Saito, O. and T. Settsu: one banker v. seven samurais

December 20, 2010

Saito, Osamu and Tokihiko Settsu (2006) Money, credit and Smithian growth in Tokugawa Japan. Hitotsubashi University. Institute of Economic Research. Discussion Paper #139.

In Osaka, Japan’s commercial capital, under the Tokugawa, rich merchants began to add to their functions that of lender to the mighty overlords (daymo) who needed to transform the production of their domain in bullion in order to cover their expenses in Edo and the taxes due to the Shogun (p.2). At the time, the country was segmented in small local capital market and no security was traded over the whole country. Despite those limitations, the rural industries did grow over the period, yet for that they had to have access to some fundings. Where did this capital come from? (p.3)

This wholesaler system arose in replacement of an inexistent banking sector (p.4). However this organization favored greatly the Osaka merchant who managed to impose de facto their service as a necessary precondition to any industrial or agricultural endeavor (p.5). But at that time, local merchants took on Osaka’s oligopoly.

To develop the production and trade of a wealth of proto-industrial products, they started delivering themselves those products to Edo, thus by-passing the Osaka intermediaries. Local lords backed these initiatives, for instance by issuing bank notes (hansatsu) to remedy to the dramatic shortages of money (p.9). However often successful, these initiatives led to a quick segmentation of the Japanese capital market and each of these small areas suffered from high interest rates (more than 18%), while at the same time interest rates in Osaka kept following (p.10).

A system, close to the earlier one arose after the Meiji Revolution, but this time with several commercial cities as the center of the operations instead of Osaka alone (p.13).

History’s among us

May 21, 2009

Google unveils an odd cast-based discrimination dating back from the Tokugawas: scandal in Japan (from Yahoo! tech).

Old Japanese maps on Google Earth unveil secrets

By JAY ALABASTER, Associated Press Writer – Sat May 2, 2009 11:39AM EDT

TOKYO – When Google Earth added historical maps of Japan to its online collection last year, the search giant didn’t expect a backlash. The finely detailed woodblock prints have been around for centuries, they were already posted on another Web site, and a historical map of Tokyo put up in 2006 hadn’t caused any problems. Read the rest of this entry »

Berry M.E. (2008) Market revolution in 17th-century Japan

March 16, 2008

Mary Elizabeth Berry (2008) “Is Consumption Virtuous? The Market Revolution and the Motives for Work in 17th-Century Japan”, conference given at UCLA.

The conference was introduced by prof. Sanjay Subrahmanyam in front of a very receptive audience in the great campus that is UCLA. These are my notes, the construction and the mistakes are mine. The drawing above have been ignominously stolen from the Gütenberg project’s Tales from Old Japan.


Prof. Berry started by reminding the “Tokugawa litany” to the audience: the 17th century was a time of tremendous change in the Japanese economic history; perhaps even more so than the Meiji period.

The population doubled, reaching 30 million. The proportion of urban population went from 3 to 12%. These figure are particularly impressive when one compares Japan to, say, France, which is 3 times larger and almost entirely arable (unlike Japan where at the time only 12% of the landmass could be cultivated), had only 19 million inhabitants. Read the rest of this entry »

Smith T. C. (1973) Pre-modern economic growth: Japan and the West

December 9, 2007

SMITH Thomas C. (1973) “Pre-Modern Economic Growth: Japan and the West”, Past and Present, 60, 127-160.

Definition of “pre-modern growth”

The income per capita advantage enjoyed before the Industrial Revolution (IR) by subsequently first-world developed countries (Europe, its offshoots and Japan). Meaning that income level before IR would be a proxy of incomes level in 1973. Read the rest of this entry »

Nakamura J.I. (1981) Human capital in rural Tokugawa Japan

October 21, 2007

Nakamura J. I. (1981) “Human Capital Accumulation in Premodern Rural Japan”, The Journal of Economic History, 41/2, 263-281.


Human capital has not always been recognized as a crucial source of historical change. Capital accumulation and technology have often been seen as more important. The development of post-WWII Japan has reminded to all that physical factors were not the only source of growth. A rather similar story happened under Meiji. The impressive and unexpected economic development of the post-1868 period was rooted in the accumulation of human resources under the Tokugawas (264). The market economy introduced by Meiji was to be the base of Japan’s economic strength, but it could not have developed so fast without the structural and cultural foundations set up under the Tokugawa and earlier. “Human capital may be broadly identified as labour skills, managerial skills, and entrepreneurial and innovative abilities – plus such physical attributes as health and strength”. Read the rest of this entry »