A History of Economic Thought in Japan: 1600–1945 9781350150133, 9781350150164, 9781350150140

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A History of Economic Thought in Japan

SOAS Studies in Modern and Contemporary Japan

SERIES EDITOR: Christopher Gerteis (SOAS, University of London, UK)

EDITORIAL BOARD: Stephen Dodd (SOAS, University of London, UK) Andrew Gerstle (SOAS, University of London, UK) Janet Hunter (London School of Economics, UK) Barak Kushner (University of Cambridge, UK) Helen Macnaughtan (SOAS, University of London, UK) Aaron W Moore (University of Edinburgh, UK) Timon Screech (SOAS, University of London, UK) Naoko Shimazu (NUS-Yale College, Singapore) Published in association with the Japan Research Centre at the School of Oriental and African Studies, University of London, UK. SOAS Studies in Modern and Contemporary Japan features scholarly books on modern and contemporary Japan, showcasing new research monographs as well as translations of scholarship not previously available in English. Its goal is to ensure that current, high quality research on Japan, its history, politics and culture, is made available to an English speaking audience.

Published:

Women and Democracy in Cold War Japan, Jan Bardsley Christianity and Imperialism in Modern Japan, Emily Anderson The China Problem in Postwar Japan, Robert Hoppens Media, Propaganda and Politics in 20th Century Japan, The Asahi Shimbun Company (translated by Barak Kushner) Contemporary Sino-Japanese Relations on Screen, Griseldis Kirsch Debating Otaku in Contemporary Japan, edited by Patrick W. Galbraith, Thiam Huat Kam and Björn-Ole Kamm th Politics and Power in 20 -Century Japan, Mikuriya Takashi and Nakamura Takafusa (translated by Timothy S. George) Japanese Taiwan, edited by Andrew Morris Japan’s Postwar Military and Civil Society, Tomoyuki Sasaki

The History of Japanese Psychology, Brian J. McVeigh Postwar Emigration to South America from Japan and the Ryukyu Islands, Pedro Iacobelli The Uses of Literature in Modern Japan, Sari Kawana Post-Fascist Japan, Laura Hein Mass Media, Consumerism and National Identity in Postwar Japan, Martyn David Smith Japan’s Occupation of Java in the Second World War, Ethan Mark Gathering for Tea in Modern Japan, Taka Oshikiri Engineering Asia, Hiromi Mizuno, Aaron S. Moore and John DiMoia Automobility and the City in Japan and Britain, c. 1955–1990, Simon Gunn and Susan Townsend The Origins of Modern Japanese Bureaucracy, Yuichiro Shimizu (translated by Amin Ghadimi) Kenkoku University and the Experience of Pan-Asianism, Yuka Hiruma Kishida Overcoming Empire in Post-Imperial East Asia, Barak Kushner and Sherzod Muminov

Imperial Japan and Defeat in the Second World War, Peter Wetzler

Gender, Culture, and Disaster in Post-3.11 Japan, Mire Koikari Empire and Constitution in Modern Japan, Junji Banno (translated by Arthur Stockwin) A History of Economic Thought in Japan, Hiroshi Kawaguchi and Sumiyo Ishii (translated by Ayuko Tanaka and Tadashi Anno)

iv 

A History of Economic Thought in Japan 1600–1945 Hiroshi Kawaguchi and Sumiyo Ishii Translated by Ayuko Tanaka and Tadashi Anno

BLOOMSBURY ACADEMIC Bloomsbury Publishing Plc 50 Bedford Square, London, WC1B 3DP, UK 1385 Broadway, New York, NY 10018, USA 29 Earlsfort Terrace, Dublin 2, Ireland BLOOMSBURY, BLOOMSBURY ACADEMIC and the Diana logo are trademarks of Bloomsbury Publishing Plc First published in Great Britain 2022 Copyright © Hiroshi Kawaguchi, Sumiyo Ishii, Ayuko Tanaka and Tadashi Anno 2022 Hiroshi Kawaguchi, Sumiyo Ishii, Ayuko Tanaka and Tadashi Anno have asserted their right under the Copyright, Designs and Patents Act, 1988, to be identified as Author and Translator of this work. Cover image: Katsushika Hokusai “Ukie To‒ eizan chu‒do‒ no zu” (Central Hall of Kan’ei-ji Temple in Edo), from the collection of the National Diet Library, Tokyo All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. Bloomsbury Publishing Plc does not have any control over, or responsibility for, any third-party websites referred to or in this book. All internet addresses given in this book were correct at the time of going to press. The author and publisher regret any inconvenience caused if addresses have changed or sites have ceased to exist, but can accept no responsibility for any such changes. Every effort has been made to trace the copyright holders and obtain permission to reproduce the copyright material. Please do get in touch with any enquiries or any information relating to such material or the rights holder. We would be pleased to rectify any omissions in subsequent editions of this publication should they be drawn to our attention. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Names: Kawaguchi, Hiroshi, 1951- author. | Ishii, Sumiyo, author. Title: A history of economic thought in Japan: 1600-1945 / Hiroshi Kawaguchi and Sumiyo Ishii; translated by Ayuko Tanaka and Tadashi Anno. Other titles: Nihon keizai shiso¯shi. English Description: London; New York: Bloomsbury Academic, 2022. | Series: SOAS studies in modern and contemporary Japan | Includes bibliographical references and index. Identifiers: LCCN 2021029815 (print) | LCCN 2021029816 (ebook) | ISBN 9781350150133 (hardback) | ISBN 9781350150140 (pdf) | ISBN 9781350150157 (ebook) Subjects: LCSH: Economics–Japan–History. | Japan–Economic policy. | Japan–Economic conditions. Classification: LCC HB126.J3 K37713 2022 (print) | LCC HB126.J3 (ebook) | DDC 330.0952–dc23 LC record available at https://lccn.loc.gov/2021029815 LC ebook record available at https://lccn.loc.gov/2021029816 ISBN: HB: 978-1-3501-5013-3 ePDF: 978-1-3501-5014-0 eBook: 978-1-3501-5015-7 Typeset by Deanta Global Publishing Services, Chennai, India To find out more about our authors and books visit www​.bloomsbury​.com and sign up for our newsletters.

Contents List of Illustration Preface to the English Edition Preface to the Japanese Edition About the Authors and Translators Notes on Style

xiii xiv xvi xvii xviii

Introduction1 Major Themes of This Book 3 Understanding Economic Thought in Relation to “Core Values” 4 Grasping Continuities and Discontinuities between the Early Modern and Modern Eras 5 Analyzing the Relationship between Indigenous and Imported Ideas 6 Growing Awareness of “Japan” in the World 7 What Is to Come 8 Module 1  The Development of the Theory of Political Economy

1

The Emergence of an Estate-Based Society 13 1.1 From War to Peace 13 1.2 Peasants, Artisans, and Merchants 14

2

Samurai in Time of Peace 16 2.1 Neo-Confucianism and Japan 16 2.2 Yamaga Sokō as Military Scientist and Confucian Scholar 18 2.3 Sokō’s View on the Duty of the Samurai 19 2.4 The Emergence of the Theory of Political Economy (Keisei Saimin Ron) 20

3

Administering the Society and Saving the People through De-Marketization 22 3.1 Urban Prosperity and Samurai Indebtedness 22 3.2 Kumazawa Banzan 23

Contents

viii 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 3.2.7

4

Banzan’s Studies and Experience in Administration Banzan’s Moral Ideal: The Way Moral Degeneracy and Economic Destitution Applying the Way Flexibly to Concrete Situations Prosperity before Morality Settlement of Samurai in the Countryside From Wang Yang-ming Thought to the Zhu Xi School

23 25 28 29 31 32 35

De-Marketization through Shogunal Power 36 4.1 Ogyū Sorai and the Akō Incident 36 4.2 Rejecting the Zhu Xi School 37 4.3 The Duty of Rulers: Creating and Practicing the Way 38 4.4 Sorai’s Assessment of Tokugawa Rule: The Absence of Proper Institutions 41 4.5 Establishing Proper Institutions: Settlement of Samurai in the Countryside 41 4.6 Replacing the Market with Taxation 43 4.7 Prices and Money 44

Module 2  A Turn toward Economic Pragmatism

5

6

A Turning Point in the Theory of Keisei Saimin 5.1 Dazai Shundai and the Ken’en School 5.2 Shundai’s Understanding of Human Nature: Competitive Mind 5.3 Shundai’s Interpretation of the Way of the Sages 5.4 Coping with a Time of Decline: Lao Tzu’s Non-Action 5.5 Extending the Life of a State: Industrial Promotion at the Domainal Level

51 51 52 52 53 55

Shogun Yoshimune and Pragmatic Officials 57 6.1 Fiscal Crisis and Reminting of Coins 57 6.2 The Kyōhō Reforms 59 6.2.1 Increase in Rice Tax 59 6.2.2 Reversal of the Debasement Policy 60 6.2.3 The Problem of Commodity Prices 60 6.2.4 The Gembun Debasement Policy and Yoshimune’s Discontent 61 6.2.5 Monetization of Annual Rice Tax 62

 Contents ix

7

Tanuma Okitsugu and the Era of Intellectual Pluralism 64 7.1 Tanuma Okitsugu 64 7.1.1 A Corrupt Politician? 64 7.1.2 Response to Fiscal Crisis 65 7.1.3 Currency Policy 65 7.2 Intellectual Currents in the Second Half of the Eighteenth Century 67

8

The Way of the Market and Domainal Interest 8.1 Kaiho Seiryō 8.1.1 Seiryō as a Management Consultant 8.1.2 The Way of the Market 8.1.3 Seiryō’s Assessment of the Contemporary Situation: Daimyō in Debt 8.1.4 Fiscal Reform Measures 8.1.5 Seiryō as a Descendant of the Sorai School 8.2 The Idea of Kokueki 8.2.1 Financial Conditions of Warrior Households and Domainal Interest 8.2.2 An Alternative Understanding of Domainal Interest

70 70 70 71 72 72 74 75 75 75

Module 3  Estate-Based Society and Occupational Duty

9

Occupational Duty and the Self-Assertion of Peasants, Artisans, and of Merchants 79 9.1 Social Contributions of Peasants, Artisans, and Merchants 79 9.2 The Ethics of Work 80 9.2.1 Miyazaki Yasusada 80 9.2.2 Nishikawa Joken 83 9.2.3 Ishida Baigan 86

10 Economic Thought in a Stationary Society 91 10.1 10.2 10.3 10.4

Stability over Growth Useful Treasures and Occupational Duties Moral Economy of Tokugawa Japan Estate-Based Society and the Significance of Occupational Duty

91 92 94 97

x

Contents

Module 4  Reconceptualizing Japan and the World

11 Japan and National Learning 101 11.1 Decentering of China and Ascent of Japan 11.2 Motoori Norinaga and National Learning 11.2.1 National Learning 11.2.2 Norinaga’s Background and Basic Intellectual Approach 11.2.3 Delegation of the Authority to Govern 11.2.4 Norinaga’s Attitude toward Politics 11.2.5 Norinaga in the History of Economic Thought in Japan

101 103 103 104 106 106 107

12 Changes in the Japanese Worldview in the Nineteenth Century 109 12.1 Structural Change in the Japanese Economy 12.2 Changing Image of the West 12.3 Changes in the International Environment and in the Japanese Worldview

109 111 113

13 Arguments for Opening Up the Country 116 13.1 Weakening Basis of Seclusion Policy 13.2 Honda Toshiaki’s Argument for Opening Up the Country 13.3 Yokoi Shōnan’s Argument for Opening Up the Country

116 117 120

Module 5  Modern Japan: Its Birth and Economic Vision

14 East Asian vs. Western Views on Human Beings and Society 127 14.1 Continuity and Discontinuity between Early Modern Japan and Modern Japan 14.2 East Asian Views on Human Nature and Society 14.3 Western Views on Human Nature and Society 14.4 Classical Political Economy 14.5 Introduction of Western Economics to Japan

127 129 130 132 133

15 Intellectuals of the “Meiji Enlightenment” 135 15.1  The Political Context of Economic Thought and Policy 15.2 Educating the New Generation in National Interest 15.3 Fukuzawa Yukichi 15.4 Takata Sanae

135 138 138 143

16 The Meiji State and the Promotion of Industry 148 16.1 The First Steps in the Economic Policy of the Meiji State 16.2 The Establishment of a New Currency System 16.3 State Promotion of Industry

148 149 150

 Contents xi 16.4 Entrepreneurship by the State 16.5 The Silver Standard and the Establishment of the Bank of Japan

151 153

17 Visions for Policy on Industry and Trade 155 17.1 Taguchi Ukichi 17.1.1 Upbringing and Intellectual Orientation 17.1.2 Taguchi’s Economic Ideas 17.1.3 A Scholar Who Stood on Two Legs 17.2 Inukai Tsuyoshi 17.2.1 Upbringing and Intellectual Orientation 17.2.2 Protectionism for a “Country with Inferior Civilization” 17.2.3 The Role and Purpose of Politics

155 155 158 159 161 161 163 165

Module 6  Managers of Modern Industrial Enterprises

18 Higher Education and Entrepreneurship 169 18.1 18.2 18.3 18.4

The Emergence of Modern Enterprises in Japan Higher Education and the Rise of Modern Enterprises Sons of Wealthy Provincial Families in Higher Education Economic Thought and Activities of Regional Entrepreneurs

169 170 171 175

19 Organizers of Entrepreneurial Activities 179 19.1 Shibusawa Eiichi 19.1.1 Background and Career 19.1.2 The State and the Occupational Duty of Entrepreneurs 19.1.3 The Analects as a Means of Attaining Wealth 19.2 Itō Yōzō 19.2.1 Background and Career 19.2.2 Yōzō’s View on Human Beings and Society 19.2.3 Contributing to the Advancement of the Region and the Country

179 179 180 181 183 183 184 186

20 New Industries of the Twentieth Century 188 20.1 Mutō Sanji 20.1.1 “Japanese-Style Manager” of a Cotton-Spinning Company 20.1.2 Mutō’s View on Human Beings and Society 20.1.3 The Occupational Duty of the “Head Clerk” 20.2 Tsutsumi Yasujirō 20.2.1 The Rise of the New Middle Class and New Industries 20.2.2 “Gratitude” and “Service”

189 189 190 191 193 193 195

Contents

xii Module 7  Questioning Modernity

21 Critical Perspectives on Japanese Capitalism 199 21.1 Three Types of Critique of Capitalism in Modern Japan 21.2 Nakae Chōmin 21.3 Abe Isoo 21.3.1 Christianity and Concern for Social Problems 21.3.2 Abe as a Christian Socialist

199 201 207 207 209

22 Social Policy and Japanese-Style Marxism 211 22.1 Socialism and Social Policy in Taishō Japan 22.2 Fukuda Tokuzō: A Liberal Advocate for Social Policy 22.3 Yamada Moritarō and the Controversy over Japanese Capitalism

211 212 218

23 Japan in an Era of Crises 224 23.1 Changing International and Domestic Environment after the First World War 23.2 International Cooperation and Industrial Rationalization 23.3 Arguments for Lifting the Gold Embargo at New Parity 23.4 The Great Depression and the Manchurian Incident 23.5 The Idea of a New Regional Order 23.6 Japan’s Drift toward a Disastrous War References Index

224 226 229 231 232 234 239 253

Illustration Maps   1

Japan’s Old Provinces, 13C–19C

xix

Tables  7.1 Coins in the Tokugawa Era 14.1 Early Meiji Translations of Major Western Works on Political Economy 15.1 Political Struggles in Early-Meiji Japan: Some Leading Figures and Their Careers 18.1 Prominent Hired Managers at Mitsubishi and Mitsui Groups 18.2 Occupational Distribution Percentage of Graduates of Private/Public Colleges

66 128 137 172 174

Preface to the English Edition It is our great pleasure to see the publication of the English translation of Nihon keizai shisōshi, which originally came out in 2015. Our main purpose in having this book translated is to introduce the English-language readers to the history of economic thought in Japan, with the hope that this will arouse more interest in Japan and the Japanese among the readers. It is also hoped that the English edition will allow the ideas expressed in this book to be discussed and critiqued by a wider readership than was possible with the Japanese edition. We hope that such criticisms will open up new perspectives from which the authors may reassess their own understanding of the book’s subject. Japanese students of Japanese economic thought have been rather reluctant to publish the results of their research in English. The idea of having our book translated even seemed a bit eccentric in our academic culture. When one of the authors (Ishii) floated the idea, the other author (Kawaguchi) did not take it too seriously. What changed the latter’s mind was the encouragement he received from Yokoyama Akinori, a former student of his at Waseda University, and currently a staff member at Waseda. This English edition would not have seen the light of day if he had not, during a chance encounter with Kawaguchi, given a strong push to turn the idea into reality. We also thank Shozō Miyamoto of Keisō Shōbō for readily agreeing to have the book translated. We are deeply grateful to Professors Bettina Gramlich-Oka (Sophia University) and Qunyi Liu (Peking University), our coauthors in the Japanese version of the book. Although their chapters on the development of Western and East Asian scholarship on the history of Japanese economic thought were not included in this English translation, their generous support was indispensable in the publication of the English translation. We also thank Ayuko Tanaka and Tadashi Anno for translating this book. We chose them as our translators without hesitation as we admired their conscientious and meticulous work in the past. Special thanks are due to Mark Metzler, Professor of History at University of Washington, who kindly helped us realize this project. His generous advice was very useful in helping us navigate the world of academic publishing in the English language. We are deeply grateful also to Chris Gerteis, Senior Lecturer at SOAS, who encouraged us to publish this book as part of SOAS Studies in Modern and Contemporary Japan, for which he serves as the series editor. May we also express our thanks to Bloomsbury Publishing, and to our editors Rhodri Mogford and Laura Reeves. Without their decision to accept this book, the chance of sharing the results of our research with English-language readers would have been lost. We would also like to express our gratitude to Waseda University for providing us with English Academic Book Publication Support Subsidy. We also thank Brill Publications for allowing us to use some materials originally published in Bettina Gramlich-Oka and Gregory Smits, eds., Economic Thought in Early-Modern Japan (Leiden: Brill, 2010) in this volume.

 Preface to the English Edition xv Numerous people and organizations have provided support for this project, and we thank each and every one of them. In closing, we would like to quote a piece of Oriental wisdom from the classic Chinese text Mencius (Book II, Part B, Section 1). Though Mencius spoke of what matters in warfare, his observation on what is most important is applicable elsewhere, including in academic work: Favorable weather is less important than advantageous terrain, but most important of all is harmony among people. Hiroshi Kawaguchi and Sumiyo Ishii June 2020

Preface to the Japanese Edition As its title indicates, this book provides a survey of the history of economic thought in Japan from the seventeenth century to the Second World War. It is intended primarily for students studying economics, commerce, business management, or history, although it is hoped that the general public will also find much of interest. Strangely, most books published in Japan regarding “economic thought” deal with Western economic thought, and only few titles are available on the history of economic thought in Japan. This does not mean that the subject is not studied. Many research articles and academic books are published each year on specific topics. But few general surveys are available. This book is designed to fill this gap, and to present some of the key results of specialized scholarship in an accessible form. Naturally, this book covers many of the “major” thinkers who are unavoidable in any survey on the subject. At the same time, included also are some “non-standard” figures such as magistrates familiar to the reader from samurai dramas, and littleknown entrepreneurs from the Meiji, Taishō, or Shōwa eras. To the extent possible, the authors have attempted to quote extensively from the writings of those thinkers, so that the readers can directly appreciate their ideas. Understanding the ideas of people who lived long ago and who had quite a different set of knowledge base and assumptions is not easy. Some of the ideas discussed may strike the readers as odd. Beginning students will no doubt find some parts of this book difficult to digest upon first reading. But once the readers overcome the initial barrier, they will discover that, although the thinkers from the past spoke a somewhat different language, and spoke in an odd tone, in the end they were grappling with some of the enduring issues that confront all human societies and economies, including our own. The ideas they have bequeathed to us, therefore, are not “dead” ideas to be catalogued and studied for antiquarian interest only. Rather, their ideas often raise questions that remain relevant today. If this volume succeeds in bringing to life the ideas of past thinkers and in helping the readers to start a conversation with them, then the purpose of this book will have been accomplished. This book could not have been published in its current form without the expert assistance of Mr. Miyamoto Shōzō of Keisō Shobō. More than twenty years have passed since one of the authors of this volume (Kawaguchi) first met him in 1991. This is the third book that Kawaguchi is publishing with his help, and, as in the past, Mr. Miyamoto has participated in the workshops organized to improve the manuscript, and has patiently seen through its completion. For this we are deeply grateful to him. The Authors June 2015

About the Authors and Translators Hiroshi Kawaguchi (Chapters 1–13, 16, 23) is Professor at the Faculty of Political Science and Economics, Waseda University. He has written and edited a number of books in Japanese on the history of Japanese economic thought, including Economic Thought in the Edo Period (1992); A Social and Economic History of Higher Education (2000); and The Universe of Economic Thought in Japan (2004). Sumiyo Ishii (Introduction, Chapters 14–15, 17–22) is Associate Professor at the Faculty of Economics, Daito Bunka University. She has written a number of articles and book chapters, with a focus on the ideas of entrepreneurs in modern Japan. In English, she has contributed to the Routledge Handbook of Japanese Business and Management (2016) and to Economic Thought in Early-Modern Japan (2010). Ayuko Tanaka is a translator specializing in academic translation in history and the social sciences. Her previous translations (from English to Japanese) include R. A. Scalapino, From Leavenworth to Lhasa (2010), Economic Thought in Early-Modern Japan (2013); and Bettina Gramlich-Oka et al., Monumenta Nipponica: Eighty Years and Counting (2020). Tadashi Anno is Professor of Political Science at the Faculty of Liberal Arts, Sophia University. His research focuses on international relations and the problems of nationalism. He is the author of National Identity and Great-Power Status in Russia and Japan: Non-Western Challengers to the Liberal International Order (2018) and a number of book chapters and journal articles, He is also a co-editor of The Dynamics of Globalization (in Japanese, 2007).

Notes on Style In Romanizing Japanese words, including personal names, we have followed the revised Hepburn system. Exceptions are made for some place names and other words commonly used in English (Tokyo instead of Tōkyō). In Romanizing Chinese words, we have followed the Pinyin system. In the text of this book, East Asian names appear in the East Asian order—that is, last names first, and first names last. This rule also applies to the Reference list, including cases where accepted style requires listing first names first. The only exceptions to this rule concern the names of the authors and translators of this book in the title page and in the list of authors/translators, which appear in the Western order. The Chinese characters for the names of Japanese and Chinese persons, and their birth/death years, are indicated where the person in question is discussed most extensively in the text, and also in the index at the end of the volume. [ . . . ] Square brackets enclose insertions that appear in the original quoted passages. ‹ .  .  . › Angle brackets enclose words and passages inserted in quotations by the authors or translators of this volume. ( . . . ) Parentheses, apart from explanations and clarifications in the text, enclose explanations of Japanese/Chinese terms/phrases by the translators, cross-references to other sections within this volume, as well as in-text references to sources listed in the References. For terms of Chinese origin that have alternative readings in Chinese and Japanese, Japanese reading is indicated. The neo-Confucian concept of “principle” 理 is pronounced li in Chinese, and ri in Japanese. In such cases, ri is used throughout. There are a few exceptions where the Chinese reading is used, when the terms are well known to English readers in the Chinese form. For instance, the Daoist concept of ying-yang 陰陽 is read as in’yō in Japanese, but the Chinese reading is used.

Map 1  Japan’s Old Provinces, 13C–19C.

xx

Introduction

In recent years, it has often been claimed that capitalism is at a major turning point (Uzawa 2000, Nakatani 2008). One ground for such a claim is that our experience of the recent past has laid bare the weaknesses of neoliberal capitalism, which has guided the world economy since the 1980s. Clearly, some readjustment is needed with respect to the roles of the market and of the government, and with respect to the balance between competition and regulation. From a larger perspective, however, the current historical moment may signify something bigger—a turning point for the modern industrial civilization as such. Developments such as global warming, the explosive increase in the global population, and the spread of pandemic diseases are compelling us to reconsider the prevalent view on the economy, which has prioritized economic growth above all else. The priority assigned nowadays to environmental protection is driving the rapid turn toward electric vehicles, and auto companies are rushing to keep up. Technology today is under intense pressure to transform itself—from being an instrument to increase human power over nature, into something that allows humans to flourish without destroying the natural environment in which we live. Apart from external limits imposed by environmental factors, pursuit of economic growth today also faces questions of more reflective nature: Will growth really bring happiness to people? In affluent societies that have left behind economic scarcity, postmaterialist values have spread. People’s interests and values have become more diverse. In such societies, the notion that further economic growth will bring greater happiness has diminished appeal, even though the same notion continues to appeal to billions of people in less developed parts of the world. Modern economics since the rise of the neoclassical paradigm has focused, above all, on questions of growth and distribution, leaving aside thorny questions about the moral aspects of the economy or about the impact of economic activities on our public life. The reason behind this tendency was the tacit, but widely accepted, assumption that many problems in modern society can be solved through economic growth, and optimal distribution of its fruits. Rapid advance in science and technology in the modern era, coupled with the development of the market economy, set in motion an unprecedented growth in the economy, and previously unthinkable, massive improvement in the living standard of the population. Under such a condition, it was perhaps natural that the notion that many, if not most, problems in society could be solved through economic growth and fair distribution of its results gained wide influence. With increasing faith in the power of economic growth, however, older questions were sidelined. Questions concerning the purpose of wealth, the relationship between economy and morality, the place of economy in the life of people, whether

2

A History of Economic Thought in Japan

virtues cherished in traditional societies have become irrelevant relics of the past, or even turned into dangerous vices, were relegated to the back burner. Japan was no exception in this regard. After the country’s defeat in the Second World War, the Japanese economy achieved quick revival, followed by two decades of “miraculous” growth. In this process, both government policy and economic thinking in Japan prioritized rapid growth of the economy and the widest possible distribution of its fruits, whereas questions concerning the impact of growth on local communities, on the social and family life of the people, or on the shape of public life in the country tended to be de-emphasized. Yet, in an age when the simple equation of economic growth and greatest happiness of the greatest number no longer seems to apply, economic thought as opposed to economics in the aforementioned sense assumes greater import. Age-old questions concerning the meaning of economic life are now given a new sense of urgency. Today, perhaps, economic questions once again must be discussed in connection with other aspects of our lives, including our relationship to the natural environment, ethical life, social life, and family life. This book, published originally in Japanese (Kawaguchi et al. 2015),1 offers a survey of the history of economic thought in Japan from the Tokugawa to the early Shōwa era. The survey begins in the Tokugawa era, because it was during this period that an “economic society” began to be formed in Japan.2 The account is carried up to 1945, a period when historians today can study with sufficient distance for scholarly analysis. Such an exercise, like any historical interpretation, will not offer any direct answers to the problems that we face today in the context of postindustrial society. Yet, we believe that our excursion into the past will help us unearth questions and perspectives which we have long forgotten, and relativize perspectives which we have come to take for granted. Another significant feature of this book, particularly for Western readers, is that it provides a sustained account of the history of economic thought in a “non-Western” country whose economic history since the early modern era has demonstrated significant parallels with the Western world. Like many Western states in the same period, Japan during the early modern and modern eras witnessed the development of a monetized market economy, the rise of advanced financial systems, and the emergence of large cities with rich consumer culture, the rise of modern industry and sizable working class, among other developments. Against this background, economic T h e present volume is a translation of Part 1 of the original Japanese edition. Part 2 of the Japanese edition, containing two chapters on the development of Western and Asian scholarship on the history of Japanese economic thought, was not included in this translation. While everything of substance in Part 1 of the original edition has been kept (except for the Introduction, which has been rewritten), a number of changes have been introduced to this edition to help the readers’ understanding. Chapters have been grouped into modules, and the sequence of chapters has been rearranged. Also, new materials have been added to many of the chapters. 2 T h e term “economic society” was introduced by Robert Heilbroner, in a book originally published in 1963 (Heilbroner and Milberg 2011). But here we follow Hayami Akira’s (1973, 14–28) definition of the term, according to which an economic society refers to a society in which people have a general inclination to behave based on economic motives, so as to achieve the highest possible level of utility at the lowest possible cost. 1

 Introduction 3 thought in Japan since the seventeenth century reached a relatively high degree of sophistication. Readers of this volume will note that in many ways, Japanese thinkers grappled with the same sort of problems that contemporaneous Western thinkers were faced with. Yet, at the same time, even while approaching the same sort of problems as their Western contemporaries, Japanese thinkers built their ideas on quite a different intellectual foundation. For instance, the view of human being and society implicit in Confucianism contrasted sharply with the more individualistic view characteristic to Western thought. For this reason, economic thought in early modern and modern Japan is often played in a different key, even when the melody being played is similar to the one familiar to students of Western economic thought. While modern Japan experienced massive importation of Western economic ideas, imported ideas were often grafted onto the foundation of indigenous ideas inherited from the past. Consequently, imported ideas were sometimes transformed into something quite unlike the original Western versions. Conversely, ideas that are quite different on the surface could perform similar social functions in Japan and in some Western states. In reading this book, the readers might try to understand the experience of Japan, taking as point of reference the economic history and economic thought of the region they are familiar with. It is also possible that the readers, having become familiar with the case of Japan, might look at the story of their region from a different angle. A major reason why the authors decided to publish the English edition of this book was precisely to facilitate and to encourage such comparisons and contrasts.

Major Themes of This Book There is voluminous literature on the history of economic thought in Japan. Yet, much of this literature is in Japanese,3 and few general surveys are available in English—or in Japanese, for that matter. In fact, no other work in English, Japanese, or any other language covers quite the same ground as this book does.4 The main purpose of this book, therefore, is to provide an overview of the development of economic thought in Japan during the period under consideration. But the book does not just provide basic information on the subject. It is intended to be an analytical work that advances a distinctive interpretation of this history. Specifically, our approach to the subject has the following characteristics: For a review of the Japanese literature, see Sugihara (2000); Komuro (2003); Yanagisawa (2004). For a list of English-language works on the history of Japanese economic thought (especially in the early modern era), see the references section of Gramlich-Oka and Smits (2010). 4 For the past few decades, Tessa Morris-Suzuki’s A History of Japanese Economic Thought (MorrisSuzuki 1989) has served as the standard English-language text on the subject. Morris-Suzuki’s work provides a long-term historical survey (from the Tokugawa era to the 1970s) from an integrated viewpoint. But it focuses on the history of economics in modern Japan, perhaps in an attempt to find the key to understanding modern Japan’s rise to the status of an “economic superpower,” and the Tokugawa era is treated as a preface to the history of the post-Meiji era. By contrast, this book’s account seeks to understand economic thought in the Tokugawa as well as modern era “in their own right,” giving roughly equal weight to the Tokugawa and to the modern eras. 3

4

A History of Economic Thought in Japan

1) By analyzing economic thought in relation to the “core values” of the thinkers (often shared by many thinkers of a particular period), this book constructs a consistent narrative that spans the early modern (Tokugawa) and modern eras, making it possible for the readers to grasp the overall development of economic thought in Japan. 2) Instead of treating the early modern era as a preparatory stage for modern Japan’s economic growth, this book seeks to understand both early modern and modern Japan’s economic thought in their own right, elucidating both elements of continuity and of discontinuity between the two. 3) With regard to economic ideas imported from the West since the end of the Tokugawa era, this book explains how those ideas were “Japanized” as they were introduced. Since ancient times, ideas imported into Japan tended to be understood, misunderstood, accepted, ignored, or rejected, depending on the political, economic, and social conditions of the period. In this sense, Western ideas were subjected to the same fate as were ideas imported previously into Japan. 4) In addition to intellectuals, this book seeks to broaden the coverage to include policymakers and business persons, including those who are little known even in Japan. 5) Through liberal use of quotations of original sources, many of which previously unavailable in English, this book makes a conscious effort to expose the readers to the voices of those who contributed to the development of economic thought. In the following, we shall elaborate on some of these themes in more detail.

Understanding Economic Thought in Relation to “Core Values” Economy is a multifaceted phenomenon, and the content of economic thought can be quite diverse, depending, among other things, on which facet of the economy a thinker focuses on. Scholars purporting to write a history of economic thought, especially one that covers a long stretch of history, must therefore answer the question of how it is possible to weave such diverse economic ideas into a coherent historical account. This book seeks to accomplish that task by understanding economic thought in relation to the “core values” held by the individuals concerned. By “core values” we mean the ultimate value criteria underlying the ideas of each thinker. “Core values” in this sense were often shared widely by thinkers in a given society during a particular period. For instance, in some Protestant parts of Europe observed by Max Weber in the late nineteenth century, a religiously oriented attitude toward the economy, characterized by devotion to one’s “calling,” coupled with ascetic rejection of excessive consumption, may have been prevalent (Weber 1958). To the extent “core values” are shared widely by thinkers in a particular society at a particular time period, a focus on core values provides a useful angle from which to understand the general characteristic of economic thought in a particular society. In the case of Japan we find that, for most thinkers of the Tokugawa era, morally perfecting both the person and the society—an ideal with deep roots in Confucian

 Introduction 5 ideas influential at the time—served as the ultimate value standard based on which individual thinkers assessed economic as well as other questions. Of course, this is not to say that each and every thinker of the Tokugawa era subscribed to such ideas, or that those who did agreed on what exactly was meant by moral perfection of the person and of the society. But a number of scholars have pointed out that for most thinkers of the Tokugawa era, the goal of moral improvement of both the person and the society constituted their core value (Nozaki 1979; Tsujimoto 1990; Kawaguchi 2004a; Hiraishi and Kim 2010). Economic thinkers of the Tokugawa period regarded the economy as an important means for realizing this ideal; putting the economy in order was regarded as a precondition (a central one at that) for moral improvement. While the notion that the economy is a means to achieving moral goals was constant throughout the Tokugawa era, we also find significant change in the thinkers’ attitude toward the market. Thinkers of the early Tokugawa era sought to achieve their moral purposes by putting constraints on or even abolishing market relations, but thinkers from the mid- to late Tokugawa era took a different stance, seeking to regulate and to utilize the market for the realization of broader moral purposes. By contrast, for most Japanese thinkers of the modern era (up to the Second World War), “national interest” (kokueki)—or the survival and development of Japan as a nationstate—became the “core value.” Economic activities now came to be assessed by individual thinkers and by the society as a whole from the standpoint of their contribution to the wealth and power of the Japanese nation-state. Interestingly, the term kokueki came into use already in the latter part of the eighteenth century. At that time, however, kokueki denoted the economic interest of the daimyō (domain lords), and the advancement of kokueki was the exclusive concern of the daimyō and domain administration. By contrast, in modern Japan, ordinary people were expected to contribute to the national interest. As in the Tokugawa era, the economy in modern Japan continued to be “enmeshed” in a larger sociopolitical context, and economy continued to be seen as something that serves a broader “moral” purpose. But the “moral” purpose of the economy in modern Japan was defined in terms of the advancement of Japan’s national interest. In the modern era, economic activities as well as the study of the economy came to be valued as instruments for the survival and development of the nation-state. In this connection, it is important to note that a large portion of the people in Japan during the modern era continued to entertain the idea of one’s “occupational duty” that had been fostered during the Tokugawa era. Individuals thus had to recognize their own proper social role and perform them dutifully. But unlike in the Tokugawa era, the ultimate objective was no longer understood as building moral people and moral society. Rather, individuals’ performance of their social roles was supposed to contribute to the goal of sustaining and further developing the Japanese nation-state.

Grasping Continuities and Discontinuities between the Early Modern and Modern Eras In studying the history of economic thought in Japan, interpreting the early modern and modern eras from a unified and balanced perspective has been a major challenge. Changes introduced by the Meiji Restoration were so extensive that researches into

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A History of Economic Thought in Japan

the history of economic thought in Japan tended to be divided into those dealing with early modern era and those dealing with post-Restoration era. While researchers of the Tokugawa era were inclined to focus on the history of economic thought, researchers on modern Japan tended to focus on the history of economics. Such methodological bifurcation has made it difficult to examine the early modern and modern eras from a unified perspective, and to determine the extent of continuity and discontinuity between the two eras. In this book, we focus on economic thought as distinguished from economics in the sense of specialized and systematic academic endeavor, and analyze the evolution of economic thought both before and after the Restoration. By focusing on the “core values” underlying economic thought, we hope to give one answer to the question of continuity and discontinuity between the early modern and modern eras in Japanese economic thought. Another problem in the existing literature has been the tendency to discuss the early modern era only as a preparatory stage for modern economic growth. This tendency is understandable given that rapid economic growth in the modern era is what has attracted the attention of most observers of the Japanese economy. It is indeed possible to find in Tokugawa Japan’s economic thought elements that were similar to concepts in modern Western economics, and ideas that prepared the ground for the introduction of modern economic ideas. However, such an approach can hardly do justice to the ideas of the Tokugawa era. Economic thought of Tokugawa Japan had its own meaning and logic. This book seeks to examine both early modern and modern economic thought in their own right, by studying them in connection with the “core values” of the time. Such an approach, it is hoped, would also help us understand the characteristics of the main trends of economic thought in a given period in comparison with earlier and later periods.

Analyzing the Relationship between Indigenous and Imported Ideas During the Tokugawa era, imported ideas enjoyed considerable influence. NeoConfucian theory of the so-called Zhu Xi school had a particularly significant impact in that it instilled in the Japanese people the notion that the formation of moral persons and of moral society is the proper purpose of government. Yet Chinese thought was not imported to Japan without modification. What Japan accepted was a “Japanized” version of Chinese ideas (Bitō 1961; Tahara 1967; Watanabe 1985; Kawaguchi 2010b). This book will show that the same thing happened with respect to the importation of Western ideas during the Meiji era. Like Chinese ideas during the Tokugawa era, Western ideas were accepted selectively, merged with indigenous ideas, and often took root in a Japanized form. One example is the introduction of classical political economy. Though the ideas of British political economists stood on the basis of individualism, they were introduced into Japan as an instrument for the maximization of national rather than individual interest. Partly due to the spread of a Japanized form of Confucianism, the notion that individual persons are embedded in broader social contexts from which they are inseparable had taken deep root in

 Introduction 7 Tokugawa Japanese society. When classical political economy was imported into such a society, it was perhaps inevitable that it took a different form than it did in its original home in Britain. Obviously, economic thought in early modern Japan did not develop so as to prepare the soil for acceptance of modern Western ideas. Naturally, there were also ideas not easily compatible with imported ideas. In modern Japan after the Meiji Restoration, imported ideas coexisted with indigenous thought, and the two repelled against each other at times, while merging at other times. One of the tasks of this book will be to consider why certain ideas were imported while others were not, how imported ideas were Japanized and grafted on to elements of indigenous thought.

Growing Awareness of “Japan” in the World In the course of transition from the early modern to the modern era, preservation and prosperity of Japan as a nation-state emerged as the core value espoused by many thinkers. This was not accomplished by some political fiat or artificial intellectual exercise. Rather, it reflected the organic growth of national consciousness within a changing international environment. Economic thought in Japan also developed in a way which corresponded to the growth of Japanese national consciousness, and which adapted to the changes in the global reality. Tracing how changing relations between Japan and the world influenced economic thought in Japan is another theme of this book. China occupied a central position in Japanese worldview in the ancient, medieval, and early modern eras. But starting in the late eighteenth century, China’s centrality in the world was questioned as the West began to occupy an important place in the Japanese imagination. As the Japanese became more conscious of the world outside, they became more aware of Japan itself. The development of “National Learning” (kokugaku), which claimed uniqueness and superiority of Japan over other lands, is one indication of this trend. In this book we show that, starting in the late eighteenth century, new theories of “political economy” (keisei saimin) began to emerge which regarded China as a negative example, and which instead turned to the West as a model of prosperity accomplished through the promotion of domestic industry and foreign trade. Such arguments sought increasingly to promote the interests of Japan as a whole, rather than of individual domains. While “national interest” emerged as the core value in modern Japanese thought, the definition of Japan’s “national interest” varied depending on Japan’s position in the international environment. Until the beginning of the twentieth century at least, Japan was a small and relatively weak nation in the global arena. Under such a condition, an urgent task for Japan was to preserve the country’s independence. For this purpose, Japan pursued a strategy captured by the slogan of “rich country, strong military (fukoku kyōhei 富国強兵).” Importation of Western knowledge and scholarship was part of this strategy. As the First World War ended, and as Japan emerged as one of the “Big Five” in the postwar Peace Conference, however, many Japanese began to see the country as a “first-tier nation (ittōkoku).” During the 1920s, the main current

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A History of Economic Thought in Japan

of economic thought was oriented toward cooperation with Britain and the United States through disarmament and the restoration of the Gold Standard. The Great Depression starting in 1929 marked the end of the liberal phase in Japanese economic thought. Instead of attempting to improve its position within an international order led by the United States and the United Kingdom, the alternative policy of building an autonomous sphere of Japanese influence in Asia gained in credibility. In search for military, political, and economic autonomy, Japan drifted toward international isolation.

What Is to Come After this introduction, the rest of this book is divided into twenty-three chapters grouped into seven modules. It offers a narrative on the history of economic thought in Japan from the Tokugawa era through 1945. Module 1 (Chapters 1–4) discusses the early Tokugawa era. During this period, samurai thinkers began to raise the question on the role of samurai within the broader society. We will discuss the ideas of samurai intellectuals such as Yamaga Sokō, Kumazawa Banzan, and Ogyū Sorai, tracing the emergence of the ideas on keisei saimin (administering the society and saving the people). Module 2 (Chapters 5–8) discusses the further evolution of ideas on keisei saimin in the mid-Tokugawa era. This was a period when the development of a market economy became an irreversible trend, and when new proposals on monetary policy and on promotion of industry were made in response to this trend. Discussed here are the ideas of thinkers and policymakers including Dazai Shundai, Arai Hakuseki, Tokugawa Yoshimune and his retainers, Tanuma Okitsugu, Kaiho Seiryō, and Miura Baien. Module 3 (Chapters 9–10) focuses on the idea of occupational duty (shokubun), and explores its function in Tokugawa-era Japan. The module shows how the idea was widely accepted by peasants and townsmen by helping them assert their own role within the Tokugawa status hierarchy. The module then goes on to consider the place of shokubun in the moral economy of Tokugawa Japan—a society where economic growth was not taken for granted. Discussed in this module are the ideas of Townsmen such as Nishikawa Joken and Ishida Baigan, and the samurai-turned-peasant Miyazaki Yasusada. Module 4 (Chapters 11–13) discusses economic thought in the late Tokugawa era—a period when Japanese perception of the world began to change following the expansion of the West, and when proposals calling for Japan to open up to trade and to follow the practices of Western statecraft appeared. Discussed in this module are a diverse group of intellectuals including the National Learning scholar Motoori Norinaga, the astronomer Nishikawa Masayoshi, the Dutch learning scholar Maeno Ryōtaku, the political economist Honda Toshiaki, and the Confucian scholar Yokoi Shōnan. Module 5 (Chapters 14–17) focuses on the early to mid-Meiji period (1868–1880s). This was a period when ensuring Japan’s independence was the highest priority, and when Western scholarship was eagerly absorbed for this purpose. But acceptance of Western ideas also meant their indigenization. Examined in this module are the ideas

 Introduction 9 of educators such as Fukuzawa Yukichi and Takata Sanae, policymakers such as Ōkubo Toshimichi, Ōkuma Shigenobu, and Matsukata Masayoshi, and journalists such as Taguchi Ukichi and Inukai Tsuyoshi. Module 6 (Chapters 18–20) concerns the mid-Meiji to the Taishō period (1890s– 1926). During this period, capitalist development of the Japanese economy after the Western model proceeded rapidly. This module focuses on the ideas of industrialists and entrepreneurs. They include businessmen representing indigenous industries, the modern industrial sector, as well as new industries that emerged in the twentieth century. Industrialists both in major cities and in provinces will be discussed, including Katō Rokuzō, Kawakami Zembē, Shibusawa Eiichi, Itō Yōzō, Mutō Sanji, and Tsutsumi Yasujirō. Module 7 (Chapters 21–23) focuses mainly on the Taishō and early Shōwa eras (1912–1945). This was a period during which greater attention was paid to “social issues” attendant to rapid industrialization, which led some to question of the legitimacy of the capitalist path to growth. As a result, thinkers began to call for the introduction of social policy or to turn to Marxism. In terms of Japan’s external relations, calls were made for the construction of an alternative international order not centered around the United States and the United Kingdom. The module discusses the ideas of a wide variety of figures—including intellectuals such as Nakae Chōmin, Kōtoku Shūsui, Abe Isoo, Fukuda Tokuzō, Kawakami Hajime, and Yamada Moritarō, policymakers such as Hamaguchi Osachi, the journalist Ishibashi Tanzan, and the military officer Ishiwara Kanji.

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Module 1

The Development of the Theory of Political Economy In this module, we begin with a brief overview of the social structure and the economy of Tokugawa Japan (Chapter 1). Then, in Chapters 2–4, we will describe the development of the theory of political economy or keisei saimin ron among the samurai class in the early part of the Tokugawa era. With the end of the Warring States period, samurai redefined their role in society from warriors to rulers and administrators. In this new capacity, they began to develop keisei saimin ron, meaning “arguments on how to administer the society and to save the people.” Tokugawa society was based on the separation of the warriors and peasants, not only in terms of status but also geographically. This encouraged the expansion of the role of the market in the economy, which in turn brought about financial difficulties for the samurai class already in the early Tokugawa era. Financial difficulties experienced by the samurai class were one of the central issues that keisei saimin ron sought to address. Yet, the term keisei saimin referred to the need to save “the people” rather than just the samurai class. Thus, the goals of keisei saimin could not be limited to improving the financial conditions of the warrior class. Neo-Confucian teachings, which exerted a great amount of influence in Tokugawa Japan, had popularized the notion that the proper purpose of government consisted in fostering moral persons and moral society. Arguments concerning keisei saimin in the early Tokugawa era thus revolved around how to reconcile such Confucian ideals with the reality of a rapidly developing market economy.

12

1

The Emergence of an Estate-Based Society

This chapter provides an overview of the structure of Tokugawa Japanese society as a background for consideration of the economic thought of the Edo period in the subsequent chapters. The term “estate” here does not mean landed property. Rather, it denotes status groups into which a country’s population is divided.

1.1  From War to Peace In 1615, in the twentieth year of Keichō era (1596–1615), through the summer campaign in the siege of Osaka, the Tokugawa clan and its allies defeated and destroyed the Toyotomi clan. With the end of this campaign, the tumultuous Warring States period finally came to an end, and the reign of Tokugawa effectively began. Two months later, the name of the era was changed from Keichō 慶長 to Genna 元和. The arrival of the long period of peace under Tokugawa rule is known as Genna Armistice, or GennaEmbu in Japanese. Embu literally means putting down arms and ending wars. Japanese history is commonly divided into four major periods: ancient, medieval, early modern, and modern eras. Among these, the medieval and the early modern eras are periods of warrior rule. But naturally, vast changes occurred during this 700year period (Kamakura, Muromachi, and Edo periods, with the Warring States period covering the last 100 years of the Muromachi period), and the differences between the medieval and the early modern eras are particularly significant. Here two major differences are worth pointing out. First, warriors (bushi 武士, or samurai) became urban residents in the Edo period. Bushi prior to the Warring States period were often “resident landholders” (zaichiryōshu) who lived on their own fiefs which they ruled directly, and where they were also engaged in agriculture. In other words, they did not live in one concentrated area and they were half-warriors, half-farmers. The separation of warriors and peasants (heinō bunri 兵農分離) brought about fundamental changes to the lives of warriors. This policy was initiated by some warlords to separate the retainers from their fiefs and to concentrate them close to the warlord’s own residence. With the implementation of this policy, individual warriors were separated from their own fiefs, concentrated near the warlord’s residence, and ceased to be farmers-producers, becoming, economically speaking, pure consumers. Since warriors-consumers now lived in one place, that area gradually became a town.

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A History of Economic Thought in Japan

Correspondingly, only peasants and other producers were left to live on warriors’ fiefs, resulting in clear geographical separation of warriors and peasants. This system was spread throughout Japan by the Toyotomi and Tokugawa clans, who unified the country. Warriors living in urban areas were a new phenomenon of the Tokugawa era, not seen during the medieval era. Second, after the Genna Armistice, the possibility of recurrence of large-scale battles became increasingly smaller. As a result, warriors, now residing in cities, effectively ceased to be soldiers. Most people, including warriors, must have welcomed the end of the Warring States period. Yet, if the essence of samurai was their role as soldiers, what were samurai who became mere consumers, deprived of even an opportunity to attain military glory? The more peace became consolidated, the more difficult it got to answer this question.

1.2  Peasants, Artisans, and Merchants Who provided goods and services to urban-dwelling samurai? After the separation of warriors and peasants, food producers were peasants and fishermen living in rural villages. During the Edo period, areas other than “cities” (machi, machikata) were called “rural villages” (mura, murakata, jikata). Residents of such areas were classified as rural residents (hyakushō)1 in terms of division of estates. Thus, most of the population were hyakushō, and they were the food producers. Samurai in the cities, however, could not consume goods produced in the rural areas unless such goods were transported to where they resided. One of the means of collecting goods from the rural areas was imposition of annual tax on hyakushō in the form of rice (nengu). Yet, samurai could not obtain various goods other than rice (shoshiki) through the annual rice tax. To fulfill such needs, producers and distributers of various goods were needed. They were hyakushō, artisans, and merchants. Hyakushō and artisans produced various goods, merchants distributed them, and samurai bought them. Since samurai received most of their income in rice, they first had to sell rice to obtain money to purchase those goods. For this reason, fluctuation in the price of rice had major impact on the finances of the warrior households (by which we understand the shogunate, daimyō2 domains and individual samurai households). In addition, currency in Tokugawa Japan circulated in three different forms (gold, silver, and bronze), each with its own system of denomination (three-coinage system, sanka heiritsusei, see Table 7.1). Complicating the matter even more was the fact that the exchange rate between different types of currency fluctuated on a daily basis. Thus, economically speaking, the lives of samurai in the Edo period stood on a more complicated foundation than is commonly realized. In contemporary Japanese, hyakushō is a term roughly equivalent to “peasants,” and it thus denotes farmers living in the countryside. However, in the Tokugawa era, the term referred to rural residents more generally, including those engaged in non-farming occupations such as fishing and forestry. 2 Daimyō 大名 (domain lords) were vassals of the shogun with fiefs producing more than 10,000 koku of rice. During the Tokugawa era, there were approximately 260 daimyō who administered their domains more or less autonomously. 1

 The Emergence of an Estate-Based Society 15 While the rice tax system constituted the main pillar of the Tokugawa economy, the system was not complete; it had to be complemented by the market mechanism. Goods and services other than rice had to be produced and circulated through the medium of currency. While Edo was the center of politics, Osaka became the center of economic activities early in the Tokugawa era. Osaka’s rice market was the largest in Japan, and a significant portion of rice collected as nengu in various provinces was sent to Osaka for sale. Osaka also developed as a major financial center. Looking at the entire system in terms of estate-based division of labor, producers in rural areas were hyakushō, those in urban areas were artisans, while merchants in cities served as distributers of goods. These three together were sometimes called “three social groups” (sammin 三民), while the latter two were collectively known as townspeople (chōnin 町人). Switching occupations between hyakushō and townspeople were, if not unrestrained, relatively easy; though such was not the case between the samurai class and three other estates. Samurai were the governors and administrators and stood above the other groups in terms of status hierarchy. Yet, economically, they were dependent on the three social groups. This does not mean, however, that hyakushō or townspeople were autonomous. They did not have the power to rule, and their economic activities (agriculture, handicrafts, and commerce) would have become unstable unless the samurai fulfilled their role. Thus, none of the four estates were really autonomous; each estate played a certain social role and depended on each other, and thereby helped the functioning of the entire system. This structure of interdependence may have also ameliorated any conflict among different estates. Terms such as shi nō kō shō 士農工商 (literally meaning warriors, peasants, artisans, and merchants) or shimin 四民 (four social groups) may sound too simplistic. Nonetheless, they concisely capture the interdependent relationship among different estates in Tokugawa Japan. The estate system constituted the basis for the economic thought of samurai as well as of hyakushō and of townspeople.

2

Samurai in Time of Peace

After the Genna Armistice, samurai effectively lost their social role as soldiers. Under such conditions, it was natural that some warriors began to inquire about the functions and the meaning of samurai in a new era. The economic thought of samurai during the Tokugawa era initially developed from such an inquiry. In this chapter, we will introduce the ideas of Yamaga Sokō 山鹿素行 (1622–85), one of the prominent thinkers of the early Tokugawa era who pondered on the role of samurai. Sokō defined the occupational duty of samurai from a Confucian perspective and suggested that samurai, as a role model, lead the other social groups by perfecting their moral conduct. The idea that the role of samurai in the new era consists in governance of the society eventually led to the development of arguments regarding governance and administration known as keisei saimin ron. Leaving more detailed discussions of these arguments to later chapters, here, we will briefly look at how the role of samurai was defined for the new era.

2.1  Neo-Confucianism and Japan Before discussing Yamaga Sokō, however, a brief explanation on Confucianism is in order. Confucianism (jukyō 儒教 or jugaku 儒学) is a system of ethical and social teachings initiated by the Chinese thinker Confucius 孔子 (551–479 BCE), who lived toward the end of the Spring and Autumn period (770–453 BCE). After his death, Confucius’s teachings were developed in a variety of directions. Throughout the ages, the foundation of Confucianism remained the virtue of benevolence (jin 仁). According to Confucius, the core element of benevolence was filial piety (kōtei 孝悌, or respect toward and obedience to parents and elders). While benevolence is an inner virtue, it manifests itself outwardly as propriety (rei 礼), a set of rites and norms considered necessary for building harmonious relationships and for maintaining social order. By focusing on benevolence and propriety, Confucianism sought to build a social order in which people knew their place, and in which a virtuous king ruled through moral suasion (governance through virtue, tokuchi 徳治). During the Song-dynasty period (960–1279), a new wave of Confucian thought emerged in China, and it later spread to the rest of East Asia. The leading representatives of this new wave, known as neo-Confucianism, include Zhou Dunyi 周敦頤 (1017– 73), Cheng Hao 程顥 (1032–85), his younger brother Cheng Yi 程頤 (1033–1107),

 Samurai in Time of Peace 17 Zhu Xi 朱熹 (1130–1200), and Wang Yang-ming 王陽明 (1472–1529), the last of whom lived during the Ming dynasty era (1368–1644). The introduction of Confucianism to Japan began already in the fifth or sixth century, and neo-Confucianism, too, was brought to Japan starting in the twelfth century. But in ancient and medieval Japan, Confucianism had only limited influence, which was far eclipsed by the influence of Buddhism. In the early modern era, however, Confucianism gained much greater influence compared with the previous eras. One reason for this may be found in the change in the worldview of the Japanese people. For reasons which need not concern us here, people in Japan had shifted their attention from the next world to problems in this world by the beginning of the Tokugawa era (Kawaguchi 2010b, 54–7). If one were to consider the political, economic, and social problems in this world, leaving the next world out, then, Confucianism provided the most suitable intellectual framework among alternative traditions with which the Japanese at the time were familiar. For this reason, since the beginning of the Tokugawa era, Confucianism became the most authoritative system of thought for many Japanese intellectuals. This is not to say that Confucian teachings spread rapidly and smoothly in Tokugawa Japan. Japan under warrior rule did not provide an ideal condition for the spread of Confucianism, which called for moral governance by educated, virtuous rulers and civilian officials. Samurai, who saw themselves as warriors, were often uninterested in learning. Moreover, it was difficult for many people to understand classical Confucian texts and commentaries on them, which were written in Chinese. Even among samurai, Confucian education did not spread widely until the second half of the eighteenth century. For most commoners, familiarity with Confucianism is likely to have been limited to some basic moral teachings. To the extent Confucianism found acceptance in Tokugawa Japanese society, it often did so in altered, Japanized forms. Yet, despite all this, Confucianism occupied a position of great importance in the intellectual history of Japan since the early Tokugawa era. While Confucianism was originally a practical teaching oriented toward the achievement of moral governance, the distinctive character of the neo-Confucian thinking of Zhu Xi was that it provided a metaphysical foundation for Confucianism. Zhu Xi’s basic idea was ri-ki dualism (ri-ki nigenron 理気二元論), according to which everything in the world is formed by the union of “principle” (ri 理) and “vital force” (ki 気). Ri is the fundamental principle constituting all things, and it inheres in everything, including human beings. Ki, on the other hand, is understood as gas-like substance that permeates the universe. Ri cannot become tangible matter unless it is combined with ki, while ki cannot constitute a distinct “thing” unless it embodies ri, which is the principle of all things. Applying this ri-ki dualism to human beings, Zhu Xi argued that the original nature (honnen no sei) of human beings, endowed by Heaven, is ri—a doctrine known by the phrase “nature is principle” (sei soku ri 性即理). For Zhu Xi and his followers, ri, as it inheres in humans as original nature, is essentially good. But this original nature cannot be materialized unless it combines with ki or vital force. And the vital force of each person differs in its quality (kishitsu, or quality of the vital force), containing varying degrees of impurity. To the extent that an individual’s kishitsu is impure, his behavior is driven by impure desires, and he is prone to do wrongs. Zhu Xi

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A History of Economic Thought in Japan

argued that one must recover one’s original, good nature of human beings by removing the contaminations that derive from ki. For Zhu Xi, the method for achieving this goal consisted in “abiding in reverent seriousness” (kyokei), and in “investigating things and exploring the principle” (kakubutsu kyūri 格物窮理). If those above and below recover the original nature of human beings, Zhu Xi thought, it would be possible to achieve a moral society. While Zhu Xi’s ideas acquired many followers in Tokugawa Japan and formed the basis of the Zhu Xi school of neo-Confucianism, his ideas did not go unchallenged. In fact, Yamaga Sokō was one of the Japanese scholars who challenged Zhu Xi’s ideas, as we shall see.

2.2  Yamaga Sokō as Military Scientist and Confucian Scholar Yamaga Sokō was a military scientist and Confucian scholar who lived in the early Tokugawa period. In his youth, Sokō studied the teachings of Zhu Xi with the prominent scholar Hayashi Razan 林羅山 (1583–1657), becoming his disciple at age nine. Later in his life, however, Sokō became more skeptical of the Zhu Xi school, criticizing it for its abstractness and deviation from original Confucian teachings. He states: “what is essential in learning is to study the teachings of the ancient sages, to master them, and to apply them to daily life” (Yamaga 1970a, 12). In making this argument, Sokō launched the kogakuha 古学派 school of Confucianism. Kogakuha is a collective term for currents of Confucian thought which criticized neo-Confucianism and which sought to build on the foundation of classics from ancient China. More specifically, Sokō called for studying the teachings of the ancient masters such as the Duke of Zhou1 and Confucius based on the original texts, rejecting later interpretations by scholars such as Zhu Xi. Apart from Sokō’s own ideas, a variety of traditions existed within the kogakuha school. The Kyoto merchant Itō Jinsai, for instance, launched the kogigaku 古義学 school, which concentrates on two classic Confucian texts (the Analects and Mencius), and sought to understand the ideas of Confucius and Mencius 孟子 (372– 289 BCE) through close reading of those texts. The third important tradition within the kogakuha school, kobunjigaku 古文辞学, was initiated by Ogyū Sorai, whom we shall discuss in Chapter 4. Kobunjigaku sought to achieve accurate understanding of ancient texts based on the study of old linguistic usages.2 Despite their differences, all the three currents of kogakuha school were united by their common aspiration to uncover the true meaning of Confucianism by going back to the classic texts. It is important to note also that the kogakuha school had a pragmatic orientation, seeking to apply Confucian teachings to “daily life.” As stated above, the Zhu Xi school was metaphysical in its orientation, and presupposed the existence of ri, which is a principle underlying the

T h e Duke of Zhou (Zhougong Dan 周公旦 [around the eleventh century BCE?]) was a younger brother of the King Wu of the Zhou dynasty (1046–256 BCE), and an eminent political figure who contributed to the consolidation of the dynasty. He was venerated by Confucius for establishing the ritual system of the Zhou dynasty. He is also often credited with the writing of two classic texts on rituals: Rites of Zhou (shurai 周礼) and Book of Etiquette and Ceremonial (girai 儀礼). 2 For more details on kobunjigaku, see n. 2 in Chapter 4. 1

 Samurai in Time of Peace 19 universe. Kogakuha scholars, however, were skeptical of such metaphysical arguments, and Sokō was no exception in this regard. During his lifetime, however, Sokō was more famous as a military scientist. As a matter of fact, he served the Asano clan of the Akō domain in the Harima Province from 1652 to 1660, teaching military science. After resigning from his position with the Akō domain, Sokō moved to Edo. But in 1666, he was censured by the shogunate (bakufu 幕府)3 for the content of his writings, and was exiled to the Akō domain until 1675. This incident indicates that he was a rather influential figure.

2.3  Sokō’s View on the Duty of the Samurai If samurai were essentially soldiers, it is quite natural that military science had great significance for them. But what purpose would military science serve during the long period of peace after the Genna Armistice? The fact that Sokō was not only a military scientist but also a Confucian scholar may be indicative of the paradoxical position of the samurai in the Edo period. They were, after all, soldiers who never engaged in actual battle. Sokō pondered on the question of what samurai should be: Human beings and living things are born by mysterious union (myōgō 妙合) of ‹Ying 陰 and Yang 陽, which are› two manifestations of ‹vital› force (ki 気) within Heaven and Earth (tenchi 天地).4 Humankind is the master of all creation, and all things reach their ultimate in humans. ‹For generation after generation, people have produced food by farming, made› various devices from skillful technology, and satisfied social needs by commerce. These are the inevitable social functions of farmers, artisans and merchants. Unlike them, warriors do not engage in farming, production and commerce. Why? . . . Warriors must have their own social function. Those who obtain food and necessities without performing their social function are called idlers (yūmin 遊民) . . . ‹If warriors never fulfill their occupational duty all their life, they must be called bandits.› Warriors ought to reflect on themselves ‹and› consider their proper social function so that their occupation will finally become clear. (Kawaguchi 2010b, 51–2)5

Here, Sokō states that peasants, artisans, and merchants each have their own occupational duty (shokubun 職分) or socially useful function that they must fulfill.6 This idea reflects Sokō’s view that only those who fulfill their social function Contemporaries usually referred to the shogunate as kōgi 公儀 (or gokōgi to show proper reverence). As a historical term, however, bakufu has been more commonly used. The terms “the shogunate” and bakufu are used interchangeably throughout this book. 4 Here, Sokō draws upon the theory of Ying-Yang and the Five Elements. See Chapter 3, n. 6. 5 T h e translation has been adopted from the source with some modifications. For the original Japanese passage, see Yamaga (1970b, 31–2). 6 T h e Chinese character 職 (shoku) means “office” or “duty.” The character 分 (bun) means “share [of a whole].” Therefore, shokubun means the portion of the work that is allotted to one person (or one group of people). 3

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are respectable human beings. Those who do not fulfill their occupational duty are “idlers” and “bandits” deserving of reproach. Did samurai in peacetime have their own occupational duty to fulfill? This was the question that Sokō asked himself, and he answered it in one of his writings, Shidō 士道 (the Way of the Samurai) as follows: The proper occupation of a samurai is . . . to find a master and to serve him with utmost loyalty, to be true in his relationship with his peers, to behave suitably in his personal conduct, and to devote himself to the cause of righteousness. A samurai is also by necessity involved in relationships with parents and children, with his brothers, and with his wife. These are relationships that everyone in this world is involved in, and everyone needs to conduct them properly. Yet, since peasants, artisans, and merchants are preoccupied with their own productive functions, they cannot devote themselves to morally perfecting these relationships. By contrast, the samurai, instead of engaging in productive occupations, devote themselves to moral conduct. It is the duty of the samurai to promptly punish those among the three social groups who violate proper norms, seeking to restore moral righteousness in society. This would be impossible unless they possess virtues and knowledge in both martial arts and in learning. So the samurai must outwardly be adept at swordsmanship, archery, and horsemanship, and inwardly perfect their conduct in the relationships between masters and retainers, between friends, between parents and children, between brothers, and between spouses. If the samurai are proficient both in learning and in martial arts, then the three social groups would naturally look up to them as their teachers, listen to what they tell them, and would understand the proper order of things. Only then can we say that the way of the samurai is properly observed, that the samurai need not feel guilty about earning a living without performing any productive function, and that they have repaid the benevolence they have received from their masters and parents . . . This is the occupational duty of the samurai . . . Before anything else, a samurai must first understand his occupational duty. (Yamaga 1970b, 32–3)

What is interesting about Sokō’s arguments here is that he places importance on martial skills as well as cultivation of morality. Despite the fact that Confucianism had a wellknown inclination to hold military matters in low regard, Sokō argued that samurai should possess both military skills and moral rectitude. By developing these two qualities, he believed, samurai could serve as role models for peasants and townspeople, fulfill their function as the governing class, and help bring the society closer to ideal conditions. That is the occupational duty of the samurai in the new era, and this is why Sokō devoted himself to the study of both military science and of Confucianism.

2.4  The Emergence of the Theory of Political Economy (Keisei Saimin Ron) Martial skills and cultivation of morality, which Sokō regarded as essential, were both related to samurai’s social role as the governing class. Samurai exercised military power

 Samurai in Time of Peace 21 in conquering enemies and in putting down rebels. But when social order was restored, they would turn to political means in order to perpetuate the social order. Thus, it was not surprising that samurai would turn into a class of governors and administrators during peacetime. Cultivation of morality, another point emphasized by Sokō, was also linked with the necessity of establishing the legitimacy of samurai’s rule. In other words, in a time of peace, samurai were expected to rule over the three social groups as well as to guide them. It is quite natural, therefore, if other samurai put greater emphasis than Sokō on governance and administration. During the Tokugawa era, the task of governance was captured in the expression “keisei saimin 経世済民,” and arguments about the proper way of governance and administration were called keisei saimin ron (or keiseiron for short). Keisei saimin literally means “administering the society and saving the people.” The current Japanese term for economy (keizai 経済) derives from an abbreviation of keisei saimin, but unlike in current usage, during the Tokugawa era, the terms keizai and keisei saimin meant something close to politics,7 as seen in the following passage: “to govern a state or the realm below Heaven (tenka kokka 天下国家) is the practice of keizai. It means to administer the society and to save the people” (Dazai 1967a, 394). One reason why samurai intellectuals began to engage in arguments about keisei saimin since the late seventeenth century was that governance in the broad sense replaced military affairs as samurai’s own conception of their social role. But this was not the only reason for the rise of keisei saimin ron. Another important reason was the financial difficulties experienced by the samurai class. In the late seventeenth and early eighteenth centuries, marketization of the economy advanced both in its scope and in its depth, leading to the strengthening of the power of the merchant class. By contrast, the financial conditions of samurai households deteriorated, and various proposals were made to address such a situation. This became another motive for samurai intellectuals to engage in arguments about keisei saimin. Until the end of the Edo period, military responsibilities and military way of thinking did not disappear from samurai’s thought (Maeda 1996). However, with the passage of time, samurai began to regard governance as an occupational duty that was as important as or perhaps even more important than military affairs. This amounted to a redefinition of what samurai should be, undertaken in response to peacetime conditions. In the next two chapters, we discuss the ideas developed by Kumazawa Banzan and Ogyū Sorai, who are conspicuous theorists of keisei saimin ron in the late seventeenth and early eighteenth centuries, respectively.

For this reason, keisei saimin is often translated as “political economy.”

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Administering the Society and Saving the People through De-Marketization

As we have seen in the previous chapter, the samurai had a role in society even in peacetime—the task of “administering the society and saving the people.” The economic thinking of the samurai developed as part of their reflection on the question of how they should govern society. Because Confucian ideas had great influence among the samurai, it is natural that their thinking on questions of economy and governance was cast in a moralistic mold. Confucianism, after all, was a doctrine whose purpose was to realize an ideal society through moral governance. In fact, most thinkers during the Tokugawa era regarded economic problems as something broader than making the best use of scarce resources. Rather, economy in the narrow sense was often seen as an instrument for the attainment of a higher purpose— building a moral society. Yet, it was not self-evident how Confucian ideals could be put into practice in the context of Tokugawa Japan, for the Japanese society at that time was different from Chinese society at the time of Confucius or of Zhu Xi. Besides, the answer to the question varied depending on concrete, practical issues the society faced at a given point in time. How, then, did samurai thinkers perceive social and economic situation during the latter part of the seventeenth century? We will start the discussion in this chapter by taking a brief glance at the social and economic situation during this period.

3.1  Urban Prosperity and Samurai Indebtedness Shison kagami (Handbook for Descendants) is a didactic book published by Samukawa Masachika 寒河正親 around 1667. The book is interesting in that it allows us to imagine what Edo was like at that time. One of the episodes introduced in the book depicts the prosperity of Edo as follows: The ‹Edo› castle is said to be 20-chō (2180 m) square in size. Not only are residential areas of hatamoto ‹bannerman, liege vassals to the shogun› and daimyō grand in size, the central districts for the townspeople are gigantic . . . Not even a small lot is left empty . . . On the Sumida River, pleasure boats, commercial vessels from various provinces, and other kinds of ships coming and going, big and small,

 Saving People through De-Marketization 23 swarm by tens of thousands . . . What a prosperous time to live in! (Samukawa 1975, 53)

This account was written some eighty years after Tokugawa Ieyasu 徳川家康 (1542– 1616) entered the Kantō region and set up his headquarters in Edo. Here, the new city of Edo, still in the process of development, is depicted as a prosperous, bustling city. This prosperity did not, however, benefit everyone. Another episode from the same book introduced the personal narrative of a certain samurai. With a fief producing 300 koku,1 this man belonged to the upper stratum of the samurai class. Yet, according to the story, his household was running an annual deficit of 33 ryō and was having difficulty in covering social expenses and house repair expenses (Samukawa 1975, 80–2). It was around this time when financial situations deteriorated not only for individual samurai households but also for entire daimyō domains. For example, in the case of the Ikeda house of Okayama in Bizen Province, “as of 1706, the family had a debt of 8130-kamme in silver, with annual payment of interests alone amounting to more than 680-kamme” (Taniguchi 1964, 379). Naturally, some among the samurai class regarded such developments as problematic and began to search for solutions. Their arguments are examples of keisei saimin ron, or, to be more precise, of early Tokugawa keisei ron. The distinctive feature of early Tokugawa keisei ron consisted in regarding the development of market economy and the deterioration in warrior finances as problematic, and in arguing for a return to a more subsistence-based agrarian society, which was to be brought about by the settlement of the samurai in the countryside. In the rest of this chapter, we will discuss the ideas of Kumazawa Banzan, who was one of the most prominent representatives of this type of argument. After a brief look at Banzan’s life, we will turn to an examination of the Confucian ideals that formed the basis of Banzan’s thought. This will be followed by an analysis of how Banzan understood the contemporary social and economic situation, and what sort of measures he proposed.

3.2  Kumazawa Banzan 3.2.1  Banzan’s Studies and Experience in Administration Kumazawa Banzan 熊沢蕃山 (1619–91) was born into a rōnin2 family, but in 1634, he was able to receive a position to serve the Ikeda house of Okayama mentioned in the

Koku 石 was a measure of volume, most often used for rice. One koku was about 180 liters, and it was considered equivalent to the amount of rice one adult might consume in a year. The size of a fief was also expressed in koku, which was known as kokudaka (volume of officially designated rice yields). To be exact, a fief with the kokudaka of 100 koku did not necessarily produce 100 koku of rice. Rather, a 100-koku fief produced a bundle of products (including rice and other grains, vegetables, fish, timber, etc.) that was considered equivalent to 100 koku of rice. 2 A rōnin means a masterless or unemployed samurai.

1

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previous section. Three years later, during the Shimabara Rebellion,3 Banzan asked for a permission to join the campaign in Shimabara, but permission was not granted. Just as in the case of Yamaga Sokō, he was forced to realize that samurai were no longer soldiers. It was probably this experience that directed Banzan’s interest to scholarship. He resigned his post with the Ikeda house and returned to Ōmi Province, where his family resided. Banzan began his studies in 1641 with the Confucian scholar Nakae Tōju 中江藤樹 (1608–48), who lived in Ōmi Province. At that time, Tōju was interested in the teachings of Wang Yang-ming. The year before Banzan began to study with him, Tōju wrote his major work, Okina mondō (Conversations with an Old Man). Wang Yang-ming thought (yōmeigaku 陽明学 in Japanese) is a current of Confucian philosophy developed by the Chinese philosopher Wang Yang-ming (Jp. Ō Yōmei) based on criticism of the Zhu Xi school. The core idea of Wang Yang-ming thought is the notion that “the mind is principle.”4 Both the Zhu Xi school and Wang Yang-ming thought belong to neo-Confucianism introduced in Chapter 2. Because Banzan began his studies with Tōju, it is probable that Banzan’s initial position was close to Wang Yang-ming’s view, with its emphasis on innate moral sense rather than on scholarly knowledge. Interestingly, Tōju gradually shifted his position to one that was “close to Buddhism” in his later years (Yamashita 1974, 407). Banzan later criticized Tōju as well as his younger self: “Mr. Nakae . . . was academically not so profound and had the weakness of being attracted to unorthodox teachings ‹Buddhism›. When he was alive .  .  . we occupied a rather marginal position in Confucianism” (Kumazawa 1978, 108). This indicates that Banzan’s own ideas developed in a direction opposite from Tōju’s ideas. In 1645, Banzan once again entered the service of the Ikeda house and, two years later, he gained the favor of Ikeda Mitsumasa 池田光政 (1609–82), the lord of the Okayama domain. Since then until 1657, Banzan was involved in top-level decisions in the domain administration.

