TARABA STATE UNIVERSITY

PMB 1167, JALINGO

FACULTY OF ART
DEPARTMENT OF HISTORY AND DIPLOMATIC
STUDIES

PRESENTATION ON
COURSE CODE: HDS 105
COURSE TITTLE: INTRODUCTIONTO ECONOMY

TOPIC: JAPANESE ECONOMY AT THE END OF 19TH AND 2OTH

CENTURY
BY GROUP (8)
TSU/FART/HS/21/1010 TSU/FART/HS/21/1083
TSU/FART/HS/21/1133 TSU/FART/HS/21/1110
TSU/FART/HS/21/1053 TSU/FART/HS/21/1051
TSU/FART/HS/21/1104 TSU/FART/HS/21/1002
SA, ADATU UMAR
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 INTRODUCTION

This presentation offers a historical tour of Japan’s socio-economic changes

over the last few centuries paying particular attention to industrialization. It is

not intended to be a mono-tonous chronology or a collection of specialized

academic research. Rather, it explains why Japan developed so fast among

all latecomers by presenting a broad and coherent picture of its steps from a

comparative perspective. While the writing style of this book may seem plain and

not overly technical, it nonetheless introduces the reader to a large amount of

facts and data as well as advanced—and sometimes highly controversial—

research on the modern history of Japan. As such, the book is suitable for those

who have little prior knowledge of Japanese society or economy but want to take

a quick look at how Japan industrialized. But those who already know much about

Japan will also benefit greatly from the rich information and arguments concisely

presented in this volume. In this sense, the book is introductory and professional

at the same time.

if we are to give in-details the Japanese Economic History, the time will not be

enough. That’s why we tried to give A BRIEF HISTORY OF JAPAN ECONOMY AT

THE LATE 19TH AND 20TH CENTURY.

Broadly speaking, the Meiji Restoration was a political revolution that ushered in

the Meiji era (1868-1912) by ending the rule of the Tokugawa Shogunate. The end

of the war saw power restored to the imperial palace under the newly crowned

Emperor Meiji. The modernization and westernization of Japan was ushered in

through major political, economic and social change, which all occurred in a

remarkable span of merely 50 years.

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The unfair treaties that Japan had signed with western nations was one driving

force of the Meiji Restoration. Recovery of Japanese sovereignty and power

became the basis of a large part of the policies formed during the Meiji period.

After more than two centuries of isolation, Japanese nationalists feared that

Japan would be subjected to the same western intervention as was happening in

China in the mid 19th century. As such, the slogan “Enrich the country,

strengthen the army” (fukoku kyohei) was used as a rallying call to create a nation-

state capable of standing equal among Western powers.

The first call of action was moving the imperial capital of Japan from Kyoto to the

shogunate capital of Edo, which later took on its current name of Tokyo (“The

capital of the east”). This was followed by the dismantling of the feudal regime

and its class privileges, and replacing domains with the present-day system of

prefectures.

Furthermore, a national army, along with universal conscription law and universal

education, resulted in a nationalist ideology shift. Thinking shifted from a line of

defense against western colonization, to a fight to obtain equality with western

industrialized nations. These changes were not welcomed with open arms.

Throughout the 1870s and reaching its peak in the 1880s, former samurai,

stripped of their privilege and status led a series of uprisings. Peasants were

dissatisfied with agrarian and taxation policies that served only as a form of

revenue for the new Meiji government, without benefiting the common folk.

Due to the introduction of universal education, which largely started with

importing western philosophy, a growing popular rights movement called for the

creation of a constitutional government. In response, the Meiji government

created a cabinet system in 1885 and four years later, Itō Hirobumi, Japan’s first

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prime minister, drafted the Meiji Constitution. Modeled after the Prussian and

British models of a mixed constitutional and absolute monarchy, the Meiji

Constitution named the Meiji Emperor head of state and the prime minister the

head of government. The Meiji Constitution remained in place until 1946, when it

was revised to Japan’s current constitution.

Along with political advances, Meiji era Japan underwent an enormous process of

industrialization and modernization. Known as bunmei kaika  (“civilization and

enlightenment”), western culture was widely promoted. From intellectual trends

to clothing and architecture, trends were adopted to promote and strengthen

Japan’s science, technology, iron and steel manufacturing, shipbuilding, and coal

mining industries. The first railroad was built in 1872, and all major cities were

linked by telegraph lines by 1880. Private firms were also encouraged with

government financial support, and aided by the institution of a European-style

banking system in 1882.

By the end of the 19th century, Japan had become a full-fledged modern

industrialized nation, on par with western powers. The unequal treaties of 1854

that had granted foreign powers judicial and economic privileges through

extraterritoriality were revised in 1894. While the death of the Emperor Meiji in

1912 marked the end of the period, several of the important Meiji leaders carried

on as elder statesmen, many of whom were educated at Hagi’s Shouka Sonjuku.

