- Economic Thought in Early Modern Japan
Why was Japan so successful in responding to the Western intrusions of the early nineteenth century, in short order overthrowing the Tokugawa shogunate, embracing openness in trade, importing and adapting Western technology, and emerging as the paramount military power of East Asia? The consensus is that the answer lies in the Tokugawa period, in Japan’s “early modern” period. But what key characteristics of early modern Japan made this possible? On this point, there is much to dispute. The book under review attempts to find the answer in the world of ideas. To be fair, it discovers the answer in the way ideas struggle with practical economic, political, and social problems. The hard facts of the material world are not forgotten but they mainly serve as a backdrop for a detailed discussion of intellectual and abstract policy-oriented debates.
The introduction to the volume, penned by Mark Metzler and Gregory Smits, sets out many of the themes taken up in the individual chapters. Politically, early modern Japan was a multistate system, with over 200 fiefs acting as ministates, competing with each other and with the shogunate (bakufu). From an economic point of view, fief competition took the form of mercantilism; it was realized through fief monopolies, fief paper money backed by shogunate coinage or commodities, the promotion of granaries that acted as fief-backed banks (thereby diminishing the market power of merchants), fief educational systems, and fief-encouraged smuggling that made a mockery [End Page 258] of “closed country” (sakoku) policies. Culturally, Tokugawa Japan operated in a Sino-centric world, with the views of Confucian intellectuals like Zhu Xi influencing Japanese intellectuals in the early Tokugawa period. These three factors—multistate political architecture, fief economic competition, and Confucian reasoning—were the cornerstones on which Tokugawa economic thought was erected.
Most Japanese scholarship agrees there was a remarkable expansion in the use of money during the Tokugawa period, copper coinage in particular. As a result, Tokugawa thinkers worried greatly about Japan’s export of silver, gold, and copper. Chapter 2 of the book, authored by Ethan Segal, takes us back to the Kamakura and Muromachi periods and argues that the use of currency in Japan commenced with the import of Chinese coins in the twelfth century, setting the stage for the growing use of coins by religious institutions and other nonstate actors. Basic economics tells us that money—simultaneously a store of value, a medium of exchange, and a unit of account—greases the wheels of commerce and sets the stage for the creation of financial intermediaries. Using this logic, one gathers that Segal’s chapter is designed to establish some kind of historical continuity between medieval Japan and Tokugawa Japan in the sense that burgeoning Tokugawa markets had their origins in an earlier era.
The theme of cutting down on the export of precious metals so the supply of money in circulation could keep pace with the soaring demand for currency generated by an expanding domestic economy in the Tokugawa period is taken up by Ochiai Kō in chapter 4. The argument is that import substitution, bolstering domestic production at the expense of imports, was a major goal of both shogunate and fief policymaking intellectuals. For instance, Satsuma fief and the bakufu took a mercantilist stance on sugar which was largely imported into Japan by the Dutch Verenigde Oostindische Companie (VOC; United Dutch East India Company) operating from its Dejima base in Nagasaki harbor. Both fief and bakufu were active in promoting the production of brown and white sugar and rock candy on the basis of kokueki (“national interest”) arguments, with Satsuma intellectuals construing “national” to mean Satsuma fief and the bakufu thinking about its holdings as a “nation.” In short, mercantilist thought in early modern Japan was grounded in economic competition between the various fiefs and in competition between a specific fief and the bakufu.
Unlike Japan, the Chinese empire was not a multistate system. True, there were regional tensions in China, for example, between north...