a brief economic history of japan

8/8/2019 A Brief Economic History of Japan

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A Brief Economic History of JapanBefore the mid-19th century, Japan's economy was supported by a rural,agrarian society. Japan had maintained a policy of isolation, preferring to keepsome distance between itself and the rest of the world. With the visit of U.S.Naval Commander Matthew Perry, this situation changed dramatically. Japan

became economically linked to the western world, and with the prospect of tradewith western nations, Japan began to transform itself as quickly as it could intoan industrial society.In the mid-to-late 19th century, Japan began the transition toward modern,economic growth. Much of this growth depended on international contacts, soJapan systematically sought Western economic knowledge. They did this bysending their best people to all parts of the world to be educated and to find outas much as possible about different industries and processes from other parts ofthe world.The Japanese also did several things within their own country. They officiallyabolished the class system and established a free and compulsory education

system. They began a policy of offering government subsidies to encouragepeople to start private businesses. They also began putting money into keyindustries such as textiles. Along with these changes they developed systems ofmodern communication and transportation. Railroad and telegraph lines, as wellas a postal system, were established.The Japanese began to import machinery for their factories. Silk and cottonmilling became an important industry. With the assistance of Western technologyand advice, mining also began to take on some importance. A modern bankingsystem was started with the establishment of the Bank of Japan and theintroduction of a modern form of currency. With an increase in industrialization,government-sponsored factories were sold to private interests.Even though many changes occurred in the mid-to-late 19th century, Japan stilldepended on agriculture and a great deal of the population was rural. Around theturn of the century, the Japanese economy was a combination of the new andthe old. This was because modernization depended on traditional factors ofproduction - a labour force, raw materials, food supply, and an industrialinfrastructure (capital goods).World War 2 changed many things in Japan. The war left the Japanese economydestroyed. Its roads, cities, factories, hospitals, etc. had been systematicallydestroyed by the bombing. Over 8 million people were dead or injured. Japanwas occupied by U.S. armed forces and did not have sufficient resources torebuild on its own, It was completely dependent on western nations for economicaid.Japan's occupation by the U.S. resulted in many changes. Before World War IIJapan's early economic system had been controlled by what were known as"zaibatsu". These were large, powerful financial organizations (trusts) owned bysingle families who were very wealthy, conservative elites. They controlled andoperated such things as banks, factories, mines and so on in ways which wereoften of more benefit to the family than to Japan. Eliminating the zaibatsu createdmore competition in the Japanese economy by allowing more people to startbusinesses and compete with new and better ideas.


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Japan also benefited from a number of American policies toward Japan followingthe war. Japan was not forced to pay for war damages to the U.S. and othercountries. The U.S. gave $2 billion in direct aid to Japan. The terms of Japan'speace treaty stated that Japan could no longer have a large military. This meantthat Japan could concentrate its scarce resources on rebuilding its shattered

economy in ways that gave it the most up-do-date industries in the world.The Japanese concentrated on new technology in such areas as steelproduction, shipbuilding, electronics, household appliances, and the automotiveindustries. Farmers were now allowed to own their land, organized labour wasestablished. Within a decade (the 1950's) the Japanese were back on the path toprosperity.The Japanese government established protectionist systems which made it verydifficult for any other nation to sell in the Japanese market. This internal marketwas growing very quickly because of the population growth and because of therising standard of living. Since only Japanese industry could sell in this market,Japanese businesses were able to grow quickly with little foreign competition.

During this time, Japan concentrated on international trade, rather than theterritorial expansionism they had been practising. By the mid-1950's, industrialproduction had risen dramatically and economic output began to increase byover 10% each year. There were two things that helped Japan during this time.First, it began to produce things for export in the international market, andsecond, world trade began to accelerate making it easy to sell on the worldmarkets. The work force, of course, was as disciplined and hard-working as everand so was able to turn out large quantities of inexpensive goods.Today, Japan is successful to the point where western nations are eithercomplaining about its trading practices or looking to it to discover the secrets ofeconomic growth. Japan still makes it extremely difficult for nations to exportgoods to Japan. Japan still subsidizes its farmers so that it is difficult to sellagricultural products. Japan is accused of using unfair trade barriers againstother countries something Japan denies. Despite the fact that it has few naturalresources, Japan has the strongest economy of all industrialized nations.Japan is held up as a model of industrial development. Despite the fact thatJapan lacks raw materials, Japan has been able to become one of the world'sleading industrial powers. Most observers agree that Japan's commitment toquality products, good education, an emphasis on hard work, protectionism, andlittle military spending are the reasons for Japan's success.A Brief Economic History of CanadaWhen examining the economic history of Canada, much depends on the regionof the country and the origin of the people who settled those regions.In the years before contact with the first European explorers, the IndigenousPeoples of Central Canada lived mainly by hunting and gathering. These skillswould allow them to play a crucial role in the fur trade. During the 16th century,French and British traders purchased furs from Central Canadian Indians inexchange for tools and weapons. This drastically changed the Indian way of life.It also established a view of Canada as a great storehouse of inexpensive naturalresources that could be easily exploited.Permanent settlers first came to Central Canada to take advantage of fisheries


