79.4% of all urban homes and 48.9% of rural homes in Japan had television.
Labor unions
![NUGW May Day 2011](https://upload.wikimedia.org/wikipedia/commons/3/35/NUGW_May_Day_2011.jpg)
Trade unions emerged in Japan in the second half of the
Meiji period
The is an era of Japanese history that extended from October 23, 1868 to July 30, 1912.
The Meiji era was the first half of the Empire of Japan, when the Japanese people moved from being an isolated feudal society at risk of colonization ...
as the country underwent a period of rapid
industrialization
Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
.
[Nimura, K]
''The Formation of Japanese Labor Movement: 1868–1914''
(Translated by Terry Boardman). Retrieved 11 June 2011 Until 1945, however, the labour movement remained weak, impeded by lack of legal rights,
[Cross Currents]
Labor unions in Japan.
CULCON. Retrieved 11 June 2011 anti-union
Union busting is a range of activities undertaken to disrupt or prevent the formation of trade unions or their attempts to grow their membership in a workplace.
Union busting tactics can refer to both legal and illegal activities, and can range ...
legislation,
management-organised factory councils, and political divisions between "cooperative" and radical unionists.
After the war the Occupation authorities initially encouraged the formation of independent unions.
Legislation was passed that enshrined the right to organise, and membership rapidly rose to 5 million by February 1947.
The organisation rate, however, peaked at 55.8% in 1949 and subsequently declined to 18.2% (2006).
[Japan Institute for Labour Policy and Training]
Labor Situation in Japan and Analysis: 2009/2010.
Retrieved 10 June 2011 The labour movement went through a process of reorganisation from 1987 to 1991 from which emerged the present configuration of three major trade union federations,
Rengo
The , commonly known as , is the largest national trade union center in Japan, with over six million members as of 2011.Rengo websitRengo brochure 2010-2011 Retrieved on July 6, 2012 It was founded in 1989 as a result of the merger of the Japan ...
,
Zenroren
The , commonly known in Japanese as , is a national trade union center.
Founding and history
Zenroren was founded on November 21, 1989.
Party affiliation
Zenroren is not affiliated to any political party, but is generally aligned with the Japa ...
, and
Zenrokyo
The , commonly known in Japanese as , is a national confederation of Japanese labor unions. There was another from 1947-1950.
Founding and history
In the late 1980s there were many changes in the trade union movement in Japan. The two major bod ...
, along with other smaller national union organisations.
Oil crisis
Japan faced a severe economic challenge in the mid-1970s. The
1973 oil crisis
The 1973 oil crisis or first oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries (OAPEC), led by Saudi Arabia, proclaimed an oil embargo. The embargo was targeted at nations that had supp ...
shocked an economy that had become dependent on imported petroleum. Japan experienced its first post-war decline in industrial production, together with severe price inflation. The recovery that followed the first oil crisis revived the optimism of most business leaders, but the maintenance of industrial growth in the face of high energy costs required shifts in the industrial structure.
Changing price conditions favored
conservation
Conservation is the preservation or efficient use of resources, or the conservation of various quantities under physical laws.
Conservation may also refer to:
Environment and natural resources
* Nature conservation, the protection and managem ...
and alternative sources of industrial energy. Although the investment costs were high, many energy-intensive industries successfully reduced their dependence on oil during the late 1970s and 1980s and enhanced their productivity. Advances in microcircuitry and
semiconductor
A semiconductor is a material which has an electrical resistivity and conductivity, electrical conductivity value falling between that of a electrical conductor, conductor, such as copper, and an insulator (electricity), insulator, such as glas ...
s in the late 1970s and 1980s led to new growth industries in
consumer electronics
Consumer electronics or home electronics are electronic (analog or digital) equipment intended for everyday use, typically in private homes. Consumer electronics include devices used for entertainment, communications and recreation. Usually r ...
and computers, and to higher productivity in pre-established industries. In 1978, Japan's Ministry of International Trade and Industry provided subsidies, which was illegal under international law, to help Japanese semiconductor companies sell their chips at artificially low prices in the United States while keeping prices high in Japan, a trade practice known as
dumping The net result of these adjustments was to increase the energy efficiency of manufacturing and to expand knowledge-intensive industries. The service industries expanded in an increasingly postindustrial economy.
Structural economic changes, however, were unable to check the slowing of economic growth as the economy matured in the late 1970s and 1980s, attaining annual growth rates at only 4–6%. But these rates were remarkable in a world of expensive petroleum and in a nation of few natural resources. Japan's average growth rate of 5% in the late 1980s, for example, was far higher than the 3.8% growth rate of the United States. Despite more petroleum price increases in 1979, the strength of the Japanese economy was apparent. It expanded without the double-digit inflation that afflicted other industrial nations (and that had bothered Japan itself after the first oil crisis in 1973). Japan experienced slower growth in the mid-1980s, but its
demand
In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...