Shimabara Rebellion of 1637–8 was an uprising of peasants (many of whom were Catholics) in the Shimabara peninsula in Hizen Province. In suppressing the revolt, the shogunate mobilized a large number of troops from daimyō domains in western Japan, but the Okayama domain did not participate in the campaign. 4 Shimada (1967). “Mind is principle” (shin soku ri, 心即理) means that “principle” (ri) or the standard for moral conduct already inheres in the human mind, including its emotional dimensions. It is contrasted with the Zhu Xi school slogan “nature is principle” (see 2.1). The Zhu Xi school taught that the principle of morality (ri) inheres in human nature. But according to the Zhu Xi school, the actual human mind may turn to evil, because the mind is influenced also by emotional elements, which are influenced by vital force (ki). Thus, from the viewpoint of the Zhu Xi school, good conduct requires restraining the emotional, ki-based part of the mind, so that the good nature would shine forth. By contrast, for Wang Yang-ming, ri is not an external standard with which to regulate the human mind. Rather, ri inheres in the actual, changeable human mind, including its emotional dimensions. Thus, mind cannot be separated into good fundamental nature and bad emotional elements. What is necessary for good conduct is not to restrain human emotions, but rather for each person to become aware of the innate moral sense that is in every person’s mind. This is what Wang Yang-ming meant by “mind is principle.” Moreover, Wang emphasized the importance of practice over scholarly knowledge, arguing that no amount of knowledge about morality is of any use unless it is put into practice. 3

 Saving People through De-Marketization 25 It was quite unusual for a low-ranking samurai like Banzan to be directly promoted by the lord himself. It was even more unusual for a Confucian scholar to play an important role in the administration of a domain. Such a case was quite rare throughout the Edo period. The prevailing idea in Chinese Confucianism was that responsibility of governance should be left to officials trained in Confucian learning (Watanabe 2010, 26). According to this view, a social hierarchy was at the same time a moral hierarchy in which a virtuous gentleman (i.e., the prince) occupied the top position. The key to governance by a virtuous prince was his inner moral qualities; he would rule through demonstration of virtues, while the people would voluntarily accept his authority. This is how governance through virtue (tokuchi 徳治) was supposed to work, and this kind of governance was considered the ideal form of rule in Confucianism. Yet, this ideal did not fit the realities of Tokugawa Japan. Ieyasu became the ruler of entire Japan not because of his virtues but because he was the final winner in the battles of the Warring States period. The peacetime political and administrative organization of the shogunate was appropriated from military organization of the Warring States period (Kasaya 1988, 195). In such a society, measurable achievements such as military victory counted much more than intangible measures such as inner virtues. This is why Confucian scholars were rarely appointed to political or administrative posts. In thinking about Tokugawa Japanese thought, it is important to note such discrepancy between Confucian ideals and the Japanese realities. Ever since the Shimabara Rebellion, Banzan pondered on the question of what it means to be a samurai: “Farmers grow the five grains to feed the people. Women weave to clothe the people. But samurai have nothing to do” (Kumazawa 1971a, 325). In short, Banzan posed the same question raised by Yamaga Sokō (see 2.3). Banzan, however, stumbled upon an answer to the question unexpectedly, through his participation in the administration of the Okayama domain. He retired from his post at the Ikeda house in 1657 and concentrated on his writings from around age fifty. His ideas on keisei ron were based on practical experience in administration, and herein lies the significance of Banzan in the history of Japanese economic thought. In his writings after retirement, Banzan criticized not only his former teacher, Nakae Tōju, but also the administration of the Okayama domain. As a result, his relationship with lord Ikeda Mitsumasa deteriorated, and in his very last years, by the order of the shogunate, he was confined within the castle of the Koga domain in Shimōsa Province. Banzan must have been a stubborn man.

3.2.2  Banzan’s Moral Ideal: The Way In Confucianism and in Chinese thought more generally, the term “the Way” (道 dao [Chinese], michi [Japanese]) was often used to denote the highest value. This usage was adopted also by Japanese thinkers of the Tokugawa era (Nozaki 1979). Both Banzan and Ogyū Sorai (discussed in the next chapter) use the term “the Way” to refer to the highest value. It is important to understand Banzan’s concept of the Way because early Tokugawa keisei ron, including Banzan’s argument, takes the Confucian notion of moral government as its ideal. Confucian notions on the essence of human beings, how they should live, and how societies should be organized served as the basis for

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thinking about political and economic questions. Next we will introduce four passages from Banzan’s writings showing how he understood “the Way,” and what that implied for his conceptions of ideal society and politics. Though the passages may appear arcane to the modern reader, brief explanations attached to them should help clarify their meaning: The Way consists of the three bonds and the five constants. These correlate with Heaven, Earth, and Man, and the Five Elements. Even when there was yet no word for virtue and no teachings of the Sages, this Way was already being practiced; and before man came into being, it was enacted in Heaven and Earth. And before Heaven and Earth were separated from one another, it was enacted in the Supreme Void. Even though man becomes extinct and Heaven and Earth revert to nothing, it will not perish. How much less so in our time! (McMullen 1999, 186–7)5

Banzan understood the Way as a cosmic principle that is moral in its essence. He starts out by emphasizing the moral essence of the Way, stating that it consists of Three Bonds and Five Constants, both of which refer to basic Confucian moral precepts. But at the same time, the Way is seen as a cosmic principle that existed before the appearance of human beings—in fact, even before Heaven and Earth were separated. In Banzan’s view, the Confucian moral principles of Three Bonds and Five Constants each corresponds with basic components or elements constituting the world—the three components of Heaven, Earth, and Man, and the Five Elements of wood, fire, earth, metal, and water.6 This notion of correspondence between cosmic and moral For the original Japanese passage see Kumazawa (1978, 63). The three bonds (sankō) refer to the proper norms governing relationships between ruler and subject, father and son, husband and wife. The Five Constants (gojō) refer to the five basic virtues in Confucianism, which are benevolence (jin 仁), righteousness (gi 義), propriety (rei 礼), wisdom (chi 智), and integrity (shin 信). The Five Elements (gogyō) refer to wood, fire, earth, metal, and water. In classical China’s natural philosophy, they were considered the basic elements constituting the universe. 6 Banzan’s reference to the Five Elements draws upon the Ying-Yang and Five-Elements Theory (陰陽五行説 in’yō gogyō setsu). This theory originated in ancient China as two separate theories (the Ying-Yang theory and the Five-Elements theory). The two theories later merged, and in that form, it was imported into Japan starting in the Asuka period (592–710). The Ying-Yang theory ascribes everything in the natural world into either Ying (dark, negative) or Yang (bright, positive). For instance, the Sun is Yang, the Moon is Ying; males Yang, females Ying, etc. The Five-Elements theory, on the other hand, states that everything between Heaven and Earth is composed from five basic elements of wood, fire, earth, water, and metal. According to the theory, these five elements affect each other, generate each other, and these processes produce changes in everything. The theory of Ying-Yang and the Five Elements was formed by a synthesis of the two theories. According to this theory, the Five Elements are categorized into Ying and Yang, with wood and fire representing Yang, metal and water representing Ying, and with earth standing in between. The theory explains changes in the world by the changing balance between Ying and Yang, and among the Five Elements. This theory was used to explain and to interpret a wide variety of phenomena, including the movement of heavenly bodies, the functioning of the human body and its organs, as well as the interpretation of classic texts. As such, the theory had strong influence on Japanese thought. The Ying-Yang and Five-Elements theory was also adopted by neo-Confucian scholars as they sought to give a metaphysical foundation to Confucianism. Zhu Xi, for instance, incorporated this theory into his own theory of ri-ki dualism, arguing that ki or vital force is divided into YingYang, and into Five Elements. Banzan’s reference to the theory appears consistent with a neoConfucian reading of the theory. 5

 Saving People through De-Marketization 27 principles is a typical feature of neo-Confucian metaphysics. In Banzan’s thought, “the Way” is also reflected in human nature: The principle existing in the Supreme Void, the Ying-Yang energy and the Five Elements combine in a mysterious union and form human beings, and because of this, humans are endowed with innate luminous virtue (meitoku 明徳). This virtue is called nature (sei 性). In this nature inhere principles or virtues of benevolence, righteousness, propriety, wisdom, and integrity. The primal principle of Heaven (ten-no-gen 天ノ元), when it inheres in a human being, is called benevolence . . . Benevolence, righteousness, propriety, wisdom, and integrity are all principles that inhere in our nature regardless of whether they are actually enacted. (Kumazawa 1971a, 102)

In this passage, Banzan states that human beings are formed by a mysterious union of the principle (ri) and the vital force (ki) of negative and positive (Ying-Yang) directions. Because human beings hold within them the cosmic-moral principle, humans are endowed with “luminous virtue.” Luminous virtue inheres in human nature, and it includes benevolence, righteousness, propriety, wisdom, and integrity, which are the same as the Five Constants mentioned in the previous quote. For Banzan, these virtues reflect heavenly principles. For instance, “benevolence” is “the primal principle” when it exists in Heaven. Likewise, “innate luminous virtue” of humans exactly reflects heavenly principles in their essence. Banzan further argues that, since society consists of humans, the affairs of “the state and the realm below Heaven” cannot be separated from moral principles: Benevolence is the primal principle of Heaven, and at the same time, it is the lifeforce of humans. In its essence, benevolence is voiceless and has no smell, but when it is applied to concrete phenomena, it appears as sentiments of affection and compassion. The affairs of a state, or of the realm below Heaven, cannot be sustained even for a single day without the sentiment of affection. (1971a, 102–3)

To put it differently, “the primal principle of Heaven” appears as “benevolence” in human nature, and, when it is applied to the affairs of this world, it is expressed as “sentiments of affection and compassion.” This ethical sentiment of affectionate concern for other people, Banzan argues, is the foundation of governing a state or the realm below Heaven. Given such an understanding, it is quite natural that Banzan advocated government through virtue based on “the Way”: If the rulers follow the Way and this is evident to all, then people below will follow the correct path even without encouragement, and they would refrain from wicked acts even without penalties . . . Government by sages and wise princes is almost effortless, for all they have to do would be to clarify the Way and to follow it, and to reign over the people. (1971a, 117)

Banzan’s ideas introduced above basically derived from neo-Confucianism of the Song-Ming period. The key points in Banzan’s philosophy are that the Way is a cosmicmoral principle that is reflected also in human nature, and that, since human beings

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are endowed with luminous virtue, an ideal society is one that is governed morally by “sages and wise princes.”

3.2.3  Moral Degeneracy and Economic Destitution Banzan’s social and political ideal was based on the Confucian notion of moral governance. How then did the contemporary reality appear in his eyes? He identified two problems: (1) moral degeneracy of the samurai and (2) rampant economic destitution. A letter by Banzan from 1675, when he was living in Akashi in Harima Province, reflects his outrage at the moral degeneracy of the retainers of the Ikeda house. The letter was addressed to Ikeda Terutoshi 池田輝録 (1649–1714), who was the third son of Lord Ikeda Mitsumasa and who was at one time an adopted heir of Banzan. He wrote: According to a story told by people who came to Akashi from Bizen Province, they witnessed along the way many who had starved to death. This is quite an unforgivable situation . . . Yet, among the retainers of the Okayama domain, there are many who waste their time in entertainments like jōruri and kouta (short songs) . . . When the sense of righteousness is weakened to such an extent and when morality collapses, we cannot exclude the possibility of unexpected calamities . . . If an emergency occurs and if samurai remain morally degenerate, then people would harbor deep grudge against the authorities and the fall of the lordly family would not be far away . . . It would be reasonable to say that the situation in our domain is worse than in other domains . . . The sense of rectitude appears to be completely lost. (1979b, 138–9)

For Banzan, it was unacceptable for samurai to be engrossed in frivolous entertainments while the people starved to death; to secure a comfortable life for the people was the moral duty of the samurai: Each grain of rice in the rice bowl is the result of hard labor by peasants . . . In this world, people are supposed to help each other and to return the favor received. Thus, he who does not do good is the enemy of Heaven and Earth. This is all the more true for those who behave arrogantly and torment the people. For samurai to be versed in letters, to conduct themselves properly, to learn archery and equestrianism and to be skilled in martial arts is a duty just as farming is the duty of peasants. Samurai keep peace in society to let the people live in comfort, become the shield and castle for the prince, and wish to bring calm to the society by the force of their arms. This is because samurai, having a sense of morality, wish to reciprocate the hard work of the people. (1971a, 353)

From Banzan’s viewpoint, samurai in reality were devoid of a proper sense of morality. Moral degeneracy of samurai was the first problem Banzan perceived in contemporary society.

 Saving People through De-Marketization 29 In addition, Banzan was also concerned about economic situation of his time. He writes: Nowadays, there is tremendous amount of rice which is wasted without becoming anyone’s property. Yet, what is strange about today’s situation is that things go well precisely because a lot of rice is wasted. After peasants pay the taxes in rice and samurai collect them, the more rice is wasted, the better the situation is for both samurai and peasants. If we stop wasting rice without fundamentally changing the current situation, people will suffer from economic hardship. If we stop wasting any rice, the price of rice will plummet. In recent years, because we have had some good harvest, both samurai and peasants are suffering economically. When both samurai and peasants are destitute, there will be no business. Thus, both artisans and merchants will suffer as well . . . This situation of general destitution is caused by good rice harvest. (1971b, 417)

If no rice was wasted, the supply of rice would increase, depressing its price. When the price of rice decreases, samurai who obtain their income from rice receive less money. The same is true of peasants who sell surplus rice on the market. When the monetary incomes of samurai and of peasants go down, artisans and merchants also suffer because they depend on the demands from samurai and peasants. Because everyone in the society suffers, Banzan called this situation “general destitution.” Good harvest paradoxically leads to general destitution because samurai and peasants participate in the grain market and they are affected by fluctuation in the price of rice. This is an indication of the extent to which market relations had penetrated the society of the early Tokugawa era.

3.2.4  Applying the Way Flexibly to Concrete Situations For Banzan, moral degeneracy and economic hardship were the pressing issues of his time. How did Banzan attempt to address them? While Banzan’s ideal was the Confucian notion of moral governance, he did not seek to apply his ideal mechanically. Rather, Banzan’s approach was flexible, taking into consideration the concrete situation he faced. For Banzan, the Way remained constant. But methods—or concrete applications of the Way—were changeable, depending on specific conditions. Banzan states: The Way and methods are two separate things . . . but many mistake methods for the Way. Methods change over time even if they were made by the Chinese sages . . . The sages made methods to fit particular situations depending on time, places, and rank.7 For this reason, those methods fit the Way when they were made. Yet, as time passes and rank changes, even methods made by the sages would not Here “rank” refers to the rank of the ruler. The sages, because of their high rank (deriving from their immense wisdom), were able to govern through virtue, and governance through virtue would entail certain methods. But the same methods may not be appropriate for rulers of a lower rank (such as ordinary princes). The sages, in other words, devised methods that would fit their own rank, but not necessarily of other rulers.

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A History of Economic Thought in Japan always be adequate for the times. Using methods that do not fit the times can be actually harmful for the Way . . . When methods do not fit the conditions of concrete times and places, they cannot be regarded as following the Way. (1978, 63–4)

This situational reasoning, known as “time, place, and rank argument (jishoiron 時所位論),” gave Banzan considerable room for flexibility in policy recommendations. For instance, one of Banzan’s policy proposals was the promotion of capable men to positions of responsibility. In this connection, Banzan stated: “to carry out benevolent rule, it is necessary to appoint right persons in the right places. When wise men are appointed to high posts, pragmatic men with talent are put in charge of governmental affairs, and capable men are assigned to various tasks, then the prince will be better able to conduct benevolent rule with magnanimity” (Kumazawa 1971b, 411). In this passage, Banzan speaks of “benevolent rule (jinsei 仁政),” and his proposal here diverges in a subtle way from his vision of “government through virtue (tokuchi 徳治)” discussed earlier (3.2.1). The nature of this divergence is expressed more clearly in the following passage: It is the work of sages to help the creative powers of Heaven and Earth with their virtues. To help the creative powers with governance is the work of men. Even if the virtues of a prince were not as great as those of the sages, he could still help the creative powers with his governance as long as he is qualified for the calling of being father and mother of people . . . If the prince . . . practices benevolent rule, that would be suitable to his calling .  .  . The key to benevolent rule is to promote the right kind of people . . . In terms of goodness of the heart, a good man comes first, followed by a wise and courageous man, and then by a pragmatic man with talent. But in terms of capability for governance, a pragmatic man with talent comes first, followed by a wise and courageous man, and then by a good man. (1979a, 68–9)

Banzan argues in effect that government through virtue is possible for sages and wise princes, but not for ordinary princes. What ordinary princes can aspire to instead is “benevolent rule.” For this purpose, it is necessary to appoint to responsible positions pragmatic men with talent who excel in their ability to govern, though ranking low in “goodness of the heart.” Banzan does not deny that government through virtue is the ideal form of government. But what he advocates for his own time is something different. Building on his “time, place, and rank” theory, Banzan argues that the appropriate form of politics varies, depending on the “rank” of the ruler. What is also significant here is the fact that Banzan placed “pragmatic men with talent” above “good men” in their capability for governance. Once the ideal of government through virtue was recognized as impossible in his time, then politics had to be judged by the standard of efficacy, or by concrete results accomplished in helping the creative powers of Heaven and Earth. Furthermore, political efficacy required something other than moral virtues. Banzan’s view on this point is clearly expressed in the following passage:

 Saving People through De-Marketization 31 Virtue without efficacy is not good enough for government. A prince who is evil is nonetheless obeyed if he has authority, while a good prince without power and authority cannot command obedience. In today’s world, a prince who is upright in his conduct and who is free from personal greed must still be called a wellmeaning but powerless figure unless he also has authority. Moreover, such a person does not know the way of governance. It is morally good to be upright and to be free from greed. But if the prince lacks authority, his example would fail to influence the samurai, and the benefit of his governance would not reach the people. (1971a, 250)

Here, Banzan emphasizes the significance of power and authority in politics. Efficacy rather than personal moral goodness should be the standard for assessing politics. Being “not greedy” or “well-meaning” is dismissed as useless, unless such virtues are accompanied by efficacy.

3.2.5  Prosperity before Morality While Banzan held on to the ideal of “the Way,” he was flexible in dealing with concrete problems. This flexibility was demonstrated in Banzan’s approach to addressing the most pressing issues of his day. Specifically, Banzan placed considerable importance on addressing the issue of economic destitution. At the same time, he warned against any hasty attempt to improve the moral situation, as the following passage shows: The Great Way (daidō 大道) means Great Unity (daidō 大同). The leader must move forward with the common people; he should not run ahead of the rest. The leader must act together with the people; he should not act alone . . . When the people seem ready to follow, the leader may advance ahead of the people. But even if he is anxious to lead, he must not do things which the people find difficult to follow. It should be evident that what is often taught by moralists is nothing other than the small Way (shōdō 小道). (Kumazawa 1971a, 88)

Banzan’s call for gradualism may be seen as reflecting his pessimism on moral questions. But in the light of Banzan’s overall arguments, this should be regarded as an example of the “time, place, and rank argument.” In other words, in today’s world where “the small Way” is dominant, the ruler should not do things which many people cannot follow. “Time, place, and rank argument” does not deny the universality of “the Way,” nor does it justify inaction in response to concrete situations. Rather, the ruler must devise and implement “methods” appropriate to current conditions. What then were the methods appropriate to current conditions? Banzan’s answer to this question focused on the need to address economic issues first: The foundation of a state is the people. The basis of people’s livelihood is food . . . The prince and lords are responsible to Heaven for the performance of their duties .  .  . They should do their very best in taking care of and governing the people. Nobody gets more attention and care from people than their own children. The

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A History of Economic Thought in Japan ruler is father and mother of his people. What is more important for parents than their children? Feeding children must be the number one priority. When children are adequately fed, then parents can proceed to teach them. It is for this reason that a benevolent ruler recognizes the hardship of agricultural work. (1971a, 344)

What is important here is that feeding is regarded not only as an economic issue but also as a moral issue. Banzan’s remark that “when children are adequately fed, then parents can proceed to teach them” suggests that feeding the people is effectively the precondition for moral teaching. To quote another passage of Banzan: When the ruler wishes to teach people good conduct, he must first carry out the great work of spreading prosperity (fuyū taigyō no matsurigoto) so that everyone has enough. It is difficult to teach people who are destitute and desperate, for they have no time to learn about proper behavior. (1979a, 69)

As we have seen, Banzan held that luminous virtue inhered in human nature. But in this passage, he argues that good conduct of the people depends on giving them stable livelihood. While he does not reject the moralistic view on human beings, Banzan’s argument here in effect modifies the moralistic view by positing economic condition as the critical intervening variable between human nature and people’s conduct. In other words, everyday economic conditions shape how people actually live. Moral conduct is unlikely unless people’s livelihood is secured. That is why Banzan, in defining “benevolent rule,” emphasized the importance of not undermining the basis of people’s livelihood: It is said that Buddhist monks lure people into believing in misguided viewpoints, while luxury entices them into a life of poverty. But since many people have made their living out of luxury for decades, a sudden curtailment of luxury can cause many to go hungry. Also, since there are several hundreds of thousands of Buddhist monks, we cannot restrain their influence immediately. Benevolent rule is about not causing harm to anyone. If the Great Way prevails, nobody will be harmed, and delusion and destitution of the people will disappear. (1978, 12)

From Banzan’s viewpoint, both luxury and Buddhism are something to be condemned. So in one sense, the society would be better off without people who spread Buddhism or luxury. But the ruler must avoid the appearance of a new group of destitute people, even for the purpose of realizing something good. This is what benevolent rule meant for Banzan.

3.2.6  Settlement of Samurai in the Countryside Banzan believed that good harvest paradoxically caused general destitution of the population. As we have seen, by the early Tokugawa era, the samurai had left their fief in the countryside and had become a class of urban consumers. Their livelihood now depended on money and the market economy. But living in the city accustomed the

 Saving People through De-Marketization 33 samurai to more comfortable, and increasingly luxurious lifestyle which could not be supported by their fixed stipend. As a result, samurai ran into financial difficulties, which they attempted to solve by increasing the tax burden on the peasants. Besides, marketization of the economy made samurai’s income dependent on the price of rice, which could be severely depressed in years of good harvest. For Banzan, these were serious problems, and he argued that the fundamental solution to them required de-marketization of the economy through the return of the samurai to the countryside. In other words, Banzan called for a return to the state prior to the separation of warriors and peasants. This proposal, which is quite radical in its content, is known as “settlement of samurai in the countryside (bushi dochaku)” or “the farmer-soldier system (nōheisei)”: The fact that the annual tax rate has gradually increased and that the people have fallen into poverty is because samurai and peasants were separated from each other. We must have samurai settle in the villages. Not only that, since peasants in the villages will serve the samurai and share the same fate with them for many generations to come, samurai should be encouraged to treat them well. In case military service is required, samurai will mobilize the peasants and serve with them. For this reason, they do not have to maintain a large number of retainers during peacetime . . . Samurai will cultivate the land . . . train themselves in both literary and martial arts, and will become true soldiers who can serve as the shield and castle for the prince . . . In future generations, samurai will eventually become farmer-soldiers and the tax rate could be reduced to 10 percent. (1971b, 440)8

When samurai move to and settle in the countryside (i.e., in their fiefs), they would be able to reduce their living expenses by leading a modest lifestyle of the countryside. Moreover, they could augment their real income by engaging in agriculture themselves. By this measure, it would be possible to alleviate the taxes imposed on the peasants, reducing them ultimately to 10 percent. Samurai would also train themselves in martial arts and form stronger ties with the peasants. From the viewpoint of the lord, this would help the domain finances, for the amount of stipend paid to the retainers could be reduced. In other words, by going back to the situation before the separation of warriors and peasants, samurai and commoners would once again be directly tied to each other. Since samurai themselves would also engage in agriculture, what is necessary for daily life would be procured inside the villages without the medium of a market economy. Hence the number of artisans and merchants could be greatly reduced, and the society would once again be composed simply of samurai and peasants. In such a society, there would be no paradox of good harvest leading to general destitution. Instead, the great work of spreading prosperity will have been accomplished, ensuring that everyone has enough. The key to all this is de-marketization of the economy through the settlement of samurai in the countryside. This sort of radical reform seems to be incompatible with Banzan’s own definition of “benevolent rule.” Yet, he argued that the farmersoldier system should be implemented in a way which harms nobody—in a way that A tax rate of 10 percent was considered an ideal level in Confucian classics such as Mencius.

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pleases both samurai and commoners. Ultimately, after the reform is accomplished, he hoped that “benevolent rule” would become a reality. Banzan believed that the rural settlement of samurai would not only solve economic problems but also facilitate the building of a moral society; for feeding the people, as we have seen, is the precondition for teaching them: Wealth is for the benefit of the entire society . . . When poverty ceases to exist, and everything is in order, there will be no superfluous expenses by the authorities. Things will return to the conditions of the past before the separation of warriors and peasants, the taxes will be reduced to 10 percent, and wealth will spread around. Then, people’s minds will be united, they will have all they need, and they will be prosperous, kind and honest. In such a society, people do not know of poverty. When the farmer-soldier system is adopted, the martial strength of Japan will be especially great and Japan will truly deserve its reputation as a martial country. (1971b, 442–3)

The proposed settlement of the samurai in the countryside was intended to resolve the issues of both economic destitution and moral degeneracy. As discussed earlier, Banzan held that, in order to let people manifest their innate, moral nature, it was necessary first to solve the problem of economic destitution. In this sense, it may be argued that Banzan developed an economy-centered view of people and of society, according to which economic conditions shape the actual behavior of people, and the nature of the society they form. Yet, this did not alter the fact that the realization of the Way remained Banzan’s ultimate goal. While critically important, economy was just an instrument for the realization of the Way. Banzan did not negate the role of the market, or of the merchants; their roles in society were recognized within certain bounds. Yet, he did not regard prosperity as an objective in itself, nor did he hesitate to propose a policy which would result in drastic reduction in the number of merchants and artisans. More fundamentally, by using the term “prosperity,” Banzan did not mean relentless pursuit of economic growth for its own sake. Rather, what he meant was a condition in which people’s livelihood is secured, free from threat of destitution. In response to the question, “Is it true that even the people under the rule of Emperors Yao and Shun9 could not avoid poverty?” Banzan answered that what matters is people’s state of mind: Even though the people were poor, they were not indigent. They were happy with what they had and did not wish for more. They had to work hard physically, but they felt happiness in their heart. It is for this reason that the people under the rule of Emperors Yao and Shun are said to have been blessed with peace. (1971a, 55)

Economy is indispensable for human society. It is not self-evident, however, what kind of meaning is assigned to it. The meaning of “prosperity” also depends on the perspective that is adopted. For Banzan, it denoted a condition in which people’s lives were stable, and in which people were satisfied with what they had. Legendary emperors from ancient China.

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3.2.7  From Wang Yang-ming Thought to the Zhu Xi School Banzan began his studies with Nakae Tōju, but later his thought developed in a different direction. When he constructed his own ideas on keisei ron based on practical experiences in administration, what emerged as the key issues were the problems of morality and economy. For Banzan, the fundamental solution to these problems was the settlement of samurai in the countryside. What kind of philosophy, then, served as the foundation for Banzan’s keisei ron? Banzan’s starting point was Wang Yang-ming thought, which emphasized the importance of seeking truth in one’s own sentiments. Yet, his own experiences, including involvement in practical questions of domain administration, encouraged him to turn his attention to issues lying outside one’s own mind, and to incorporate those issues into his own theoretical system. For instance, Banzan states: Among the principles that govern this world, particularly significant are the principles regarding how to order the household, how to govern a country, and how to pacify the realm under Heaven. For each of these tasks, a particular ability bestowed by Heaven is necessary. The prince understands this, and appoints to various positions people with appropriate talents, while the prince’s subjects do their best according to their abilities . . . Things in this world are varied, and the principles that govern them are inexhaustible. (1971a, 159–60)10

From this passage, we may discern that Banzan recognized the variegated character of things and events in nature and society, and that he believed that each of these had its own nature or logic. Yet, Banzan’s claim that “things in this world are varied, and the principles that govern them are inexhaustible” was difficult to fit into the framework of Wang Yang-ming thought. When Banzan broadened his interest from the human mind to what lies outside of it, ideas of the Zhu Xi school, with its all-encompassing character, were more likely to provide an effective theoretical foundation. This is not to say that Banzan made a complete transition to the Zhu Xi school. But in terms of doctrinal questions, he gradually approached the position of the Zhu Xi school, and it is possible that this transition was made under the influence of his practical experience in administration. In any case, Banzan constitutes an intriguing example showing how the ideas of Zhu Xi and Wang Yang-ming, which were among the most sophisticated Chinese thought systems, were accepted in Japan of the Tokugawa era.

Here, Banzan emphasizes the importance of “how to order the household, to govern a society, and to pacify the realm below Heaven” (seika chikoku heitenka 斉家治国平天下). This idiom is taken from the classic text, the Great Learning (Daigaku 大学). This particular section states that one first must cultivate one’s own character (shūshin 修身). Only then can one proceed to “order the household” (seika), to “govern a society” (chikoku), and eventually to “pacify the realm under Heaven” (heitenka). While the Great Learning was originally a section in the Book of Rites (Raiki 礼記), one of the so-called Five Classics (see Chapter 4, n. 2), the Zhu Xi school emphasized its importance, and made it one of the “Four Books,” along with the Analects (Rongo 論語), Mencius (Mōshi 孟子), and the Doctrine of the Mean (Chūyō 中庸).

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De-Marketization through Shogunal Power

In this chapter, we will focus on the economic thought of Ogyū Sorai 荻生徂徠 (1666–1728). Sorai was one of the most influential thinkers of the Tokugawa era. Along with Banzan, he was one of the chief proponents of early Tokugawa keisei ron, which sought to build a more stable society through de-marketization of the economy. Sorai’s ideas bear resemblance to Banzan’s in that he saw the economic destitution of both samurai and peasants as problematic, and in that he called for the settlement of samurai in the countryside. Yet, Sorai’s ideas diverged from those of Banzan in some respects. His thinking, in its philosophical basis, built upon a fundamental criticism of the Zhu Xi school. Rejecting neo-Confucianism, Sorai initiated the new school of kobunjigaku, which sought to study classic Confucian texts closely, based on linguistic analysis of old Chinese usages. Further, unlike Banzan, he understood “the Way” not as a moral principle, but as a human artifact created by ancient Chinese sages. Sorai’s arguments proved quite influential, and led to the formation of the Sorai school, which made a significant contribution to the subsequent development of Japanese thought. We will begin by introducing a characteristic episode from his life, which helps us understand Sorai’s way of thinking. Then we will discuss his critique of the Zhu Xi school, which forms the theoretical basis of his ideas, and how this position influenced his understanding of “the Way” and of the duty of rulers. This will be followed by an examination of how Sorai perceived the contemporary situation, and what kind of measures he proposed to deal with existing problems. In the final section of the chapter, we will consider Sorai’s ideas on the issues of prices and currency.

4.1  Ogyū Sorai and the Akō Incident Sorai was born in Edo, but his family had to leave the city when his father was punished in 1679 for some reason. They moved to Honnō village in Kazusa Province, where the family of Sorai’s mother resided. In 1690, Sorai was able to return to Edo. At first, he had no stable job and is said to have lived from hand to mouth. Six years later, however, Sorai was taken into the service of Yanagisawa Yoshiyasu 柳沢吉保 (1658–1714), a close advisor to the fifth shogun Tokugawa Tsunayoshi 徳川綱吉 (1646–1709). A well-known episode related to Sorai is worth mentioning here as it illustrates his characteristic way of thinking. In January 1703, forty-seven rōnin, who were former

 De-Marketization through Shogunal Power 37 retainers of the now-dispossessed Asano clan, raided the residence of Kira Yoshinaka 吉良義央（1641–1703）in Edo, and killed him. Two years earlier, Asano Naganori 浅野長矩 (1667–1701), who had been the lord of the Akō domain in Harima Province, attacked Kira with a dagger inside the Edo Castle. Apparently Naganori held some grudge against Kira, but while Naganori was ordered by the shogunate to commit seppuku (ritual suicide by disembowelment), Kira did not receive any penalty. This incident led to the dispossession of the Asano clan, and, as a result, the former retainers of the clan became rōnin. Following Kira’s death, the rōnin, too, were ordered to commit seppuku.1 It is said that it was Sorai who recommended seppuku as a punishment, apparently in response to an inquiry from Yanagisawa Yoshiyasu (Yanagisawa hizō jikki 1934, 64–5). While many people at the time were sympathetic to the rōnin, Sorai argued that ordering them to commit seppuku was the right thing. Sorai’s reasoning was as follows: by carrying out the wish of their former master, the rōnin acted according to the demands of “righteousness” in the private sphere. Yet, from the viewpoint of public order, their action stood condemned as a recourse to “private justice,” so the rōnin should not be left alive. However, they should be granted honorable death through seppuku rather than dishonorable death through execution, in consideration of the fact that they acted “righteously” from the viewpoint of their loyalty to their master (Ogyū 1910, 150). Sorai’s reasoning here contained seeds of his later criticism of the Zhu Xi school in that he distinguished between personal morality and public, legal order in society, and put priority on the latter. By the middle of the second decade of the eighteenth century, Sorai established his own brand of Confucianism based on a critique of the Zhu Xi school. What we now understand as Sorai’s teachings usually refer to his thought after the mid-1710s. After playing a role in the bakufu under the fifth shogun Tsunayoshi, Sorai was estranged from the administration under the sixth and seventh shoguns. When Tokugawa Yoshimune became the eighth shogun in 1716, however, Sorai once again gained the favor of the shogunate. Sorai’s work Seidan (Discourse on Government) was written in response to Yoshimune’s 1725 “inquiry on policy issues” (Hiraishi 1984, 151, 263).

4.2  Rejecting the Zhu Xi School Sorai’s ideas were based on the rejection of the Zhu Xi school. Before examining Sorai’s ideas on keisei ron, let us direct our attention to his basic philosophical views. As explained in Chapter 2, the Zhu Xi school held that ri is a formless principle underlying the physical universe, and that in essence it is a moral principle. Ri inheres in everything in this world, including in human beings, and it constitutes the essence of everything. Sorai, too, recognized the existence of ri, stating, “principle is naturally present in all sorts of things” (Ogyū 1973b, 150). But he believed that things of this world are quite diverse, and hence ri, which inheres in such diverse things, is also T h e number of rōnin who committed seppuku was forty-six rather than forty-seven. There are a variety of theories regarding how to account for the one-person difference. See Tahara (1978); Noguchi (1994).

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variable. In other words, ri is not a single unifying principle for the universe. Sorai also thought that people who perceive ri are diverse, and the mind through which people perceive ri is formless and indeterminate (Ogyū 1973a, 27). Thus, for Sorai, ri cannot be defined as something fixed. Sorai states: When we consider something with our mind, sometimes it appears that things must be this way, or that things cannot be that way, and we call such necessities ri . . . Based on this, we must say that ri is something that cannot be fixed; for . . . people are bound to have different views, depending on their nature .  .  . Each person sees what is visible to him, and fails to see what is not. And thus their views end up being different. (Ogyū 1973b, 150)

For Sorai, neither ri nor the mind is fixed or absolute. If ri is a single, unified principle underlying the entire universe as the Zhu Xi school claims, then it stands to reason that social order can be constructed (and interpersonal relations can be carried out) on the basis of a unified principle. But if neither ri nor the mind is fixed, how can a good social order or proper norms in interpersonal relations be maintained?

4.3  The Duty of Rulers: Creating and Practicing the Way Sorai’s answer to the question just raised centered on the idea of the Way. The Zhu Xi school regarded the Way as a moral principle which permeates the universe and which inheres in human nature. We have seen that Banzan also viewed the Way in this manner. Sorai, too, used the same term. But what he meant by the term was quite different. For Sorai, the Way was neither a cosmic principle nor a personal moral norm. Rather, it was a set of institutions created by the early kings, who Sorai regarded as having actually lived in ancient China. In other words, the Way was an artifact.2 As Sorai states: The way of the early kings consists in what the early kings formulated. It is not the natural way of heaven and earth. Now the early kings received the decrees of heaven and implemented royal government over the realm below heaven because of their virtues of intelligence, clarity, and wisdom. Their minds were focused entirely on their duty to bring peace to the realm below heaven. Thus they exhausted the strength of their minds and the ultimate skill of their wisdom in formulating this For Sorai, what was important was to understand “the Way” as an artifact of the early kings. The “Way” (more concretely, rites, music, law enforcement, and political administration [rei, gaku, kei, sei, 礼楽刑政]) was described in the so-called “Six Classics” (rikukei 六経) [of which one was lost early on], which predated Confucius. For this purpose, neo-Confucian reinterpretations from the Song-Ming period were not useful, nor was a close study of the Analects or Mencius. One had to go back to the [remaining] Five Classics, and to understand those texts, paying sufficient attention to contemporary Chinese usage. That is what Sorai’s kobunjigaku, or the study of old linguistic usages, was designed to accomplish.

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 De-Marketization through Shogunal Power 39 way and having all people below heaven and later generations follow this way and practice it. How could this [way] possibly have been a natural [product] of heaven and earth? (Tucker 2006, 142; Ogyū 1973a, 14)

For Sorai, the Way was not a manifestation of natural, cosmic principle, but a product of the wisdom and skill of the early kings. The early kings, however, did not create something out of nothing, without being subject to any constraints. As Sorai states, they “followed human nature in formulating the way” (Tucker 2006, 142; Ogyū 1973a, 14). Or, as he stated elsewhere, “the sages, with their deep and wide wisdom, established [the Way] in accordance with human nature” (Ogyū 1973c, 478). Then how did Sorai understand human nature?: At first people lived scattered in the mountains and valleys, dissolving in their milieu and not connecting with each other. Yet, it is people’s nature to connect with each other, to love each other, to help and feed each other, to form groups and to live comfortably. This is what is called benevolence. The sages established the Way in accordance with people’s nature; they connected people with each other through the five relationships,3 and let the four social groups help each other. In this manner, all under the sun is turned into one family, the country is unified as if it is a single person, and this Way is practiced for thousands of generations. The Way is nothing other than benevolence. Furthermore, the sages, concerned that the benevolent nature of people might be too weak, and that the Way might not be practiced naturally, established propriety, music, penalty, and decrees . . . This is what is called “the Way of the early kings.” (Ogyū 1976, 586)

In other words, people have “nature toward kinship, love, livelihood, and nourishment” (Tucker 2006, 146; Ogyū 1973a, 18), or the innate tendency to form groups. It is this nature on the basis of which the early kings formulated the Way. The Way of the sages brought the latent, group-forming nature of human beings to the surface, thus putting an end to the primitive state of human life. The Way—or the historical fact of formulation of the Way by the sages—was the decisive momentum which allowed people to form a society, and which led to “the emergence of the world of humans” (Ogyū 1973c, 478). Sorai did not understand the Way as some cosmic-moral principle. He recognized that human nature contains benevolence and that humans tend to live in groups. But this nature was not in itself a moral principle, and it only provided a basis for the construction of the Way. Thus, for Sorai, the Way remained an artifact created by the early kings. Sorai stated that “the Way of the early kings exists outside the self ” (Ogyū 1973a, 47). What he meant to say was that perfecting people’s private morality does not T h e “five relationships” refer to the relationships between master and retainer, between father and son, between husband and wife, between elder and younger brothers, and between friends, which were considered the basic bonds among people.

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necessarily accomplish the political task of bringing about peace in the realm below Heaven. What is needed instead is a set of institutions that regulates people’s behavior from the outside. In this manner, Sorai shifted the central focus of Confucianism away from questions of private morality toward questions concerning the public art of government. How did Sorai’s understanding of the Way influence his view on the duty of rulers? The Way, he believed, already existed in complete form in ancient China. But from this it did not follow that in later generations, peace was automatically brought to the realm below Heaven. As mentioned earlier, Sorai believed that the early kings expected “all people below Heaven and later generations ‹to› follow this Way and ‹to› practice it.” In other words, rulers of later generations were expected to practice the Way of the early kings. Sorai states: In the teachings of Confucius and his disciples, benevolence is the utmost great [virtue]. If one asks for the reason why this is so, it is because benevolence can uphold the Way of the Early Kings and embody it. The Way of the Early Kings .  .  . ‹boils down to› bringing peace and contentment to the world. Its roots lie in the respect of the Mandate of Heaven. ‹If› Heaven causes us by its orders to ‹become› emperors, . . . feudal lords, . . . high nobles and great officers, . . . ‹then we have› vassals and common people ‹to take care of› . . . Further, all the gentry and high nobles and great officers are responsible with their rulers in their heavenly occupations. Therefore, in the Way of the ruler only benevolence constitutes the great [virtue]. (Lidin 1970, 36–8; Ogyū 1973a, 17)

Here Sorai discusses the relationship between the rulers (emperors, feudal lords, high nobles, and great officers) and the ruled (vassals and common people). In this relationship, the former are required to “bring peace and contentment” to the latter. To do so would be to implement the Way in the realm below Heaven, and for a later generation. In other words, rulers in later periods assume the role of the early kings on a smaller scale. Naturally their method of ruling must be in accord with the Way created by the early kings: ‹T›he fact is that later kings and princes, respecting the rites and music of the Early Kings, practiced them; they have not in any way turned their backs on them. Further, rites, music, law enforcement, and political administration are what the Early Kings used when they perfected the Way for the peaceful rule of the world. This is so-called benevolence. Only by following the teachings of rites and music, as they were established by the Early Kings, can later kings and princes be considered benevolent men. (Lidin 1970, 32; Ogyū 1973a, 16)

Whether it is possible to bring peace and contentment to a certain region in a certain time-period depends on how well the later kings or princes perform their duty. This also applies to the rulers of the Tokugawa era.

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4.4  Sorai’s Assessment of Tokugawa Rule: The Absence of Proper Institutions For Sorai, the task of rulers was to bring peace to the realm below Heaven. To do so, it was important to establish a proper set of institutions suitable for the purpose. Yet, in Sorai’s view, such institutions were lacking in Japan of his time, and this was the root cause of various problems: Why do I say that we have no seido 制度 (system, institutions) today? The sages established seido in the ancient times, during their reign. It was a well-designed means for distinguishing between high and low, restraining extravagance, and for bringing about prosperity to the world. Naturally, subsequent rulers all made use of this seido. Yet, the present rulers are different. They established peace under Heaven through military prowess by emerging victorious from a long series of wars. Since the time was already so distant from the era of the ancient sages, the original seido established by them simply could not be applied. Moreover, all the seido from the past were completely destroyed due to the long period of wars. Since that time, habitual practice of the people was left as it was ‹without establishing institutions›. Now we do not have proper seido for anything, and people, both high and low, tend to act just as they wish. (Ogyū 2011, 99–100)

Though all dynasties in history have established their seido, the Tokugawa shogunate never did so. Since there was no system to order the external realm, people’s minds, which are fickle by nature, became even more uninhibited. Sorai argues that in today’s world both high and low do as they please. When seido is absent, the problem of economic destitution arises: When peace lasts for a long time, high and low in the society gradually becomes impoverished. Such impoverishment will lead to the disruption of institutions and rules essential for social order and ultimately result in a war . . . Thus, in order to govern the state or realm under Heaven, it is essential to bring prosperity first. This is the very basis of governance. (2011, 86)

In the society of his day, Sorai saw rampant economic destitution and dissolution of social order. Since “in all times and places, the impoverishment of high and low has been the cause of social disorder” (Ogyū 2011, 90.), Sorai’s approach to administering the society and saving the people (keisei saimin) focused on economic questions as the first priority. In this sense, Sorai’s approach was similar to Banzan’s ideas (3.2.5).

4.5  Establishing Proper Institutions: Settlement of Samurai in the Countryside In Sorai’s view, the root cause of the problems lay in the absence of institutions. Specifically, he identified two causes of economic destitution:

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A History of Economic Thought in Japan The first thing that needs to be done is to examine the cause of impoverishment .  .  . ‹T›here are some things that the ancient sages did in solving the problem of impoverishment, which are missing in the present day . . . There is nothing better than to find what these ‹missing elements› are and to rectify the current ways . . . The basis of the ancient sages’ ways of governance is to attach people, both high and low, to the land and to establish the system of rites and laws. This is the essence of governance. Nowadays, the disease of impoverishment for high and low appears, because these two elements essential for good governance are missing. (Ogyū 2011, 90)

One of the causes identified by Sorai was the absence of rites and laws (reihō), or a set of rules concerning the proper manner of behavior and pattern of consumption for each status group. Under a proper seido, the way of life of each status group is regulated by a set of rules, which ensures economic stability. But in the absence of rites and laws, there is nothing to prevent the fickle human mind from chasing after unsustainable luxury. But for Sorai, this was not the root of the problem. There was a more fundamental cause for economic destitution; both high and low live away from the land. He described this condition as “living as if in an inn (ryoshuku no kyōkai).” Ryoshuku literally means “a traveler’s inn.” In other words, what he meant was that people, especially samurai, were leading the life of travelers who stay at an inn, not in their original home. This condition led to the following negative consequences: The warrior households (buke 武家), whether in the territories of the shogunate or of the domain lords, sell off all rice for cash except what they need for their annual consumption. With that money, they buy goods necessary for their daily life from various domains. That is the way of life for warrior households today . . . They cannot survive without merchants. Since all goods are kept in the hands of merchants and can be obtained only in exchange for money . . . it is the merchants who set the prices. This is all because warriors now live as if in an inn. In the past hundred years, merchants have been making tremendous amount of profit, which is unprecedented since the beginning of the world. Such a thing has never been heard of either in Japan or in foreign countries. (2011, 93)

When at home, all the daily necessities are readily available. But when living in an inn, everything has to be purchased at a price. In other words, samurai became dependent on the market economy. As a consequence, economic power shifted from samurai to merchants, resulting in the emergence of “a merchants’ paradise” (2011, 109). The main point of Sorai’s policy proposal was to have “all people, high and low, be attached to the land.” In particular, samurai should be relocated from castle towns to their fiefs: “If the buke live in the countryside, they do not have to spend money on clothing, food, and housing. Thus, their circumstances would improve” (2011, 77). In sum, leading a frugal lifestyle in the countryside was expected to contribute to the improvement of samurai’s economic condition. Sorai’s proposal is similar to Banzan’s argument (3.2.6), and it rejects the separation of warriors and peasants, which was the foundation of the Tokugawa system. Yet, this was not all. He made an additional proposal for a radical reform of the Tokugawa system.

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4.6  Replacing the Market with Taxation Sorai’s additional proposal concerned drastic strengthening of the shogunate’s and the daimyō’s power of taxation. In particular, he argued that the bakufu should be allowed to collect taxes from entire Japan, and also to collect taxes in items other than rice: This circumstance of living as if in an inn is also true of the shogunate’s finances. The reason is that the bakufu purchases everything needed with money . . . yet, since the shogun controls the realm under Heaven, all of Japan is his realm. He should simply use whatever he needs and does not have to purchase anything. Purchasing things means to take something that originally belongs to someone else; and because it should not be taken for free, money is paid as compensation. Yet, in the case of the shogun, the whole of Japan belongs to him, everything throughout this country is his. Thus, to buy things, thinking that they belong to someone else, is a serious mistake. (Ogyū 2011, 91–2)

In the passage just quoted, Sorai argues (1) that the Tokugawa Shogunate is the supreme ruling authority over the entire Japan; (2) that the entire country should be considered a fief of the shogunate; (3) that the shogunate should be in a position to collect taxes from the entire land; and (4) that the taxes should not be limited to rice tax. Under the system prevailing at the time, daimyō, though subordinate to the shogun, enjoyed considerable degree of autonomy from the shogunate, and ruled their own domain with exclusive right to collect rice tax. The Tokugawa shogunate was not a central government in the modern sense. What Sorai proposed was to fundamentally alter the nature of the Tokugawa shogunate, including its relationship with daimyō. Concretely, the shogunate was to collect rice tax from entire Japan. This meant strengthening of the power of the shogunate at the expense of daimyō, for the shogunate would be allowed to reach into their pockets. Another of Sorai’s proposals was to collect goods other than rice as tax. As we have seen in Chapter 1, annual tax in the Tokugawa era was basically collected in rice. But Sorai argued in the passage quoted earlier that “the Way of the early kings” was to collect “everything” as annual tax, not just rice. This applied not only to the shogunate but also to daimyō, who would be allowed to practice “the same policy as the shogunate” in relation to their own domain (2011, 121). Surely, if this policy was implemented, “the situation of living as if an inn” as described in the passage earlier would come to an end. If the taxing power of the shogunate was extended to the entire land, and if annual tax was collected in goods other than rice, the basis of the Tokugawa system would change dramatically. Samurai would have less need to sell rice to purchase other articles, and the significance of the market would diminish. The money-based market economy would be supplanted to a significant extent by an economy based on in-kind taxation, and the fiscal basis of the shogunate would be strengthened to a great extent. Sorai did not reject the market economy in principle. Nor did he take a hostile view of merchants. Yet, like Banzan, he envisioned a de-marketized society that would not depend on the market. To realize this vision, he thought that the shogunate, acting

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as “later kings or princes,” had to “establish institutions.” Moreover, the institutions envisioned were something that would change the Tokugawa system from its foundations. Presumably, Sorai counted on the exercise of formidable shogunal power to bring about such changes.

4.7  Prices and Money For Sorai, the fundamental solution to contemporary economic problems lay in de-marketization through the settlement of samurai in the countryside. From such a viewpoint, issues concerning prices and money may have appeared to have only secondary importance. Yet Sorai paid much attention to such issues. One obvious reason has to do with the economic environment in which he lived. As we shall see in Chapter 6, the monetary policy of the Tokugawa shogunate experienced frequent changes in the forty years since 1695, as a result of which price levels also fluctuated widely. In his work Seidan, written around 1726, Sorai considered the problem of price fluctuations and related problems of currency. In closing this chapter, we shall examine Sorai’s views on the questions of prices and money. Sorai’s position was that price levels were basically determined by the demand and supply for goods, and he did not place much emphasis on monetary factors: Prices of goods ‹other than rice› have gone up because the number of consumers has increased. The increase in the number of consumers results from the lack of seido. If there is a rule that people in high ranks use high quality goods while members of the lower orders consume inferior articles, goods of two different kinds would be distributed to proper classes and thus the prices would not go up. But nowadays, even the inferiors use high-quality goods. Because of this, prices rise due to the shortage of goods .  .  . The difference in prices of goods between now and forty or fifty years ago is more than ten times. The problem of price escalation, due to the increase in the number of consumers, can be solved by the establishment of a seido; it would severely regulate townspeople and rural residents (hyakushō) and that would ultimately reduce the prices of most goods. (Ogyū 2011, 126–8)

For Sorai, prices had risen because the condition of excess demand had persisted for a long time. And the excessive demand was caused by the absence of seido, which allowed people to buy what they wanted. Thus, if the shogunate regulated the people’s living standard depending on their status, demand would be suppressed, and prices would decrease to proper levels. Political power, in Sorai’s view, could regulate people’s life, patterns of consumption and demand, and, therefore, also prices. What is more, if samurai were to settle in the countryside, their dependence on the market economy and on merchants would be diminished, and the power balance between merchants and samurai would shift in the latter’s favor. This, too, would help samurai control price levels in the markets:

 De-Marketization through Shogunal Power 45 If the warriors all live on their fiefs, they do not have to sell rice to make a living. Merchants, then, would be the one who wish to purchase rice. In that case, the warriors will be the host, the merchants guest; as the host, they can freely set prices of goods. This is an everlasting rule created out of wide and deep knowledge of the ancient sages. (2011, 155)

But even if this were possible, its realization would require some time. As a more pressing concern, the fluctuations in money supply and in price levels (which resulted from changes in the shogunate’s monetary policy) could not be ignored. In fact, Sorai, too, noted the fluctuation. But he did not place much emphasis on the quality or the quantity of gold and silver coins: The gold and silver money were debased during the Genroku 元禄era (1688– 1704), and the shogunal treasury was filled with money . . . Soon . . . such gold and silver money spread and the amount of money circulating among the people increased all the more. Because of that, people became more extravagant and merchants began to make more profit. The expenditure for even one person or one household increased as well . . . ‹A›s far as I remember, it was since Genroku that the merchants spread everywhere throughout the countryside. Even though the amount of gold and silver money in circulation is now reduced by half and became about the same as that of former Keichō era ‹through improvement in the quality of gold and silver currency›, things are completely different from back then in that people’s lifestyle in general has become more extravagant . . . ‹B›ecause the money which people possess is reduced by half, it is natural that financial difficulty would occur. The assumption that things should be better is, therefore, nothing but a silly idea which does not fully consider what is going on in this country as a whole. The rise in prices of various goods did not occur because the gold and silver coins were debased during the Genroku era. Nor did it happen because the amount of money circulating increased due to the debasement. The lifestyle of living as if in an inn together with the absence of a seido allowed the merchants to flourish. This, combined with other factors, gradually pushed up the prices of goods and the situation became exacerbated with the increase in the amount of money in circulation during the Genroku era; people became more extravagant, and the merchants tended to be everywhere throughout the countryside. As a result, the number of consumers increased all the more, and the prices of goods, too, rose even higher. Leaving untouched such conditions in the present time and merely reducing the amount of gold and silver in half resulted in both the reduction of people’s purchasing power by half and insufficiency of gold and silver. It is obvious that this is why people nowadays have become impoverished. (2011, 134–5)

For Sorai, neither the increase in money supply resulting from the debasement of gold and silver coins since 1695 nor its decrease as a result of the reversal of the debasement policy after 1714 was the gist of the problem. The heart of the matter was the spread of “extravagance,” which was due to the absence of seido.

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This is not to say that Sorai was entirely oblivious of monetary issues. In this regard, he focused his attention not on gold and silver coins, but on copper coins, or, more precisely, on the relative prices of copper coins in relation to gold and silver money: The price of copper coins during the Keichō era, I heard, was one ryō of gold per four kammon4 . . . Until thirty or forty years ago, one ryō was equivalent to five kammon. From the Genroku era, it went back to one ryō per four kammon again .  .  . Now one ryō is equivalent to about four kammon and the rate does not go down below that level. ‹T›his is because the amount of copper coinage is reduced. (2011, 138)

Here Sorai points out that one ryō of gold was equivalent to four kammon of copper coins in the Genroku era, during which the supply of gold coins increased due to debasement. Yet, the exchange rate stayed at roughly the same level in more recent years, despite the fact that the supply of gold and silver coins decreased. If the supply of gold coins was cut in half under such condition (in which the gold–copper exchange rate was stable), then people would be able to obtain only half the amount of copper coins, and “poverty is to be expected when the people’s money is halved.” For Sorai, the real issue was the supply of copper coins, which are most frequently used in people’s daily lives. Therefore, his policy proposal focused not on gold and silver money but on copper coins: The cheapest price of any goods is one mon of copper coin and nothing is cheaper than that. Just because the amount of copper coins is decreased and the value of copper coins rise, we cannot break one-mon copper coin into two or three pieces and use them. That is why the copper coins should be equivalent to the lowest unit of value, and why it should be used as a criterion for measuring the purchasing power of the gold and silver money. (2011, 137)

Sorai proposed minting a large amount of copper coins for the purpose of decreasing the relative value of copper in relation to gold and silver: The best way of bringing about prosperity to the present society is to mint copper coins .  .  . If copper coins were mass produced so that one ryō of gold became equivalent to seven or eight kammon of copper, the relative value of gold and silver would be doubled even if the amount in circulation were diminished by half. The effect would be the same as when the ‹debased› Genroku gold and silver coins were left as they were, with the amount of gold and silver coins undiminished. The true value of gold and silver coins fluctuates depending on the changes in their relative value to copper coins. When the value of copper coins rises, the value of gold and silver declines; if the value of copper coins declines, the purchasing power of gold

Kammon 貫文 is a unit of copper coins and is equivalent to 1,000 mon. Kammon is also referred to as simply kan. For currency units during the Tokugawa era, see Chapter 7, Table 7.1.

4

 De-Marketization through Shogunal Power 47 and silver becomes stronger. Thus, it is meaningless to merely improve the quality of gold and silver money. (2011, 136–7)

As stated earlier, Sorai focused on the balance of supply and demand of commodities and did not place much emphasis on the quality or quantity of metal coins. Yet, he understood that the small amount of copper coins obtained in exchange for gold and silver coins was causing inconvenience in people’s daily life. Therefore, he thought that an abundant supply of copper coins would “bring about prosperity” and contribute to the smooth functioning of the market economy in the short run. Bringing about prosperity, however, was only a provisional response to the current situation. For once Sorai’s proposals on the settlement of samurai in the countryside and the changes in the system of annual tax were implemented through the exercise of formidable shogunal power, the size of the market economy would shrink, the demand for money would decline, and a de-marketized society would emerge. In this sense, it would be anachronistic to understand Sorai’s notion of “bringing about prosperity” as equivalent to modern concepts such as economic recovery or growth. Nevertheless, leaving aside Sorai’s intentions, it would be an interesting intellectual exercise to consider how his view on currency problems is related to the views of policymakers of the shogunate, which we shall discuss in Chapter 6.

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Module 2

A Turn toward Economic Pragmatism In this module, we will trace the development of keisei saimin ron in the middle part of the Tokugawa era (Chapters 5 and 8) and discuss how this was related to developments in economic policy (Chapters 6 and 7). As we saw in the previous module, the task of keisei saimin ron originally consisted in making compatible the goal of fostering of moral persons and society with the reality of a rapidly evolving market economy. By the middle part of the Tokugawa era, however, market relations had irreversibly penetrated all aspects of the economy, defying any attempt to rein them in. For this reason, arguments on economic policy during this period typically presupposed the penetration of market relations. They sought to attain economic stability and to improve the financial conditions of samurai households on this basis. One example is the pursuit of currency policy based on realistic understanding of the market economy. Another is the encouragement of the pursuit by daimyō lords of “domainal interest” (kokueki), or promotion of industry and “export” trade at the domainal level. As concrete policy discussions were dominated by immediate goals of stabilizing the economy and solving problems of warrior finances, the goal of building a moral society tended to be pushed back beyond the immediate time horizon. This does not mean, however, that “core values” going beyond economic stability and avoidance of economic destitution disappeared. Even as economic policy took a pragmatic turn, the ideal of a “moral person” spread beyond the samurai class and gradually became embedded among wider range of social groups in the form of ethically conceived notions of “occupational duty” (shokubun), though this is a subject to be discussed in Module 3.

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5

A Turning Point in the Theory of Keisei Saimin

5.1  Dazai Shundai and the Ken’en School Ogyū Sorai was one of the most influential thinkers of the Tokugawa era. Sorai’s thought gained both support and criticism in various quarters, including among Confucian scholars. Sorai and his disciples were collectively known as the Ken’en school (Ken’en gakuha 蘐園学派). The name was connected with the location of his academy. Sorai once lived in the Kayabachō 茅場町district of Nihombashi in Edo, and opened his school there. His academy came to be called Ken’en (miscanthus patch) because the characters ken 蘐 and kaya 茅 both meant miscanthus. The most prominent among Sorai’s disciples were Hattori Nankaku 服部南郭 (1683–1759) and Dazai Shundai 太宰春台 (1680–1747) (Tajiri and Hikita 1995; Hino 1999), the latter of whom we shall discuss in this chapter. Because Sorai separated the question of social order from the question of personal morality, social order came to be regarded as a human artifact, rather than as a natural manifestation of the inborn nature of human beings. This directed Sorai’s attention, on the one hand, to the art of governance itself—which now came to be regarded as something independent of personal morality. Yet, Sorai’s attention was not focused entirely on problems of governance. Because ri (principle) was variable, people’s private lives were also variable; they could not be guided by a single set of moral precepts. Rather, they emerged as an autonomous sphere containing enormous variety that is worth investigating. For this reason, Sorai directed a significant amount of attention to issues concerning the private sphere of life (Maruyama 1974, 102–13). After Sorai’s death, the mainstream within the Ken’en school inherited “aspects of Sorai’s thought . . . concerning the private sphere, which accepted the manifestations of human sentiments as natural, and which recognized literature as something independent of morality” (Hino 1975, 21). In other words, the majority in the Ken’en school sought their raison d’être in spheres other than the public realms of politics and economy. Nankaku more than anyone else represented this tendency. Shundai, by contrast, “considered himself the direct and legitimate successor of Sorai’s scholarship” (Bitō 1972, 487), and took upon himself the task of inheriting and developing Sorai’s ideas on Confucianism and on keisei ron. From Shundai’s viewpoint, Nankaku’s style was objectionable, and the two eventually drifted apart. As a result, Shundai gradually became isolated within the school. It is worth noting that between

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Sorai and Shundai, too, “there was . . . a sense of estrangement” (Bitō 1972, 487). Part of this estrangement may have stemmed from the differences between their ideas.

5.2  Shundai’s Understanding of Human Nature: Competitive Mind Then what were Shundai’s ideas like? Let us first examine Shundai’s idea on human nature. In the following passage, he starts out from a description of the primitive state of humanity just as Sorai did (4.3). As we can see, his understanding of human nature is quite different from his master’s: When Heaven and Earth were created . . . ‹m›en were all equals without distinctions between noble and lowly, or high and low. They were all commoners. Although they were physically humans, their minds were no different from those of birds and beasts . . . ‹Among those men› there were wise ones and foolish ones; the strong and the weak. The wise managed to escape hunger and cold, while the foolish could not do so. The strong took from the weak clothing and food, while the weak were deprived of their possessions. From then on, conflicts arose among commoners . . . There are no men without desires. Desire is a part of ‹our› sentiments . . . Fools in ancient times did not know that there were things that humans should do and should not do. Thus, they did not do what they should do and did what should not be done. That is why their acts were similar to those of birds and beasts. (Dazai 1969, 14–16)

While Sorai found “nature toward kinship, love, livelihood, and nourishment” in primitive humanity, Shundai’s “commoners” were like “birds and beasts” in that they acted as they desired. He therefore saw conflicts as inevitable: No one in the realm below Heaven is free from competitiveness. To compete is to contend and to struggle with each other. To struggle with each other is to engage in rivalry. When we engage in rivalry, we wish to win; when we compete, we try not to fall behind. This is all manifestations of natural human sentiments . . . And in this regard, there is no difference between the wise and the foolish, between gentlemen and small men. (Dazai 1972, 79–80)

As is evident, Shundai was not a mere follower of his master with regard to the view on humanity; the bases of their thought were quite different.

5.3  Shundai’s Interpretation of the Way of the Sages If people possess desires and competitive mind, and if the normal state of mankind is to be in conflict, how can they and their society be good? Shundai’s argument on this question seems at first glance to follow Sorai’s thinking. For he, too, stresses the importance of “the Way of the sages” in answering this question:

 A Turning Point in the Theory of Keisei Saimin 53 Without the Way of the sages, the realm below Heaven can never be governed peacefully even for a single day. From the emperor to the masses, no one can survive for a day if it were not for the Way . . . The sages . . . with their profound wisdom understood the principles of all things in the universe, and established for everyone below Heaven an unchanging Way . . . The sages, in teaching about righteousness, distinguished between what should be done and what should not be done. They taught that one should strive to do what he should do, and avoid doing what he should not do even at the cost of death. This righteousness is what the sages meant by the Way. (Dazai 1969, 13–14; 16–17)

Shundai argues that the ancient sages taught men, who were no different from “birds and beasts,” norms of righteousness. “The Way” is a general term for such behavioral norms. However, Shundai’s “Way of the sages” does not presuppose what Sorai called “nature toward kinship, love, livelihood, and nourishment.” To the extent that Shundai understands humans to be driven by desires and by competitive mind, it is impossible for norms to be formulated on the basis of human nature. Rather, the Way cannot be anything other than a set of rules that regulates people’s behavior from the outside; Shundai never expected that human nature would be corrected, or that conflicts would cease: The Way of the sages never touches on the matter of inner qualities of people’s heart— whether they are good or bad. The teachings of the sages approach the issues from the outside . . . He is a gentleman who has the outward appearance of a gentleman. The inner qualities of his heart are never questioned . . . Virtue is nothing other than the condensation of a man’s clothing, how he carries himself, and his verbal utterances. (1972, 95)

Here, Shundai’s argument is based on a pessimistic view of human nature. For him, “the possibility of community is acknowledged neither as something inherent in human nature nor even as a latent inclination among individuals” (Maeda 2012, 66). That is why he focuses on the external appearance of people rather than on the inner qualities of their heart. Since the realm below Heaven consists of such human beings, no basis can be found for the emergence of a good social order. Thus, society needs “the Way of the sages” that regulates it from the outside: To govern the realm below Heaven, what is necessary first and foremost is to establish seido (system, institutions) in all matters. To establish institutions is to set up rules for various matters . . . To manage a state or the realm below Heaven, it is necessary at the outset to set up rules for all matters, to keep them for generations, never to change them, and for both high and low to strictly adhere to them. (1967a, 624)

5.4  Coping with a Time of Decline: Lao Tzu’s Non-Action Yet, Shundai did not call for the establishment of seido as a matter of practical policy. Shundai was similar to Sorai in recognizing the necessity of institutions. He also

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followed his master in thinking that “generally speaking, contemporary states do not have institutions” (Dazai 1967a, 625). Unlike Sorai, however, Shundai did not think it was possible to establish institutions given the conditions of his time. Sorai believed that only sages could formulate “the Way,” but acknowledged the possibility that later kings and princes could act as “benevolent men” by following the early kings (4.3). But Shundai’s assessment of the contemporary situation was more pessimistic: Concerning the way for administering the society and saving the people (keisei saimin/keizai), the best type of keizai emerges when, at the time of the establishment of a state, a bright ruler, assisted by wise ministers, appoints officials of various ranks and positions, establishes institutions and implements strict laws, and governs according to rules established for ages to come. The next best type of keizai emerges when, at a later period in the life of a state, a wise and courageous prince appears, promotes judicious ministers and changes bad old customs, rectifies the manners, appoints officials in their proper places, rewards good deeds and punishes bad ones, masters the way in which the early kings and princes governed . . . and thereby revives a state in decline, and extends its period of prosperity. This is called an act of revival of a state . . . Yet since ancient times, bright rulers and wise ministers have seldom appeared at the same time, and it is, therefore, extremely rare that the prince and his vassals would be united . . . ‹Thus› realization of successful keizai is exceedingly difficult. To change the established manner of governance and to seek after temporary gains based on myopic interests instead of performing the tasks of keizai in a proper fashion would just confuse the people. It would bring great harm to the state . . . We live in a condition where no proper institutions have existed from the very beginning, nor any firm laws, nor governance based on lessons from the past—a condition where superficial, stopgap measures have been implemented for hundreds of years, and where the gentry ‹meaning samurai here› have lived a life of luxury and debauchery with their stipend, while the people have sought after petty gains, neglecting their proper occupations. The manners have become debased, and both high and low are living in destitution. In such a condition, to change the old way of governance here and there rather than practicing proper keizai would be highly inappropriate. The best thing to do would be to do as little as possible in terms of governance, and to follow the way of non-action. (1967a, 657–8)

What is interesting here is that Shundai suggested Lao Tzu’s idea of inactivity (Rōshi no mui)1 as a prescription to deal with the difficult conditions of his time. No one among contemporary rulers, he thought, was qualified for the tasks of properly administering the society and of saving the people. He also held the view that he was living in a time of decline. In such a period, policies designed to improve the situation may well exacerbate it. Thus, even if the current state of affairs was not desirable, it would be inappropriate to tamper with it. That is why he recommended the way of non-action: Lao Tzu 老子 (Jp. Rōshi, around the sixth century BCE?) is regarded as the founder of Daoism as a philosophical doctrine.

1

 A Turning Point in the Theory of Keisei Saimin 55 What Lao Tzu means by non-action is that both high and low do not use contrivances, that they leave everything to the natural flow of Heaven and Earth, that they never meddle in the matters of the realm below Heaven, and that they just leave those matters as they are. From the viewpoint of Confucian scholars, such an approach may seem to go against benevolence. Yet, it does not. This is the proper way for a time of decline . . . ‹A state› may be governed better by avoiding the use of contrivances to govern it. This is called government through not governing, and that is what Lao Tzu meant by non-action. There is no better way to govern a state in a time of decline. (1967a, 659–60)

To follow the way of non-action means to accept the current condition as it is (regardless of its appropriateness or righteousness) and to adapt to it. According to Shundai, the basis for establishing a good social order, whatever such a basis might be, does not exist within human nature. In principle, order could still be maintained from the outside by utilizing the Way of the sages. Yet in a time of decline, when “the Way of the sages” was not practicable, Shundai argued that the only alternative was to accept Lao Tzu’s non-action. To some extent, Shundai’s idea resembles Banzan’s “time, place, and rank argument,” which we discussed previously (3.2.4). But it is noteworthy that while Banzan’s thought presupposed the universality of the Way, Shundai virtually gave up on “the Way of the sages.” In this regard, the gap between their ideas is quite significant.

5.5  Extending the Life of a State: Industrial Promotion at the Domainal Level Banzan and Sorai advocated using the instrument of politics to build a de-marketized economic system. Shundai, too, held that a time of decline could be reversed given a proper seido. Yet, Shundai believed that such a feat was practically impossible under the present circumstances. Does this mean that he thought it was better to do literally nothing? The answer is no. While Shundai accepted the reality that a fundamental solution was beyond the realm of possibility, he pondered what could be done within existing constraints. To use his own words, he wished to “extend, even for a little while, the life of a state . . . which is in decline, suffering from various complications” (1967a, 661). Shundai analyzes the situation of his time as follows: Under the rule of the sages, census was taken throughout the realm below Heaven. The number of households for the four estates were checked frequently, and so were the personal information of residents. And it was forbidden for peasants to switch to other occupations. Yet, nowadays, such a ban does not exist, and the number of artisans and merchants is increasing day by day. They spread everywhere and serve people’s needs. Although this seems to be quite convenient, such a situation inclines people to become extravagant, and all gold and silver coins go rushing into the merchants’ coffer. What a deplorable condition! (1967a, 492)

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Here, Shundai points out how merchants were accumulating wealth while warrior households were suffering from financial difficulties. He recognized that the samurai were unable to regulate the workings of the economy and regarded this as a problem like Banzan and Sorai. In addressing this problem, Shundai focused on domainal economy, and encouraged daimyō to promote industry within their domains to obtain gold and silver through the sales of domainal products to other regions: Today’s world is a world in which gold and silver dominate . . . Even if one has rice, other grains, or textiles, he is not in a favorable position unless he possesses gold and silver . . . Therefore, in today’s world . . . it appears that it is necessary to obtain gold and silver, using whatever means necessary. The best way to obtain gold and silver is through trade . . . Regardless of their size, all daimyō domains produce some local products. Some domains may have more products than others. Domains with few local products should guide the people and encourage them to increase the variety of local products. Depending on the local conditions, grains, wood, or any other useful plants should be planted for this purpose. Also, the local population should be taught the skills for suitable handicrafts, so that they can produce something useful when they do not have agricultural work. The local products should be exchanged with products of other domains, thereby fulfilling the needs of their domain. This is the way to bring prosperity to a domain. (1967b, 677–8)

Shundai was aware that this was merely a stopgap measure rather than a fundamental solution (i.e., a proper measure to administer the society and to save the people). It was just “a way to cope with urgent problems” in a time of decline (Dazai 1967b, 681). It is not easy to tell whether Shundai truly approved of the measures he proposed. But leaving aside the issue of his subjective intentions, Shundai’s bold assertion that “there is no alternative to accumulating gold and silver” has historic significance (Dazai 1967b, 681–2). With Shundai, we reach a major milestone. Going beyond Banzan’s and Sorai’s call for a de-marketized society, Shundai opened up a new horizon in the history of Japanese economic thought (Kawaguchi 1988).

6

Shogun Yoshimune and Pragmatic Officials

6.1  Fiscal Crisis and Reminting of Coins The financial conditions of the warrior households began to deteriorate after the midseventeenth century. Tokugawa Tsunayoshi, who became the fifth shogun in 1680, sought to improve the bakufu’s finances, but without much success. In 1695 (the eighth year of the Genroku era), the shogunate initiated a policy of currency debasement (known as genroku kingin fukikae), which was discussed by Sorai (4.7). The purposes of this debasement policy were, first, to replace old coins with new ones, and, second, to add the proceeds from debasement (known as deme) to the revenues of the shogunate. This policy of fiscally driven debasement was continued until the Hōei 宝永 era (1704– 11). Yet, the deterioration in the shogunate’s finances continued, because of mounting expenses on disaster relief, and also because increased money supply pushed up price levels, causing an increase in the shogunate’s expenditure. Inflation also inevitably aroused discontent and criticism. In particular, Arai Hakuseki 新井白石 (1657–1725)1 spearheaded the criticism against Ogiwara Shigehide 荻原重秀 (1658–1713),2 the main architect of the debasement policy. Hakuseki’s ideas exerted significant influence on Tokugawa Ienobu 徳川家宣 (1662–1712) and Ietsugu 家継 (1709–16), the sixth and seventh shoguns. Hakuseki writes: Wise rulers of old used to conduct their policy based on an assessment of the relative worth of goods and money. Prices of goods are high when the worth of money is small, and the worth of money is small when there is a large amount of money. Thus, it is necessary in such a case to retrieve money and reduce the amount in circulation. Conversely, prices of goods are low when the worth of money is big, and the worth of money is big when there is not much money in circulation. In such a case it is necessary to increase the amount of money in circulation. If the worth of both goods and money is balanced, then economic activities in the realm Arai Hakuseki was a prominent Confucian scholar who served as an advisor to Shoguns Ienobu and Ietsugu. During the Ienobu era, he played a major role in reform policies that later came to be known as the Shōtoku Reforms. 2 Ogiwara Shigehide was a hatamoto who was promoted to the post of superintendent of finance and tax department (kanjō bugyō) in 1696. He lost the position in 1712, facing severe criticism, including from Arai Hakuseki. 1

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A History of Economic Thought in Japan below Heaven would be quite smooth . . . There is no doubt that the high price of goods today is caused by the fact that the worth of money diminished due to the large amount of money in circulation. (Arai 1907, 191–2)

In Hakuseki’s view, there was a correlation between the price level and the amount of money supply. The inflation of his time was the result of the increase in money supply, and Hakuseki argued that Ogiwara was responsible for this. In fact, Ogiwara was dismissed from his position in 1712, and in the next year, Hakuseki submitted to Tokugawa Ietsugu a policy proposal including the passage just quoted. If the issue could be reduced to the problem of money supply and price level, then the only thing needed was to decrease the money supply to an appropriate level. In fact, to adjust the money supply to a proper level, Hakuseki even proposed the use of ginshō or paper currency (Arai 1907, 209). Yet, for Hakuseki, the problem could not be reduced to the correlation between money supply and price level. He also emphasized the grade of gold and silver coins, stating, “when discussing gold and silver coins, it is important to recognize that such coins come in varying grades” (Arai 1907, 246). To some extent, it was natural that Hakuseki paid attention to the grade of coins, because the coins’ quality was directly related to the amount of money supply, and hence to price levels. But if he was interested in coin grade only insofar as it affected the money supply, then the issue was reducible to money supply, and the question of coin grade would be nonessential. Then why did Hakuseki pay so much attention to the issue of grade? The answer might be found in his statement on “the five basic principles” on gold and silver coins, the first item of which instructed policymakers “to follow the laws of the Keichō era” (Arai 1907, 208). Hakuseki’s point was that the shogunate’s currency policy should follow the original policy implemented during the Keichō era, that is, at the time of the establishment of the shogunate. Hakuseki’s emphasis on restoring the original currency policy of the shogunate was most probably motivated by the political need to demonstrate the undiminished authority of the shogunate. Thus his policy proposal was driven by interests that went beyond economic concerns for money supply or price level. Hakuseki’s concern for the legitimacy of the shogunate was also linked to his understanding of gold and silver as precious metals—rare natural objects that have value in themselves: The emergence of gold and silver between Heaven and Earth can be likened to the growth of bones in human body, while other precious goods are like blood, flesh, skin and hair. Blood, flesh, skin and hair will eventually be reproduced even if they are damaged . . . Yet bones, once they are broken and removed, can never grow back. Gold and silver are the bones of Heaven and Earth . . . After removing them, there is no way that they will grow again . . . When our august founder ‹Tokugawa Ieyasu› ascended to power, Heaven and Earth seem to have attempted to help him achieve his great deeds; the amount of gold, silver, and copper produced in this country . . . was unprecedentedly large and such an instance was unheard of anywhere in the world. (Arai 1906a, 673–4)

 Shogun Yoshimune and Pragmatic Officials 59 For Hakuseki, gold and silver could function as currency owing to their special value as precious metals. This special status of gold and silver, in his mind, became linked up with the legitimacy of the Tokugawa clan. His call for a return to the policy of the Keichō era originated in this linkage. For him, the problem with the debasement of gold and silver coins did not end with the inflation it brought about, though that was serious enough an inconvenience. What was even more problematic was the injury to the legitimacy of the Tokugawa regime. In 1714, in line with Hakuseki’s recommendations, the shogunate reversed the policy of debasement by issuing coins minted according to the original specifications of the Keichō era. Yet, two years later, Ietsugu passed away, and Yoshimune became the eighth shogun. With this change in leadership, Hakuseki, too, was forced to leave the top level of the shogunal administration.

