The intellectual roots of Japanese capitalism: Economic thought and policy, 1835--1885

When the Tokugawa shogun subdued his rivals and established peace in 1600, the military rivalry between warring feudal domains moved into the economic sphere. By the mid-eighteenth century, many domains fell into debt keeping their lords in appropriate luxury. Despite Tokugawa Confucian disparagement of commerce, samurai bureaucrats in several domains resorted to mercantilist policies to bring wealth to their domains.; The Satsuma domain in Kyushu was particularly successful in its economic reforms and industrial promotion efforts. Exploiting its warm climate, the Satsuma state established a monopoly over sugar in the early nineteenth century. This monopoly saved the domain from bankruptcy and soon made Satsuma one of the wealthiest domains in Japan.; In the 1840s, when British, French and American warships demanded trade relations, the Satsuma Lord Shimazu Nariakira employed his samurai officials in technical research and industrial promotion. In a short time, Satsuma officials built steamships, cast cannon, and constructed a steel furnace. To pay for these experiments, Satsuma experimented with western techniques to improve sugar refining and textile production.; When the Meiji Restoration of 1868 toppled the Tokugawa shogun, several Satsuma samurai officials became leading economic policy makers in the new regime. In the 1870s, Okubo Toshimichi as Minister of Home Affairs established a bureau of industrial promotion that built model textile factories to introduce Western technology. Matsukata Masayoshi as Minister of Finance used bond policy and military spending to assist Japanese producers of a wide range of goods. Maeda Masana as an official in the Ministry of Agriculture and Commerce assembled one of the world's first comprehensive industrial development plans. All three were deeply concerned with improving Japan's balance of trade.; Japan's statist and nationalist approach to economic policy grew out of the feudal domains' competition with one another in the Tokugawa period. When Japanese leaders went to Europe and America in search of models for economic development in the 1870s, they already had their core beliefs firmly in mind. French and German statism rather than English liberalism naturally resonated with the state-centered paradigm of political economy that these Meiji leaders had formed earlier in Satsuma.