-sustained
economic boom
An economic expansion is an increase in the level of economic activity, and of the goods and services available. It is a period of economic growth as measured by a rise in real GDP. The explanation of fluctuations in aggregate economic activity ...
of the late 1980s revived many troubled industries.
Factors of growth
Complex economic and institutional factors affected Japan's post-war growth. First, the nation's prewar experience provided several important legacies. The
Tokugawa period
The or is the period between 1603 and 1867 in the history of Japan, when Japan was under the rule of the Tokugawa shogunate and the country's 300 regional ''daimyo''. Emerging from the chaos of the Sengoku period, the Edo period was characterize ...
(1600–1867) bequeathed a ''vital commercial sector'' in burgeoning urban centers, a relatively well-educated elite (although one with limited knowledge of European science), a sophisticated government
bureaucracy
The term bureaucracy () refers to a body of non-elected governing officials as well as to an administrative policy-making group. Historically, a bureaucracy was a government administration managed by departments staffed with non-elected offi ...
, productive agriculture, a closely unified nation with highly developed financial and marketing systems, and a national infrastructure of roads. The buildup of industry during the Meiji period to the point where Japan could vie for world power was an important prelude to post-war growth from 1955 to 1973, and provided a pool of experienced labor.
Second, and more important, was the level and quality of investment that persisted through the 1980s. Investment in capital equipment, which averaged more than 11% of GNP during the prewar period, rose to about 20% of GNP during the 1950s and to more than 30% in the late 1960s and 1970s. During the economic boom of the late 1980s, the rate still hovered around 20%. Japanese businesses imported the latest technologies to develop the industrial base. As a latecomer to
modernization
Modernization theory is used to explain the process of modernization within societies. The "classical" theories of modernization of the 1950s and 1960s drew on sociological analyses of Karl Marx, Emile Durkheim and a partial reading of Max Weber, ...
, Japan was able to avoid some of the trial and error earlier needed by other nations to develop industrial processes. In the 1970s and 1980s, Japan improved its industrial base through licensing from the US, patent purchases, and imitation and improvement of foreign inventions. In the 1980s, industry stepped up its
research and development
Research and development (R&D or R+D), known in Europe as research and technological development (RTD), is the set of innovative activities undertaken by corporations or governments in developing new services or products, and improving existi ...
, and many firms became famous for their innovations and creativity.
Japan's
labor force
The workforce or labour force is a concept referring to the pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic regio ...
contributed significantly to economic growth, because of its availability and literacy, and also because of its reasonable wage demands. Before and immediately after World War II, the transfer of numerous agricultural workers to modern industry resulted in rising productivity and only moderate wage increases. As population growth slowed and the nation became increasingly industrialized in the mid-1960s, wages rose significantly. However, labor union cooperation generally kept salary increases within the range of gains in productivity.
High productivity growth played a key role in post-war economic growth. The highly skilled and educated labor force, extraordinary
savings rate
Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash. Saving also involves reducing expenditures, such as recur ...
s and accompanying levels of investment, and the low growth of Japan's labor force were major factors in the high rate of productivity growth.
The nation also benefited from
economies of scale
In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables ...
. Although medium-sized and small enterprises generated much of the nation's employment, large facilities were the most productive. Many industrial enterprises consolidated to form larger, more efficient units. Before World War II, large holding companies formed wealth groups, or
zaibatsu
is a Japanese language, Japanese term referring to industrial and financial vertical integration, vertically integrated business conglomerate (company), conglomerates in the Empire of Japan, whose influence and size allowed control over signi ...
, which dominated most industry. The zaibatsu were dissolved after the war, but
keiretsu
A is a set of companies with interlocking business relationships and shareholdings. In the legal sense, it is a type of informal business group that are loosely organized alliances within the social world of Japan's business community. The ''ke ...
—large, modern industrial enterprise groupings—emerged. The coordination of activities within these groupings and the integration of smaller
subcontractor
A subcontractor is an individual or (in many cases) a business that signs a contract to perform part or all of the obligations of another's contract.
Put simply the role of a subcontractor is to execute the job they are hired by the contractor f ...
s into the groups enhanced industrial efficiency.
Japanese corporations developed strategies that contributed to their immense growth. Growth-oriented corporations that took chances competed successfully. ''Product diversification'' became an essential ingredient of the growth patterns of many keiretsu. Japanese companies added plant and human capacity ahead of demand. Seeking market share rather than quick profit was another powerful strategy.
Finally, circumstances beyond Japan's direct control contributed to its success. International conflicts tended to stimulate the Japanese economy until the devastation at the end of World War II. The
Russo-Japanese War
The Russo-Japanese War ( ja, 日露戦争, Nichiro sensō, Japanese-Russian War; russian: Ру́сско-япóнская войнá, Rússko-yapónskaya voyná) was fought between the Empire of Japan and the Russian Empire during 1904 and 1 ...