6.2  The Kyōhō Reforms The Kyōhō reforms (Kyōhō kaikaku 享保改革) refer to the reforms led by the eighth shogun Tokugawa Yoshimune 徳川吉宗 (1684–1751).3 Not only did Yoshimune personally direct the reform measures as shogun, he continued to play a leading role in the shogunate’s policies even after leaving his position in 1745. For this reason, we regard the period from 1716 to 1751 (the year of Yoshimune’s death) as the period of the “Kyōhō Reforms” and of the “Yoshimune administration.” When Yoshimune became shogun, the shogunate was faced with financial difficulty left unresolved by the previous administration. Another pressing issue was whether to continue the newly implemented policy of minting high-grade coins following the Keichō-era specifications. The memory of rampant inflation due to the Genroku recoinage policy was still fresh, and preventing its recurrence must have been a high priority. In dealing with these issues, the shogunal administration was not unified. Available evidences indicate that it was divided over policy lines. While Yoshimune was no doubt the central figure in the administration, a key supporting player, Ōoka Tadasuke 大岡忠相 (1677–1751), advocated a policy line different from Yoshimune’s vision. The divergence in policy line was especially clear in currency policy, as we shall see.

6.2.1  Increase in Rice Tax One of the most effective and practical responses to a fiscal crisis is reduction in expenditure. Yoshimune was a man who valued frugality, and even apart from that, the fiscal situation demanded cuts in expenditure. Nevertheless, in 1722, the shogunate’s debt amounted to more than 130,000 ryō, and Yoshimune was forced to resort to the extraordinary measure of requiring the daimyō to pay 1 percent of their kokudaka4 Fukai (1991). The name derives from the fact that they were launched during the Kyōhō era (1716– 36). 4 On kokudaka, see Chapter 3, n. 1. 3

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to the shogunate in exchange for the relaxation of the requirement for alternate attendance (sankin kōtai 参勤交代).5 Evidently, a cut in expenditure was not sufficient; the shogunate had to come up with a more aggressive policy to increase its revenues. The main item in the shogunate’s revenues was the rice tax collected from rural residents. Thus, one way of solving the problem was the attempt to increase agricultural production and hence rice tax. One pillar of the Kyōhō reforms was a change in agricultural policy. And Yoshimune achieved significant results in this area. In fact, the gross kokudaka and the amount of rice tax (nengu) for the Tokugawa clan reached its all-time peak around 1740.

6.2.2  Reversal of the Debasement Policy The Yoshimune administration continued the policy of reversal of debasement initiated in 1714. One reason was that a decrease in money supply was expected to stabilize price levels. Because the contemporaries had experienced the inflation after the Genroku recoinage, there must have been many people who knew from experience that the debasement of currency had resulted in the increase in money supply, and that this had caused the rise in prices. Moreover, Yoshimune, apart from the objective of stabilizing the prices of commodities, might have held a view similar to Hakuseki’s with regard to currency policy—a view which deemed the Keichō-era gold and silver money as the standard of legitimate currency. In fact, his inclination to go back to the origins of the Tokugawa shogunate can be seen in various policy areas. His view on agriculture is one example. His negative attitude toward debasement policy, which we shall discuss subsequently, is another.

6.2.3  The Problem of Commodity Prices The amount of money in circulation was reduced due to the reversal of debasement (Iwahashi 1976, 258). In addition, the Yoshimune administration’s policy encouraging frugality presumably suppressed aggregate demand. Additionally, population growth, which had continued from the beginning of the Tokugawa era, started to slow down in the eighteenth century. Production of goods, on the other hand, was gradually increasing. These changes in the relationship between supply and demand must have made the recurrence of inflation unlikely. Indeed, commodity prices shifted from going upward to downward during the Kyōhō era, and they continued to decline in the subsequent years. In general, it is not a bad thing for inflation to subside and for prices to stabilize. Yet, when considering the Edo period, particular attention needs to be paid to the relationship between the price of rice and the prices of other goods. From the viewpoint of the warriors who relied on annual rice tax, critically important questions included Alternate attendance was a policy of the Tokugawa shogunate that required the daimyō to live alternately in their own domain and Edo, while their wives and heirs had to remain in Edo. This policy was designed to keep the daimyō under close supervision.

5

 Shogun Yoshimune and Pragmatic Officials 61 at what price rice could be sold, and how much goods could be purchased with the money thus obtained. Such matters had a direct impact on their governance as well as on their personal lives. During the Kyōhō era, commodity prices in general declined, but the price of rice dropped even more precipitously. This hampered the stabilization of the financial condition of the shogunate. Thus, officials such as Ōoka Tadasuke, a city magistrate of Edo (machi bugyō),6 implemented a variety of measures designed to address the problem. Such efforts, however, did not bring about the desired outcome. This situation continued until 1736, when the reign name was changed from Kyōhō to Gembun 元文.

6.2.4  The Gembun Debasement Policy and Yoshimune’s Discontent In 1736, the first year of the Gembun era (1736–41), the shogunate resumed the policy of debasement of gold and silver coins, and it also started minting copper coins as Ogyū Sorai recommended (4.7). Yet, unlike the previous episode of debasement from the Genroku to Hōei eras, the Gembun debasement policy was not carried out for the purpose of obtaining the proceeds of debasement (deme). The deme obtained by the shogunate was kept at a low level, and old gold and silver coins were exchanged for new coins substantially greater in denomination (by 65 percent in gold coins, and by 50 percent in silver coins). In other words, owners of old gold or silver coins could have them exchanged for a larger amount of new gold or silver coins. Why did the shogunate introduce such a policy? Quite possibly, the policy makers expected that, by increasing the money supply, they could increase the commodity prices (and the relative price of rice), which would in the long run bring about an increase in the revenues of the shogunate. To put it differently, the Gembun debasement was a policy designed to “influence the market . . . not so much through fiscal policy as through monetary policy” (Shimbo 1978, 56–7). The experience in currency policy accumulated since the Genroku debasement apparently helped the shogunate officials better understand the workings of the market mechanism, and the new understanding was used as the basis for policy formulation. In fact, the Gembun debasement achieved the desired outcome. Commodity prices rose, and so did the relative price of rice, which, along with an increase in the amount of rice tax collected, led to an improvement in the shogunate’s financial conditions. The fiscal problems that afflicted the shogunate since the late seventeenth century were resolved, if only for once. From the Gembun debasement to the end of the 1750s, the fiscal conditions of the shogunate became stabilized. Part of the credit for this achievement must go to Ōoka Tadasuke, for it was he who pushed for the adoption of the debasement policy over Yoshimune’s opposition. Indeed, in the winter of 1738, two and a half years after the Ōoka served as the city magistrate from 1717 to 1736, and then as magistrate for temples and shrines (jisha bugyō) from 1736 until shortly before his death in 1752. In addition to overseeing their own areas of jurisdiction, the magistrates were key members of the Supreme Judicial Council (hyōjōsho), which played a significant role in the shogunate’s policymaking. Thus, as city magistrate and temples and shrines magistrate, Ōoka participated in the top-level decision-making of the shogunate.

6

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implementation of the debasement, Ōoka wrote in his diary that Yoshimune “disagreed with” the policy from the start (Ōoka 1972, 345). While Yoshimune focused on the symbolic value of Keichō-era gold and silver money, pragmatic officials such as Ōoka cared for the economic functions of the currency. They formulated a policy that fits the actual condition of the market, and carried it out, in spite of the shogun’s opposition. Although the relationship between Yoshimune and Ōoka was very close, they seem to have supported different viewpoints in economic policies (Kawaguchi 1995a).

6.2.5  Monetization of Annual Rice Tax When we examine the finances of warrior households from a market-based perspective, the system of annual rice tax paid in kind appears to be problematic, for this system made the revenues of warrior households highly dependent on the (relative) price of rice, which was determined by the market. In 1742, Ōoka apparently made a policy proposal for monetizing annual rice tax based on the recommendation of his deputy Mino Masataka 蓑正高 (1687–1771) (Kawaguchi 1995b). In his proposal, Ōoka suggested that “rice tax be paid in money at the conversion rate of the posted price [known as oharigami nedan7] plus three ryō” (Ōoka 1972, 576). In reality, it was not until the Land Tax Reform (chiso kaisei 地租改正) of 1873— about 130 years later—when the rice tax was actually replaced with a tax paid in money. In this sense, Ōoka’s policy proposal was far too premature. Nonetheless, the significance of his proposal for monetization cannot be ignored, for monetization of rice tax, if actually undertaken, would have involved a momentous political decision to change the kokudaka system (kokudakasei 石高制)8 as well as the system of rice tax, both of which constituted the foundations of the Tokugawa regime. Ōoka’s proposal must have been based on the recognition that in his day, peasants, villages, and agriculture were all deeply enmeshed in the market economy, making monetization of the rice tax a practical possibility. In fact, such a view accurately predicted the subsequent developments in the economy. It is also worth noting that Ōoka’s proposal was in line with his market-oriented view of the economy, which underpinned the Gembun debasement. In his perception of the reality, in policy objectives and the instruments for achieving them, and in the values that underpinned all these, Ōoka’s view must have diverged from Yoshimune’s. Like Banzan’s and Sorai’s visions on the settlement of samurai in the countryside (see 3.2.6 and 4.5), Ōoka’s proposal would have undermined the foundations of the Tokugawa regime. Yet, Ōoka’s approach was T h e posted price was the official conversion rate when rice stipends for hatamoto and gokenin (housemen, liege vassals to the shogun who were lower in rank than hatamoto) were paid in money. The price posted was the equivalent in gold currency for 100-hyō (or approximately six tons) of rice. 8 Kokudakasei refers to the sociopolitical system in early modern Japan in which kokudaka served as a key organizing principle (on koku as a unit of measurement and kokudaka; see Chapter 3, n. 1). Kokudaka was calculated for a piece of agricultural land, and it was used first as the basis for calculating the amount of annual rice tax. The size of the fief of samurai and daimyō was also measured in kokudaka, or the estimated annual rice yield for the fief. Additionally, kokudaka functioned as an indicator of the rank of daimyō or samurai, for warriors whose fief yielded greater amount of rice were considered to rank higher than their peers with smaller kokudaka. 7

 Shogun Yoshimune and Pragmatic Officials 63 diametrically opposed to those of Banzan and Sorai, for while the latter two aimed at de-marketization of the economy, Ōoka sought to utilize the market mechanism more thoroughly. When considering the “Kyōhō reforms” from the viewpoint of economic thought, we can see how two different views on the economy (Yoshimune’s and Ōoka’s) coexisted, complemented each other, and competed with each other. Interestingly, the differences between these two viewpoints appear to mirror the contrast between the ideas of Ogyū Sorai and Dazai Shundai both chronologically and in terms of intellectual substance. What we observe here is parallelism between the ideas of policymakers and of intellectuals. And this is something that extends beyond the era of Yoshimune, and into the second half of the eighteenth century.

7

Tanuma Okitsugu and the Era of Intellectual Pluralism

This chapter first considers the shogunate’s economic policies in the latter half of the eighteenth century, the period following the Kyōhō reforms. The central figure here is the senior councilor (rōjū 老中)1 Tanuma Okitsugu 田沼意次 (1719–88). It then goes on to provide an overview of intellectual developments during the second half of the eighteenth century.

7.1  Tanuma Okitsugu 7.1.1  A Corrupt Politician? Born in a family of hatamoto, Tanuma was appointed in 1734 as a page to Tokugawa Ieshige 徳川家重 (1711–61), who was to become the ninth shogun in 1745. Rapidly promoted under Ieshige, in 1758, he became a daimyō and a member of the Supreme Judicial Council (hyōjōsho 評定所). Under the administration of the tenth shogun Tokugawa Ieharu 徳川家治 (1737–86), Tanuma was elevated to the position of grand chamberlain (sobayōnin 側用人)2 in 1767, and senior councilor five years later. In these capacities, he played a leading role in the shogunate’s economic policy. Yet, amid a series of disasters (such as the Great Temmei Famine of 1782–8, and the eruption of Mount Asama in 1783), Tanuma lost out in the power struggle and was removed from the post of senior councilor in 1786. He died two years later a disappointed man. While Tanuma has often been depicted as a corrupt politician, some scholars argue that there is no basis for such an image (Ōishi 1991), and no scholarly consensus Rōjū (senior councilor) was the highest administrative post within the shogunate. At any given point, three to five individuals, selected from among fudai daimyō (daimyō whose ancestors became vassals of the Tokugawa house before the pivotal Battle of Sekigahara in 1600) with a fief of 25,000 koku or more, occupied this position, with one serving as the rōjū on duty on a monthly alternate basis. 2 Sobayōnin (grand chamberlain) was shogun’s personal attendant, serving as the liaison between the shogun and high officials of the shogunate, including rōjū, waka-doshiyori 若年寄 (junior councilor), and san bugyō 三奉行 (the three magistrates), including temples and shrines magistrate (jisha bugyō 寺社奉行), city magistrate (machi bugyō 町奉行), and superintendent of finance and tax department (kanjō bugyō 勘定奉行). Sobayōnin were appointed from among fudai daimyō with a fief of 10,000 koku or more. Though lower in rank than rōjū in terms of kokudaka (Chapter 6, n. 8), at times they wielded greater influence than did rōjū, since they controlled access to the shogun. 1

 Tanuma Okitsugu and the Era of Intellectual Pluralism 65 exists on this issue (Yamada, T. 2001). From the viewpoint of the history of economic thought, however, what interests us is Tanuma’s policies, which made it easy for his enemies to portray him as a corrupt figure who took bribes from the merchants.

7.1.2  Response to Fiscal Crisis As explained in Chapter 6, the shogunate’s financial condition regained some stability in the latter part of the Yoshimune administration. Yet, the shogunate’s finances once again deteriorated, just as Tanuma began to participate in the top level of shogunal administration. One natural response to a fiscal crisis was an increase in rice tax. Indeed, Tanuma attempted to raise the shogunate’s revenue from rice tax through land reclamation project at Lake Imba in Shimōsa Province (which failed due to flooding). He also considered the possibility of opening vast agricultural lands in Ezochi (Hokkaido), and dispatched an official expedition to determine its feasibility. While this plan came to naught with Tanuma’s fall from power, his bold initiatives, which could have brought about a radical change in the shape of the country, were symbolic of the transformation in Japanese society and thought in the latter half of the eighteenth century. Tanuma certainly did not neglect agriculture, but the distinctive feature of his economic policy was the attention paid to the nonagricultural sectors. The encouragement of the formation of merchant guilds (kabunakama), coupled with de facto taxation of merchants and artisans, is one example. The development of quid pro quo relationship with merchants and artisans no doubt contributed to his image as a corrupt figure. Tanuma was also an innovator in trade policy; he encouraged the export to China through Nagasaki of marine products from Ezochi, in return for the import of silver. Overall, Tanuma’s economic policy took the development of the market economy as its basis, worked with the market, and sought to maximize monetary income rather than revenue measured in the volume of grain.

7.1.3  Currency Policy As Table 7.1 indicates, the “three-coinage system” (sanka heiritsusei) of the Tokugawa era was quite complicated by today’s standard (for a basic explanation, see 1.2). Despite its complexity, the three-coinage system launched by the Tokugawa shogunate was virtually the first unified currency system to extend over the entire Japan, for medieval Japan lacked an official currency system (Takizawa 1996). By Tanuma’s time, the economy of Japan had grown larger, and the use of money had expanded to an unprecedented level, which necessitated a reform of the currency system to something more streamlined. Tanuma’s currency policy touched on the relationship between the gold and silver coins in the three-coinage system. More concretely, he issued two new silver coins, as shown in Table 7.1. One of these, the 5-momme silver coin (go-momme-gin), was a currency by table, or coin with fixed value of 5-momme, issued in 1765. Next year, the shogunate instituted an official exchange rate of twelve 5-momme silver coins to 1-ryō gold coin, regardless of the fluctuations in the gold–silver exchange rate. In other words, the exchange rate between gold and silver was fixed at 1-ryō (of gold) to 60-momme (of silver), which made silver coins

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Table 7.1  Coins in the Tokugawa era Coins used throughout the Tokugawa Era Gold coins Silver coins Copper coins

Type

1 ryō 両 = 4 bu 分=16 shu 朱 1 kan 貫 = 1000 momme 匁 = 10,000 fun 分 = 100,000 rin 厘=1 million mō 毛 1 kan 貫 = 1000 mon 文

Currency by table* Currency by weight Currency by table

Silver coins newly issued under Tanuma Face value

Year issued

Silver coin

5-momme

1765

Silver coin

2-shu

1772

Exchange rate

Type

Twelve 5-momme silver Currency by table coins to 1-ryō gold coin Eight 2-shu silver coins Currency by table to 1-ryō gold coin

* Currency by table is a currency accepted at the value inscribed on it. Paper currency is a currency by table because It is accepted at the designated value. In the case of metal currency, currency by table usually has standardized size, shape, grade, and weight. By contrast, currency by weight is a metal currency that is not standardized in terms of size, shape, or weight. Thus, the exchange value of currency by weight must be determined case by case, based on the coin’s weight and grade.

auxiliary to gold coins. The introduction of 5-momme silver coins was thus designed to weaken the independence of silver coins in relation to gold coins, and to change the currency system to one which was more gold-centered. It may also have been driven by the desire to strengthen the position of the gold-based economy of Edo in relation to the silver-based economy of Osaka. However, in practice, the 5-momme silver coins did not circulate widely, because they were heavy and not convenient to carry. For this reason, the first attempt to transform the three-coinage system ended in failure. The other new silver coin, the 2-shu silver coin (ni-shu-gin), was revolutionary in that, even though it was a silver coin, it was a currency by table denominated in shu, which was a unit of gold coins. In other words, the 2-shu silver coin was an auxiliary currency in relation to gold coins. Furthermore, unlike the 5-momme silver coins, the 2-shu silver coins were welcomed by the users. From then on, with some interruptions until the end of the Tokugawa era, the shogunate resorted to the practice of melting silver coins by weight and issuing instead coins by table denominated in units of gold coins. Tanuma’s policies may in one sense be regarded as a reflection of the social and intellectual conditions of the second half of the eighteenth century—a period characterized by increasing diversity, hybridity, and fluidity. At personal level, too, Tanuma came from a background less strictly bound by the traditions of the shogunal administration, and hence was in a better position to adopt innovative policies.3 Tanuma and his policies symbolized the new historical trends of this period. Tanuma’s father was a low-ranking samurai known as ashigaru (lightly armed foot soldier) serving in the Kishū domain. He was later promoted to the position of hatamoto by serving the eighth shogun Yoshimune as a page. Tanuma, too, achieved unusually rapid promotion through his service to Yoshimune’s heir. Due to the relatively humble background of his family, he was rather free from conventions within the shogunal administration.

3

 Tanuma Okitsugu and the Era of Intellectual Pluralism 67 However, when placed in a historical perspective, it would be inappropriate to emphasize only the novelty of Tanuma’s policies. In approving the expansion and deeper penetration of the market economy, and in attempting to achieve fiscal stability on the basis of dependence on the market, Tanuma’s approach may be regarded as a further development along the lines of Ōoka Tadasuke’s policies discussed previously. Just as during the Yoshimune administration, the shogunate at this time continued to be divided on questions of economic policy. Not everyone approved of Tanuma’s marketoriented approach. This was demonstrated by Tanuma’s dismissal from his position in 1786, after which a very different policy of fiscal austerity and encouragement of frugality known as the Kansei Reforms (kansei kaikaku 寛政改革) was pursued under the leadership of the new senior councilor Matsudaira Sadanobu 松平定信 (1758– 1829).4 Thereafter, the policy orientation represented by Ōoka and Tanuma disappeared from the surface of the shogunate’s economic policy. But a market-oriented approach they represented was continued by thinkers such as Kaiho Seiryō discussed in the next chapter, and also by many policymakers at the domain level.

7.2  Intellectual Currents in the Second Half of the Eighteenth Century The second half of the eighteenth century witnessed some new intellectual developments. The estrangement between Dazai Shundai and Hattori Nankaku anticipated the growing diversity in Japan’s intellectual world after the death of Ogyū Sorai (Hino 1975, 21). Even if we limit our attention to Confucianism, there were competing schools of thought during this period. Within the kogakuha school, for instance, the kogigaku school led by Itō Jinsai 伊藤仁斎 (1627–1705) and his son Itō Tōgai 伊藤東涯 (1670–1736) retained its influence. In addition, despite criticism from Jinsai and Sorai, the Zhu Xi school did not lose its significance or intellectual vitality. One good example is the establishment of a private school known as Kaitokudō in Osaka in 1724. This school, originally set up based upon the contributions of five influential merchants (Najita 1987; Miyagawa 2002; Kaitokudō kinenkai 2004), provided education to commoners as well as samurai based on Zhu Xi school Confucianism. Two years after the establishment, the school was officially recognized by the shogunate as an institution of learning, and it survived for a century and a half, until 1869. Nakai Chikuzan 中井竹山 (1730–1804), who became the head of the school in 1782, composed Hichō (Critique of Sorai’s Commentary on the Analects), and criticized the Sorai school. At a time when the mainstream of the Sorai school focused on literary pursuits, the Zhu Xi school preserved the normative view of human beings and society, and continued to raise important questions from that perspective. In 1790, or the second year of the Kansei 寛政 era (1789–1801), the shogunate moved against heterodox versions of Confucianism in the Kansei prohibition of heterodoxy Matsudaira Sadanobu was a grandson of Shogun Yoshimune, and a daimyō of the Shirakawa domain in Mutsu Province. He was the chief senior councilor (rōjū shuza) of the Shogunate between 1787 and 1793.

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(Kansei igaku no kin). The four scholars who were behind this policy—Rai Shunsui 頼春水 (1746–1816), Shibano Ritsuzan 柴野栗山 (1736–1807), Bitō Jishū 尾藤二洲 (1747–1813), and Koga Seiri 古賀精里 (1750–1817)—all belonged to the Zhu Xi school, and they had connections with Kaitokudō in some capacity. But Kaitokudō was not unified under the banner of the Zhu Xi school. Among those who studied there were diverse scholars not belonging to the Zhu Xi school, including Tominaga Nakamoto 富永仲基 (1715–46), Yamagata Bantō 山片蟠桃 (1748–1821), and Kusama Naokata 草間直方 (1753–1831). Other scholars who had connections with Kaitokudō included the astronomer Asada Gōryū 麻田剛立 (1734–99), and Miura Baien, whose ideas will be discussed in Chapters 8 and 10. Another stimulus to the intellectual world of the late eighteenth century came from the outside. While the inflow of information from Europe was strictly regulated since the early Tokugawa era, in 1720, restriction on the import of Western books in Chinese translation unrelated to Christianity was relaxed. This stimulated interest in Western knowledge, and by 1774, the Japanese translation of Ontleedkundige Tafelen (Anatomical Tables), undertaken by a team of doctors led by Maeno Ryōtaku 前野良沢, was published as Kaitai shinsho (A New Book on Anatomy).5 The latter half of the eighteenth century witnessed the rise of Dutch learning (rangaku 蘭学) in the field of natural sciences, including medicine and astronomy. The rise of Dutch learning cannot be explained entirely by the import of Western books; for the understanding and acceptance of information and scholarly knowledge from overseas required certain intellectual preconditions. One condition that enabled the acceptance of Western knowledge was the fact that kogakuha Confucian school had developed the ontological position of ki-based monism (ki-ichigenron 気一元論), which gave ontological priority to the tangible, physical world.6 Another was the intellectual proclivity, fostered by the Zhu Xi school’s tenet of “investigating things and exploring the principle” (kakubutsu kyūri), to search for lawlike regularities in the world. These two conditions helped to prepare the ground for the acceptance of modern Western science. Interest in European scholarship naturally aroused broader interest in Europe. Significantly, the Industrial Revolution was just starting in England at that time, ahead of all other regions. People in Japan could hardly grasp what was really happening, but the recognition gradually spread that Western countries were acquiring an unprecedented level of power and extending their influence throughout the world. As we shall see in Chapter 12, this undermined the Sinocentric worldview that had been prevalent since ancient times; it also generated new ideas and attitudes concerning both Japan’s relationship with the outside world and the ideal self-image of Japan. Akaezo fūsetsukō (Thoughts on Rumors about Red Barbarians), a work by Kudō Heisuke Ontleedkundige Tafelen was the Dutch translation of the original German text Anatomische Tabellen by the German anatomist Johann Adam Kulmus (1689–1745). 6 As explained previously (2.2), kogakuha school Confucians were skeptical of Zhu Xi’s notion of metaphysical principle (ri). Itō Jinsai, for instance, stated that “between Heaven and Earth, there exists only vital force (ki) and nothing else . . . Ri is nothing other than the logic that is inherent in ki” (Itō, J. 1970, 37–41). This philosophical position tended to direct the attention of thinkers toward the perceptible, empirical world, and prepared the ground for the acceptance of Western knowledge. 5

 Tanuma Okitsugu and the Era of Intellectual Pluralism 69 工藤平助 (1734–1800), who served as the domain doctor for the Date clan of Sendai in Mutsu Province, is one indication of growing interest in the outside world (Satō, S. 1972). Akaezo refers to the Russians, and Heisuke’s work is said to have been a major stimulus behind Tanuma’s plan for the development of Ezochi. Heisuke also served as a hub of intellectual exchange during this period, communicating with a number of Dutch learning scholars, translators of the Dutch language, daimyō, and merchants (Gramlich-Oka 2006). Furthermore, this type of intellectual network was spreading to different parts of Japan. For instance, Kimura Kenkadō 木村蒹葭堂 (1736–1802), an Osaka merchant who was a contemporary of Heisuke, was famous for organizing a network involving a wide variety of figures including scholars, artists, doctors, poets, and so on. He was well versed in botany, poetry, calligraphy, painting, as well as in seal-carving, and his collections (of calligraphy, paintings, books, specimen of plants, animals, and of minerals) were recognized inside and outside of Japan. Interest in European expansion developed in lockstep with the search for a new self-image and identity for Japan. As we shall see in detail in Chapter 11, Motoori Norinaga, a scholar based in Matsuzaka in Ise Province, began to work on what was to become his magnum opus Kojikiden (a commentary on the classic Japanese text Kojiki [Records of Ancient Matters]) in 1764. He completed the writing in 1798. Norinaga helped consolidate National Learning (kokugaku), which was an intellectual tradition separate from both Confucianism and Dutch learning. The rise of National Learning popularized the idea of “reverence for the mikado” (sonnō), and this idea, which found wide acceptance, including by Confucian and Dutch learning scholars, would eventually raise the question of the proper relationship between the mikado and the shogun. The thirty-five years during which Norinaga worked on Kojikiden coincided with a period of tremendous intellectual ferment in the history of Japanese thought. This period witnessed the competition of various kogakuha schools as well as the Zhu Xi school in Confucianism, the development of botany, rangaku-inspired natural sciences, and the emergence of a new view of both the world and of Japan. Moreover, these diverse ideas stimulated and cross-fertilized each other, while fiercely competing among themselves. Economic thought in this period developed against this background, and it reflected or reacted to the changing economic conditions of the time. In the next chapter, we shall turn to developments after Tanuma’s dismissal.

8

The Way of the Market and Domainal Interest

Tanuma Okitsugu was dismissed from his position following a political battle within the shogunal administration. But the ideas behind Tanuma’s policy line did not disappear with him. On the contrary, such a policy became standard practice among administrators of daimyō domains. By the nineteenth century, daimyō domains throughout Japan were implementing, with or without success, policies designed to promote domainal products. Many domains were issuing regional paper currencies— so-called hansatsu—to finance such policies. The amount of such currencies was also on the increase. Kaiho Seiryō 海保青陵 (1755–1817), whom we discuss in this chapter, was a strong advocate of domainal products and domainal interest. His ideas gave expression to what had become commonsensical among those in charge of fiscal policies of daimyō domains. As we shall see, Seiryō developed a highly original vision which regarded everything in this world as an exchangeable commodity. But this unique viewpoint served as the basis for his strong support for the pursuit of domainal interest. For Seiryō, it was not a shame for warriors to engage in buying and selling. He argued that daimyō domains could solve their fiscal problems through commodity production and trade—that is, through increased production and export of local products. For Seiryō, advancing the interest of the domain meant solving the domain’s fiscal problems. But the notion of “domainal interest” (kokueki) also allowed for an alternative interpretation, which placed less emphasis on the domain’s fiscal problems, as we shall see in the case of Miura Baien 三浦梅園 (1723–89). Before turning to the discussion of Seiryō’s and Baien’s ideas on domainal interest, let us briefly examine Seiryō’s background and his unique, commodified view of the world.

8.1  Kaiho Seiryō 8.1.1  Seiryō as a Management Consultant Kaiho Seiryō was born and brought up in Edo, but his father was a house elder (karō 家老) for the Aoyama clan of Miyazu domain in Tango Province. Since his father had studied under Usami Shinsui 宇佐美灊水 (1710–76), one of Sorai’s disciples, Seiryō, too, studied under him since the age of ten. Thus he was a grand-disciple of Sorai’s.

 The Way of the Market and Domainal Interest 71 Unlike his father, Seiryō distanced himself from direct involvement in politics, and left Edo after age thirty. He then traveled to various parts of Japan and chose to live outside of the normal warrior-class society. Although he left the life of samurai class, he worked as a kind of management consultant for the daimyō houses. He was, in other words, a political economist in the Tokugawa sense of the word (keiseika), providing advice on economic questions. He is well known in this capacity to this day (Aoyagi 2009).

8.1.2  The Way of the Market A central characteristic of Seiryō’s thought is that he understood all kinds of human relationships in terms of economic relations in the market. Symbolic of this fact is Seiryō’s use of the term shidō (the way of the market, 市道). The following passage shows how he perceived everything in this world from the angle of economic value: What does it mean to have peasants pay rice tax in return for letting them use rice paddies? . . . Everything that exists between Heaven and Earth, from rice paddies, mountains, to the sea, money, and to rice, is an exchangeable object (shiromono). It is reasonable that an exchangeable object produces another exchangeable object. That the rice paddy produces rice is no different from money generating interest . . . It is the law between Heaven and Earth that money or rice generates interest. Leaving rice paddies unused does not produce anything . . . Lending rice paddies to peasants and requiring 10 percent of rice tax means to receive 10-percent interest . . . It means to receive interest in return for lending exchangeable objects . . . This is a law of Heaven and Earth . . . From ancient times, it is said that ‹the relationship between› prince and vassals is like the way of the market. Prince gives his vassals land and puts them to work. Vassals, in return, sell their ability to the prince and obtain rice. Prince buys vassals, and vassals sell themselves to the master. This is what we call a relationship of buying and selling. And buying and selling is a good thing. (Kaiho 1970, 221–2)

In the context of the Tokugawa-era society, the first thing that comes to our mind when we hear the term shidō is the way of warriors (shidō 士道, or bushidō 武士道, see 2.3). But in this passage, Seiryō uses a different Chinese character to express a completely different meaning, that is, “the way of the market.” Seiryō asks on what ground samurai collect rice tax (nengu) from peasants. He begins his explanation with the premise that everything is an exchangeable object (shiromono). Shiromono literally means “something that substitutes for something else.” In other words, shiromono means a commodity that has economic value. Seiryō believed that “an exchangeable object produces another exchangeable object.” Commodities generate new economic value. For him, the world between Heaven and Earth was composed of commodities with economic value. Yet economic value does not multiply in and of itself. For this to happen, the human act of production must intervene, and production is carried out by the people. But the land was owned by samurai, not the people (i.e., peasants) themselves. Thus, samurai,

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as owners, lent the land out to peasants and, in return, collected interest. Thus, rice tax was seen as interest on the land that had been lent out. In this view, the relationship between samurai and peasants was an economic relationship of leasing. What is striking about Seiryō’s passage is that he applied the same perspective in understanding the ties between the prince and his vassals—which is normally supposed to be governed by bushidō. For Seiryō, this, too, was a relationship of buying and selling, and that is why he used the characters signifying “the way of the market.” For him, the world between Heaven and Earth was composed of exchangeable commodities. Human beings were also one component in this world, and they lived among commodities, and engaged in market relationships. What bound people to each other, too, was also economic relationship of buying and selling, lending and borrowing, rather than some moral relationship (as orthodox Confucianism taught), or political relationship (as implied by Sorai’s teachings). While Seiryō was a grand-disciple of Sorai’s, he was no mere exponent of the great master’s teachings. And unlike Shundai, Seiryō showed no hesitation in asserting the virtues of market relations.

8.1.3  Seiryō’s Assessment of the Contemporary Situation: Daimyō in Debt How did Seiryō, who held the view that everything in this world was an exchangeable commodity, assess the contemporary situation? During this period, warrior households faced serious financial difficulties and daimyō fell deeply into debt. Seiryō connected the financial problem of warrior households with the system of rice tax, stating: Luxury simply means excessive amount of expenditure .  .  . Warrior households have a fixed income, determined by the size of their fief which was granted at the time . . . of the august Shogun Ieyasu. Their income does not increase with changes in trends or customs. The income of peasants, artisans, and merchants, on the other hand, grows according to changes in trends and customs. Because their income is increasing, their finances are balanced even if their expenditure is rising. Yet for warrior households, income stays the same while expenditure rises with changing customs. Thus, their budget is not balanced. This is why many daimyō are deep in debt. (Kaiho 1970, 285)

What is noteworthy here is that Seiryō understood the issue of luxury not as a moral question but as an economic problem. The idea implicit in this passage is compatible with what we saw in the previous quote; he saw both prince–vassal relations and the issue of luxury as matters of economic calculus.

8.1.4  Fiscal Reform Measures Then, how did Seiryō propose to deal with the financial difficulties of warrior households, especially daimyō? He argued that a domain should sell its products to

 The Way of the Market and Domainal Interest 73 other domains (sambutsu mawashi in his term). As seen in the following passage, Seiryō’s position on this issue was quite clear. He claimed that if a daimyō house is in financial difficulty, it should encourage the production of marketable commodities in the domain, and it should export them. And he was unapologetic in advancing this argument: In order to make the domain one team (ikkoku hitomikata ni narite 一国一ト味方ニナリテ) and to extract money from other domains, the export of local products（sambutsu mawashi 産物マワシ）is the key . . . If the domain encourages its people to produce and to export local products, it means the entire domain is united in extracting money from other domains . . . So far, there have been many commodities privately exported by the people themselves as nayamono.1 These commodities should also be handled by the domain . . . they should be put together as one big consignment, and shipped outside the domain to be sold there . . . Places such as Osaka, Kyoto or Ōtsu are not the only markets available. There are other places where those commodities can be sold. Any big city can be a market for the domain’s products . . . In addition, we can do more than just selling the domain’s products and buying goods from other domains. It is also possible to purchase products from one domain and to sell them to a third domain . . . After all, warrior households cannot survive without selling rice. So selling and buying things should not be regarded as a shameful activity for them. (Kaiho 1970, 323–4)

At a time when revenue from rice tax was becoming insufficient, Seiryō proposed to rebuild the finances of warrior households through the export of local products. To do so, he thought it necessary for a domain to become “one team.” A domain consisted of multiple groups, including samurai and commoners, and they did not constitute a unified team. Seiryō thought it necessary to unify the entire domain for the purpose of extracting money from other domains. Until then, samurai and commoners had been trading with other domains separately. By integrating them into a single, stronger economic unit, Seiryō believed, it was possible to augment the monetary income for the domain. In terms of the genealogy of economic thought, Seiryō’s policy approach belonged to the same tradition as did the ideas of Ōoka Tadasuke and Tanuma Okitsugu. As mentioned in the previous chapter, this type of policy became commonsensical for policymakers of daimyō domains. In this context, the concept of kokueki gained prominence as a term denoting the interests of the daimyō houses or of the regions they governed. One thing worth noting here is that Seiryō used the term ikkoku 一国 to refer to a daimyō domain. In modern Japanese, the character 国（read as koku or kuni）means a country or a state. But what Seiryō meant was the daimyō domain in relation to other domains, not Japan in relation to the outside world. Seiryō’s idea was part of the growing body of writings in the latter half of the Tokugawa era encouraging the Nayamono referred to products sold on the market by private merchants, as opposed to the shogunate or domain authorities. Products sold by the latter were known as kuramono.

1

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pursuit of domain’s interest (kokueki 国益) through the export of local products. On this literature, we will have more to say in Section 8.2.

8.1.5  Seiryō as a Descendant of the Sorai School One of the characteristics common to the Sorai school (or kogakuha Confucianism more generally) was the tendency to place more emphasis on concrete, tangible things rather than on abstractions such as principle (ri). From what we have seen earlier, it is evident that Seiryō’s thought also shared this inclination. When it comes to concrete measures for fiscal reconstruction, however, Seiryō’s position was quite different from what Sorai advocated. Sorai proposed de-marketization. Dazai Shundai accepted the spread and penetration of the market economy as something irreversible, though he also preserved some fundamental principles of Sorai’s teachings. But with Seiryō, we see no evidence of struggle to reconcile the reality with principles; he openly accepted the spread and penetration of the market economy, and had no hesitation in saying that “buying and selling is a good thing.” In one sense, Seiryō’s statement may be regarded as a culmination, in the field of economic thought, of the ontological premises of the Sorai school, which emphasized concrete reality over abstract principles. Then, did Seiryō entertain any vision of an ideal society? Kumazawa Banzan sought to deal with concrete economic problems of his day just like Seiryō did. But beyond this, Banzan had a vision of an ideal society. His use of the “time, place, and rank argument” was an attempt to build a bridge between the reality of his day and his ideals. Yet, in Seiryō’s case, it is not clear what served as “the Way” to guide his arguments. This may in part be a result of the general characteristics of the Sorai school, which understood “the Way” not as abstract moral norms but as a concrete set of institutions. Even so, we must still raise questions about the foundation of Seiryō’s ideas on inter-domainal trade, for economic ideas are usually justified by some sort of core values. We also need to reflect on Seiryō’s understanding of human relations as marketbased relationship of “borrowing and lending,” “buying and selling,” and on its significance in the intellectual history of Tokugawa Japan. If the relationship between princes and vassals is indeed governed by the way of the market, then both princes and their vassals should act according to the precepts of economic rationality. But if this happens, it could undermine the foundations of lord–vassal relations. If the rice tax was indeed the rent that the peasants paid to samurai as landowners, this, too, might involve a fundamental reconceptualization of the relationship between samurai and peasants. Did Seiryō really mean to reconceptualize the Tokugawa system from the ground up, with possibly destructive consequences? If so, we must conclude that Seiryō was a thinker of utmost significance in the history of economic thought of Tokugawa Japan. Yet, we should be careful lest we reach any premature conclusion based on his provocative statements, without having explicated what his core values were. Seiryō’s thought provides an interesting case study for assessing the elements of continuity between the early modern and modern eras in the history of economic thought.

 The Way of the Market and Domainal Interest 75

8.2  The Idea of Kokueki 8.2.1  Financial Conditions of Warrior Households and Domainal Interest As was mentioned earlier, the term kokueki came to be widely used in the latter half of the Tokugawa era. The term has been used in two separate senses. In the first usage, which is common in modern Japanese, kokueki means national interest. The development of the idea of kokueki in this sense will be discussed in Chapter 12. In the second usage, the same term refers to the interests of daimyō domains rather than of Japan as a whole (Fujita 1966; Fujita 2011). Seiryō’s idea on inter-domainal trade was designed to promote kokueki in this second sense. As we have seen, Seiryō’s encouragement of domainal production and export was driven in large part by his concern for fiscal problems of warrior households. In this sense, it is possible to see some continuities between the ideas implicit in Tanuma’s policies and the ideas Seiryō advocated. The key elements in both were the acceptance of the market economy, and the attempt to improve the finances of warrior households through promotion of industry and commerce. Yet, understanding kokueki only in connection with warrior finances would be a one-sided view, for even though samurai were in control of policymaking, production and distribution were carried out primarily by peasants and townspeople. Commoners, in other words, played a significant role in advancing kokueki, and they could also become its beneficiaries. Then, were the fruits of kokueki to be tasted by both samurai and commoners alike? Who were to receive what share of benefits? Why was it necessary to pursue kokueki in the first place? What is the ultimate purpose in doing so, and on what ground?

8.2.2  An Alternative Understanding of Domainal Interest It is reasonable to assume that in the case of Seiryō, the main beneficiaries of domainal interest were to be samurai, for his rationale for pursuing kokueki was the need to increase daimyō revenues. His standard of judgment was a contribution to the improvement of daimyō finances. But the term kokueki was employed by a diverse group of people. To illustrate this point, we shall take the case of Miura Baien, a village doctor in Bungo Province whom we briefly mentioned in connection with Kaitokudō, the private school in Osaka (7.2). Seiryō and Baien were similar in that they both took the domain as an economic unit, and sought to advance its interest, and in that they attempted to do so through the promotion of local production. Yet, on the question of who were to enjoy the benefits of kokueki and for what purpose, they held different views. In a memorandum he submitted to Matsudaira Chikakata 松平親賢 (1753– 1802), the lord of the region where he resided, Baien writes as follows: It would indeed bring benefit beyond measure if the production of cotton within the domain is encouraged, and if local demands could be met basically by domestic products. Even if cotton production is not possible in all parts of the domain,

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Here, Baien asks Lord Chikakata to promote cotton production inside the domain to prevent the outflow of money. His idea of kokueki—that is, encouraging monetary inflow into the domain while preventing its outflow—is also captured by the following colorful expression: “It is of utmost importance that we make a ‘basin’ out of our domain, into which outside wealth flows in, and from which wealth does not flow out” (Miura 1979a, 830). On this point, Baien’s view is roughly the same as Seiryō’s. But when it comes to the distribution of the benefits of kokueki, Baien argues that the authorities should exercise self-restraint in reaping the benefits: I am sure that you are well aware that too rigorous exaction from the people would cause their weakening and downfall, while . . . those who are at the bottom would prosper if those above accept some loss. Your domain produces nearly 50,000 koku, on top of other revenues obtained from merchants in the cities, from forestry, shipping, shichitō,2 etc. It would be really nice if the Lord could cover the domain’s expenses with the existing revenues . . . If this is done, if peasants and merchants are allowed to benefit fully from their extra income, and if you spread teachings (kyōyu no michi) on this basis, the domain will naturally prosper. (Miura 1979a, 892)

In other words, the lord should refrain from “rigorous exaction,” avoid excessive interference in the lives of commoners, and manage his finances with existing revenues. This, for Baien, was the way to bring prosperity to the domain. His view on the distribution of the benefits of kokueki is clearly different from that of Seiryō. Then why did Baien argue for such a distribution? One obvious answer is because he himself was a commoner who lived in the village. Though this is probably not far off the mark, focusing only on Baien’s social position is not sufficient. The fact that Baien spoke of the need to “spread teachings” suggests that the ultimate goal for him went beyond the pursuit of domainal interest in the economic sense. Baien may have sought to distribute the proceeds of kokueki in a manner that benefited those who were at the bottom, because achieving economic well-being of the people was the precondition for spreading teachings. In other words, for Baien, teachings remained the central value, whereas pursuit of domainal interest was a means for achieving it. While Baien was concerned about economic well-being, he envisioned on that basis a society and people guided by “teachings.”

Shichitō is a plant whose stalk is used for producing tatami mattress.

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Module 3

Estate-Based Society and Occupational Duty In contrast to the previous two modules, which focused on the development of keisei saimin thought among the samurai class in the early- to mid-Tokugawa era, this module focuses on the idea of occupational duty (shokubun)—an idea which penetrated broader strata of the population, and which profoundly shaped Japanese economic thought of the early modern and modern eras. The idea of occupational duty held that it is the moral duty for each person (and each social group) to fulfill his (its) occupational role. The question posed by Yamaga Sokō concerning the duty of samurai led to the development of keisei saimin thought. This intellectual tradition inquired about the proper way to carry out samurai’s occupational duty, which was “to administer the society and to save the people.” But samurai were not the only group of people who asked questions about their occupational duty. Already in the second half of the seventeenth century, the same question was being asked by a broad segment of the population, including peasants and townspeople. Chapter 9 backtracks in time to the seventeenth and early eighteenth centuries and takes up the cases of three thinkers—Miyazaki Yasusada, Nishikawa Joken, and Ishida Baigan—and discusses how the idea of occupational duty helped peasants and townspeople assert their own social role and moral worth. All three thinkers asserted the essential moral equivalence among the four status groups by emphasizing, on the one hand, the social contribution of the peasants and townspeople, and on the other, the neo-Confucian notion of “innate, moral nature that is common to all humans.” The idea of occupational duty thus became an important basis for the self-assertion of peasants and townspeople. From a broader viewpoint, we might say that the idea of occupational duty served to legitimize and to stabilize a social order based on hereditary status distinctions. At the same time, the idea of occupational duty encouraged people of different social standing to find deeper meaning in their work. Chapter 10 focuses on themes that span the entire Tokugawa era, and explores the meaning of work and economic activities in a “stationary” society, where the idea of secular economic growth was unknown. While work was necessary for quenching hunger and thirst, and for ensuring the stable supply of basic goods, economic wealth was not considered a goal in itself. Rather, economic activities were often viewed as a means for moral improvement. For many ordinary

78 A History of Economic Thought in Japan people in the Tokugawa era, however, what mattered here was not the mastery of abstruse Confucian theories, but everyday morals such as honesty and diligence. And in this everyday morality, the notion of occupational duty came to occupy a central role, perhaps because the idea imparted positive meaning to life in an estate-based society. The idea of occupational duty thus elevated the position of work in Japanese people’s sense of morality and outlook on life. Its residue may still be observed in today’s Japanese society.

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Occupational Duty and the Self-Assertion of Peasants, Artisans, and of Merchants

In the estate-based society of the Tokugawa era, the four estates of samurai, peasants, artisans, and merchants each performed certain social roles. They depended on each other, and each made a contribution to the functioning of the society as a whole. Under such a system, it is not surprising if peasants, artisans, and merchants pondered upon their own social functions and values just as samurai did. Given that non-samurai social groups were placed lower in the status hierarchy, they may have had a greater urge to ask who they were, and to assert their own senses of self. Naturally, these social groups were all engaged in economic activities. Thus, it was likely that their economic thought would be formed in connection with how they understood their own social functions.

9.1  Social Contributions of Peasants, Artisans, and Merchants When peasants, artisans, and merchants sought to articulate themselves, one possible avenue available was to take their cue from the ideas of samurai, who stood higher in the status hierarchy. For instance, Yamaga Sokō’s discussion on the social contributions of peasants, artisans, and merchants (see 2.3) was probably something that could easily be accepted by townspeople as well as peasants. Bammin tokuyō (The Significance of All Vocations), by the Buddhist priest Suzuki Shōsan 鈴木正三 (1579–1655), is one example of a work that is compatible with Sokō’s viewpoint: Without all kinds of artisans, various needs of this land cannot be fulfilled. Without samurai, order cannot be maintained. Without peasants, food cannot be provided, ‹and› without merchants, there will be many inconveniences. Besides these, various kinds of vocations emerge, and they all make their contributions. (Suzuki, S. 1962, 70)

One basis for the self-assertion of peasants and townspeople was the idea that they were performing their proper functions, and thereby contributing to society. In other words, they were fulfilling their occupational duties just like samurai. The fact that they were playing socially useful roles guaranteed the legitimacy of their own position

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in society, regardless of their status (Bitō 1992). This way of thinking probably derived from the structure of mutual interdependence that existed among the four estates during the Tokugawa era. Yet, the social contributions of peasants and townspeople may not have provided sufficient ground for proving their worth. After all, slaves may perform “socially useful” functions, but they are denied their worth and dignity as human beings. In a society dominated by status hierarchy, few would have believed that peasants and townspeople were equal to samurai, despite their socially useful functions. Kumazawa Banzan once wrote that “the word idiot (tawake) originally referred to peasants who divide up their inherited rice paddies . . . Dividing up rice paddies (tawake 田分) leads to decline of the later generations of the family, resulting in its discontinuation . . . For this reason, people who are myopic and have no longer-term vision are called tawake” (Kumazawa 1978, 8–9). Such an image of peasants as unintelligent was probably quite widespread, at least among samurai. Was it possible to overturn such a derogatory view? Was there another ground for claiming the worth of peasants and townspeople alternative to their social contributions?

9.2  The Ethics of Work Members of the samurai class did not base their self-assertion exclusively on the usefulness of their contribution to society. As we have seen in the case of Yamaga Sokō (2.3), samurai’s self-reflection touched not only on their social roles but also on the inner qualities of those who performed such functions. How, then, did peasants and townspeople apply this type of thinking to their own situation? In this section, we will introduce the thought of three commoners, namely, Miyazaki Yasusada 宮崎安貞 (1623–97), Nishikawa Joken 西川如見 (1648–1724), and Ishida Baigan 石田梅岩 (1685–1744). All of them, while asserting the contribution of commoners to society, advanced additional arguments concerning their inner worth. In making such arguments, the three thinkers built upon the Confucian (particularly neo-Confucian) understanding of human nature as something that transcends status boundaries. According to the Zhu Xi school, the universal principle, which is moral in its essence, inheres in all humans. Thus, all humans have the capacity (and the duty) to manifest this innate moral nature through self-cultivation. From this viewpoint, there is no difference between samurai, peasants, and townspeople. Yasusada, Joken, and Baigan all relied on this notion of commonality of human nature to assert the inner worth of the commoners. We shall first turn to the ideas of Miyazaki Yasusada.

9.2.1  Miyazaki Yasusada Yasusada’s Background—Compendium on Agriculture Miyazaki Yasusada was a samurai in his youth, serving the Kuroda House of Fukuoka in Chikuzen Province. But after turning thirty, he quit being a samurai, and spent the rest of his life practicing agriculture for about forty years in the nearby Myōbaru

 Peasants, Artisans, and Merchants 81 village. Even though Yasusada was engaged in farming, he probably belonged to the upper stratum of the peasantry. Apart from pursuing agriculture, Yasusada studied with the botanist and Confucian scholar Kaibara Ekiken 貝原益軒 (1630–1714), and also traveled around Chūgoku, Kinai,1 and other regions, collecting information on agricultural affairs. His work Nōgyō zensho (Compendium on Agriculture) was the first book focusing on agricultural techniques published in Japan (Furushima 1972, 513).

Agricultural Techniques as the Basis for Economic Well-Being and Morality One reason why Yasusada focused on agricultural techniques was to ensure sufficient harvest and, thereby, to secure the financial conditions of the peasant households. He emphasizes the importance of learning proper method as follows: When I observe the daily work of the peasants, I see that they are not well-versed in agricultural techniques. On the contrary, they often do things that go against the proper method. For this reason .  .  . they seldom succeed, and often suffer from bad harvest in the fall . . . All this is because peasants are not familiar with agricultural techniques, and do not know how to take care of their work . . . In general, it is difficult to achieve good results in anything unless we obtain good knowledge of the subject and work hard to achieve the results. So it is important first to understand agricultural techniques, and then to gain practical experience. (Miyazaki 1972, 70–1)

Here, Yasusada argues that hard work alone does not guarantee success. What is important is to acquire concrete and systematic knowledge, and to master techniques based on such knowledge. Yet, for him, improvement in the financial conditions of the peasants was not the only reason to promote appropriate agricultural method. Better provision of food and clothing, he thought, would lay the groundwork for the building of a moral society. In a passage directly following the previous quote, Yasusada states: One cannot have stability of mind unless he has stable means. Proper behavior is possible only for those who have sufficient food and clothing. Thus, if the peasants know well the way of planting seeds, and as a result achieve good harvest of the five grains, so that they have enough food and clothing and occupy their proper places, then they will be free from greediness, and conduct themselves with propriety and sense of honor. That way, people’s customs will be honest and decent, their mind calm and moderate, and the society would become a more comfortable place day by day, and month by month. (1972, 71)

It is noteworthy how Yasusada links stable means with the conditions of people’s mind and of the society. For him, economic condition is (at least) one factor that affects Chūgoku region refers to the westernmost part of the Honshū Island. Kinai region refers to the area including Kyoto, Osaka, and Nara.

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people and the society as a whole. He emphasizes the importance of agriculture and good harvest of the five grains precisely because of this.

Heaven and the Nobility of Human Beings The notion that the material comfort would help build a moral society was not limited to Yasusada. Kumazawa Banzan also expressed similar ideas (3.2.5). The linkage among economic conditions, people, and society appears to have been a widespread, commonsensical notion in the Tokugawa era. But it is not self-evident that stable means brings stable mind. The opposite hypothesis that economic stability causes laziness is also possible. So Yasusada’s claim must be based on certain additional assumptions about human beings. If economic stability leads people toward propriety and honor rather than laziness, the reason must be sought in human nature, not in the conditions of economic stability itself: Of all the things that emerged below Heaven, nothing is more noble than people. The nobility of people consists in the fact that they are naturally inclined to take loving care of everything below Heaven and to nurture them, as if they have adopted the will of Heaven as their own. (Miyazaki 1972, 84)

In this passage, the nobility of human beings is explained by the notion that they “adopt the will of Heaven as their own.” The will of Heaven refers to the tendency to “take loving care of and to nurture everything,” which is a virtue inherent in nature and also in human beings. In other words, people are noble because in their nature, they are one with Heaven. To claim that the will of Heaven and the mind of people are one is to claim that morality inheres in human nature. Only under such an assumption is it possible to assume that stable means would lead people toward propriety and honor. Planting of seeds can be regarded as an activity of central significance precisely because of this optimistic view on human nature. For Yasusada, the nobility of human beings and the critical significance of agricultural work were both underpinned by a view of humanity as moral beings, which presumably derived from the ideas of the Zhu Xi school. Yasusada did not assume that the will of Heaven inherent in human nature would automatically manifest itself: For everything, there is proper order of doing things .  .  . The teachings of the ancient sages boil down to two things—feeding and instructing the people. Agricultural techniques are the basis of feeding the people . . . Filial piety is the basis of instructing them. Without it, morality would be unclear, proper conduct cannot be taught, and people would live like birds and beasts. During their reign, Yao and Shun . . . first taught their people agriculture . . . and then morality. Thanks to this, their people were well-fed and morality was clear . . . Ever since, every sageking and wise prince has without fail encouraged people to take up agriculture, taught them how to work, and sought to rectify their morality. This has been the foundation of their policy. (1972, 69–70)

 Peasants, Artisans, and Merchants 83 What this passage states is that, while human beings have innate virtue, it will become manifest only if people are first well fed by means of agriculture and then instructed by the rulers.

The Significance of Peasants and Agriculture Agricultural work performed by peasants is a socially useful act. This provides a basis for the worth of the peasants as a social group. But there is an additional argument concerning the identity between the Heaven’s will and the mind of people. Here, people refer to everyone regardless of social status. The four social groups are equal in that they are endowed with innate moral quality of the will of Heaven. Such moral quality, however, will become manifest only with the presence of two preconditions: instruction by the ruler, and the existence of stable means. The products of agriculture are the basic condition for subsistence of people and society. They are also essential if human beings and society are to be guided by moral standards. Agricultural work is carried out by peasants, who stand below samurai in the divisions of status. Yet, for Yasusada, (1) peasants are neither above nor below samurai in their basic, innate virtue. All the four social groups are homogeneous in the moral sense, and they all have a legitimate place in society; (2) agriculture provides goods essential for the survival of both people and society; (3) agriculture also makes it possible for the moral essence of people and society to manifest itself. These three points, in his view, demonstrate the worth of the peasants. In sum, agriculture was not mere labor; it was understood more ethically as “industry.”

9.2.2  Nishikawa Joken Joken’s Background Nishikawa Joken was a relatively well-to-do merchant in Nagasaki. After turning fifty, Joken published a number of writings, which made him famous as an astronomer and geographer. But Joken was interested not only in natural sciences but also in the Zhu Xi school neo-Confucianism. His theory of astronomy and geography was an attempt to synthesize the results of empirical observations with the ri-ki dualism of the Zhu Xi school.2

The Social Position of Townspeople—Five Grades and Four Social Groups How did Joken understand the social position of townspeople (chōnin)? In his famous work Chōnin bukuro (Townsman’s Satchel), he writes: If one is born as a townsman and wishes to enjoy his path, he should first understand the social station of townspeople as well as the essence of what it means to be a townsman. Based on this understanding, he should correct his mind Kawaguchi (1992). For an explanation on ri-ki dualism, see 2.1.

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A History of Economic Thought in Japan and rule himself . . . There are five social gradations, called the moral talent of five grades (gotō no jinrin). First is the son of Heaven (tenshi), second are lords (shokō), third are higher officials (kei taifu), fourth are bureaucrats (shi), and the fifth are the common people (shojin). In Japan, the son of Heaven is the mikado, lords are daimyō, higher officials are hatamoto, and senior samurai holding high office (kan’i), and bureaucrats are hatamoto without high office . . . Samurai, except the direct retainers of the shogun, are undervassals (baishin) and constitute one part of the common people . . . Low-ranking samurai in various parts of Japan are the common people. On the other hand, there are four varieties of common people, called shimin, or shi nō kō shō. Shi are low-ranking samurai. Nō are peasants . . . Kō are artisans. Shō are merchants. The previously mentioned five social gradations and the shimin constitute moral talent based on the self-evident principle of Heaven (tenri). If there are no shimin, the moral talent of five grades cannot become manifest. Therefore, all over the world, there are no countries without shimin. It is essential to know that those other than shimin are called idlers, and are useless for society . . . In the past, townspeople were to be seated lower than peasants. But as the money economy penetrated the realm below Heaven, gold, silver, and other treasures began to accumulate in the hands of townspeople . . . Because of this, it now seems as if townspeople are above peasants in their grade . . . Though townspeople are ranked at the bottom of the four social groups, they do business with the upper five ranks. How lucky of us to be born in such a time and in such social station!3

What strikes us first when reading this passage is perhaps Joken’s self-confidence as a townsman. By superimposing the five grades and the four social groups, he categorizes the great majority of samurai into the rank of commoners, along with peasants, artisans, and merchants. Moreover, he claims that the four social groups constituting the commoners are all useful and indispensable. While Joken does not negate the distinctions of social status, the gap among different status groups has narrowed considerably in his mind. This narrowing of status differentials is supported by his view on the nobility of human beings, as we will see next.

Joken’s Understanding on Human Beings Joken holds a positive view on human nature, influenced by the ideas of the Zhu Xi school. He states: All the virtues deriving from Ying-Yang energy and the Five Elements4 reach and permeate everything. When imparted to human beings, such virtues constitute A large portion of this translated quote has been adopted, with some modifications, from Kawaguchi (2010b, 53). For the entire original passage, see Nishikawa J. (1942, 13–14). 4 Here, Joken draws upon the Ying-Yang and Five-Elements theory, which Zhu Xi incorporated as part of his cosmology. For an explanation of this theory, see Chapter 3, n. 6. The theory was used to explain a large number of phenomena, including the movement of heavenly bodies. For instance, the Sun represented Yang, the Moon represented Ying, while the five easily visible planets (Mercury, Venus, Mars, Jupiter, and Saturn) were regarded as corresponding to the Five Elements of water, 3

 Peasants, Artisans, and Merchants 85 their mental nature. Above, they expand to the largest proportions, permeating the Seven Heavenly Bodies (the Sun, the Moon, Jupiter, Mars, Saturn, Venus, and Mercury), while below, they penetrate everywhere, reaching the most minute things. For this reason, the ancient sages, when they set the standard for human beings and established moral teachings, followed the Five Elements, and made sure that people would not be diverted from the principles of the Ying-Yang energy and the Five Elements, and wished that people would not go against the ever-blooming life force that is animating all things. (Nishikawa, J. 1900, leaf 1)

Cryptic as the passage may sound, the key points here are as follows: (1) what constitutes everything in this world is “the Ying-Yang energy and the Five Elements”; (2) Joken understands the essence of these (in’yōgogyō) as “all the virtues,” that is, as something moral; and (3) such virtues are also imparted to human beings and constitute their “mental nature.” Based on this view, Joken states that “since human beings are the most elevated of all things (bambutsu no rei), they are very earnest when it comes to properly conducting the five relationships.”5 In other words, Joken believed in the nobility of all human beings, and saw no difference among the five grades or the four social groups in this regard.

The Legitimacy of Commerce—The Story of a Folding Screen Joken utilizes the Confucian moral view explained earlier to establish the legitimacy of peasants, artisans, and merchants in society. The following passage is a good illustration. Here he talks about the legitimacy of commercial activities and on the proper attitude of merchants in conducting their business: There was a certain merchant who would always say that “merchants and folding screens cannot stand without being bent,” and he would engage in dishonest dealings. One night, the spirit of the old folding screen kept in this merchant’s house appeared in his dream, and said: “I am angry because you always think of me as something that is bent. It is not my wish to bend in order to stand. What I do instead is to extend and to shrink as the occasion requires . . . If I am extended straight, I cannot stand even for a moment. But if I am shrunk too much, I cannot stand, either. When I achieve the golden mean between extending and shrinking, then I can stand firm for a long time. Moreover, I will fall down unless I am placed on a flat, plane surface . . . Perhaps you, too, should first flatten and rectify your mind, and then, think about how to conduct your business. If you do business without overextending or shrinking too much, and if you achieve the golden mean, your business should stand on a stable foundation.” (Nishikawa, J. 1942, 16–17) metal, fire, wood, and earth. Joken’s claim later in this passage that the virtues deriving from YingYang energy and Five Elements permeate the Seven Heavenly Bodies is based on this notion of correspondence between the seven components of Ying-Yang and the Five Elements and the Seven Heavenly Bodies. 5 Nishikawa J. (1942), 196. On the five relationships, see Chapter 4, n. 3.

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Joken emphasizes the importance of striking the right balance in commercial activities and argues that merchants should rectify their mind and conduct themselves righteously. Behind this emphasis on the moral character of merchants lies the Confucian vision of humanity, which holds that people are noble beings endowed with all the virtues that should be cultivated in the right direction. From this viewpoint, commercial activities, which are often associated with greed, are legitimate as long as they are conducted with the right attitude.

9.2.3  Ishida Baigan Baigan’s Background: Lecture Series for Townspeople Miyazaki Yasusada was a former samurai who took up agriculture, and belonged to the upper stratum of the peasantry, while Nishikawa Joken was a well-to-do merchant. In contrast to them, Ishida Baigan was a son of an ordinary peasant in Tōge Village in Tamba Province. When he was eleven years old, Baigan was apprenticed to a merchant family in Kyoto, and led the life of a merchant. Although he returned to his native village once, he moved back to Kyoto at the age of twenty-three and continued to work as an employee of a merchant family. What made Baigan unique was the fact that, while working as a merchant, he deeply reflected for over twenty years on how people should live their life. By 1729, he was sufficiently confident about his own ideas to start a series of lectures in his home in Kyoto for the benefit of others—particularly townspeople. The small gatherings started by Baigan, after his death, developed into a major intellectual movement known as Ishida-School Study of the Mind (Sekimon shingaku 石門心学).

Baigan’s Perception of the Contemporary Situation Baigan’s lecture series continued from the 1730s into the early 1740s. This period coincided with the latter part of the Kyōhō Reforms, during which the shogunate hesitantly groped for a proper way of dealing with the market economy. Merchants like Baigan, by contrast, accepted the development of the market economy as something unproblematic: Sales of goods depend on the market conditions . . . When the prices go up, we tend to be bullish, but when they go down, we become bearish. This is what Heaven wills, and it is not something that merchants can control . . . Prices always change . . . Regardless of what prices we are speaking of, they change on a daily basis. Without considering these changes in prices, merchants cannot possibly get by. (Ishida 1956, 81)

Baigan understood fluctuations in price levels as a phenomenon with its own dynamics beyond the will or wishes of individual merchants. He took this condition for granted, but perhaps such understanding of the market was prevalent among merchants in general. With regard to the issue of social usefulness of commoners, Baigan’s view was similar to those of Yasusada and Joken. He states:

 Peasants, Artisans, and Merchants 87 Samurai, peasants, artisans, and merchants all contribute to the proper functioning of the realm below Heaven. None of the four social groups is dispensable. It is the duty of the prince to govern over the four social groups. To help the prince govern is the duty of the four social groups. Samurai originally referred to servants with ranks. Peasants are grassroots servants. Merchants and artisans are servants in cities and towns. (1956, 82)

Then, on what ground could the worth of commoners be justified other than their contribution to society? For the rest of the chapter, we will focus on Baigan’s answer to this question.

Baigan’s Way of Understanding Heaven and Earth To understand Baigan’s idea on the inner worth of commoners, we must first turn our attention to his understanding of Heaven and Earth. The following passage may seem rather abstract and perplexing, but it provides an important basis to grasp the core element of Baigan’s thought: Heaven and Earth are tangible things, and they lack neither sound nor smell; but what makes Heaven and Earth work has no sound or smell. Yet, despite being soundless and smell-less, it acts upon Heaven and Earth and gives birth to everything. (1957, 274)

What needs to be understood here is that, while everything existing between Heaven and Earth has its own concrete form, what makes Heaven and Earth work and gives birth to everything is something formless and metaphysical. This idea is based on the Zhu Xi school philosophy in the broad sense. Thus, it is not surprising that Baigan understands the essence of “what makes Heaven and Earth work” as benevolence: The soundless, smell-less thing that gives form to everything is provisionally known by a variety of names, including ken 乾,6 Heaven (ten 天), the Way (michi 道), principle (ri 理), destiny (mei 命), nature (sei 性), and benevolence (jin 仁). Although there are various names, they refer to one and the same thing. (1956, 72)

One striking thing about this passage is how Baigan uses different terms for “what gives form to everything.” Lack of attention to terminological consistency and systematicity is a common feature in the writings of those who were not specially trained as scholars. This is one thing that requires some attention when reading sources in the history of Japanese economic thought. Yet, despite the seemingly imprecise terminology, the passage contains one key point in Baigan’s thought, which is that he identified principle (ri 理) with destiny (mei 命). To quote from Baigan again, “principle and destiny are two names that refer to the same thing . . . while the two differ in referring respectively to static and dynamic aspects, they are one and the same” (Ishida 1956, 72). If principle Ken is one of the eight symbols in Daoist cosmology, and it usually signifies heaven or sky.

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inheres in everything, and if principle is nothing other than destiny, then it follows that everything in the world has its own destiny.

Heaven’s Will—Larvae and Mosquitoes The key idea in Baigan’s thought is the notion that people should accept their own destiny just as it is. If Heaven gives birth to everything, the form and substance of each and every thing are determined through “destiny assigned by Heaven” (temmei 天命) (Ishida 1957, 202). He makes this point by using a rather unique example: Mind is inherent in the form . . . When mosquito larvae live in water, they do not bite. But once they metamorphose into mosquitoes, they immediately begin to bite. This is because larvae and mosquitoes have minds corresponding to their forms . . . The form has its own mind. (Ishida 1956, 113–14)

What Baigan argues here is that both larvae and mosquitoes act according to their destiny (temmei) and that such characteristics should be accepted as they are. In fact, larvae and mosquitoes never question their own destiny. Yet, for human beings, it is not easy to follow the Heaven’s will. People are selfconscious, and this consciousness interposes itself between their destiny and their mind, thereby creating the possibility of disjuncture between the two. People’s mind, in other words, may diverge from mind corresponding to the form, and make its own, self-centered judgment. Then what should people do? For Baigan, the answer lay in achieving selflessness. In his own words, “Heaven and Earth are selfless. What I realized is that if we achieve the innocence of an infant, then our mind is one with the mind of Heaven and Earth” (Ishida 1957, 302). Once we eliminate our concern for the self and become like babies, then we would be no different from larvae and mosquitoes, and this would allow us to have mind corresponding to the form, which is assigned by Heaven. As stated earlier, Baigan understood the essence of Heaven as moral norms. Hence, a selfless, innocent man is an ideal moral being.

Devotion to Inherited Occupation and Wealth According to Baigan, a person’s social station was determined by his destiny assigned by Heaven. As such, an individual has a mind corresponding to his form. If he is innocent, then his behavior would follow the path set by Heaven. What does this mean concretely? Baigan states: ‹When Confucius was appointed an official in charge of breeding domestic animals,› he accepted the position as a destiny assigned by Heaven. All the social groups should take this as a guide, and learn to both accept and be content with their inherited occupation .  .  . Once we understand this, there is no room for neglecting our occupational duty. (Ishida 1956, 37–8)

In sum, Baigan believed that to follow the Heaven’s will was to engage in one’s “inherited occupation” (kagyō 家業) or to perform his “occupational duty.” An ideal human being was someone who would devote himself to his own work.

 Peasants, Artisans, and Merchants 89 What, then, was the occupational duty of merchants, the main audience of his lecture series? Baigan states: Merchants make their living by being experts in counting money. Thus, they should not make light of even a small coin. The proper way of merchants is to accumulate such money, and to attain wealth .  .  . Even if a merchant builds a mountain of wealth as a result of this, that cannot be criticized as a manifestation of greed . . . If merchants behave in this manner, their acts would encourage thrift in the realm below Heaven. They would also be following the destiny assigned by Heaven, and would be blessed with good fortune. (1956, 32–3)

The occupational duty of merchants is to preserve and to multiply their family assets through hard work. This is just a manifestation of a merchant’s mind that “corresponds to his form,” and not something that derives from greed. Since Heaven is nothing other than moral norms, to engage in inherited occupation and to fulfill occupational duty is a supremely moral act. Such an act not only agrees with Heaven’s will, but also “contributes to the proper functioning of the realm below Heaven.” Thus, any profit merchants obtain from their business is legitimately gained: The money a craftsman receives is the artisan’s stipend. The income which a peasant earns during the agricultural off-season is also equivalent to the stipend for a samurai. How could anyone in the realm below Heaven survive without their own means of livelihood? The profit made by a merchant is also a legitimate stipend recognized by all below Heaven. (1956, 82)

In sum, Baigan justified the worth of commoners by appealing to the concept of “destiny assigned by Heaven,” in addition to their social contribution. To devote oneself to performance of occupational duty was not only socially useful, but also in accordance with the will of Heaven.

Sekimon shingaku After Baigan’s death, his thought was spread throughout Japan by his disciples from the late eighteenth to the nineteenth centuries. Baigan’s thought was welcomed not only by townspeople but also by peasants and samurai, and came to be known as Sekimon shingaku. Teshima Toan 手島堵庵 (1718–86), Nakazawa Dōni 中沢道二 (1725–1803), Uekawa Kisui 上河淇水 (1748–1817), and Ōshima Urin 大島有隣 (1755–1836) were some of the people who played a major role in spreading Baigan’s ideas. *****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​**** Yasusada, Joken, and Baigan all differed from each other in their lifespans, social positions, interests, and in their occupations. Nonetheless, it is possible to categorize them under the same current of thought, for all of them asserted (1) the social contributions of agriculture, handicrafts, and of commerce; (2) the moral equivalence of the four social groups; (3) the moral legitimacy of occupations and incomes that accrue from them. Furthermore, they resembled each other in not attempting to assert

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the position of the commoners in competition with the samurai. Rather, they saw the four social groups as interdependent, embroiled as they were in a system of division of labor. In brief, all these thinkers accepted the estate-based society of the time and encouraged peasants and townspeople to devote themselves to their occupational duty. Through the performance of one’s duty, everyone can make his own contribution to the society, and there was no distinction of status when it came to people’s basic worth as human beings.

10

Economic Thought in a Stationary Society

The Tokugawa era lasted for more than two and a half centuries, a period nearly twice as long as the modern era since the Meiji Restoration. During this period, people were organized into estates, which were linked with one’s occupation and place of residence. The economic ideas of people in the Tokugawa era took on a particular hue, depending on the specific period and on which estate they belonged to. At the same time, however, there are also certain common elements in terms of values and of underlying assumptions. In this chapter, we shall reflect on some characteristics which were common to the economic thought of the seventeenth to the nineteenth centuries. To understand them, we must first be aware that, unlike modern society, Tokugawa Japan was a “stationary” society in which economic growth was not regarded as the normal state of affairs.

