UNRESOLVED ISSUES IN JAPAN'S EARLY ECONOMIC DEVELOPMENT*

Publication Date01 June 1968
AuthorR. P. Sinha
DOIhttp://doi.org/10.1111/j.1467-9485.1968.tb00007.x
SCOTTISH
JOURNAL
OF
POLITICAL
ECONOMY
JUNE
1969
UNRESOLVED ISSUES
IN
JAPAN'S EARLY
ECONOMIC DEVELOPMENT*
R.
P.
SINHA
AT a time when most developing countries are groping to find ways
to break out of their vicious circle of poverty, misery and slow rate
of
growth, it is natural that the unprecedented rate of growth of Japan
-both a non-European and non-Socialist State-should attract imme-
diate attention. Although economic change is a continuous process
making
it
difficult to pinpoint the exact time when such a process
starts, very often acceleration in the rate of change
is
triggered
off
by
certain events at a certain point
of
time. It is generally agreed that in
recent Japanese history the Meiji Restoration
of
1868
was such an
event, although
no
one would deny that some significant contribution
in this direction was made during the Tokugawa Japan.
In
recent years, a number
of
eminent economists have, therefore,
analysed the process
of
Japanese economic development since the
Meiji era and
in
many instances have stressed the desirability
of
copying-to some extent-' the Japanese model
'
by the developing
countries
of
today.
*
I
have greatly benefited from the comments
of
many persons who read
a
first
draft
of
the Paper, in particular Professors
E.
F.
Penrose,
G.
C.
Allen,
M. Bronfenbrenner,
E
Hagen,
K.
Ohkawa, John
W.
Mellor,
R
P.
Dove,
R.
Murphey,
H.
T.
Patrick,
J.
I.
Nakamura,
Fr.
J. Hirschmeier,
H.
Rosovsky,
Dr.
C.
D.
Sheldon. Many of my Glasgow colleagues have made useful sugges-
tions in discussion, but especial thanks is due to Mark ElVin, who has en-
couraged the study
from
the
start. None of these
persons
is in any way
responsible for the Views expressed-any errors and omissions
are
entirely mine.
1
109
110
R.
P.
SINHA
Such economists* tend to agree that the Japanese economic develop-
ment was heavily dependent
on
a rapid growth of the agricultural
sector which provided
sufficient
food for the growing population,
savings for capital formation and adequate foreign exchange for the
import of capital goods badly needed for industrialisation. Such an
increase in productivity was achieved without making more than
‘minimal demands
on
the scarce resources of capital and foreign
exchange that were iadispensable for industrial expansion.’a The
industrial expansion itself relied
on
light industries,’
in
particular
cotton textiles-assumed to have, almost by definition, a low capital
intensity.
Most
of these writers have stressed broadly the constructive
role of the government but nevertheless they assert that ‘the real
economic growth of Japan took place in those areas
of
private activity
which owed least to political subsidy or
upp port.'^
Thus Japan repre-
sents the success story of a
simultaneous growth
’5
approach, with a
predominant private sector, the State providing
only
the ‘routine’
government services. This is rather a generalised summary, but it is
a fair approximation to the currently accepted majority view
on
Japanese economic development.
The aim
of
this paper is to
show
that none of these conclusions can,
within the present state of knowledge about Japanese economic
development be established beyond reasonable doubt. While it is
undeniable that the agricultural sector did make some positive contri-
butions, it would clearly be an overstatement to suggest that it
provided
sufficient
food and
adequate
capital or foreign exchange
1
Johnston,,B.
F.
(1951), ‘Agricultural Productivity and Economic Develop-
ment in Japan
,
Journal
of
Political Economy,
LIX,
6, December; Johnston,
B.F.
pd Mellor, J. (1961), ‘The Role
of
Agriculture
in Economic Develop-
ment
,
American Economic Review,
September; Johnston,,
B.
F.
and
Tolley,
G.
S.
(1965), ‘Strategy for Agriculture in Development
,
Journal
of
Farm
Economics,
May; Johnston, B.
F.
(1962), ‘Agricultural Development an:
Economic Transformation
:
A Comparative Study
of
the Japanese Experience
,
Food Research Institute Studies,
111,
2, November; Johnston, B.
F.
(1966).
‘Agriculture and Economic Development: The Relevance
of
the Japanese
Experience
’,
Food Research Institute Studies,
Vol.
VI,
No.
3;
Ohkawa,
K.
and
Rosovsky,
H.
(1
960),
The Role of Agriculture in Modern Japanese Economic
Development
’,
Economic Development and Cultural Change,
Part
11,
October;
Ohkawa and Rosovsky (1965), ‘A Century
of
Japanese Economic Growth
in
Lockwood,
W.