(1904–05),
World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
(1914–18), the
Korean War
, date = {{Ubl, 25 June 1950 – 27 July 1953 (''de facto'')({{Age in years, months, weeks and days, month1=6, day1=25, year1=1950, month2=7, day2=27, year2=1953), 25 June 1950 – present (''de jure'')({{Age in years, months, weeks a ...
(1950–53), and the
Second Indochina War
The Vietnam War (also known by other names) was a conflict in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. It was the second of the Indochina Wars and was officially fought between North Vietnam an ...
(1954–75) brought economic booms to Japan. In addition, benign treatment from the United States after World War II facilitated the nation's reconstruction and growth.
The changing occupational structure
As late as 1955, some 40% of the labor force still worked in agriculture, but this figure had declined to 17% by 1970 and to 7.2% by 1990 and under 5% in the 21st century as Japan imported more and more of its food and small family farms disappeared.
Japan's economic growth in the 1960s and 1970s was based on the rapid expansion of heavy manufacturing in such areas as automobiles, steel, shipbuilding, chemicals, and electronics. The secondary sector (manufacturing, construction, and mining) expanded to 35.6% of the work force by 1970. By the late 1970s, however, the Japanese economy began to move away from heavy manufacturing toward a more service-oriented (tertiary sector) base. During the 1980s, jobs in wholesaling, retailing, finance, insurance, real estate, transportation, communications, and government grew rapidly, while secondary-sector employment remained stable. The tertiary sector grew from 47% of the work force in 1970 to 59.2% in 1990.
1980s
Throughout the 1970s, Japan had the world's third largest gross national product (
GNP
The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP), plus factor incomes earned by foreign ...
)—just behind the United States and Soviet Union—and ranked first among major industrial nations in 1990 in per capita GNP at US$23,801, up sharply from US$9,068 in 1980. After a mild economic slump in the mid-1980s, Japan's economy began a period of expansion in 1986 that continued until it again entered a
recessionary period in 1992. Economic growth averaging 5% between 1987 and 1989 revived industries, such as steel and construction, which had been relatively dormant in the mid-1980s, and brought record salaries and employment. In 1992, however, Japan's
real
Real may refer to:
Currencies
* Brazilian real (R$)
* Central American Republic real
* Mexican real
* Portuguese real
* Spanish real
* Spanish colonial real
Music Albums
* ''Real'' (L'Arc-en-Ciel album) (2000)
* ''Real'' (Bright album) (2010) ...
GNP growth slowed to 1.7%. Even industries such as automobiles and electronics that had experienced phenomenal growth in the 1980s entered a recessionary period in 1992. The domestic market for Japanese automobiles shrank at the same time that Japan's share of the United States' market declined. Foreign and domestic demand for Japanese electronics also declined, and Japan seemed on the way to losing its leadership in the world
semiconductor
A semiconductor is a material which has an electrical resistivity and conductivity, electrical conductivity value falling between that of a electrical conductor, conductor, such as copper, and an insulator (electricity), insulator, such as glas ...
market to the United States, Korea and Taiwan.
Unlike the economic booms of the 1960s and 1970s, when increasing exports played the key role in economic expansion, domestic
demand
In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...
propelled the Japanese economy in the late 1980s. This development involved fundamental economic restructuring, moving from dependence on exports to reliance on domestic demand. The boom that started in 1986 was generated by the decisions of companies to increase private plant and equipment spending and of consumers to go on a buying spree. Japan's imports grew at a faster rate than exports. Japanese post-war technological research was carried out for the sake of economic growth rather than military development. The growth in high-technology industries in the 1980s resulted from heightened domestic demand for high-technology products such as electronics, and for higher living, housing, and environmental standards; better medical care and more welfare; expanded leisure-time facilities; and improved ways to accommodate a rapidly aging society.
During the 1980s, the Japanese economy shifted its emphasis from primary and secondary activities (notably agriculture, manufacturing, and mining) to processing, with telecommunications and computers becoming increasingly vital. Information became an important resource and product, central to wealth and power. The rise of an information-based economy was led by major research in highly sophisticated technology, such as advanced computers. The selling and use of information became very beneficial to the economy. Tokyo became a major financial center, home to some of the world's major banks, financial firms, insurance companies, and the world's largest
stock exchange
A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for th ...
, the Tokyo Securities and Stock Exchange. Even here, however, the recession took its toll. In 1992, the
Nikkei 225
The Nikkei 225, or , more commonly called the ''Nikkei'' or the ''Nikkei index'' (), is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the '' Nihon Keizai Shimbun'' (''The Nikkei'') newspaper since 1950 ...
stock average began the year at 23,000 points, but fell to 14,000 points in mid-August before leveling off at 17,000 by the end of the year.