10.1  Stability over Growth To say that Tokugawa Japan was a “stationary” society is not to say that there was no economic growth. There was growth, particularly in the latter part of the Tokugawa era. But growth was rather slow. Although no detailed statistical data exist, the average annual rate of change in the actual harvest of rice over the period from 1600 to 1872 has been estimated at 0.32 percent (Hayami and Miyamoto 1988, 44). The per capita rate of increase in rice harvest over the same period is estimated to have been –0.07 percent per year (Saitō 2018b). A recent study gives the following set of estimates for the annual growth rate of per capita GDP in Tokugawa Japan: 0.01 percent for the period of 1600 to 1721; 0.2 percent for the period of 1721 to 1846; and 0.4 percent for the period of 1846 to 1874 (Saitō 2018a, 96). While economic growth accelerated toward the end of the Tokugawa era, through much of the period, growth was so slow that only marginal changes may have been noticeable in an average lifespan. Tokugawa Japan was thus a stationary society in the sense that concepts such as progress, development, and growth were not taken for granted. What was the meaning of economic activities in such a society? What did people seek to get out of the economy? In a stationary economy where bad harvest or natural disaster could lead to starvation, it is natural that the purpose of economic activities was understood as “quenching hunger and thirst, and protecting the body from the elements” (Miura 1979b, 920) or

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as ensuring that “there is no shortage in food or basic expenses throughout the year” (Mino 1967, 626). To put it differently, stability was prized over growth. This emphasis on stability is reflected, for instance, in the ways in which the meaning of “thrift” was understood in Tokugawa Japan. Generally speaking, during this period, thrift was considered a virtue. The eighth shogun Tokugawa Yoshimune emphasized the importance of thrift in order to address the financial problems faced by warrior households (6.2.1). For Yoshimune, thrift was a virtue through the inculcation of which he hoped to restore the conditions of the early Tokugawa era, and thereby to ensure social and political stability. Tokugawa Muneharu 徳川宗春 (1696–1764), the seventh lord of the Owari branch of the Tokugawa family, took a different stance with regard to thrift, stating as follows in a policy manifesto he wrote in 1731: Thrift and avoidance of empty formality are the basis of economy, so they should be encouraged .  .  . Yet excessive austerity that goes against the right principles would mean mercilessness. It would result in lack of benevolence, and would end up hurting people, requiring additional and wasteful expenses .  .  . Everything has a proper price . . . The important thing is to make sure that one achieves the right balance, to cut back on luxury that benefits no one, and to avoid waste such as ordering too many of one item or replacing still functioning items with new things. It is important to be thrifty in one’s daily life. (Tokugawa 1966, 414)

While Muneharu recognized that thrift is the basis of economy, he warned against excessive thrift. For him, excessive thrift would result in unreasonably low prices, which would cause a decrease in the quantity or quality of goods supplied. Thus, undue thrift would cause greater harm than good. What Muneharu wanted to see was a condition where things were “balanced.” Unlike Yoshimune, he did not seek to counter the power of the market through thrift. However, he did not call for or expect a secular increase in production. Thrift was not encouraged for the purpose of future investment. Though Yoshimune and Muneharu had differing views on thrift, both sought stability, not growth.

10.2  Useful Treasures and Occupational Duties In an economy where growth was barely noticeable and where famine was a real threat, basic goods essential for people’s livelihood were valued the most. Such goods were often called treasures (takara). In fact, the term takara is frequently used in Tokugawa-era writings. In this context, takara referred not to money or precious gems but to grains and clothing. In other words, goods indispensable for people’s basic livelihood were to be valued above all else. High appreciation of such useful treasures is evident in the writings of two men whom we discussed earlier. One of them is Mino Masataka, who was an administrator working for the shogunate under Ōoka Tadasuke (6.2.5). The other is Miura Baien, the village doctor in Bungo Province (8.2.2).

 Economic Thought in a Stationary Society 93 As an administrator of rural areas, Mino Masataka was a man well versed in agriculture and water management policy. In his work Nōka kankō (A Handbook for Farming Households), he writes as follows: When we speak of the treasures (takara) of a state, we speak first of the five grains, and second of clothing. Treasures are something that comes from rice paddies (ta-kara 田から), which is why we call the five grains treasures. We cannot eat gold and silver when hungry. We cannot wear them when it is cold. Verily, the five grains and clothing are two foundations that sustain people’s lives, so they are rightly considered treasures . . . Treasures do not refer to gems and expensive items; they refer to abundance of grain. Peasants are considered rich . . . if they do not suffer from shortages throughout the year . . . People should work hard in the fields, live better than their parents, and lay the foundation for the prosperity of their offspring. (Mino 1967, 625–6)

The same emphasis on the importance of useful treasures may be seen in Miura Baien’s work Kagen (The Essence of Price). In the following passage, Baien emphasized the importance of the “six elements” (roppu 六府), which refers to water, fire, wood, metal, earth, and grain—or basic items which are necessary for people’s livelihood: Water, fire, wood, metal, earth, and grain are called six elements. Rectifying morals (seitoku 正徳), making good use of things (riyō 利用), and enhancing people’s wellbeing (kōsei 厚生) are called three requirements (sanji 三事). Governance in later ages ‹periods after sages› . . . boils down to . . . six elements and three requirements . . . ‹Six elements› are the precious treasures of the realm below Heaven . . . and yet, they are not difficult to obtain . . . Treasures which are difficult to get are those we can do without, while treasures which are easy to obtain are those which we cannot do without even for a moment for the purpose of people’s welfare . . . The treasures of true princes are useful treasures. (Miura 1979b, 905–6)1

Leaving seitoku, riyō, and kōsei for later discussion, here let us note Baien’s claim that the six elements are the treasures of the realm below Heaven. Baien says that they are treasures because they are indispensable for people’s lives. Stability which was prized in a stationary society meant a condition in which basic, useful treasures were supplied in a dependable manner. Useful treasures, however, do not grow naturally. To ensure stable provision of useful treasures, it was necessary that each person perform his occupational duty. When applied to economic problems of a stationary society, the idea of occupational duty implied that a plentiful supply of daily necessities could be achieved only by Roppu and sanji are phrases that originate in the Chinese classic, the Book of Documents. The phrases appear in a section known as the Counsels of Great Yu. The idea of roppu bears obviously resemblance to the Five-Elements Theory (see Chapter 3, n. 6), according to which everything between Heaven and Earth is composed of the five elements of wood, fire, earth, water, and metal. In Kagen, Baien stated that the idea of roppu was the older and more authentic idea compared with the Five-Elements Theory (Miura 1979b, 905).

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each person and each social group performing his (its) occupational duty. The duty of peasants and townspeople would be to produce and to distribute takara in the sense explained earlier, while the samurai’s duty consisted in maintaining a stable and decent social order so that the three social groups could engage in their own economic activities.

10.3  Moral Economy of Tokugawa Japan As is evident from the foregoing discussion, in the thought of Tokugawa Japan, economic activities and moral concerns were not separate from each other; they were inextricably intertwined. On the one hand, to prevent hunger, thirst, or shortage of basic items, it was necessary that each person should perform his occupational duty. Performance of moral duty was considered the foundation of economic welfare. On the other hand, economic welfare was not a goal in and of itself. Welfare was an important condition necessary for building a moral society. When Miura Baien spoke of “making good use of things” (riyō) in the passage quoted earlier, his purpose was not limited to “quenching hunger and thirst, and protecting the body from the elements” (Miura 1979b, 920). Consumption was not a goal in itself. Rather, it was supposed to bring “well-being” (kōsei) to people, so that they can live a complete life. Moreover, people’s lives were supposed to be guided by “moral rectitude” (seitoku): Though people are divided into high and low ranks, they are all children of Heaven and Earth, so there is no difference among them when it comes to respecting and serving the will of Heaven. To disturb the great virtue of Heaven and Earth would be a most horrible thing. Everyone ‹who plays a role in governance›, according to his station, should do what he can to prevent cruelties and to rebuke criminals. This is all about administering the society and saving the people (keizai). Keizai is about making good use of things, enhancing people’s well-being, and rectifying morals. Even if a perfect way is found to advance good use of things and to enhance people’s well-being, people will not follow instructions they happen to dislike, nor will customs of propriety, modesty, and honor spread among them, unless the ruler himself rectifies his own morality . . . For this reason, in fulfilling the three requirements, we need to start by making good use of things, and build on the foundation of enhancing people’s well-being. But the main thing is to guide people by rectifying morality. People are swayed morally if they are guided through moral rectitude. (Miura 1979b, 937–8)

Like Kumazawa Banzan (3.2.5), Ogyū Sorai (4.4), and Miyazaki Yasusada (9.2.1), Baien argued that administering society and saving the people need to begin by enhancing people’s well-being. But economic well-being was just a precondition for rectifying morality. And moral rectification had to begin from the ruler. This last point is repeated in the following passage:

 Economic Thought in a Stationary Society 95 If the samurai above lead with their manners of honor, propriety, and modesty, and if the people below change their manners of excessive luxury and decadence, the number of idle hands would gradually decrease. Concerning the reduction of idle hands, the Great Learning states: “Many would engage in production while few would eat without producing; production is quick, while consuming things takes time.” What is discussed here is the importance of making good use of things. He who makes good use of things will be enhancing people’s well-being. (1979b, 920–1)

As an intellectual, Baien emphasized the importance of rectifying morality. What ordinary people of the time aspired for was probably something simpler—“quenching hunger and thirst, and protecting the body from the elements,” so that “there is no shortage in food or basic expenses throughout the year.” For the majority in the Edo period, the purpose of economic activities was to sustain a life that may be “poor, but not indigent” (Kumazawa 1971a, 55). This does not mean that the influence of moral ideals was limited to the rulers. The customs of propriety, modesty, and honor were expected to spread to the people as well. The idea of occupational duty was accepted by peasants and townspeople who used their performance of such duty as one basis for claiming their legitimacy and self-worth. One might argue that the ideal of fostering moral persons and moral society spread and penetrated the Tokugawa-era society in the form of the sense of occupational duty. To the extent that ordinary people in the Tokugawa era were selfconscious about moral rectitude, occupational duty was its key component. Contrasted to the idea of occupational duty was the notion of idler (yūmin 遊民), which was mentioned by Yamaga Sokō (2.3) and by Nishikawa Joken (9.2.2). Idlers are “those who do not perform the work of any of the four social groups, while consuming various things” (Morimoto 1985, 33). If all four estates must fulfill their own occupational duty, it is natural that people who fail to do their part would be given a negative assessment. Reducing idle hands was a necessary part of moral rectification. The idea of occupational duty penetrated a wide segment of the Tokugawa Japanese society. Moreover, the idea remained influential throughout the entire Tokugawa era. Here, we introduce two examples from the early Tokugawa and late Tokugawa eras. The first example is the famous seventeenth-century poet and writer Ihara Saikaku 井原西鶴 (1642–93). His work Nippon eitaigura, a collection of stories about merchants who acquired a great amount of wealth, is well known for candidly expressing the outlook on life typical for merchants of his time. Saikaku urged his readers to make money and build a fortune, because few things are more valuable than money: Heaven is silent, while it brings ample benefit to our land. But people are often insincere . . . When it comes to your own occupation for life . . . you should follow the advice of the Deity of Saving (shimatsu dai-myōjin), and save up gold and silver. Apart from your parents, money is the source of life . . . There are only five things in this world that cannot be achieved by the power of money (Ihara 1972, 91).

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But while Saikaku wasted no time trying to justify the notion that money is the source of life,2 what he recommended as the path to wealth was hard work and disciplined life, including rising early, working late, being thrifty, and taking care of one’s health (1972, 149). For Saikaku, “peasants have their own proper station in life, so husbands should cultivate the rice paddies, and wives should weave, and they should do their work from morning to evening, and the same thing applies to everyone” (1972, 92–3). Saikaku also stated that people “should give up on dreams beyond their reach, and work hard at their family’s occupation.” (92). Clearly, fulfilling one’s occupational duty was central to Saikaku’s teachings. Interestingly, about a century after Saikaku, two idiomatic expressions that seem to go against Saikaku’s advice regarding monetary accumulation were born: “Edoites do not hold onto their earnings overnight,” and “Only Edoites who were born wrong try to save up money” (Tanaka, Y. 2010, 10, 12). To some extent, such idiomatic expressions may have been just bravado to hide the fact that many were actually living from hand to mouth. Yet, it is also possible to see in them the notion, widespread in contemporary society, that earning and accumulating money should not be the ultimate goal in one’s life, and that proper performance of one’s work was an ethical virtue in its own right. The ethically conceived notion of occupational duty is frequently encountered also in the writings from the latter part of the Tokugawa era. At times, occupational duty appeared in combination with the idea of domainal interest or kokueki. One such example is Go-kokka son-eki honron (The Essence of the Profit and Loss for Our Domain), a work by Miyoshi Tsunenori 三善庸礼 (1779–?). Miyoshi was a samurai who served the Tachibana house of Yanagawa in Chikugo Province. In this 1842 work, he argued that every person, regardless of his social station, needs to contribute to the prosperity of his own domain: Artisans should work hard to fulfill their occupational duty. They should perfect their skills so that their products demonstrate utmost artistry. They should fill the need of their own domain, and any excess products should be sold to other domains in exchange for other products, or for gold and silver. Carpenters, woodwork specialists, and other craftsmen, when they have no job in their own domain, should go to another domain to earn money, and bring the money home to enhance kokueki. They should also produce items for daily use, sell them in other domains to collect gold and silver, so that the needs of the domain are amply met .  .  . Merchants are those who make a living out of trade, engaging in their family business and advancing the domainal interest . . . They should engage in honest dealings, make proper amount of profit, and make a living. This is the rule which merchants and townspeople should follow. (Miyoshi 1973, 17–18)

In the passage just quoted, Miyoshi preached about the occupational duties of artisans and of merchants. But his point was that each social group has its own social role, While Saikaku emphasized the importance of money-making, he also advised merchants to “act on the basis of benevolence and righteousness, and pay respects to kami and Buddha” (92). Perhaps even for Saikaku, the goal of economic activities was not limited to accumulating money.

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 Economic Thought in a Stationary Society 97 and that the sincere performance of occupational duties by all social groups would contribute to the domain’s prosperity.

10.4  Estate-Based Society and the Significance of Occupational Duty Given the estate-based nature of the Tokugawa Japanese society, people in general had limited choice concerning their occupation. While change in occupation was not prohibited, many had no choice but to succeed to the occupation inherited from their ancestors. Others had to find whatever available means of livelihood, or live as subordinate dependents in their own household. In this sense, the idea of occupational duty simply stated the inevitable—it taught everyone to accept his own status and occupation without questioning. In this sense, the idea of occupational duty performed the conservative function of legitimizing and upholding the existing social order. At the same time, the idea of occupational duty recognized a high moral worth in one’s performance of occupational duty. To the extent that one accepted his occupational role and devoted himself to the task, everyone was recognized as morally worthy persons. By offering a sort of moral equality within the confines of hereditary status distinctions and occupational roles, the idea of occupational duty directed people’s energies toward devout performance of their occupational roles (Watanabe 2010, 83). The performance of occupational duty became a central component of morality in the Tokugawa Japanese thought partly because it was associated with basic Confucian virtues such as loyalty and filial piety. As we have seen (9.2.3), for Ishida Baigan, “[s]amurai, peasants, artisans, and merchants all contribute[d] to the proper functioning of the realm,” and, thus, the commoners were “serving” their lord (or perhaps Heaven) just as the samurai were (Ishida 1956, 82). Or, more explicitly, the popular didactic writer Samukawa Masachika wrote in his Shison kagami (Handbook for descendants, c. 1667) that “people should devote themselves to their family business above all else. That is what loyalty means for commoners” (Samukawa 1975, 37, quoted in Watanabe 2010, 82, italics added). Also, to the extent that an occupational role was inherited from generation to generation within a household (ie), occupational duty belonged to the household, rather than to the individual person. Thus, to perform one’s occupational duty and to contribute to the prosperity of the household was to do his filial duty. As the Haiku poet and didactic writer Tokiwa Sadanao 常磐貞尚 (1677–1744) stated in his 1735 work, Basic Learning for Beginners (Minka dōmō kai), “[f]amily business is the achievement bequeathed to us by our ancestors’ toil and moil, and it is the belated reward for their unseen virtues. We inherit it because our parents sustained it. For us to uphold it, to preserve it, and to pass it on to our children is an act of filial piety” (Tokiwa 1917, 198– 9, quoted in Watanabe 2010, 79, italics added). Thus, to perform one’s occupational duty was also to do one’s duty as a loyal subject of the realm, and as a filial son. In this manner, in Tokugawa Japanese society, the economic ethic of occupational duty came to play an outsized role in people’s sense of morality, and in their outlook on

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life more generally. As the intellectual historian Watanabe Hiroshi argued, the idea of occupational duty “confined individual persons to their own household, but it provided them with the motivation to work hard at their occupation and to lead a more disciplined life” (Watanabe 2010, 83). Though the idea of occupational duty was elevated to a central position in the moral life of a broad range of people, it is worth noting that, in the “stationary” economy of Tokugawa Japan, occupational duty was not tied to concepts like growth and innovation. Tokiwa Sadanao, whom we just quoted, went on to warn the readers as follows: Do not abandon your old business and shift to a new one out of envy for someone making a lot of profit [in that business]; that is something which frivolous people do . . . One should not seek after high profit and excessive gains. Fish are caught with appetizing bait, and people perish out of their greed . . . One should be thrifty and avoid pompous luxury; a bountiful year may be followed by a year of famine . . . fortune and calamity are intertwined, and they come by turns. (Tokiwa 1917, 199–200)

As we shall see in later chapters (Chapters 15, 17–20), the idea of occupational duty continued to exercise a significant influence in the post-Restoration era. In this sense, there was broad continuity between the early modern and modern Japan’s economic thought. But there was also a clear element of discontinuity, too. In the period after the Meiji Restoration, when status distinctions were removed and when the secular growth of the economy came to be regarded as a normal state of affairs, the idea of occupational duty provided a powerful moral energy for economic growth. During the Tokugawa era, however, the idea of occupational duty remained embedded in the fabric of a society in which the goal of economic activities was stability rather than growth.

Module 4

Reconceptualizing Japan and the World This module traces the changes in the worldview of the Japanese in the latter half of the Tokugawa era. In Japan, the Sinocentric view of the world prevalent in East Asia since ancient times began to be undermined from the late eighteenth century. As knowledge of the wider world deepened, China, which had been revered by many as the center of civilization, came to be referred to as Shina—a term imported from the Dutch language—and was thereby relativized, or even despised (Chapter 11). By contrast, Western states were increasingly regarded as a model of wealth and power attained through trade, industry, and colonization, which in turn depended on a practical application of advanced scientific knowledge (Chapter 12). The decentering of China and the rise of the West entailed a process through which people became more conscious of “Japan” in contrast to the world outside, and through which their sense of belonging to Japan deepened. The development of National Learning (kokugaku) exemplified this tendency (Chapter 11). The growing strength of national consciousness had a direct impact on Japanese economic thought as well. As explained in Module 2, the pursuit of domainal interest (kokueki) became widespread in Japan since the late eighteenth century. By the early nineteenth century, this policy had led to a deeper integration of the Japanese economy. The rise of national consciousness and deepening economic integration prepared the ground for a new understanding of kokueki as the interest of Japan as a whole. When the perception of Western threat heightened in the wake of the Opium War, the notion of kokueki as Japan’s national interest was rapidly elevated to the position of the core value for many thinkers. In the last phase of the Tokugawa era, an intense debate occurred concerning the question of whether Japan should maintain its policy of “seclusion.” This debate further popularized the notion that Japan’s national interest should be the ultimate standard of judgment (Chapter 13).

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11

Japan and National Learning

Since ancient times, people in Japan saw China as the center of the world. In the Tokugawa era, too, the Sinocentric view of the world held sway, especially through the influence of Confucianism. Yet, as we saw in Chapter 7, this traditional worldview of the Japanese began to change starting in the second half of the eighteenth century. As knowledge of the West and of the wider world spread, the Sinocentric view was gradually undermined. At the same time, an interest in Japan and the sense of belonging to it deepened. A growing interest in and knowledge of the world outside, and the concomitant growth in the awareness of “Japan” as a single unit, eventually generated the consciousness of kokueki at the national, rather than the domainal, level. In effect, kokueki came to mean the “national interest.” In this chapter, we will first briefly discuss the growth of interest in Japan and the rise of ethnocentric views. We will then go on to discuss National Learning, which best exemplifies this intellectual orientation. Specifically, we will examine the ideas of Motoori Norinaga, and assess his significance in the light of the subsequent development of Japanese thought.

11.1  Decentering of China and Ascent of Japan The process of decentering of China in the Japanese worldview may be discerned from the gradual spread of the term Shina (支那) to refer to China. Among the Japanese of the Tokugawa era, the most common terms used to refer to China were Tō, Kara 唐, and Morokoshi 唐土.1 These terms were similar to the English word “China” in that they were more or less “neutral” names that did not carry derogatory or honorific connotations.2 Confucian scholars and those who admired Chinese(-style) poetry and prose used honorific terms such as Chūgoku 中国 or Chūka 中華 in deference to the “center of civilization.”3 Tō was the Japanese name for China’s Tang dynasty (618–907). People in Japan continued to refer to China as Tō even after the dynasty collapsed. The character 唐 was also read as Kara in Japanese, and it also referred to China (though the word Kara could also refer to Korea and, more broadly, to foreign lands in general). Morokoshi, on the other hand, referred specifically to China. 2 As is well known, the English term “China” and similar terms in European languages derived from the Qin dynasty (221–206 BCE), the first dynasty to unify China. 3 Chūka means “the center of civilization,” while Chūgoku means “the Middle Kingdom.” From the viewpoint of non-Chinese peoples, these are honorific names for China.

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In comparison with these, the term Shina was relatively new. It was the Japanized form of “China.” “The term Shina, which was later to become a disparaging term to refer to China, initially entered the Japanese language through translation . . . from the Dutch. As such, the term was initially used by scholars of ‘Dutch learning’ and of ‘Western learning’ in the late Tokugawa to Bakumatsu4 period, and it also spread to scholars of National Learning” (Sawai 2000, 24, 44–5). Although the term Shina did not carry any negative meaning at the beginning, it signified the decentering of China in the sense that the use of Shina meant looking at China through a European lens. The use of Shina eventually spread even to Confucian scholars and began to acquire critical or derogatory connotation, especially after the Qing dynasty’s defeat in the Opium War. This tendency continued and culminated after the Meiji Restoration. For instance, in his Encouragement of Learning (1872–6), Fukuzawa Yukichi, a leading thinker of the time, states: Japan and the nations of the West are peoples who live between the same heaven and earth .  .  . and possess the same human feelings. Therefore, nations which have should share with those which have not. We should mutually teach and learn from each other, without shame or pride. We should promote each other’s interests and pray for each other’s happiness. We should associate with one another following the laws of Heaven and humanity. Such an attitude, based on reason, implies acknowledging one’s guilt even before the black slaves of Africa; but it also means standing on principle without fear of the warships of England and America. It further implies that if this nation is disgraced, every Japanese citizen, to the last man, must sacrifice his life to prevent the decline of her prestige and glory. National independence entails all of these things. By contrast, nations such as China has behaved as if there were no other countries in the world but their own. Whenever they see foreigners, they call them barbarians, and revile and scorn them as animals. Without calculating the power of their own country, they have recklessly attempted to banish the foreigners, only to be rebuked by the foreigners in return. Such a situation can be said to have come about because they did not truly understand the “place” of a single nation. If their case be compared to that of an individual person, they have been like someone who has fallen into selfish and dissolute habits because he has not attained natural freedom. (Fukuzawa 2012, 6)

In the first half of this passage, Fukuzawa emphasizes how Japan has entered (or should enter) a world guided by a Western standard, but in the second half, he dwells on how nations such as China (Fukuzawa uses the term Shinajin to refer to the Chinese in the original text) deviate from this standard. Here, the West, Japan, and China are ranked clearly in a hierarchical order. While China was decentered and descended in the Japanese people’s worldview, the interest in the West grew deeper. As we will explain in Chapter 12, starting in Bakumatsu 幕末 means the last part of the era of Shogunal rule; it usually refers to the period between the arrival of Commodore Mathew Perry (1794–1858) in 1853 and the Meiji Restoration of 1868.

4

 Japan and National Learning 103 the latter half of the eighteenth century, some began to see Europe as the model civilization and even as the center of the world. The more the knowledge of the wider world spread, the more people became aware that they belong to a country called Japan. As the sense of belonging to Japan deepened, people became more interested in the position that Japan occupied in the wider world. In this context, the ethnocentric view that regards Japan as a “superior” country gained currency. Nishikawa Joken had the following to say on Japan already in the second decade of the eighteenth century: Japan is a country that places less emphasis on literary arts, and that prioritizes its martial strength. In this sense, Japan is a perpetual, impregnable fortress which is second to none in the world. Whether we take our sentiments, customs, literature, or various tools and articles, Japan is in a class of its own in the world. Our arts and crafts, too, all aim for neatness and simplicity . . . This is all the divine manner of our land, shaped by climate and geography . . . While Chinese dynasties have come and gone, losing their original rites and customs, our own imperial house has never changed from the beginning of our land, and one and the same line has continued. Therefore, the ancient customs of our court have been preserved to this day. (Nishikawa, J. 1942, 141, 148)

In this passage, contained in a work published in 1719, China is called Morokoshi, and is relativized as just one among many regions of the world. By contrast, Japan is regarded as a special country that is “second to none in the world,” and endowed with “divine manner . . . shaped by climate and geography.” Further, the continuity of the imperial family is regarded as the basis for Japan’s special status. Such a transformation in Japan’s perception of the world and of itself was going to exert a profound influence on the history of Japan after the Meiji Restoration (Matsumoto, Sannosuke 2011).

11.2  Motoori Norinaga and National Learning 11.2.1  National Learning By the middle of the Tokugawa era, a new indigenous school of thought known as National Learning or kokugaku 国学 gained considerable influence. Although the character koku is the same character that was used in kokueki 国益, here it does not denote individual daimyō domain but, rather, Japan as a whole. Kokugaku is a school of thought that values more than anything else the “archetypal” Japan uncontaminated by foreign influences. It is also a scholarly tradition that seeks to uncover such archetype through the study of classic Japanese texts. As such, it differed from imported doctrines such as Buddhism or Confucianism that had until then dominated the Japanese intellectual scene. National Learning encompassed a wide variety of ideas as it evolved from its inception in the seventeenth century to the end of the Tokugawa era. But its main thrust was the emphasis on the uniqueness and superiority of Japan. It also developed a quasi-religious dimension, as it became linked up with Shintō 神道.

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Underlying this was the strong belief in archetypal Japan before the influx of massive influence from China. Well-known representatives of National Learning include Keichū 契沖 (1640–1701), Kada no Azumamaro 荷田春満 (1669–1736), Kamo no Mabuchi 賀茂真淵 (1697– 1769), and Hirata Atsutane 平田篤胤 (1776–1843). But here we shall discuss the thought of Motoori Norinaga 本居宣長 (1730–1801), who is regarded as the greatest National Learning scholar, and assess his position in the history of Japanese economic thought.

11.2.2  Norinaga’s Background and Basic Intellectual Approach Born in a merchant family in Matsuzaka in Ise Province, Norinaga studied medicine and Confucian learning in Kyoto. After returning home, he devoted himself to the study and teaching of National Learning, while practicing medicine for living. Norinaga offered his advice on policy issues in his Tamakushige (Precious Comb Box) and Hihon tamakushige (Secret Book of the Precious Comb Box), written at the request of Tokugawa Harusada 徳川治貞 (1728–89), the lord of the Kii domain, who was also the lord of Matsuzaka (Matsumoto, Shigeru 1981, 88). In 1792, Norinaga entered the service of the Tokugawa House of the Kii domain, if only briefly. Norinaga was a harsh critic of Confucianism. At the heart of his critique was the denunciation of what he called “Chinese way of thinking” (kara-gokoro 漢意) and the attempt to recover the true heart (magokoro 真心) that presumably characterized Japan’s native tradition. Norinaga defined kara-gokoro as follows: “It refers not only to the tendency to love Chinese way of doing things and to revere China, but also to the inclination to make judgments about things being good or bad, and to try to determine the principles of things, all in the manner of Chinese books” (Motoori 1968a, 48). By contrast, magokoro referred to the mental attitude of perceiving things as they are, and of accepting them just as they are. For Norinaga, accepting things did not mean maintaining perfect composure in the face of events. Rather, magokoro meant accepting the natural sentiments of people—it meant rejoicing in happiness, and lamenting what is sad. For him, magokoro had less to do with moral principles or logic of things (ri) than with human sentiments (jō 情). Norinaga approved of the natural expression of human sentiments, which is why he studied and appreciated the stories in the mytho-history as told in Kojiki, the tradition of waka poetry, and the Tale of Genji, which Confucian scholars had criticized as immoral. This appreciation of natural human sentiments is reflected also in Norinaga’s view on death: People in this world, high and low, decent or wicked, all must go to the land of the dead (yomi-no-kuni) when they die, which is very sad . . . This is not something that we should argue about with our shallow, superficial mind . . . To value composure above all else, not to be elated with things we are happy about, and not to lament things that make us sad, is falsehood imported from overseas. It is not the true reflection of people’s heart, but a cumbersome imposition . . . Although what I said may be irrelevant from the viewpoint of conduct of governance, it should help us distinguish between the true Way of our imperial ancestors and the way of foreign lands. (Motoori 1972a, 315–6)

 Japan and National Learning 105 From Norinaga’s viewpoint, it was inappropriate for people to discuss the principle of things, or to judge whether things are good or bad. Norinaga’s position rested on the recognition that the cognitive capacity of human beings is limited: To argue about what we cannot really see, and to assert that this is how things should be, or that such a thing cannot be possible, etc., are practices characteristic of Chinese writings . . . The principles behind various things below Heaven cannot be fathomed by the shallow mind of humans . . . Human mind is something that is limited in its scope, and we often encounter things and events beyond our expectations. To doubt the existence of mysterious things and events that may have existed in the ancient age of deities (kami), to attach seemingly reasonable explanations based on guesswork, making them sound plausible, are acts of extreme impudence, and they go completely against the way of kami. (1968b, 174–5)

Here, Norinaga claims that there are things in this world that Confucian canons never even imagined. More generally, he emphasizes the limits of human understanding. The notion that everything can in principle be understood by human mind is rejected as an instance of kara-gokoro or pretentious, Chinese way of thinking (Maeda 2002, 344). Norinaga held that “everything is an expression of the will of kami, and that one has to simply accept it, whether or not the consequences are happy ones” (Sagara 1978, 104; emphasis in the original). He had a passive, fatalistic attitude concerning the relationship between humans and kami: “Each and every thing between Heaven and Earth is according to the will of kami . . . Some things are the expressions of the will of Maga-tsu-hi-no-kami, but nothing can be done about them, which is really sad” (Motoori 1968c, 53, 55). Maga-tsu-hi-no-kami is seen by Norinaga as a kami that brings about calamity. But whatever happens, nothing can be done; things cannot be helped. But good things also happen, and they, too, are the will of kami. The best of all things that has happened is the “fact” that descendants of the Sun Goddess Amaterasu (Amaterasu Ōmikami 天照大御神) have continued to reign over Japan: The kami whom we know as Amaterasu Ōmikami is none other than the Sun that brings light to our world. This Amaterasu instructed her grandson to reign over Ashihara no nakatsukuni (i.e. Japan), so the grandson descended from Heaven onto this land. In the Divine command issued by Amaterasu at that time, it is stated, “the Imperial Throne shall thrive forever, as long as there is Heaven and Earth.” This Divine command is the foundation of the Way. The sources of truth and morality in this world are all contained without exception in what happened during the age of kami. (Motoori 1972a, 310)

For Norinaga, the continuity and eternity of the imperial line (based on Amaterasu’s Divine command, known as Tenjō mukyū no shinchoku 天壌無窮の神勅) is the “foundation of the Way,” and the basis for the claim of Japan’s superiority to other countries.

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11.2.3  Delegation of the Authority to Govern Emphasizing the divine origin of the mikado cannot but raise questions about the relationship between the mikado and the shogun, and about the shogun’s authority to govern. How did Norinaga deal with these questions? Norinaga believed that everything was “according to the will of kami,” and politics was not an exception in this regard: Today, based on Amaterasu’s discretion and the delegation from the imperial court, Azuma-terukami-mioya-no-mikoto (i.e. Tokugawa Ieyasu) and his descendants hold the rein of governance over the realm below Heaven. The shogunate’s authority is divided by provinces and counties, and is delegated to daimyō, who exercise the authority of governance. Hence, the people under the reign of each daimyō are not private subjects of the lords, nor are the provinces private domains of the lords. All the people below Heaven are people who have been entrusted by Amaterasu to the shogunal family descending from Azuma-terukami-mioya-nomikoto. This land is also a land entrusted to the shogunal family by Amaterasu. (Motoori 1972a, 319)

Here, Norinaga expounds the theory of the delegation of the authority to govern (taisei-inin-ron 大政委任論), which is one of the theories explaining the legitimacy of the Tokugawa regime. At the basis of this theory is Norinaga’s view that everything is “according to the will of kami.” More specifically, Amaterasu Ōmikami is regarded as the source of legitimacy for governance over the realm below Heaven. Her will is embodied by her descendants, or the mikado and the imperial court, which in turn has delegated the authority to govern to the shogunal family, descending from Ieyasu. The shogunate has then entrusted provinces and counties to daimyō, and, in this manner, the common people are also placed in relation to Amaterasu. The will of Amaterasu props up and legitimizes an order that links the court, the shogunate, daimyō, and the people. It is worth noting that this theory, while it legitimizes Tokugawa rule, also has the effect of relativizing the authority of the shogunate by seeking the basis of its legitimacy in the Sun Goddess Amaterasu. This is an important point concerning the history of Japan from the nineteenth century onward, for once the people are placed in relation to Amaterasu and the imperial court, the shogunate and daimyō could be theoretically dispensed with.

11.2.4  Norinaga’s Attitude toward Politics For Norinaga, everything that happens is a result of the “will of kami.” Nothing is absolute in the sense of existing on its own, and yet, people have no choice but to accept everything as it is. In Precious Comb Box, submitted to Lord Harusada, Norinaga advised against implementing any radical reform: All the changes we observe in this world are the work of kami, and as such, they cannot be stopped by human power. Even if there are things which are not good,

 Japan and National Learning 107 many of those things cannot be easily corrected .  .  . Thus, to govern a domain in this age, it is necessary to adapt to the conditions of the time, to follow the instructions of the shogunate, not to destroy what has been passed down from the past, and to follow the established way of doing things. This is the true Way, and it is also in line with governance according to the will of kami, which was practiced in ancient times. (Motoori 1972a, 322)

Thus, Norinaga advised general acceptance of the status quo. In Secret Book of the Precious Comb Box, he even argued that corrupt officials who “act like voracious merchants” should be tolerated: Facing fiscal problems, many daimyō houses have appointed officials in charge of financial affairs called O-katte-gata. The duty of these officials is . . . to pay close attention to the domain’s expenditure items inside and outside the domain and to reduce them as much as possible. It is also their duty to find ways to reduce spending on existing expenditure items. All this is very much needed today. However .  .  . since these officials are in charge of making ends meet .  .  . those who are merchant-like and money-smart tend to be selected for this position. For this reason, such officials tend to act like voracious merchants, using any means necessary to obtain as much money as possible for the short term, caring neither about the suffering of those below, nor about the possible harmful consequences in the future, nor about the shame this might bring to the lord . . . Yet, at a time when the lord is in grave financial difficulty, and is experiencing problems covering even immediate expenses, nothing can be done unless some money is brought in. In such a time, it is natural that the work of such officials is highly appreciated. (1972b, 362–3)

The notion that policies need to be adapted to the existing conditions was commonplace during the Tokugawa era. We have encountered this idea in the writings of Dazai Shundai, Kaiho Seiryō, and in the policies adopted by pragmatic officials such as Ōoka Tadasuke. What made Norinaga’s view distinctive is that he regarded the existing conditions as unalterable by human intervention.

11.2.5  Norinaga in the History of Economic Thought in Japan It is not easy to place Norinaga in the history of economic thought. Norinaga’s ideas do not belong in the tradition of “political economy” or keisei saimin ron. Nor was he interested in propagating didactic teachings for the commoners. Yet he was clearly one of the central figures in the increasingly pluralistic intellectual world of the late eighteenth century. So it is worth attempting to assess the significance of Norinaga from the viewpoint of history of economic thought. One of Norinaga’s contributions concerned how to understand the relationship between Japan and the rest of the world. As we shall see in Chapter 12, international environment in East Asia was transformed drastically starting in the second half of the eighteenth century. In this context, the problem of how Japan should respond became

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an urgent matter. Japan’s response depended on how people viewed the country itself. Norinaga’s view of Japan and of the rest of the world, though it had a rather weak empirical foundation, gradually gained in influence. Equally important, the notion that Japan constitutes a single unit gained more currency. This was significant, for instance, in relation to issues of foreign trade. Foreign trade raised the question of kokueki for entire Japan. Norinaga’s emphasis on Japan as a unit must have encouraged people to think in terms of the interest of Japan as a whole. Another significant point concerns the notion that everything in the world is a result of the work of kami. This obviously inclines people toward passive acceptance of the status quo (Matsumoto, Sannosuke 1972). But this does not necessarily exclude changes, for changes are also the work of kami. From such a perspective, nothing in the world is absolute, including the regime dominated by the Tokugawa house, and the economic system associated with it. Given National Learning’s emphasis on the uniqueness and superiority of Japan, one might have expected that it would offer stiff resistance to opening up the country to Western influence. Indeed, National Learning provided major stimulus for the idea of jōi 攘夷 (the aspiration to “expel the barbarians”). Yet, the passion for jōi subsided relatively quickly after the Restoration. The quick change in people’s attitude may be attributed in part to the fact that National Learning—or at least Norinaga’s brand of this doctrine—offered no basis for resistance in case of even major changes to the system. If we assess Norinaga’s ideas in terms of their social functions, we might say that they facilitated the political and economic changes that Japan would go through in the nineteenth century. At least, they were compatible with such changes, though we cannot say that Norinaga intended this. But this intellectual flexibility—or the tendency to respond to changing situations without asking questions—arguably caused a different kind of problem in the subsequent development of Japanese thought, as we shall suggest at the end of this book.

12

Changes in the Japanese Worldview in the Nineteenth Century

This chapter discusses the change in the Japanese people’s worldview in the nineteenth century—a shift in which a Sinocentric view of the world was replaced by a view centered on the West. Although this process accelerated after China’s defeat in the Opium War (1840–2), two developments prepared the conditions for the rapid change in the mid-nineteenth century. One was a structural change in the Japanese economy since the second half of the eighteenth century, and the other was the evolution in Japanese perception of the West since the eighteenth century. We will first discuss economic change in Japan, and then examine the evolution in Japanese image of the West before turning to the shift in the Japanese worldview in the nineteenth century.

12.1  Structural Change in the Japanese Economy In speaking about a structural change in the Japanese economy, we are referring to the beginning of the transition from an agriculture-based economy to one in which the nonagricultural sectors play a greater role (Ōta, Kawaguchi, and Fujii 2006, 150–62). While cultivation of cash crops and production of processed agricultural products were spreading already in the eighteenth century, this trend accelerated in the nineteenth century. Moreover, the production of such items was spreading from the Kinai region (around Kyoto and Osaka), which had long been the center of the Japanese economy, to other regions. In other words, with the commercialization of the rural economy, the economy of various regions in Japan experienced an upsurge. In rural villages, the production of nonagricultural products such as salt, paper, and cotton also increased. In the Chōshū domain, for instance, by the 1840s, the annual production values in the agricultural and nonagricultural sectors were “roughly equal” when measured by the silver-convertible paper currency (ginsatsu/ ginshō) issued by the domain (Nishikawa, S. 1979, 27). Part of the nonagricultural products of various domains was exported in exchange for products from other domains. In other words, inter-domainal trade became more active. The development of inter-domainal trade meant a decline in Osaka’s position in the Japanese economy. While the volume of goods passing through Osaka increased rapidly until the beginning of the nineteenth century, the amount decreased by 20 to

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60 percent between the 1820s and the 1840s. This reflected the development of direct trading network linking various regions without the intermediary role of Osaka. Direct trade became possible because producers and distributors in various regions gained greater capacity through the process of de-agrarianization of the economy, and because the domainal governments reduced their dependence on Osaka merchants. They did so by promoting samurai bureaucrats called rizaitsū who are well versed in economic affairs. The Tokugawa-era economy with Osaka as its hub was changing, and was being reorganized into a more dense network linking the provinces with Edo and with each other. Through this process, all of Japan was integrated into a close-knit trading network. This process of integration was facilitated by the reforms undertaken in many daimyō domains starting in the second half of the eighteenth century. Daimyō and their retainers in the early Tokugawa era were granted fiefs by the Tokugawa shogunate, which functioned as the “public authority” (kōgi 公儀) for all of Japan. Under this system, daimyō could be moved to another location (tempō) or deprived of their fiefs altogether (kaieki). Under such a system, the relationship of daimyō and the retainers with their fief could be rather tenuous. However, the instances of kaieki or tempō declined dramatically since the second half of the eighteenth century. As a result, daimyō and their retainers became more deeply rooted in their own fiefs, over which they ruled in a hereditary manner (Fujita 2011, 81–2). Thus, daimyō and samurai came to view the fief and the commoners as “their own.” In this way, kuni came to be understood as a land or a fief, on which lived peasants, plus a ruling group of samurai composed of daimyō and his retainers. “Domain” (han 藩) is a term that captures this concept of kuni, encompassing both the samurai and the commoners. The reforms carried out by daimyō in various provinces from the second half of the eighteenth century were “reforms of the domain” (hansei kaikaku) rather than reforms of the daimyō household affecting only the daimyō and his retainers. Unlike household reforms, “reforms of the domain” sought to involve the peasants and the townspeople in an attempt to enhance domainal interest. The development of domainal industry and trade resulting from such reform policies encouraged the independence of provincial economies from Osaka and advanced the economic integration of Japan. Thus, the reforms and the pursuit of kokueki at the domainal level had the effect of deepening the integration of the Japanese economy. Such a process of economic integration was not sufficient to make the general populace aware of Japan as a unified country. Economic integration at the national level did not immediately generate correspondingly national consciousness. When Kaiho Seiryō wrote at the beginning of the nineteenth century that “the entire domain (kuni) ‹should be› united in extracting money from other domains” (Kaiho 1970, 323), what he meant by kuni was individual domains, not the provinces under the ritsuryō system,1 or Japan as a whole. Yet, as Japanese images of the West changed, and as Ritsuryō was a code of law that was first developed in China, and was introduced to Japan starting in the late seventh century. In Japanese history, ritsuryō system refers to a system of government based on ritsuryō, which existed between the late seventh and the early tenth centuries. Under this system, Japan (from Kyūshū to Tōhoku) was divided into sixty-odd provinces, each of which

1

 Changes in the Japanese Worldview 111 Japanese worldview changed with the shift in the international environment, the term kuni began to denote Japan as a whole.

12.2  Changing Image of the West In Japan of the seventeenth century, Western countries with the exception of the Netherlands were perceived negatively. They were seen as spreading the evil religion of Christianity (Hiraishi 2001, 123–6). But this image began to change gradually since the first half of the eighteenth century, as Japanese understanding of the West deepened. Here, we will focus on two characteristics of eighteenth-century Japanese view of the West. The first is the idea that, while Westerners possess superb knowledge concerning material things, they do not have a clue when it comes to things metaphysical. The second is the growing recognition that Western states are capitalizing on their knowledge of the material world to increase their wealth and power. One of the first Japanese to make the first point was Arai Hakuseki, whose involvement in currency policy we discussed in Chapter 6. Having expanded his understanding of the West through his interrogation of the Italian Catholic priest Giovanni B. Sidotti (1668–1714),2 Hakuseki stated as follows in his 1715 work, Seiyō kibun (Records of the Occident): The man ‹Sidotti› is widely-read and has remarkable memory. He is learned in many fields, and when it comes to astronomy and geography, it seems pointless even to try to match his knowledge . . . ‹Yet› when it comes to religious teachings, not a word of him comes close to the truth. An intelligent man suddenly becomes stupid. It was as if I was faced with a different man. Thus I understood that their scholarship is good only at exploring forms and functions. They know only what is physical. Their understanding of what is metaphysical appears non-existent. (Arai 1906b, 748–9)

Here, Hakuseki divided Western knowledge into two categories. He did not appreciate the metaphysical aspects of Western ideas, stating, for instance, that Christian beliefs are “nonsensical, shallow, and not even worth discussing” (1906b, 788). Yet he had a very high opinion of Western natural sciences concerning the physical world, including geography and astronomy. Naturally, Hakuseki’s view did not exhaust the contemporary Japanese view of the West; there also existed a contrasting view that emphasized the universality of moral sentiments. For instance, Nishikawa Joken made the following statement around the same time as Hakuseki’s remark: “Although the Netherlands is often despised as was known as kuni (see Map 1 on p. xix). These kuni did not coincide with domains. While some daimyō controlled more than one province, most daimyō domains were smaller than ritsuryōbased provinces. Nonetheless, daimyō domains were also referred to as kuni. 2 Sidotti was a Sicilian-born Jesuit priest who, in 1708, entered Japan against the policy of the shogunate. Immediately arrested, he was first sent to Nagasaki, and then, in 1709, to Edo, where he was interviewed by Hakuseki. Hakuseki wrote Seiyō kibun based on interviews with him.

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barbaric, the Dutch people appear to be loyal to their master and practice filial piety. In particular, filial piety is a nature endowed by Heaven, so it seems that people of all countries practice it” (Nishikawa, J. 1942, 202). Yet it was Hakuseki’s dichotomic understanding of Western knowledge that became the basic framework through which many Japanese of subsequent generations perceived the West. Another example of this bifurcated understanding may be found in the writing of Joken’s third son, Nishikawa Masayoshi 西川正休 (1693–1756). While Masayoshi recommended his readers to study highly sophisticated Western theories of astronomy, he wrote the following in 1729: The Dutch, from the King above down to the commoners below, all consider trade to be their main business . . . and obtain a great amount of profit . . . Their vessels are as sturdy as castles, with several cannons on both sides. All the instruments and equipment on board are so well-crafted that it is difficult even to express in words. Though the Netherlands is a small country, it is militarily very powerful, and it has acquired a number of dependencies by raiding and robbing weak countries. The Dutch believe that their ability to rob other countries and to obtain their riches comes from their knowledge of astronomy and navigation, and from the fact that they use this knowledge to travel to all parts of the world. Thus, it is said that the Dutch regard astronomy as a most important treasure, and that many study the subject. While gentlemen use astronomy to clarify the principles of morality and human nature, the Dutch use astronomy to perfect the principles of malevolence and greed. What a pity! Why is it that the Dutch, who are so proficient in the astronomy of the physical world, do not know the astronomy of first principles and of human nature? . . . We should accept Dutch astronomy. But we should avoid absorbing their greed. (Nishikawa, M. 1898, leaf 4, verso–leaf 5, verso)

In the West, astronomy was harnessed to navigation technology, and thus facilitated military expedition to other states and acquisition of wealth. While Masayoshi appreciated the high level of Western natural sciences, he disapproved of its use for obtaining wealth and power, with the ultimate purpose of satisfying “greed.” In the foregoing passage, Masayoshi repeats the theme of physical–metaphysical bifurcation expressed by Hakuseki. He also touches on the second theme in Japanese perception of the West, which is how Western states use their knowledge to increase their wealth and power. Masayoshi did not take the West as a standard against which the conditions in Japan were to be assessed; nor did he see the West as a model from which Japan should learn. But the recognition that the economic and military power of the West is based on the development of natural sciences would play an increasingly important role from the second half of the eighteenth century onward. Let us turn to the case of the Dutch learning scholar Maeno Ryōtaku (1723–1803), the main translator of the book of anatomy, Kaitai shinsho (see 7.2). Like Masayoshi, Ryōtaku noted that in the West, scholarly knowledge was applied in practice to great effect. But unlike Masayoshi (and Hakuseki), Ryōtaku did not dismiss the Western approach to things metaphysical. If anything, in his work published in 1777, his high

 Changes in the Japanese Worldview 113 evaluation of the West appeared to extend to metaphysical matters, including religion, ethics, and politics, in addition to technology and industry: Science school ‹in the Netherlands› takes upon itself the task of uncovering the original, inherent principles of everything between Heaven and Earth, and this is known as the study of nature (honnengaku). Based on this knowledge, they pay their respect to Heaven, worship their God, govern the country, and improve their skills. They are knowledgeable about the principle of things, and are highly skilled in their arts and crafts. They make improvements on their wares, adding to their convenience. Their rulers spread moral teachings, notables sustain the state, commoners concentrate on their work, and perfect their skills in every endeavor. Indeed, the influence of the science school is both profound and far-reaching. (Maeno 1972b, 129)

The quoted passage does not depict the Netherlands as a society at a higher stage of sophistication, or further along the developmental ladder compared with Japan; a progressive view of history still lay in the future. But Ryōtaku recognized the existence in the West of intellectual endeavor that seeks to “uncover the original, inherent principles of everything between Heaven and Earth,” and understood it by the Confucian category of exploring the principle (kyūri 窮理; see 2.1). Besides, in the case of Ryōtaku, high evaluation of the West led him to regard the West as a new civilizational model. In a 1771 work, Ryōtaku wrote: “Though China styles itself as a country of sages and of morality, it actually depends on the West when it comes to technology” (1972a, 74). Scholars of Dutch learning initially learned from kogakuha school Confucianism’s emphasis on experience and evidence as sources of knowledge. As they accumulated more concrete knowledge of Western medical science, however, they came to a deeper appreciation of Western science. Instead of China, the country of sages, Western states, or countries that excelled in “exploring the principle,” became the new model (Hiraishi 2001, 128–9). The case of Ryōtaku is a clear indication that, by the late eighteenth century, some Japanese ceased to see China as the center of the world, and began to seek in the West a new model.

12.3  Changes in the International Environment and in the Japanese Worldview From the mid-eighteenth to the early nineteenth centuries, the Industrial Revolution occurred in Western countries in rapid succession, beginning with Britain. Until the eighteenth century, trade between the West and Asia consisted largely in unilateral export of Asian products in exchange for precious metals. The Industrial Revolution changed this. Western states began to capitalize on their overwhelming economic and military power to turn Asian countries into dependencies that were expected to serve as sources of raw materials and as markets for Western products. Britain spearheaded Western penetration of Asia, controlling a vast swath of territory including India, and playing a pivotal role in the forced opening of the Qing dynasty. With its defeat in

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the Opium War and in the Arrow War (1856), China was forced to conclude unequal treaties with Britain and other Western powers and to concede territories. China began its descent to semicolonial status. These changes prompted a major transformation in the worldview of the Japanese. Since ancient times, Japan had depended heavily on the import of Chinese institutions and culture. In addition, since the Middle Ages, the cognitive frame of three countries (sangoku 三国), which saw the world as containing three major countries (China, India, and Japan) had shaped Japan’s worldview (Watanabe 2010, 301). At times, Japan was incorporated in the China-centered, hierarchical order in East Asia through tributary trade coupled with the establishment of feudal ties with the Chinese emperor. The Tokugawa shogunate, to be sure, self-consciously distanced itself from this Sinocentric order, and instead envisioned a Japan-centric order encompassing Korea, the Ryukyu Kingdom, and Ezochi (Hokkaido). Through this vision, the shogunate sought to display its autonomy and legitimacy to other Asian states (Sugiyama 2012, 17). Yet, this stance of the shogunate did little to change the centrality of China in the East Asian world. The defeat of the Qing dynasty at the hands of the Western powers undermined the East Asian international order and Japan’s preexisting worldview. Japanese interest in China shifted away from ancient China as described in the classics toward the situation in contemporary Qing dynasty. What had been regarded as a model to emulate now began to be perceived as a negative model (Satō, H. 2001, 206). The West, on the other hand, loomed increasingly large in the Japanese worldview. By this time, the West was seen not just as countries with advanced knowledge of the natural sciences; an increasing number of Japanese began to recognize other strengths of Western states. This is reflected in terminological change. The West used to be referred to as namban 南蛮 (southern barbarian [states]), a derogatory term used by China to refer to insubordinate peoples to the south. Western states now came to be described by terms such as “strong states” (kyōkoku 強国), which pointed to their preponderant power and global reach in economic, military, diplomatic, and cultural matters. China, by contrast, was increasingly referred to as Shina, instead of more deferential Chūgoku or Chūka. Starting in the late eighteenth century, the danger of invasion or colonization by the West began to be felt, and the urgency of this issue increased with the passing years. From the arrival of Russian vessels to Ezochi in the 1790s, an increasing number of Western vessels were starting to knock on Japan’s doors. By the 1840s, some American vessels were already visiting the Uraga Bay, just 50 kilometers south of Edo. As explained in the first section of this chapter, Japan in the early nineteenth century was being integrated into a single network through the medium of commodity trade. Yet, the majority of educated Japanese continued to see their domain as the place where they belonged, and saw people from outside their domain as aliens. That was the basis for the pursuit of domainal kokueki discussed earlier. But in the mid-nineteenth century, the pressure from the West increased to such an extent that it was acutely felt by all informed people. At that point, the sense of vulnerability to incursions by the Western great powers must have aroused the sense of unity that transcended the boundaries of the domains.

 Changes in the Japanese Worldview 115 In the meantime, Japanese arguments on questions of political economy began to take on a new sense of urgency. This new wave in keisei saimin ron was characterized by the attempt to understand the situation in Japan in the light of developments in the contemporary West, and to offer practical policy proposals on how to respond to domestic and external problems. Increasingly, such arguments focused on the shape of Japan as a country, and as a nation.

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Arguments for Opening Up the Country

13.1  Weakening Basis of Seclusion Policy As the international environment surrounding Japan changed, debates heated up concerning the proper method for sustaining and defending Japan as a country. Until then, the shogunate had imposed tight control over foreign trade, following which trade was allowed with only a limited number of states or regions (with the Netherlands, Qing China, Korea, the Ryukyu Kingdom, and with Ezochi), and only through specified channels (Nagasaki for the Netherlands and China, Tsushima for Korea, Satsuma domain for Ryukyu Kingdom, and Matsumae domain for trade with the Ainus). This system has commonly been known as the seclusion policy (sakoku 鎖国). The term was a neologism first used by Shizuki Tadao 志筑忠雄 (1760–1806). He was a Dutch learning scholar and official Dutch translator for the shogunate, who translated part of Engelbert Kaempfer’s (1651–1716) work The History of Japan as Sakoku-ron.1 By the early 1850s, the term was also being used by top-level officials (Ōshima 2010, 22). Kaempfer had argued that Japan needed no foreign trade because she was selfsufficient, and that seclusion was the optimal policy from the viewpoints of domestic stability and of external security. But by the nineteenth century, the domestic and external situations had changed drastically compared with the end of the seventeenth century. The Industrial Revolution and rapid progress in navigation transformed the conditions in the world. The geopolitical and economic rationales for seclusion policy were disappearing (Watanabe 2010, 315–16). As the international environment changed, a debate started among the Japanese concerning whether to maintain the existing policy, or to open up the country and to engage in foreign trade. The publication of Shizuki’s Sakoku-ron played a nonnegligible role in spurring this debate. First, Shizuki’s use of the term sakoku (literally meaning “locking up the country”) aroused awareness among the Japanese that their country was “closed.” This awareness triggered the debate concerning whether Japan should continue to keep itself closed. Also, while some readers of Shizuki’s work read it Kaempfer, a German doctor, came to Japan in 1690 to work in the Dutch Trading Post in Nagasaki. His manuscripts in Latin, giving comprehensive description of Japan, were posthumously published in English as The History of Japan in 1727. Translated into a number of languages, it was widely read by Western intellectuals as an introduction to Japan. Shizuki translated part of the work from the Dutch edition under the title of Sakoku-ron.

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 Arguments for Opening Up the Country 117 as a source of information on the conditions of foreign countries, others were alarmed by the fact that some Westerners were better informed about Japan than the Japanese themselves, and became wary of the West (Ōshima 2006, 5–24). Thus, Shizuki’s work invigorated the argument for maintaining sakoku policy. At the same time, the growing recognition of the wealth and power of Western states led many Japanese to see the West as a model to emulate. By the beginning of the nineteenth century, it was becoming self-evident that Western powers enjoyed an overwhelming advantage in technology and military power. In seeking to determine how to respond, proponents of various positions naturally took military balance and economic advantage into consideration. But at the same time, they also sought to find a solution that was in accord with “reasonable principles” (dōri 道理). In this chapter, we will focus on the ideas of two major thinkers (Honda Toshiaki and Yokoi Shōnan) who made arguments in favor of opening up Japan for foreign trade. Honda Toshiaki was concerned that domestic production in Japan might fail to keep up with the increase in population. Foreign trade was a means of solving this problem. Yokoi Shōnan, on the other hand, highly evaluated the policies of Western states from a Confucian viewpoint as bringing benefit to people’s lives, and argued that Japan should also engage in foreign trade.

13.2  Honda Toshiaki’s Argument for Opening Up the Country Already in the second half of the eighteenth century, some theorists of keiseiron advocated the strengthening of Japan based on the Western model. One example is Honda Toshiaki 本多利明 (1743–1821). What is interesting is that Toshiaki advocated opening up the country to foreign trade half a century before the debate on this issue erupted toward the end of the Tokugawa era. Given its early appearance, Toshiaki’s proposal may be understood as an extension of the ideas behind the trade policy of the Tanuma era. Honda Toshiaki is said to have been born in a rural village in Kambara County in Echigo Province, but it is not clear what his family’s status was (Tsukatani 1970, 444). At the age of eighteen, he went to Edo and studied mathematics and astronomy there. He also acquired knowledge of Dutch learning, particularly of astronomy, surveying, and geography. Except for the one-and-half-year period from 1809, when he was in the service of the Maeda clan of Kanazawa in the Kaga domain, he lived his whole life as an independent scholar. Unlike most of his contemporaries, Toshiaki did not stand on the foundation of Confucianism. Rather, he built his ideas upon his knowledge of mathematics, astronomy, and Dutch learning. In this sense, Toshiaki’s keiseiron was rather unique, though as an intellectual living in Tokugawa Japan, he could not avoid being influenced by Confucianism in some respects. Toshiaki focused his attention on Japan as a “state” (kokka 国家). Like Kaiho Seiryō, he emphasized the importance of kokueki, but, unlike Seiryō, he understood kokueki as the interest of Japan as a whole: Who among those of us born in Japan would not have the good of the country in mind? Who would celebrate the country’s misfortune? Who would detest what

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is good for the country? It is natural for people born in Japan to rejoice in and to help realize what is good for the country, while being unhappy about and trying to avoid what is bad for the country. (Honda 1970a, 12)

In his famous work Keisei hisaku (The Key to Administering the Country and Achieving Its Prosperity), he laid out his proposals for enhancing Japan’s national interest. In Toshiaki’s view, the productive capacity of Japan and its adjacent islands (including Ezochi, the Izu Islands, etc.) was limited. He felt that Japan’s national interest could not be secured unless changes were made (Miyata 2012). Toshiaki wrote: Thankfully, right now, we are enjoying a peaceful condition like never existed before in Japan. All the people occupy their proper place and enjoy what they can . . . Under such a condition, it is quite natural that the population would increase day by day, month by month. This means that unless the country’s products also keep up with the population increase on a daily and monthly basis, we will be faced with shortages . . . Therefore, it is necessary to cultivate all available land . . . and to produce all kinds of grains, vegetables, and fruits. If agricultural products are in short supply, people’s needs cannot be fulfilled, and in years of famine, people would starve . . . in which case there can be no peace . . . But if the ruler prioritizes the four urgent tasks as top policy agendas . . . the country will enjoy prosperity. (1970a, 12–13)

For Toshiaki, the problem was the limited production capacity of Japan. To achieve prosperity of the state, he listed “four urgent tasks,” including (1) use of gunpowder for the purpose of strengthening military power, and for construction projects including the leveling of internal waterways for easier navigation, as well as the development of new rice paddies; (2) accumulation of gold, silver, and copper through trade; (3) state-run seaborne trade; and (4) development of islands adjacent to the main islands of Japan. The prosperity of the state, in his view, was to be achieved through intensive development of Japanese territory (including adjacent islands), development of transport network, and through state-run external trade. Western states were the model which inspired Toshiaki’s proposal: Nowadays, the capital cities of France, Spain, England, and the Netherlands, etc., are considered the most prosperous cities .  .  . Convenient tools have all been invented in Europe. In European states, promoting astronomy, almanac, and algebra are all considered the responsibility of the king, who instructs the common people in the principles of Heaven and Earth. As a result, great men arise from among the commoners. Many people achieve wonderful results by working hard at their own occupation, and they have started a number of new endeavors not attempted anywhere else in the world. For this reason, it is said that the products and treasures from all countries are now concentrated in Europe .  .  . European states send vessels to all countries, and export the rarities, useful wares, and various sophisticated products, and in exchange import gold, silver, copper, and other useful products. Naturally, European states grew rich. Because of this, they

 Arguments for Opening Up the Country 119 also became militarily powerful . . . Today, European states have no match in the world. (1970a, 30–1)

Toshiaki argued that Japan, too, should emulate the behavior of European states and accumulate riches through trade: Since Japan is a maritime country, navigation, seaborne transport, and seaborne trade are the natural vocation and primary duty of its rulers. As a maritime state, Japan should send vessels to all countries, and import products which are necessary for the country, as well as gold, silver, and copper. This is the way for a maritime country to achieve strength and prosperity. (1970a, 32)

As we can see, Western states are characterized as great powers without rivals in the world, possessing both wealth and military power. In Toshiaki’s understanding, Western states achieved wealth and power through trade, which he considered “the most important task for governing a state” (1970b, 103). Further, he recognized that the promotion of science, technology, and education by rulers of Western states was what allowed them to initiate enterprising ventures not attempted anywhere else in the world. Toshiaki’s perspective appears to bear the imprint of Confucianism to the extent that he assumes that the conditions of a country would ultimately depend on its ruler. Also, Toshiaki is similar to Nishikawa Masayoshi discussed in Chapter 12 in his recognition that science is the basis of Western power and wealth. But unlike Masayoshi, Toshiaki clearly idealizes the West as a model. Moreover, in contrast to Masayoshi, who warned against copying Western greed, Toshiaki proposed a Western-inspired policy of trade promotion whose purpose was the advancement of national interest. This does not mean that Toshiaki envisioned only friendly relations with foreign countries. In fact, he stated that “‹f›oreign trade is an exchange through which each country seeks to extract power from each other, so it is like a war” (1970a, 61). Thus, Toshiaki thought that the West is not only a trading partner but also a potential threat to Japan. He idealized the West, but at the same time, saw it as a threatening “other,” which is why he focused so much attention on Japan’s national interest. For Toshiaki, Japan and its national interest were emerging as the core value. Toshiaki believed it was essential that the state take the lead in conducting trade. In his view, if the government engages in trade, prices can be stabilized, and the life of peasants will be secure. But if trade is left to merchants, who are inclined to seek exorbitant profit, prices will fluctuate violently, peasants will go destitute, production will fall, and “the state will decline” (1970a, 18). Rulers were supposed to “bring prosperity to the state” (19). Toshiaki, however, did not deny the role of the merchants. He stated that “in trade, apart from the business of the merchants, there is a function which the ruler should fulfill” (19). Merchants’ role was recognized insofar as they engaged in trade as their family business. Furthermore, as the following passage indicates, Toshiaki subscribed to the familiar view that, regardless of their social station, people cannot live apart from the society,

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and that they are social beings who help each other through the performance of occupational duty: Independence is something that human beings cannot achieve in this world . . . Would it be possible for each person to make his own clothes, starting from growing cotton, hemp, or silkworms? To grow his own food starting from the seeds? To build his own house, starting from cutting down the trees? It should be evident that, from the mikado down to the common people, in everything concerning human affairs, we are dependent on the assistance of other people to make our living. For this reason, independence of a person in this world is an impossibility. The help we receive from other people is known as one’s indebtedness to the country (kokuon 国恩). Each and every person helps one another and thereby earns his daily living, maintains his household, and thereby sustains the society. (1970a, 76)

The notion that the four social groups are interdependent and that each group makes a valuable contribution to society was quite common in the Tokugawa era. Toshiaki, too, appreciated the social role of the merchants from such a point of view. Yet, in the light of Toshiaki’s own decision “to place priority on national interest” (1970a, 18), the merchants’ inclination to seek after exorbitant profit could not be tolerated. That is why Toshiaki argued that trade was “the natural vocation and primary duty of the rulers.”

13.3  Yokoi Shōnan’s Argument for Opening Up the Country Yokoi Shōnan 横井小楠 (1809–69), like Honda Toshiaki, was a strong advocate of opening up Japan for foreign trade. But his reasoning was quite different from Toshiaki’s. Shōnan highly evaluated the West from the viewpoint of Zhu Xi school Confucianism. For him, the first task of government was to ensure the “welfare of the people” (minsei 民生). A government that takes the welfare of the people as its goal was called “government for the people” (minsei 民政). He praised the West because he thought that Western states approximated the ideal of ancient China’s golden age in terms of both carrying out governance for the people and realizing the welfare of the people. While not oblivious to the need to advance national interest through the promotion of trade, Shōnan prioritized above all else the building of a moral society based on Confucian ideals. Shōnan was born in a samurai family in Higo Province. He studied at the Jishūkan, the school of the Hosokawa Domain in Kumamoto. In 1839, at the instruction of the domain authorities, Shōnan went to Edo to study before returning home the next year. Around this time, he became the leader of a reformist faction within the Hosokawa domain, known as Jitsugakutō (practical learning faction). Later, he was invited by Matsudaira Yoshinaga 松平慶永 (1828–90), the lord of the Fukui domain in Echizen Province, to come to Fukui, where he participated in domain administration. In 1862,

 Arguments for Opening Up the Country 121 when lord Yoshinaga assumed the post of Senior Political Councilor (seiji sōsaishoku)2 for the shogunate, Shōnan went to Edo with Yoshinaga and played a role in the shogunal administration. In 1868, he entered the service of the new Meiji state, but was assassinated in Kyoto shortly thereafter. Early in his career, Shōnan argued that Japan should not associate with “rogue (mudō 無道)” countries (Yokoi 1977a, 12), and supported maintaining the sakoku policy. But in the 1860s, after the country began to engage in foreign trade, Shōnan became a proponent of opening up the country. How was it possible for Shōnan to highly evaluate the West and to advocate opening up of Japan while standing on the basis of Confucianism? To answer this question, we need to understand Shōnan’s brand of Confucianism. According to him, “Heaven has never changed from ancient times. People are a small universe inside this larger universe . . . Those of us born as human beings are obliged to serve Heaven, each in his own capacity” (Motoda 1977, 924). Shōnan’s idea that the individual person is a small universe within a larger universe is in the tradition of Zhu Xi school universalism, for in this view, the same principle permeates both Heaven as a whole and individual human beings. And this was a generalization that applied to all human beings. In his 1864 conversation with Inoue Kowashi 井上毅 (1844–95), as recorded later by Inoue, Shōnan remained opposed to the introduction of Christianity to Japan on the ground that “it would result in doctrinal dispute and possibly in civil war” (Inoue, K. 1977, 902). Yet he argued that “the harm brought by Buddhism is greater than the harm which Christianity would bring,” because “while Buddhism abolishes morality, Christianity seeks to establish it” (Inoue, K. 1977, 901). Moreover, he appreciated Western society because in the West Christianity was supplemented by “managerial and natural sciences,” which brought “huge benefit” to people’s daily lives: The educated elite in the West do not devote themselves single-mindedly to Christianity. Apart from this, they have invented managerial and natural sciences, with which they supplement the teachings of Christianity. These managerial and natural sciences bring huge benefit to people’s daily lives, and they accomplish what the ancient sages achieved . . . Now the Westerners have invented through their studies all sorts of things that make people’s life more convenient, such as paddle steamers, steam locomotives, electric telegraph, and use of water mills for spinning cotton. Recently, they have dug a canal through the isthmus of the Red Sea, and opened up a new path for navigation. The benefit this brings is tremendous. On top of all this, Western countries communicate with countries all over the world and derive benefit from trade with them. Because of this, they have grown both economically rich and militarily strong. The life of people is comfortable, while

Senior Political Councilor was a high-ranking office in the Tokugawa shogunate, equivalent in rank to Chief Minister or tairō 大老. In the shogunate, lords of the Shimpan domains (or domains whose lords descended from male members of the Tokugawa family, including the Fukui domain) could not occupy the post of tairō, so instead of appointing Yoshinaga to that post, the office of the Senior Political Councilor was created in 1862.

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the tax burden is light. What the Western countries have achieved in governance deserves to be equated with the work of the sages. (Inoue, K. 1977, 903–5)

Shōnan appreciated Western achievements because governments in the West “benefited the society and made people’s lives comfortable.” He thought that contemporary Western governments were similar to the idealized rule of the Three Dynasties in ancient China (Yokoi 1977c, 40; the Three Dynasties refer to Xia, Shang, and Zhou). For him, promotion of trade and industry was a central part of “the work of the sages”: We may have an overview of the work of the sages from the first part of the Book of Documents; they brought benefit to the society and made sure that the people may live comfortably . . . The sages above took care of people’s daily lives . . . they mastered the six basic elements3 and made the best use of them; they created various goods and invented conveniences, and opened up a wide path along which people could live comfortable lives .  .  . It is said that the Westerners are quite impressed by the scale of the irrigation canals constructed under the leadership of Emperor Yu ‹in ancient China› . . . Trade via waterways is also something that was begun by the sages, for its advantages are mentioned in the Book of Changes. Although agriculture must be the most basic occupation of the people, if there was only agriculture, and there were no artisans making various necessary things, the life of the people would be inconvenient . . . Everyone fulfills his own need through what is produced by others. Thus, the life of people would be inconvenient without trade. (Inoue, K. 1977, 903–4)

Unfortunately, the situation in Japan was quite different from the West, and it was assessed negatively in this respect. Trade was highly developed in the West, and was significant also from a Confucian viewpoint in that it was initiated by the ancient sages. Yet, in Japan, trade routes were underdeveloped, the market was small, and as a result, the country remained destitute: Japan has become such a destitute country because there is no law that facilitates trade .  .  . Because people look at the matter from the viewpoint of a locked-up country, and because they seek to achieve convenience only within the sphere of one county or one province, trade is not carried out without hindrance. For this reason, goods produced cannot be freely exported and sold. Because goods cannot be exported, the products of each province sit there idly, and eventually go bad. When products cannot be sold widely, idlers cannot engage in artisanal work; they are forced to sit idly by, without having any work to do, which is a pity . . . What is necessary is to produce various goods specific to the region. For this purpose, it is important to enhance trade, so that even excess products can be sold . . . Once the path of trade opens up, everything can be sold, and nothing will be wasted. (Inoue, K. 1977, 904–5)

For an explanation of the concept of six basic elements, or roppu, see Chapter 10, n. 1.

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 Arguments for Opening Up the Country 123 Shōnan recognized the significance of agriculture, of handicrafts, and of trade, so he hoped to expand all these sectors. He also took it for granted that the pursuit of profit was an important driving force of economic activities. Overall, Shōnan’s view reflected the actual state of the Japanese economy at the time, including the development of the provinces, de-agrarianization, and the development of a trading network, indicating that he was well aware of the current situation (Kawaguchi 2010c, 91–5). For Shōnan, trade must be encouraged, because wealth cannot be attained without it. At the same time, however, Shōnan thought that trade should not be left to private merchants, who were inclined to pursue their own self-interest at the expense of people’s welfare. Rather, it should be carried out by the government, which could conduct the business with popular welfare in mind: In the past, what was produced by the people was all sold to the merchants, so the purchase prices were set at the lowest level. Moreover, if the producers are out of luck, and come across wicked merchants, they could be swindled in various ways, and often end up receiving only half of the proper price for their goods. Instead of letting this situation continue, the government should buy up products at a price that benefits the people without causing losses to itself. Since the government does not seek to derive profit from commerce, this would benefit the people . . . Also, there are people who would like to produce various goods, or produce more of them, but cannot do so due to lack of resources. In such cases, the government could lend money or grain to those people and let them produce what they wish to, and then, purchase their products at a discount price to compensate for their debt. Since the government does not need to charge interest on the debt, this would also be a great benefit to the people . . . Further, the government could serve as a pioneer in experimenting with various instruments and methods that could be applied profitably by the private sector. It should teach and guide the private sector with sincere interest in their success. (Yokoi 1977c, 33–4)

In this passage, Shōnan called upon the government to adopt a policy of industrial promotion, including wholesale purchase and distribution of the products of the private sector, provision of finance, and technological leadership. For Shōnan, government intervention in the market appears to have posed no problem. While Shōnan’s vision may have been inspired in part by the West, it was also in line with active economic policies that had been carried out in various domains. Such policies typically included promotion of industrial development, domain monopoly on certain products, and issuance of domainal paper currency. As in the case of Toshiaki, one factor that led Shōnan to advocate state-controlled trade was his skeptical view of merchants. Shōnan’s distrust of merchants was coupled with a positive view on the role of the government. He believed that the government, unlike merchants, could implement policies that would bring benefit to the people. The following passage clearly illustrates this point: These three ventures—opening of copper mines, opening of iron ore mines, and accumulating timber for shipbuilding—if undertaken hastily, would only give

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wicked people (kanmin) chances to make money, and end up in grand failure. So it is necessary to start by establishing an office in the government, and by recruiting talented people from around the country, and by studying Western methods in mining. Once such methods are clarified, wicked swindler-miners would not be able to use their tricks . . . Such a policy would not only help the development of mining, but also turn hundreds of thousands of wicked people into law-abiding ones. It is a smart method of governance. (1977b, 27)

The trust in the positive role of the government evident in this passage may be regarded as reflecting Shōnan’s Confucian perspective, for what characterizes Confucianism is the conviction that the rulers are (and should be) the sources of morality, that the common people are not inherently moral beings, and that they could become moral and law-abiding only under the positive influence of the ruler. The people, including wicked ones, are to be regulated by the government. The following quote expresses such a viewpoint quite clearly, though in a Japanized form. To govern a country is to govern the people, and the samurai are there to govern the common people. Of course, it is a foundational principle of governance that not only samurai but also commoners should be taught the virtues of filial piety, integrity, and loyalty. But the sages also taught that moral teachings should be spread only after bringing wealth to the people. Especially in a time of moral decline like today, there is even a stronger argument for addressing first the task of spreading wealth. (1977c, 36)

Shōnan argued that the way of governance by the state consisted first of all in enriching the people. People could turn wicked. To make sure that they remain law-abiding, it was necessary to give them wealth before instructing them in morality. Shōnan regarded economic conditions as one of the key factors shaping human behavior and social order. Yet, wealth itself was not the ultimate value; it would be meaningless unless it was accompanied by moral instructions. For Shōnan, the ideal ruler was someone who would implement an effective policy for the welfare of the people. Yet, while economic policy was an indispensable element in his vision, what was most important for him was moral norms such as filial piety, integrity, and loyalty, and political guidance by the government based on such norms (Kawaguchi 2010a, 97–101).

