Economic History of Japan

Japanese Economy Between World War One and World War Two: The Japanese economy was dealt multiple blows between the two world wars. The first was the Showa Financial Crisis in 1927 and the second one was the Showa Depression of 1930-31 (Bank Of Japan). The Showa Financial Crisis of 1927 resulted from continuous economic instability which was because of the unfinished reforms related to commerce and banks, lenders who lent out too much money and were unable to collect it on time. The government transformed the business world via massive tax payer subsidies and consolidated failing banks to ease the burden of debt. The great depression’s impact on Japan was known as the Showa Depression of 1930-31. Japan’s economy was shielded from some of the worst effects of the Great Depression more so than other countries because of “macroeconomic stimulus measures” (Bank of Japan) started by Korekiyo Takahashi, an experienced Finance Minister who took the oath of office in December 1931. Takahashi

Overview of the Meiji Restoration: Japan began to industrialize throughout the Meiji period. The process of modernizing Japan was started by Meiji officials around the late 1800’s so that Japan could compete with Europe and America. The state apparatus was involved in massive infrastructure buildup which consisted of improving existing roads, improving the railways and embracing policies regarding land that would make future infrastructure improvements smoother. The Japanese government also started up a schooling system modeled after schools in Europe and America for Japanese citizens of school and college age, sent many Japanese youth to the west and invited thousands of Western foreigners to teach STEM and many other subjects in Japan. Many Japanese politicians referred to as the Iwakura Mission journeyed throughout Europe and the United States in 1871 looking for western concepts that would help the Japanese speed up industrialization. The conclusions reached by those who travelled

The Caste System and its impact on the Japanese economy:  During the Edo period (also known as the Tokugawa period) the Tokugawa Shogunate made it impossible for citizens to move up with the Japanese caste system. In order to maintain social harmony. Many samurais and citizens who made up the warrior class moved to the Capital and towns of political significance. They leveraged their elite positions to land bureaucratic jobs. Poor farmers who constituted a majority of Japans population were restricted to only farming. This guaranteed a continuous revenue stream to the ruling class whose income was based on taxing the harvest of the poor. Diagram of the Caste System Impact of European Colonization on the Japanese Economy: As the west was increasing its colonial presence in Asia. The Tokugawa Shogunate feared a cultural and military invasion of Japan by the west, The Tokugawa focused in particular on Catholic missionaries who had been crucial to the European colonization of Sou

Early European Impressions of Japan: Europeans during the Renaissance held Japan in high regard based on their initial dealings with Japan in the 16th century. Japan’s soil was perceived as possessing a large amount of precious metals based on records of the explorer Marco Polo who observed gilded temples and palaces. Another contributing factor was the many minerals and metals on the surface that would be found in a country home to so many volcanos. (This was prior to times when equipment would allow people to mine deeper within the earth’s surface). Japan would position itself as one of the biggest exporters of precious metals such as copper and silver during the 16th Century. Early Trade with Europe:  The Portuguese were the first Europeans to trade with Japan. They dealt in Chinese products such as silk and porcelain. The Japanese were not allowed any interaction or trade with the emperor of China. This created an opportunity for the Portuguese to broker trade between the