Since the end of the Cold War
1989 Economic Bubble
In the decades following World War II, Japan implemented stringent
tariff
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and poli ...
s and policies to encourage the people to save their income. With more money in banks, loans and credit became easier to obtain, and with Japan running large
trade surpluses, the
yen
The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar (US$) and the euro. It is also widely used as a third reserve currency after the US dollar and the e ...
appreciated against foreign currencies. This allowed local companies to invest in capital resources more easily than their overseas competitors, which reduced the price of Japanese-made goods and widened the trade surplus further. And, with the yen appreciating, financial assets became lucrative.
With so much money readily available for investment, speculation was inevitable, particularly in the
Tokyo Stock Exchange
The , abbreviated as Tosho () or TSE/TYO, is a stock exchange located in Tokyo, Japan. It is the third largest stock exchange in the world by aggregate market capitalization of its listed companies, and the largest in Asia. It had 2,292 listed co ...
and the real estate market. The
Nikkei stock index hit its all-time high on 29 December 1989 when it reached an intra-day high of 38,957.44 before closing at 38,915.87. The rates for housing, stocks, and bonds rose so much that at one point the government issued 100-year bonds. Additionally, banks granted increasingly risky loans.
At the height of the bubble, real estate was extremely over-valued. Prices were highest in Tokyo's
Ginza
Ginza ( ; ja, 銀座 ) is a district of Chūō, Tokyo, located south of Yaesu and Kyōbashi, west of Tsukiji, east of Yūrakuchō and Uchisaiwaichō, and north of Shinbashi. It is a popular upscale shopping area of Tokyo, with numerous intern ...
district in 1989, with choice properties fetching over US$1.5 million per square meter ($139,000 per square foot). Prices were only slightly less in other areas of Tokyo. By 2004, prime "A" property in Tokyo's financial districts had slumped and Tokyo's residential homes were a fraction of their peak, but still managed to be listed as the most expensive real estate in the world. Trillions were wiped out with the combined collapse of the Tokyo stock and real estate markets.
With Japan's economy driven by its high rates of reinvestment, this crash hit particularly hard. Investments were increasingly directed out of the country, and Japanese manufacturing firms lost some degree of their technological edge. As Japanese products became less competitive overseas, some people argue that the low consumption rate began to bear on the economy, causing a
deflation
In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Inflation reduces the value of currency over time, but sudden deflation ...
ary spiral.
The easily obtainable credit that had helped create and engorge the real-estate bubble continued to be a problem for several years to come, and as late as 1997, banks were still making loans that had a low guarantee of being repaid. Loan officers and investment staff had a hard time finding anything to invest in that would return a profit. Meanwhile, the extremely low interest rate offered for deposits, such as 0.1%, meant that ordinary Japanese savers were just as inclined to put their money under their beds as they were to put it in savings accounts. Correcting the credit problem became even more difficult as the government began to subsidize failing banks and businesses, creating many so-called "zombie businesses". Eventually a
carry trade The carry of an asset is the return obtained from holding it (if positive), or the cost of holding it (if negative) (see also Cost of carry). For instance, commodities are usually negative carry assets, as they incur storage costs or may suffer fro ...
developed in which money was borrowed from Japan, invested for returns elsewhere and then the Japanese were paid back, with a nice profit for the trader.
The time after the , which occurred gradually rather than catastrophically, is known as the in Japan. The
Nikkei 225
The Nikkei 225, or , more commonly called the ''Nikkei'' or the ''Nikkei index'' (), is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the '' Nihon Keizai Shimbun'' (''The Nikkei'') newspaper since 1950 ...
stock index eventually bottomed out at 7603.76 in April 2003, moved upward to a new peak of 18,138 in June 2007, before resuming a downward trend. The downward movement in the Nikkei is likely due to global as well as national economic problems.
Deflation from the 1990s to present
Deflation in Japan started in the early 1990s. On 19 March 2001, the
Bank of Japan
The is the central bank of Japan.Louis Frédéric, Nussbaum, Louis Frédéric. (2005). "Nihon Ginkō" in The bank is often called for short. It has its headquarters in Chūō, Tokyo, Chūō, Tokyo.
History
Like most modern Japanese instituti ...
and the Japanese government tried to eliminate deflation in the economy by reducing interest rates (part of their '
quantitative easing
Quantitative easing (QE) is a monetary policy action whereby a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity. Quantitative easing is a novel form of monetary pol ...
