*** economics economies Japan

National Economics: Japan

Japanese pesantry
Figure 1.-- Japan was one of the most traditional, isolated countries in Asia. And a country with few natural resources. In the West it was the countries involved in international trade and with natural resources that were the first to industrialize. It is interesting that inward-looking, isolated, and very conservative Japan wityhout needed natural resources that would become the first Asian country to industrialize. The quest for natural resources and markets would have deadly consequences. This cabinet portrait was tken by I. Shibata in Aomori. It is undated, but looks to have been taken in the late-19th century.

Japan unlike China faced major obstacles to developing a productive economy. There were very few natural resources and limited arable agricultural land. Medieval Japasn was a very conservative society with son following his father in the fields ot trade. The arrival of the Europeans and spread of Christianity began fed on existing forces which were destabiling society (16th century). The Shogun decided to liquidate the Christians and expel the Europeans, except for a small Dutch trading community. Foreigners who landed in Japan were executed which tended to limit foreign commerce. This continued until the arrival of Commodore Perry and his black ships (1853). Insightful Japanese leaders observing what was hapening in China, realized that they would have to modernize or be taken over by the foreigners. The first step was the Mejii Restoration which ended the Shogunate. Thus super-isolated Japan became the first Asian country to introduce Western methods and industrialize. The relationship between industry and military power was clear. The country, however, took to economic moderization much quicker than to political modernization. Japanese leaders influenced by 19th century European colonization concluded that their country would need a colonial empire to provide both raw materials and a masrket for industrial production. This attitude became particularly entrenched within the military. The result was first a long-drawn out war in China and then unable to defeat China, the Japanerse military decided to attack the United states. While Japan had built a sizeable industrial establishmednt, it was dwarfed by American industry. The result was the bloody Pacific war and national disaster. One of the great economic success stories of the 20th century was the recovery amd modernization of Japan following World War II. From the American occupation, Japan emerged both an economic powerhouse and a modern democratic country. Japan experienced economic stagnation (1990s). And the lost decade has become two lost decades. Japan today is one of the most important industrial nations. Demographic trends with the aging population is creating major problems.


Japan unlike China faced major obstacles to developing a productive economy. There were very limited arable agricultural land and few natural resources. Until the modern age, agriculture was the primary source of wealth for millennia. Japan unfortunately has very limited arable land that supports agriculture. The country is mountaneous. Forests abound, but agricultural land is limited. One source estimates it at 12.5 percent. When the population was firly small, this was sufficient to meet domestic demand. As the population expanded the country's agricultural harvest barely met demand. And as Japan began to indistiaze after the Meiji Restoration, it was totally insuffient to meet the food demands of the growing cities and industrial workforce. Japan to begin importing rice and other foodstuffs. Despite the need for food, Japan at the time of World War II had an inefficent agricultural sector. This change with the many reforms promulgated during the Amercan occupation. Although arable land is limited, agricultural resources are not insignificant. Japanese crop yields per land area sown are among the highest in the world. The country now produces more than 60 percent of its food. Japan has boutiful coastal waters that provide and other marine foods. Given the large population, however, the demand far exceds the coastal resource. After World War II Japan began building distant-water fishing vessels. But the finote limots on ocean productibity and coastal countries expanding their limits based on the Law of the Sea (LOS) Convention have closed off most produvctive fistant-water grounds. One important resource that Japan has is timber. The country is heavily forested. And many homes in Japan are constructed of wood. Even with all the dorests, Japan has to import wood, including lumber, pulp, paper, and other wood products. Some forests in Hokkaido and northern Honshu have been severely over harvested affecting not only production, but causing local environmental problems. Even in ancient times, natural resources were of some importance, but nothing like the demands of an industrial economy. With the rise of Japan as an industrial powerhouse, Japan found itself needing to import just about everything. And while some coal was availvle, there was a virtual absence of oil and natural gas. Small domestic oil fields in northern Honshu and Hokkaido supply a negliible share of the country's energy needs. At the time of World War II, Japan wss totally dependent on imported oil. And even worse for Japan, its primary source was the United states. The hydrocarbon resources it did have, coal, were not avilable in sufficent quantity. Coal deposits in Hokkaido and Kyushu are more abundant but are mostly low grade and expensive to mine. They are also located at some distance to the major cities and industrialized areas where they are most needed. Japan does have abundant water and hydroelectric potential and has developed hydroelectric industries. Japan is particularly lacking in metal and mineral resources. Japan did have a copper resource. The great mines at Ashio in central Honshu and Besshi on Shikoku have been depleted and have been closed. There are no appreciable domestic sources of bauxite, cobalt, iron, lead, tin, tungsted, zinc, and other major industrial ores. These are not only the key netals needed for an industrial economy, but were the metals along with oil that Jpan needed to wage World War II. Some of the few mineral resources Japan has are titanium and sheet mica.


