Economic Growth in

Tokugawa Japan

Michael Smitka

March 2001

Economics 297 Presentation

Mid-16th Century Han(“countries”)

Issues

• was Japan poor? -- standard of living

• was the economy static -- growth process

• institutional, other legacies

• Curiosity: merely understanding Japan (1600-1868)

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

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

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?

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”

Unification = ?

• multiple “kuni” (country?!) – each headed by a semi-autonomous

“daimyo” (lord)

– variations in laws, economic structure

• roughly 250 political-economic units remained

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

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?

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

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

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

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

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

Shipping Routes after 1720

Area of Indica

(short-grain)

Rice Cultivation

–early 1700s

–darker hatching indicates greater

cultivation of indica rice

–

Kawaguchi Ironware

Zaguri (silk weaving

machine)

Loom (karabikibata)c. 1770

SpinningSilk

Whale Processing

Factory

Population Growth Rates

Region 1798 1804 1828 1834 1846 ‘98-’46Kinki 93.5 93.5 0.0%Tokai 100.1 106.6 6.5%Kanto 85 86.6 1.9%Tohoku 86 88.7 3.1%Tozan 106.1 1798 110.1 3.8%Hokuriku 105.3 -1834 117.6 11.7%San'in 118.8 120 129.9 132.7 11.7% 124.8 4.0%San'yo 106.8 109.9 119.8 121.8 14.0% 120.2 9.4%Shikoku 111.7 114.9 123.8 126.1 12.9% 126.8 10.4%Kyushu 105.3 107.3 111.3 112.2 6.6% 113.8 6.1%

1721 = 100Kinki, Tokai, Kanto, Tohoku, Tozan all fell. 48 yearsHokuriku slow growth selected regions, old data

Agriculture Outgrows Population

50.00

46.00

42.00

38.00

34.00

30.00

26.00

22.00

18.00

14.00

10.001600 1650 1700 1720 1730 1750 1800 1850 1872

Tokugawa Population & Agriculture

Population (millions) Arable Land (100,000 í¨) Agricultural Output

Tokugawa Population & Agriculture

Area Yield YieldPop Arable Farm per per per

Year (mil) Land Output Pop Pop Area1600 12.0 20.7 19.7 17.25 1.64 0.0951650 17.2 23.5 23.1 13.66 1.34 0.0981700 27.7 28.4 30.6 10.25 1.10 0.1081720 31.3 29.3 32.0 9.36 1.02 0.1091730 32.1 29.7 32.7 9.25 1.02 0.1101750 31.1 29.9 34.1 9.61 1.10 0.1141800 30.7 30.3 37.7 9.87 1.23 0.1241850 32.3 31.7 41.2 9.81 1.28 0.1301872 33.1 32.3 46.8 9.76 1.41 0.145

Specialization in AgricultureCotton Production

Koga county, Harima han near modern Kobe

IrrigatedYear fields Dryland Reclaimed Total1801 0.4% 13.7% 28.5% 8.2%1807 0.6 15.1 25.2 8.21813 3.0 41.5 36.9 17.31822 4.3 38.6 36.8 17.41832 0.5 34.5 34.8 13.41842 2.2 38.6 36.9 16.21847 1.5 35.2 35.2 14.5

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.

Shifts in Family Structure

Average for Selected villages Suwa Region, modern Nagano Prefecture

Avg. Household Size Avg Couples per HouseholdYear Nishiko Yamaura Nishiko Yamaura

1671-1700 7.87 8.55 1.97 1.831701-1750 6.14 9.93 1.41 2.341751-1800 4.66 6.94 1.32 2.051801-1850 4.22 4.73 1.25 1.371851-1870 4.31 4.48 1.20 1.30

Osaka as an Entrepot (1714)Principal non-Rice Imports / Exports

Imports ExportsMarine products 20.2% Oil & beeswax 36.4%Agricultural items 19.5 Clothing & textiles 25.2Clothing & textiles 15.4 Misc tools 7.5Oilseed 12.9 Misc exports 7.3Mining products 7.5 Processed food 6.1Fertilizer 6.4 Accessories & decorations5.8Wood products 5.9 Lacquerware & pottery 4.6Misc Imports 4.1 Seedcake (fertilizer) 3.4Tea & tobacco 2.8 Furniture 0.5Tatami 2.0 Weapons 0.5Kyoto crafts 0.9 Arts & crafts 0.4%Total (Ag value) 286,561 kan Total 95,800 kan

Extent of Cotton CultivationJapan remained able to shift land out of food crops

Growth of a National MarketRice Price Movements Converged in the 17th Century

Structure of National Output

– 1874 –

• shortly after “opening” to

the West

• before significant

structural change from

– new technologies

– convergence of domestic &

international prices