W.
(ed.),
The State and Economic Enterprise in Japan,
Princeton.
Johnston, 1966, p. 256.
Reybens, Edwin P. (1955). ‘Foreign Capital and Domestic Development
in
Japan
.
in Kuznets.
S.
fet
~1.1.
Economic Growth: Brazil, India, lalapan.
Durham,
p.
192.
4Lockwood,
W. W.
(1955). ‘The Scale of Economic Growth in Japan
1868-1938’ in Kumets,
S.
(et al.), Economic Growth: Brazil, India, Japan.
Durham, p.
588.
5
Ohkawa, K. (1964),
Concurrent Growth
of
Agriculture with Industry:
A Study
of
the Japanese Case
’,
in Dixey,
R.
N.
(1964),
lnternafional Explora-
tions
of
Agricultural Economics.
Ames; Lewis,
W.
A. (1955), The Theory
of
Economic Growth,
London, p.
388.
JAPAN’S
EARLY
ECONOMIC DEVELOPMENT
111
for modem economic development.
As
it will appear from the following
discussion, the role of food imports and foreign capital has largely
been understated by such writers. Their description of the Japanese
strategy is also highly questionable. Above all a closer scrutiny of the
State activities makes it difficult to outline areas of private activity
which did thrive, without direct or indirect State subsidy or support.
Finally it is necessary to indicate that the broader relevance of the
Japanese experience for the present day developing countries may be
of a very limited nature.
The traditional view
of
Japanese agricultural development
in
the
Meiji era, suggesting an annual rate of growth of agricultural output
of
2
per cent or more6-considered until now as almost conclusively
established- has been seriously challenged recently by Nakamura.’
He blames the traditionalists for a rather uncritical acceptance of the
official statistics and argues that if an allowance were made for a
significant understatement for both acreage and yield, widely practised
in
the early Meiji period for evasion of taxation, agricultural output could
not
have grown by more than one per cent per annum
in
the entire
period.
An
acceptance of Nakamura’s position-agricultural produc-
tion just keeping pace with population growth8-virtually destroys
the traditionalists’ thesis regarding
the strategic role of agricultural
development in the economic growth of Japan
’.
Under the circum-
Various estimates of rates of growth are as follows:
1.9
per
cent. (John-
ston
(1951),
p.
499); 2.4
per cent. (Ohkawa and Rosovsky
(1960),
Table
I,
p.
45);
1.8
per
cent. (Yamada,
S.
(1964)).
N6gyo sanshutsu gaku
no
suikei
(Estimation
of the value of agricultural production),
Keizai Kenkyu,
XV,
1,
pp.
71-76,
quoted in Nakamura, J.
1.
(1966).
Agricultural Production and the Economic
Development
of
Japan,
Princeton, p.
119; 23
per
cent. from
1890
to
1905
and
3.5
per cent.
from
1905
to
1920’s,
Colin Clark
(1967)
Agricultural Production and
Economic Development of Japan
1873-1922
(Book Review).
Journal of Agri-
cultural Economics,
VIII,
3,
pp.
428-30.
7Nakamura
(1966),
op. cit.; see also Nakamura
(1968).
‘The Nakamur?
versus The LTES Estimates of the
growth
rate
of
Agricultural Production .
Keizai Kenkyu,
Vol. XIX, No.
4,
October. pp.
358-61,
and Nakamura (1968-A),
Incentives. Productivity Gap and Agricultural Development
in
Japan, Taiwan
and Korea
(Preliminary Draft).
8The
population IS esomated to have grown anything between
0.8
and
1.3
per
cent.
per
annum between the Restoration and the First World War (Ohkawa
and Rosovsky
(1%0),
p.
46).
There is, however, some difference
of
opinion
both
on
the actual level
of
population and its rate of growth in the Meiji Era.
See Ishii, R.
(1937),
Population Pressure and Economic Life in Japan,
Chicago;
Taeuber,
I.
B.
(1958),
The Population
of
Japan,
Princeton; Schumpeter, E.
B.
(ei
al.), Zndusirialization
of
Japan and Manchukuo
1930-1940.
Since
the first real census
in
Japan was taken only in
1920,
preyious estimates are
likely to have a considerable margin
of
error.
E.
F.
Penrose, Mortality, Repro-
duction and Rate
of
Increase
of
the Population since
1920’
in Schumpeter
(et al.)
(1940)
is
very critical of the population statistics and suggests that the
quantity of statistics hardly justifies the use of reibed methods of measure-
ment of mortality, reproduction
or
growth rates.

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