The start of a Ginza “Charge!”
INDUSTRIALIZATION
The most important single fact about Japan today is its industrialization and economic impact on the rest of the world. Since the early 1950’s when Japan became an American outpost in Asia and a link in the fence of the United States containment of Communism, the energies and talents of the Japanese people have been directed by a solidly entrenched ruling-class partnership of big business and government toward creating a modern, industrial, consumer society based on an American model. Other factors instrumental to the remarkable Japanese economic success are a massive and expensive importation of foreign technology, and an educated and dedicated work force. Along with the latest and most productive facilities operated by workers who still believe in a work ethic, the Japanese economy has benefited from governmental planning of investment goals, strategies, and priorities. The Japanese government has acted much like a Board of Directors and a central planning agency directing business activity to areas which would bring the largest economic returns and would most benefit the economy.
A little more than a hundred years ago. Japan was almost totally an agricultural economy never quite able to feed its people adequately. During the feudal Tokugawa period, Japan had cut itself off from foreign penetration for two hundred and fifty years, and was ignorant of the commercial and industrial revolutions and new technologies of the rest of the world. The government of the country was in the hands of feudal chiefs, the great daimyo, and their retainers, the samurai or fighting men. This group had ruled and kept in bondage the peasant bulk of the Japanese population since the thirteenth century. During feudal times this ruling class was composed of some 400,000 families numbering about two million persons, 7 percent of the population. Typically, as in all historical feudal societies, the ruling class disdained commercial activities and concerns, leaving such matters to the lowest social class, the merchants. The warriors were not allowed to deal with money or to accumulate it. They were paid in rice, which they used as a means of exchange to purchase their necessities. They did no work except to fight in the service of their lords. This ruling class lived on a minimum of fifty percent of the entire agricultural production, which in such a society was practically all of what we would call the GNP. Its level of living was twelve times higher than that of the peasant class which did all of the work and often was too poor even to eat the rice that it had labored over. The samurai class had the exclusive right to bear family names, to carry swords, and to use them with impunity on anybody of the commoner class, the other 93 percent of the population.
But with the opening of japan to foreign trade by the American Commodore Perry in 1854, great changes eventually took place. Foreign trade caused the emergence of a money economy which threatened to redistribute the wealth and power of the feudal chiefs, which lay in land and rice, to the rising class of merchant bankers. Accordingly, the more perspicacious daimyo sought money by encouraging trade and industry within their domains, and then monopolizing them. Thus were laid the foundations of Japan’s modern industrial and commercial structures. These daimyo developed spinning and weaving industries as well as the manufacture of porcelain, paper, and other products. They developed coal mines, iron foundries, and shipbuilding. In the years after the Meiji Restoration of 1868 the feudal clans which had become successful in their economic enterprises, and having learned by experience that strength lay in the accumulation and control of capital, established the pattern of monopolistic control which is still the basic Japanese idea behind industrial and governmental activities.
However, the new money economy saw the rise in prices and a drain of gold which, in addition to other factors, brought eventual collapse of the feudal system. More and more of the real power in the feudal society gradually shifted to the prospering merchant class. In the growing commercialization of the economy, feudal lords grew poorer and poorer, and sought additional revenues by taxing their already impoverished peasants at ruinously higher rates. This increased taxation resulted in further impoverishment of the peasant class, in greater confusion and discontent in the changing patterns of life, in lowered productivity, and in widespread rioting. Without realizing it, the daimyo were undermining the very base of their social system. The samurai also shared in the impoverishment of those in the feudal system, and by the end of the Tokugawa period the entire ruling class found itself in desperate financial straits. The overwhelming number of samurai owned nothing but their swords, and were reduced to the working-class level or near it. Although the commercial class in Japan at that time had been a despised one, many samurai families were forced to enter its ranks, either as shopkeepers or small handicrafts manufacturers. Thus, at the advent of the new age of money and commerce, many samurai families found themselves inadvertantly at the head of the line, so to speak, and subsequently prospered.
The Meiji Restoration in 1868, engendered by the collapse of the feudal economy and the threat of Western domination, saw the eclipse of the ancient power of the daimyo, the restoration of the Emperor to active status, and the beginning of state-industrial-monopoly capitalism. The leaders of the Restoration came for the most part from the lower stratum of the samurai class, and the military class which had ruled Japan for centuries still continued to rule, but with a different leadership and with a unified, national, and industrial purpose. To protect itself from nineteenth century Western imperialism, the government embarked on a program of industrialization and took over or promoted strategic industries such as the manufacture of munitions, railways, telephone and telegraph, mining and shipbuilding. In the course of time, the government returned or sold most of these enterprises to private ownership, but it never entirely relinquished its power of direction and intervention. During these times, Japan was not a consumer economy or one with a business ethic. Rather, in keeping with its feudal background, the nation was organized on a militarist-socialist pattern. With the example of the depredations of the Western powers before them, the new Japanese leaders had much to fear from these war-like nations, and acted accordingly. It should be no wonder that japan developed along military-industrial lines until 1945.
At the beginning of the industrialization of japan, it was the lower samurai which controlled the government, and it was from this segment of this social class that most of the young men were chosen for education overseas or for modern, scientific education in the newly established national universities at home. Although all feudal privileges in matters of education were swept away by the Restoration, the peasant class was totally illiterate, and only the samurai, who in addition to the martial arts were also required to be well versed in literature and learning, were capable of immediately absorbing Western knowledge. Public education was also established for the masses, but it would take years before they could profit from it. In addition to educational advantages, government grants-in-aid established many samurai families in industrial enterprises. In the Pension Capitalization of 1876, some $210 million of public bonds and cash were issued by the government to the former samurai in return for their anachronistic rice stipends. Since these samurai owned no land and little money, this gift of the government helped to absorb them into the framework of the new, capitalistic economy by making them capitalists. Not all families made good use of this government boon, but those who did became very rich indeed.
The peasants remained on the land where their forebears had been for centuries and were taxed heavily by the samurai rulers to finance the capitalization of the nation and the samurai class. The peasants furnished at different times from 70 to 87 percent of the government’s revenue, and never, it could be said, was so much extorted from so many by so few and for so long. Eventually, the collection of taxes in rice proved too unwieldy and the government changed it to a money tax. The result was that landowners and peasants were placed at the mercies of rice brokers and bankers who took advantage of the farmers’ need for cash money to pay this tax. The farmers had to accept whatever was offered to them by the rice dealers
