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Japan Modernization and Industrialization
Japan emerged from the Tokugawa-Meiji transition as the
first
Asian industrialized nation. Domestic commercial
activities and
limited foreign trade had met the demands for material
culture in
the Tokugawa period, but the modernized Meiji era had
radically
different requirements. From the onset, the Meiji rulers
embraced
the concept of a market economy and adopted British and
North
American forms of free enterprise capitalism. The private
sector--
in a nation blessed with an abundance of aggressive
entrepreneurs--
welcomed such change.
Economic reforms included a unified modern currency
based on
the yen, banking, commercial and tax laws, stock
exchanges, and a
communications network. Establishment of a modern
institutional
framework conducive to an advanced capitalist economy took
time but
was completed by the 1890s. By this time, the government
had
largely relinquished direct control of the modernization
process,
primarily for budgetary reasons. Many of the former
daimyo,
whose pensions had been paid in a lump sum, benefited
greatly
through investments they made in emerging industries.
Those who had
been informally involved in foreign trade before the Meiji
Restoration also flourished. Old bakufu-serving
firms that
clung to their traditional ways failed in the new business
environment.
The government was initially involved in economic
modernization, providing a number of "model factories" to
facilitate the transition to the modern period. After the
first
twenty years of the Meiji period, the industrial economy
expanded
rapidly until about 1920 with inputs of advanced Western
technology
and large private investments. Stimulated by wars and
through
cautious economic planning, Japan emerged from World War I
as a
major industrial nation.
Data as of January 1994
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