Module 5

Modern Japan: Its Birth and Economic Vision This module discusses Japanese economic thought in the era of profound transformations—from the Meiji Restoration to the middle of the 1880s. The Restoration initiated a process of fundamental changes to nearly all aspects of Japanese life. Economic thought was no exception. Western expansion in East Asia aroused the fear that Japan’s independence was under threat. In this context, Japan’s national interest (kokueki), understood as securing the country’s independence and promoting its prosperity, became the core value for many Japanese thinkers. To advance Japan’s national interest, the new government resorted to massive importation of Western technology, institutions, and ideas. What used to be cherished traditions were thrown away like pieces of rubbish. Yet, the discontinuity between Edo and Meiji, between early modern and modern Japan, was by no means absolute. Inevitably, there were also strong elements of continuity. As a result, modern Japan’s economic thought was often characterized by a “dual structure” containing elements of both indigenous and imported ideas. To better understand this dual structure, we will review in Chapter 14 the characteristic features of traditional Japanese/East Asian view on human beings and society, and contrast them with the viewpoints characteristic to modern Western liberal ideas. The chapter will then examine how this basic discrepancy influenced the ways in which modern Western economic thought was introduced to Japan, taking the example of classical political economy. Chapter 15 examines the ideas of Fukuzawa Yukichi and Takata Sanae, two “Enlightenment” thinkers who played a major role in the development of private universities. Both Fukuzawa and Takata sought to educate a new generation of Japanese who would contribute to the country’s modernization in an independent capacity. They thereby hoped to advance Japan’s national interest. Moreover, while seeking to propel Japan’s modernization, both Fukuzawa and Takata stood on traditional East Asian foundations in terms of their views on human beings and society. Chapter 16 discusses the Meiji state’s economic policy, paying attention to the linkage between currency policy and the policy of industrial promotion. While the

126 A History of Economic Thought in Japan policies of the Meiji era were different from those of Tokugawa era, in some respects the policy debates within the government resembled those of the Tokugawa era. Chapter 17 focuses on the ideas of Taguchi Ukichi and Inukai Tsuyoshi, two journalists who debated Japan’s foreign trade policy in the 1880s. The debate, in which Taguchi supported free-trade and Inukai protectionism, was a Japanese enactment of the controversy fought out in other countries. But the debate proceeded on the basis of conceptual frameworks inherited from the Tokugawa era.

14

East Asian vs. Western Views on Human Beings and Society

14.1  Continuity and Discontinuity between Early Modern Japan and Modern Japan In the Meiji era, Japan embarked on a course of rapid modernization through a massive importation of Western ideas, institutions, and technology. As a consequence, a clear break in the development of Japanese history between the early modern and modern eras emerged. Among the most important changes were the replacement of a decentralized system of governance by a centralized, unitary state, and the abolition of the distinction among the four social groups, which established freedom of occupation and of movement as a matter of principle. There was also a clear break with the past in the sphere of culture. This is evident, for instance, in changes in culinary culture. Meat-eating was not common in early modern Japan. Yet, by 1871, meat-eating was being depicted as a new “civilized” food culture, as is evident in this passage: “samurai, peasants, artisans or merchants, young and old, men and women, wise or foolish, rich or poor—whoever does not eat beef-hot-pot is an unenlightened ignoramus” (Kanagaki 1967, 27). Japan changed drastically. But modern Japan did not become thoroughly Western in terms of culture or social structure. While some things and ideas from the Tokugawa era were simply replaced by those of Western origin, others persisted intact into the modern era. Still others became synthesized or syncretized with Western ideas and things through a process of merging or grafting. A significant portion of modern Japanese culture has been built upon such a process of grafting. Instances of such grafting abound also in the sphere of industrial technology. One example is filature raw silk, whose production became widespread during the Meiji period. In Meiji Japan, raw silk was produced using a method based on the adaptation of imported technologies to Japanese conditions. The Tomioka Silk Mill in Gumma prefecture (a silk reeling factory established by the Meiji government) was set up on the basis of French silk throwing technology, but it incorporated improvements in equipment and in throwing process to better fit Japan’s climatic condition, quality of silk, and existing skills. When such technology was introduced to the private sector, further innovative measures were taken. For instance, factory buildings were built using wood instead of bricks, and iron-made components of factory machinery

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were substituted with wooden ones. Also, cocoon boiling pots made of copper were replaced with porcelain, and water power was utilized for machine operations instead of steam power. All of these were efforts made by small-sized entrepreneurs to lower production costs (Miyamoto et al. 1998, 112–13). Meiji Japan’s industrialization was driven by such processes of local adaptations of imported technologies. In the sphere of economic thought, too, Meiji Japan eagerly imported Western economics as well as economic thought. Already in 1862, Nishi Amane 西周 (1829– 97) was learning classical political economy at Leiden University in the Netherlands, and in the following years, many books on economics and economic thought were actively translated and published, as shown in Table 14.1 (Mishima 2003, 84–8). Yet, the eager importation of modern Western ideas did not lead to the disappearance of ideas inherited from the Tokugawa era. In some cases, inherited ideas served as the basis upon which imported ideas were grafted. In other cases, they remained without being merged or synthesized with new foreign ideas. In either case, indigenous thought continued to live on. In this manner, a “dual structure” became characteristic of modern Japan’s economic thought. Such dual structure persisted well into the postwar era. But it was perhaps most pronounced during the early Meiji era, for intellectuals writing during that era spent half of their lives under Tokugawa rule, and had a Confucian educational background. One source of discrepancy between modern Western economic thought and ideas inherited from the Tokugawa era was the different ways in which the Westerners and the Japanese at that time (and, more broadly, East Asians traditionally) understood the nature of human beings and of the societies they form. In this chapter, we shall first identify, albeit in a necessarily highly schematic and simplified way, the differences in traditional East Asian and modern Western understanding of human beings and of society, taking Zhu Xi school Confucianism and classical political economy as paradigmatic cases of each. This chapter will then go on to offer a hypothesis regarding how these differences influenced the ways in which modern Western economic ideas

Table 14.1  Early Meiji Translations of Major Western Works on Political Economy Year Translator

Translated Work Title

Outlines of Social Economy W. Ellis The Elements of Political F. Wayland Economy Principles of Political J. S. Mill Economy

1850 1837

KandaTakahira Obata Tokujirō

Keizai shōgaku Eishi keizairon

1867 1871–7

1848

1875–86

An Essay on the Principle of Population

1798

Hayashi Tadasu/ Miru keizairon Suzuki Shigetaka Ōshima Marusasu Sadamasu jinkōron yōryaku Ishikawa Eisaku Fukokuron Saga Shōsaku

Original Work Title

Author

T. R Malthus

An Inquiry into the Nature A. Smith and Causes of the Wealth of Nations

1776

Year

1877 1884–8

 East Asian vs. Western Views 129 were accepted in Japan. Application of the hypothesis to concrete cases will be the task of the chapters to follow.

14.2  East Asian Views on Human Nature and Society At the risk of oversimplification, it may be ventured that the general characteristics of the traditional East Asian views on human nature and society, exemplified by the philosophy of neo-Confucianism, include the following points (Tsuchida 2014, 100– 13): 1) ontological priority of the network of human relationships over individuals involved in them, or the notion that the individual is not so much the basic unit of society as nodes in networks of human relationships;1 2) the notion that the central task of governance consists in regulating human relationships; 3) the idea that morality, which is innate in human nature but is to be manifested through learning, is the key to regulating human relationships; and 4) hierarchical conception of human relationships and of society, in which society is divided into a small number of elite and a large number of uneducated masses. The elite has the duty of morally instructing and guiding the masses. In this view, individual human beings are regarded as being embedded from their birth in a dense web of human relationships. Social order is maintained when each person handles the relationships in which he is involved in a proper manner. For this purpose, each person needs to learn to conduct himself properly, according to moral principles that are inherent in human nature. Thus, the first task of governance is understood to be the inculcation of proper morality through education, rather than regulation of individual behavior through law. This view also implies the existence of morally accomplished “gentlemen” (kunshi 君子) who provide example and guidance for “small men” (shōjin 小人). Such a view on human beings and society may be detected, for instance, in the following famous passage that opens Confucius’s Analects. The Master said, To learn and rehearse it constantly, is this indeed not a pleasure? To have friends come from afar, is this indeed not a delight? Others do not know him, yet he feels no resentment, is he indeed not a superior man? (Gardner 2003, 31-2)2

On the Japanese case, see Hamaguchi, E. (1982). For a comparative view between Asian and Western views, see Marsella, De Vos, and Hsu (1985). 2 Gardner also translates Zhu Xi’s commentaries that appear after each line, but they are not reproduced here. 1

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From the opening passage, the Analects speaks about the importance of learning. Human beings, or more specifically “gentlemen,” are expected to learn “the Way” to achieve moral excellence. The passage also takes it for granted that learning takes place in the context of a network of relationships—between the master and the disciple, among the disciples, and with other people.3 In other words, the passage suggests that the inner quality of a gentleman is polished through relationships with others in society, rather than through solitary self-discipline or through some religious practice. Also implied in the passage is a pedagogical hierarchy between the master and the disciple, between the learned gentlemen and the plain folk. Neither understanding of human beings as intrinsically embedded in a web of relationships nor the view that moral teaching is the key to governance is unique to Japan or to East Asia. The main currents of Greek political theories understood human beings first and foremost as members of their own communities and saw the cultivation of virtues as the key to the good life (Sabine and Thorson 1973, 26–33, 141–4). The Roman statesman Cicero (106–43 BCE), in his widely influential De Officiis, preached on the duties that each person owed to his family, friends, and country, and on the duty “to contribute to the general good (communes utilitates) . . . by our skill, our industry, and our talents to cement human society closer together” (Cicero 1913, 23–5; Ueda 1989b, 370–5). This is a small example to show that the type of economic and social thought characteristic to Tokugawa Japan had analogues elsewhere. The spread of Christianity in Europe introduced the concept of a monotheistic God that was largely absent in East Asia, and thereby widened the difference between East Asian and European views on human beings and society. Yet, it could be argued that in medieval Europe, just as in traditional East Asia, human beings were seen as members of communities, and that they were to be guided morally according to a unified view on how people should live. The modern West that Japanese of the Meiji era encountered, however, had departed from such a traditional viewpoint.

14.3  Western Views on Human Nature and Society The uniqueness of the modern Western view on human beings and society consists in the central role assigned to individuals, and in the latitude given to individuals in choosing what constitutes the good life for them. Most traditional societies, be they Eastern, Western, or otherwise, sought to regulate human behavior and society through the imposition of a fixed set of moral or social norms shared by a community. By contrast, modern Western society took individuals as the basic unit of society, and gave them freedom to make their own choices.

In both He Yan’s 何晏 (195–249) interpretation, which was dominant prior to Song-dynasty reinterpretations of the Analects, and in Zhu Xi’s interpretation, which became dominant in the later centuries, the word “friends” in this passage was understood to mean “fellow seekers of the Way.” See Gardner (2003, 30–1).

3

 East Asian vs. Western Views 131 Schematically, the emergence of this view proceeded in three analytically separate moments. First, since the Reformation, the attempt to regulate the society through the imposition of a unified religious orthodoxy was abandoned, and the individual, each of whom was seen as endowed with inviolable conscience, emerged as the effective unit of religious choice. Second, the rediscovery of classical antiquity during the Renaissance led to the emergence of the view of human beings as rational, autonomous actors who, liberated from religious dogma, use their reason not only to pursue their goals effectively but also to set the values and goals for themselves. Third, building upon these prior developments, the modern theory of social contract evolved, which theorized the founding of political society on the basis of contract among individuals who find themselves in a state of nature, liberated from cultural norms and traditions. Combined, these three moments had a defining influence on the modern Western view on human beings and society. It would, of course, be ludicrous to suggest that a single view of human beings and society dominated the entire modern West. Nonetheless, it is possible to summarize the view on human beings and society implicit in modern liberalism, which has been the most influential current of political, social, and economic thought in the modern West: 1) the development of the concept of a sovereign, autonomous individual: a) unlike in the Confucian vision, an individual is presumed to be ontologically prior to society; b) the individual is regarded as a free agent capable of making autonomous decisions, and thus also as a bearer of certain basic rights; c) the individual is seen as an agent freely seeking after his own desire, which underpins the idea of the freedom to pursue economic gain. 2) human beings are regarded as free in their original state, and as having the freedom to choose their own values and lifestyles so long as they do not violate similar freedom of others. To that extent, moral questions are to be left to the choice of individuals. The attempt to govern society through moral guidance under a single orthodoxy is abandoned. 3) all human beings are regarded as essentially equal, especially because they are stripped of customs and traditions in the state of nature. Legitimate social organizations are seen as resulting from voluntary agreements among equal individuals. Hence, egalitarian, rather than hierarchical, relationships are the dominant type of relationships in society. The state is regarded as an artifact resulting from a contract among equals—as an instrument to guarantee individuals’ self-interest, equality, and self-preservation. 4) the task of governance revolves around the attempt to regulate individual behavior through laws backed by coercive power. The state’s job is to ensure that the individuals, each with their diverse conceptions of the good, can pursue those visions as freely as possible. There existed currents of modern Western economic thought that did not build upon the viewpoint summarized earlier. Cicero’s ideas on a person’s social duty, and an “organic” view of society implicit in his ideas, were quite influential in Europe

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throughout the medieval and early modern eras. Arguably, the same organic view of society nourished some anti-mainstream currents in modern Western economic thought such as socialism and economic nationalism (Ueda 1989a). But from its inception in the ideas of John Locke (1632–1704), liberal economic theory placed an emphasis on the importance of property rights and economic freedom. The rise of classical political economy since the eighteenth century established liberal economic thinking based on individualistic assumptions as the mainstream of Western economic thought.

14.4  Classical Political Economy Classical political economy refers to a school of economic thought that flourished in Western Europe (particularly in Britain) from the late eighteenth to the midnineteenth centuries. The most prominent thinkers in this tradition include Adam Smith (1723–90), Jeremy Bentham (1748–1832), David Ricardo (1772–1823), James Mill (1773–1836), and John Stuart Mill (1806–73). As an empirical economic theory (and as a source of policy ideas), classical political economy was being superseded by neoclassical economics already in the 1870s. Yet, in terms of broader influence on economic, political, and social thought, the basic principles of classical political economy left a lasting and profound impression on the modern world, including Japan since the Meiji era (Sugihara 1971). In terms of its basic tenets, classical political economy may be regarded as an extension into the economic sphere of the basic ideas implicit in the liberal conceptions about human beings and society. While liberal theory advocated the principle that individuals should be free to act as long as they do not interfere with other people’s freedom, classical political economy provided powerful support for this idea by showing that, in a market economy, the pursuit of material interest by private individuals ends up contributing to public welfare. This claim amounted to a veritable revolution in the history of economic thought. Before the modern era, most societies were stationary societies in the sense explained in Chapter 10. Economically stationary societies are by definition “zerosum” societies in which a greater wealth of a particular individual could only come at someone else’s expense. It was perhaps for this reason that many traditional societies developed social norms that inhibit a relentless pursuit of private wealth (Landes 1969, 132). By contrast, classical political economy presented a vision of sustained economic growth through technological progress, capital accumulation, and division of labor in the market. In an economy where the total amount of wealth was increasing, individual pursuit of material wealth did not have to be seen in a negative light. Besides, classical political economists, following Bernard Mandeville’s (1670–1733) Fable of the Bees, showed that the market turns private greed into a powerful engine for economic growth and for public welfare. Seen against this background, the pursuit of private wealth now came to be regarded as a virtue rather than as a vice. As is evident in the case of Adam Smith, classical political economists did not base their theories on a simplistic understanding of human motivation focusing exclusively

 East Asian vs. Western Views 133 on the pursuit of economic interest. The Scottish Enlightenment, of which Smith’s ideas were an important element, may be interpreted as an attempt to intellectually reconcile the new spirit of English capitalism with more traditional views on human beings and society then prevalent in Scotland (McNally 1990, 157–8). Smith’s wellknown discussion on the importance of “sympathy” is a reflection of this effort. For him, the ambition for accumulating riches had to be checked by the senses of “prudence,” of “justice,” and of “beneficence” (Smith 2002, 309–12). Only then would accumulation of riches be viewed with sympathy. Yet, the most powerful implication of classical political economy was to justify the emerging capitalist system by liberating the pursuit of economic wealth from the constraints of traditional ethics and customs. By the middle of the nineteenth century, the teachings of Adam Smith and other classical political economists had become an international economic orthodoxy in Europe. Although there were critics of the classical school from both socialist and economic nationalist perspectives, many European states were adopting policies based on the precepts of classical political economy. In Britain, belief in the universal benefit of free trade was so strong that protectionist policies of other governments were regarded as “flying in the face of nature’s laws” (Kennedy 1981, 25). It was this current of thought that Meiji Japan mainly absorbed in its early years.

14.5  Introduction of Western Economics to Japan Meiji Japan enjoyed a rather favorable condition for the introduction of classical political economy (and, more generally, Western economic thought). General receptivity toward the importation of foreign culture, rooted in the country’s long history of borrowing from the Asian continent, was amplified in this instance by the acute sense of national crisis. Importing Western thought and scholarship was understood as a matter of national survival (Uete 1974, 112–13). Borrowing from the West was carried out self-consciously, with a clear sense of purpose—to contribute to Japan’s national interest. The relatively high level of economic development in Tokugawa Japan, coupled with a sophisticated tradition in economic thought, amply prepared the country for the introduction of classical political economy. In addition, Zhu Xi school neo-Confucianism, with its assumption about the universality of heavenly principles, provided a convenient conceptual medium through which universalistic ideas of Western enlightenment could be translated and comprehended. Yet, new ideas from overseas often underwent modifications to fit local conditions. Specifically, there were two factors that contributed to modifications and “misinterpretations” of classical political economy in Japan. First, while it was not difficult to import explicit teachings that were on the “surface” of classical political economy, the hidden assumptions and underlying views about human beings and society were more difficult to understand and to absorb. In a society where the assumption of embeddedness of individual human beings in society was deeply entrenched, the assumption of the ontological priority of autonomous individuals implicit in classical political economy was not easily accepted. Second, the fact that Western ideas were imported into Japan in the context of a national crisis for the

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purpose of ensuring national survival made it all the more difficult for the Japanese to grasp, much less absorb, the individualistic basis of classical political economy (Uete 1974, 168–70). Third, while the laissez-faire, free-trade orientation inherent in classical political economy well suited the conditions of contemporary Britain, the suitability of these ideas for the conditions of Japan was more questionable. Some insights of the classical political economy were quite compatible with elements of indigenous economic thought. For instance, ideas such as the importance of the role of the market, and the need to avoid excessive interference must have been easy to accept, for they were consistent with influential strands of Tokugawa economic thinking. Other aspects of modern Western thinking, such as the idea of historical progress, were not present in Tokugawa thought, but were readily accepted. When it came to basic views on human beings and society, however, conventional views persisted. While the universalistic language of neo-Confucianism served as a medium for accepting universalistic elements of Western thought (including the theory of natural rights as well as classical political economists’ attempt to devise a general theory of economic action), neo-Confucianism entailed the notion that morality and sociability are inherent in human nature. Such a view, however, served as an obstacle for acceptance of the Western notion of self-contained, autonomous individual, and of the legitimacy of pursuit of individual economic interest (Uete 1974, 150–9). The persistence of the traditional view on human beings and society meant that the influence of individualism remained limited. People were seen as embedded in society, and they were expected to perform their occupational duty for the purpose of enhancing Japan’s national interest. The emphasis on national interest became even stronger when, starting in the 1890s, the ideas of Friedrich List and of the German historical school began to be introduced, bringing with them greater attention to the pursuit of national interest and to the specificities of national history (Sugihara 1971, 15–19). When modern, Western ideas were grafted onto the foundation of ideas inherited from the Tokugawa era, the nature of the imported ideas changed to better fit indigenous intellectual traditions. The process of adjustment was mutual. While Western ideas were transformed to fit the Japanese context, they also left indelible marks on Japanese thought. Moreover, in the Meiji era, this process of mutual adjustment was far from complete. Elements of indigenous ideas continued to coexist with imported ideas, without being completely merged. In the following chapters, we will see how the dual structure of the conventional economic thought and imported economic ideas was manifested in the ideas of Japanese thinkers and practitioners.

15

Intellectuals of the “Meiji Enlightenment”

15.1  The Political Context of Economic Thought and Policy Having discussed the continuity in Japanese and East Asian views on human beings and society, we will now discuss Japanese economic thought in the modern era. But first, it is necessary to take a brief look at the political background against which economic thought and policy developed. On November 9, 1867,1 the fifteenth shogun Tokugawa Yoshinobu 徳川慶喜 (1837–1913) expressed his intent to “return” the reins of power to the imperial court, and the court sanctioned Yoshinobu’s initiative the next day. This event, known as “the Return of the Power of Government” （taisei hōkan 大政奉還), was carried out based on the theory of the “delegation of the authority to govern” explained in Chapter 11. On January 3, 1868, the court issued the Declaration of the Restoration of Imperial Rule, which stated that the court would henceforth act as Japan’s central government. This, however, was not accepted immediately by the pro-shogunate forces. Although Yoshinobu “returned” the reins of power to the imperial court, his real intention was to replace the shogunate with a council of daimyō in which the Tokugawa house, the largest of the daimyō, would continue to play a leading role. Yet, the Declaration on the Restoration of Imperial Rule meant that the court and the anti-Tokugawa forces would seize power, excluding the Tokugawa house and its allies. On January 27, the Boshin War between the two sides broke out in the southern outskirts of Kyoto. By the end of June the next year, the war had ended in the victory of the new imperial government. Meanwhile, on September 3, 1868, Edo was renamed Tokyo, and on October 23 of the same year, the name of the era was changed to Meiji 明治.2 On April 5, 1869,3 Japan’s capital moved from Kyoto to Tokyo, which henceforth became the city of imperial residence as well as the seat of power. Key players in the new Meiji government were former activists in the Restoration movement, including lower-ranking samurai hailing mostly from four domains in October 14, the third year of the Keiō 慶応 era according to the Japanese calendar. T h e fourth year of the Keiō era became the first year of the Meiji era (1868–1912). Simultaneously, the court issued a rescript announcing that thenceforth, a single era name would be used throughout the reign of one Emperor. 3 February 24, the second year of the Meiji era. On January 1, 1873, Japan adopted the Gregorian calendar. Thus, December 3 of the fifth year of the Meiji era became January 1 of the sixth year of the Meiji era, which exactly coincided with the year 1873. 1 2

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southwestern Japan (Satsuma, Chōshū, Tosa, and Hizen), along with some courtiers serving the mikado. Many of these men were born during the Tempō 天保 era (1830– 44). By the time when men of the “Tempō generation” were born, the notion that Japan was an “imperial country” (kōkoku 皇国) had become widespread among the educated strata. Thus, many absorbed this idea as part of their upbringing. Also, men of the Tempō generation experienced the shock of Commodore Mathew Perry’s arrival in their youth. Faced with the impact of Western civilization, they had broadened their intellectual horizon beyond their domain. They began to think about Japan and its national interest in a wider context. Also, as the Tokugawa order began to crumble, these men were entering the most active period in their life. Thus, it is no accident that men of the Tempō generation constituted the bulk of activists who carried out the Restoration and later became leaders of Meiji Japan (Kawaguchi 2004a, 14). Among them, there were those who rose to top leadership positions and, due to their contribution to the establishment and consolidation of the new government, and due to their political skills and influence, stayed in such positions for decades on end. Later, they came to be known as “senior statesmen” (genrō 元老), and exercised strong leadership while maintaining intra-group cohesion. But at its inception, the new government contained within itself major disagreements over the future direction of Japan as well as over the distribution of power. These disagreements resulted in a series of political crises during the second decade of the Meiji era. In 1873, key figures in the government including Itagaki Taisuke 板垣退助 (1837– 1919), Saigō Takamori 西郷隆盛 (1828–77), and Etō Shimpei 江藤新平 (1834–74) advocated a military expedition (or at least a diplomatic mission) to Korea, both as a punitive measure for Korea’s perceived “disrespect” toward Japan, and in order to secure employment for a large number of now-dispossessed former samurai. But the plan for the expedition was overruled by other leaders, including Iwakura Tomomi 岩倉具視 (1825–83), Ōkubo Toshimichi 大久保利通 (1830–78), and Kido Takayoshi 木戸孝允 (1833–77). Having returned from a long sojourn in the West (known as the Iwakura Mission), these leaders felt that the priority should be on consolidating domestic rule and modernizing the country through the import of Western civilization. Among those who lost out in the political battle and left the government in 1873, Etō and Saigō each led a revolt of disgruntled former samurai against the government. Etō’s Saga Rebellion was suppressed in 1874, while Saigō’s Satsuma Rebellion was put down after an eight-month civil war in 1877. Ōkubo, who emerged as the leading figure in the government, was also assassinated a year later.15.1 After armed revolts against the government were suppressed, Freedom and People’s Rights Movement (jiyū minken undō 自由民権運動) emerged as the main form of oppositional politics, criticizing the monopoly of power by samurai from Satsuma, Chōshū, and a few other domains, and calling for the establishment of a national legislature. Itagaki, who left the government in 1873, emerged as a leading voice in this movement. Among those who remained in the government, Ōkuma Shigenobu 大隈重信 (1838–1922) expressed a view that echoed Itagaki’s, calling for an early opening of a national parliament, and for the introduction of a British-style cabinet responsible to the parliament. But Ōkuma’s view did not prevail in the government.

 Intellectuals of the “Meiji Enlightenment” 137 Table 15.1  Political Struggles in Early Meiji Japan: Some Leading Figures and Their Careers Name

Birth/Death

Background

IWAKURA Tomomi SAIGŌ Takamori

1825–83

Courtier

1828–77

Satsuma

ŌKUBO Toshimichi

1830–78

Satsuma

ITŌ Hirobumi

1841–1909

Chōshū

KIDO Takayoshi ETŌ Shimpei

1833–77

Chōshū

1834–74

Hizen

ŌKUMA Shigenobu

1838–1922

Hizen

SOEJIMA Taneomi

1828–1905

Hizen

GOTŌ Shōjirō

1838–97

Tosa

ITAGAKI Taisuke

1837–1919

Tosa

Office Prior to 1873 crisis Later Career Minister of the Right Councilor, General of the Army Lord of Finances

Died in office

Left government in 1873, died in the Satsuma Rebellion Became Councilor and Lord of Finances, but assassinated Acting Minister Became the first prime of Public minister Works Councilor Died in office Councilor, Lord Left government in 1873, of Justice executed Councilor, Vice Left government in 1881, Minister of later returned as Prime Finances Minister Lord of Foreign Left government in Affairs 1873, later returned as Interior Minister Councilor Left government in 1873, participated in the Freedom and People’s Rights Movement, later returned as Communications Minister Councilor Left government in 1873, leader in the Freedom and People’s Rights Movement, later returned as Interior Minister

In the Political Crisis of 1881, mainstream leaders led by Itō Hirobumi 伊藤博文 (1841–1909) purged Ōkuma and his associates from the government, while promising to open a parliament by 1890.4 After the Political Crisis of 1881, the Meiji government constituted a relatively cohesive oligarchy consisting mainly of former samurai from Satsuma and Chōshū domains. Opposition forces for their part focused on their criticism of “domain-clique” (hambatsu 藩閥) government through the Imperial Diet. The economic thought

While Saigō Takamori came from the Satsuma domain, other important leaders who left the government since 1873 came from Tosa and Hizen. Thus, successive episodes in power struggle led to further monopolization of power by former samurai from Satsuma and Chōshū domains.

4

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and economic policy of the early part of the Meiji era evolved against such political background.

15.2  Educating the New Generation in National Interest Political leaders were not the only people who stood up to meet the challenges of the new era. So did businessmen and intellectuals. With a voracious appetite, the new generation absorbed from the West new ideas, institutions, and technology necessary for building a modern state. Yet, they were born and came of age during the Tokugawa era, having received their formative education in Confucianism and other Tokugawaera intellectual currents. Therefore, it is natural that their thought contained elements that were continuous with Tokugawa-era ideas. The rest of this chapter discusses the ideas of two intellectuals of the Meiji era— Fukuzawa Yukichi 福沢諭吉 (1835–1901) and Takata Sanae 高田早苗 (1860–1938). Fukuzawa is a man of the Tempō generation, while Takata belongs to a younger generation that came of age after the Restoration. Despite their generational difference, they were both very much men of the Meiji era. For them, the core value was clearly Japan’s national interest defined as independence and prosperity of the country. They felt that Japan lagged far behind the West both in power and in the advancement of civilization. Modernizing the country and securing its independence were their highest priorities. They sought to accomplish this goal through education and the introduction of Western science. In particular, they played leading roles in the development of private universities in Japan—Fukuzawa as the founder of Keio University, Takata as a key figure in the development of Waseda University. Fukuzawa, who is considered the leading Enlightenment thinker of Meiji Japan, played a central, unparalleled role in introducing Western civilization through his writings and educational leadership. Though less well known than Fukuzawa, Takata, too, played a significant role in spreading Western knowledge through his wide-ranging activities encompassing politics, education, writing, and university administration. For Fukuzawa and Takata, economic activities had to serve the overall purpose of enhancing Japan’s national interest. Yet, Fukuzawa and Takata kept some distance from the Meiji state dominated by the Satsuma–Chōshū oligarchy, and instead sought to educate men who would contribute to Japan’s national interest in an independent capacity, whether through business or politics. Japan’s development, they believed, could not be accomplished without the contribution of an educated and energetic people who are infused with a new sense of patriotism.

15.3  Fukuzawa Yukichi Fukuzawa Yukichi was born in 1835 as the second son of a low-ranking samurai who served the Okudaira house in Nakatsu, Buzen Province. Yukichi’s birthplace was Osaka, but due to his father’s death barely a year later, Yukichi’s family moved to Nakatsu, where he spent his childhood. Having studied with a Confucian scholar at a young age,

 Intellectuals of the “Meiji Enlightenment” 139 Fukuzawa became a highly capable student of Chinese learning in his youth. In his own words, his knowledge was good enough “to serve as a curtain raiser for a real scholar of Chinese learning” (Fukuzawa 1970b, 12; 2007, 8). In 1855, Fukuzawa went to Osaka, and enrolled in Tekijuku, a private school opened by the Dutch learning scholar Ogata Kōan 緒方洪庵 (1810–63). Having devoted himself to Dutch learning at Tekijuku, Fukuzawa moved to Edo in 1858, and opened a school of Dutch learning in the Nakatsu domain’s Edo residence. This became the origin of later Keiō Gijuku (subsequently Keio University). Soon after, Fukuzawa discovered that in order to acquire more Western knowledge, he had to retool himself and learn English instead of Dutch. So he switched to “English learning” (eigaku 英学), or the study of English to acquire Western knowledge. In 1860, Fukuzawa was allowed to join the shogunate’s mission to the United States. Including this first trip, Fukuzawa made three trips to the West (two to the United States and one to Europe) before the Meiji Restoration. Based on these experiences, Fukuzawa began to publish a number of works introducing Western civilization to a Japanese audience, including the best-selling work Seiyō jijō (Conditions in the West, 1866–70). After the Meiji Restoration, he continued to publish highly influential books, including Gakumon no susume (An Encouragement of Learning), which sold in millions of copies, and Bummeiron no gairyaku (An Outline of a Theory of Civilization, 1875), and also established the Jiji Shimpō newspaper in 1882. Significantly, though, Fukuzawa never took up a position in the government, despite receiving invitation to do so. The key reason appears to have been his distaste for what he called “imbalance of power” (kenryoku no henchō), or the widespread tendency he observed in Japanese society for human relationships to be organized hierarchically, with inferiors deferring to and sucking up to their superiors (Fukuzawa 2008, 176). The rush to obtain government office, which he saw among former samurai and commoners alike, was a manifestation of this disease. Fukuzawa “felt determined to make an example” of himself for independence, because he believed that “‹t›he independence of a nation springs from the independent spirit of its citizens” (2007, 314). In his educational activities, too, Fukuzawa underscored the importance of independence. In his view, Japanese scholars were eagerly waiting for a chance to serve the government. But real scholarship had to stand upon its own intellectual authority. Scholars who derive their authority from their association with the government would turn scholarship into an appendage of politics. For this reason, Fukuzawa felt he had an important mission in running a private institution of higher education. By doing so, he thought he could “point out the directions of private initiatives” that others could follow (2012, 33). Apart from being a leading publicist and educator of his time, Fukuzawa was also active in business, managing and/or investing in companies including the Maruya Bank, Jiji Shimpō Company, and the Yokohama Specie Bank. Fukuzawa also contributed to the establishment of educational institutions other than Keio University. One of them later developed into Hitotsubashi University. Another became the origin of today’s Osaka City University. During the early Meiji era, Fukuzawa was concerned first and foremost with “preserv‹ing› the independence of our country” (2008, 254). As a leading

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“enlightenment” thinker in Japan, Fukuzawa acknowledged that the ultimate purpose of human societies was the development of “civilization” (bummei 文明), stating that “civilization is all-important; it is the goal of all human endeavors” (2008, 46). He further argued that “‹t›he summit of human knowledge and virtue naturally aspired after is what is lofty, and we must not confine ourselves to such small matters as one nation’s independence” (2008, 254). Yet, Fukuzawa felt that, given the current circumstances, Japan had no choice but to focus on the “small matter” of preserving its own independence: The only reason for making the people in our country today advance toward civilization is to preserve our country’s independence. Therefore, our country’s independence is the goal, and our people’s civilization is the way to that goal. (2008, 254)

In order to ensure Japan’s independence, both the country and its people had to change—and so had the relationship between the two. To assure Japan’s continued independence, Fukuzawa advocated a strategy for enriching the country through improving Japan’s products and promoting foreign trade. In his view, the affluence of the Western powers was built upon trade and the manufacturing industry. Thus, if Japan was to grow rich, it had to expand its own export of industrial products (Fujiwara 1998, 156, 165): Peoples of the West actively trade with the rest of the world, undeterred by tens of thousands of miles of ocean waves .  .  . As a result of this, innovations were accomplished in industry, and cargo shipping developed .  .  . Western countries achieved wealth incomparable in the world thanks to extensive trade. These are well-known facts that require no explanation . . . So in order . . . to advance the people of our country to a state of affluence and civilization, there is no other way except to expand our trade, and to seek wealth in markets around the world .  .  . Although we need vast improvements in all sectors, including agriculture, industry, and commerce, the fastest path to wealth at this moment consists in improving our products . . . So I assert with confidence that it is very easy to raise our country’s wealth and civilization to a level equal to Western countries. The only thing needed is to expand our trade. (Fukuzawa 1970c, 569)

Activities aimed at strengthening Japan’s position as a trading state could make or break the country’s survival as an independent nation. They were a matter of national concern. Yet, unlike Honda Toshiaki and Yokoi Shōnan, Fukuzawa did not advocate state control of the economy. Instead, he argued that a new class of business elite should lead a modern Japanese economy: “If we are to develop businesses which is up to contemporary civilizational standard, we must count on the activities of public-spirited men with (modern) education (shiryū gakusha)” (1970a, 155). Nor was Fukuzawa’s educational project limited to just the business elite. To secure the independence of the country, Fukuzawa wanted each and every Japanese to achieve “independence” at the personal level. As he stated in An Encouragement of Learning:

 Intellectuals of the “Meiji Enlightenment” 141 Independence means to manage one’s own personal affairs and not to have a mind to depend upon others. The person who can himself discern the right and wrong of things, and who does not err in the measures he takes, is independent of the wisdom of others. The person who makes his own livelihood through his own physical or mental labors is independent of the financial support of others. (2012, 21)

“Independence” meant both mental and financial independence (Komuro 2013, 250– 1). Fukuzawa stressed the value of independence in another passage from the same work: Heaven, it is said, does not create one person above or below another .  .  . Nevertheless, as we broadly survey the human scene, there are the wise and the stupid, the rich and poor, the noble and lowly, whose conditions seem to differ as greatly as between the clouds and the mud. Why is this? The reason is clear . . . these differences are entirely the result of whether they have or have not acquired the powers which learning brings. It is not because of some decree of Heaven . . . ‹T›here are no innate status distinctions separating the noble and base, the rich and the poor. It is only the person who has studied diligently, so as to have acquired a deep knowledge of things who becomes noble and rich, while his opposite becomes base and poor . . . The object of one’s primary efforts should be a practical learning that is closer to ordinary human needs. For example, a person should learn the 47-letter kana syllabary, methods of letter writing and of accounting, the practice of the abacus, the way to handle weights and measures, and the like. And there is much additional knowledge to be acquired ‹including› Geography . . . Physics . . . History . . . Economics . . . ‹and› Ethics . . .5 The above-mentioned subjects are ones common to mankind, matters which everyone should have an interest in, irrespective of rank or position. After acquiring learning in these areas, ‹samurai, peasants, artisans and merchants› can go on to do their duties or manage their family businesses, with independence redounding to the individuals, families, and the nation alike. (Fukuzawa 2012, 3–5)

This is the opening passage of An Encouragement of Learning. The first sentence is particularly well known in Japan for enunciating a basic principle of modern society. Fukuzawa was highly critical of the feudal system, stating late in his life: “To me, indeed, the feudal system is my father’s mortal enemy which I am honor-bound to destroy” (2007, 6). In his view, people had to be liberated from unreasonable shackles and made equal. Yet, what needs attention here is the rest of the passage. Fukuzawa did not negate inequality among people in general. Rather, he accepted the legitimacy of social and economic inequality resulting from differences in abilities as a matter of course. While people are born equal, they grow up to be different, depending on differences For ethics, the term used by Fukuzawa is shūshingaku 修身学, which derives from the idea of “selfgovernance” (shūshin). See Chapter 3, n. 10.

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in abilities acquired through learning. That is why Fukuzawa encouraged people to acquire learning, especially of the practical kind. What he meant by practical learning (jitsugaku 実学) was the kind of learning which “is closer to ordinary human needs,” and which is “effective” in the sense that it can be applied to real life. Fukuzawa’s emphasis on pragmatic, effective learning may be compared to the claim of Confucian scholars of the kogakuha school, who argued that knowledge needs to be applicable to daily life (2.2). But for Fukuzawa, practical learning was to be based on scientific, positive knowledge, rather than on hermeneutics of classic texts. Fukuzawa equated practical learning with Western science, stating: “Whether we are discussing literary texts or affairs of the world, ‹we need› to base our claims on practical learning from the West” (1971a, 415).6 In his view, one needed to pay attention to tangible facts, which he equated with “statistics, or ‹concrete› facts” (1971b, 271). This intellectual orientation was inseparable from his negative view on Confucianism. Confucianism, he believed, bred the attitude of credulity (wakudeki), or the attitude that encouraged people to “believe in and cherish the old, and make not the slightest ‹mental› effort of their own.” In short, Confucianism made people “mental slaves” (2008, 199). A person can achieve mental independence only by acquiring practical learning, which contrasted in its character with conventional, Confucian learning. Fukuzawa also argued that, having acquired practical learning, “samurai, peasants, artisans and merchants can go on to do their duties or manage their family business.” A person should fulfill his occupational duty and achieve financial independence. Practical learning enables one to achieve both mental and economic independence. Furthermore, Fukuzawa argued that the mental and financial independence of a person would facilitate the independence of “families and the nation alike.” In the context of the post-Restoration era, the performance of occupational duty came to be understood as a duty that all “Japanese nationals” must perform in order to ensure Japan’s independence (Kawaguchi 1989, 99–111). The country’s independence hinged upon the mental and economic independence of each Japanese national. That is why the independence of the person, of the family, and of the nation were inseparable from each other. It is also important to consider how Fukuzawa conceived of the relationship between the individual person and the country. From the quoted passages, it is evident that he emphasized the close connection between the two. This is not to say that Fukuzawa believed that the individual person simply dissolved (or should dissolve) into the nation. Yet, it appears that, in stressing the value of personal independence, Fukuzawa did not base his argument on the notion of self-contained individual. Rather, he underscored the inseparable linkage between individual and society. In fact, Fukuzawa’s view may be regarded as a metamorphosed version of the Confucian idea that moral “self-governance” (shūshin) would allow one to “order the house, govern the country, and pacify the realm under Heaven” (seika chikoku heitenka).7 Given that Confucianism focused on personal morality as the key to building a good society, it Specifically, Fukuzawa asked his readers to read the term “practical learning” (usually read as jitsugaku) as saiyansu, or science. 7 On this idea, see Chapter 3, n. 10. 6

 Intellectuals of the “Meiji Enlightenment” 143 would not be surprising if the mental and financial “independence” of individuals took the place that moral “self-governance” occupied in Confucian thought (Ishii 2010, 68). One half of Fukuzawa’s life was spent during the Tokugawa era, the other half in the Meiji era. In his own words, he felt that Japanese scholars of his generation “have lived two lives, as it were; we unite in ourselves two completely different patterns of experience” (Fukuzawa 2008, 4). Fukuzawa was a great innovator in Japanese thought, and there were clear elements of discontinuity between his ideas and what came before. Yet, concerning the relationship between the individual and the society, Fukuzawa accepted the Confucian view that emphasized the embeddedness of individuals in society. This was an element of (perhaps subconscious) continuity that links Fukuzawa’s ideas to the tradition of Japanese thought during the Tokugawa era.

15.4  Takata Sanae Takata Sanae was born in 1860 in a well-to-do merchant family in Edo. Having grown up playing with children of retainers of the shogunate, young Takata sympathized with the pro-shogunate forces during the Boshin War (Takata 1927, 14). As he later recalled, “children of Edo disliked the imperial forces. Being children, we did not understand in the least what was meant by ‘imperial forces,’ but we just felt that they were bad people who bullied the weak” (1927, 16). Takata began his studies in 1866 and entered the Tokyo Kaisei Gakkō (later Imperial University) in 1876. When the college was reorganized as the University of Tokyo the next year, Takata joined the preparatory school for the university, and entered the Faculty of Literature in 1878. In 1881, Takata met Ono Azusa 小野梓 (1852–86), a legal scholar who was close to Ōkuma Shigenobu, and in the next year, he participated in the founding of the Rikken Kaishintō (Constitutional Reform Party) led by Ōkuma. Upon graduation from the university in 1882, Takata rejected a lucrative job offer from the Ministry of Education to throw in his lot with Ōkuma, Ono, and their associates (Takata 1927, 78). For the rest of his life, he belonged to the Rikken Kaishintō and its successor parties. Takata’s decision to associate himself with Ōkuma, who had been banished from the government in 1881, may well have been prompted by his upbringing and his sense of distance from the Satsuma–Chōshū-dominated government (Shōda 2002, 101). In 1890, when the first session of the Imperial Diet opened, he became the youngest member of the House of Representatives (the Lower House of the Imperial Diet) and served several terms. Later in his life, Takata was appointed a member of the House of Peers (the unelected upper house of the Diet), and briefly (1915–16) served as the Minister of Education during the Second Ōkuma Cabinet (1914–16). Takata’s primary goal was to secure Japan’s independence and to enhance its national interest. In 1886, he went so far as to say that the urgent task for Japan of his day was a new kind of jōi (expelling the barbarians) in the form of winning in international competition. He called upon college students to be the frontrunner in this new jōi:

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In olden times, if one wanted to expel the barbarians, one would do so using cannons and guns. But nowadays, the weapons we use are knowledge, experience, science, and technology . . . ‹T›he most dangerous perhaps are the Anglo-Saxon peoples in Britain and the US. They are out to conquer the world with their industrial and commercial power, and their influence is now about to penetrate our country .  .  . Faced with such a situation, we cannot count on unmotivated merchants, uneducated artisans, and ignorant peasants . . . Today, only students can be the avant-garde of our new jōi . . . We cannot expect the state to become prosperous without promotion of industry . . . ‹Therefore› I would like to encourage patriotic students to go on to study subjects such as politics, economics, and science, and after finishing their studies, to go into real business, and to devote their life to their occupation. Building on their mental power and knowledge, they should become our country’s avant-garde in carrying out jōi. (Takata 1886b, 1–2)

Evidently, Takata believed that industry was a source of national power, and that economic activities were instruments that should serve broader national interest. His intense patriotism is also evident in his call for independence of Japanese scholarship from the West. This is a point that he emphasized when, in 1882, he helped with drafting Ono Azusa’s congratulatory remarks at the foundation ceremony for the Tokyo Semmon Gakkō (Tokyo College, later Waseda University). Specifically, he proposed that education at the college be conducted in Japanese, for “independence in matters of scholarship would be utterly impossible if we continue educating our youth using foreign languages and books” (1927, 106). Yet, jōi did not mean expelling foreigners or foreign influence for Takata, who had been studying English since his early teens. Nor did he seem to care about the notion of Japan’s superiority that National Learning scholars had emphasized. While he advocated the independence of Japanese scholarship from the West, he did not mean to reject Western influence. He stated: However much a scholar of Chinese learning bemoans, and however much a National Learning scholar laments, it is a settled matter that when it comes to scholarship, Western learning is superior by far. (Takata 1887a)

To carry out the new jōi, Japan had to absorb knowledge from the West and to beat the West in its own game. He was even willing to consider the spread of Christianity in Japan as a means of social progress: If one wants to improve the society, one has to direct his attention to its foundations . . . If social reformers in our country would like to introduce Western manners, then spreading Christianity would be the best way. If Christianity spreads, then a new hairstyle would also spread, and so will Western-style clothes, dance and music, not to speak of eating meat and drinking less. (Takata 1886a)

Takata’s support for spreading Christianity was motivated by the desire to “introduce Western manners.” Thus, it is not certain if he was serious in his recommendation. But the passage is sufficient to demonstrate that he was no xenophobic purist.

 Intellectuals of the “Meiji Enlightenment” 145 In political questions, Takata followed Ōkuma and Ono, and took British-style parliamentarism with constitutional monarchy as the model that Japan should follow. Takata and his associates rejected both Prussian-style conservatism favored by the oligarchy and Rousseauian idea of popular sovereignty preferred by radical advocates of Freedom and People’s Rights Movement (see 21.2 on Nakae Chōmin). Instead, they advocated a path of gradual progress consistent with Japan’s imperial institution. While Takata played a role in politics, the main focus of his activities was higher education. To transform Japan into a modern state, it was necessary not only to build modern institutions but also to educate a new generation of people infused with a new spirit (Manabe 2002, 122–3). He joined Ono in the founding of the Tokyo Semmon Gakkō and became an instructor there. After Ono passed away, Takata became the central figure in the administration of the college, laying the foundation for its later development. He was appointed the dean of the college in 1900, and became the first Rector of Waseda University in 1907. In 1923, Takata became the third president of the university and devoted himself to its development, remaining in his post until 1931. In his capacity as educator and school administrator, Takata stressed the importance of practical learning that contributes to the national interest and to the welfare of the people. In 1887, he made the following remark: In principle, no learning is superfluous .  .  . Yet, there are differences between learning that is immediately useful, and one which is less directly connected with real life. Today’s scholars should devote themselves to studying what is immediately useful, what contributes to national interest (kokueki) . . . Scholars today should acquire many skills, without dismissing trivial things. They should try anything to help out the common people. (Takata 1887b)

In emphasizing the importance of contribution to national interest, Takata was committed to Meiji Japan’s pursuit of wealth, power, and international status. At the same time, Takata argued for the independence of scholarship from the government. In his 1891 speech, Takata called upon the graduates of Tokyo Semmon Gakkō to “avoid becoming a bureaucrat” and to “go work in the provinces” as much as possible (quoted in Manabe 2002, 125). He went on to state: With the opening of the Imperial Diet, a new path of advancement has opened for people outside the government .  .  . Those of you who have studied politics . . . may indeed have the chance to serve as ministers of state. To renounce such a promising career in the independent sector only to work as a bureaucrat would be an act of utmost folly . . . Those of you who have ambitions should give up any thought of becoming a bureaucrat, gradually establish your position, and seek to use the power of your tongue and your pen for the purpose of bringing down the domain-clique government. (quoted in Manabe 2002, 27)

Takata sought to educate a new generation of Japanese who would contribute to national interest in an independent capacity. As is evident in the quoted passage, he initially focused on the task of educating those who would serve to check the power

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of the government and, thereby, contribute to the development of constitutionalism in Japan. Later, as Japan’s industrial development accelerated, he began to focus on business and commerce as another area of contribution to national interest (Manabe 2002, 136–7). Takata called upon students who were learning Western knowledge such as politics, economy, and science to contribute to national interest through business activities (jitsugyō 実業). As already stated, Takata’s support for gradual progress in political matters reflected the position of the Rikken Kaishintō. At the same time, his political views appear consistent with his basic mode of thought. In his thinking, Takata had the tendency to prioritize material, empirical reality, and actual functions of things over abstract ideas or principles. His thinking was also characterized by a degree of skepticism about the power of human reason. This tendency is discernible in his attitude toward religion. Although Takata was agnostic about the existence of supernatural beings like kami or Buddha, he made a conscious choice to be a believer, because he felt that belief might serve him well, both in this life and in the next: I for one firmly believe in the existence of heaven and hell .  .  . In my view, no philosopher can assert with confidence whether kami or Buddha really exists. These are problems which are unfathomable by our limited intellectual power . . . I just fear I might go to hell, which is why I choose to believe in the existence of heaven and hell, and try to live out my life as a faithful believer. (Takata 1887c)

Evident in this passage is a degree of skepticism about the power of human reason, coupled with the readiness to accept anything that is “useful” in this (or the next) world. While Takata was concerned about afterlife, his religious belief was not genuine; it appears little more than an insurance policy. But this is not necessarily to say that his belief lacked sincerity, for Takata chose to be a believer partly because of the effect of religious belief on life in this world. To that extent, he appears to have been a serious believer. Religious belief gives people psychological security as well as the incentive to behave morally. These concerns appear to be behind his decision to be a believer (Kawaguchi 2002, 39–44). Furthermore, religions also provided the foundation for culture, as his assessment of Christianity indicated. For him, it was Christianity that helped Western manners, culture, and life develop to a high level. Despite his intellectual agnosticism, he appreciated the practical functions of religion. It is not difficult to discern the notion of occupational duty in Takata’s ideas. He took it for granted that individuals are embedded in society, and that they owe an important moral obligation to perform their work for the benefit of society. He argued throughout his life that Japanese nationals had the duty to contribute to Japan’s national interest through work. *****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*** Both Fukuzawa and Takata were “modern” thinkers in that they both sought to contribute to Japan’s “progress” and “civilization” through the introduction of

 Intellectuals of the “Meiji Enlightenment” 147 Western knowledge. Naturally, there were important differences between the two. For Fukuzawa, Confucianism remained a real threat that could encourage credulity and mental slavery among the people. By contrast, Takata, who received a more Westernstyle education from his youth, appears basically uninterested in Chinese and National Learning (Kawaguchi 2002, 49–52). Also, the two thinkers conceived of Japan’s national interest somewhat differently. While Fukuzawa was concerned about securing Japan’s independence, Takata, at least in his later years, took the country’s independence for granted and focused on the pursuit of Japan’s prosperity. Despite these differences, the two thinkers shared the common objective of introducing modern Western civilization for the purpose of enhancing Japan’s national interest. Yet, once we shift our attention to deeper assumptions underlying their thinking, it is possible to discern elements of continuity with the Tokugawa era. In their basic assumptions about human beings and society, Fukuzawa and Takata stood on the same foundations as did thinkers of the Tokugawa era. Also, in emphasizing the importance of “practicality” in learning, the difference between the ideas of the Tokugawa era and those of the post-Restoration era was perhaps not too large (Kawaguchi 2002, 54–5). However, as the writings of Fukuzawa and Takata demonstrate, the purposes for which learning was supposed to serve were redefined in the course of the nineteenth century, and so were the intellectual contents of the learning required for accomplishing such tasks.

16

The Meiji State and the Promotion of Industry

This chapter focuses on the economic policy of the Meiji state between the Restoration and the beginning of Japan’s industrialization in the mid-1880s. Particular attention will be paid to the policy of industrial promotion pursued between 1873 and 1881, and to the view on currency that was implied in this policy. The way in which policymakers of this period understood the nature of currency presupposed and built upon ideas from the Tokugawa era. But it was also inextricably linked with the problem of how to construct a new, national economy. Thus, an analysis of currency policy provides a valuable angle from which to understand how ideas carried over from the previous era were reformulated and applied to problems of the new era.

16.1  The First Steps in the Economic Policy of the Meiji State Between 1868 and 1869, the fiscal policy of the new Meiji government was entrusted to Yuri Kimimasa 由利公正 (1829–1909), a retainer of Lord Matsudaira Yoshinaga of Fukui in Echizen Province.1 Right after the Restoration, the new government stood on a very weak fiscal foundation. Though the new government had taken over the former fiefs of the Tokugawa family, it was not easy to collect taxes from those lands right away. Meanwhile, most of the daimyō houses continued to exist and retained the exclusive right to tax their own domains. It was not until 1871 that domains were abolished and were replaced by prefectures, to be administered by governors sent by the central government in Tokyo. To cope with this fiscal crisis, Yuri resorted to borrowing under the pretext of “fiscal basis fund” (kaikei motodate kin) in the amount of three million ryō, and also issued Dajōkan (Grand Council of State) bills2 in the amount of fortyeight million ryō. It was effectively the first time in Japanese history that the central government borrowed money or issued a paper currency.3

T h ough closely related to the shogunate, Lord Yoshinaga supported the new imperial government at the time of the Boshin War. 2 Dajōkan 太政官 (Grand Council of State) was the official name for the system of central government administration established in 1869. The Dajōkan system lasted until 1885, when it was replaced by the cabinet system (naikakusei 内閣制). 3 Although the shogunate was not a “central government,” it did not, unlike daimyō, borrow money or issue paper currency. 1

 The Meiji State and the Promotion of Industry 149 The immediate background to these measures was, of course, the fiscal crisis faced by the new government. Yuri’s policies were also based upon the experiences of many daimyō houses in the late Tokugawa era, which resorted to borrowing as well as issuing of domainal paper currency (see Chapter 8). It is worth recalling that domainal paper currencies issued by the daimyō served not only to make up for fiscal deficits but also to advance domainal interest by means of promotion of domestic production. Similarly, it appears that Dajōkan bills were issued in part to finance new projects. This is indicated by the decree of the Dajōkan promulgated on the occasion of the issuance of the bills: The bills lent out to various domains are meant to serve as the basis for enriching the domains. So each domain should recognize this, and use the money wisely by developing domainal products and by advancing its kokueki. (Dajōkan 1988, 5)

In this passage, Yuri referred to the portion of the Dajōkan bills that had been lent out to the daimyō domains. The amount of lending depended on the domain’s kokudaka, with one ryō of money lent for every koku of rice yield, to be repaid in about thirteen years with 30 percent interest (Dajōkan 1988, 5). His recommendation was that each domain use the money wisely to enhance kokueki. What Yuri meant by kokueki was the interest of each domain. But Yuri’s ultimate purpose was no longer limited to the interest of individual domains. Rather, through the promotion of domainal interest, he was attempting to enhance Japan’s national interest. Thus, this decree is indicative of the transitional era in which the idea of national interest replaced the earlier notion of domainal interest. The idea of exporting local products to other domains, which Kaiho Seiryō captured with the concept of sambutsu mawashi (8.1.4), was being put into practice in many daimyō domains in the late Tokugawa era. Thus, the notion that the government should take a leading role in the promotion of industry and trade must have been prevalent within the new government as well. Given this background, it is not unreasonable to assume that the government’s currency policy was motivated in part by this concern for industrial promotion. Industrial promotion in Meiji Japan is one example of policies that, though they might appear to be based on imported Western ideas, turn out to have roots in the Tokugawa era. Another such example is the policy of trade protectionism, which will be discussed in the next chapter.

16.2  The Establishment of a New Currency System Soon after its establishment, the Meiji government halted the circulation of mommegin, or silver currency by weight. Gold and copper coins remained in circulation, but a fundamental reform of the currency system was inevitable sooner or later. One factor that needed to be taken into account was the emergence of the international gold standard among Western states. The gold standard, first introduced in Britain, began to spread to other Western countries since the 1870s, and an international system of gold standard emerged. This influenced the course of currency reform in Japan as well.

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In 1871, the government issued the New Currency Act (shinka jōrei) and established a new currency system. The yen 円 was made the basic currency unit, with one yen being equivalent in value to one ryō,4 to one US dollar, and to 1.50 grams of gold. In this manner, the new currency system was to be linked both to the past and to the world economy. This Act involved an attempt to introduce the gold standard to Japan by making the new currency exchangeable with gold. But if Japan was to adopt the gold standard, any paper currency issued had to be made convertible to the specie metal. The cash-strapped new government did not have the gold reserve necessary for supporting a convertible paper currency. Thus, in 1872, the government issued the National Bank Act (kokuritsu ginkō jōrei), permitting the establishment of private banks around the country with the right to issue paper currency convertible to specie. Although these banks were called “national banks,” they were private joint-stock companies. The government encouraged their establishment to mobilize private funds for the purpose of introducing the gold standard as envisioned in the New Currency Act. Yet, this attempt to use private funds to accomplish a state goal was unworkable to begin with, and only four national banks (beginning with the First National Bank established in 1873) were founded under this Act. If we consider the New Currency Act and the National Bank Act from the perspective of economic thought, we can discern a “metallist” view of currency, according to which money should be ideally gold (or silver) currency, and any paper currency should be convertible to specie metal. Meiji government’s attempt to construct a new currency system was initially guided by the ideas of metallism and balanced-budget principle. If the policies of Yuri Kimimasa at the very beginning of the Meiji era resembled in some respects the policies of Ogiwara Shigehide (6.1), Ōoka Tadasuke (6.2), Tanuma Okitsugu (7.1), the idea of a “proper” currency and fiscal policy based on “frugality” may be traced back to the policies of Arai Hakuseki (6.1), Tokugawa Yoshimune (6.2), and Matsudaira Sadanobu (7.1). The policy debates in the early Meiji era had their own specificities, but in some respects they continued earlier Tokugawa-era debates.

16.3  State Promotion of Industry In 1873, as a result of a power struggle within the Meiji government, influential figures including Saigō Takamori, Soejima Taneomi 副島種臣 (1828–1905), Gotō Shōjirō 後藤象二郎 (1838–97), Itagaki Taisuke, and Etō Shimpei left the government. Among those who remained in the government, Ōkubo Toshimichi emerged as the most powerful figure as the Lord of Home Affairs (naimukyō), while Ōkuma Shigenobu and Itō Hirobumi occupied the positions of the Lord of Finances (ōkurakyō) and the Lord of Industry (kōbukyō), respectively. Under their leadership, the government pursued a policy of industrial promotion (shokusan kōgyō 殖産興業). While Ōkubo was assassinated in 1878, his policy was continued by Ōkuma. Thus, we treat the period One ryō was equivalent to two Man’en nibu-ban gold coins, which contained 1.32 grams of gold.

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 The Meiji State and the Promotion of Industry 151 from 1873 to 1881, the year when Ōkuma fell from power, as the period of industrial promotion policy. In his Memorandum on the Promotion of Industry, written in 1874, Ōkubo made the following statement: Generally speaking, the strength of a country depends on the wealth of its people, and people’s wealth depends on the abundance of production, which in turn depends on whether the people devote themselves diligently to industry. But if we inquire into the sources of people’s industry, we will find that in every case, it is due to the guidance and encouragement of government officials . . . When it comes to encouragement of industry and promotion of production, little if any results have been achieved, and it appears that domestic production and consumption shrink by the day. This of course is due to the fact that our people are still not enlightened, and that they cannot engage in useful business in response to changing circumstances. But it is also because government officials have not paid enough attention to this matter, and have not done enough to direct and guide the people . . . Those who are responsible for the state and its people must reflect deeply and exhaust their power of intellect . . . Concerning what is urgently needed for the protection of the people, government officials must determine the proper methods, corresponding to the country’s climes and customs, and reflecting the people’s temperament and knowledge, make those methods the basis of administration, preserve what has already been accomplished, and guide and promote what is only beginning to develop . . . If the people become prosperous and content, then it is inevitable that the state will achieve wealth and power . . . and then it will also allow Japan to compete on an equal footing with the great powers. (Ōkubo 1988, 16–17, 19)

For Ōkubo, a central task for the state was to guide and to encourage the people for the purpose of promotion of industry. The immediate purpose was to make the people prosperous and content, but Ōkubo’s longer-term goal was to make Japan an equal of the great powers. The (nation-)state-centric perspective adopted by Ōkubo may be seen as a consequence of the rise of the view of Japan as an “imperial country” since the second half of the Tokugawa era. At the same time, and more immediately, it was also the result of the international circumstances of the nineteenth century, during which the expansion of the Western powers aroused a sense of crisis concerning the independence of Japan.

16.4  Entrepreneurship by the State If the government was to implement the policy of industrial promotion, a substantial amount of fund from the state coffer had to be allocated to investment in and financing of new projects, while national banks had to supply a sufficient amount of convertible paper currencies to the financial markets. As it was, the government did not have money

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to spare, and few national banks were established. Faced with this situation, Ōkuma issued in 1875 a Memorandum on Strengthening the Economy and Establishing the Fiscal Basis of the State. In this document, he advocated an alternative policy approach: Observing the situation today . . . we see that production has withered rather than grown, that agriculture, commerce, and industry have stagnated, that import has exceeded export by a wide margin, and that specie metal is flowing out of Japan at a rapid pace. Inevitably, the entire country is languishing and tax revenue is meager .  .  . All this is due to the lack of convenient means of transportation, and to the absence of financing . . . I don’t even need to mention that the building of adequate infrastructure today is beyond the capacity of the people. There is no other way to overcome this problem except through government spending. (Ōkuma 1960, 121–2)

For Ōkuma, keeping the government budget balanced was less important than stimulating the economy by pumping money into industrial development projects. For this purpose he was willing to accept a budget deficit. Also, he revised the National Bank Act in 1876 and abandoned the attempt to introduce the gold standard. The revised Act allowed national banks to issue nonconvertible paper money, thereby facilitating the provision of financing by national banks. Another policy measure sanctioned the establishment of “private banks” without the authority to issue currency, which facilitated the conversion of idle money into industrial capital. If the government’s initial policy stance was based on the combination of metallism and balanced-budget principle, under Ōkubo’s leadership, an alternative policy was adopted, based on the issuance of paper currencies and on expansionary fiscal policy. After Ōkubo’s death, Ōkuma proceeded along the same path. Yet, this new policy was not entirely successful. The policy of industrial promotion involved the establishment of state-run factories and mines, in addition to railroads and shipping lines. But many of these enterprises were economically unviable, due to high initial outlay and to low efficiency. Thus they became liabilities for the government’s finances. Another negative fallout from this policy was inflation. Generally speaking, expansionary fiscal policy coupled with loose monetary policy creates an inflationary pressure. In this particular case, the problem was exacerbated by the outbreak of the Satsuma Rebellion in 1877. The huge amount of money spent by the government in this civil war was financed by inconvertible paper currency, which fanned inflation, and the value of paper money plummeted in relation to specie metal. Not surprisingly, Ōkuma became the target of criticism for this situation. Ōkuma’s position was further weakened by his Memorandum on the Establishment of a National Assembly. This memorandum angered leaders from Satsuma and Chōshū domains who constituted the core of the Meiji oligarchy. As a result, Ōkuma was relieved from the post of Councilor (sangi) in 1881. From the viewpoint of economic policy, the Political Crisis of 1881 meant an end to the policy of industrial promotion pursued by Ōkubo and Ōkuma. It also signified a return to metallism and to balanced-budget principle. After Ōkuma’s fall, Matsukata Masayoshi 松方正義 (1835–1924) became the Lord of Finances, and took Japan’s fiscal and monetary policy in a different direction.

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16.5  The Silver Standard and the Establishment of the Bank of Japan Even before Ōkuma was dismissed from his position, Matsukata had submitted a Memorandum on Finances, in which he stated as follows: Given the decline in the value of paper currency we have been witnessing, and given that many are complaining as a result . . . the government would have to compensate for the decline in value. Otherwise, the government will lose the confidence of the people, and will henceforth be unable to initiate new undertakings. The value of paper currency declined not just because of the large amount of money printed. Another reason has to do with the depletion of the specie reserve to back up the paper currency . . . The depletion in the specie reserve is caused . . . by the import surplus and by the resultant outflow of specie. And the import surplus is due to the stagnation in our production. And it is evident that the stagnation in production is due to the lack of investment, caused by the instability in our currency policy. To summarize, the devaluation of paper currency is due to the insufficiency of specie reserve, which is due to stagnation in production. That, in turn, is caused by the instability in our currency policy. (Matsukata 1988b, 115–16)

As a competent official who rose through the ranks of the Finance Ministry, Matsukata was familiar with the course of Japan’s currency policy since the Restoration. Thus, he believed that the issuance of paper currency was inevitable. His argument was that, in order to resolve the issue of depreciation of the paper currency against specie, it was necessary to replenish the specie reserve and to reestablish the convertibility of currency. Like Ōkuma, Matsukata felt that the promotion of industry was necessary, for the growth of industry could contribute to diminishing the imbalance in trade. Apparently, what Matsukata could not tolerate was Ōkuma’s proposal to achieve convertibility of currency through foreign borrowing. In 1880, Ōkuma proposed to “borrow fifty million yen in specie” from Britain, to use that money to “liquidate inconvertible paper currency by exchanging them with specie,” and to “establish gold standard” (Ōkuma 1988, 85–6). For Matsukata, a large-scale foreign borrowing was a “measure fraught with danger” (Matsukata 1988a, 97). The difference between Ōkuma and Matsukata, in other words, may have been difficult to bridge because it concerned their views of the international political environment rather than their economic ideas. But if reliance on foreign debt was to be avoided, then there was no choice but to “establish the basic principle of our currency policy, to accumulate specie metal so that we have enough fund to redeem the paper currency in circulation, to encourage domestic production and to limit the amount of import” (Matsukata 1988b, 109). The policy that Matsukata actually implemented involved fiscal austerity coupled with a decrease in the amount of paper money in circulation. This resulted in deflation, a more balanced trade, and eventually, “an increase in reserve specie through foreign exchange” (Matsukata 1988a, 97). When the specie reserve increased to a sufficient level, then convertible paper currency was to be issued again.

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Matsukata’s policy caused a sharp decline in prices known as “Matsukata deflation.” But despite its costs, his policy line based on metallism and balancedbudget principle put an end to the policy debates since the beginning of the Meiji era, at least for a while. National banks were abolished, and issuance of currency was limited to a single, central bank. The Bank of Japan, established in 1882, became the sole currency-issuing authority. The bank issued its first convertible bank notes in 1885. As is evident from the fact that these notes were known as “silver notes” (ginken), the specie against which these banknotes were issued was silver, not gold. Thus, the issuance of convertible paper currency by the Bank of Japan meant that only one half of the objectives laid out in the New Currency Act of 1871 was realized. It was not until 1897 that Japan adopted the gold standard. When it did, one yen was made equivalent to 0.75 grams of gold, or half the amount stipulated in the New Currency Act.

17

Visions for Policy on Industry and Trade

Economics as an academic discipline is a phenomenon unique to the modern West. It emerged in the West and spread to the rest of the world. Yet, by the time when the Japanese encountered Western economics for the first time in the mid-nineteenth century, a rich tradition of economic thinking had developed in Japan. Thus, it was unlikely that Western economic ideas would spread to Japan in their original, unadulterated form. Some economic thinkers of Meiji Japan may have believed that they were loyally following the teachings of foreign masters. But like the Tokugawa Confucian scholars, thinkers of Meiji Japan could not but develop their own distinct ideas, if only because they were building on their own indigenous foundations. This chapter examines the ideas of Taguchi Ukichi 田口卯吉 (1855–1905) and Inukai Tsuyoshi 犬養毅 (1855–1932). Taguchi advocated free trade, while Inukai supported protectionism. If Meiji Japan was to build new, modern industries, Japan needed to import machinery, fuel, and raw materials. For this purpose, indigenous industries had to function as export industries capable of earning foreign currency (Sugiyama 2012, 153). As Japan became increasingly dependent on foreign trade, Taguchi and Inukai debated proper methods of developing industry and trade.

17.1  Taguchi Ukichi 17.1.1  Upbringing and Intellectual Orientation Taguchi Ukichi was born in Edo as a son of a retainer of the shogunate. His greatgrandfather on the maternal side was the famous Confucian scholar Satō Issai 佐藤一斎 (1772–1859), whose disciples included prominent figures of the late Tokugawa era such as Watanabe Kazan 渡辺崋山 (1793–1841) and Yokoi Shōnan (13.3). Taguchi studied at the Shōheizaka Academy, a Confucian academy run by the shogunate. After the Restoration, however, Taguchi’s family lost its income and had to move from Edo to Yokohama, where the family eked out a meager existence through menial work. The family’s predicament was deepened by the death of Taguchi’s father before the Restoration. Taguchi himself worked as a servant for Westerners in Yokohama, hoping that this would help him learn English (Taguchi, C. 2000, 18–30). But he soon moved to Numazu (in Suruga Province) to join the newly established military academy. At the military academy, he studied medicine along with English,

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presumably to become a military doctor. But the school was closed in 1872, and Taguchi moved back to Tokyo. In Tokyo, he became a paid “senior student” at the Translation Bureau of the Ministry of Finance, whose mission included translation of foreign books and education of future finance officials. At the Ministry, he witnessed how top positions were occupied by people from Satsuma and Chōshū domains, while competent officials who used to serve the shogunate were languishing in lower-rank positions (Taguchi, C. 2000, 64–5). Taguchi studied political economy and history, and published works such as Nihon kaika shōshi (A Short History of Japanese Civilization, 1877–82) and Jiyū kōeki nihon keizairon (Japanese Economy and the Merits of Free Commerce, 1878). Taguchi left the Ministry in 1879, and, in the same year, established Tokyo Keizai Zasshi, a journal modeled after the British journal The Economist. In his later years, he worked on the compilation of basic sources for the study of Japanese history, reissuing Gunsho ruijū (Categorized Collection of Books),1 and editing Kokushi taikei (Collected Sources on the History of Japan, 1897–1901). He was also active in business and politics, serving as a Chief Manager of the Tokyo Stock Exchange, as the president of the Ryōmō Railroad Company, and as a member (1894–1905) of the House of Representatives in the Imperial Diet (1894–1905). Like many Japanese intellectuals of his generation, Taguchi was committed to advancing Japan’s national interest. He justified his advocacy of free trade by reference to this goal. He explained that “advocates of free trade .  .  . argue that free trade policy should be adopted precisely because they believe that it will bring benefit to the country” (Taguchi, U. 1990d, 274). Taguchi’s concern was not limited to national interest. When he confided his intention to launch Tokyo Keizai Zasshi to Alexander Allan Shand (1844–1930), who was his superior at the Ministry of Finance,2 Shand reportedly suggested that the level of Japan’s economic development was not high enough to justify the publication of an economic journal. Taguchi, feeling “as if [his] heart was pierced by a needle,” responded by vowing to Shand that he would publish such a journal. He went on to write in the first issue of the journal: Whether this journal will establish its name throughout the Orient and thereby deal a blow to the arrogance of the Westerner, or it will perish, justifying the Westerner’s ridicule, all depends on the response from you, the reading public. If you feel the sentiment of patriotism and if you would like to demonstrate to the world that Japan’s level of economic development is sufficient to sustain an economic journal, please support and cherish this journal. (Taguchi, U. 1990h, 444–5)

In addition to his concern for national interest, Taguchi was quite sensitive to questions of national pride. Yet, given Taguchi’s background, it was perhaps natural that his brand of patriotism was colored by some emotional distance from the government Gunsho ruijū is a major collection of old Japanese texts consisting of 666 volumes in 25 categories edited by Hanawa Hokiichi 塙保己一 (1746–1821), a blind National Learning scholar. 2 Shand was a Scottish merchant employed by the Japanese Ministry of Finance as an advisor concerning the creation of a modern system of banking. 1

 Visions for Policy on Industry and Trade 157 dominated by the Satsuma-Chōshū clique. For Taguchi, national interest was not something to be monopolized by the government and imposed from above on the populace. For him, national interest was nothing other than “the sum total of the interests of all the people” (1990a, 19). Underlying this understanding was Taguchi’s utilitarian assumption that people’s actions are driven by their utility (shirishin). In his view, “human beings pursue their own self-interest. To put it differently, people wish to preserve their life and avoid death” (1977c, 351). Taguchi first made his name as a historian, by rewriting the history of Japan from the perspective of “history of civilization.” In the early years of the Meiji era, a rather crude historical narrative of the Restoration reigned. This view regarded the proimperial forces as representing justice and attributed the shogunate’s demise to the latter’s ineptitude and corruption. By offering a sweep of Japanese history from the novel perspective of history of civilization, Taguchi was able to relativize the defeat of the shogunate and the establishment of the Satsuma-Chōshū-dominated government (Taguchi, C. 2000, 80–1). In his work A Short History of Japanese Civilization, Taguchi critically assessed the aristocratic government of the Nara and Heian eras for having forcibly advanced Japan’s civilization after the Chinese model at the expense of popular welfare. Instead, he praised the warrior rule of the Kamakura period as an “inexpensive” government that was suitable for Japan’s conditions at the time (Taguchi, U. 1977a, 7–10, 19–24). In another work, Nihon kaika no seishitsu (The Nature of Japanese Civilization), Taguchi criticized Japanese civilization up to the Tokugawa era as predominantly aristocratic and contrasted it with the more “plebeian” civilization of the modern West. Like François Guizot and Henry Thomas Buckle, whose works provided him with a model of history writing, Taguchi accepted the idea of progress, according to which human civilization developed from lower to higher stages.3 Yet, while progress was important, he thought it should not be imposed upon the people; it had to advance in a way that meets their actual needs (Taguchi, U. 1977b). At the basis of Taguchi’s ideas was a utilitarian approach to society. Concerning the relationship between man and society, Taguchi wrote: The reason why a person joins the society of other human beings is to benefit from the convenience ‹that cooperation brings›, and to make one’s own life more comfortable. If people simply do their work and pursue their interests, and do not harm one another, ‹moral conventions› would simply cease. There would be no countries and hence no patriotism; no distinction between prince and subject, so there would be no need for loyalty. There would be no such thing as the royal lineage, so the idea of divine right would be ludicrous. People would not do good or evil, and the notions of good and evil, justice and injustice would disappear without a trace. Such a condition is what I would call the healthy state of affairs in human society. (1977a, 32)

Another influence on Taguchi in this regard was Adam Smith. See Kumagai (2006, 50).

