http://premodeconhist.wordpress.com/2008/03/24/smith-t-c-1973-pre-modern-economic-growth-japan-and-the-west/ - This entry is also available on my blog

Definition of “pre-modern growth”

The income per capita advantage enjoyed before the Industrial Revolution (IR) by subsequently first-world developed countries (Europe, its offshoots and Japan). Meaning that income level before IR would be a proxy of incomes level in 1973.

The very peculiar Japanese case

The second half of Tokugawa period in Japan was characterized by a steady – if slow – output growth while population remained unchanged (eg. +3% in 1721-46). “What combination of factors held population in check for this long in the face of expanding output – especially after previous rapid growth – is one of the most important and mysterious secret of Japanese social history” (128). Although, these advantages were not evenly distributed.

If both the West and Japan knew pre-modern growth before IR, the nature of that pre-modern growth was different: urban population stagnated or decreased in the most advanced parts of the country; although, lesser castle-towns located in backward areas went on growing thanks to artisans and merchants in-migration.

Smith argues that “without a considerable degree of de-urbanization no growth could have taken place” (130). He estimates the decline of urban at 18% (1700-1850). The urban population declined as neighbouring rural population was growing (Hiroshima –33%; the countryside +66%).

Proto-industrial Japan

The most commonly cited reason for the urban population decline was the development of rural trades and industries. The government tried to fight that trend, however ineffectively. The consequences of putting-out were often dramatic for the towns. The reasons evoked being: guild and municipal regulations and higher costs.

Towns also lost their monopoly on interregional exports (foodstuff) or imports (manufactured items). The phenomenon accelerated after 1750. Higher wages (for weavers for instance) appear to be the real engine of this town-to-country in-migration. Salaries in the country seem to have significantly higher (1840s).

The advantages of the country were the following: (1) nearer from raw material and waterpower, (2) close to growing rural market, (3) workers more authority-abiding (in the absence of real commercial legal system), (4) by-employment (farm + industry = lower wages), (5) less taxes and guilds’ regulations.

Consequences

Government was farming to urban merchants monopoly over some goods. But enforcement of these grants in the country was nearly impossible (most of the administration being local, the samurais having been relocated in the towns in the 17th century).

But in Japan (unlike Europe) there was no intercontinental trade, no port towns to develop. Significantly, when international trade was restored, population resumed growing.

If there is more work, why isn’t it more people? Somehow rural households incomes are kept close to subsistence level. As they remain partly dependent to farming the small size of the fields acts as a powerful check (abortion’s and infanticide’s rates also remained high). Besides, adoption didn’t force the peasants to have a male heir to inherit the land.

The reason why the towns’ population in the advanced areas decreased and not in the more backward one was because precisely advanced areas’ countryside had a comparative advantage (being close from consumption centres) that helped develop their proto-industries and checked the migration to the towns. Having no by-employment available, the backward countryside’s populations went on moving to the towns.

The result of the Japanese’s path to pre-modern growth was the shrinking of the urban bourgeoisie completely dominated by the military and administrative nobility (unlike Europe). Consequently, rural entrepreneurs became central figures in the island’s economy, a powerful class in itself, mightier than any town merchant. On the contrary of the later, the new comers are firmly opposed to any government’s regulation. Ultimately, they proved opposed to the closed hierarchical system of the shogunate that limited their growth. Rural uprisings ensued.

Aftermath

The government didn’t manage to profit from the pre-industrial growth because it failed to efficiently tax the countryside. The budget shrank and consequently the samurais grew poorer, weakening the whole Tokugawa system

This affected Japan’s first industrialization, as before the 1930s it was mainly centred on light industries (textile) produced by small, labour-inensive units of production with little bank or state direct action.

This was made possible by the fact that the work force shaped by proto-industry was rather skilful, ready to migrate and commercial networks pre-existed. This view seems supported by the fact that most of the modern industrialization took place in the place that had benefited the most from the proto-industrialization wave.

Discussion

The comparison is interesting, but the claim that only Europe and Japan had proto-industry is clueless, and the presentation of Japan as a completely close country has been revised now.