From Foot Soldier to Finance Minister: Takahashi Korekiyo, Japan's Keynes (review)

The classic form of the political biography has become rare in English-language studies of Japanese history, and Richard Smethurst has brought us a fine one of a very engaging personality. This long-awaited study lets Takahashi Korekiyo take his place in the historiography where he belongs, as the most influential economic policymaker of twentieth-century Japan. As such, and as a "Keynesian before Keynes," Takahashi also deserves a significant place in the global history of the century.

Historians outside Japan have routinely misunderstood Japan's great interwar depression as having been no depression at all. In significant part, this is because the depression started early and finished early; the early recovery was thanks above all to the famous "Takahashi financial policy" inaugurated in December 1931.¹ It is for this success that Takahashi is best remembered, but it is less at the center of Smethurst's interest than is Takahashi the man and his times.

The narrative begins with a fascinating account of Takahashi's early life, much of it drawn from Takahashi's famous autobiography. After a discussion of Takahashi's forebears, Smethurst explores the living conditions of the ashigaru (foot soldier) class in Edo and their position at the lowest fringe of samurai society. From this background, the lucky and talented Takahashi was sent to Yokohama for training in English at the age of ten, which gave him a rare facility with English and a rarer social ease with foreigners. The English language opened many doors to Takahashi and would later enable him to open the lending windows of Western banks to Japan. Young Takahashi's education was haphazard, however, and he was in many ways self-taught. Smethurst finds this to be an important source of his lifelong intellectual vitality and originality. The story proceeds through Takahashi's teenage adventures as an indentured servant in California, his conversion (as it seems) to Christianity and then to Buddhism, and his backsliding carousing including his time as the attendant of a geisha whom he wanted to marry. We see Takahashi as a youthful teacher and government official, a borrower and debtor, and a merchant-adventurer in the Peruvian Andes, where he led a group of hard-drinking, brawling Japanese miners and risked his life crossing snowy passes only to discover that the silver mine he and his partners had purchased was long since mined out. Takahashi's personal story offers a close view of the tensions and excitement of the Tokugawa-to Meiji transition and of early Meiji bureaucratic politics.

This book is full of important new details on Meiji politics and finance that I cannot begin to summarize here. Among the most important points are Takahashi's participation in Maeda Masana's national economic survey and regional economic development plan in the early 1880s, the Kōgyō iken (Views on the promotion of industry), which died as a result of bureaucratic infighting. Takahashi's remarkable ability to bounce back from adversity (which together with his visage and roly-poly physique later earned him the nickname of "Daruma daijin") was exemplified by his ability to survive the purge of Maeda's group at the hands of Matsukata Masayoshi in 1885. Two detailed chapters explain how Takahashi raised the foreign loans that funded the Russo-Japanese War and postwar empire building. Here Smethurst's work is based on an extraordinary effort of multiarchival research in Japan, Britain, and the United States and seems unlikely to be superseded.

There is also a revealing discussion of Takahashi's progressive hopes for the Seiyūkai, which he joined in 1913 and of which he became president after the assassination of Hara Takashi in 1921. In contrast to my own (more fragmentary) account of Takahashi, Smethurst emphasizes less Takahashi's role as an advocate of the proto-Keynesian "positive [spending] policy" (sekkyoku seisaku), for which he became famous in partnership with party boss Hara. This policy became...