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For Taguchi, the pursuit of personal utility did not have to result in pervasive conflict. Rather, a person joins the company of other human beings for the purpose of cooperation with them. So harmony in society was a possible and even likely outcome. In his view, harmony was possible not because “the sentiment of pity and sympathy” was inherent in human nature as Mencius claimed (1977a, 13). Rather, Taguchi argued that the pursuit of personal utility in the broader sense generated norms facilitating social harmony: What is this sentiment of pity and sympathy? All human beings have the inclination to pursue their own personal utility. From this emerges love of one’s own family, brothers, and friends. In consideration of this, it is reasonable to say that filial piety is an outgrowth of pursuit of personal utility. (1977a, 14)

In other words, the pursuit of personal utility itself would generate ethical sentiments which foster behavior that is conducive to social harmony.

17.1.2  Taguchi’s Economic Ideas Taguchi’s interest in issues of political economy was a result of coincidence. He shifted from studying medicine to political economy because being a paid student at the Ministry of Finance’s Translation Bureau offered him a better prospect for making a living. But his studies (and work) at the Ministry aroused his interest in political economy. Taguchi absorbed the ideas of classical political economists beginning with Adam Smith and emerged as a leading advocate of free trade. The progress of society, Taguchi argued, was based on the manifestation of the inborn nature of human beings. But this did not mean that progress would occur naturally. For the society to flourish, it was necessary to avoid protection and intervention by the government: ‹In comparison with the miserable state of the Muromachi period›, during the Tokugawa era, civilization flourished radiantly. This clearly shows the principle of social progress. It is important to understand that this progress was not achieved due to government protection, or due to foreign enlightenment. It advanced entirely due to indigenous processes within the Japanese society . . . ‹This fact is› sufficient to dispel any delusion about government protection and intervention. (Taguchi, U. 1977a, 61)

Driven by their tendency to pursue utility, human beings take up occupations that are most advantageous for them. This division of labor necessitates trade, and, as a result, goods are distributed properly in what he calls “distribution on the basis of human nature” (Taguchi, U. 1990a, 5, 7–8). In a similar manner, Taguchi thought that, if social order is formed on the basis of human nature and to the exclusion of government protection and intervention, then a balance would be achieved between various components of society, such as government and the people, town and

 Visions for Policy on Industry and Trade 159 country, capitalists and workers. In his view, avoidance of government protection and intervention was the key to progress and to social harmony. By the same logic, he opposed some aspects of the government’s industrial promotion policy. He was “personally worried that the ‹existing plan for railroad development› is too ambitious given the current level of wealth of our country” (1990e, 26). Instead, Taguchi proposed a combination of railroads and horse-drawn railway as a transportation network that would better suit Japan’s needs and level of development (27). Taguchi thought that the same laissez-faire principle also applies to the world economy: ‹P›olitical division of the world into separate states is not necessary from an economic viewpoint . . . Political division simply establishes broad boundaries ‹which economic activities easily transcend›. It is as if our blood circulates through our entire body, even though at any given point in time, a particular stream of blood may be found in the liver, lung, stomach, kidney or other organs . . . ‹Similarly, economic activities transcend state boundaries›. In economics, we take communities integrated through commerce as single units. For this reason, these divisions ‹among independent states› are insignificant—so much so that we need not study them .  .  . ‹From an economic viewpoint›, parts of France, Italy, and Spain should be seen as constituting a region called “Grapeland” ‹within the world economy›. Parts of China and Japan make up “Tealand” . . . Though Grapeland is divided into different states, this simply means that different parts of Grapeland are administered separately. (1990a, 11)

In the absence of political regulation, each country, as a result of competition, will specialize in those sectors of the economy that exploit their “natural advantages,” and engage in the international division of labor (1990a, 21). And if countries trade freely responding to the “popular demands” of the market, various goods will be “distributed evenly to different regions” (1990a, 14). In this manner, the entire world would enjoy prosperity and order (Mutō, Shūtarō 2009, 46). Inquiring about the causes of the prosperity of Britain, Taguchi found the answer in the practice of free trade and of transit trade. He wished “to transform Japan into a huge entrepot where traded goods from around the world come in and out” (Komine 1995, 218). Why did Taguchi so enthusiastically embrace the idea of free trade? Certainly, one reason must have been the fact that free trade was the economic orthodoxy in the West—particularly in Britain, which was the leading nation of the day. Another reason was that Taguchi wanted to see the development in Japan of a more plebeian type of civilization. In his view, free trade would contribute to the development of such a civilization. Protectionist measures were undesirable not only because they would not bring economic benefit but also because they would foster the wrong kind of civilization.

17.1.3  A Scholar Who Stood on Two Legs Taguchi’s advocacy of free trade might make him appear like an idealistic liberal who wanted to remake Japan thoroughly after the British model. Yet, what he sought to do

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was to absorb and transplant Western economic ideas on the soil of a Japanese tradition, including Chinese tradition that Japan had digested and made its own. Having studied at the Shōheizaka Academy, Taguchi was well versed in Chinese classics. Mori Ōgai 森鷗外 (1862–1922), one of the greatest Japanese writers of the Meiji era, wrote that Taguchi was a rarity among Japanese scholars of his day who stood on two legs .  .  . with one foot each on Western and Eastern cultures .  .  . Generally speaking, his weight fell more heavily on the ground of Western culture. But he straddled wide, and certainly had a foot on the ground of Oriental culture. (Mori 1973, 423)

Ōgai’s words carry considerable weight, for few intellectuals in Meiji Japan embodied the ideal of “standing on two legs” as he did (Hirakawa 1971). As already stated, Taguchi stumbled upon classical political economy almost by chance. Taguchi eagerly embraced classical political economy partly because of its influence in the West, and also because of his own preference for a plebeian civilization. Another factor may have been his prior familiarity with neo-Confucian teaching. Since Zhu Xi school neo-Confucianism had developed the notion of the “nature” of human beings, Taguchi may have found it easy to absorb the ideas of classical political economists, who sought to explain the character of the economy by reference to human nature. Also significant was the presence in Tokugawa Japan of a tradition of thinking emphasizing the autonomy of the market (Koga 2001, 139–41). In Taguchi’s view, Japan’s intellectual tradition, nurtured by Confucianism and other Chinese schools of thought, amply prepared Japan for accepting Western economic ideas. In his introduction to the first Japanese translation of Adam Smith’s Wealth of Nations, he stated: Our Eastern civilization has from early on developed a tradition of political economy (keizaigaku 経済学), and understood the great principle (dairi大理) of society, which is that the most basic rule that should be followed in governing a country is to leave things alone. ‹The only difference from what Adam Smith accomplished was that› our studies were still not detailed, and had not clarified the logic behind the principle. (Taguchi, U. 1990b, 83; 1990c, 224)

Taguchi’s mention of “the great principle” of society is reminiscent of Zhu Xi school neoConfucianism (Abe, S. 2018, 11–12), while “leaving things alone” is a clear reference to the ideas of thinkers such as Lao Tzu and Chuang Tzu 荘子 (369–286 BCE?). This is evident in the following passage, where he explicitly uses the term “non-action”: In ancient times, sages held that non-action is the core principle of government. Although this appears to be a recommendation for negligence, in fact this captures the essential truth about political economy. (Taguchi 1990b, 83)

It should be evident that Taguchi’s intention was by no means to replace Japanese tradition with imported modernity.

 Visions for Policy on Industry and Trade 161 Dazai Shundai, whom we discussed in Chapter 5, understood Lao Tzu’s non-action as accepting the existing conditions as they are, regardless of their justice or injustice, and adapting to it. Taguchi appears to have interpreted the idea of “non-action” in a slightly different way. While he rejected “artificial intervention” in the economy, he did not negate the role of government policy entirely. He believed that “the fundamental purpose of economic policy was to preserve the harmony of socio-economic organization.” For this, politics had to play the role of constructing “institutions” (seido) which people could follow without undue difficulty (Taguchi 1990f, 15; 1990g, 74). Taguchi argued that the inborn nature of humans inclines them toward the division of labor and market economy. But he thought that the human mind is also influenced by “customs and political systems” (1990a, 15). Moreover, depending on the latter, liberalism, or “the great principle of the economy,” could be endangered (Kōno 2008, 182). Thus, constructing proper institutions was something necessary, and was distinguished from “artificial intervention.”

17.2  Inukai Tsuyoshi 17.2.1  Upbringing and Intellectual Orientation Inukai was born as a second son in the family of a rich peasant who served as the village headman and as the county magistrate in Kaya County, Bicchū Province. Having studied Confucianism in his youth, he left for Tokyo in 1875 and entered an English school called Kyōkan Gijuku. While studying there, Inukai also worked as a reporter for the newspaper Yūbin Hōchi Shimbun. In the next year, he changed school to Fukuzawa Yukichi’s Keiō Gijuku, while keeping his newspaper job. During his time at Keiō, he made his name by reporting on the battles of the Satsuma Rebellion from the front lines for the Yūbin Hōchi Shimbun. But in 1880, he left the school, quit his newspaper job, and founded an economic journal entitled Tōkai Keizai Shimpō. In 1881, while serving as the editor of the journal, Inukai joined the Statistics Office of the government, which was established in the previous year under the leadership of Ōkuma Shigenobu. He thus drew close to Ōkuma just in time for the latter’s fall from power in the Political Crisis of 1881. In 1882, he joined Ōkuma’s Constitutional Reform Party. From then on, Inukai’s political career took off. From the opening of the Imperial Diet in 1890 until his death in 1932, he served as a member of the Lower House of the Diet for forty-two years. In 1931, Inukai became the prime minister, only to be assassinated the next year during the May 15th Incident.4 T h e May 15 Incident of 1932 was an attempted coup d’état carried out by young officers and cadets at the Imperial Japanese Navy and Army. While the coup plotters did not achieve immediate success in establishing a military-dominated government committed to domestic regimentation and external expansion, they succeeded in assassinating Inukai. Japanese politics from the 1910s leading up to the beginning of the 1930s is often characterized as a period of “Taishō democracy,” an era when cabinets were formed on the basis of parliamentary majority, and when liberal tendencies prevailed in society. The Manchurian Incident of September 1931 and the May 15 Incident marked a definitive end to this period and became important turning points in the rise of a militarist government in Japan.

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Today, Inukai is chiefly remembered as a party politician active during the period of “Taishō democracy.” But when he was working as a journalist, he vigorously debated economic issues with Taguchi, advocating protectionism on the pages of Tōkai Keizai Shimpō. Inukai’s resolute stance in favor of protectionism was a manifestation of his strong sense of patriotism. Like many party politicians in prewar Japan, Inukai came from outside the Chōshū or Satsuma domains, and he later joined the Constitutional Reform Party. Apart from brief stints in ministerial positions and five months as the prime minister, Inukai was a man who stayed out of power. Yet, from the start, he was not an inveterate opponent of the Satsuma–Chōshū-dominated government. Unlike Taguchi, he had not suffered personally as a result of the Restoration, and it was only after the Political Crisis of 1881 that his feeling toward the Satsuma-Chōshū clique soured (Tokitō 1996, 297). Although Inukai became a member of one of the “people’s parties” (mintō) that opposed the government, he was ready to cooperate with the government when doing so would serve the interest of the state. Inukai was a patriot first and foremost. He averred that “in my mind there is the nation and nothing else” (Inukai 1887, 12). For the purpose of advancing Japan’s national interest, Inukai claimed that he would transcend partisan divisions between the government and the opposition. In a book published in 1887, he lamented the deep rift between the government and the opposition, and looked forward to the appearance of a statesman “who would stand amid the crossfire from the opposing sides, and who would calm down the tensions” (1887, 30). Such a statesman, Inukai argued, must have “the kind of patriotism that would move Heaven and Earth and even the demons,” and possess the courage and nerve, the intellect, and the wisdom that would allow him to bear the entire nation on his shoulders” (1887, 32). No doubt, Inukai imagined himself in such a role. Inukai’s view of the state contrasted with Taguchi’s view. For him, the state was a manifestation of the social nature of human beings: It is the inborn nature of human beings to gather together, to form a country, and to seek to reform it and to perfect it, and this is what separates human beings from birds and beasts .  .  . ‹In human societies,› activities that are necessary for the country are divided and assigned to individuals, and working together, they enhance the welfare of the country as a whole. It is as if an organization divides its tasks among different departments . . . As long as human beings exist, do they not have the duty to build a state, to improve it, and to perfect it? (1983c, 224)

Here, we may discern a distant echo of Ogyū Sorai’s argument concerning the inborn tendency of human beings to form groups (4.3). It is also evident that Inukai accepted the notion of occupational duty. Individuals had to contribute to the welfare of the whole society because: ‹t›he benefits enjoyed by each individual derive from the combination movement of the society. Since the interest of the society is the most universal and largest of interests, taking care of the interest of the society is the best way to protect the true interest of each individual. (1983b, 4)

 Visions for Policy on Industry and Trade 163 Inukai stated that his view differed from “disorganizing individualism which asserts the interests of each individual and thereby hinders the combination movement of society” (1983b, 4). Given such a viewpoint, it is not surprising that Inukai saw national interest as something transcending the sum total of individual interests, in contrast to Taguchi. In Inukai’s view, states existed in a competitive world where their interests often collided with those of other states. Upon such a basis he advocated trade protectionism.

17.2.2  Protectionism for a “Country with Inferior Civilization” In the history of Western economic thought, the doctrine of protectionism may be traced back to the era of mercantilism. But in a systematic form, it was developed since the mid-nineteenth century by German economists of the historical school such as Friedrich List (1789–1846). The contributions of American thinkers such as Alexander Hamilton (1755–1804) and Henry C. Carey (1793–1879) were also significant (Galbraith 1987, 89–102). According to these thinkers, liberal political economy fits the conditions of industrially advanced states. But for developing states, free-trade policy would bring about negative consequences. The influx of industrial products from advanced countries hinders the development of domestic industry. Thus, latedeveloping states had to introduce import tariffs, plus a policy of industrial promotion. When Japanese thinkers turned to the West for economic ideas, it was natural that they accepted the teachings of the then-dominant classical political economy. Free trade was the policy prescription that naturally followed from it. Even without such policy ideas, the provisions of the “unequal treaties” signed between Japan and the Western powers during the Ansei 安政 era (1855–60) had limited Japan’s import tariff rate to 5 percent. Under this trade regime, early Meiji Japan ran trade deficit, as a result of which species continued to flow out.5 It was in such circumstance that foreign trade policy became a subject of controversy in Japan. The opening salvo in the debate had been fired by Wakayama Norikazu 若山儀一 (1840–91), an official at the Ministry of Finance, who, before Inukai, advocated trade protectionism in an article published in 1871 (Wakayama 1940). Wakayama also translated John Barnard Byles’s (1801–84) protectionist tract Sophisms of Free Trade: Popular Political Economy Examined (1849) and published it in 1877 under the title of Jiyū kōeki ana sagashi (What Is Wrong with Free Trade). Taguchi articulated his freetrade position in opposition to such protectionist arguments, and Inukai countered his arguments using Tōkai Keizai Shimpō as his platform. In debating Taguchi, Inukai received help from Wakayama, who allowed him to consult books in his possession (Kobayashi, Tadashi 2009, 32). Inukai also translated a work by Henry C. Carey, whose ideas were originally introduced to Japan by Wakayama. In 1884, he published a summary translation of The Principles of Social Science (Mishima 2008, 11). Inukai’s argument for protectionism followed in its broad outlines those of Carey and List. At its basis was the notion that “interests of individuals do not necessarily Kobayashi Tadashi (2009, 30). For Japan’s trade statistics in the early Meiji years, see Yokohama zeikan (2008, 99).

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agree with the welfare of the nation as a whole .  .  . thus it was all too natural that individuals’ behavior would be restricted through the intervention of national power” (Morota 2003, 270–2). For Inukai, each state had its own distinct interests separate from those of individuals and from those of other states: National economy is not the same as cosmopolite economy, nor is it identical with private economy. The state is a group that is formed in between one’s own family and the entire humanity, and it stands apart from and independent of other groups. Each state differs in terms of race and descent, language and letters, customs and habits, laws and institutions, and in terms of the stage of civilization. Hence, each state has its own interests, and we cannot speak in terms of a single world economy. (Inukai 1983a, 1)6

What, then, were Japan’s interests? Why was it necessary for Japan to introduce protectionist policies? Inukai’s argument included several different strands that were not clearly sorted out. On the one hand, he seemed to favor complete economic selfsufficiency except for products impossible to produce domestically. For instance, he argued that “the benefit of trade consists in trading what one country has in plenty for what it naturally lacks. We should import only those items in whose production our country cannot possibly hope to compete even if we introduce protectionist measures. Other forms of import trade are disadvantageous” (1983f, 340). He maintained that “countries that depend on foreign import for daily necessities on a permanent basis are independent in name only. In fact, they are subservient to other states, which is a great shame” (1983c, 224–5). At the same time, Inukai also implied that the problem with foreign trade was not the loss of self-sufficiency. Rather, the problem was that under free trade, Japan would end up concentrating entirely on agriculture and other primary industries. The underlying assumption here was that, under free trade, Japanese commerce and manufacturing would lose out in competition against foreign rivals: The policy of protection is designed to defend the country’s industries. It is intended to protect the public interest of the country, and to prevent the situation of foreign monopoly—to protect the industries of countries of inferior civilization, and to prevent the uncontrolled influx of the products of countries of superior civilization. Thus, protectionist tariffs are an essential measure for countries where production and trade are underdeveloped . . . In our country, production is still underdeveloped. Trade is anemic. In capital and skills, we cannot match foreign countries. We are exporting raw materials and importing finished products; exporting agricultural products and importing manufactured ones. We only engage in agriculture. For commerce and industry, we are totally dependent on foreign countries. (Inukai 1983b, 1) T h e terms Inukai uses for “national economy,” “cosmopolite economy,” and “private economy” are, respectively, ikkoku no keizai, sekai ippan no keizai, and hitori ikka no keizai, but he indicates the English equivalent for these terms in katakana, Japanese alphabet often used for rendering words imported from outside of East Asia.

6

 Visions for Policy on Industry and Trade 165 Inukai listed several different reasons why concentrating on agriculture is bad for the Japanese economy. First, it would deprive the Japanese people of “their freedom of choice of occupations” (1983b, 2). Second, since agriculture is subject to the vagaries of climate and other natural conditions, countries that concentrate on agriculture are more exposed to risks than those countries in which multiple industries thrive. Third, he argued that a country that depends on the import of industrial goods would have to pay more transport cost than countries where both agricultural and industrial sectors are present inside the country (1983e, 299–300). Finally, he argued that manufacturing industry has more room for technological advancement and growth than does agriculture. “If we concentrate on unfinished products, and leave all finished goods under foreign monopoly,” he asked, “how can we expect to see improvement of manufacturing skills, or advancement in inventions and technology?” (1983b, 2). Inukai made it clear that the survival of the nation was his top priority. He acknowledged that Japan’s policy options were limited due to the provisions of the trade treaties concluded by the Tokugawa shogunate with the Western powers. But he argued that Japan needed to impose import tariffs to prevent the influx of foreign products, and to promote domestic production. In support of his view, he cited J. S. Mill’s argument that “in a new country a temporary protecting duty may sometimes be economically defensible” (Mill 1965, 920; Inukai 1983d, 263).

17.2.3  The Role and Purpose of Politics Inukai was a strong proponent of protectionism and of industrial promotion. For him, government “intervention in the economy” in the sense of protection and promotion of industries “is not what is often dismissively called ‘interference.’ Rather, it is the genuine duty of the government” (Inukai 1983c, 225). Since trade was closely connected with industries and with the government’s finances, he reasoned, government intervention was necessary for “maintaining our country’s independence eternally” (1983c, 225). Intervention in the economy was also important for protecting the people’s “freedom of choice of occupations.” As explained earlier, Inukai held that fulfilling one’s occupational role was part of the “inborn nature” of human beings. The protection of industries was thus necessary to ensure that each person can prove his own worth. This is also evident in the following quote: The duty that the government owes the people is heavy. The heaviest of all is the responsibility to protect the people from foreign countries. The first priority should be to defend the country from foreign invasions, to defend domestic industries, and to protect the security of people’s occupations, from which they derive their livelihood. (1983d, 262–3)

The notion that the government should look after the people and the society as a whole was common in Japan during the second half of the Tokugawa era. Consciously or not, Inukai continued the paternalistic view of the role of the government inherited from the Tokugawa era.

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Taguchi and Inukai were men of the Meiji era. In a clear break from Tokugawa-era keisei ron, they accepted ideas such as “progress” and “development” as a matter of course. And both were committed to advancing Japan’s national interest. They took it for granted that the overriding task for Japan was to defend the country’s independence by developing its economy. Modern economic ideas imported from the West were put in the service of this overarching goal. While the type of economic theory they supported differed greatly, Taguchi and Inukai agreed in viewing the establishment of a certain type of institutional framework as a key role of the government. Also, while Taguchi and Inukai accepted Western economic thought, their ideas stood on the basis of intellectual traditions bequeathed from the Tokugawa era.

Module 6

Managers of Modern Industrial Enterprises This module discusses the economic thought of businessmen from the 1880s to the 1920s. By this time, the turmoil caused by the Meiji Restoration had subsided, and the Japanese economy entered a period of sustained growth. A notable feature of Japanese economic development during this period was the simultaneous growth of both indigenous and transplanted industries. This period also witnessed the growth of modern, Western-style higher education. Though quite small in number, graduates of institutions of higher education played a significant role in the development of modern industries. Chapter 18 discusses the roles college graduates played in entrepreneurship and in management in general terms, and then focuses on the thought of regional entrepreneurs and managers who, after receiving higher education, returned to work in their own region. The chapter shows that regional managers and entrepreneurs often built their thinking on the idea of occupational duty. At the same time, they took advantage of their newly gained knowledge in their industrial activities. That way, they sought to contribute to the welfare of their region, and to the interest of the nation as a whole. Chapter 19 analyzes the thought and behavior of Shibusawa Eiichi and Itō Yōzō, two organizers of industrial activities on a national and regional scale, respectively. Shibusawa established a large number of joint-stock companies in modern sectors of the economy. His overriding goal was to promote national prosperity. Shibusawa sought to use Confucius’s Analects to justify profit-seeking activities and to give moral foundation to organized business. Like Shibusawa, Itō sought to contribute to the broader society through economic activities. In addition to his family business, Itō helped the development of infrastructure in his region. Chapter 20 discusses the thought of Mutō Sanji and Tsutsumi Yasujirō, two leading businessmen of the early twentieth century. As the chief manager of the then largest private company in Japan, Mutō introduced new management methods such as Taylor’s scientific management. But he is remembered today as the initiator of “quasi-familial company” and “paternalistic management”—ideas that later came to be regarded as central to “Japanese-style management.” Tsutsumi was an innovator who proposed a new lifestyle for the emerging new middle class, offering a package

168 A History of Economic Thought in Japan of services including railroad transportation, suburban real estate development, and department stores and amusement parks as weekend leisure spots. While Tsutsumi’s business model intimated the rise of a more consumerist and private-oriented mass public, he continued to justify his business activities as an expression of his “gratitude” toward the country and the society. In all cases, we can discern the influence of the idea of occupational duty, coupled with the idea of contribution to the nation. Like intellectuals, Japanese businessmen of the Meiji era committed themselves to the task of advancing national interest, while building their ideas on the organic view of society bequeathed from the Tokugawa era.

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18.1  The Emergence of Modern Enterprises in Japan The fiscal and monetary policies implemented by Matsukata Masayoshi in the 1880s caused a severe deflation (16.5) and inflicted much economic pain, especially in the countryside. On the other hand, Matsukata’s policies ended the inflation since the 1870s, improved the trade balance, and allowed Japan to establish a new currency system with silver as the specie metal. As a prominent economic historian noted, “‹i›f the Satsuma Rebellion marked the end of the period of Restoration in the political-military sense, then it was Matsukata’s deflationary policy that put an end to the period of economic turmoil, and opened up new vistas for the modern era” (Nakamura, T. 1985, 7). Indeed, starting in the 1880s, Japan’s economy was launched on a trajectory of sustained economic growth. One of the key characteristics of economic development in Meiji Japan was parallel, simultaneous growth of indigenous industries (such as silk-spinning and teaprocessing industries) that had spread to various regions since the Tokugawa era, and of new industries transplanted from the West. This process of industrial growth was accompanied by rapid development in entrepreneurial activities. In the transplanted industries, firms often took the form of joint-stock companies due to the need for a large amount of capital investment. By contrast, the development of indigenous industries was led by small and medium firms, mostly in the regions (Nakamura, T. 1985, 177–85). Until the beginning of the twentieth century, the indigenous industrial sector was far bigger than the new, transplanted industrial sector in the value of output, and in the number of workers. In terms of industrial organization, it is well known that zaibatsu 財閥, or conglomerates under the control of a single family, played a significant role in modern Japan’s industrial development. Dating back in some cases to the Tokugawa era,1 zaibatsu conglomerates grew into expansive industrial/financial empires from the Meiji era, and they came to dominate the Japanese economy in the early twentieth century, only to be disbanded after the Second World War as part of occupation reforms. But zaibatsu were not the only important corporate groups in modern Japan. Corporate groups not owned by a single family were also significant. Both in major cities and in the regions, Mitsui and Sumitomo are two zaibatsu dating back to the Tokugawa era. Other groups arose in the Meiji era or later. While the best-known zaibatsu were headquartered in Tokyo or Osaka, they emerged not only in major cities but also in regions across Japan.

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it was common for landowners and merchants to form groups, to pool their capital, and to start new companies. In many cases, these groups of businessmen joined to form multiple new companies. Such business networks propelled the development of industry in the regions and covered entire Japan. They made a significant contribution to the overall growth of the Japanese economy (Suzuki, Kobayakawa, and Wada 2009). This chapter focuses on the activities and ideas of regional entrepreneurs and businessmen who, having received higher education in major cities, returned home to engage in business and entrepreneurship, often through participation in such regional business networks. These men sought to build their family assets, and to do their share in contributing to the welfare of their regions. But they did not stop there. They embarked on risky new ventures for the advancement of their region. What explains this risktaking behavior? Few sources remain to help us answer this question, for these people were men of practice who left no systematic exposition of their thought. Nevertheless, it is possible to discern the meaning of their actions and the ideas behind them, if we weave together evidences including their writings, their educational background and activities, and the social and intellectual environment that surrounded them. We will first take a general look at the role that higher education played in the rise of business and entrepreneurship in the Meiji era (18.2). We will see that many sons of well-to-do provincial families attended colleges in Tokyo and then returned home to engage in business activities (18.3). In the last section, we will discuss the activities and ideas of these regional businessmen (18.4).

18.2  Higher Education and the Rise of Modern Enterprises In this section, we will briefly survey the role that college graduates played in the rise of business and entrepreneurial activities in Japan since the 1880s. Obviously, business and entrepreneurship in modern Japan were not a monopoly of college graduates. In 1915, only 1 percent of the college-age cohort in Japan attended institutions of higher education. By 1935, the figure had only increased to 3 percent (Mombushō chōsakyoku 1962, Table 10). Although it is quite possible that college graduates were more likely to engage in such activities than were non-college graduates, there is no doubt that the major portion of entrepreneurial activities in Japan up to the mid-twentieth century was undertaken by those without higher education. Nonetheless, institutions of higher education played an important role in producing leaders who pushed forward Japan’s industrialization. First, institutions of higher education provided large corporations with a class of professional managers. This was not true in the initial period of modern Japan’s entrepreneurial development, when the founder or the owner of the company tended to serve as the chief manager. Rising to prominence in a revolutionary era, such business leaders typically lacked higher education, at least in the modern sense.2 During this Examples include Iwasaki Yatarō 岩崎弥太郎 (1835–85), the first president of Mitsubishi Corporation (and of the Mitsubishi conglomerate), and Fujita Denzaburō 藤田伝三郎 (1841– 1912), a prominent leader of the business world in the Kansai region.

2

 Higher Education and Entrepreneurship 171 period, it was common for big shareholders to sit on the board of directors of multiple corporations. While they were interested in their reward and dividends, they often lacked expertise in company management. By the beginning of the twentieth century, however, major corporations began to rely on professional managers, or employees who are put in charge of company management. At the same time, some institutions of higher education began to focus explicitly on the education of business leaders. A well-known example is Tokyo Higher School of Commerce (Hitotsubashi University), where the idea of educating “captains of industry” was adopted as the school motto from the writings of the Scottish historian Thomas Carlyle (1795–1881) (Kuga 1997). Second, a numerically more significant contribution was made by colleges and universities in providing education to those who succeeded to family businesses, or started new ones, often in the regions. Leaving the discussion of college graduates in family business for the moment, here let us examine the contribution of colleges and universities to the education of professional managers. Leading representatives of such hired managers for Mitsubishi and Mitsui zaibatsu conglomerates are listed in Table 18.1. The table clearly shows that many of the professional managers were college graduates. But the number of professional managers was quite small during the Meiji era. Until new firms in the heavy and chemical industries were founded in the 1920s, the number of companies that employed college graduates was small. Only a small portion of college graduates could find jobs in major business firms (Chūō kyōiku shingikai 2001). Thus, a more significant contribution of higher education during this period was in educating managers and entrepreneurs of small- and medium-sized companies. Such companies were mostly located in the regions, and were often managed by their founder or the current owner, most of whom lacked a college education. But there were cases in which college graduates who returned from their studies were appointed as managers of such companies (Ishii 2004, 312). As time passed, college graduates began to play an increasingly important role in the management of both big corporations and small- and medium-sized firms in the regions.

18.3  Sons of Wealthy Provincial Families in Higher Education Most college graduates who engaged in industrial activities in the regions came from wealthy provincial families. They were often the sons of landowners or merchants, and they returned home, having absorbed new knowledge in Tokyo. During the Meiji era, institutions of higher education were concentrated in Tokyo. As late as the early twentieth century, 80 to 90 percent of college students attended schools in Tokyo (Amano 1989, 191, 253). Among institutions of higher education, private colleges constituted the majority both in the number of institutions and in the number of students enrolled. At the beginning of the Meiji era, students who entered private colleges tended to be the

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Table 18.1  Prominent Hired Managers at Mitsubishi and Mitsui Groups Company Group Name

Mitsubishi

Mitsui

Birth / Death

Education

Major Positions Occupied Director, Mitsubishi Holding Co.

1852–1895

Keiō Gijuku (hereafter Keiō) Keiō

1852–1920

Keiō

Department Head, Mitsubishi Bank

1849–1918 1856–1947

Keiō Keiō

President, Ōji paper Co. President, The Bank of Japan

1848–1921

Keiō, Daigaku nankō University of Tokyo University of Tokyo University of Tokyo

President, Nippon Yūsen Co.

Shōda Heigorō

1847–1922

Yoshikawa Taijirō Toyokawa Ryōhei Asabuki Eiji Yamamoto Tatsuo Kondō Rempei Suenobu Michinari Katō Takaaki Isono Hakaru

1858–1897

Masuda Takashi

1848–1938

Komuro Sankichi

1863–1920

Fukui Kikusaburō Dan Takuma

1866–1946

Hayakawa Senkichirō Nakamigawa Hikojirō Fujiyama Raita Mutō Sanji Wada Toyoji Ikeda Shigeaki

1863–1922

Hibi Ōsuke Fujiwara Ginjirō Kobayashi Ichizō

1855–1932 1860–1926

1858–1932

President, Nippon Yūsen Co.

President, Tokyo Marine & Fire Insurance Vice President, Mitsubishi Co./ Prime Minister Director, Receiving Station at Kōbe Port, Mitsubishi Mail Steamship Co. Later founded Meidi-Ya Grocery Chain

J.C. Hepburn’s President, Mitsui & Co. Private School Shōhō kōshūjo Director, Mitsui & Co. (Commerce Training School) Shōhō kōshūjo Director, Mitsui Gōmei Co.

1854–1901

Massachusetts President, Mitsui Gōmei Co. Institute of Technology Tokyo Imperial Managing Director, Mitsui Bank University Keiō Councilor, Mitsui Ōmotokata

1863–1938

Keiō

1867–1934 1861–1924 1867–1950

Keiō Keiō Keiō

1860–1931 1869–1960

Keiō Keiō

1873–1957

Keiō

Source: Miyamoto et al. (1998, 109–10).

Managing Director, Ōji paper Co., President, Dai-Nippon Sugar, Co. President, Kanegafuchi Spinning Co. President, Fuji Gas Spinning Co. President, the Bank of Japan / Minister of Finance President, Mitsui Draper’s Shop President, Ōji paper Co. Head, Research Division, Tokyo Headquarters, Mitsui Bank. Later established the Hankyū Group

 Higher Education and Entrepreneurship 173 sons of former samurai. But as the higher education boom spread since the 1870s, sons of landlords, of rich merchants, and of industrialists from the regions came to constitute the majority of students. Tuition at private colleges was too expensive for less wealthy families, so it was natural that sons of rich families became numerically dominant.3 Private colleges during this period may be classified into three categories based on the type of education they provided. Institutions belonging to the first type consisted of multiple departments and were private versions of national universities. Keiō Gijuku and Tokyo Semmon Gakkō (later Waseda University) exemplify this category. The second category comprised private schools of law, which specialized in educating middle- and low-ranking government officials.4 The third category of schools provided religiously oriented education.5 Religiously oriented colleges aside, private colleges generally had lower admission criteria and served a wider group of students. Table 18.2 shows the occupational distribution of the graduates of major colleges and universities around 1902. Note that the data are incomplete, since there are many whose occupation was unknown, and that the data for different schools are not necessarily from the same year. The data show that among private colleges, Keiō had by far the largest percentage of graduates working in “industries,” presumably meaning business firms. At that time, government jobs were the domain of the graduates of the Imperial Universities (in Tokyo and Kyoto) and of private schools of law. It was not easy for Keiō graduates to get a position in the government, which amplified the tendency of the graduates to seek jobs in the business world. But as already noted, few college graduates before the 1920s received employment in managerial positions of large companies. In fact, it is possible that the graduates who are listed as working in “industries” included those who started their own companies. In all probability, a majority of the graduates, including some who were listed as working in “industries,” succeeded to their family business or started their new companies. And this is not limited to graduates of Keiō. For instance, according to an alternative source of information, the 42.2 percent of Tokyo Semmon Gakkō graduates listed in Table 18.2 as “no data” actually included “many who go back home to succeed to their family business” (Waseda daigaku daigakushi henshūjo 1978, 1029). What is certain is that there were many sons of wealthy provincial families who, after attending private colleges in Tokyo, returned to their home regions. They did so because they had the chance to establish themselves by carrying on their family business in their home region. Also, it was often the wish of their parents that they would return home and succeed to the family business.

As of the early 1890s, the annual tuition for private colleges was 30 yen for Keiō, 19 yen for Tokyo Semmon Gakkō, and 10 yen for Meiji Hōritsu Gakkō (Amano 1992, 82). Around the same time (in 1891), male workers in manufacturing industries typically received only 50 to 80 yen per annum (Kanda 2010, 71; Mizutani 1999, 73). 4 Examples of this type included Meiji Hōritsu Gakkō (today’s Meiji University) and Wafutsu Hōritsu Gakkō (Hōsei University). 5 Examples of this type included J. C. Hepburn’s private school (Meiji Gakuin University) and Rikkyō Gakkō (Rikkyo University). 3

Table 18.2  Occupational Distribution Percentage of Graduates of Private/Public Colleges*

Institution Type Education Government Industries Professions Self-Employed Politics Others No Data Total Number of Graduates

Keiō Gijuku

Tokyo Semmon

Meiji Hōritsu

Wafutsu Hōritsu

Tokyo Imperial University

Private 7.9 3.4 35.3 4.4 26.0 1.1 21.9 100.0 1630

Private 7.7 16.5 11.5 12.8 5.7 3.6 42.2 100.0 2581

Private 38.1 9.2 18.6 4.3 2.8 27.0 100.0 2673

Private 0.6 21.2 6.5 1.3 0.5 59.9 100.0 665

National 24.2 46.7 16.9 8.7 2.8 0.3 0.4 100.0 3485

* Source: Excerpted from Amano (1989), 378–9, Tables 8-7, 8-8.

Tokyo Higher School of Commerce National 12.1 8.6 73.0 0.6 5.7 100.0 521

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18.4  Economic Thought and Activities of Regional Entrepreneurs What, then, were the characteristic features of the ideas of regional entrepreneurs in the Meiji era? What was the impact of higher education on their ideas? Because many of these regional entrepreneurs came from well-to-do families and inherited the family assets and businesses, one of their first priorities was to ensure the continued prosperity of the family. The following excerpt from the diary of a regional entrepreneur clearly indicates this point: I have been lucky to be born in a middle-class family, to succeed to some property, and to obtain some education. Nevertheless, I am not at all satisfied yet. So what do I need to do? First, I need to cultivate my own character; second I need to increase and multiply the family assets inherited from my forebears; and third, I need to broaden my knowledge, deepen my thoughts, to excel in writing, to improve my capacity for judgment, and to apply these skills in my undertakings. (Katō [1882?])

The quoted passage is an excerpt from the diary of Katō Rokuzō 加藤六蔵 (1858– 1909). Katō was born in Maeshiba Village, Hoi County, Mikawa Province, in a family of a major landowner with interests in soy-source brewing and sericulture. Having studied at Keiō Gijuku between 1875 and 1879, he returned home to succeed to the family business. For Katō, building his family’s assets was a priority in his activities. But regional entrepreneurs like him often had broader objectives, which had to do with contributing to their own region and to the nation through the performance of occupational duty. In a sense, the whole passage may be read as a modern adaptation of the classic Confucian idea that a ruler should begin by “cultivating one’s own character,” and then proceed to the bigger tasks of ordering the household, governing the country, and pacifying the realm under Heaven.6 Likewise, Katō thought he should begin by cultivating his character, and by properly managing his family business. But he sought to go beyond ordering his household by applying new skills to undertakings that would benefit the broader society. Katō was involved in the founding of a number of public institutions and business enterprises, including schools, banks, a local chamber of commerce, a commodity market for rice and wheat, and in the planning for the building of railroad lines. He was also active in politics, serving as a local assemblyman as well as a member of the Imperial Diet (1890–4, 1898–1902) (Ishii 2004). In a collection of short biographies of business persons entitled Jitsugyō jinketsu den (Biographies of Prominent Business Persons) published in 1895–8, short biographies of 408 business persons, including Katō, are compiled (Hirota, S. 1895–8). Of the 408 people listed, 81 were born between 1862 and 1871. Among them, 21 were those who returned to their home regions after studying in Tokyo. According to the biographies, all of these 21 people, in addition to continuing their family business, See Chapter 3, n. 10.

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founded and managed companies in newly transplanted industries such as banking and railroad—fields related to the infrastructure of the entire economy. That a number of new companies were founded across Japan during the late 1880s certainly had something to do with the activities of those who returned home after studying in Tokyo. Many formed local networks of entrepreneurs and helped establish a number of companies. In addition, these regional entrepreneurs often contributed funds for building local schools and served as local assemblymen. These men made their home region the base of their economic, social, and political activities. This was because they felt that their home region provided the best platform on which they could attain social and political status as well as economic gain (Tanimoto 2003, 259–60). In the villages of the Tokugawa era, the social norm became widespread which held that each person (or family) should make his own share of contribution to common village projects depending on their wealth. The ways these sons of well-to-do local families acted in their home region may perhaps be seen as a modern incarnation of the same phenomenon (Sakane 2011, 135–6). Yet, regional entrepreneurs with higher education did more than just continue their family business and do their share of duty for their own region. In the early stage of industrialization, starting new companies in transplanted industries involved considerable risk, because they were based on unfamiliar, imported knowledge and technology. Given such risk, one would expect that many would simply continue their inherited family business. Yet, many sons of well-to-do local families embarked on new industries. One explanation for such behavior is that these entrepreneurs wished to contribute to the development of society and of the nation as a whole. For many sons of rich provincial families, the purpose of studying in big cities was to acquire Western-style education (Hirota, T. 2004, 147, 151). Studying in big cities, these scions of wealthy regional families must have opened their eyes to developments in the world, and felt the need to modernize the country and their region. The education they received exposed them to new trends in politics, in society, in economy, and in technology. It must also have helped them in the task of establishing and leading new industries and public enterprises. It was perhaps for this reason that such people were often put in charge of company management, even though they were usually not the largest shareholders. One of the regional entrepreneurs who brought new ideas back to their native region was Kogure Budayū 木暮武太夫 (1860–1926), who was born in an inn-keeper’s family at the Ikaho Hot Springs in Gumma Prefecture. Rather than simply carrying on with his family business, Kogure built gardens that could be enjoyed by visitors and sought to transform Ikaho into a more integrated hot spring resort after the Western model. He did so because he felt that this would help develop Ikaho both economically and culturally (Ishii 2007). Another example is Kawakami Zembē 川上善兵衛 (1868–1944), who was a big landowner in Takashi Village, Nakakubiki County, Niigata Prefecture. Zembē’s region was traditionally characterized by rice monoculture, and hence was subject to the vagaries of rice harvest and prices. To help the farmers in his region, he picked up wine making as a way to supplement the income of local farmers, and established the

 Higher Education and Entrepreneurship 177 Iwanohara Vineyard, which continues to operate today as one of Japan’s oldest wineries (Kijima 1991). In our third example, the case of Shimomura Kamesaburō 下村亀三郎 (1867– 1913), the idea of contribution to the local community was linked explicitly to enhancing Japan’s national interest: Raw silk produced in our country is second to none in terms of its natural quality, far surpassing the products of France or Italy. Yet, in the markets of Europe and the US, silk from those countries have a higher reputation. Why is this? This is simply because silk-spinning in Japan is not yet developed. We do not apply the results of academic research to the production process, as a result of which we produce silk threads which are either of low or uneven quality. This is not only a disadvantage to individual producers, but also a damage to the country as a whole . . . Although sericulture developed early in our county . . . when it comes to silk-spinning . . . no initiative is taken for its improvement, and we are mass-producing low quality or uneven products. For this reason, though our county ranks near the top in the country in terms of production volume, the call “rejected!” reverberates in the Yokohama Silk Market. The larger our production volume grows, the wider our bad reputation spreads . . . That is why we are attempting to improve silk-spinning by introducing steam-powered spinning machines. (Shimomura 1889, 33–4)

Shimomura, who penned the diary entry just quoted, was born the eldest son of a middling farming family in Kami-Maruko Village, Chiisagata County, Shinano Province. Although his family was not too wealthy, he was able to enter Keiō Gijuku with the help of the principal of the elementary school he attended. After studying for about a year at Keiō in 1885, he returned home. In 1889, he established the first machinespinning factory in the area. A year later, he founded a silk-spinning company called Yoda-sha (today’s Shinano Kenshi Co. Ltd.). Yoda-sha produced quality silk thread and grew bigger, occupying the ninth position in Japan in 1909 in terms of the amount of silk thread marketed, rising to the fourth position by 1913. In addition to Yoda-sha, Shimomura was involved in a number of local enterprises, including a gas company, a light railroad, a hospital, and a school of agriculture and commerce. Besides, he also served as a local assemblyman, and as the headman of Maruko Village (Ishii 2003). During this period, silk yarn was Japan’s most important export product, along with cotton yarn. Thus, Shimomura considered the unevenness or low quality of silk yarn “a damage to the country as a whole.” Entrepreneurial activities were closely linked to the interest of his own region as well as to Japan’s national interest. And in advancing those interests he found the meaning of his activities (Ueda Shiritsu Maruko Kyōdo Hakubutsukan 2008). *****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​ Katō, Kogure, Kawakami, and Shimomura are just four samples from a large number of entrepreneurs who were active across various regions of Japan. Influenced by the notion

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of occupational duty, college-educated regional entrepreneurs continued their family businesses, and sought to contribute their share to the benefit of their own region and to Japan as a whole. Moreover, inspired by new ideas they had absorbed in big cities, regional entrepreneurs took it for granted that the interest of their own region and of Japan as a whole consisted in achieving wealth and power through the building of modern industries. By infusing new ideas and energy into traditional industries, by building modern infrastructure in the regions, and by starting new industries, regional entrepreneurs made a very significant contribution to Japan’s economic modernization.

19

Organizers of Entrepreneurial Activities

In Japan of the late nineteenth and early twentieth centuries, few persons were wealthy enough to invest a huge amount of money in business ventures. In such an environment, pooling of investment and joint management were necessities. For this purpose, business networks and organized entrepreneurial activities played an important role (Nakagawa 1967, 13). As one economic historian explained, “in contrast to the enormity of . . . entrepreneurial opportunities . . . there seems to have been a scarcity of suitable management resources (such as capital and entrepreneurial skills) .  .  . ‹Therefore› businessmen had to cooperate with one another to use scarce resources effectively, and the situation inevitably required ‘organized entrepreneurship’” (Miyamoto 2017, 78). This chapter discusses two leading figures in the construction of business networks and organized entrepreneurial activities—Shibusawa Eiichi 渋沢栄一 (1840–1931), and Itō Yōzō 伊東要蔵 (1864–1934). Shibusawa played a leading role in the founding and management of major corporations in the transplanted industries in big cities. In his lifetime, Shibusawa was involved in the establishment of more than 500 companies, which earned him the unofficial title of “the father of Japanese capitalism.” By contrast, Itō founded small- and medium-sized firms in the imported industries of railroad and banking in his home province of Tōtōmi, while basing his activity on the management of farmland. While the two differed in the geographical scope and the sheer scale of their business activities, Shibusawa and Itō were similar in that both built extensive networks of businessmen, and mobilized them to launch a number of public and private ventures, seeking to contribute to the benefit of the society and of the country. The two were also similar in that, although they sought to introduce modern industry to Japan, they formed their ideas on the basis of indigenous thought.

19.1  Shibusawa Eiichi 19.1.1  Background and Career Shibusawa was born the eldest son of a rich farmer in Chiaraijima Village, Hanzawa County, Musashi Province. His family engaged in sericulture and in the production and distribution of indigo dye, in addition to growing rice, wheat, and vegetables. In his childhood, Shibusawa studied Confucianism, and also made frequent travels

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to neighboring provinces for indigo business. By his late teens, Shibusawa became convinced of the injustice of the rule of the shogunate, and he went to Edo and later to Kyoto to participate in the Restoration movement. Once in Kyoto, however, Shibusawa ended up serving Hitotsubashi Yoshinobu 一橋慶喜 (1837–1913) through the recommendation of one of Yoshinobu’s retainers. Hitotsubashi family was a branch of the Tokugawa family, and Yoshinobu became the last shogun as Tokugawa Yoshinobu in 1867. This gave Shibusawa the chance to visit France on the occasion of the Paris World Exhibition of the same year, and to stay there for two years. Returning to Japan after the Restoration, Shibusawa established a new company called Shōhō kaisho.1 But soon after, he joined the Ministry of Finance, where he was involved in the drafting of the National Bank Act. While at the Ministry, he also published in 1871 Ryūkai ryakusoku, a pamphlet designed to inform the public of the system of joint-stock corporation. In 1873, he quit the Ministry to become the president of the First National Bank (today’s Mizuho bank). Since then, Shibusawa worked in the business world, and was involved in the founding and management of more than 500 corporations, including today’s IHI (Ishikawajima-Harima Heavy Industries), Isuzu Motors, Sapporo Beer, Tokyo Gas, Ōji Paper Co., Osaka Spinning Co. (today’s Toyobo Co.), and the Imperial Hotel. In addition, he was involved in a broad range (more than 400 instances) of social and educational activities, including financial assistance to Japan Women’s University and to Waseda University. He was also a patron of the arts and played a role in Japan’s diplomacy as well. In order to improve US-Japan relations, Shibusawa visited the United States multiple times and met with influential figures, including Presidents Theodore Roosevelt, William Taft, Woodrow Wilson, and Warren Harding (Kimura 1991).

19.1.2  The State and the Occupational Duty of Entrepreneurs Shibusawa was an extraordinarily successful entrepreneur, who launched a large number of business and public ventures. He firmly believed that businessmen have an obligation to society that has public significance. For him, businessmen should pursue private gains that would at the same time promote common weal (kōeki 公益). They should contribute to society through the performance of their occupational duty: To engage in commerce is of course something that one undertakes for his own benefit. But it would be a big mistake to think that commerce is just for one’s own benefit . . . The occupational duty involved in commercial activities is thoroughly public in nature .  .  . Here, private gains and common weal are merged in one. Common weal will foster private gains, and vice versa. Private gains that do not generate common weal cannot be called gains in the true sense of the word . . . Those who engage in commercial activities should correctly understand what I have said and should pursue the sort of private gains that would generate common weal. This is the way to bring about not only prosperity to oneself and one’s own

Shōhō kaisho engaged in money lending and dealt in fertilizers as well as rice.

1

 Organizers of Entrepreneurial Activities 181 family, but also wealth to the country, and peace to the society. (Shibusawa 1913, 173, 176)

The breadth of Shibusawa’s activities reflects his sense of occupational duty, which encompassed any activity that would contribute to the nation-state. For him, “whether one is a civilian official, a military personnel, a lawyer, or an educator, or a merchant, everyone should be the same when it comes to love of country and loyalty to the monarch” (Shibusawa 1913, 93). Shokubun is a term that originated at a time when the people were divided into different estates/status groups (mibun 身分). But here, it is understood as one’s duty to contribute to the nation-state, regardless of one’s ascriptive traits. From his attempt to unite private gains and common weal, and from the notion that personal prosperity and national wealth are inseparable, we can see that for Shibusawa, the person, the family, and the country constituted one continuous whole. This mode of thinking is clearly a continuation of Confucian ideas (see 15.3).2 The central criterion of judgment in Shibusawa’s thinking and actions was the prosperity of the country. Against the long-prevalent notion that pursuit of private gains was something morally questionable, Shibusawa asserted that pursuit of profit could make a positive contribution to society. Indeed, he gave moral justification to business activities by claiming that private gains were necessary for the realization of morality. But Shibusawa did not approve of relentless pursuit of profit by any means. On the contrary, he very much cared about the ethical aspects of business. He held that business should be conducted by moral means, and that using moral means contributes to achieving profit. By calling upon businessmen to conduct themselves in an upright manner, Shibusawa sought to strengthen business ethics and to change the traditional, negative image about merchants and their activities. Japan since the early modern era had a strong tradition of belittling the merchant class (Kenjō 2008, 187). By calling upon the new class of merchants and industrialists to act morally, and in conformity with public interest, Shibusawa sought to change such a stereotype.

19.1.3  The Analects as a Means of Attaining Wealth Shibusawa’s thinking on economic questions was not limited to the problem of the occupational duty of businessmen. He was also interested in the moral foundations of organized business. Shibusawa did not believe that profit motive alone would provide a sufficient basis for organizing large-scale companies. Organized business activities required a strong moral basis. Shibusawa found such a basis in the teachings of Confucius. In his lecture Dōtoku keizai gōitsusetsu（On the Unity of Morality and Economy）delivered in 1923, he stated:

Shibusawa’s goal of “bringing prosperity to oneself and one’s family, wealth to the country, and peace to the society” resonates with the Confucian ideal of “cultivating one’s character, ordering the household, governing the country, and pacifying the realm under Heaven” in its progression from the person to the family and on to larger units. See Chapter 3, n. 10.

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If our purpose is to bring about the development of the country, then we must make the country wealthy. To attain national wealth, we must advance science and strengthen commerce and industry. The development of commerce and industry in turn requires combined forms of organization. But if we are to run a business based on combined forms of organization, then, we must stand upon strong moral foundation. But what sort of standard should we adopt? There is no better choice than to stick to the teachings of Confucius and to take the Analects as the standard. So I decided to run my business based on the principle of the Analects. In the past, scholars commenting on the Analects have clearly separated production and profit-making from the ethics of benevolence and righteousness. But this is a mistake. These two things can certainly go together. (Shibusawa 1937, 308)

The passage just quoted contains key elements from Shibusawa’s ideas on the inseparability of economics and ethics, or the compatibility of the Analects and the abacus, which he propagated after retiring from the business world. Shibusawa’s reference to the Analects in this connection is based at least in part on his “misunderstanding” of a passage contained in the Analects. In his own work Rongo kōgi (Lectures on the Analects), Shibusawa wrote, partly quoting from the classic text, “if one brings wealth to the people as a whole and saves them, that is the essence of good government.”3 While Confucius’s teaching concerned how rulers should act, Shibusawa interpreted the passage as being directed toward businesspeople. Whoever can bring wealth to the people and save them is in a position to contribute to good government. And because “wealth legitimately obtained is by no means to be despised” (Shibusawa 1925, Volume 1, Book 2, 57), for him, “the ethics of benevolence and righteousness” was compatible with “production and profit-making.” Not only that, it was the duty of the Japanese subjects to make them compatible for the purpose of the state (Tanaka, K. 2014, 45–7; Sakamoto, S. 2002, 214). Shibusawa clarified that by “the ethics of benevolence and righteousness,” he meant not only business ethics but broader moral norms which must be observed by human beings. Shibusawa was by no means the only thinker to argue for the compatibility of ethics and profit. For instance, Ishida Baigan made an argument similar to Shibusawa’s point (see 9.2.3). Yet, Shibusawa went beyond Baigan in claiming strong legitimacy for commercial and business activities. While Baigan simply claimed the indispensability of merchants to society, Shibusawa was implying that merchants and businessmen, by bringing prosperity to the country, could become the main contributors to benevolent government. Another reason why Shibusawa referred to the Analects was that it was a widely read text. In trying to organize combined forms of business organization, he needed a common language that could link businessmen of old and new generations. The Analects was perfect for this purpose. This is not to say that Shibusawa was not interested in spreading moral norms contained in the classic text. But what was more important for him was that the Analects could bring together different people and Shibusawa (1925, Volume 1, Book 3, 107). In the original text in the Analects, Confucius’s disciple asks the master if bringing wealth to the people as a whole and saving them is worth being described as benevolence. Confucius answers that such a feat goes beyond benevolence, and is worthy of the sages.

3

 Organizers of Entrepreneurial Activities 183 serve as the foundation of their cooperation in joint-stock enterprises (Shimada, M. 2014, 12–13). In other words, Shibusawa treated Confucian teachings as an instrument to motivate people for the bigger purpose of Japan’s economic development. In this sense, Shibusawa imagined the relationship between the economy and morality somewhat differently from the way many thinkers did in the Tokugawa era. While Tokugawa-era thinkers tended to treat the economy as a means for building a moral society, Shibusawa sought to use moral teachings as a means of advancing the nation’s economy—though he considered contribution to national prosperity a moral duty of the Japanese.

19.2  Itō Yōzō 19.2.1  Background and Career Itō Yōzō may be characterized as a provincial version of Shibusawa who lived a generation later. Yōzō was born as the third son of the Yamada family, a large landowner in Tsuzuki Village, near the town of Hamamatsu in Fuchi County, Tōtōmi Province. After finishing middle school, Yōzō studied at Keiō Gijuku from 1879 to 1881, completing his studies at the top of his class. Upon graduation, Yōzō became an instructor at the Mita Eigakkō (Mita School of English Studies), which was affiliated with Keiō. In 1882, he shifted to teaching at Keiō Gijuku before becoming an instructor (and later head instructor) at the Osaka shōgyō kōshūjo (today’s Osaka City University) in 1883 (Matsuzaki 2001, 5–8). In the same year, he became an adopted son of Itō Isoheiji 伊東磯平治 (1832– 1901), a large landowner in Nakagawa Village, Inasa County, in his native Tōtōmi Province, where he returned in 1884. From 1889 onward, he succeeded to the responsibility of running the business of his adoptive family. During the first dozen years in that role, Yōzō concentrated on the main business interests of the Itō family (which were agriculture, sericulture, and money lending), although he also sought to contribute to his region through the development of education. After the passing of Isoheiji in 1901, Yōzō succeeded to other business interests in which Isoheiji was involved (including banking and storage/transport). Yōzō also began to participate in new business and public ventures. These new ventures included the Inasa School of Agriculture (established in 1902), Hamamatsu Gas Co. (1910), Hamamatsu Railroad Co. (1912), and the Hamamatsu Commercial Bank (1922). Furthermore, he was involved in educational development and in land improvement projects. In all these business and public ventures, the revenue from the family’s landholdings served as the seed money (Ishii 2013, 294). Yōzō also played a role in the management of companies beyond his own region. He served as an auditor for the Fuji Gas Spinning Co, and as a director for the Fuji Electric Power Co.4 Finally, he served as a municipal and prefectural assemblyman, and later as a member of the Imperial Diet (1909–14). T h ese companies were based in the neighboring Suruga Province, though Suruga and his native Tōtōmi Provinces became part of the Shizuoka Prefecture in 1876.

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As the head of a local notable family, Yōzō stood at the center of business networks in his region. He led the effort to establish the Inasa School of Agriculture, securing the help of other notables in the region to accomplish this objective. Through business interests inherited from Isoheiji, including Hamamatsu Storage and Transport Co., and Hamamatsu Credit Bank, Yōzō formed personal ties with other businessmen in the region. It is worth noting that many people who worked with him in the Hamamatsu Storage and Transport Company also participated in the later founding of Hamamatsu Gas as well as Hamamatsu Railroad Co. (Mishina 2014, 184). In this manner, local businessmen in Hamamatsu formed a network, and together they helped advance the development of infrastructure and industry in the region. In particular, Yōzō participated in the Hamamatsu Railroad Co. from the initial stage as a major investor, and served as its president from its founding in 1912 until 1931.

19.2.2  Yōzō’s View on Human Beings and Society When Yōzō succeeded to the responsibility of running the business of his adoptive family, he signed a contract with his adoptive father, specifying how he was to manage the family business. The following passage is an excerpt from a memorandum written by Yōzō in preparation for this contract. Everything quoted here was reflected in the actual contract. The notion that the assets should be managed as the assets of the Itō family, and should not be appropriated for private use is something that I am most impressed with and most strongly support .  .  . I shall manage the family assets just as a company manager deals with the firm’s business . . . and clarify what is profitable and what is not . . . Yet, at the same time . . . if a person lacks his own property, then he lacks rights and freedom, and that is something difficult for anyone to bear as a matter of sentiment. If the situation is intolerable for a person, he will not be able to do his job properly. Therefore, I ask that I should be allowed to appropriate for private use 3 percent of the net earnings that accrue from the assets under management as a bonus . . . This way, we will achieve a balance; on the one hand, I shall manage the assets with exactitude as family assets, while on the other hand, I shall enjoy my own private income. And this will also be in conformity with the instructions you ‹Isoheiji› laid out, which I should take as the basic law of the family. (Itō, Y. 1889)

What is most striking in this memorandum is perhaps the businesslike character of the envisioned contract. Though Yōzō was adopted into the family as a son (and therefore as the heir), he was expected to manage the family assets as if he were a hired employee, and he unquestioningly accepted this basic principle. This may seem surprising to some readers, who might imagine traditional Japanese families as closeknit communal units with no room for contractual relationships. Yet, Yōzō’s contract with his adoptive father was not a unique case.

 Organizers of Entrepreneurial Activities 185 Until the first half of the twentieth century (and, in some cases, to this very day), family relations in Japan were under the strong influence of the idea of ie (meaning household, house, or family). Ie connoted a management unit whose central purpose was to perpetuate itself (with its own occupation and family assets) according to a linear and patrilineal succession line. While ie-type organization originated among noble and samurai families, by the middle of the Tokugawa era, it had spread to merchant as well as peasant families. Although the idea of ie emphasized kinship-based succession from the father to the son, ie was also an organization that prioritized its functionality and long-term continuity over biological kinship. Partly for this reason, the practice of adoption of male heirs became very common in Japan (Hirayama 1995, 1–44). It has been estimated that in the Tokugawa and early Meiji periods, at least 25 percent of all Japanese males were adopted into another family (Yuzawa 1983; Watanabe 2010, 74). Yōzō’s adoptive father was himself an adopted son who was born outside the Itō family (Ishii 2016, 263). Adoption was usually effected through the signing of a formal adoption agreement, which often made concrete provisions for dowry, inheritance, and so on (Guan 2005, 246–90). Against this background, the terms of the agreement between Yōzō and Isoheiji become less surprising than they might at first appear. The agreement between Yōzō and Isoheiji had a businesslike, contractual character. But this is not to say that Yōzō accepted an individualistic view of society. True, he demanded 3 percent of the net earnings as his personal bonus, and justified this demand by reference to his personal freedom and rights (both neologisms of the Meiji era). But he made the demand “as a matter of sentiment,” not of principle. Although Yōzō eagerly absorbed Western knowledge, in his perspective on human beings and society, he retained a more traditional view. This may be seen in his writing on education, which dates from the time when Yōzō served as a teacher at a private school he founded: Society is constituted by reason and emotion. The purpose of education is to teach students reason, and foster in them proper emotions .  .  . To be more specific, the study of reason and emotion is divided into three branches: physical science (yūkei rigaku), philosophy (mukei dōrigaku), and morality (dōtokushin). Physics, chemistry, zoology, physiology, botany, astronomy, etc. are branches of the physical science. Psychology, economics, politics and law constitute branches of philosophy. Good deeds including filial piety, loyalty, integrity, and patriotism, the sentiment for national interest—these do not come naturally without cultivation. To cultivate these sentiments, it is necessary first to open people’s minds with physical science and philosophy, and then impart moral sentiments. Only then can one become a fully formed person. (Itō, Y. 1885a)

As is evident from this passage, Yōzō emphasized the importance of Western knowledge. Yet, when it comes to moral education, he emphasized traditional Confucian virtues such as filial piety, loyalty, and integrity, adding “patriotism and the sentiment for national interest” on top of them. It appears that in his view on man and society, Yōzō emphasized the embeddedness of individual human beings in the context of social relations. This understanding is also expressed in the following passage:

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The reason why human beings are considered the most elevated among all animals is that they are endowed with the natural inclination to avoid solitude, or the inclination to get together in groups and to form a society. Society is a product of the most fundamental nature of human beings, and it is what qualifies humans as the most elevated of all beings. Thus, to properly foster this social nature, and to develop and to advance human society are the most important duties of human beings. (Itō, Y. 1885b)

To form a society was part of human nature—in fact, it was the most fundamental nature of human beings. There is no one who is not a member of society, and the individual human being is inextricably embedded in society. And human beings have the duty to work for the development and advancement of human society. Yōzō’s thinking was clearly based on the familiar notion of occupational duty.

19.2.3  Contributing to the Advancement of the Region and the Country Given such a view on human beings and society, it is natural that Yōzō felt that it was his responsibility to contribute to his family, region, and his country. His ready acceptance of the duty to work for the Itō family and his constant efforts to help the region’s development are cases in point. As explained previously (18.4), at least since the Tokugawa era, it was expected for wealthy local families to contribute to the welfare of the village and of the region. To some extent, Yōzō’s behavior can be understood as a continuation of this established practice (Sakane 2011, 135). But Yōzō did not merely replicate the behavior of local notables of the past generations. Comparing Yōzō’s activities with those of Isoheiji clarifies this point. As already stated, Isoheiji was involved in a variety of local business ventures. The money Isoheiji invested in these ventures no doubt came from the revenues derived from the family’s landholdings, for during the Meiji era, most of the family’s revenues came from agricultural land rent (Mishina 2017). Yet, Isoheiji kept his own investment in these ventures in an account that was kept separate from the main assets of the Itō household. Investments in new ventures such as storage and transport business involved some risks, while Isoheiji wished the main assets of the Itō household to be managed conservatively, avoiding risky investments (Ishii 2016, 267–8). As Isoheiji stated in front of his relatives in 1896: When I joined this household ‹at the age of 33›, my thoughts were directed toward two things—Giving comfort to my adoptive parents by succeeding to this household, and managing the household efficiently so as to increase its prosperity. Now Yōzō is 33. Even if he started today, he should be able to accomplish as much as I have been able to do. It gives me great pleasure to think that I was able to create a second Isoheiji . . . I would hope that rather than attempting to expand them, the household’s business activities should be kept as they are now. Even if Yōzō does not make new plans, he should be able to build the household’s assets substantially by the time he reaches my age. What is to be feared is to commit the household’s

 Organizers of Entrepreneurial Activities 187 assets to risky ventures . . . I would like to strictly forbid my successors from doing such a thing. (Itō, I. 1896)

In fact, when Yōzō showed interest in investing the household assets in the planned construction of Kakegawa Railroad in the same year, Isoheiji did not approve of the plan. Isoheiji understood that his main responsibility was to maintain the Itō household’s assets and its main business. Contribution to the region was secondary to his responsibility to the adoptive family (Ishii 2016, 267–70). In Isoheiji, we may perhaps discern the echo of the advice given by Tokiwa Sadanao that one should avoid shifting one’s family business in search of profit (10.4). By contrast, Yōzō showed more interest in contributing to the development of his region. His activities in this field included establishing schools, promoting sericulture, and river improvement projects (Matsuzaki 2001, 25–7). Besides, unlike Isoheiji, Yōzō did not hesitate to invest the household assets in new business ventures, which involved considerable risks. While the income of the Itō family was derived mainly from the land until the first years of the twentieth century, after 1914, income from investment in securities exceeded the income from landholdings (Mishina 2017). This was a result of Yōzō’s investment in new ventures, which was carried out in line with his idea that the most important duty of human beings was “to develop and to advance human society.” As a representative of a wealthy landlord family, Yōzō must have felt a sense of duty to his region. Furthermore, as somebody who returned to his home region after embarking on an educational journey to Tokyo, Yōzō must have absorbed a strong sense of commitment to Japan and to its development.5 This sense of duty explains why he not only devoted himself to managing the family landholdings but also initiated a variety of ventures, including railroad, bank, and education, through the building of a local entrepreneurial network. *****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​*****​* Needless to say, for businessmen like Shibusawa and Itō, making profit was an important priority in their activities. But does pursuit of profit—and the presence of entrepreneurial opportunities—provide a sufficient explanation for the risk-taking behavior of these entrepreneurs? The cases of Shibusawa and Itō suggest that the behavior of these entrepreneurs was driven in part by the sense of occupational duty, and by the notion that legitimate business activity should contribute to the society as a whole. Just as in the Tokugawa era, Japanese in the Meiji era (and beyond) understood economic activities in the context of broader social and moral goals. Unlike in the Tokugawa era, however, broader social/moral goals for Meiji-era businessmen focused on service to the nation. Moreover, service to the nation was understood in terms of increasing its wealth and power. This idea led them to undertake ventures that carried inordinate risk from a purely economic standpoint.

On how such “journeys” can create new meanings and contribute to the formation of national identity, see Anderson (1991, 47–65).

5

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New Industries of the Twentieth Century

The Meiji era was a period of massive changes, during which some businessmen and entrepreneurs launched and managed a large number of companies, often in a wide variety of industries. However, by the early twentieth century, things were changing. Management of companies, especially large ones, was increasingly entrusted to professional managers with deep knowledge of the company and its business. As the statesman Ōkuma Shigenobu stated in 1910: Today, Japan’s commercial and industrial world is in a period of transition. In such a time, we need people like Shibusawa ‹Eiichi›. But it would be a disaster if younger generation of businessmen tried to imitate him. In the future, people with specialized knowledge would have to manage businesses in their specialized areas. (Waseda daigakushi henshūjo 1969, 194)

The new century brought about an altered situation in other respects as well. With the rapid increase in the number of workers, the labor movement began to emerge from the end of the nineteenth century. The first socialist party in Japan, Shakai Minshutō (The Social Democratic Party), was established in 1901, though it was disbanded only two days later. At the same time, a new urban middle class consisting of white-collar workers emerged. This chapter discusses the economic thought of Mutō Sanji 武藤山治 (1867– 1934) and Tsutsumi Yasujirō 堤康次郎 (1889–1964). These two men belonged to a new generation of business managers that came to prominence in the early twentieth century. Mutō worked as a manager and later as the president of a leading cottonspinning company. He introduced the key ideas behind what later came to be known as Japanese-style management, in a move that anticipated the rise of the labor movement. Tsutsumi astutely sensed and reacted to the new social trends of the early twentieth century, and built an extensive corporate empire linking retail, railroad, and real estate development. While the two men reacted sensitively to new trends of the twentieth century, this chapter shows that they also accepted the thinking about human beings and society bequeathed from the past.

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20.1  Mutō Sanji 20.1.1  “Japanese-Style Manager” of a Cotton-Spinning Company Mutō was born as the first son in a family that had served for generations as the village headman in Nabeta Village, Kaisai County, Owari Province. In terms of his generation and family background, Mutō was similar to Shimomura Kamesaburō (Chapter 18) and Itō Yōzō (Chapter 19). But Mutō’s path diverged from theirs after his studies in Tokyo. After finishing primary school, Mutō studied at Keiō Gijuku from 1880 to 1884. In 1885, he went to the United States to study. Being penniless, he found a job as a school boy at the University of the Pacific in San Jose, California, which allowed him to take courses while working. Returning to Japan in 1887, he established the first advertisement agency in Japan, and worked as a newspaper advertisement agent. He joined the Mitsui bank in 1893 at the invitation of Nakamigawa Hikojirō 中上川彦次郎 (1854–1901), who was a nephew of Fukuzawa Yukichi. Next year, at the age of twenty-seven, he was assigned by the Mitsui group to work as the director for one of the factories of the Kanegafuchi Spinning Co. (commonly known as Kanebō), in which the Mitsui group had invested. Mutō became a senior managing director at Kanebō in 1908, and became the president of the company in 1921. Cotton spinning was Japan’s main export industry at the time, along with silk-spinning. Between 1890 and 1910, the amount of cotton yarn export increased 136,000-fold (Miwa and Hara 2007, 77). During this period, Kanebō became the largest company in Japan in terms of sales. Apart from managing Kanebō, Mutō served as the employers’ representative in the Japanese delegation to the International Labor Conference (the first annual meeting of the International Labor Organization) held in Washington, DC in 1919. After leaving the post of the president of Kanebō in 1930, Mutō served as an adviser to the Jiji Shimpō newspaper (founded by Fukuzawa). From 1924 to 1932, he also served as a member of the House of Representatives of the Imperial Diet. Mutō is often referred to as “the founder of Japanese-style management,” based on the way he managed Kanebō. Japanese-style management denotes a set of management practices including lifetime employment, seniority system, and internal promotion system, which emerged in the 1920s as a coherent set of practices, and became widespread among major Japanese companies during the period of rapid growth in the postwar decades (Enoki 2009, 33). Although Kanebō under Mutō did not necessarily introduce these core elements of Japanese-style management, Mutō is still considered its founder because he played a key role in developing the idea of “management familism” (keiei kazokushugi), which underlies Japanese-style management. In the 1920s, with the development of heavy and chemical industries, corporate managers were faced with the need to foster new type of workers fit for the new technological environment. This, coupled with the rise of labor movement, led managers in Japan to introduce new methods of labor management inspired by Western

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management science. Mutō, too, introduced the “scientific labor management” method pioneered by the American engineer Frederick W. Taylor (1856–1915). But in doing so, he combined Western method with ideas of management familism and paternalism, and achieved favorable results (Yamamoto, C. 2013).

20.1.2  Mutō’s View on Human Beings and Society Mutō expressed his ideas on “familism” and “paternalism” on various occasions. For instance, in his memoir, Mutō stated that “‹t›he management of Kanebō Corporation is based on the familial system . . . it is permeated with the spirit of familial sympathy through and through” (Mutō, Sanji 1934, 238). A clear indication of this familism was the fact that “‹a›s the company’s profits grew, the compensation and benefits for the employees advanced to unprecedented levels, which at times aroused the criticism that they were too generous” (Mutō, Sanji 1934, 220). When reading passages like this, the skeptical reader will no doubt ask if Mutō’s references to the family represented anything more than a nice-sounding ideological cover for an essentially exploitative relationship. It is certainly true that Mutō’s familism was not something that would trump his duty as the manager of a commercial enterprise. Mutō himself acknowledged as much, as we shall see later. But his familism was not an empty rhetoric, either. In 1905, Mutō expressed his desire to “gradually perfect measures designed to enhance the happiness of the workers of our company.” By that time, he had already introduced a number of measures designed to strengthen the employee’s welfare and their sense of identification with the company. They included the opening of a nursery in the factory (1902), the establishment of a buyers’ cooperative (1903), and a mutual aid association (1905) for the benefit of the employees. Mutō also introduced a suggestion box through which employees could get rewarded for making useful suggestions to the management (1903). He also started issuing two company bulletins, partly to foster employee loyalty (Mutō, Sanji 1934, 234–5). From an early stage in his career, Mutō was convinced that managers should stay close to the factory floor. As a young factory director, he was often seen on the factory floor, wearing trousers soiled with grease from the machinery. His conviction on this point was so strong that, as the president of Kanebō, he revised the company’s articles of incorporation so as to prohibit establishing offices outside factory campuses (Matsui 2005, 41). Mutō was quite popular among the workers of Kanebō. When he quit his job as the general manager due to a disagreement with an investor who took control of a large portion of Kanebō stocks after Mitsui sold them off, the workers went on strike, demanding the return of Mutō to his position. As a result, Mutō returned to Kanebō, though not exactly in the same capacity. Mutō’s ideas and practices of familism were rooted in his view on human beings and society, which is expressed in the following passage: To collaborate in harmony is a congenital nature of human beings .  .  . In each family, there is inevitably an undisputed head. Each member of the family serves him with his or her strengths. Each member appreciates and praises each other and

 New Industries of the Twentieth Century 191 yields to each other to the maximum extent. Because of this, sentiments of envy and resentment do not arise among family members . . . Isn’t the family a beautiful example the nature has given to humanity? If we can extend relations within the family and apply it to other cases, then to collaborate in harmony should not be difficult . . . In a society where harmonious collaboration is practiced, there is no room for any selfish concerns. Within the family, each member thinks solely about the family and assists its head. Within the country, each person takes the interest of the country as the priority, assists its leader, and works together . . . In places where the relationships among people have major consequences for their lives such as big business corporations or factories, the need for harmonious collaboration is selfevident . . . Where there is harmonious collaboration, there will be improvement and progress. (Mutō, Sanji 1964, 10–11)

For Mutō, harmonious collaboration was a “congenital nature of human beings.” Harmonious collaboration implied division of labor, which binds different persons in mutually complementary relationships (Kawaguchi 2004b). It presupposed the existence of social hierarchy and emphasized the duty of individual persons to contribute to the collectivity as a condition for enjoying its benefits. Of all human groupings, the best exemplar of such cooperation was the family (or household; ie). Mutō prioritized the larger, more “public” entities over the smaller, more “private” ones. The individual person, the family (household), corporations/ factories, and the country constituted a set of concentric circles in which the smaller units had to devote themselves to the advancement of the larger units, while the larger units were supposed to take care of the smaller units. In expressing his ideas about the division of labor in society, Mutō also used the term “responsibility,” as in the following quote: As long as each of us lives in this world as a human being, we cannot avoid some responsibility. The only difference is between big and small, noble and lowly responsibilities . . . From government leaders to door-keepers and chambermaids, from presidents of companies to janitors, whether one is engaged in farming or industry, nobody is without some responsibility. Only someone who properly fulfills such responsibility may be regarded as leading a proper life as a human being. (1964, 6)

It would be difficult to find a clearer modern statement of the idea of occupational duty. Each person has the duty to perform the social function assigned to him or her, and only by performing such function does one acquire legitimacy as a person. This idea also influenced Mutō’s approach to the management of Kanebō Corporation.