' policy). Despite having interest rates near zero for a long period, this strategy did not succeed. Once the near-zero interest rates failed to stop deflation, some economists, such as
Paul Krugman
Paul Robin Krugman ( ; born February 28, 1953) is an American economist, who is Distinguished Professor of Economics at the Graduate Center of the City University of New York, and a columnist for ''The New York Times''. In 2008, Krugman was th ...
, and some Japanese politicians spoke of deliberately causing (or at least creating the fear of) inflation. In July 2006, the zero-rate policy was ended. In 2008, the Japanese Central Bank still had the lowest interest rates in the developed world and deflation continued.
Systemic reasons for deflation in Japan can be said to include:
* Fallen asset prices. There was a large
price bubble
An economic bubble (also called a speculative bubble or a financial bubble) is a period when current asset prices greatly exceed their intrinsic valuation, being the valuation that the underlying long-term fundamentals justify. Bubbles can be c ...
in both
equities
In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
and real estate in Japan in the 1980s (peaking in late 1989).
* Insolvent companies: Banks lent to companies and individuals that invested in real estate. When real estate values dropped, many loans went unpaid. The banks could try to collect on the collateral (land), but due to reduced real estate values, this would not pay off the loan. Banks have delayed the decision to collect on the collateral, hoping asset prices would improve. These delays were allowed by national banking regulators. Some banks make even more loans to these companies that are used to service the debt they already have. This continuing process is known as maintaining an "unrealized loss", and until the assets are completely revalued and/or sold off (and the loss realized), it will continue to be a deflationary force in the economy.
* Insolvent banks: Banks with a large percentage of their loans which are "non-performing" (loans for which payments are not being made), but have not yet written them off. These banks cannot lend more money until they increase their cash reserves to cover the bad loans. Thus the number of loans is reduced sooner and less funds are available for economic growth.
* Fear of insolvent banks: Japanese people are afraid that banks will collapse so they prefer to buy gold or (United States or Japanese) Treasury bonds instead of saving their money in a bank account. People also save by investing in real estate.
''
The Economist
''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Econo ...
'' has suggested that improvements to bankruptcy law, land transfer law, and tax law will aid Japan's economy. In October 2009 the Japanese government announced plans to increase
tobacco
Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...
and
green tax
An environmental tax, ecotax (short for ecological taxation), or green tax is a tax levied on activities which are considered to be harmful to the environment and is intended to promote environmentally friendly activities via economic incentives. ...
es while reducing rates for small and medium-sized companies, according to
NHK
, also known as NHK, is a Japanese public broadcaster. NHK, which has always been known by this romanized initialism in Japanese, is a statutory corporation funded by viewers' payments of a television license fee.
NHK operates two terrestr ...
.
In 2011 Japan under
Yoshihiko Noda
is a Japanese politician who was Prime Minister of Japan from 2011 to 2012. He was a member of the Democratic Party, and a member of the House of Representatives (lower house) in the Diet (national legislature). He was named to succeed Naoto ...
decided to consider joining the
Trans-Pacific Strategic Economic Partnership
The Trans-Pacific Strategic Economic Partnership Agreement (TPSEP), also known as P4, is a trade agreement between four Pacific Rim countries concerning a variety of matters of economic policy. The agreement was signed by Brunei, Chile, Singapor ...
.
The
global economic recession of the late 2000s significantly harmed the economy of Japan. The nation suffered a 0.7% loss in
real GDP
Real gross domestic product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e. inflation or deflation). This adjustment transforms the money-value measure, nominal GDP, into an index for quantity ...
in 2008 followed by a severe 5.2% loss in 2009. In contrast, the data for world real GDP growth was a 3.1% hike in 2008 followed by a 0.7% loss in 2009.
Economic policy over the past several quarters in Japan has been influenced by the '
Abenomics
refers to the economic policies implemented by the Government of Japan led by the Liberal Democratic Party (LDP) since the December 2012 general election. They are named after Shinzō Abe, who served a second stint as Prime Minister of Japa ...
' debate, with the government pursuing aggressive government infrastructure spending hikes and significant yen devaluations.
Prior to the global
COVID-19 recession
The COVID-19 recession, also referred to as the Great Lockdown, is a global recession, global economic recession caused by the COVID-19 pandemic. The recession began in most countries in February 2020.
After a year of global economic slowdown ...
, the 2019 4th quarter GDP shrank an annualized 7.1% from the previous quarter due to two main factors.
One is the government's raise in
consumption tax
A consumption tax is a tax levied on consumption spending on goods and services. The tax base of such a tax is the money spent on Consumption (economics), consumption. Consumption taxes are usually indirect, such as a sales tax or a value-added ta ...
from 8% to 10%. The other is the devastating effects of
Typhoon Hagibis
Typhoon Hagibis, known in Japan as Typhoon No.19 or , was a large and costly tropical cyclone that caused widespread destruction in Japan. The thirty-eighth depression, ninth typhoon, and third super typhoon of the 2019 Pacific typhoon season, ...