The economic history of Japan like most countries is dominted by agriculture. Agrculture in northeast Asia develoed from the Chinese River valleys, especially the Yellow River. China was the last of the great river valley civilizations to merge (about 4,000 BC). Agiculture was slower to develop in Japan. The technology was not easily transferable as there are no great rivel valleys in Japan. Agriculture began to develop in China, but not the intensive agriculture we see in China. Millet was for the first millennia the stape crop. Millet bgan to be replaced by rice as the main staple food (300 BC). We only begin to see substantial development with the introduction of iron tools and farming techniques from Korea during the Kofun Period that efficient farming methods were adopted in Japan (3rd-6th century AD). Japanese farmers even during the Nara Period (8th century AD) were still using primitive tools. Limited areas were being farmed and irrigation techniques were still inadequate to prevent crop failures and periodic famine. Especially severe famies were experienced (about 730 and 1180 AD). Japan like Europe and many other contries had a feudal era. Warlords dominated the Home Islands and the Emperor's authority declined. It is during this era that the shoguns emerge. The feudal era emerged at about the same time as it did in Europe (8th century AD), but lasred longer (19th century). Agricultural development was slow. There apparently was some state support such as loans for seed-rice (9th century AD). The impact was, howver limited because of high interest rates (30-50 percent). Only in the Kamakura Period (1183-1333 AD) do we begin to see advanced techniques like double-cropping, better seed selection, and more extensive use of fertiliser. From an early point, seafood was preferred to meat by the Japanese. To raise meat you had to either feed animals or devote large areas to pasture. Seafood in contrast could be gathered or taken in Japan's rich coastal waters. The introduction of Buddhism only reinforced alread existing trends (6th century AD). Buddhism discouraged the killing of animals and birds, but not fish. Despite being an island nation, Japan did not extenively pursue foreign trade. While Chinese traders were active in Southeast Asia including what is now Indonesia. this was not the case of the Japanese. As Japan’s agricultural productivity improved we see the deveopment substantial craft proiductiomn in both rural and urban areas. There was also some mining. The relative abundance of surface ores characteristic of a volcanic country, before large-scale deep-mining became possible in Industrial times. Japan was to become a major exporter of copper and silver during the period. Japan was the first Asian country to develop an industrial economy for which the country bis best known today. This was a process begun with the Meiji Restoration (late-19th century).


Japanese society and the economy has been powerfully shaped by geography. Economic patterns were largely inherited from China. They was no over arching plan, but brought by Chinese immigrants seeking new land. Until the arrival of Chinese immigrants during the a poorly defined Yayoi period, Japan was inhabited by the Jōmon. a hunter gathering people. The Yayoi brought Chinese agriculture and economic activity to Japan. Chinese political control, however, did not follow. The Chinese were never able to fully dominate Korea and Japan because of the lack of a land bridge was even more of a problem. There was one major effort. Kublai Khan of the Yuan dynasty launched two massive invasions (1274 and 1281) to conquer Japan. Both were disasters. Thus Japan was left to develop with basically a Chinese economy on it own. There was one major difference--The Japanese Home Islands are highly mountainous . This meant that there were no vast areas of arable land that could be farmed. One might have thought that this would have pushed the Japanese people toward the sea. While fishing was important and there were ocean-going traders, the Japanese did not take to the sea until the modern era. We suspect that the Chinese example was an influence. Thus, as in China, Japan did not find its way to the West, but the West arrived on Japanese shores (16th century). The impact on Japan's conservative, rigidly hierarchical society was unsettling. The Japanese reaction was to brutally suppress the spread of Christianity which had made major inroads and to wall itself off from disruptive European influences--basically the Korean approach. This lasted until the arrival of American Admiral Perry and his Black Ships (1853). Within two decades there was civil war and the Meiji Restoration (1871). Japan became the first non-Western country to modernize and achieve great power status. The attention at the time was largely on modernization and technology. Almost no Western observer recognized the wealth generating potential of capitalism. Reformers in the West were more focused on socialism and the demonization of capitalism. The Meiji reformers for their part took the Western example only too well. They believed that great power status and a successful economy required colonial possessions. The geography of Japan only fueled this outlook. The mountainous terrain meant that Japan could not feed its growing population and contained few of the resources needed by Japanese industry--especially oil. The result was that Meiji Government adopted a policy of imperial expansion. The Japanese military then launched upon a campaign of aggression (1930s) leading to the disastrous Pacific War with America and Britain (1941-45). The country with its highly educated, industrious population quickly recovered from devastation t-- the Japanese Economic Miracle. Japan became the world's second largest economy after only the United States. Economists in Japan and Europe began to understand that colonies were not necessary for economic success, but were slower ti understand the vital importance of capitalism. While the West and the newly independent countries emerging from the former European colonial empires were still absorbed with socialism, a few Pacific Rim countries decided to follow the Japanese example and also achieve notable success--the Asian Tigers followed by China which would eventually surpass Japan. After the Financial Crisis (1970s) became mired in the Lost Decades and economic stagnation.


Ohno, Kenichi. The Economic Development of Japan: The Path Traveled by Japan as a Developing Country (GRIPS: 2006).


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Created: 2:54 AM 5/2/2011
Last updated: 8:31 AM 4/1/2022