20.1.3  The Occupational Duty of the “Head Clerk” Regarding his own position in Kanebō as a hired manager, Mutō stated: “This company is .  .  . a joint stock company, and I am just a head clerk (bantō) of yours (the stockholders)” (Mutō, Sanji 1964, 574). From his perspective, Kanebō was a

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fictitious family consisting of three elements: the stockholders, the employees, and the management led by the head clerk. Mutō’s duty as the head clerk was to bring about “harmonious cooperation” among them, and to bring benefit to the broader society. Mutō stated: The products . . . supplied to the society . . . by our company are the very best in Japan . . . Moreover, they are also the most affordable . . . If the goals of corporate management consist in paying the highest dividends to the stockholders, supplying the best products to society, and giving the highest compensation and benefits to the employees, then we must say that Kanebō is an exemplary company. (1964, 610–11)

Delivering the highest dividends to the stockholders and paying the highest wages to the employees—these amounted to distribution of company’s profits to all the members of the corporate “family” according to their respective positions. This, for Mutō, was the realization of “harmonious collaboration” within a corporation. In addition, he felt that his occupational duty also included provision to the society of best quality products at the most affordable prices. But this responsibility to society did not contradict the need to score high profits for the company. He clarified his position on this point as follows: Because our company is a commercial enterprise . . . it goes without saying that all our decisions should be based on the calculation of profit . . . ‹When I say that we should pay the highest compensation to the employees›, what I mean to say is that we should pay high compensation to the employees because—and to the extent that—doing so is in the long-term interest of the company. (1966, 408)

In other words, Mutō’s paternalism did not trump his duty as the manager of a commercial enterprise. As Kanebō’s head clerk, Mutō felt he owed responsibility not only to the company and the society but also to the nation: When it comes to industries, they must be national in character .  .  . If we are concerned about the fate of our country, we must work for the development and prosperity of domestic industries. (1963, 571)

In emphasizing the national dimension of occupational duty, Mutō was similar to Shibusawa Eiichi and Itō Yōzō. For many Japanese of the Meiji era, contribution to the independence and development of the nation was the self-evident, core value that guided their behavior. In managing his company, Mutō employed imported spinning machines as well as a new labor management method from the West. But to ensure good performance, he had to make sure that these new machines and practices were embraced by the members of the company—that is, the employees and the stockholders. Just as Shibusawa used the Analects, Mutō accomplished this goal by appealing to ideas that were familiar and

 New Industries of the Twentieth Century 193 acceptable to most people of his time, such as embeddedness of individual persons in society and occupational duty. Familism and paternalism were labels by which he invoked these familiar ideas. Thus, Mutō combined in his managerial style a Tokugawaera understanding of human beings and society, a typically modern Japanese attitude toward the nation and its historical development, and technology imported from the West.

20.2  Tsutsumi Yasujirō 20.2.1  The Rise of the New Middle Class and New Industries If Mutō was a reformer in the sphere of labor management, Tsutsumi Yasujirō was innovative in discerning and anticipating emerging social trends, and in building new industries that responded to them. Born twenty-two years later than Mutō, Tsutsumi started his business activities right before the First World War, when the Japanese society and its values were undergoing important changes. With the end of the Russo-Japanese War (1904–5), the sense of national crisis subsided, and the single-minded focus on securing national independence and achieving national prosperity, which characterized Japanese thought of much of the Meiji era, gave way to a more relaxed atmosphere, where private pursuits (be they economic, scholarly, artistic, etc.) unrelated to national interest could be more openly celebrated (Mitani 2013, 1–4). Japan entered the First World War in 1914 on the side of the Entente Powers. After its victorious conclusion, the notion that Japan had become a “first-tier nation” (ittōkoku) spread among the Japanese public. The First World War occasioned an unprecedented boom of the Japanese economy, though this was followed by a long period of stagnation in the 1920s. Acutely sensing changes in the Japanese society, Tsutsumi launched a new type of business, and, within his own lifetime, built a corporate empire based on railroad, real estate, and retail sales, known as the Seibu Group. Tsutsumi was born as the first son in a middling farming family in Shimoyagi Village, Echi County, Shiga Prefecture. When he was just four years old, his father passed away. Thus, he was raised by his grandparents, while his mother was sent back to her parents’ home so that she could remarry. Tsutsumi entered the elementary school in 1894, finishing its eight-year curriculum in 1902. Though he was planning to enroll in middle school, his grandfather opposed the idea, because he wished to keep him away from the “bad influence of an urban area.” Yasujirō was to carry on the family name, and grandfather wanted him to stay home and to engage in farming (Kawaguchi 2006, 5). By not attending middle school, Tsutsumi was thrown off the regular pathway to higher education, which was becoming the standard route for social advancement. For some time, Tsutsumi focused on improving his family farm. But being a farmer in a rural village did not satisfy his ambitions. Higher education was a prerequisite to work for a major corporation and to join the class of the business elite (Fujii 2000, 44–7). In 1909, two years after his grandfather’s death, Tsutsumi mortgaged family assets to obtain some cash, moved to Tokyo, and enrolled in the preparatory school for Waseda

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University. In the next year, he entered Waseda’s Department of Political Science and Economics. Having graduated from Waseda in 1913, Tsutsumi engaged in a number of business ventures, including publication of a magazine, production and sales of rubber products, maritime transport as well as mining. He faced stiff competition in most business fields, but found that land development was a different story. Here, competition was limited, and the possibility for realizing his ideas was wide open (Yui, Maeda, and Oikawa 1996, 77–8). Tsutsumi was an innovator in this industry who responded to (and to some extent anticipated) the aspiration for a new urban lifestyle among the emerging new middle class (Kawaguchi 2006, 14–20). His first foray into real estate business was the development of vacation cottages in resort areas such as Karuizawa and Hakone. In 1920, Tsutsumi founded the Hakone Real Estate Co. for this purpose. This was a new business, and Tsutsumi’s development projects helped ignite a boom for vacation cottages among well-to-do urban residents. Simultaneously, Tsutsumi started his residential real estate business, purchasing a substantial tract of land in the Naka-Ochiai district in Tokyo. He eventually developed this district as the Mejiro Culture Village (Mejiro Bunka-mura). This “village” was an upscale residential area with so-called culture housing (bunka jūtaku), a Westernized Japanese-style housing in which the kitchen, the bathroom, and the toilet were integrated with the rest of the house under one roof. In addition, in the newly developed western suburbs of Tokyo, including Ōizumi Gakuen, Kodaira Gakuen, and Kunitachi, Tsutsumi developed upscale residential areas around (planned) college campuses. Here, too, Tsutsumi, like a stage director, was producing a new “cultured” lifestyle for consumption by the new urban middle class. Tsutsumi’s land development and real estate business targeted the emerging new middle class, or well-to-do white-collar employees, many of whom worked for major companies (particularly in the heavy and chemical industries). Japan in the early twentieth century was in the midst of rapid urbanization, and a new urban culture was emerging. Men and women clad in Western clothes now filled the streets of major cities, and Japanized Western dishes, including pork cutlet, potato croquettes, and curry over rice, became popular. New types of popular entertainment including manzai (stand-up comedy) also emerged. Information about the newly emerging urban mass culture spread throughout the country via popular magazines (some of which had circulation in the hundreds of thousands) and radio broadcast, which started in 1925. The new middle class often lived in the suburbs and commuted to the city center using suburban trains. In fact, Tsutsumi was one of the entrepreneurs who, by combining railroad business and real estate development, proposed such a lifestyle for the new middle class. Department stores were opened next to the terminal stations of such trains in big cities, with the Hankyū Department Store in Umeda, Osaka (the terminal station for the Hankyū Railroad), being one of the first such stores. The opening of “terminal department stores” was one part of a broader change in Japanese retail business at the time. The famous Mitsukoshi Draper’s Store, with a history going back to 1673, became a full-fledged department store in 1928. The new middle-class men derived their sense of status from their new lifestyle—they lived in the so-called culture housing in the suburbs, they commuted to the city by railroad, and on

 New Industries of the Twentieth Century 195 weekends, they would take their wives (who now became full-time housewives) and children to restaurants in terminal department stores, or take the train in the opposite direction, toward resort areas such as Hakone, or toward suburban amusement parks (Suzuki, H. 1999, 229–56). In the late 1920s and the early 1930s, Tsutsumi was involved in a number of new projects catering to this new lifestyle, including the construction of the Lake Tama Railroad, the purchase of the Musashino Railroad and Seibu Railroad, and the opening of the Musashino Department Store (today’s Seibu Department Store). Apart from building a business empire, Tsutsumi was also active in politics. Since 1924, Tsutsumi served as a member of the House of Representatives in the Imperial Diet. Though he was banned from holding public office during the occupation years, he resumed his career as a Diet member in 1952, serving in that capacity until 1964. Though Tsutsumi never became a minister, he served as the Speaker of the House of Representatives in the National Diet (1953–4).

20.2.2  “Gratitude” and “Service” Tsutsumi is a figure who arouses controversy. His reputation as a businessman is evenly split. On the positive side, he has been praised for creating new values by purchasing undeveloped lands for cheap prices, and by building railroads, housing, department stores, and so on. At the same time, he has often been criticized for riding roughshod in making land purchases, and for his one-man management style (Kawaguchi 2006, 14–15). Late in his life, Tsutsumi reminisced about his business philosophy as follows: At that point ‹when I was about to expand my real estate business›, I had to think for myself . . . and then I hit upon a philosophy of life, which is also a business philosophy . . . I must use my own head to think of something that nobody else can do . . . Besides, I should not be concerned about profit only. A true business has to put priority on service to others and to the society. Otherwise it will not succeed . . . As I was approaching thirty years of age, I finally acquired this philosophy of “gratitude and service” . . . After I acquired this philosophical basis, my businesses grew steadily. (Tsutsumi 1958, 14–15)

In this passage, Tsutsumi was obviously trying to attach a positive meaning to his life’s work. As such, we cannot take his words at face value. Nonetheless, even if there is a big gap between his words and deeds, Tsutsumi’s utterances reflect his thinking in some sense. What he meant by “gratitude and service” may be gathered from the following passage: Why did I end up building such big companies? The answer is that I had a stronger sense of service to society and state than other people. Then where does my orientation to service come from? It comes from the spirit of filial piety . . . Parents’ affection for their children is unconditional. My idea of repaying the debt to parents gradually developed into service to the society through my business

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ventures . . . People who are constantly thinking about how they could serve the society will achieve happiness for themselves. (Tsutsumi 1952)

Once again, it is tempting to dismiss such a statement as a shameless attempt to put a window-dressing on a lifetime of ruthless business practices. But it would be a mistake to discount his statement entirely. Although Tsutsumi’s father died at a relatively young age, his grandfather poured his love toward him. Tsutsumi’s sense of gratitude to his grandparents—and his belief in the importance of filial piety and gratitude—appears to have been genuine (Kawaguchi 2006, 31; Yui, Maeda, and Oikawa 1996, 14–31). In developing his plan for campus towns, Tsutsumi established elementary and middle schools, and personally handpicked school principals, based on his conviction that the most important thing in primary and secondary education is to find good teachers. He did this based on his awareness of his indebtedness to his teachers. In the postwar years, he was unshaken in his belief in the importance of filial piety as the pillar of moral education. Based on this view, he consistently attacked the activities of the progressive Japan Teachers’ Union in his campaign speeches, even though he was advised to avoid the topic because it would not win him votes. Late in his life, whenever he visited his home province, Tsutsumi would deliver lectures at elementary and middle schools, and he would speak on the love he received from his grandparents, his respect for his teachers, and his philosophy of “gratitude and service” (Yui, Maeda, and Oikawa 1996, 461–2). These facts suggest that Tsutsumi himself took his philosophy seriously, regardless of any deeds that might seem to belie his words. Gratitude arises from the sense of indebtedness to one’s parents, who love their children unconditionally. Service comes from filial piety, or the desire to repay the debt owed to one’s parents. While gratitude and service both arise in the context of one’s relationship with parents, in Tsutsumi, these sentiments were extended and transferred to one’s relationship with the “society,” or, more concretely, with the country. Business was the concrete manifestation of one’s sense of gratitude to the society. Naturally, service for Tsutsumi was not a unilateral act of altruism. On the contrary, it led to the steady development of his own business and happiness. Yet, for Tsutsumi, too, the relationship between the self and the larger society (the company and the country) appeared as a series of concentric circles in which the self was embedded harmoniously within the social context. As was true of other businessmen, policymakers, and intellectuals of modern Japan that we have discussed so far, it is easy to see in Tsutsumi’s references to “service and gratitude” and to “filial piety” the continued influence of the view of people and society that was inherited from the Tokugawa era. Furthermore, Tsutsumi’s case demonstrates that such a view continued to live on in people’s moral sense at least until the midtwentieth century.

Module 7

Questioning Modernity In general, modern Japan’s economic thought developed in lockstep with its economic modernization and emergence as a great power. As we have already seen, the mainstream of economic thought in modern Japan approved of this development. Naturally, however, there were currents of thought that were skeptical of Japan’s path of modernization. This module focuses on those skeptical viewpoints, and on how one strand of such skepticism became the hegemonic idea in the era of global crisis in the 1930s and 1940s. Skepticism concerning Japan’s path of modernization and Westernization came from a variety of angles. Some criticized Japan’s modernity on the basis of Western critique of modernity. The most influential type of such criticism was Marxism. Yet, others criticized Western modernity and the Japanese version of it based on older intellectual traditions, including Confucianism and nationalistic theories derived from National Learning. While these types of skepticism differed from each other, they overlapped in some important respects. Chapter 21 discusses the ideas of three intellectuals who criticized Japan’s capitalist modernity in the Meiji era—Nakae Chōmin, Kōtoku Shūsui, and Abe Isoo. While the first was a Rousseauian advocate of popular sovereignty, and the other two were pioneer socialists, their critique of Meiji Japan reflected older sensibilities and ideas bequeathed from the Tokugawa era. Chapter 22 discusses the ideas of three intellectuals who grappled with the problems of capitalism in Japan during the Taishō 大正 (1912–26) and early Shōwa 昭和 (1926–45) eras1—Fukuda Tokuzō, Kawakami Hajime, and Yamada Moritarō. Fukuda was a prolific economist who argued that social policy, rather than socialism, was the appropriate response to contemporary problems of capitalism. Kawakami was Fukuda’s younger rival who, though initially supportive of social policy, later embraced Marxism and communism. Yamada, by contrast, began his activities at a time when suppression of liberal and left socialist views was intensifying. Though he wrote in a deliberately abstruse language to avoid censorship, his Marxist analysis of Japanese

T h e Shōwa era lasted from December 1926 to January 1989.

1

198 A History of Economic Thought in Japan capitalism had lasting influence not only on subsequent Marxist scholarship but also on postwar Japan’s social science and history education until the 1960s. Chapter 23 discusses Japan’s path from international cooperation to aggression and expansionism. While the shift in Japan’s economic as well as foreign policies may in part be attributed to changes in international circumstances, deficiencies in Japan’s decision-making system as well as features of Japanese intellectual history contributed to Japan’s irrational drift toward excessive expansionism.

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21.1  Three Types of Critique of Capitalism in Modern Japan Critiques of capitalist modernity in Japan came from at least three different directions. One type of critique took theories imported from the West to assess the conditions in Japan. Modern Japan imported not only Western institutions and practices but also a Western critique of modern society, and the latter was applied to Japanese modernity. Marxism became the most influential form of Western-inspired critique of Japanese society in the 1920s and 1930s. We shall discuss the Marxist critique in the next chapter. Another type of critique was based on Confucian morality. Confucianism sought to foster morality as a key to building a good society. Although Japanese economic thought took a more pragmatic turn since the eighteenth century, the moral core of Confucian tradition continued to influence thinkers like Yokoi Shōnan at the end of the Tokugawa era (see 13.3). In modern Japan, the value of fostering moral persons and society was replaced by a more pragmatic pursuit of national interest. This turn in Japanese thought was subjected to criticism from a consistently moralistic perspective. Pursuit of national interest required economic development. For that purpose, the modern capitalist economy was introduced based on the Western model. As we have seen, modern Japanese capitalism developed in an ideological environment where pursuit of private profit had to be justified by reference to its contribution to broader national interest. This, however, did not alter the fact that modern Japanese economy was based on capitalism, with its characteristic strengths and problems. While capitalism unleashed the entrepreneurial energy of the people, it was prone to generate problems such as periodic booms and busts, and dire poverty on the margins of society. The enormous wealth generated by the modern industrial economy underscored the gap between the rich and the poor. Such a situation easily attracted criticism from a Confucian standpoint, especially if capitalism was regarded as based on selfishness and greed. The third type of critique came from the ideology of the “national polity” or kokutai 国体, which originated in the Tokugawa era. Kokutai is a term literally meaning “the body of the state/nation.” As such, the term originally meant something similar to “constitution” in the sense of “how the state is organized.” According to this definition, all states were regarded as having their own kokutai. Yet, since the late Tokugawa

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period, under the influence of National Learning and of the so-called Mito school,1 the term came to refer specifically to the “uniquely superior” way in which the Japanese polity is constituted. According to this view, Japan was “unique among all lands” in that it is reigned over by an unbroken chain of emperors descending from Amaterasu, the Sun Goddess, the mythical ancestral deity of the imperial family (see 11.2.2). The Meiji Restoration was carried out under the banner of “restoring the emperor to his rightful position.” To this extent, the Restoration embedded the idea of kokutai in the modern Japanese state. This does not mean that the policies of the Meiji state were guided by a xenophobic rejection of foreign imports. Our discussion of the ideas of various figures in the previous chapters amply demonstrates this point. Yet, as the international situation deteriorated in the wake of the Great Depression, reference to the term kokutai in the ethnocentric sense became more frequent, reaching its peak in the late 1930s (Yonehara 2015, 8). Particularly during this period, kokutai was used to suppress socialist and liberal ideas. Such an ideological environment also strengthened the influence of a distinctive type of state socialist economic theory, calling for a new, economic “restoration” in which the power of production would be “returned” to the emperor (Tsubouchi 2011; Naimushō keihokyoku 1963). This idea played an important role in the movement for “Showa Restoration” in the 1930s. What is interesting is that the three types of critique—whether they were based on Western theories, Confucianism, or on National Learning ideas—often merged with each other. Criticisms of Japanese capitalism were often based on perspectives that combined Confucian morality (or the vision of national economic community) with imported Western theories. Consequently, ideas that appear to be the avant-garde of Japanese modernity were often based on the foundations of Confucian morality. Socialist theories, especially in the 1930s and 1940s, often merged with nationalism to yield a Japanese version of “national socialism.” To put the matter differently, some of the more traditional moral sensibilities survived into the modern era by taking a different, more modern appearance. This chapter focuses mainly on the ideas of Nakae Chōmin 中江兆民 (1847–1901) and Abe Isoo 安部磯雄 (1865–1949). In connection with Chōmin, we will also touch on the ideas of Kōtoku Shūsui 幸徳秋水 (1871–1911). These three thinkers illustrate divergent patterns of relationship between indigenous and Western-inspired critique of Japanese capitalism. Chōmin played a central role in the introduction of modern European (particularly French) philosophy and social theory, and became a leading theorist of the Freedom and People’s Rights Movement in the 1870s and 1880s. He introduced Rousseau’s theory of popular sovereignty to Japan, which earned him the nickname of “Rousseau of the Orient.” Yet, Chōmin absorbed Rousseau’s ideas on the basis of Confucian thinking. While Rousseau criticized Western modernity and sought to reconstruct it on a more ethical foundation, Chōmin wished to base Japanese modernity on the foundation of Confucian morality, rather than on the pursuit of T h e Mito school (mitogaku 水戸学) refers to the tradition of scholarship that flourished in the Mito domain since the mid-seventeenth century with support from the domain authorities. While the initial focus of the activities of the Mito school was the compilation of a comprehensive Dai Nihonshi (Great History of Japan) from a neo-Confucian perspective, the school later absorbed a variety of influences, including from the National Learning school.

1

 Critical Perspectives on Japanese Capitalism 201 private economic gains. Acceptance of Western ideas on the basis of indigenous morality is also characteristic of Kōtoku, a disciple of Chōmin’s, who was executed for his alleged involvement in a 1910 attempt on the life of Emperor Meiji. He supported socialism because he believed that it would provide an economic foundation for a moral society. Kōtoku’s socialism was thus built on the foundations of indigenous thought as much as on ideas imported from the West. Abe, by contrast, was a Christian socialist who sought to combine Christian morality with socialist economics. Unlike in Chōmin or Kōtoku, the influence of indigenous thought is less evident in Abe’s ideas, though it is not far-fetched to suggest that in him, Christianity took the position that had been occupied by Confucianism.

21.2  Nakae Chōmin Nakae Chōmin was born in a family of ashigaru2 who served the Yamauchi clan in the Tosa domain. After studying Confucianism and Western learning at the Bumbukan, the domain school, he was sent by the domain to Nagasaki in 1865, where he studied French. Chōmin’s knowledge of the French language served him well. In 1871, he was allowed to join the Iwakura Mission as a provisional employee of the Ministry of Justice. Chōmin traveled to the United States and to Europe with the Mission, but instead of returning home with the Mission, he stayed and studied in France. Chōmin returned to Japan in 1874 and opened a private school known as the French Academy (furansu gakusha). He was appointed the president of the Tokyo College of Foreign Languages (today’s Tokyo University of Foreign Studies) the next year, but resigned from the position soon thereafter. In the early 1880s, Chōmin established the newspaper Tōyō Jiyū Shimbun (1881), joined the Jiyūtō (Liberal Party), and became a leading theorist of the Freedom and People’s Rights Movement. In 1882, Chōmin published a partial translation of Rousseau’s Du contrat social as Min’yaku yakukai (Translation and Commentary on Social Contract). He later served as a member of the House of Representatives in the Imperial Diet from 1890 to 1891. In 1891, dissatisfied with the way the Diet operated, Chōmin quit his post and moved to Hokkaido, where he started a number of eventually unsuccessful business ventures, including the newspaper Hokumon Shimpō and a logging business. While Chōmin is generally regarded as a leading exponent of modern Western political theory in Meiji Japan, he had a high opinion of the Chinese intellectual tradition. In his collection of essays published in the last year of his life, Chōmin stated that the principles of people’s rights, freedom, and equality “were discovered also in China by people like Mencius and Liu Zongyuan. The West does not have monopoly over such principles.”3 At his French Academy, Chinese learning was an important See Chapter 7, n. 3. Nakae (1983b, 177). Liu Zongyuan 柳宗元 (773–819) was a high-ranking official in China during the Tang dynasty, well known for his poetry and other writings.

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subject for teaching alongside French language and thought. In fact, Chōmin felt that the moral society in ancient China during the era of the sages was preferable to modern Western society composed of autonomous individuals. In an essay written in 1878, Chōmin stated as follows: What is the ultimate purpose of politics? It is to make sure that people will have no use for politics . . . This is of course what Chinese sages sought to accomplish. They asked how it is possible to guide the people toward good conduct, and answered that what is needed is to teach people morality. This is the method of the Three Dynasties. By contrast, the Western method is to induce people through techniques. Western theorists argue that people are born with desires . . . If people’s desires are not fulfilled, that would cause conflicts. If conflicts persist, peace will be destroyed. But the products of this earth are limited. They cannot be multiplied quickly . . . ‹Under such a theory›, it would be unrealistic to hope that peace under heaven will be maintained for long. But the laws of the Three Dynasties are different. Back then, schools were established not only in the capital, but in the villages. And the schools taught moral codes, including loyalty to the master, filial piety, the difference between husband and wife, the order of seniority, and trust among friends. All these are means through which people govern themselves and rule other people. Under this system, people were guided by moral virtues rather than being distracted by the pursuit of interests and desires. As the teachings penetrate people’s minds and accumulate in them, ultimate moral goodness is attained, and people will be able to govern themselves. I hear that a Frenchman named Rousseau wrote a book in which he severely criticized the Western political techniques. His point appears to be that people’s education is more important than guiding them with technical means. It seems that Rousseau is someone who understood the gist of politics. (Nakae 1974a, 179–80)

What we can discern in this passage is a normative view of human beings and society inherent in the Confucian (and particularly Zhu Xi school) tradition (see 2.1). Chōmin’s comments on Western society are also reminiscent of Rousseau’s critique. The French philosopher observed that in the civilized society of his day, people were driven by the incessant desire for social recognition. As a result, “free and independent as men were before, they were now, in consequence of a multiplicity of new wants, brought into subjection, as it were, to all nature, and particularly to one another; and each became in some degree a slave even in becoming the master of other men” (Rousseau 1923, 218). To avoid a life of slavery to ever-expanding material and social needs, Rousseau thought it necessary to educate children from a young age to restrict their needs, so that they could “attain self-sufficiency and autonomy amid society” (Xenos 1989, 25). For Rousseau as well as for Chōmin, the solution to problems of social order lay not in economic development but in moral education. Chōmin’s critique of Western society was not limited to its materialist, technical approach to social problems. He was also critical of the foreign policies of the Western great powers. In an essay on foreign relations published in 1882, Chōmin described the intrigues and violence that plagued the relationships among European great powers,

 Critical Perspectives on Japanese Capitalism 203 and noted the arrogance with which Westerners dealt with the Turks or the Vietnamese in Port Said and Saigon, which he visited on his way home from France. He then went on to state: Based on what I have said, it is possible to identify the way in which European states have conducted foreign relations for centuries. In dealing with states which are equal to them in civilizational development, they have recourse to all kinds of stratagems to weaken them, and when they have a chance, they either immediately attack them, or conspire with a few other states to put pressure on them to secure selfish advantage while they suffer. In dealing with states which are far behind them in terms of civilizational development, they frighten them with military power, use schemes to deceive them, and satisfy their sense of vainglory (Nakae 1985b, 135).

Chōmin believed that states had to be judged by the same set of rules as individual human beings: What is a state? It is nothing other than people who gather to form a union. Thus, it is completely evident that what is immoral for a person is immoral for a state, too . . . When a common man commits an evil act, he is called a villain. Yet, when a state gets away with such an act, it is called a great power. I do not see any logic in this whatsoever . . . To my mind, there is only one way through which small states can stand on their own feet and preserve their independence: to always keep one’s faith and not to move away an inch; not to fear even a great power and to respect even a small state for the sake of the right cause; never to surrender even if the entire country is ruined if one is unjustly attacked by another state; and not to move one’s troops even if there is a civil war in a neighboring state. (1985b, 129–30, 136)

From his viewpoint, international relations also had to be guided by morality. Though Chōmin was very much concerned about Japan’s independence, he felt that the way to secure Japan’s survival lay in strict adherence to moral norms. This was a view that was shared by Yokoi Shōnan. Like Shōnan, Chōmin believed in the universality of Confucian values and applied them to questions of foreign policy. Yet, despite his commitment to Confucian morality, Chōmin rejected Confucian politics in favor of a Rousseauian theory of popular sovereignty. Confucian political theory was based on the idea of a virtuous ruler (gentleman) who, through personal example, influences and instructs the “small men.” However, Rousseau’s theory of social contract showed Chōmin a way of reinterpreting Confucianism in a novel way.4 In Du contrat social, Rousseau wrote, commenting on the nature of the social contract: ‹T›he act of association comprises a mutual undertaking between the public and the individuals, and . . . each individual, in making a contract, as we may say, with Sakamoto T. (2007, 163–76). The discussion in this chapter on the role of indigenous ideas in Chōmin’s and Kōtoku Shūsui’s thought draws heavily on Chapters 3 and 4 of Sakamoto’s work.

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himself, is bound in a double capacity; as a member of the Sovereign he is bound to the individuals, and as a member of the State to the Sovereign. (Rousseau 1923, 16)

When Chōmin translated this passage and added commentary on it in his Min’yaku yakukai, the passage was transformed in the following manner: The act of association is something that is accomplished by the mutual agreement between the prince and the subjects. Here, the prince refers to none other than the totality of the people. Thus . . . in substance, people contract with themselves. Why is this so? The people together form a collective entity. When they make the decision ‹to form an association› and issue orders ‹about this decision›, they do so as the prince. No single person is specially designated as an august ruler. Everyone participating in a decision partakes in the role of the prince . . . But the people also act as the subjects in receiving the order from the ‹collective› prince. (Nakae 1983a, 160–1)

Chōmin’s commentary explicates Rousseau’s idea on the dual capacity in which the people participate in the social contract. Notably, in translating Rousseau’s passage, Chōmin used the terms “prince” (kimi 君) and “subject” (omi 臣)—terms deeply rooted in the Confucian moralistic thinking—to render “the Sovereign” and “member of the State.” Chōmin used the term “prince,” even though the term that has since become the standard translation for “the sovereign”—shukensha—was already in use (Sakamoto, T. 2007, 166–7). Evidently, Chōmin interpreted Rousseau’s theory through the lens of Confucian moralism. Yet, rejecting the notion of rule by a benevolent gentleman-ruler, he hoped to make all the people “partake in the role of the prince.” For Chōmin, popular sovereignty had moral significance going beyond the political sphere. In Confucian morality, there was an implicit division of labor between the benevolent prince, who exemplified the Way, and the “small men,” the objects of the prince’s moral influence. The latter engaged in economic production, while the former focused on governing through moral examples. As Tokugawa-era Confucian scholars emphasized, economic well-being was a precondition for moral instruction. To that extent, economic activities had a legitimate place in Confucian moral landscape. And yet, in Confucianism (and in Chōmin’s understanding of it), there was the persistent notion that those who engage only in economic activities cannot achieve the status of a gentleman. This inclination, which Chōmin imbibed from Confucianism, must have been amplified by his exposure to Rousseau’s ideas. The latter had inherited from classical antiquity the republican theory that men who are preoccupied with economic activities are in a state of slavery, and that only through political participation do men become citizens and free men. Through his theory of popular sovereignty, Rousseau envisioned a society in which all citizens, rather than a small minority supported by slaves, would partake in the role of the sovereign (Sakamoto, T. 2007, 169). For Chōmin, too, only through the exercise of popular sovereignty would the majority become complete persons. More concretely, they would become “gentlemen” in the Confucian sense of the word. That, however, required that each person complete the process of moral education within himself. In his 1887 work, Sansuijin keirin mondō

 Critical Perspectives on Japanese Capitalism 205 (Discourse by Three Drunkards on Government), Chōmin depicted an ideal vision for Japan of the future as follows: ‹My proposals are› to establish an equal, democratic system . . . to transform the entire country into a garden of morality and a hotbed of scholarship; to open a unicameral parliament to avoid any schism in the country’s brain; to give anyone who has come of age . . . rich or poor, men or women, the right to vote as well as the right to run for elections, so that everyone will truly become a ‹complete› person . . . to establish schools around the country without the necessity for tuition, so that every person will take up learning, and that everyone will be given the means of becoming a gentleman (kunshi); to abolish death penalty and the gallows, which are instruments of legally sanctioned cruelty; to remove tariffs and to avoid the barrier of economic envy; and to do away with all restrictions on expression, publication and association except when there is danger of corrupting the customs or inciting revolt. That way, speakers will enjoy freedom to speak, audience freedom to hear, writers freedom to write, readers freedom to read, and participants in meetings freedom to convene. This is the outline ‹of my proposals› .  .  . Everyone loves and yearns for a garden of morality. No one would dare destroy it. A hotbed of scholarship serves everyone’s needs. No one would want to demolish it . . . Let’s take this small Asian country and make it a laboratory for democracy, equality, morality and scholarship! (Nakae 1974b, 19–20)

What we should note here is that as the people become complete persons and sovereign masters of their fate, they are also expected to receive education, and to avail themselves of the “means of becoming gentlemen.” Furthermore, the ideal state of future Japan is described as a “garden of morality.” It is evident that for Chōmin, popular sovereignty was a means to build a moral society by turning every person into a “gentleman.” Given that Chōmin saw popular sovereignty as a condition for building a moral society, it is not surprising that he had a rather overblown expectation about the Imperial Diet that opened its doors in 1890. True, the Meiji Constitution, which was based on the principle of imperial sovereignty, did not quite satisfy Chōmin. And yet, he referred to members of the Diet as “esteemed gentlemen” (shikunshi 士君子) (Sakamoto, T. 2007, 197; Nakae 1985a, 97), which indicates his high expectations for the Diet and its members. Chōmin was elected as a member of the House of Representatives in the Diet in the first general elections in 1890. But he quit only three months later, when he learned that some colleagues from the Liberal Party accepted bribes from the government in return for supporting the government’s budget proposal. The reality of parliamentary politics was so far removed from his highminded ideals that he simply could not stand it. Having left the Imperial Diet, Chōmin began a series of unsuccessful business ventures, which preoccupied him through much of the rest of his life. One reason he went into business was his realization that Diet members cannot act independently in politics unless they also have independent financial means (Sakamoto, T. 2007, 198–200). Like many Confucian scholars of the Tokugawa era, he, too, had to realize that economic well-being was a precondition for a moral life and moral society. Yet, unfortunately, Chōmin was not able to return to

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politics with independent means of his own. While he continued to write articles, and penned important philosophical tracts in the last two years of his life, he died in 1901, without having accomplished his political ideals or having secured sufficient financial resources. Similar to Yokoi Shōnan, Chōmin understood Western society and ideas through the prism of Confucian thought, and constructed a vision for a future Japanese society and economy on such basis. This mode of thinking was continued by Chōmin’s disciple, Kōtoku Shūsui, who advocated socialism on the basis of Confucian morality. Kōtoku’s understanding of socialism was very much rooted in a moralistic view of human beings and society inherited from indigenous thought. Kōtoku stated that individual persons must keep in mind that “they are above all members of society.” They must “work for the benefit of the whole society and achieve happiness of the society . . . and individual persons become happy as a part of that social achievement” (Kōtoku 1982a, 439; Sakamoto, T. 2007, 212). That was what socialism was all about. It is evident that Kōtoku subscribed to the notion of the unity of human beings and society, and that for him, socialism was a formalized expression of his underlying view of man and society. It should be recalled here that Chōmin sought to build an ideal moral society where every person would become a gentleman, but failed due to the lack of economic foundation for such a society. Kōtoku thought socialism could provide precisely such a foundation. The main problem in the society of his day, he thought, was the rampant “corruption and degeneracy.” He sought to address this issue by reviving bushidō, or the way of the samurai. Kōtoku was not trying to reinstitute a hereditary class of warriors in Meiji Japan. In fact, he distanced himself from the martial aspects of bushidō, as is evident in his steadfast opposition to the RussoJapanese War. Rather, he used the term to evoke an image of moral integrity. In later writings, Kōtoku used the term “men of righteousness and benevolence” (shishi jinjin 志士仁人) instead of bushidō to refer to his ideal. In his view, samurai during the Tokugawa era “had no worries about food and clothing, so they could maintain their honor and integrity, and focus on public service with righteousness and courage, without paying attention to loathsome questions of money” (Kōtoku 1982b, 37; Sakamoto, T. 2007, 222). The possibility of morally righteous behavior, then, depended on freedom from economic insecurity. That was the purpose of socialism for Kōtoku. Just as the samurai sacrificed his life for his master, under socialism, individual persons would have to understand that “our bodies and our lives belong to the society.” In return, “the society . . . has to provide everyone with food and clothing . . . just as the master used to feed his retainers” (Kōtoku 1982b, 38–9; Sakamoto, T. 2007, 222). In this manner, socialism was to liberate people from the insecurities of a market economy. In the early Tokugawa era, Yamaga Sokō wondered the proper social function of the samurai and found it in exemplifying morality (see 2.3). Perhaps without realizing it, Kōtoku was tracing Sokō’s footsteps when he argued that socialism was the precondition for the revival of bushidō. Kōtoku’s case clearly demonstrates that socialist ideas were accepted in Japan partly because they resonated with traditional moral sensibilities.

 Critical Perspectives on Japanese Capitalism 207 At the same time, socialism also attracted those who stood on a different foundation than did Kōtoku. One of them was the Christian socialist Abe Isoo, who, along with Kōtoku, played a leading role in the nascent socialist movement of Meiji Japan.

21.3  Abe Isoo 21.3.1  Christianity and Concern for Social Problems Abe was born as the second son in the Okamoto family, a samurai family serving the Kuroda clan in Chikuzen province. The fortunes of the Okamoto family declined after the Restoration, so Isoo grew up poor. After finishing elementary school, however, Isoo was able to continue his studies thanks to the help from a relative. He entered the Dōshisha English School (today’s Dōshisha University) in Kyoto in 1879, and received baptism from Niijima Jō 新島襄 (1843–90), the school’s founder, and an eminent figure in the history of Christianity in Japan. Isoo was adopted into the Abe family in 1885, and, in 1886, became an instructor at Dōshisha. But in the next year, he quit the job at Dōshisha and became a pastor at the Okayama Church, affiliated with the Congregational Church of Christ in Japan. In 1891, Abe went to the United States and studied at Hartford Seminary in Connecticut. While in the United States, he was exposed to socialist ideas. After graduating from the Seminary, he studied at the University of Berlin for a brief period. Abe returned to the Okayama Church in 1895, and once again took up a position at Dōshisha in 1897. Having quit Dōshisha in 1899, Abe moved to Tokyo to become a lecturer at the Tokyo College (today’s Waseda University), and became a full professor in 1907. From the 1890s onward, Abe played a leading role in the nascent socialist movement in Japan. In 1898, he joined Kōtoku Shūsui and others to establish the Socialism Study Group (shakaishugi kenkyūkai). In 1901, Abe established the Social Democratic Party with Kōtoku, Katayama Sen 片山潜 (1859–1933) and others. As can be gathered from his background, Abe was a Christian and a socialist. How were these two identities related in his mind? How did he become a Christian in the first place? On this last question, Abe stated: Before entering Dōshisha, I never even imagined that it was a school based on Christian principles . . . But after entry, I noticed that the school had a very serious atmosphere. Not just the teachers, but the students there were also very earnest and dedicated. ‹After observing this›, I had no hesitation to accept Christianity . . . From then on, I wholeheartedly devoted myself to Christian belief, and sought to cultivate my own soul. (Abe, I. 2009d, 170)

Abe did not seek out Christianity; he stumbled upon it. But his acceptance of Christianity may not have been accidental, for, as the passage indicates, by turning to Christianity, he sought “to cultivate [his] own soul.” It is possible that the aspiration to “cultivate the soul” was already in him before he encountered Christianity. In his childhood, Abe had received instructions on Confucian texts such as the Analects from

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his grandfather. It is not far-fetched to suggest that in Christianity, he perhaps sought a new basis for morality and self-cultivation that would take the place of Confucianism (Iguchi 2011, 27–30). Another reason for accepting Christianity may have been his positive evaluation of its impact on society: ‹In Christianity›, there is no innate distinction between high and low when it comes to a person’s soul. This idea ‹about the fundamental equality of all people› is the foundation of the notion of popular rights. Thus, the wealth and power of European states are ultimately founded on Christian belief .  .  . How can our country advance toward civilization except by relying on Western examples? . . . Our government officials all focus on the flowers of Western civilization, and fail to realize that their roots are in Christianity (Abe, I. 2009a, 7–10).

Like many Japanese of his generation, Abe was strongly impressed by the wealth and power of the West. This impression was no doubt strengthened by his direct experience of the West. While studying in the United States, he once “crossed the iron bridge in Brooklyn . . . To the north, the New York City stretched as far as the eye could see, while to the south, the Statue of Liberty stood as if from the surface of the sea. It was difficult even to describe the prosperity and advancement of civilization” (2009b, 126–7). As the long passage quoted earlier indicates, Abe attributed the West’s wealth and power to Christianity. When he wrote the passage in 1881, he felt that Christianity could solve the problems not only of the soul but also those concerning “wealth and power.” This observation on the practical effects of Christianity must also have been a powerful incentive for accepting the teaching. Incidentally, Abe directed much effort to the development of sports in Japan, particularly among college students. At Waseda, he served as the first director of the baseball club, of the tennis club, and of the track and field club. He was also the president of the Tokyo Intercollegiate Baseball League, as well as the president of Japan Student Baseball Association. He later established the Greater Japan Athletics Association. For him, sports of Western origin were also part of “civilization” that Japan needed to import. What Abe observed in the United States, however, was not limited to the prosperity of the country. He also witnessed the inequality and poverty that resulted from the development of capitalism. And this was not something unique to the United States. In fact, he had already noticed the issue of poverty while studying at Dōshisha: What did I find at Dōshisha? .  .  . I found pilgrims without a place to stay and beggars spending the night on the campus lawn. It was indeed a pitiful sight. There were at least a few times when I bought some bread nearby to feed such people. But I was poor myself. And the question nagged me concerning why there is such poverty in the world. I felt that though religions could save people’s souls, they had no power to save people’s bodies . . . Having studied economics, I believed that contemporary problems of poverty could only be solved through economics . . . So I took the position that we should save souls with religions, while the salvation of the body should be left to economics. (2009c, 162–3)

 Critical Perspectives on Japanese Capitalism 209 After returning to Japan following his years abroad, Abe became convinced that Japan suffered from the same sort of social problems as did the United States. He preached a division of labor between Christianity and economics. The focus of his interest in economic questions had now shifted from overall prosperity of the country to the problem of poverty. This concern inclined him toward a socialist perspective.

21.3.2  Abe as a Christian Socialist How was Abe’s religious belief connected with his embrace of socialism? He explained the relationship between the two as follows: In my own understanding, I hold on to Christianity on the one hand, while on the other hand, I have socialism as an important key to economic problems. If I go out to work in this world with these two things, I believe that I will be able to make a great contribution to the humanity as a whole .  .  . I believe that the principle of our lives should be one of “simple living and high thinking.” We need to live a materially simple life, but seek after high-minded ideals . . . In the spiritual sphere, we should advance as much as we can on an individual basis, without waiting for others to keep up, for nobody loses because of this. On the other hand, in the material sphere, if one person lives an extravagant life, others suffer as a consequence . . . There is a difference between personal wealth and a happy, affluent life . . . We should all be content with modest life on an individual level . . . Our true ideal should be “socially rich but individually poor” . . . When it comes to ‹public facilities such as› . . . schools . . . roads . . . local governments . . . we feel that such constructions must be up to a still higher standard . . . But the spirit of our religion is that we should be content to live a very modest life at the individual level. In this manner, our religious life agrees with our economic life . . . We should work toward accumulation of the riches of society . . . Even if we may be individually poor, we should be happy if we are socially rich. (2009d, 188–90)

Abe hoped that Christianity would bring about fulfilling spiritual life and spread “the love of humanity,” by which he meant “doing all one can for the sake of fellow human beings” (2009d, 180). His economics, on the other hand, was socialist in orientation (Ogino 1990, 54). It is probable that Abe’s ideal of a “modest life” derives from his Christian belief, though frugality was also a virtue strongly encouraged in Tokugawa Japan. This preference for “modest life” was also based on his economic analysis. Given that the majority of the population were poor, a reduction in income inequality was likely to result in a low income level, at least in the short run. By reallocating the wealth that had been monopolized by the few for the purpose of building better public facilities such as schools, the low level of individual income would be compensated for. In this manner, the effective living standard for the entire society would rise. Abe is generally regarded as a socialist. But his socialism was not of a radical variety. Rather, he sought to address the problem of economic inequality through the improved provision of public services. His socialism was meant to achieve concrete

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improvements in the lives of the masses through social policy, rather than to overturn the existing order through revolutionary means. Abe believed in the progress of humanity. His advocacy of Christianity and of socialism was based on the notion that they would bring “social wealth” and “great happiness for humanity.” It is also worth noting that in his view, progress was associated with the advanced societies of the West. Thus, Christianity and socialism were both understood as means by which Japan could overcome “social problems” and better approximate the conditions of Western modernity. In this sense, Abe’s attitude toward Christianity and socialism was rather pragmatic and instrumental. This sort of pragmatism, in which the value of an idea is assessed by the concrete function it performs, was characteristic of many Tokugawa-era thinkers. While Abe’s thought was clearly discontinuous with Tokugawa-era ideas in substance, in his pragmatic attitude toward ideas, it is perhaps possible to see elements of continuity with the past.

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Social Policy and Japanese-Style Marxism

22.1  Socialism and Social Policy in Taishō Japan The latter part of the Meiji era witnessed the appearance of a small socialist movement in Japan. Though this first wave of socialism left important marks by calling for better conditions for workers and opposing the war against Russia, its evolution came to an abrupt end with the arrest and execution of Kōtoku Shūsui and eleven of his associates for (alleged) involvement in an attempt to assassinate Emperor Meiji. Severe repression led to a period that is known as the “winter period” in the history of Japanese socialism. Yet, just a few years later, a new stage in the development of socialist ideas began. The rapid industrial development during the First World War led to the expansion of the urban working class. The steep hike in rice prices triggered the Rice Riots of 1918 in cities across Japan. Since the end of the Meiji era, public opinion formed around mass media began to play a more important role in Japanese politics. Coupled with the influx of new democratic ideas from overseas, these developments gave rise to the era of “Taishō democracy.” In this context, topics such as socialism and the rights of workers were more widely discussed. Marxism gained in influence, especially among the intellectuals. This chapter focuses mainly on the ideas of Fukuda Tokuzō 福田徳三 (1874–1930) and Yamada Moritarō 山田盛太郎 (1897–1980)—two thinkers who pondered over the problems of capitalism and of socialism in the interwar period. In connection with Fukuda, we will also discuss the ideas of his rival, Kawakami Hajime 河上肇 (1879– 1946). Fukuda was an economist who became one of the leading theorists of Taishō democracy. Though liberal in intellectual orientation, he sought to solve labor issues through the pursuit of active social policy, and emphasized that “people’s right to live” should be given the highest priority in policymaking. Rejecting socialism, Fukuda devoted himself to the study of the emerging field of welfare economics, reviving the Confucian concept of kōsei in the process. Kawakami was a longtime rival of Fukuda, and was one of the most influential socialists in Japan of the Taishō and early Shōwa eras. He initially approached the issue of poverty from a moralistic perspective very much in line with traditional Confucian viewpoints. As the influence of Marxism grew during the Taishō era, he devoted himself to the study of this doctrine, and eventually became a convinced Marxist. Yamada was a Marxist economist twenty years younger than Fukuda and Kawakami. While Yamada spent his young adulthood during the era of Taishō democracy and

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started his career in academic studies of Marxism, the tightening of repression forced him to resign from his university position by 1930. This led him to work on a pioneering Marxist analysis of Japanese capitalism, which greatly influenced subsequent Japanese Marxist scholarship and the development of postwar Japanese social science.

22.2  Fukuda Tokuzō: A Liberal Advocate for Social Policy Fukuda was born in a family of merchants in Tokyo six years after the Restoration. Under the influence of his mother, who had become a Christian, Fukuda was baptized at the age of twelve. Around the same time, Fukuda started reading articles in Taguchi Ukichi’s Tokyo Keizai Zasshi, which became Fukuda’s first textbook in economics (Kanazawa 2013, 145–6). After finishing elementary school and a private middle school, he entered the preparatory course for the Tokyo Higher School of Commerce (today’s Hitotsubashi University) in 1890. As a student, he was an active member of the YMCA, and was involved in the settlement movement (Kanazawa 2013, 155). Having graduated from the Higher School of Commerce, he taught at Kōbe School of Commerce and also at his alma mater. In 1898, he went to Germany, having been selected by the Ministry of Education to study abroad. At universities in Leipzig and in Munich, Fukuda studied social policy with eminent professors belonging to the German historical school, including Karl Bücher (1847–1930) and Lujo Brentano (1844–1931). Upon his return to Japan, Fukuda taught at the Higher School of Commerce, and then at Keiō. Later, he returned to the Higher School of Commerce, where he is honored to this day as the founder of its strong tradition of research in economics. When Fukuda started his career in the 1890s, the influence of the German historical school of economics was on the rise in Japan. Fukuda’s studies in Germany constituted part of this trend. The 1890s were also a time when the rapid rise of capitalism generated “social problems.” In 1897, Shakai seisaku gakkai (the Association for the Study of Social Policy, hereafter ASSP) was formed to address such problems. This influential academic association claimed as its members not only academics but also bureaucrats and businessmen. The ASSP was designed to offer a way of coping with social problems alternative to both laissez-faire liberalism and socialism. On the one hand, unlike Taguchi Ukichi, who denied the necessity of any social policy on the ground that such matters should be left to the workings of the market, members of the ASSP asserted the necessity of state intervention. At the same time, the ASSP distanced itself from socialism. Indeed, when Kōtoku, Abe, and others organized the Socialism Study Group in 1898 (see 21.3.1), the ASSP issued a manifesto clearly distancing itself from socialism. Under the influence of the German historical school, the ASSP called for proactive response to social problems through reforms of the capitalist system. Fukuda shared this position, and he joined the association in 1902. Yet, Fukuda’s position was distinctive within the ASSP. Mainstreamers within the ASSP, including the famous economist Kanai Noburu 金井延 (1865–1933) and the noted specialist on labor law Kuwata Kumazō 桑田熊蔵 (1868–1932), advocated a paternalistic approach to social policy that sought to capitalize on the existence of quasi-familial relationships between the employers and the employees. Their views

 Social Policy and Japanese-Style Marxism 213 were not unlike Mutō Sanji’s management philosophy (20.1). They tended to regard workers as passive objects of state paternalism. By contrast, Fukuda emphasized the importance of the autonomy of individual persons. For Fukuda, quasi-familial understanding of labor relations in Japanese firms did not reveal the harmonious nature of Japanese society. Rather, it was evidence of the backwardness of Japan’s economic organizations, in which the individuality of workers was insufficiently developed. In his view, “economic and political progress depend[ed] on the degree of the development of individuality” (Fukuda 1928a, 36). Fukuda argued that an effective social policy must be predicated on the growth in the workers’ consciousness of their individuality and rights, and on their voluntary union in labor organizations. Thus, he sought to combine an emphasis on individual autonomy and self-help with support for proactive social policy (Miyajima 1982, 87–92). While Fukuda and other members of the ASSP advocated social policy as an alternative to socialism, he felt that unlike socialism, social policy did not have a firm philosophical foundation. Fukuda sought to develop such a foundation, and found it in the idea of “the people’s right to live” (kokumin no seizonken). The people’s right to live, he believed, came before property rights. The problem of economic inequality cannot be resolved by the enfranchisement of the working class. It was therefore necessary to recognize the right of the workers to organize and to go on strike. To put it in legal terms, he believed that “the people’s right to live must be considered the most fundamental law of the state. Private law, which revolves around the protection of private property, must be regarded as secondary to this basic norm” (Fukuda 1926b, 2032). Based on this idea of “people’s right to live,” Fukuda also developed the notion of “true democracy.” This propelled him to the position of a leading theorist of “Taishō democracy” along with Yoshino Sakuzō 吉野作造 (1878–1933), a leading political scientist at Tokyo Imperial University. While Yoshino’s idea focused on how to interpret and to use the Meiji Constitution to promote “government for the people,” Fukuda argued that purely political democracy was insufficient: This new democracy . . . must first and foremost ensure that . . . the vast majority of the lower, proletarian class .  .  . enjoy economic security and stable source of livelihood; in other words, it must recognize their right to live, as I have often asserted. Thus, new democracy is above all economic democracy .  .  . True democracy in today’s context must secure the livelihood of the entire people. (Fukuda 1926c, 763–4; see also Nishizawa 2004, 371)

In his view, Anglo-American style democracy was not a “true” democracy because, in effect, it included only propertied classes. It was also fully compatible with “capitalist aggression,” which, he believed, was the motive force behind the Great War. He argued that what was needed was a democracy in the sense of rule by the entirety of the people, including those who are without property and who make their living based solely on their labor (Miyajima 1983, 58–63). The capitalists’ freedom to pursue profit was subject to limitation by social policy. That way, he sought to ensure that all the people would enjoy the right to live (Mutō, Shūtarō 2009, 120). This did not make

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Fukuda an advocate of total state control of the economy (Inoue, T. 1998, 117). But the simultaneous emphasis on both individual autonomy and restriction on property rights made his ideas complicated—perhaps too complicated and subtle for an age of mass politics. As labor movement grew rapidly in the context of “Taishō democracy,” Marxist influence on the labor movement grew stronger. In response, Fukuda and his successors took social policy in a direction more clearly opposed to Marxism. Consequently, Fukuda’s influence on social movements waned in the 1920s. Thus, the role Fukuda played in Japan’s intellectual history of the subsequent period was to open up the path for more radical socialist and “renovationist” trends (Miyajima 1983, 63–4). But despite declining influence, Fukuda continued to engage in a wide range of intellectual activities. Here, we focus on two aspects of his activities in his later years. One was his critique of Marxism, and the other was an attempt to build his own brand of welfare economics (kōsei keizaigaku). While Fukuda sympathized with the socialist ideal of “liberation of man,” he disagreed with socialism (particularly with Marxism) on three counts. First, as an economist of liberal orientation, he disagreed with the negation of the role of individual self-interest that was implied in the Marxist vision of a market-less society. Second, he could not support the idea of violent revolution against the existing order. Finally, he disagreed with the notion of proletarian dictatorship. The following passage clarifies Fukuda’s stance on the problems capitalism faced, the weaknesses of Marxism, and on the significance of social policy: Socialism, at least in its Marxist version, holds a very optimistic view about this struggle ‹among social classes›, based on its materialist philosophy. For Marxists, class struggle is destined to disappear sooner or later, because capitalism itself is doomed to collapse. By contrast, the social policy approach, as I understand it, does not indulge itself in such wishful thinking. It does not regard capitalism as destined to collapse on its own. If we leave things as they are, the tendency toward capital accumulation would intensify, and would trample under itself the true welfare and happiness of the people. We argue that we need to counter this natural trend by means of a deliberate policy. This is the reason why social policy is necessary . . . Social policy provides the correct approach to resolving issues which socialists address wrongly. (Fukuda 1926a, Introduction, 10–11)

If the market was left unregulated, the result would be conflict and inequality between the rich and the poor. But the Marxist idea that class difference would lead to violent struggle resulting in the inevitable collapse of capitalism was not realistic. Instead, Fukuda supported the implementation of social policy within the framework of capitalism for the purpose of ensuring everyone’s right to live. As someone interested in the people’s right to live, Fukuda was attracted to the newly emerging field of welfare economics (pioneered by authors such as Alfred Marshall [1842–1924] and Arthur C. Pigou [1877–1959]). Even before the publication of Pigou’s The Economics of Welfare in 1920, Fukuda was groping toward a new approach to enhancing economic well-being. While he played a leading role in the

 Social Policy and Japanese-Style Marxism 215 introduction of welfare economics to Japan, he believed that welfare economics that focused exclusively on quantifiable economic variables was insufficient. The issue of labor relations in capitalist economies was not limited to the problem of economic distribution. Equally important was the fact that the personhood of workers was being subjected to things and to prices. Fukuda believed that welfare economics had to address this ethical dimension (Miyajima 1984, 38–9). It is worth noting that, in translating the concept of “welfare economics,” he revived the old Confucian term kōsei (see 10.2), and defined it as “the attempt to enrich our existence as human beings, to make it more meaningful, and to advance it” (Fukuda 1928b, 20). As is evident, kōsei included non-economic dimensions of human flourishing. But Fukuda’s understanding of this term was quite different from its original Confucian meaning. In his view, kōsei was not something that rulers should grant the people through paternalistic benevolence. Rather, kōsei presupposed the development of individuals as autonomous persons, free from unilateral subordination to things and prices. In his vision, kōsei had to be obtained through struggles conducted by industrywide labor unions, and secured through union participation in the running of factories (Miyajima 1984, 38–40). Fukuda’s concept of kōsei, however, was superseded by a more traditional understanding of the term when the Ministry of Welfare (Kōsei-shō 厚生省) was established in 1938. The establishment of this ministry, which oversaw healthrelated policies as well as social security and welfare, decisively influenced the meaning of kōsei. In contemporary Japanese language, kōsei connotes health and welfare benefits provided by the state or by employers to the people or to the employees—which is closer to the traditional Confucian sense of the word compared with the way Fukuda defined the term. The displacement of Fukuda’s definition of kōsei by a more traditional understanding of the term is perhaps indicative of the difficulty his ideas encountered in the context of the Japanese society at the time. Fukuda emphasized the autonomy of individuals, but this emphasis was mitigated by his recognition that states should play an active role in ensuring the people’s right to live. In an intellectual environment where the duty of individuals to the collectivity was constantly emphasized, an attempt to tread the thin line between liberalism and state activism was particularly difficult. In the period of crisis after the Great Depression, economic liberalism in Japan was eclipsed by ideas of state control, either of the Marxist or of the “state socialist” variety. While Fukuda rejected socialism and supported social policy from his distinctive liberal stance, his longtime rival Kawakami Hajime was someone who, having started out as an advocate of social policy, eventually converted to Marxism.1 Like Fukuda, Kawakami was deeply interested in the social problems of the day, and he joined the ASSP to address them. But being a dedicated moralist, Kawakami was more sympathetic toward socialism than Fukuda from the start and exhibited greater interest in it. The reason why he initially did not support socialism despite his sympathy had to do with his understanding that socialism is an essentially materialistic doctrine. Having been deeply influenced by Confucian morality, Kawakami was convinced that what mattered most was moral improvement, rather than changes in social structure or institutions. T h e discussion of Kawakami here draws heavily upon Sumiya (1962) and Bernstein (1976).

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Part of what changed his attitude toward socialism was his year-long stay in Europe in 1914, particularly his observation on the persistence of poverty amid material plenty in the most advanced capitalist states, including Britain and France. Returning to Japan, Kawakami wrote Bimbō monogatari (Tales of Poverty), a highly popular series of essays published in the Osaka Asahi Shimbun newspaper. In this work, he moved closer to socialism by emphasizing the problem of distribution, which, if left unaddressed, would capsize any attempt to solve the problem of poverty, however rich the country may become. But in addressing the problem, he continued to speak in a language that Tokugawa-era Confucian scholars would have easily understood: In these tales, my intention was to discuss the problems of wealth and poverty from a Confucian viewpoint. Some economists are inclined to assess the development of civilization taking only the criterion of the advancement of material civilization—or multiplication of wealth. But it is my view that the development of civilization in the true sense of the word occurs when many people—as many people as possible—learn the Way. Then why do I remain an economist and discuss the problems of poverty and wealth day in and day out? That is because, as Mencius said, only a gentleman can maintain tranquil mind in the absence of stable means. As for ordinary people, if they lack stable means, they will not be able to attain calmness of mind. Rather, they will behave selfishly and licentiously, refraining from nothing, and deviating from the Way farther and farther. (Kawakami 1917, 4–5)

In writing this passage, Kawakami stood squarely in the long tradition of Tokugawaera Confucian scholars. Also, in addressing the problems of poverty, he continued to prioritize moralistic solutions. Kawakami pointed out that the problem of inequality could theoretically be solved under three circumstances: (1) if the rich stopped consuming luxury goods, thereby shifting the balance of effective demand in favor of the production of goods consumed by the popular masses; (2) if the inequality in income and wealth was reduced; or (3) if the capitalist system was fundamentally transformed. Among the three, he advocated the first solution, which was the most moralistic, least structural solution. While he recognized that social structure shapes people, at the end of the day, he felt that it is people who shape society: In a nutshell, people and the circumstances in which they find themselves are interdependent. While people shape their environment, environment shapes people. But if we must decide which one comes first, then we must say that people come first and environment second. Thus, I must say that the reform of the social structure cannot be the most fundamental solution to the problem of poverty. (1917, 216–7)

Institutions and social structures cannot bring about the desired results unless they are populated by the right kind of people.

 Social Policy and Japanese-Style Marxism 217 Tales of Poverty showed Kawakami’s growing interest in Marxism. Yet, his traditionalism is evident in the way he discussed Marxism: Here, I do not intend to regurgitate and to critique Marx’s arguments one by one. Fortunately, ideas similar to his economic view of society can be found in our own Oriental tradition. So without explicating Marx’s ideas in detail, we can just refer to some well-known passages by ancient thinkers to give the readers some general ideas about Marx’s arguments. Specifically, I am referring to Confucius’s answer to his disciple Zigong’s question about proper way of politics, recorded in the Analects: “First ‹you must› provide food, then raise an army, and then you must have the people believe in the ruler.” In our own country, Kumazawa Banzan wrote, commenting on this passage: “If there is not enough food, samurai will act greedily and the ordinary folks will steal. Conflicts are incessant and punishments are endless . . . Under such circumstances, the state will be defeated even before a war begins. There is no question of raising an army, let alone gaining the confidence of the people.” When we read such passages, we feel as if we were listening to the speeches of ‹David› Lloyd-George in the Tokugawa era. As Mencius observed . . . without improvement in the economy, moral advancement is impossible. And this is an application of the so-called economic view of society. (1917, 224–7)

In Kawakami’s highly creative interpretation, Karl Marx’s (1818–83) materialist view of history is turned into a Confucian theory of “political economy” in which provision of material welfare is followed by moral teaching. It is not far-fetched to suggest that Kawakami’s influence as a socialist owed in part to his ability to explain Western socialist ideas using Confucian moral language familiar to many readers. But by the time he wrote Tales of Poverty, other scholars, including some of his disciples, had absorbed Marxist teachings and criticized Kawakami for “misunderstanding” Marx. Intellectually sincere, and unsure about his own understanding of Marx, he devoted himself to the study of the philosophical basis of Marxism. As his studies deepened, he moved away from social policy and became a convinced Marxist. Through his studies of Leninism, Kawakami also became convinced that Marxist theory needs to be integrated with political practice. By 1932, he joined the outlawed Nihon kyōsantō (Japanese Communist Party, JCP), and translated the Comintern’s “1932 Theses” for the Party (see 22.3). By joining the JCP, Kawakami indicated his willingness to accept Marxism (and the Party’s interpretation of it) in toto. Yet, by devoting himself to the JCP and to its cause, Kawakami may have been practicing the ethic of absolute self-abnegation that he had absorbed in his youth (Bernstein 1976, 29–33). Kawakami’s path from social policy through moralistic socialism to Marxism was a slow and often tortuous process through which he struggled to reconcile his moralistic convictions with the structural arguments of modern social science. Through his own example, Kawakami built a bridge between traditional moral ideas and modern socialism and Marxism, by crossing which many intellectuals of later generations accepted socialist or Marxist beliefs.

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22.3  Yamada Moritarō and the Controversy over Japanese Capitalism Starting in the late nineteenth century, Marxism began to attract the attention of some Japanese. But it was in the 1920s when Marxism began to exert wider and deeper influence on the Japanese intellectual scene. The 1920s were a period of slow growth and financial instability. The rapid expansion of a modern working class and the growing gap between the rich and the poor provided a fertile ground for receiving new socialist ideas. Whatever its faults, the USSR served as a powerful magnet for intellectuals and workers who believed in socialist ideals. The Great Depression, which started in 1929, amplified the influence of Marxism by underscoring the problems of capitalism. In addition, Marxism provided intellectuals with a grand theory by using which they could analyze (and to predict) the economic, societal, political, cultural, and intellectual development of human societies in a comprehensive manner. Knowledge of Marxism became indispensable even for non-Marxist intellectuals wishing to comment on social, political, or economic issues. For Japanese intellectuals, to accept Marxism was to believe that Japan would experience a proletarian revolution in the future. But depending on how one understood the current stage of Japan’s historical development, the strategy for a future revolution would vary. On this issue, Japanese Marxists were divided into two factions by around 1927. The two factions came to be known as Kōzaha (Lectures Faction) and Rōnōha (Labor-Farmer Faction). The main difference between the two concerned their interpretations of the character of the Meiji Restoration when viewed in the light of Marxism. The main contribution which Yamada made to the history of economic thought in Japan was to articulate an interpretation of modern Japanese capitalism that became fundamental to Kōzaha theory. Yamada Moritarō was born in a family of well-to-do farmers in Kuroda Town, Haguri County, in Aichi Prefecture. In 1916, he entered the Eighth Higher School in Nagoya (today’s Nagoya University), where he encountered socialism and Marxism through the writings of Kawakami Hajime. Earlier, Yamada was interested in more personal questions on the meaning of life, which he explored through readings in philosophy, literature, and the arts. But after reading Kawakami, he appears to have decided that his personal problems could not be solved in isolation from larger social problems (Terade 2008, 30–2). In 1920, he entered the Faculty of Economics at Tokyo Imperial University, where he studied Marxist economic theory. After graduation, he stayed on at the university as a research assistant, rising later to the rank of an assistant professor and an associate professor. Unlike Fukuda and Kawakami, Yamada started his academic career at a time when Marxism was at the center of intellectual debates in the social sciences—at a time when one did not have to be a maverick to pick Marxist economics as one’s research area. By temperament, Yamada was a man of study rather than of action. Though his interest had moved from philosophy, literature, and the arts to social sciences and economics, by his own admission, he was “inclined to think at a highly abstract level, so ‹he› was inexperienced when it comes to ‹participation in political activities outside

 Social Policy and Japanese-Style Marxism 219 the university campus›” (Terade 2008, 35). Yamada’s early academic works focused on faithful explication of Marxist theory—a subject that was rather removed from the frontline of political struggles. Yet, by the early 1930s, ideological repression was tightening, and ivory-tower theoreticians like Yamada were not off limits. Though he was not politically active, and appears not to have joined the JCP, in his theoretical views, he was moving closer to the JCP. Yamada was arrested in 1930 under the Peace Preservation Law for making a small financial contribution to a student newspaper published by a communist youth organization. Though he received a suspended sentence, he had to resign from his university post. Having been invited to participate in a book series project organized by Kōzaha scholars, Yamada began to work on an analysis of Japanese capitalism from a Marxist viewpoint. In this manner, he became involved in the ongoing debate between the two competing groups of Marxist scholars. The starting point for the debate between Kōzaha and Rōnōha was the so-called 1927 Theses issued by the Communist International (Comintern) in July 1927. The Comintern was established in Moscow in 1919 to spread Soviet-style communism around the world. It was organized as a “global” political party for which communist parties in individual countries served as local “branches.”2 The Japanese Communist Party was established in 1922 under the guidance and financial support from the Comintern (Tachibana 1983). Between 1922 and 1932, the Comintern issued four “Theses” concerning Japan—in 1922, 1927, 1931 (draft theses), and in 1932. These documents were prone to be influenced by the exigencies of political struggles within the USSR. Nevertheless, the JCP and many non-JCP Marxists accepted Comintern Theses as documents with near-absolute authority. Thus, they exerted a strong influence on Japanese Marxists’ analyses of Japan. The 1927 Theses viewed contemporary Japan as a country that is “ruled by a bloc of capitalists and landowners, a bloc in which the capitalists predominate” (Degras 1960, 398). Thus, while the immediate task of revolution in Japan was to complete a bourgeois-democratic revolution, the high degree of capitalist development in Japan meant that this revolution “will immediately turn into a socialist revolution, a revolution against capitalism as such” (Degras 1960, 398). In this manner the 1927 Theses left some ambiguity about the exact character of contemporary Japanese society and the nature of the coming revolution. Members of the Rōnōha (so called because they contributed to the magazine Rōnō, published 1927–32) included the veteran socialists Yamakawa Hitoshi 山川均 (1880–1958) and Sakai Toshihiko 堺利彦 (1871–1933) as well as economists Inomata Tsunao 猪俣津南雄 (1889–1942) and Sakisaka Itsurō 向坂逸郎 (1897–1985), among others. They argued that the Meiji Restoration was a bourgeois revolution (albeit an incomplete one), and that Japan was already at the capitalist stage of development. These theorists deemphasized Japan’s distinctiveness and held that capitalism tends to eradicate much of the historical specificities in a country’s pattern of historical T h ough the Russian Communist Party was theoretically subordinate to the Comintern, in reality, the Russian party never took orders from the Comintern. Rather, the Russian party directed the Comintern, which in turn guided (and financially assisted) other national parties.

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development. For them, Japan’s agricultural sector (in which many were tenant farmers working for landowners) was basically capitalist and thus modern in character. Since Japan was already at the capitalist stage, the task of the proletariat was to carry out a one-stage socialist revolution. By contrast, Kōzaha was the “orthodox” group that was more closely associated with the JCP, and with instructions of the Comintern. Members of this faction included Noro Eitarō 野呂栄太郎 (1900–34), Hattori Shisō 服部之総 (1901–56), Hani Gorō 羽仁五郎 (1901–83), and Hirano Yoshitarō 平野義太郎 (1897–1980) as well as Yamada Moritarō. In contrast to Rōnōha, Kōzaha theorists placed greater emphasis on the feudal elements in contemporary Japanese society. This led them to argue that, before attaining socialism, Japan would have to go through a two-stage revolutionary process. As a group of theorists more closely associated with the JCP, they apparently felt the need to establish their viewpoint as the orthodoxy, and to characterize the Rōnōha position as a heresy (Fukumoto 2000, 4–5). As Kōzaha theorists distanced themselves from Rōnōha, they came to place greater emphasis on the feudal elements in contemporary Japan. Between 1932 and 1933, scholars belonging to the Kōzaha published a seven-volume book series, through which they attempted a comprehensive analysis of modern Japanese economy, society, politics, and culture from their own Marxist viewpoint. It was this book series, entitled Nihon shihonshugi hattatsu-shi kōza (Lectures in the History of the Development of Capitalism in Japan), that gave Kōzaha its name. Yamada contributed three substantial articles to the book series, and they later became the basis of his landmark 1934 work, Nihon shihonshugi bunseki (An Analysis of Japanese Capitalism), which had a decisive influence on the later development of Kōzaha theory. In these works Yamada sought to analyze the path of capitalist development in Japan since the Meiji Restoration, to identify the particular “character-type” of capitalism peculiar to Japan, and to clarify its logic. Summarizing his own arguments, Yamada wrote: This process of the emergence ‹of industrial capital in Japan› is a process that took place mainly between 1897 and 1907—i.e. during the period of the SinoJapanese War and the Russo-Japanese War. And it was through this process that the militaristic, serfdom-like character-type of Japanese capitalism was finally consolidated. This process, through which Japan’s peculiar form of capitalism proceeded, was at the same time a process through which Japanese capitalism was transformed into imperialism, and also into finance capitalism. This is a logical result of the peculiar character of Japanese capitalism. The specifically Japanese form of capitalism, which has developed since the Meiji Restoration, was thus finalized through the process of the consolidation of industrial capitalism .  .  . The Meiji Restoration was made inevitable when the Tokugawa feudaldictatorial system lasting from the seventeenth century came under the pressure from advanced capitalist states. Japanese capitalism, which originated from this Restoration, is a peculiar, perverse form of capitalism that stands upon serfdom-like petty farming, which is based on the foundation of the statute labor or corvée, and which is characterized by the practice of debt servitude. This perverse peculiarity

 Social Policy and Japanese-Style Marxism 221 of Japanese capitalism, which is based on its world-historical underdevelopment, is structurally condensed in the definition of the process of the establishment of industrial capital. (Yamada, M. 1934, 1–3)

According to Yamada, Tokugawa Japan corresponded to feudalism in Marx’s scheme of historical development (Terade 2008). Yet, in Japan, the urban bourgeois class was lacking or weak, as a result of which Japan could not achieve an internally driven transition to capitalism. For this reason, the Meiji Restoration ended up being an incomplete revolution. Meiji Japan represented a reorganized form of feudalism. The emperor system, which is absolutist in character, was at the core of the system, while the economy was still characterized by the continuation of feudal landholding system. Under this system, capitalism was forcibly created from above by state initiative. This forced creation of capitalism was carried out at the expense of “serfdom-like petty farming.” Japan’s industrialization was carried out, using capital derived from land tax. Investment into the modern industrial sector was made possible through the expropriation of agriculture and through the imposition of heavy burden on indigenous industries. Rapid growth was observed in the light industries, including silk and cotton spinning. Yet, in such industries, mechanized factory production coexisted with domestic industry under a subcontract system. In both cases, wages were low. The coexistence of different production systems and low wages were observed in other industries, and constituted one of the characteristic features of Japanese capitalism. But the priority in the creation of capitalism was placed on militaryrelated industries, and on the building of infrastructure, including railroad and telecommunications. This oppressed the light industries, and the low wages of workers and the low income of tenant farmers meant that Japan’s domestic market was quite narrow. This forced Japanese capitalism to seek markets in Asian countries. Coupled with the paucity of natural resources in Japan, this circumstance necessitated Japan’s military expansion into Asia, which further strengthened the need to develop a bloated military organization (Yamazaki 1978, 7). Part of the appeal of Yamada’s work consisted in its recondite, inaccessible writing style featuring convoluted sentences and unfamiliar terms, which were allegedly designed to dodge censorship (Hara, A. 2016, 1). But its main appeal perhaps was that Yamada analyzed Japanese capitalism as an integrated “structure,” in which agrarian relations, industrial structure, and overseas expansion all constituted parts of a unified whole. At the same time, Yamada’s (and more generally Kōzaha’s) view of Japanese capitalism represented a new turn in the evolution of modern Japan’s self-images. By contrast to most observers of modern Japan up until that time, Kōzaha scholars painted a predominantly negative portrait of modern Japan (Terade 2008, 203–7). Why, then, did Kōzaha theory acquire such great influence in Japan? It is possible to suggest three reasons for this. First, in the 1920s and 1930s, Marxism was regarded as an “advanced” theory representing the new wave of civilization. Japanese intellectuals were historically used to importing from overseas intellectual frameworks for understanding the wider world, be they Buddhism, Confucianism, or modern Western thought. When the “Western civilization” became ideologically split into several factions in the interwar era, Marxism came to represent one variety of

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“advanced thought.” Second, as mentioned before, Marxism provided an exceptionally powerful intellectual tool with which to understand the evolution of world history. In the interwar era, Marxism acquired great intellectual authority and influence among intellectuals, not only in Japan but also in Europe and other parts of the world. Third, as the Japanese society experienced successive economic crises, tightening repression, and military expansionism, Kōzaha’s analysis of Japan appeared more convincing. Repression of communism, socialism, and liberalism intensified as the 1930s progressed. Yamada and other leading Kōzaha theorists were arrested in 1936 for the so-called Communist Academy Affair, while Rōnōha theorists met the same fate in the “Popular Front Affair” of the next year.3 Under arrest, Yamada was pressured into declaring his apostasy, and into taking An Analysis of Japanese Capitalism off store shelves. He spent the war years keeping silent, and refraining from political activities or Marxist scholarship. Japan’s defeat in 1945 drastically changed the situation surrounding Marxists in Japan. In October 1945, the JCP was reestablished. One month later, Yamada was reinstated as a professor at the Tokyo Imperial University, along with others who had been banished due to their political views. In postwar Japan, the influence of Marxism, particularly of Kōzaha variety, grew markedly. As Japan sought to transform itself into a democracy in the postwar era, the Japanese had to reflect upon the question of why and how Japan’s attempt to build a modern state ended up in a militarist dictatorship that led Japan to a path of expansion, aggression, and defeat. Kōzaha theory appeared to provide a clear set of answers to such questions, suggesting that dictatorship and war were the necessary results of the very structure of modern Japanese society. The theory directed observers’ attention to such issues as “semi-feudal” relationship between landlords and tenant farmers, personal dependency of factory workers on the company management, infringement of individual rights in the context of patriarchal ie-type organizations (see 19.2.2), and the “absolutist” character of the emperor system. Kōzaha theorists saw all these as the consequences of the peculiar and perverse pattern of Japanese capitalism. For those who suffered from the experience of militarism and war, and for those who were deeply impressed by that experience, the notion that prewar Japan’s modernity was fundamentally skewed and anomalous was easy to accept. One important point to note about the Kōzaha Marxists is that they emphasized the need to achieve “true (bourgeois-capitalist) modernity” as the immediate task before Japan. To this extent, Kōzaha theory could express not so much a search for an alternative to modernity, but the aspiration for achieving “true” modernity. This made the Kōzaha perspective compatible to a significant extent with the views of some liberal intellectuals. Kōzaha’s point about the skewed nature of Japanese modernity was shared by a small, but influential, group of liberal intellectuals such as the intellectual historian Maruyama Masao 丸山眞男 (1914–96) and the economic historian Ōtsuka Hisao 大塚久雄 In the Communist Academy Affair, sixty-one Kōzaha-affiliated people were arrested for allegedly planning to organize an institution similar to the “Communist Academy” in the USSR. In the “Popular Front Affair,” 465 people, including prominent Rōnōha scholars, were arrested for allegedly collaborating with the JCP in the attempt to form a “Popular Front.”