, also known as the , or . The 38th depression, 9th typhoon and 3rd super typhoon of the
2019 Pacific typhoon season, it was the strongest typhoon in decades to strike mainland Japan, and one of the largest typhoons ever recorded at a peak diameter of 825 nautical miles (950 mi; 1529 km). It was also the costliest Pacific typhoon on record, surpassing
Typhoon Mireille's record by more than US$5 billion (when not adjusted for inflation). In the resort town of Hakone, record rainfall of almost a meter (942.3 mm, 37.1 inches) fell in only 24 hours. This adds to the effects of the COVID-19 pandemic on people's lives and the economy, the prime minister unveiling a "massive" stimulus amounting to 20% of GDP. In April 2020, Prime Minister
Shinzo Abe
Shinzo Abe ( ; ja, 安倍 晋三, Hepburn romanization, Hepburn: , ; 21 September 1954 – 8 July 2022) was a Japanese politician who served as Prime Minister of Japan and President of the Liberal Democratic Party (Japan), President of the Lib ...
announced that
COVID-19 pandemic in Japan
Coronavirus disease 2019 (COVID-19) is a contagious disease caused by a virus, the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The first known case was COVID-19 pandemic in Hubei, identified in Wuhan, China, in December ...
, which also forced a national state of emergency, gave the nation its worst economic crisis since the end of World War II.
Jun Saito of the Japan Center for Economic Research stated that the pandemic delivered the "final blow" to Japan's long fledging economy, which also resumed slow growth in 2018. Two stimulus packages, in April and May 2020, injected 234 trillion yen (US$2.2 trillion), or almost 40% of Japan's GDP.
Timeline
* 1600, Foundation of
Tokugawa shogunate
The Tokugawa shogunate (, Japanese 徳川幕府 ''Tokugawa bakufu''), also known as the , was the military government of Japan during the Edo period from 1603 to 1868. Nussbaum, Louis-Frédéric. (2005)"''Tokugawa-jidai''"in ''Japan Encyclopedia ...
, beginning of early modern industrialization
* 1868,
Meiji Restoration
The , referred to at the time as the , and also known as the Meiji Renovation, Revolution, Regeneration, Reform, or Renewal, was a political event that restored practical imperial rule to Japan in 1868 under Emperor Meiji. Although there were ...
, beginning of industrialization
* 1930s, Controlled economy
* 1945,
Surrender of Japan
The surrender of the Empire of Japan in World War II was announced by Emperor Hirohito on 15 August and formally signed on 2 September 1945, bringing the war's hostilities to a close. By the end of July 1945, the Imperial Japanese Navy ...
: economic prostration;
American Occupation
* 1948,
Reverse Course
The is the name commonly given to a shift in the policies of the U.S. government and the U.S.-led Allied occupation of Japan as they sought to reform and rebuild Japan after World War II. The Reverse Course began in 1947, at a time of rising Co ...
Conservative governments
* 1950s, Recovery and growth.
* 1960,
Income Doubling Plan
The was a long-term economic development plan initiated by Japanese prime minister Hayato Ikeda in the fall of 1960. The plan called for doubling the size of Japan's economy in ten years through a combination of tax breaks, targeted investment, a ...
* 25 April 1971, End of the
gold standard
A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the la ...
* 22 September 1985,
Plaza Accord
The Plaza Accord was a joint–agreement signed on September 22, 1985, at the Plaza Hotel in New York City, between France, West Germany, Japan, the United Kingdom, and the United States, to depreciate the U.S. dollar in relation to the French ...
* 29 December 1989,
Nikkei 225
The Nikkei 225, or , more commonly called the ''Nikkei'' or the ''Nikkei index'' (), is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the '' Nihon Keizai Shimbun'' (''The Nikkei'') newspaper since 1950 ...
average peaks at 38,915
* 1990s, "
the Lost Decade", the time after
Japan's economic bubble collapsed. The
Nikkei 225
The Nikkei 225, or , more commonly called the ''Nikkei'' or the ''Nikkei index'' (), is a stock market index for the Tokyo Stock Exchange (TSE). It has been calculated daily by the '' Nihon Keizai Shimbun'' (''The Nikkei'') newspaper since 1950 ...
stock index bottomed out at 7603.76 in April 2003, moved upward to a new peak of 18,138 in June 2007, before resuming a downward trend.
* July 1997, start of the
Asian financial crisis
The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1 ...
which caused several companies including
Nissan Mutual Life Insurance and
Yaohan
or ; ) was a Japanese retail group, founded in 1930 by and his wife . Initially a single shop, it was expanded by their son Kazuo Wada into a major supermarket chain with most retail outlets located in Shizuoka prefecture, south of Tokyo. It ...
to go bankrupt
* Post 2000,
Bank of Japan
The is the central bank of Japan.Louis Frédéric, Nussbaum, Louis Frédéric. (2005). "Nihon Ginkō" in The bank is often called for short. It has its headquarters in Chūō, Tokyo, Chūō, Tokyo.