ECONOMIC MATURITY AND SLOWDOWN

Japan’s high growth came to an end in the early 1970s. Annual growth fell to an
average of about 4 percent in the 1970s and 1980s, and further down to near zero in
the 1990s (see Figure 11.1 in the previous chapter). The government called this “stable
growth.” Why did growth slow down in the early 1970s?One important fact that we should
keep in mind is that growth slowdown in this period was common to all industrial countries in

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North America and Western Europe. The reasons for slowdown must have therefore been at
least partly global though domestic factors may also have played a role.
Moreover, inflation accelerated in all industrial countries in the 1970s. This also points to
a globally common cause. Let us look at the domestic and interna-tional causes of Japan’s
slowdown respectively.The end of catching upOn the domestic side, transition to lower
growth was natural and inevitable because the Japanese economy had caught up with the
US and European economies and matured. During the catching up process, a developing
country can (selectively) import technology and systems that exist in the developed
world. But when you become part of the developed world, you can no longer copy
others but must create something new in order to grow. Naturally, clearing your own path
is harder and slower than following someone else’s path.Measured in income per head (in
actual dollars, not purchasing power parity—or price-adjusted—dollars; see below), the
gap between Japan and the United States was 1 to 14 in 1950, 1 to 6 in 1960 and 1 to 2.5
in 1970.
This narrowing of bilateral income dif-ference was the result of Japan’s much faster growth
compared with the United States. In the 1970s, the fluctuating yen–dollar exchange rate began
to disturb this income compar-ison. The income ratio was 1 to 1.3 in 1980 and 1 to 0.93 in
1990, which means Japanese income was temporarily higher than US income in that year.
But since Japanese prices were in general much higher than in the United States, this
does not necessarily mean Japanese people had attained a higher living standard than
Americans in 1990.
To make adjustments for different price levels, the concept of purchasing power parity
(PPP) is used. The same amount of money can buy much in countries with low prices and only
a little in countries with high prices. For example, consumers in Vietnam, where prices
are low, could enjoy much higher living standards than consumers in Japan, where prices are
high, if they had the same income measured in a common currency. The real income of
Japanese consumers must therefore be discounted by the extent that Japanese prices are
higher than Vietnamese. This adjustment is necessary to correctly compare income and living
standards across countries. Measured by this PPP criterion, Japan’s per capita income
surpassed that of Italy in 1966 and that of Britain around 1975. Japan did not overtake the
United States, West Germany or France but came close to them by the mid 1970s.

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Thus, it can be said that Japan was firmly in the highest income group by the 1970s.Another
way to measure income is by affordability of consumer durables (Figure 12.1). It took 10.7
months of average Japanese salary to buy a new car (the basic model of Toyota Corolla) in
1966, but workers had to work only 4.0 months to buy a similar car in 1974. In 1991,
a new car could be had after 2.4 months of work. By the mid 1970s, virtually all Japanese
households were equipped with washing machines, refrigerators, vacuum cleaners,
telephones and color TVs. Automobiles and air-conditioners were not as widely owned as
these items because they were not considered necessary or useful for some households.

CONCLUSION
In conclusion, Japan faced enormous challenges in developing the modern,

affluent, and technologically advanced economy that it is today. It was the first

nation to deliberately set out to change itself in fundamental ways for the express

purpose of modernizing the economy and society along Western lines. The risk-

taking creativity of that endeavor left little untouched. Growth itself wrought

continuing mutations and permutations in techniques, technologies, and

relationships. In fact, breathtaking change has been an integral part of Japanese

economic history.

Ironically, the lingering effects of one particular phase of this history—the so-

called miracle years—now bind Japanese psychology and policy to inappropriate

routines that once had economic logic behind them but that now are

unproductive. As Japan makes the transition to a permanently slower growth

trajectory, a move that requires greater attention to the mundane objectives of

rates of return and profitability, the nation once again is being forced to change.

History leaves little doubt about Japan’s capacity to adapt to a new environment.

Nevertheless, the legacy of the past can handicap the race to the future, however

sure the eventual results may be.

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REFERENCES

1. Angus Maddison, “Ultimate and Proximate Growth Causality,” in Explaining the

Economic Performance of Nations (Brookfield, Vt.: Edward Elgar Publishing Co.,
1995), 97.
2. Kozo Yamamura, “Toward a Reexamination of the Economic History of
Tokugawa Japan, 1600-1867,” The Journal of Economic History, September 1973,
533.
3. Sydney Crawcour, “Economic Change in the Nineteenth Century,” in Marius
Jansen (ed.), The Cambridge History of Japan, Vol. 5, The Nineteenth Century
(Cambridge, England and New York: Cambridge University Press, 1989), 585.
4. Kazushi Ohkawa and Henry Rosovsky, Japanese Economic Growth (Stanford,
California: Stanford University Press, 1973), 8.
5. World Bank, World Development Report, 1999 (Washington, D.C.: 1999).
6. For a good description of the transportation and post-house system and for a
flavor of the changes occurring during the second half of the nineteenth century,
see the novel by Toson Shimazaki, Before the Dawn (Yo-ake Mae), trans. William
Naff (Honolulu, Hawaii: University of Hawaii Press, 1987).
7. Constantine Vaporis, “To Edo and Back: Alternate Attendance and Japanese
Culture in the Early Modern Period,” Journal of Japanese Studies, XXIII, No. 1,
1997.
8. Yamamura.
9. Ohkawa and Rosovsky, 7.
10. Maddison, 93.
11. The period of convergence depends on the current ratio of the two countries’
GNPs and the difference in the rate of growth. The convergence period n is: n =
(ln U/J)/(j-u), where U is American GNP in the base year, J is Japanese GNP, j and u
are the Japanese and American growth rates (a 1.5 percent growth rate is stated
as 0.015), and ln is the natural logarithm.