Many people seem to think that the system introduced to Japan at the beginning of the Meiji Period was free market capitalism. This was really more of a state fascism than anything else. Has there ever really been a free market in Japan?
Just a quick, unsubstantiated opinion: No Way!
Having had a little more than a passing interest in Japan, one thing I am ready to conclude is that the culture has been virtually the same for the past 1,000 years. Just my humble opionion…
“Many people seem to think that the system introduced to Japan at the beginning of the Meiji Period was free market capitalism. This was really more of a state fascism than anything else. Has there ever really been a free market in Japan?”
No. Japan has a long history of zaibatsus. They are basically big corporations that work with the government to create subsections to meet directed demand. It’s like Sony producing several various commodities in different market sectors. Yamaha, Honda, etc.
The Japanese economy is dominated by the nine major keiretsu.
http://en.wikipedia.org/wiki/Keiretsu
It does seem a bit feudal, doesn’t it?
The relationship with government officials and labour unions is historically very close. There’s a dated cultural belief that a decent job should be with a single employer for life.
Well, even fascism is better than what the rest of the world had. Something of a free market is a very rare bird in history.
There’s one often overlooked episode in the history of the big zaibatsu. During the early part of the Meiji era the Imperial government had embarked on modernization program of its own. It modernized its own mines, set up large industries (manufacturing everything from rifles to fabrics) with no expense spared and hired foreign experts at extravagant rates to run them. This, of course, was all paid from government coffers which, by the early 1880’s, had run dry. This resulted in a massive “fire sale” of government-owned properties to the private sector. In that period capital in Japan was pretty scarce. There were only two kinds of people who had the money to buy from the State: the first were the few ancient families who had prospered under the Tokugawa shogunate and, by massive bribing and fast-talking, had managed to preserve their wealth and influence. The others were the “new rich”, self-made men who had managed to prosper when the rigid social organization imposed by the Tokugawa was dismantled by Emperor Mutsuhito-Meiji in 1868. Examples of the old families were the Sumitomo and the Mitsui. The Sumitomo had the monopoly of copper under the Tokugawa while the Mitsui managed the Tokugawa tax revenues, becoming so powerful as to be allowed to issue both currency and government bonds. Examples of the new rich were the Asano and Yasuda families and the Mitsubishi shipping concern. The Asano started out as a humble peddling business of charcoal and firewood in Tokyo and went on to own a multitude of major companies. The Yasuda were originally simple moneylenders. The Mitsubishi shipping concern deserves a bit more of history.
Iwasaki Yataro was a low-level samurai that had in the pre-Meiji era had worked in Osaka as an agent for his lord’s domain. In 1871 his bosses turned their business into a private operation and put Iwasaki as the head. In a couple of years he ammassed enough wealth to buy out the business and set up a firm of his own. He named the company Mitsubishi (“three diamond shapes”) taking the name of the logo of his old business and moved his base of operation to Tokyo. His business was shipping, and he was damn good at it. In 1870 the Imperial government had set up a State-owned shipping company, the YJK (meaning roughly “Japan National Mail Steamchip Co”) using government-owned ships, government funds and money coerced from some old families who had supported the Tokugawa. This company turned out to be a disaster: the old families really had no interest in this operation and the State-appointed managers constantly fought among themselves and had no experience handling coastal shipping, let along long hauls. In 1874 Japan decided to launch its first modern military expedition, the invasion of Taiwan. It possessed a modern and efficient army (drilled by American and French officers) but it lacked a navy to carry it to Taiwan. Of course YJK was “asked” to bring the troops over to Taiwan. The management, knowing the sorry state of their shipping concern, declined. What would the Western nations think when they heard the Japanese army was camped out near Yokohama harbor, in full battle gear and with nowhere to go?
Out of desperation the Imperial government offered Mitsubishi a contract to bring their troops to Taiwan. Iwasaki immediately accepted and Mitsubishi ships carried troops to Taiwan and back. When YJK fell into deep financial troubles the Imperial government simply looked the other way. Iwasaki bought the best ships at rock bottom prices and became the undisputed ruler of Japan’s domestic shipping. In a single year he had forced all foreign rivals to abandon the lucrative Yokohama-Shanghai route by offering lower prices and more frequent runs. When the big “fire sale” came Mitsubishi had enough money to buy a bank (they had been forbidden from opening one), a shipyard and several mines. And the rest is history as they say.
So you see, there’s more than one side of the coin, as usual.
Where do you get all this stuff man?
Most of it came from a superb 1996 book simply titled Keiretsu by Kenichi Miyashita and David Russell. The rest was pieced together from various sources I don’t remember anymore. I’ve read far too much in my life and I tend to lose track.