1. Economic Growth in Tokugawa Japan Michael Smitka March 2001 Economics 297 Presentation

2. Mid-16th Century Han (“countries”)

3. Issues was Japan poor? -- standard of living was the economy static -- growth process institutional, other legacies Curiosity: merely understanding Japan (1600-1868)

4. Models economic growth : –Solow one-sector model –Lewis-Fei-Ranis two-sector model Solow model is simple production function Y = f (K, L, N, tech) [“N” is land] –technical change is core of Solow’s work –capital deepening is a key factor (incl human capital) –population growth can eat up gains

5. Other factors besides “hard” tech organizational & institutional change are both underrated –“Smithian” growth through specialization and trade –government provision of infrastructure, other public goods –development of business networks and accepted practices in markets

6. Demographics population growth can swamp positive factors. indeed, for most of human history standards of living changed little how about Japan? -- and if not, why?

7. Basic Historical Overview breakdown of old govt & continual warfare during 1500s spread of irrigated rice varieties diffusion of civil engineering techniques from China 1540: arrival of Francis Xavier & diffusion of muskets unification under Oda Nobunaga & Toyotomi Hideyoshi –neither was able to set up a system that outlived them enduring unification under Tokugawa Ieyasu (1600) Tokugawa “bakufu” officially founded in 1603 – Ieyasu named “shogun”

8. Unification = ? multiple “kuni” (country?!) –each headed by a semi-autonomous “daimyo” (lord) –variations in laws, economic structure roughly 250 political-economic units remained

9. Politics and the economy how maintain the peace? –impoverish your rivals –keep hostages alternate attendance system –every-other year in Edo (modern Tokyo) –families (heirs) must stay there –mandated high expense levels by 1700 Edo had a population of over 1 million

10. Growth stimulus? Tokugawa control system had: –implications for macroeconomic resource flows in a two-sector context –implications for commercialization and monetization of the economy Lewis two-sector model: forced flows?

11. Government role the Edo “bakufu” fostered navigation –port and lighthouse development –maps etc. all by around 1720 formal financial markets promoted –rice futures market in Osaka by 1720 –transferring money in place of in-kind taxes –insurance markets (esp. casualty) –local (rural) finance by 1800s

12. Market-oriented economy especially intense development in several regions –cash-crop farms around Osaka (hence farmers bought food....) –large urban consumer market commercial elite for whom political advancement was foreclosed (cf. English Dissenters) education spread. –ukiyoe were for mass-market (wedding presents…) –lots of agricultural handbooks - 200+ titles in print

13. Specialization by the “kuni” (export products) Silk, cotton, salt, lumber, paper, fish Some regions largely industrial Seasonal “proto-industry” often accompanied by regional migration Both men & women active in wage labor outside the home

14. Technical Change hard to measure industrial level but –very rapid ability to reproduce industrial revolution technology –clear shifts in agriculture diminishing returns? –demographic evidence mixed for whole country –but not true (??) for “advanced” regions

15. Standard of Living transformation of consumption –various rough fibers replaced by cotton; silk worn by more than just elite –new (and better foods). peppers, sweet potatoes / taro, corn, etc. –new and better housing: tatami mats off the ground –vast increases in protein-laden soybean-related consumption (miso, soy sauce) Education –Literate society, perhaps more so than England! –Vast outpouring of books, circulated through lending libraries –Even nascent “western” studies, esp. in 1800s

16. Shipping Routes after 1720

17. Area of Indica (short-grain) Rice Cultivation – early 1700s – darker hatching indicates greater cultivation of indica rice –

19. Kawaguchi Ironware

20. Zaguri (silk weaving machine)

21. Loom (karabikibata) c. 1770

22. Spinning Silk

23. Whale Processing Factory

24. Population Growth Rates Region1798180418281834 1846‘98-’46 Kinki93.5 93.5 0.0% Tokai100.1106.6 6.5% Kanto85 86.6 1.9% Tohoku86 88.7 3.1% Tozan106.1 1798 110.1 3.8% Hokuriku105.3 -1834117.611.7% San'in118.8120129.9132.711.7%124.8 4.0% San'yo106.8109.9119.8121.814.0%120.2 9.4% Shikoku111.7114.9123.8126.112.9%126.810.4% Kyushu105.3107.3111.3112.2 6.6%113.8 6.1% 1721 = 100 Kinki, Tokai, Kanto, Tohoku, Tozan all fell. 48 years Hokuriku slow growthselected regions, old data

25. Agriculture Outgrows Population

26. Tokugawa Population & Agriculture Area Yield Yield Pop Arable Farm per per per Year (mil) Land Output Pop Pop Area 1600 12.0 20.7 19.7 17.251.64 0.095 1650 17.2 23.5 23.1 13.661.34 0.098 1700 27.7 28.4 30.6 10.251.10 0.108 1720 31.3 29.3 32.0 9.361.02 0.109 1730 32.1 29.7 32.7 9.251.02 0.110 1750 31.1 29.9 34.1 9.611.10 0.114 1800 30.7 30.3 37.7 9.871.23 0.124 1850 32.3 31.7 41.2 9.811.28 0.130 1872 33.1 32.3 46.8 9.761.41 0.145

27. Specialization in Agriculture Cotton Production Koga county, Harima han near modern Kobe Irrigated YearfieldsDrylandReclaimedTotal 18010.4%13.7%28.5% 8.2% 18070.615.125.2 8.2 18133.041.536.917.3 18224.338.636.817.4 18320.534.534.813.4 18422.238.636.916.2 18471.535.235.214.5 Note: I find it surprising that any irrigated fields were used for cotton instead of rice! In the 1880s imports led to a sharp drop in domestic output, and production ceased by 1900.

28. Shifts in Family Structure Average for Selected villages Suwa Region, modern Nagano Prefecture Avg. Household SizeAvg Couples per Household YearNishikoYamauraNishikoYamaura 1671-1700 7.878.551.971.83 1701-1750 6.149.931.412.34 1751-1800 4.666.941.322.05 1801-1850 4.224.731.251.37 1851-1870 4.314.481.201.30

29. Osaka as an Entrepot (1714) Principal non-Rice Imports / Exports ImportsExports Marine products20.2%Oil & beeswax36.4% Agricultural items19.5Clothing & textiles25.2 Clothing & textiles15.4Misc tools7.5 Oilseed12.9Misc exports7.3 Mining products7.5Processed food6.1 Fertilizer6.4Accessories & decorations5.8 Wood products5.9Lacquerware & pottery4.6 Misc Imports4.1Seedcake (fertilizer)3.4 Tea & tobacco2.8Furniture0.5 Tatami2.0Weapons0.5 Kyoto crafts0.9Arts & crafts0.4% Total (Ag value)286,561 kanTotal95,800 kan

30. Extent of Cotton Cultivation Japan remained able to shift land out of food crops

31. Growth of a National Market Rice Price Movements Converged in the 17th Century

32. Structure of National Output – 1874 – shortly after “opening” to the West before significant structural change from –new technologies –convergence of domestic & international prices