History
Like most modern Japanese instituti ...
begins
quantitative easing
Quantitative easing (QE) is a monetary policy action whereby a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity. Quantitative easing is a novel form of monetary pol ...
strategy
* 2011, the
Aftermath of the 2011 Tōhoku earthquake and tsunami
The aftermath of the 2011 Tōhoku earthquake and tsunami included both a humanitarian crisis and massive economic impacts. The tsunami created over 300,000 refugees in the Tōhoku region of Japan, and resulted in shortages of food, water, shelte ...
had far-reaching economic consequences
* 2012,
Abenomics
refers to the economic policies implemented by the Government of Japan led by the Liberal Democratic Party (LDP) since the December 2012 general election. They are named after Shinzō Abe, who served a second stint as Prime Minister of Japa ...
Prime Minister
Shinzō Abe
Shinzo Abe ( ; ja, 安倍 晋三, Hepburn: , ; 21 September 1954 – 8 July 2022) was a Japanese politician who served as Prime Minister of Japan and President of the Liberal Democratic Party (LDP) from 2006 to 2007 and again from 2012 to 20 ...
's programme to help the country's economic recovery: the economics side is one part of a more general programme, which was commented by
Joseph Stiglitz
Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the Joh ...
.
* 2020,
COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identif ...
, with Abe announcing that Japan had encountered its worst economic crisis since the end of World War II.
* 2022, Japan's core consumer price inflation increased to 3.7%, the highest it has been since 1981.
See also
*
Bank of Japan
The is the central bank of Japan.Louis Frédéric, Nussbaum, Louis Frédéric. (2005). "Nihon Ginkō" in The bank is often called for short. It has its headquarters in Chūō, Tokyo, Chūō, Tokyo.
History
Like most modern Japanese instituti ...
*
Economy of Japan
The economy of Japan is a highly developed social market economy, often referred to as an East Asian model. It is the third-largest in the world by nominal GDP and the fourth-largest by purchasing power parity (PPP). It is the world's secon ...
*
Economic relations of Japan
In its economic relations, Japan is both a major trading nation and one of the largest international investors in the world. In many respects, international trade is the lifeblood of Japan's economy. Imports and exports totaling the equivalent o ...
*
Economics of feudal Japan In Feudalism, Feudal Japan between 1185 CE and 1868 CE. Vassals offered their loyalty and services (military or other) to a landlord in exchange for access to a portion of land and its harvest. In such a system, political power is diverted from a ce ...
*
History of Japan
The first human inhabitants of the Japanese archipelago have been traced to prehistoric times around 30,000 BC. The Jōmon period, named after its cord-marked pottery, was followed by the Yayoi period in the first millennium BC when new inven ...
*
Japanese cuisine
Japanese cuisine encompasses the regional and traditional foods of Japan, which have developed through centuries of political, economic, and social changes. The traditional cuisine of Japan (Japanese: ) is based on rice with miso soup and other ...
*
Keiretsu
A is a set of companies with interlocking business relationships and shareholdings. In the legal sense, it is a type of informal business group that are loosely organized alliances within the social world of Japan's business community. The ''ke ...
– a distinctive Japanese way in which firms are related
*
Labor market of Japan
*
Poverty in Japan
In Japan, relative poverty is defined as a state at which the income of a household is at or below half of the median household income. According to OECD figures, the mean household net-adjusted disposable income for Japan is US$23,458, higher t ...
*
Tokugawa coinage
Tokugawa coinage was a unitary and independent metallic monetary system established by ''shōgun'' Tokugawa Ieyasu in 1601 in Japan, and which lasted throughout the Tokugawa period until its end in 1867.
History
The establishment of Tokugawa coi ...
*
Japanese asset price bubble
The was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and Japan's economy stagnated. The bubble was characterized by rapid acceleration ...
*
Lost Decade (Japan)
The was a period of economic stagnation in Japan caused by the asset price bubble's collapse in late 1991. The term originally referred to the 1990s, but the 2000s (Lost 20 Years, 失われた20年) and the 2010s (Lost 30 Years, 失われ ...
*
Japanese Economic Miracle
The Japanese economic miracle refers to Japan's record period of economic growth between the post-World War II era and the end of the Cold War. During the economic boom, Japan rapidly became the world's second-largest economy (after the Unit ...