3

 Social Policy and Japanese-Style Marxism 223 (1907–96). In fact, these liberals were influenced in their views of modern Japan by Kōzaha theory, even as they sought to distance themselves from Marxism. In effect, Kōzaha Marxists and liberals formed a “united front” in attempting to overcome the “backward, feudal” aspects of Japanese society. The Kōzaha perspective on modern Japan thus became part of mainstream thinking in Japanese social, political, and economic thought, and maintained that position until the 1960s, especially among academics and among school teachers. It was postwar Japan’s “economic miracle” that undermined the influence of Kōzaha theory and of Marxism more generally. With rapid economic growth, the notion that Japan had become a “nation of middle class people” ringed true to a large percentage of Japanese. Under such a situation, Marxist theories appeared to have lost touch with the social reality. As a prominent Marxist had to acknowledge, “both Kōzaha and Rōnōha revealed inability to analyze the current conditions, and lost a sense of how they could come to grips with contemporary reality . . . The rapid growth [of the Japanese economy] sounded the death knell [to Japanese Marxism]” (Furihata 1983, 6–9).

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Japan in an Era of Crises

23.1  Changing International and Domestic Environment after the First World War The international environment that Japan faced during the Meiji era was characterized by the collective hegemony of the Western great powers, coupled with imperialist rivalries among them. Japan’s overall policy objective (or the core element of “national interest”) was to avoid the fate of colonization, and to participate in the competition among the great powers on an equal footing. It was for this purpose that Meiji Japan undertook a bold policy of Westernization. The introduction of a modern legal system, the construction of modern industries, and the building of modern army and navy— all these were undertaken for this purpose. Japan’s victories in the First Sino-Japanese War (1894–5) and in the Russo-Japanese War only served to validate Japan’s pursuit of wealth and power in a world of military and industrial competition. From these two wars, Japan emerged as an empire, ruling over Taiwan, Korea, southern Sakhalin, and possessing treaty-based privileges in China and especially in Manchuria.1 The First World War brought further windfall gains to Japan’s military and commercial expansion. The fact that European powers were preoccupied with a lifeor-death struggle at home meant that a huge power vacuum appeared in the AsiaPacific region. This condition, which was amplified by the collapse of the Qing dynasty in China (1912) and of the Russian Empire (1917), whetted Japan’s expansionist appetite. Japan entered the war in August 1914 on the side of the Entente powers, and quickly took control of the German colonies of Qingdao and of the Pacific Islands. In 1915, Japan presented the so-called Twenty-One Demands to China in order to secure Qingdao for Japan, and to consolidate and to expand its interests in China. Chinese government’s acceptance of most of Japan’s demands on May 9, 1915 was later remembered in Republican China as the “Day of National Shame,” and aroused anti-Japanese nationalism. After the Russian Revolution, Japan joined Britain, the Manchuria refers to today’s northeastern China. Although Manchuria was originally a territory controlled by the Manchu people, by the early twentieth century, Han Chinese came to constitute the majority of population. The southern part of Manchuria was the main battlefield of the RussoJapanese War. As a result of the war, Japan took control of Port Arthur (near Dalian), of the South Manchurian Railroad between Port Arthur and Changchun (with a branch line connecting the main line with Korea), and of the territories adjacent to this railroad. Through control of this railroad, Japan turned southern Manchuria into its sphere of influence.

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 Japan in an Era of Crises 225 United States, and France in sending troops to Soviet Russia. Under the pretext of rescuing the Czechoslovak Legion, Japan occupied a long stretch of territory along the Trans-Siberian Railroad from Vladivostok to Irkutsk, keeping its troops in parts of Far Eastern Russia long after other states had withdrawn theirs. Economically, too, the absence of European competition allowed Japan’s light industrial exports to gain new footholds in distant markets including the Middle East, Africa, and Latin America. Though Japan was a debtor nation prior to the First World War, it became a creditor nation due to a huge influx of specie. Japan experienced a huge economic boom during the war. Small wonder, then, that Yamagata Aritomo 山県有朋 (1838–1922), a samurai from Chōshū who became one of the most powerful senior statesmen of Meiji Japan, saw the First World War as a “once-in-a-thousandyear chance” for Japan to extend its influence abroad (Kobayashi, Tatsuo 1963, 5). But the world was transformed after the First World War. Europe was no longer the center of global power, wealth, and civilization. Imperialist rivalry and power politics were delegitimized for having caused the devastating war. Under American leadership, attempts were made to build a political and economic order based on international cooperation and liberalism. Japan’s territorial expansion aroused animosity and suspicion not only in the regions occupied, but also in third countries including the United States. Facing intense pressure and suspicion from the Western powers (and from rising Chinese nationalism), Japan abandoned some of its wartime gains and settled into the new postwar international order in which the United States emerged as the most influential power. There were also significant changes in domestic politics. As we have seen, Japanese politics since the Political Crisis of 1881 was dominated by a cohesive group of former samurai leaders who later came to be known as senior statesmen or genrō (see 15.1). For the rest of the Meiji and part of the Taishō eras, the genrō guided the Japanese state with strong leadership. But by the early 1920s, most of them died, leaving the government with weaker cohesion. The Meiji Restoration was carried out based on the idea of “returning the emperor to his rightful position as the ruler” (11.2.3). This meant that the modern Japanese state was built on the principle of imperial sovereignty, which was also written into the Meiji Constitution. However, the emperor in fact refrained from taking an active role in policymaking. De jure, policies were made in the emperor’s name, but de facto, they were made by people who “assisted” the emperor. But no one under the emperor was in a position to oversee, to integrate, and to reconcile the entire range of government policies.2 The role that the senior statesmen played in Meiji Japan’s political system was to provide a cohesive, integrated leadership, which the formal institutions could not provide. From the early 1920s to the beginning of the 1930s, during the era of the so-called party cabinets, the two major political parties in the Imperial Diet—Seiyūkai and Rikken Minseitō—provided a degree of cohesiveness to the policymaking process (Mitani 1977). With the collapse of the party cabinets in the May 15th Incident of T h e Meiji Constitution, for instance, provided for “Ministers of State” but made no mention of the cabinet or the prime minister. The prime minister’s authority was rather weak, because the position was stipulated only in the Cabinet Law.

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1932,3 however, the Japanese political system was left without a viable center, and policymaking became increasingly disintegrated, as we shall see later in this chapter. Japan’s economic conditions also changed. In the 1920s, the Japanese economy suffered from a state of chronic malaise, experiencing recessions three times. It did not fall into complete stagnation as the development of heavy and chemical industries, which commenced during the war years, showed gradual progress. But this newly emerging sector was not powerful enough to lead the recovery of the economy as a whole, and Japan’s foreign exchange reserve decreased significantly. In addition, while major trading states gradually returned to the gold standard, Japan remained outside the regime. From the 1920s to the beginning of the 1930s, debates on economic policy were fought over how Japan should adapt to the new political-economic order centered around the United States and Britain. Yet, later in the 1930s, Japan took a different path and attempted to create an autonomous political-economic order in the Asia-Pacific region. This meant new territorial expansion in Asia that was sure to have a negative impact on Japan’s relations with the United States and other Western powers (not to speak of China). Japanese policymakers, however, did not have a clear game plan in pursuing a new order. The Japanese government, without having an effective center of decision-making, and being pushed around by bureaucratic forces it was unable to rein in, staggered into an unwinnable war. How did this happen? Did features of Japanese thought (including economic thought) have anything to do with this? In the remainder of this chapter, we will first trace the debate on economic policy in Japan during the 1920s, and then discuss the turn toward the policy of building an autonomous political-economic order in the Asia Pacific. We conclude by analyzing how the characteristic features of Japanese thought influenced the way Japan reacted to the crisis of the 1930s and early-1940s.

23.2  International Cooperation and Industrial Rationalization Roughly speaking, Japan in the latter half of the 1920s had two options to get out of the economic difficulties: (1) to balance the budget, to promote industrial rationalization, and to reduce domestic price levels, which would allow the country to return to the gold standard; or (2) to introduce expansionary fiscal policy, currency devaluation without the presupposition that Japan would return to the gold standard, coupled with the promotion of export and the expansion of aggregate demand (Takeda 2002, 36). The cabinet led by Prime Minister Hamaguchi Osachi 浜口雄幸 (1870–1931),4 formed in July 1929, made a clear choice in favor of the former option. At its start, the Hamaguchi Cabinet proposed its basic policy objectives in the so-called “Ten-Point Program.” The following is an excerpt of those points that concerned foreign policy and economic policy: See Chapter 17, n. 4. Hamaguchi was the president of the Rikken Minseitō (the Constitutional Democratic Party) from 1927 to 1931.

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 Japan in an Era of Crises 227 (#4) It is an urgent task to revamp the current state of diplomatic relations between Japan and China and to form a strong bond as good neighbors . . . Resorting to military force without good reasons does not lead to enhancement of national prestige. What our government desires is coexistence and co-prosperity .  .  . To promote close friendships between the Empire of Japan and other nations and to advance mutual trade and Japanese business overseas are priorities of this government . . . Improvement in our balance of international indebtedness mainly hinges upon the promotion of trade and the development of Japanese businesses overseas. At the same time . . . to cooperate with the activities of the League of Nations wholeheartedly, and to contribute to world peace and to the welfare of all mankind are part of our country’s noble mission. (#5) With regard to the issue of disarmament, Japan, together with other nations, should have strong determination in seeking an international agreement on this matter. (#6) Those people who occupy leading positions in the society should all take the lead in working hard and practicing frugality to show our resolution and to awaken the nation as a whole. Specifically, the government will resolutely carry out austerity measures in local as well as central government finances. Through these measures, we hope to achieve consolidation in the business world and reduction in consumption levels. (#7) Since the beginning of the Great War, the outstanding balance of government bonds has grown at an alarming pace .  .  . ‹T›his seriously weakens the basis of national finance, threatens the stability of the financial world, and undermines the credibility of government bonds. The government, therefore, plans to stop selling new bonds to cover expenses in the general account budget, and to limit the annual amount of bonds sold for special account budget to half of what was originally planned. (#8) Removal of the ban on gold export ‹i.e. returning to the gold standard› is an absolutely necessary measure for reconstructing government finances as well as the private sector. Moreover, introduction of this measure cannot be postponed for too long. (Hamaguchi, O. 2000a, 135–7)

Points #4 and #5 concern foreign policy issues, while Points #6 through #8 relate to economic policy. Let us first consider the foreign policy program. The shape of the postwar international order was defined by a number of key treaties and arrangements. Among those, the most important for our purposes were: the Versailles Peace Treaty (1919), which included as its first part the Covenant of the League of Nations; a series of treaties signed at the Washington Conference of 1921–2;5 the Kellogg–Briand Pact T h e Washington Conference was convened at the initiative of the US government for the purpose of disarmament and of adjustment of interests among states having interests in the Asia and Pacific region. The treaties signed at the conference included the Four-Power Treaty concerning the Pacific (signed in 1921 by the United States, Britain, France, and Japan), the Washington Naval Treaty (signed in 1922 by the United States, Britain, France, Italy, and Japan), and the Nine-Power

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(1928);6 the London Naval Treaty (1930);7 and the modified gold standard (1925–31), which was a key component of the international economic order. Japan’s diplomacy in the 1920s was conducted in keeping with this international order. The Hamaguchi Cabinet took a firm position that emphasized cooperation with the United States and Britain, renunciation of war, and disarmament. It is worth noting that the cabinet statement on foreign policy contained references to such economic issues as “the promotion of trade and the development of Japanese businesses overseas,” and “improvement in the balance of international indebtedness.” Hamaguchi also made it clear that one of the purposes of his cabinet’s disarmament policy was “to reduce the burden on the people” (Hamaguchi, O. 2000c, 258). In Hamaguchi’s thinking, foreign policy objectives were closely linked with economic goals, and vice versa. The foreign policy of the Hamaguchi Cabinet was based on the acceptance of the international order centered around Britain and the United States as the premise upon which domestic policy agendas were to be pursued. While Hamaguchi sought to promote the development of the Japanese economy, the economic measures introduced in points #6 and #7 could have a negative impact on the economy in the short term. Also, Hamaguchi presented disarmament as a policy that would “reduce the burden on the people,” which was intended to contribute to fiscal consolidation and austerity. Furthermore, on January 11, 1930, Japan returned to the gold standard at the pre–First World War parity (49.85 dollars/100 yen). This exchange rate overvalued the yen in relation to the real exchange rate. Thus, the return to the gold standard increased Japan’s trade deficit, which led to an outflow of specie and reduction in money supply. All these measures could, at least in the short run, cause deflation and recession. Yet, Hamaguchi thought that the economic pain would last only a short time and that in the medium to long term, Japan could achieve stable economic growth. In January 1930, he stated: The lifting of gold embargo is just the first step in the return of Japan’s financial world to a normal state of affairs. From now on, the Japanese people, building upon this renewed foundation, must continue their serious effort in ensuring the steady development of the national economy, striving to improve our balance of international indebtedness and to sustain the gold standard .  .  . Thus, what the government regards as pressing issues include regulation of corporations, improvement in efficiency, the strengthening of basic industries, improvement in the management of primary industries, encouragement of the consumption of domestic products, improvement in the system of industrial finance, and rationalization of the distribution system. Currently, Japan’s industrial world is quite chaotic, lacking in discipline, and is characterized by excessive competition which results in mass production of low-quality products. To correct this situation, Treaty concerning China (signed in 1922 by the United States, Britain, France, Italy, Belgium, the Netherlands, Portugal, Republic of China, and Japan). 6 T h e signatories of the Kellogg–Briand Pact pledged to renounce war as an instrument of national policy (except in the case of self-defense). 7 T h e London Naval Treaty extended and supplemented the Washington Naval Treaty. It was signed by the United States, Britain, and Japan.

 Japan in an Era of Crises 229 I believe it is necessary to eliminate redundant and overlapping investments, to find a way to lower production costs, to stabilize and to improve the quality of products, and to encourage merger or alliance among corporations with the purpose of regulating them. (Hamaguchi, O. 2000b, 219)

In order to develop the national economy, Hamaguchi thought it necessary for the government to take measures to encourage corporate merger or alliance so that large corporations capable of withstanding international competition would emerge. Such large corporations were to be placed under government regulation. The so-called “industrial rationalization policy” (sangyō gōrika seisaku) was implemented in an attempt to strengthen the international competitiveness of Japanese industries to facilitate the return to the gold standard. To promote industrial rationalization policy, Major Industries Control Law was enacted in 1931. Japan aimed to return to the international gold standard at the old parity, and to promote disarmament. Disarmament would reduce the financial burden on the government, which, together with the return to the gold standard, would cause deflation and recession. Such an economic environment would accelerate the process of industrial rationalization, which would strengthen the international competitiveness of Japanese industries, and this would ultimately lead to growth in trade and to the steady development of the country’s economy. This policy of achieving the development of national economy while maintaining cooperative relations with the United States and Britain represented one approach in defining Japan’s relationship with the rest of the world. It signified the attempt to accept painful domestic adjustments in order to integrate into the international order as its faithful member.

23.3  Arguments for Lifting the Gold Embargo at New Parity Naturally, not everyone supported the policy of the Hamaguchi Cabinet. Some observers argued that when returning to the gold standard, Japan should set the value of the yen at a level closer to the real exchange rate. One example was Ishibashi Tanzan 石橋湛山 (1884–1973), a prominent journalist of liberal orientation, and a later member of the National Diet (1952–63) and prime minister (1956–7). In 1928, he explicated his view regarding this matter on the pages of his own journal, Tōyō Keizai Shimpō: The purpose of lifting the embargo on gold exports is nothing other than to maintain the stability of the exchange rate. The exchange rate can be stabilized .  .  . if the import and export of gold are conducted freely at a certain parity. There is no particular reason why we must return at the old parity. (Ishibashi 1971a, 151; emphasis in the original)

What was important for Ishibashi was the stability of the exchange rate, which would facilitate international economic transactions. To stabilize the exchange rate, the ban on the export and import of gold had to be lifted. At what parity Japan returned to

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the gold standard was not too significant an issue. Ishibashi’s argument seems to have been based on his trust in the functioning of the gold standard, as is evident from the following excerpt: Whether we are dealing with freight or money . . . what is essential in the economy is to make the circulation of such items as international as possible. That is also the key to bringing prosperity to the nation. Yet, because our country now bans the export of gold, the exchange rates fluctuate widely on a constant basis even for small reasons. On top of that, the government may suddenly lift the ban on the export of gold, and the exchange rates may go back to the level close to the old parity. I believe that the current policy of the government hinders international flow of short- and medium-term capital to a greater extent than is commonly realized . . . It is obvious that the ban on the export of gold causes constant fluctuations in the exchange rates, which hamper the healthy development of Japanese trade as well as industry. (Ishibashi 1971b, 152–3)

If the free flow of freight and money is essential to the economy and constitutes the basis of national prosperity, then it goes without saying that military confrontation with other nations should be avoided. Ishibashi criticized that Japan’s foreign policies so far had focused too much on its “special position in Manchuria” (1971d, 235),8 and stated as follows with regard to the proper orientation in China policy: Japan shares borders with China and possesses especially significant interests in China . . . ‹Thus, it› should create a clear plan and be ready to solve on its own any problems which may arise in relation to China. The most important point in the plan is . . . that Japan should abandon its special interests in Manchuria-Mongolia. (1971c, 229)

Ishibashi’s suggestion concerning the gold standard went unheeded by the Hamaguchi Cabinet, as did his much more heretical proposal about abandoning special interests in Manchuria. Return to the gold standard at the old parity, together with economic policies formed on such a basis, caused a recession in the economy, especially due to the deepening of the Great Depression. As a consequence, the Japanese economy plunged into the so-called Shōwa Depression (1930–1) (Nakamura, M. 1989; Iwata 2004). Against this background, Ishibashi’s argument for lifting the embargo on gold exports at a new parity appears to be an eminently reasonable opinion that better corresponded to the economic condition at that time. Yet, from a larger perspective, the difference between Hamaguchi and Ishibashi was not all that great. They shared the same opinion on the importance of an open international economy based on the gold standard. Although Hamaguchi did not go nearly so far as to call for abandoning Japan’s special interests in Manchuria, he agreed with Ishibashi that military spending On Japan’s special position in Manchuria, see n. 1 in this chapter. Ishibashi speaks of ManchuriaMongolia because the presumed Japanese sphere of influence included part of today’s Inner Mongolia.

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 Japan in an Era of Crises 231 should be limited to such a level that would not hamper the development of the civilian economy. Both Hamaguchi and Ishibashi took the international order in the 1920s as a given. The differences in their opinions about whether to adopt the old or new parity concerned tactics, not fundamental orientations to the rest of the world.

23.4  The Great Depression and the Manchurian Incident The Hamaguchi Cabinet, established in July 1929, was replaced in April 1931 by another Rikken Minseitō cabinet of Wakatsuki Reijirō 若槻礼次郎 (1866–1949). The Wakatsuki Cabinet, in turn, was replaced in December 1931 by another party cabinet led by the Seiyūkai politician, Inukai Tsuyoshi (see 17.2). The Inukai Cabinet lasted until May 1932. During those three years, a series of momentous changes transformed the domestic and international environment faced by Japan. One such change was the stock market crash in New York in October 1929. From that point onward, the US economy fell into a deep recession, and its negative impact spread to Europe and other countries (including Japan) that depended on US money. The Great Depression brought an end to the international gold standard, and Western states left the system one after another. In response to the depression, Western powers established exclusive economic blocs or increased tariff levels to protect their own economic zones and to shut out other countries from trade. Such measures heightened political as well as military tensions throughout the world. Japan suffered from a serious economic downturn known as the Shōwa Depression. Changes in the international economic environment meant that the premises for the policies of the Hamaguchi Cabinet now collapsed. Another development, which was more long-standing, had to do with the upsurge of nationalism in China. One factor that allowed the incursion of Western (and later Japanese) imperialism into China since the mid-nineteenth century was that China had not been transformed into a modern nation-state. Yet, by the 1920s, nationalism was spreading rapidly, especially in urban parts of China, resulting in the rise of mass movements aiming to curtail and to abolish foreign interests and privileges ceded since the Opium War. By the early 1930s, Japan’s special interests in Manchuria were facing increasing pressure from the rising nationalist tide in China. While Japan’s interests in Manchuria as well as “China proper” were based on treaties concluded between Japan and Chinese authorities, for Chinese nationalists, such treaties were forced upon China at a time of the latter’s weakness and were thereby illegitimate. But to many Japanese, Chinese nationalist challenges to treaty-based privileges appeared to undermine Japan’s hard-won position in Manchuria and in China. Faced with severe depression and with a growing threat to Japan’s special interests in China, political forces calling for a “Shōwa Restoration” (Shōwa ishin) gained in influence. This was a political slogan often used in the 1930s by those who wished to change the political and economic status quo in Japan (and in the wider world) by carrying out a second “restoration” based on the idea of emperor-centered national socialism (see 21.1). While the focus of attention in the “Shōwa Restoration” was on domestic politics and economy, this idea became closely aligned with the notion

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that Japan should build an autonomous, Japan-centered regional order in Asia, using military means if necessary. The rise of radical political forces calling for domestic and international transformation manifested itself in the third major change that transformed Japan’s political climate—terrorist attacks on the political and economic establishment. In fact, one of the first manifestations of such a tendency was an assassination attempt on Prime Minister Hamaguchi. On November 14, 1930, Hamaguchi was shot at Tokyo Station by a right-wing terrorist named Sagōya Tomeo 佐郷屋留雄 (1908–72). Hamaguchi survived this assassination attempt, but his health condition deteriorated in April of the following year. Wakatsuki Reijirō assumed the leadership of the party and formed a successor cabinet. Wakatsuki’s decision to continue with the economic policies of the Hamaguchi Cabinet was reasonable in the sense that the government did not succumb to this act of terrorism.9 Yet, this decision may well have exacerbated the depression. Only thirteen months after Hamaguchi’s resignation, another act of political terrorism shook the nation; Prime Minister Inukai Tsuyoshi was assassinated in the May 15th Incident, bringing the era of party cabinets to a close. In the meantime, there was a fourth major change, involving Japan’s foreign relations—namely, the Manchurian Incident. Alarmed by increasingly strident challenges to Japan’s “special interests” in Manchuria, officers of the Japanese Kwantung Army (a unit of the Imperial Japanese Army stationed along the South Manchurian Railroad) moved to resolve the problem by military means. On September 18, 1931, the Kwantung Army bombed the South Manchuria Railway near Liutiao Lake, located in the suburb of Mukden (today’s Shenyang). Blaming this explosion on the Chinese forces of the warlord Zhang Xueliang 張学良 (1901–2001), the Kwantung Army quickly moved troops and occupied the entire Manchuria by early 1932. By March, the puppet state of Manchukuo was established, with Aisin Gioro Puyi 愛新覚羅溥儀 (1906–67), the last emperor of the Qing dynasty, installed as its figurehead. Facing criticism in the League of Nations over the Manchurian question, Japan withdrew from the League in March 1933. Kwantung Army’s actions moved Japan in a direction diametrically opposed to Hamaguchi’s Ten-Point Program. The Manchurian Incident was Japan’s first major attempt to undermine the international order led by Britain and the United States, and to carve out its own sphere of influence in the Asia-Pacific region. It also marked the first stage in a long period of war that lasted until August 1945.

23.5  The Idea of a New Regional Order The new policy direction that Japan took since the Manchurian Incident suggested an alternative vision concerning Japan’s future. This was the idea of the creation of an autonomous, Japan-centered order in the Asia-Pacific region. In retrospect, it is easy to dismiss such an idea as a megalomaniac delusion. Yet, given that the international One of the reasons for the assassination attempt mentioned by Sagōya was that “the Hamaguchi Cabinet adopted a harmful policy, as a result of which the economy became depressed and a large number of people lost their jobs.” See Hajimekara keikakuteki (1930).

9

 Japan in an Era of Crises 233 order of the 1920s had already collapsed, one could argue that this alternative path was in line with the global trend at that time. It thus appeared a viable policy approach to many Japanese. But a Japan-centered regional order in the Asia-Pacific region was easier proposed than built. If Japan wished to establish its own self-sufficient sphere by breaking away from the previous international order, one obvious direction of expansion was toward China. Other regions of the Asia-Pacific save for Thailand were under the colonial rule of the Western powers. In fact, Japan continued to seek greater influence in China, attempting to carve out an extended sphere of influence in North China, even after securing Manchuria for itself. By July 1937, Japan was fighting the Second SinoJapanese War (1937–45), an all-out war fought across much of China for more than eight years. In 1940, three years into the war, General Ishiwara Kanji 石原莞爾 (1889–1949), who, as a staff officer of the Kwantung Army, had served as one of the masterminds of the Manchurian Incident, wrote as follows: The Shōwa Restoration is not just a matter for Japan alone. By combining the strengths of the peoples in East Asia, we are to complete the preparation for the final war with the representatives of the Western civilization . . . East Asia, which is still backward at this moment, must possess more productive power than that of Europe or of the Americas .  .  . We must overtake Germany in the progress of science and the development of industry, and quickly acquire the very best industrial power. This must be the most important agenda for our national policy. We must carry out our own great industrial revolution ahead of Germany and of course ahead of the United States . . . With this industrial revolution . . . we should be able to produce amazingly advanced weapons suitable for the final war, and only then is it possible to make perfect preparation for the final war, which is to come in about thirty years’ time. (Ishiwara 1993, 48–51)

Here, Ishiwara argued that Japan should unite the peoples of East Asia and spend thirty years to carry out a great industrial revolution. If this arduous task was left to private economic activities, probably it would not happen even in thirty years. Ishiwara suggested that this should be the agenda of national policy. In other words, it was necessary for Japan to shift from a market economy to a command economy, and to adopt a totalitarian political system (Hara, Y. 1940). Then, Japan, having completed a new industrial revolution, should create weapons far more powerful than those of Germany or of the United States, so that it would win in the upcoming final war. The idea of making East Asia a unified entity was an answer to the conundrum of how to acquire the strongest economic and military power without depending on the United States (Katayama 2012). Yet, how could Japan hope to unite the peoples of East Asia, given that Japan was involved in an all-out war with China? Was it realistically possible to carry out an East Asian industrial revolution? In order for Japan to establish an autonomous regional bloc, resources obtainable from the Japanese Empire (including Taiwan and Korea), Manchuria, and China were not sufficient. For instance, oil production in Japan, Korea,

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Taiwan, Manchuria, and China fell far short of what was necessary for civilian and particularly military needs.10 Thus, Japanese expansionists felt Japan had to expand its area of control to Southeast Asia, which was back then called the “southern resourcerich regions.” Since most of this region was under colonial rule of the Western powers, Japan’s southward advance would inevitably mean confrontation with those states. With Hitler’s occupation of the Netherlands and of France in the spring of 1940, much of Southeast Asia appeared to be up for grabs. But to advance in this direction meant a war with Britain, which also meant that US intervention was probably unavoidable. In Japan at that time, there were a number of people who thought that it would be impossible for Japan to establish an autonomous regional order, and that the war with the United States would bring inevitable defeat (Inose 2010). Diplomatic efforts to improve the relationship with the United States continued. A war with the United States would be a naval war fought out in the Western Pacific. And the navy was well aware that the outlook for such a war was quite grim, at least in the long run. Yet, in the end, the navy agreed to the war. How did this happen?

23.6  Japan’s Drift toward a Disastrous War Japan’s policy choices were not the product of domestic conditions alone. Naturally, it reflected developments in the wider world. Without Germany’s initial victory in Europe, Japan probably would not have moved to occupy French Indochina in 1940. Yet, from the viewpoint of Japan’s own national interest, Japan’s choices cannot be characterized as “rational” responses to changing external circumstances, if only because they resulted in an unwinnable war against China, the United States, and Britain at the same time. A comprehensive explanation of the reckless decisions made by Japanese policymakers is beyond the scope of this chapter. But we can point to several factors in relation to the arguments made in this book. First, one obvious background factor was the strength and the specific character of nationalism in prewar Japan. This was in part a reaction to the pressure of Western imperialism that Japan was exposed to in the nineteenth century. But perhaps more important is the fact that, in responding to this challenge, Meiji Japan’s state builders installed the myth of kokutai (national polity) at the center of the modern Japanese state. The imposition of an official ideology stifled free discussion, and rational arguments tended to be displaced by ideological fanaticism, particularly since the second half of the 1930s, when the use of the term kokutai reached its peak (Yonehara 2015, 8). Second, the idea of occupational duty, coupled with the idea of national interest, bolstered the strength of Japanese nationalism, and made it difficult for citizens to criticize government policies when domestic and international tensions rose, as they did in the 1930s. The idea of occupational duty could effectively mobilize the moral energy of the people toward a national goal, but it did not contain any criteria While Japan’s oil consumption in 1940 was around 4.6 million kiloliter, domestic production (including Korea and Taiwan) was around 0.5 million kiloliters. In 1939, 81.2 percent of Japan’s oil import came from the United States. See Iwama (2011).

10

 Japan in an Era of Crises 235 for judging whether a national goal was a legitimate one. This meant that when the government appeared headed in the wrong direction, there was only weak opposition to the established course. Third, as already mentioned, there were serious weaknesses in the Japanese system of governance. The period after the Manchurian Incident is often characterized as a period of “militarism,” in which the military took over policymaking. This is true to a significant degree. For instance, in 1936, the rule that the army and navy ministers must be active-duty generals or admirals was introduced. Since active-duty military officers could be controlled by the army and navy bureaucracy, this new rule meant that the army and the navy could bring down the cabinets they did not like by withdrawing their ministers. But the problem did not stop there; it was much more complicated. One additional problem involved the question of the so-called right of supreme command (tōsuiken). The Army General Staff and the Navy General Staff, taking the constitutional provision that “the Emperor has the supreme command of the Army and the Navy,” argued that since the operational functions of the army and the navy were under the direct command of the emperor, the two General Staffs were to report directly to the emperor. This meant that they were not subject to control by the prime minister and his cabinet, including the Army and Navy Ministries. When the term “operational functions” was given expansive interpretation, this theory allowed the army and navy to practically break free from the control by the cabinet. And this was not all. While the Army and Navy General Staffs ignored the policies of the cabinet, military units stationed overseas carried out intrigues without the order from higher organs. The Manchurian Incident was a typical example of such insubordination. The plan for the Manchurian Incident did not originate in the Army Ministry or in the Army General Staff; it was planned mainly by staff officers of the Kwantung Army such as Ishiwara. The actions of the Kwantung Army clearly went against the policy of the Wakatsuki Cabinet. In fact, the actions of Ishiwara and his coconspirators constituted a serious criminal act (arbitrary use of power) punishable by death according to the Army Penal Code. Yet, neither the government nor the Army Ministry, nor the Army General Staff could rein in—or make a serious attempt to rein in—the Kwantung Army, partly because the Japanese public opinion, fanned by the mass media, supported the actions of the Kwantung Army (Tsutsui 2018, 129–48). Insubordination did not stop there. Some young officers of the army and navy became radicalized by the notion that the plutocratic establishment (including the zaibatsu and established political parties) was placing its own private gains above the good of the nation. Sympathizing with the idea of Shōwa Restoration, and believing that the emperor’s will was on their side, they staged a series of coups d’état against legitimate civilian governments. In the meantime, the army and the navy were engaged in fierce interservice rivalry; while the army emphasized the threat of the USSR, the navy focused on naval competition with the United States. Unable to set priorities, strategic documents listed both the United States and the USSR as hypothetical enemies on an equal footing, despite the lack of resources to take on two powerful enemies simultaneously. Interservice rivalry was so serious that the desire of navy officers to maintain the navy’s “face” precipitated a diplomatic crisis that made the war against the Western powers

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all but unavoidable. A former rear admiral of the Imperial Navy made the following remark on the decision-making process leading up to the Pacific War long after the war ended: We did not expect that the US would be that furious, when the Imperial Japanese Army advanced to southern French Indochina . . . We had unfounded confidence .  .  . What the staff officers’ attitude reflects is a sensitive issue. We had to think about securing budget, too . . . Once advancement into southern French Indochina was decided upon as an official policy of the nation, then the Ministry of Finance would provide us with a lot of money. So the navy wished to just prepare for a conflict. We also planned to continue diplomatic efforts. That is why we had a dispute about whether to really start a war as late as November 1941 . . . We wished to conclude negotiations between Japan and the United States successfully, and to settle the issues without a war. Yet, we also did not want the image that the navy has no guts at all . . . That was our honest feeling. (NHK supesharu shuzaihan 2011, 136–8)

In this passage, the officer explained what led navy’s key decision-makers—officers in the Navy General Staff—to call for the occupation of southern French Indochina (which became a reality in July 1941). In retrospect, Japan crossed an American “red line” by this move, and, after that, it became difficult to avoid a war. Why did the navy officers recommend this move? For one thing, there was a miscalculation about US reaction to this move. But there was another consideration, or the “sensitive issue” of the budget. The officers did not wish to fight against the United States, but they still recommended this policy because it would secure the navy a large budget. Another issue was that the navy did not wish to admit that it was not prepared to fight a war against the United States, which made it difficult for the navy to back down in a confrontation. To make matters worse, even after the navy’s wishful thinking was proven wrong by the strong reaction from the United States, the navy did not change its course. A former navy captain who was very close to the nerve center of decisionmaking at the time reminisced as follows: The navy should have thoroughly considered whether the operation plans for war against four countries (the US, Britain, the Netherlands, and China) were really feasible .  .  . Naturally, risks are unavoidable in any military operations .  .  . But normally, one would assess the risks and decide whether the risks are acceptable. Yet, we did not ponder the question and merely went with the flow of events. The fundamental cause of the tragedy was that the Imperial Navy General Staff .  .  . and the high-ranking officers in the Navy Ministry . . . did not think about the most important questions and were simply swept away by the current of the times. (NHK supesharu shuzaihan 2011, 140–1)

Momentous decisions leading to the war against the United States, it appears, were made without clear-headed analysis or hard-nosed assessment either of the international situation as a whole, or of the military balance between Japan and possible adversaries.

 Japan in an Era of Crises 237 Or, perhaps more accurately, choices were made without anybody really deciding upon anything. At pivotal moments, no one appears to have self-consciously made critical decisions. Rather, the participants in policymaking appear to have been “drifting along” with the “atmosphere” produced by their collective views, and which put strong pressure for conformity. A number of observers have suggested that Japanese society and organizations are often ruled by such “atmosphere,” and whoever sticks out his neck and voices independent views, going against the evolving atmosphere, is thrust aside and fails to influence the outcome (Yamamoto, S. 1977). After Japan’s defeat, when people asked questions about the responsibility for the war, it was not clear to many who was responsible—or many preferred not to raise such questions. It appears that the questions of who made the decisions and who were responsible were never clarified, and people somehow accepted the situation (Maruyama 2015). As we have seen in the previous chapters, a school of Confucian thought known as kogakuha had developed during the latter half of the seventeenth century. In contrast to the Zhu Xi school’s emphasis on metaphysical, universal principle, kogakuha denied the existence of such principle and asserted that only the tangible, concrete world of physical things and factual phenomena really existed. Because kogakuha school negates all abstract principles, people who accept this mode of thought must rely on something other than transcendental principles in making judgments. It is not surprising that (seeming) effectiveness in dealing with concrete problems became an important criterion of judgment for people influenced by this mode of thinking. While this mode of thinking is likely to yield useful results in dealing with many concrete issues, it might also result in the lack of an intellectual or spiritual “backbone” in people’s thinking. People whose sole criterion of judgment is efficacy in the real world are unlikely to offer principled opposition to intellectual, social, or political trends that appear inevitable. In a society of opportunistic realists, principled idealists are unlikely to achieve much success. If kogakuha-style pragmatism became the dominant mode of thinking in modern Japan, one might wonder why it failed to urge Japanese leaders to assess the situation in the world in an objective manner and to draw obvious conclusions about the impossibility of a war against the United States. Yet, in the case of decision-making leading up to Pearl Harbor, this mode of thought appears to have led the Japanese elite toward making compromises with domestic political reality—most of all with the “atmosphere” that surrounded the Japanese society at the time. Past legacies that yield positive results under some circumstances can easily turn into liabilities in other circumstances. Also, it is unrealistic to believe that we can somehow liberate ourselves from the legacies bequeathed from the past in a short time-span. Thus, the intellectual inheritances from the past are not something we can observe at a distance as if in museum showcases. They are still with us, and how to grapple with them is an actual task that is always before us.

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Index Abe Isoo安部磯雄 (1865–1949)  197, 200, 207–10 agriculture, see also de-agrarianization Inukai Tsuyoshi’s view  164–5 Kōzaha Marxists’ view  220 Miyazaki Yasusada’s view  80–3 penetrated by market economy  62 samurai and  13, 33 social contribution of  31–2, 82–3, 92–3 Tanuma Okitsugu’s policy  65 Tokugawa Yoshimune’s policy  60 Ainu people  116 Akō incident  36–7 Amaterasu, the Sun Goddess  105–6, 200 Arai Hakuseki 新井白石 (1657– 1725)  57–60, 111–13, 150 artisans  14–15, 33, 65, 79, 87, 122 occupational duty of (see under occupational duty) Asada Gōryū 麻田剛立 (1734–1799)  68 Asano Naganori 浅野長矩 (1667–1701)  37 Asia, see East Asia banks and banking Bank of Japan  154 local entrepreneurs and  175–6, 183–4 National Bank Act (1872, revised 1876)  150–2, 180 benevolence (jin 仁) as the central virtue in Confucianism  16–17, 26 n.5, 39–40 as cosmic moral principle  27, 87 as inherent in human nature  39 Kōtoku Shūsui’s view  206 Shibusawa Eiichi’s view  182 benevolent rule (jinsei 仁政)  30, 32–4, see also governance through virtue; under Confucianism

Nakae Chōmin’s view  204 Bentham, Jeremy (1748–1832)  132 Bitō Jishū 尾藤二洲 (1747–1813)  68 Boshin War (Boshin sensō 戊辰戦争, 1868–69)  135, 143 Brentano, Lujo (Brentano, Ludwig Joseph, 1844–1931)  212 Bücher, Karl (1847–1930)  212 Buckle, Henry Thomas (1821–62)  157 Buddhism Kumazawa Banzan’s view  24, 32 Nakae Tōju’s view  24 Yokoi Shōnan’s view  121 bushidō (武士道 the way of the samurai) Kaiho Seiryō’s view  71–2 Kōtoku Shūsui’s view  206 Yamaga Sokō’s view  20 Byles, John Bernard (1801–84)  163 capitalism  1, 199, 212 controversy over  218–23 in England  132–3 Fukuda Tokuzō’s view  212–15 Japanese  179, 197–8, 218–23 in the US  208 Yamada Moritarō’s view  218–23 Carey, Henry Charles (1793–1879)  163 Carlyle, Thomas (1795–1881)  171 Cheng Hao 程顥 (1032–1085)  16 Cheng Yi 程頤 (1033–1107)  16 China ancient  18, 40 changing Japanese views  7, 99–103, 113–14 difference from Japan  6, 17, 22, 25 economic relations with Japan  65, 116 Fukuzawa Yukichi’s view  102–3 Ishibashi Tanzan’s view  230 Japanese invasion  224–5 Maeno Ryōtaku’s view  113 Motoori Norinaga’s view  104–5

254

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Nakae Chōmin’s view  201–2 Nishikawa Joken’s view  103 Taguchi Ukichi’s view  159–60 Yokoi Shōnan’s view  120, 122 Christianity  68, 111, 130 Abe Isoo’s view  207–10 Arai Hakuseki’s view  111 Fukuda Tokuzō and  212 Takata Sanae’s view  144, 146 Yokoi Shōnan’s view  121 Chuang Tzu 荘子 (369–286 BCE?)  160 Cicero, Marcus Tullius (106–43 BCE)  130–2 colleges, see universities colonialism  99 modern Japanese  224 in the Tokugawa era  65, 118 Western  112, 114 commerce, see trade companies, see also corporate groups; management; zaibatsu family-like character  167, 189–93 large  173, 181, 188–9, 229 small and medium-sized  169, 171–8, 183–7 Confucianism (jukyō 儒教), see also kogakuha; neo-Confucianism critique of modernity  199–206 emphasis on human relations  129–30 (see also Five Constants; Three Bonds) explained  16–17 Fukuda Tokuzō and  215 Fukuzawa Yukichi’s view  138–9, 142–3 ideal governance  25 (see also benevolent rule; governance through virtue) Kawakami Hajime’s view  215–7 Kōtoku Shūsui and  206 moral suasion as central to  22 Motoori Norinaga’s critique  104 Nakae Chōmin’s view  201–6 Shibusawa Eiichi’s view  180–3 and socialism  205–6, 215–7 Taguchi Ukichi and  160 view on human nature  39, 80, 84–5, 129 Confucius  16, 18, 167, 181–2, 217

Ishida Baigan’s view  88 Ogyū Sorai’s view  40 core value defined  4–5 in Fukuzawa Yukichi  138 in Honda Toshiaki  119 in the modern era  5, 7, 99, 125, 192 in Takata Sanae  138 in the Tokugawa era  4–5, 49 corporate groups and networks  193, see also zaibatsu non-zaibatsu  169–70, 176, 179, 187 currency convertible  150 domainal  70, 109, 123, 149 foreign  155 gold and silver  58, 169 (see also gold standard) metallism  58–60, 150, 152, 169 paper  58, 70, 123, 148, 152 in Tokugawa Japan  14, 65 currency policy  49, 59, see also banks and banking; gold standard; three-coinage system Arai Hakuseki’s view  58–60 Gembun debasement (1736–)  61–2 Genroku debasement (1695–)  57 Meiji state’s  148–54 New Currency Act (shinka jōrei 新貨条例, 1871)  149–50, 154 Ogyū Sorai’s view  44–7 Ōoka Tadasuke’s view  61 Tanuma Okitsugu’s reforms  65–6 Tokugawa Yoshimune’s view  60 daimyō 大名 (domain lords)  14 n.2, 84, 135 alternate attendance  60 n.5 authority to govern  106 decrease in expropriation (kaieki) and relocation (tempō)  110 finances  23, 72–5 fudai  64 n.1 power of taxation  43 ranked by kokudaka  62 n.8 shimpan  121 n.2 Dazai Shundai太宰春台 (1680–1747)  51–6

 Index 255 de-agrarianization (hinōka 非農化)  109–10, 123 deflation  228–9 Matsukata Masayoshi’s policy  153, 169 de-marketization Kumazawa Banzan’s view  33 Ogyū Sorai’s view  41–4, 47 depression, see also deflation Great  8, 231 Shōwa  230–1 domain clique (hambatsu 藩閥)  137, 145, 157, 162 domains (han 藩)  14, 110, see also daimyō; kokueki abolished  148 finances, see under daimyō as locus of people’s identity  114, 136 domain school (hankō 藩校)  120, 201 Duke of Zhou (Zhougong Dan 周公旦)  18 n.1 Dutch learning (rangaku 蘭学)  68–9, 102, 112–13, 116–17, 139 Dutch people  111–13 East Asia Confucianism and neoConfucianism  16–17 Japanese expansion in  221, 226, 231–4 traditional international order  113–14 view on human beings and society  128–31 economic growth  1–2, 98, 132 in modern Japan  169–70 not taken for granted in Tokugawa Japan  8, 91–2, 98 in postwar Japan  2, 189, 223 since the 1880s  167, 169 in Tokugawa Japan  91 economics  1–2, 6, 128, 158–9, 185 Abe Isoo’s view  208–9 classical  132–3 emergence in the West  155 German historical school  134, 212 Marxist  218 neo-classical  132 socialist  200

welfare  211, 214–15 economic society  2 economy, see keisei saimin emperor Chinese  114, 122, 232 (see also Yao and Shun) Japanese  84, 200–1, 235 delegation of authority to govern  106 Emperor Meiji (Mutsuhito, 1852–1912)  201, 211 emperor system  221–2 and the Meiji Restoration  200, 225 mythical descent from Amaterasu  105, 200 English learning (eigaku 英学)  139 entrepreneurs  128, 169–71 local  171, 175–8, 187 network of  176, 179, 187 Etō Shimpei 江藤新平 (1834–1874)  136–7, 150 family, see ie; kagyō farmer, see peasants filial piety (kōtei 孝悌)  16, 82, 97, 112, 158, 195–6 First World War (1914–1918)  193, 211, 224 fiscal policy in the 17C–early 18C  57 in the 1920s  226 in the early-Meiji period  148–9 under Matsukata Masayoshi  152–3, 169 under Ōkuma Shigenobu  152 under Tanuma Okitsugu  65–6 under Tokugawa Yoshimune  59, 61 Five Constants (gojō五常)  26–7 Five Elements (gogyō五行), see ying-yang five elements theory foreign trade  116–17, 153, 155, see also free trade; seclusion policy Fukuzawa Yukichi’s view  140 Hamaguchi Cabinet’s view  227–8 Honda Toshiaki’s view  117–20 Inukai Tsuyoshi’s view  163–5 Ishibashi Tanzan’s view  229–30 Taguchi Ukichi’s view  158–9 Tanuma Okitsugu’s policy  65 Yokoi Shōnan’s view  120–1

256 Freedom and People’s Rights Movement（jiyū minken undō 自由民権運動)  136, 145, 201 free trade  133–4, 155–6, 158–9, 163–4 Fujita Denzaburō 藤田伝三郎 (1841– 1912)  170 n.2 Fukuda Tokuzō 福田徳三 (1874– 1930)  197, 211–15 Fukuzawa Yukichi 福沢諭吉 (1835– 1901)  102, 138–43, 146–7, 161, 189 genrō 元老 (senior statesmen)  136, 225 German historical school, see under economics gold standard  8, 149–50 collapse  231 early-Meiji attempt at introduction  149, 153 Japan introduces  154 Japan’s return to  226–30 Gotō Shōjirō 後藤象二郎 (1838– 1897)  150 governance through virtue (tokuchi徳治)  16, 25, 30, see also benevolent rule Great Depression, see under depression Guizot, François Pierre Guillaume (1787–1874)  157 Hamaguchi Osachi 浜口雄幸 (1870–1931)  226–32 Hamilton, Alexander (1755–1804)  163 Hanawa Hokiichi 塙保己一 (1746–1821)  156 n.1 Hani Gorō 羽仁五郎 (1901–1983)  220 Hattori Nankaku 服部南郭 (1683– 1759)  51, 67 Hattori Shisō 服部之総 (1901–1956)  220 Hayashi Razan 林羅山 (1583–1657)  18 heaven heaven’s will  82–3, 86–9, 94 mandate of heaven (temmei 天命)  38, 40, 88–9 in neo-Confucian cosmology  17, 19, 26–8, 87 principle of heaven (tenri 天理)  27, 84, 133

Index son of heaven (tenshi 天子)  84 Hepburn, James Curtis (1815– 1911)  173 n.5 Hirano Yoshitarō 平野義太郎 (1897– 1980)  220 Hirata Atsutane 平田篤胤 (1776– 1843)  104 Hokkaidō  65, 114, 201 Tanuma Okitsugu’s plan for development  65 Honda Toshiaki 本多利明 (1743– 1821)  117, 140 human beings  19, 27 as embedded in society  6, 129–30, 133–4, 142–3, 146, 186 human nature and society Dazai Shundai’s view  52–3, 55 Honda Toshiaki’s view  120 Inukai Tsuyoshi’s view  162 Kumazawa Banzan’s view  25–7 Mencius’s view  158 Miyazaki Yasusada’s view  82–3 moralistic view  32, 67, 202, 206 Mutō Sanji’s view  190–1, 193 neo-Confucian understanding  17–18, 24 n.4, 25–7, 134 Nishikawa Joken’s view  84–5 Nishikawa Masayoshi’s view  112 Ogyū Sorai’s view  39–40, 162 Taguchi Ukichi’s view  156–7 traditional East Asian view  128–30 Tsutsumi Yasujirō’s view  195–6 Western views  130–2 Yamaga Sokō’s view  19 Yokoi Shōnan’s view  121 hyakushō 百姓, see peasants idlers (yūmin 遊民)  19–20, 84, 95, 122 ie (family, household)  97, 185, 191, 222, see also kagyō organizing principles  184–5 Ihara Saikaku 井原西鶴 (1642–1693)  95 Ikeda Mitsumasa 池田光政 (1609– 1682)  24–5, 28 individualism  3, 6, 130–4 Industrial Revolution  68, 113, 116, 233 industry domainal  56, 75, 96, 110, 149 heavy and chemical  189, 194, 226

 Index 257 imported  169, 176, 179 indigenous  155, 169, 221 promotion of  117–20, 122–4, 149–51 Inomata Tsunao 猪俣津南雄 (1889– 1942)  219 Inoue Kowashi 井上毅 (1844–1895)  121 institution (seido 制度) Dazai Shundai’s view  53–5 Ogyū Sorai’s view  38, 40–2, 44–5, 74 Taguchi Ukichi’s view  161 Inukai Tsuyoshi 犬養毅 (1855–1932)  155, 161–6, 231–2 Ishibashi Tanzan 石橋湛山 (1884–1973)  229–31 Ishida Baigan 石田梅岩 (1685–1744)  80, 86–90, 97, 182 Ishiwara Kanji 石原莞爾 (1889–1949)  233, 235 Isono Hakaru磯野計 (1858–1897)  172 Itagaki Taisuke 板垣退助 (1837–1919)  136, 150 Itō Hirobumi 伊藤博文 (1841–1909)  137, 150 Itō Isoheiji 伊東磯平治 (1832–1901)  182–7 Itō Jinsai 伊藤仁斎 (1627–1705)  18, 67, 68 n.6 Itō Tōgai 伊藤東涯 (1670–1736)  67 Itō Yōzō 伊東要蔵 (1864–1934)  167, 179, 183–7, 189, 192 Iwakura Mission (1871–1873)  136, 201 Iwakura Tomomi 岩倉具視 (1825–1883)  136 Iwasaki Yatarō 岩崎弥太郎 (1835–1885)  170 n.2 Japanese Communist Party (Nihon kyōsantō日本共産党)  217, 219–20, 222 jitsugaku 実学 (practical learning)  120, 141–2, 147 jōi 攘夷 (expelling the barbarians)  108, 143–4 Kada no Azumamaro (荷田春満 1669– 1736)  104 Kaempfer, Engelbert (1651–1716)  116 kagyō 家業 (family business)  88, 96–7, 171, 173–8, 184, 187, see also ie

Kaibara Ekiken 貝原益軒 (1630–1714)  81 Kaiho Seiryō 海保青陵 (1755–1817)  70–6, 107, 110, 117, 149 Kaitokudō 懐徳堂  67–8, 75 Kamo no Mabuchi 賀茂真淵 (1697– 1769)  104 Kanai Noburu 金井延 (1865–1933)  212 Kansei Reforms (kansei kaikaku 寛政改革)  67 Katayama Sen 片山潜 (1859–1933)  207 Katō Rokuzō 加藤六蔵 (1858–1909)  175, 177 Kawakami Hajime 河上肇 (1879–1946)  197, 211, 215–18 Kawakami Zembē 川上善兵衛 (1868– 1944)  176–7 Keichū 契沖 (1640–1701)  104 Keiō Gijuku 慶應義塾 (later Keiō University)  139, 161, 173–7, 183, 189, 212 keisei saimin 経世済民  11 theories (keisei saimin ron経世済民論/keiseiron 経世論)  11, 16, 21, 23, 49, 77 Ken’en school (Ken’en gakuha 蘐園学派)  51 ki 気 (vital force)  17–18, 24 n.4, 27, 68, 83, see also ri ki-based monism (ki-ichigenron 気一元論)  68 Kido Takayoshi 木戸孝允 (1833–1877)  136 Kimura Kenkadō 木村蒹葭堂 (1736– 1802)  69 Kira Yoshinaka 吉良義央（1641–1703） 37 kobunjigaku 古文辞学  18, 36, 38 n.2, see also kogakuha kogakuha 古学派  18, 67–8, 74, 237, see also kobunjigaku, kogigaku as basis for acceptance of Western science  68 influences Dutch learning  113 pragmatic orientation  142 skepticism about neo-Confucian metaphysics  19 Koga Seiri 古賀精里 (1750–1817)  68

258

Index

kogigaku 古義学  18, 67, see also kogakuha Kogure Budayū 木暮武太夫 (1860–1926)  176–7 koku 石 (measure of volume)  23, 76, 149 kokudaka石高 (volume of officially designated rice yields)  23 n.1, 60, 149 kokudaka system (kokudakasei石高制)  62 kokueki 国益 (domainal interest)  5, 49, 110, 149 Dazai Shundai’s view  56 Kaiho Seiryō’s view  72–5 Miura Baien’s view  75–6 kokueki 国益 (national interest)  125, 133, 136, 149, 199, 224 as the core value in modern Japan  5, 7, 119, 138 Fukuzawa Yukichi’s view  140 Honda Toshiaki’s view  118–20 Inukai Tsuyoshi’s view  162–3 occupational duty and  134, 146 Shibusawa Eiichi’s view  180–1 Shimomura Kamesaburō’s view  177 Taguchi Ukichi’s view  156–7 Takata Sanae’s view  143–7 weakened emphasis after 1905  193 Western impact as stimulus  99 kokutai 国体 (national polity)  199–200, 234 Kōtoku Shūsui 幸徳秋水 (1871–1911)  200, 206–7, 212 Kudō Heisuke 工藤平助 (1734–1800)  69 Kumazawa Banzan 熊沢蕃山 (1619– 1691)  23–5, 80, 217 kunshi 君子 (gentlemen)  25, 53, 129–30, 203–6, 216 Kusama Naokata 草間直方 (1753–1831)  68 Kuwata Kumazō 桑田熊蔵 (1868–1932)  212 Kyōhō Reforms (Kyōhō kaikaku 享保改革)  59–64, 86 Kyoto Imperial University  173 laissez-faire policy  134, 159, 212, see also under Lao Tzu

Land Tax Reform (chisokaisei 地租改正)  62 Lao Tzu 老子 (around  6th Century BCE?) idea of non-action (Rōshi no mui 老子の無為)  53–5, 160–1 liberalism  131–2, 159–61, 211–12, 215, 225, see also Freedom and People’s Rights Movement; free trade; laissez-faire policy Liberal Party (Jiyūtō自由党)  201, 205 List, Friedrich (1789–1846)  134, 163 Liu, Zongyuan 柳宗元 (773–819)  201 luxury  92, 98 Dazai Shundai’s view  54 Kaiho Seiryō’s view  72 Kawakami Hajime’s view  216 Kumazawa Banzan’s view  32 Ogyū Sorai’s view  42 Maeno Ryōtaku 前野良沢 (1723–1803)  68, 112 management ie (Japanese household) as a management unit  185 Japanese-style  188–90 Mutō Sanji’s view  189–93 scientific  167 managers  188–92 college graduates  167, 170–1, 176 professional  170–3, 188 Manchuria (northeast China)  224, 230–5 Manchurian incident  232–3, 235 Mandeville, Bernard (1670–1733)  132 market economy  5, 42–4, 47–9, 62, 132, 233, see also de-marketization as beyond the control of individual action  86 Fukuda Tokuzō’s view  214 increased understanding by shogunate officials  61 integration of Japan as  109–10 Ishida Baigan’s view  86 Kaiho Seiryō’s view  71–2 Kōtoku Shūsui’s view  206 marketization  21, 23, 33 significance in the Tokugawa era  14–15, 29, 32–3

 Index 259 Tanuma Okitsugu’s policy  65–7 Marshall, Alfred (1842–1924)  214 Maruyama Masao 丸山眞男 (1914– 1996)  222 Marx, Karl (1818–1883)  217, see also Marxism Marxism  197–9, 211–12, 217–23 Fukuda Tokuzō’s critique  214 Kōzaha 講座派 (The Lectures Faction)  218–23 rise in Japan  199, 211, 214, 218 Rōnōha 労農派 (The Labor-Farmer Faction)  218–20, 222–3 Matsudaira Chikakata 松平親賢 (1753–1802)  75 Matsudaira Sadanobu 松平定信 (1759–1829)  67, 150 Matsudaira Yoshinaga 松平慶永 (1828–1890)  120–1, 148 Matsukata Masayoshi 松方正義 (1835–1924)  152–4, 169 Meiji Restoration (1868)  5–6, 125, 135–6, 169, 225, see also Shōwa Restoration and kokutai  200, 225 Marxist views  218–21 Taguchi Ukichi’s view  157 Mencius 孟子 (372–289 BCE)  18, 201 merchants  14–15 contribution to society  19–20, 79, 86–7, 182 Dazai Shundai’s view  55–6 entrepreneurship in the modern era  170 Ihara Saikaku’s depiction  95 improvement in social status  21, 83–6 Ishida Baigan’s view  86–9 Kumazawa Banzan’s view  29, 33–4 negative views  119–20, 123, 181 Nishikawa Joken’s view  83–6 occupational duty of (see under occupational duty) Ogyū Sorai’s view  42–5 schools for merchants  67, 86 Tanuma Okitsugu and  64 Mill, James (1773–1836)  132 Mill, John Stuart (1806–1873)  132, 165 mining  123–4, 152, 194

Mino Masataka 蓑正高 (1687–1771)  62, 93 Mito School 水戸学  200, 200 n.1 Miura Baien 三浦梅園 (1723–1789)  75– 6, 93–5 Miyazaki Yasusada 宮崎安貞 (1623–1697)  80–3 Miyoshi Tsunenori 三善庸礼（1779–?)  96–7 monetary policy  44–5, 61–2, 152–3, 169, see also currency policy morality  1–2 attainable only after prosperity  31–2, 34, 81–3, 94–5 business and  181–2 central to Confucianism  16–17 contrasted with efficacy  30–1 contrasted with law and governance  37, 39–40, 51 as core value in Tokugawa Japan  4–5 critique by Motoori Norinaga  104 as emanating from the ruler  124, 129 governing through moral example  16–17, 25–8 as an instrument for economic purposes  183 Kawakami Hajime’s view  215–7 Kōtoku Shūsui’s view  206 moral critique of modern society  199–200 moral degeneracy  28–9, 54 Nakae Chōmin’s view  202–5 Neo-Confucian view  6, 11, 24 n.4, 80 occupational duty as moral teaching  77–8, 94–8, 146 samurai as exemplars  19–20 self-governance as foundation of  142–3 and status distinctions  83–5, 97 in the West  111–13, 131–2 Motoori Norinaga 本居宣長 (1730–1801)  103–8 Mutō Sanji 武藤山治 (1867–1934)  189–93 Nakae Chōmin中江兆民 (1847–1901)  201–6 Nakae Tōju 中江藤樹 (1608–1648)  24–5, 35

260

Index

Nakai Chikuzan 中井竹山 (1730– 1804)  67 Nakamigawa Hikojirō 中上川彦次郎 (1854–1901)  189 Nakazawa Dōni 中沢道二 (1725–1803)  89 national identity/nationalism character of prewar Japanese  234 emergence in Japan  7, 107–8, 110–11, 114, 136 Fukuzawa Yukichi’s view  102, 139–42 Honda Toshiaki’s view  117–20 national interest, see kokueki National Learning (kokugaku 国学)  69, 101–4, 107–8, 200 national polity, see kokutai neo-Confucianism  6, 16–18, 27, 36, 160, see also Wang Yang-ming; Zhu Xi School as basis of claim for equal worth of humans  77, 80, 83–6 elements of universalism in  134 exemplifies East Asian philosophy  129 metaphysics  17, 26–7 new middle class  193–4 Niijima Jō 新島襄 (1843–1890)  207 Nishi Amane 西周 (1829–1897)  128 Nishikawa Joken 西川如見 (1648–1724)  83–6, 103, 111–12 Nishikawa Masayoshi 西川正休 (1693–1756)  112, 119 Noro Eitarō 野呂栄太郎 (1900– 1934)  220 occupation  14–15, 97 freedom of  127 occupational duty (shokubun職分)  5, 77–9, 93–7, 167–8 of artisans  19–20, 96 as condition for respectability and status  19–20, 95, 97 Fukuzawa Yukichi’s view  142 Honda Toshiaki’s view  119–20 and ie (household)  97–8 Inukai Tsuyoshi’s view  162 Ishida Baigan’s view  88–9 of Japanese nationals  134, 142, 146 of merchants  19, 88–9, 180–1

Mutō Sanji’s view  191–3 of peasants  19, 87, 90 reinforces nationalism  234 of samurai  16, 19–21, 28, 94 Shibusawa Eiichi’s view  180–1 social and political function of  97–8 Yamaga Sokō’s view  19–21 Ogata Kōan 緒方洪庵 (1810–1863)  139 Ogiwara Shigehide 荻原重秀 (1658–1713)  57–8, 150 Ogyū Sorai 荻生徂徠 (1666–1728)  18, 36–51, 162 Ōkubo Toshimichi 大久保利通 (1830–1878)  136, 150–2 Ōkuma Shigenobu 大隈重信 (1838–1922)  136, 143, 150–3, 161, 188 Ono Azusa 小野梓 (1852–1886)  143–4 Ōoka Tadasuke 大岡忠相 (1677– 1751)  59–63, 67, 73, 150 Opium War (1840–1842)  102, 109 Osaka 大坂/大阪  66–7, 169 n.1, 194 declining position in Japanese economy  109–10 as economic hub of Tokugawa Japan  15 Ōshima Urin 大島有隣 (1755–1836)  89 Ōtsuka Hisao 大塚久雄 (1907–1996)  222 peasants  14–15, 24 n.3, 33 and agricultural techniques  81 contribution to society  28, 77–80, 83, 87, 97 economic conditions  29, 62 household  185 negative view  80, 144 occupational duty of (see under occupational duty) separated from warriors (see under samurai) social status  13–15, 55, 79–80, 83–5 Perry, Commodore Matthew C. (1794–1858)  136 Pigou, Arthur C. (1877–1959)  214 poverty  46, 199 Abe Isoo’s view  208–9 Kawakami Hajime’s view  215–17 Kumazawa Banzan’s view  33–4 practical learning, see jitsugaku

 Index 261 pragmatism  49, 120, 199 in Abe Isoo  210 in Fukuzawa Yukichi  142 in kogakuha  18, 237 in Kumazawa Banzan  30 negative side of  237 prices, see currency; under rice progress  91, 132–4, 146, 157–9, 210, 213 protectionism  133, 158–9, 162–5 at the domainal level  73, 75–6 Rai Shunsui 頼春水 (1746–1816)  68 ri 理 (principle), see also ki Ogyū Sorai’s view  37–8, 51 principle of heaven (see under heaven) ri-ki dualism (ri-ki nigenron 理気二元論)  17–18, 26–7, 83 Zhu Xi’s concept  17–18, 37–8 Ricardo, David (1772–1823)  132 rice, see also kokudaka; kokudakasei; rice tax attempts to increase production  60, 65, 118 central to Tokugawa-era economy  14 market in Osaka  15 price of  29, 33, 60–2, 211 production  91 as product of peasants’ hard work  28 Rice Riots (1918)  211 as “treasure”  93 rice tax (nengu 年貢)  14–15, 60–2, 65, 73–4 Kaiho Seiryō’s view  71–2 Ogyū Sorai’s view  43 plan to convert to monetary tax  62–3 Rousseau, Jean-Jacques (1712–1778)  145, 200–4 Russo-Japanese War  193, 224 Saga Rebellion (1874)  136 Sages, Chinese  18, 82, 113, 160 Dazai Shundai’s view  52–5 Kumazawa Banzan’s view  26–30 Nakae Chōmin’s view  202 Ogyū Sorai’s view  39, 41–2, 45 Yokoi Shōnan’s view  121–2, 124 Saigō Takamori 西郷隆盛 (1828–1877)  136, 150 Sakai Toshihiko 堺利彦 (1871–1933)  219

Sakisaka Itsurō 向坂逸郎 (1897–1985)  219 Samukawa Masachika 寒河正親  22–3, 97 samurai  11–17, see also bushidō basis of economic life  14 ceases to be soldiers  16, 19, 24 and Confucianism  17, 22 financial difficulties  21, 23, 29 and keisei saimin ron  21–2, 77 Kōtoku Shūsui’s view  206 as landowners  71–2, 74 in Restoration movement  135–6, 225 separation from peasants (heinō bunri 兵農分離)  13–14, 33, 42 settlement in the countryside (bushi dochaku 武士土着)  33–4, 42–4 Satō Issai 佐藤一斎 (1772–1859)  155 Satsuma Rebellion (1877)  136, 152 science  68–9, 83, 111–13, 121, 142 need for advancement of  138, 182, 233 as source of Western power  112–13, 119 seclusion policy (sakoku 鎖国)  99, 116, see also foreign trade relaxation in the import of Western books  68 Second World War (1939–1945)  2, 234–7 Shibano Ritsuzan 柴野栗山 (1736–1807)  68 Shibusawa Eiichi 渋沢栄一 (1840– 1931)  167, 179–83, 187–8 shidō 市道 (the way of market)  71–2, 74 Shimabara Rebellion (1637–1638)  24–5 Shimomura Kamesaburō 下村亀三郎 (1867–1913)  177, 189 Shintō 神道  103–6 Shizuki Tadao 志筑忠雄 (1760–1806)  116–17 shōjin 小人 (small men)  52, 129, 203–4 shokusan kōgyō 殖産興業 (industrial promotion), see under industry Shōtoku Reform (Shōtoku no chi正徳の治)  57 n.1 Shōwa Depression (Showa kyōkō), see under depression

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Shōwa Restoration  231, 235 Sidotti, Giovanni B. (1668–1714)  111 Sino-Japanese War, First (1894–95)  224 Sino-Japanese War, Second (1937–45)  233 Smith, Adam (1723–1790)  132–3, 158, 160 socialism  197, 200, 206–17, 222, see also Marxism Confucianism and  206, 217 national  200, 231 social policy  197, 210–17 social problems (shakai mondai 社会問題)  208, 210, 212, 215 Soejima Taneomi 副島種臣 (1828– 1905)  150 state control of foreign trade  119, 123–4 status (mibun 身分)  97–8, 141, 181, 194 and consumption patterns  42 distinctions in Tokugawa Japan  13– 15, 77, 79–80, 83–4, 90 shi-nō-kō-shō 士農工商  15 Suzuki Shōsan 鈴木正三 (1579–1655)  79 Taguchi Ukichi 田口卯吉 (1855– 1905)  155–63 Taishō democracy  162, 211, 213 takara たから (treasure)  93 Takata Sanae 高田早苗 (1860–1938)  125, 138, 142–7 Tanuma Okitsugu 田沼意次 (1719–1788)  64–7, 69–70, 73, 117 Taylor, Frederick W. (1856–1915)  167, 190 Tempō generation  136, 138 Teshima Toan 手島堵庵 (1718–1786)  89 Three Bonds (sankō 三綱)  26 three-coinage system (sanka heiritsusei 三貨並立制)  14, 65–6, see also currency; currency policy thrift  59–60, 89, 92, 95–6, 209, 227 and resettlement of samurai in the countryside  33, 42 time, place, and rank argument (jishoiron 時処位論)  30–1, 55, 74

Tokiwa Sadanao 常磐貞尚 (1677–1744)  97–8, 187 Tokugawa Harusada 徳川治貞 (1728–1789)  104, 106 Tokugawa Ieharu 徳川家治 (1737–1786)  64 Tokugawa Ienobu 徳川家宣 (1662–1712)  57 Tokugawa Ieshige 徳川家重 (1711–1761)  64 Tokugawa Ietsugu徳川家継 (1709–1716)  57–9 Tokugawa Ieyasu 徳川家康 (1542–1616)  23, 25, 58, 72, 106 Tokugawa Muneharu 徳川宗春 (1696–1764)  92 Tokugawa Tsunayoshi 徳川綱吉 (1646–1709)  36–7, 57 Tokugawa Yoshimune 徳川吉宗 (1684–1751)  37, 59–63, 65–7, 92, 150 Tokugawa Yoshinobu 徳川慶喜 (1837–1913)  135, 180 Tokyo Higher School of Commerce (Hitotsubashi University)  139, 171, 212 Tokyo Imperial University  143, 213, 218, 222 Tominaga Nakamoto 富永仲基 (1715–1746)  68 townspeople (chōnin 町人), see artisans, merchants trade  96, 114, see also foreign trade; free trade Dazai Shundai’s view  56 Honda Toshiaki’s view  119 inter-domainal  49, 56, 72–4, 109–10 Kaiho Seiryō’s view  70–4 legitimacy of  85–6, 122 Osaka’s position in  109–10 Yokoi Shōnan’s view  122–3 Tsutsumi Yasujirō 堤康次郎 (1889–1964)  167–8, 188, 193–6 Uekawa Kisui 上河淇水 (1748–1817)  89 unequal treaties  114, 163 universities and colleges enrollment rate  170

 Index 263 private  138–9, 173 role in economic development  170–3 Usami Shinsui 宇佐美灊水 (1710–1776)  70 Wakatsuki Reijirō 若槻礼次郎 (1866–1949)  231–2 Wakayama Norikazu 若山儀一 (1840–1891)  163 Wang Yang-ming 王陽明 (Jp. Ō Yōmei, 1472–1529)  17, 24, 35, see also under Zhu Xi school Waseda University  138, 144–5, 173, 193–4, 207–8 Watanabe Kazan 渡辺崋山 (1793–1841)  155 Way, the (michi)  25–6, 87, 216 Dazai Shundai’s view  52–5 Kumazawa Banzan’s view  25–30, 34 Ogyū Sorai’s view  38–40, 43 welfare  93–5, 124 Fukuda Tokuzō’s view  214–5 as prerequisite to moral teaching  31–2, 34, 76, 81–3, 94, 204–5 West, the  7, 99, 101–2, 109–14, 130, 138–9, see also jōi Arai Hakuseki’s view  111 emerges as a model civilization  117, 119, 121–2 Nishikawa Masayoshi’s view  112 Yamada Moritarō 山田盛太郎 (1897– 1980)  211–2, 218–22 Yamaga Sokō山鹿素行 (1622–1685)  16–21, 79, 206

Yamagata Bantō 山片蟠桃 (1748–1821)  68 Yamakawa Hitoshi 山川均 (1880–1958)  219 Yanagisawa Yoshiyasu 柳沢吉保 (1658–1714)  36–7 Yao 堯 and Shun 舜 (legendary Emperors of China)  34, 82 ying-yang five elements theory (in’yō gogyō setsu 陰陽五行説)  26–7, 84–5, 93 n.1 Yokoi Shōnan 横井小楠 (1809– 1869)  117, 120–4, 155, 203, 206 yōmeigaku, see Wang Yang-ming Yoshino Sakuzō 吉野作造 (1878–1933)  213 Yuri Kimimasa 由利公正 (1829–1909)  148–50 zaibatsu 財閥  169, 171, 235 Zhou Dunyi 周敦頤 (1017–1073)  16 Zhu Xi 朱熹 (1130–1200)  6, 17–18 Zhu Xi school 朱子学  18, 38, 80, 82–4, 87, 202, see also neoConfucianism contrast with Wang Yang-Ming thought  24 influence on Kumazawa Banzan  35 influence on Yokoi Shōnan  120–1 Ogyū Sorai’s critique  36–8 prepares the ground for classical economics  133, 160 prepares the ground for Western science  68 receives the shogunate’s support  67–8

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