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and trade. Two fur trading companies, the Hudson's Bay Company and the NorthWest Company played key roles in early economic and population growth. Thesecompanies merged in 1821. By this time, Central Canada had established athriving timber industry.As population grew, agriculture became more important and by the early 19th

century it was well-established in the St. Lawrence Valley. Major settlementbegan with the United Empire Loyalists leaving the U.S. to come to what is nowCanada during the American Revolution. Trade in timber, potash and wheatbegan to grow. Later, the Welland Canal and the St. Lawrence River becameimportant shipping routes that allowed for increased trade in a variety of goods.With Confederation in 1867 Central Canada rapidly industrialized and citiesbegan to grow. Canada was becoming an exporter of raw materials. There wasmuch investment in developing an infrastructure (mines, sawmills, railroads, etc.)which would make possible the extraction and export of natural resources asinefficient and inexpensive as possible.The Government of Canada was concerned to see the industrial and agricultural

base of Canada grow as quickly as possible. Its first objective was to makepossible a continental trading system by building a transcontinental railroad. Thisrailroad could only make money if goods and people moved back and forth on it.So the Government established the National Policies in 1878 to make sure thishappened. These policies put in place high tariffs to protect the infant industriesof Canada from foreign competition so that only they could sell their products tothe rest of Canada. The rest of Canada would pay for these industrial goods byselling their agricultural goods and their raw materials. The surplus productswould be sold in the foreign markets making everyone in Canada prosperous.Central Canada became important for electrical equipment, chemicals, cars,aluminum, pulp and paper. Later, cheap hydroelectric power acceleratedindustrialization.Montreal and Toronto became important ports which were the centre ofcommercial and financial centres. By the mid-to-late 19th century, CentralCanada's economy had become urbanized and service-oriented.As Central Canada's economy developed in the Twentieth century a number ofmanufacturing industries grew up. Canadians started a number of automanufacturing plants which found they had to compete with Americanmanufacturing. Over time American businesses found they could get aroundCanadian protective tariffs by buying up Canadian businesses and making thembranch plants of American businesses. Over time the percentage of foreignownership of Canadian businesses has steadily increased in all sectors of theeconomy.Economic activity in Atlantic Canada began with the fishing industry establishedto meet the needs of markets in Europe. By the early nineteenth century,fisheries, forestry and shipping were established. Nova Scotia was an extremelysuccessful trading and shipping area. By 1900, iron, steel and the railwaybuilding industry became important. Halifax had developed into a financial centre.However, trade began to go down the St. Lawrence river to Montreal and Torontobypassing the Maritimes.Location began to work against Atlantic Canada, and the economy has grown


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slowly in the twentieth century. World War Two brought some economicprosperity with hydroelectricity and government-sponsored industries, but muchof the region could not maintain economic growth. Even today, Atlantic Canada'seconomy is much poorer compared to the rest of the country. Although there ispotential for petroleum development off the coast of Newfoundland, the

Maritimes continue to depend on traditional ways of making a living such as thefishing industry. These continue to do poorly.The St. Lawrence Seaway which was a massive project to construct thenecessary locks to allow ocean going vessels to sail from the Atlantic Oceanthrough to ports in Toronto, Chicago, Thunder Bay, etc. in the heart of NorthAmerica. The seaway was built to stimulate international trade and did helpCentral Canada, but it has not done much for the Maritimes.The development of Western Canada, like that of Central Canada, began withthe fur trade. The building of the railway provided the West with an economicboost. Manitoba became important for wheat, and Winnipeg became acommercial, railway and factory centre. By the late 19th century, with improved

farming methods and increased world demand for grain, the West became aprosperous wheat growing area. The combination of wheat and the railwaygreatly expanded the Prairie economy as settlers flooded in attracted by the freeland and a better way of life. The West became famous as the bread basket ofthe world.Conditions in the West became very difficult during the Great Depression (1930').Severe drought was only one of the problems. The western provinces felt thatCanada's tariff system worked against them, because it raised the price of themanufactured goods they had to buy from Central Canada while doing nothingfor the price of the products the West sold. Canada's protectionist policies hurtthe West because the rest of the world retaliated against Canada's tariffs byraising their own. This made it difficult for the West to sell its agricultural productson the international market.After the Second World War, there was some diversification in the economy ofthe West. Oil and gas exploration began in Alberta, and lumbering, fisheries andmining were established in B.C. Vancouver became and important port for Asiantrade and Prairie wheat.Western Canada was becoming increasingly urbanized. The economy diversifiedas oil, gas, and potash became more important. This helped Alberta andSaskatchewan. Lumber and coal development increased in B.C., andhydroelectricity was developed in B.C. and Manitoba. Trade began to open upwith Japan, U.S.S.R., China and the Third World, all of whom needed wheat andraw materials. Lumber and pulp and paper expanded, and investment in Alberta'star sands increased. By the 1970s, most of the population was urbanized andservice-oriented.Source:Saskatchewan Learning: Evergreen Curriculum: Social Studies 10 Activity Guidehttp://www.sasked.gov.sk.ca/docs/tensoc/activity/unit4/act6.html

a brief economic history of japan

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