References
Notes
Sources
*
Further reading
* Allen, G. C. ''A Short Economic History of Modern Japan'' (3rd ed. 1982
online* Black, Cyril, ed. ''The Modernization of Japan and Russia: A Comparative Study'' (1975)
* Duus, Peter, ed. ''The Cambridge History of Japan, Vol. 6: The Twentieth Century'' (1989), ch 8–1
excerpt* Ericson, Steven J''. The Sound of the Whistle: Railroads and the State in Meiji Japan'' (Harvard Council on East Asian Studies, 1996)
* Fairbank, John K., Edwin Reischauer, and Albert M. Craig. ''East Asia: The great tradition'' and ''East Asia: The modern transformation'' (1960) [2 vol 1960
online free to borrow famous textbook.
* Ferris, William W. ''Japan to 1600: A Social and Economic History'' (2009
excerpt and text search* Flath, David. ''The Japanese Economy'' (3rd ed. Oxford UP, 2014), on recent conditions
* Francks, Penelope. "Diet and the comparison of living standards across the Great Divergence: Japanese food history in an English mirror." ''Journal of Global History'' 14.1 (2019): 3–21.
* Free, Dan. ''Early Japanese Railways 1853–1914: Engineering Triumphs That Transformed Meiji-Era Japan'' (Tuttle Publishing, 2012).
* Fukao, Kyoji and Saumik Paul. 2020. "doi:10.1111/ehr.13021, Baumol, Engel, and beyond: accounting for a century of structural transformation in Japan, 1885–1985." ''The Economic History Review''.
* Gordon, Andrew, ed. ''Postwar Japan as History'' (1993), pp. 99–188, 259–92
* Hashino, Tomoko, and Osamu Saito. "Tradition and interaction: research trends in modern Japanese industrial history," ''Australian Economic History Review,'' Nov 2004, Vol. 44 Issue 3, pp 241–258.
* Hayami, Yujiro, and Saburo Yamada. ''The agricultural development of Japan: a century's perspective'' (University of Tokyo Press, 1991).
* , "Economy" (bibliography) pp. 304–307.
* Honjō, Eijirō. ''The social and economic history of Japan'' (1965
online* Jansen, Marius B. ed. ''The Cambridge History of Japan, Vol. 5: The Nineteenth Century'' (1989), pp 569–617
excerpt* Jansen, Marius B. ''The Making of Modern Japan'' (2002), passi
excerpt*
*
* Kodama, Riotaro. ''Railway Transportation in Japan'' (1898
online* Kornicki, Peter F., ed. ''Meiji Japan: Political, Economic and Social History 1868–1912'' (4 vol; 1998) 1336 pages
* Kozo, Yamamura, and Yasuba Yasukichi, eds. ''The Political Economy of Japan: Volume 1 – The Domestic Transformation'' (1987)
* Lechevalier, Sébastien, ed. ''The Great Transformation of Japanese Capitalism'' (2014) on 1980–201
excerpt
* Macpherson, W. J. ''Economic development of Japan 1868–1941'' (1995
online 92 pp
* Minami, Ryoshin. ''The Economic Development of Japan: A Quantitative Study'' (1994), in-depth coverage
* Morikawa, Hidemasa. ''A History of Top Management in Japan: Managerial Enterprises and Family Enterprises'' (2001)
* Nakamura, Takafusa, ''et al.'' eds. ''The Economic History of Japan: 1600–1990: Volume 1: Emergence of Economic Society in Japan, 1600–1859'' (2004); ''Volume 3: Economic History of Japan 1914–1955: A Dual Structure'' (2003)
* Nakamura, James. ''Agricultural Production and the Economic Development of Japan, 1873–1922'' (Princeton University Press, 1966)
* Odagiri, Hiroyuki and Akira Goto; ''Technology and Industrial Development in Japan: Building Capabilities by Learning, Innovation, and Public Policy'' (1996)
* Soyeda, Juichi. ''A history of banking in Japan'' (Routledge, 2013).
* Tang, John P. "Railroad Expansion and Industrialization: Evidence from Meiji Japan". ''Journal of Economic History'' 74#3 (2014), pp. 863–886
online* Tiedemann, Arthur E. "Japan's Economic Foreign Policies, 1868–1893." in James William Morley, ed., ''Japan's Foreign Policy: 1868–1941'' (1974) pp 118–152, historiography
* Tolliday, Steven. ''The Economic Development of Modern Japan, 1868–1945: From the Meiji Restoration to the Second World War'' (2 vol; 2001), 1376 pages
* Wilkins, Mira. "Japanese multinational enterprise before 1914." ''Business History Review'' (1986) 60#2: 199–23
online
* Yamamura, Kozo. "The Role of the Samurai in the Development of Modern Banking in Japan." ''Journal of Economic History'' 27.2 (1967): 198-220.
External links
Videos on Japan's Relations with the US from th
Dean Peter Krogh Foreign Affairs Digital Archives
{{DEFAULTSORT:Economic History of Japan
Economic history of Japan,