Explaining and Evaluating the “Workshop of Asia”

Building Capitalism

Building Capitalism• Emergence of industrial economy• Lead by textiles and mining

• Intimately tied to rural economy

Building Capitalism

• Significant exports by century’s end; emergence of heavy industries

•Farmers and silk producers

-Matsukata deflation of 1881-84

Building CapitalismCosts

More costs

Working women: factories and brothels

Interpretative Issues: Three Angles 1. Proto-industrialization: specialized local production

for distant markets, regional and national2. Human capital: “liberated” (dispossessed?) samurai; educated and entrepreneurial farmers, merchants

3. The Developmental State•Mobilize knowledge: the Iwakura Mission, 1871-73

Iwakura Tomomi

3. The Developmental State

Mobilize knowledge: the Iwakura Mission, 1871-73

Iwakura: “I have often heard people say that Boston is the brain of the American Union.”

Europe

N. America

Route of Iwakuramission

3. The Developmental State

•Mobilizing human resources: hired machines

3. The Developmental State

Mobilizing capital:Building infrastructure -transport and communications

Explanations: The Developmental State

-schools -postal service (and savings)

Mobilizing capital: Building infrastructure

3. The Developmental State

Building infrastructure: social -police (France)

-banking (US, Belgium)

3. The Developmental StateBuilding infrastructure: model factories

-Shipyards, coal and copper mines, engineering works and arsenals

-textiles: cotton and silk spinning

-Foundation of the zaibatsu

State roleIn sum: the government : -mobilized capital -imported knowledge, technology

-built infrastructure and factories

-mobilized human resources :foreign trainers, domestic

trainees.

Fourth factor: Luck?

A “breathing space” in the international system?

•West impinges late on Japan: learn from experience

“prostrate sprawling body of China which actedas a shield...against the greed of the Europeans”

Weighing the Explanations -proto-industrial foundation-human capital potential, unleashed -developmental state as guiding hand -“breathing space”—luck

•The state as relatively decisive?

•In a sense, it is the state which creates the “breathing space,” as much as the other way around.

•Whatever the weight of explanation, the legacy in economic thinking and policy has been profound and long-lived, both in Japan and globally