The Role of Tradition in Japan's Industrialization: Another Path to Industrialization (review)

The thesis of this book is simple. Japan's successful economic development from the 1880s to the early interwar period depended heavily upon the expansion of traditional, indigenous industries. While foreign technology using large-scale factory production was crucial to the development of many subsectors—cotton textile mills, iron and steel making, chemicals, and electrical machinery production—its importance should not be exaggerated. Rural-based businesses, often employing fewer than five workers, eschewing mechanization, improving upon traditional techniques developed during the Tokugawa era, and flexibly employing farm family members who entered and left the auspices of the workplace depending on the needs of their families, were crucial to Japan's incipient industrialization.

Why were indigenous producers so important? What were the secrets of their success? Reporting the fruits of detailed archival research in the fields of silk reeling, silk weaving, pottery, straw goods, artisan workshops in the machine tools sector, and brewing, this volume pinpoints a number of factors. One set involves the industriousness and skill levels of workers, focusing upon training, incentives written into the wage system, and the rational manner in which farm households offered the services of their members to small-scale, rural-based businesses. A second set revolves around social capital in village and small town Meiji Japan, emphasizing the way firms cooperated in local trade associations that rigorously monitored the quality of the output of member enterprises. Competition and cooperation went hand in hand. A third set stresses the export orientation of many trade associations. A fourth set embeds the analysis in dualism, arguing that the supply of fresh capital being formed nationwide was insufficient to accommodate the exclusive development of manufacturing in capital-intensive large-scale plants and that small businesses developed a symbiotic relationship with larger firms through subcontracting arrangements.

The volume makes its case mainly through ten detailed case studies, each highlighting a different industry or a different region of Japan. Part 2 of the work ("Tradition in Industrialization") deals with five studies demonstrating the vitality of industries originated in the Tokugawa period for the post-1880 era. Part 3 ("Modernization of Traditional Industries") contains two studies showing how and why indigenous sectors changed their techniques and product lines, and Part 4 ("Industry and Regional Community") focuses on the interaction of local society, politics, and economy for the evolution of social capital in rural Japan.

The first part of the volume puts the case studies in perspective. In his introduction, Masayuki Tanimoto lays out the basic definitions and criteria used to determine whether an enterprise is indigenous. A second chapter, by Takanori Matsumoto, presents both national-level estimates on the proportions of the employed population working in indigenous enterprises and factor analysis of successive pre-World-War-II prefecture cross-sections that show that indigenous enterprise employment became more important between the mid-1880s and the mid-1930s, and that it was especially important to rural economies. Excluding employment in farming, fishing, and forestry, Matsumoto's estimates suggest that the proportion of the employed populace working in indigenous enterprises rose from 28.8 per cent during 1886–90 to 34.2 per cent in 1931–35. Industrialization did not doom indigenous businesses. Matsumoto also shows that the scale of businesses in construction and commerce tended to be far larger in heavily urbanized prefectures such as Tokyo, Osaka, and Yokohama than it was within predominantly agricultural prefectures.

Chapter three by Johzen Takeuchi launches Part 2, which is centered on demonstrating the vitality of indigenous business. Takeuchi notes that cheap labor wedded to foreign technology is often cited as the key to this vitality. Drawing upon detailed studies—of cloth, knitted goods, glassware, toys, sugar, and beer—Takeuchi rejects the cheap labor explanation, offering skill formation as an alternative. Worker training is also emphasized in chapter four penned by Satoshi Matsumura. Analyzing the way dualism operated in the silk-reeling industry in Suwa in Nagano Prefecture...