The Role of Tradition in Japan's Industrialization: Another Path to Industrialization (Japanese Studies in Economic and Social History)

The Role of Tradition in Japan's Industrialization

JAPANESE STUDIES IN ECONOMIC AND SOCIAL HISTORY Edited by Osamu Saito and Kaoru Sugihara for the Socio-economic History Society of Japan Vol. 1 Japan, China, and the Growth of the Asian International Economy, 1850–1949 (edited by Kaoru Sugihara) Vol. 2 The Role of Tradition in Japan's Industrialization (edited by Masayuki Tanimoto) Forthcoming Vol. 3 Planned Economy, Occupation and High-speed Growth (edited by Juro Hashimoto and Haruhito Takeda) Vol. 4 The Demography of Traditional Japan, 1600–1870 (edited by Osamu Saito) Vol. 5 Education and Modern Economic Growth in Japan (edited by Konosuke Odaka)

The Role of Tradition in Japan's Industrialization Another Path to Industrialization

VOLUME2 Edited by MASAYUKI TANIMOTO

Great Clarendon Street, Oxford OX2 6DP Oxford University Press is a department of the University of Oxford. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York © Oxford University Press, 2006 The moral rights of the authors have been asserted Database right Oxford University Press (maker) First published 2006 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose the same condition on any acquirer British Library Cataloguing in Publication Data Data available Library of Congress Cataloging in Publication Data Data available ISBN 0–19–829274–0 978–0–19–829274–6 1 3 5 7 9 10 8 6 4 2

PREFACE This is the second volume of the series “Japanese Studies in Economic and Social History”, edited under the auspices of the Socio-economic History Society of Japan. It is a well-known story that Japan's modern economic growth started in the last quarter of the nineteenth century, transplanting the advanced technologies and institutions from industrialized western countries. Recent studies on economic history of modern Japan, however, have claimed the importance of the aspects other than the transplantation from west to realize the feature of the Japan's economic development. The indigenous factors, which we call “tradition” in the broad sense in this volume, should be pointed out to account for the cause of Japan's modern economic development. This recognition was already expressed as a concept of “balanced economic growth” from the viewpoint of macro economic analysis in the 1970s. Inspired by this argument, many economic historians in Japan have considered the role of indigenous industries, executing micro-based analysis of the industrial histories from the 1980s onwards. The principal aim of this volume is to provide the English reading academics with the fruits of this field, compiling the recent representative works. The volume also intends to clarify the existence of “indigenous development” in Japan's economic development that would shed new light on the conventional concept of “the dual economy” in the industrialized economies as well as for the developing countries. It was impossible to complete the volume without the invaluable assistance of many people. We are most grateful to Linda Grove and Patricia Sippel for their devoted efforts to improve the English-language presentation of the chapters. Hiroki Ichinose and Kei Saito helped us as well with the English translation for some chapters. Osamu Saito has given us advice and many suggestions from the beginning of this project. Some of the editorial work was helped by Hidetoshi Miyachi. The CIRJE (Center for International Research on the Japanese Economy, affiliated with the Graduate School of Economics, the University of Tokyo) generously gave us financial support. We would like to express our gratitude to them all for their contributions. Masayuki Tanimoto

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CONTENTS Preface List of Figures List of Tables List of Maps Map of Japan Notes List of Contributors Part I Introduction 1. The Role of Tradition in Japan's Industrialization: Another Path to Industrialization Masayuki Tanimoto 2. The Development of Traditional Industries in Modern Japan: A Statistical Exposition Takanori Matsumoto Part II Tradition in Industrialization 3. The Role of “Early Factories” in Japanese Industrialization Johzen Takeuchi 4. Dualism in the Silk-reeling Industry in Suwa from the 1910s to the 1930s Satoshi Matsumura 5. Factory Girls in an Agrarian Setting circa 1910 Jun Sasaki 6. The Humble Origins of Modern Japan's Machine Industry Jun Suzuki 7. How Local Trade Associations and Manufacturers' Associations Worked in Pre-war Japan Kazuhiro Amori Part III The Modernization of Traditional Industries 8. The Rise of a Factory Industry: Silk Reeling in Suwa District Masaki Nakabayashi

v ix x xiii xiv xvi xvii 1 3 45 73 75 93 121 140 157 181 183

viii 9. The Export-oriented Industrialization of Japanese Pottery: The Adoption and Adaptation of Overseas Technology and Market Information 217 Takehisa Yamada Part IV Industry and Regional Community 241 10. The Development of a Rural Weaving Industry and its Social Capital 243 Hisami Matsuzaki 11. Communal Action in the Development of Regional Industrial Policy: A Case Study of the Kawamata Silk Weaving Industry 273 Futoshi Yamauchi 12. Capital Accumulation and the Local Economy: Brewers and Local Notables 301 Masayuki Tanimoto Index 323

LIST OF FIGURES 1.1. Order, sales and piece rate in the putting-out system (Case of the Takizawas, 1897). 1.2. Yield rate and the business cycle. 2.1. Plots of the nationwide trends of traditional commerce in modern Japan by the Principal Component Analysis. 2.2. Plots of the nationwide trends of the traditional civil construction contractor industry in modern Japan by the Principal Component Analysis. 3.1. Dimensions of industrialization. 3.2. Japanese transformation from putting-out system. 4.1. Subcontracting of small reeling mills under large reeling firms. 4.2. Raw silk reeling by small independent mills. 4.3. Raw silk reeling by hand-reeling filature. 5.1. Commonest forms of cotton cloth production by the clothiers in Banshū during the 1910s. 7.1. Pottery production and export 1897–1937. 7.2. Straw goods production 1897–1937. 8.1. Relative price of filature: (Japan Filature No. 1 in New York)/(Japan Hanks in Lyon). 8.2. Relative price of filature: (Filature in Yokohama)/ (Hanks in Yokohama). 8.3. Gross margins of peasants per 1 picul of silk in 1886. 8.4. Silk re-reeling and inspection system of Kaimeisha from 1884. 8.5. Price of Shinshū Filatures and Kaimeisha Filatures in the Yokohama market 1884–1887: weekly data. 9.1. Technical schools in pottery-producing districts in the Meiji period. 10.1. Development of Isezaki weaving industry (Unit: yen). 10.2. Map around Isezaki. 10.3. Putting-out system and flow of products. 10.4. Fluctuation of amounts. 11.1. Export silk production in Date prefecture (quantity and sales). 11.2. Export silk in Date-gun and Kawamata town. 12.1. Market oriented production of sake and soy sauce. 12.2. Number of factories and workshops of brewery (Size-specific: volume of production per year).

15 18 55 62 82 89 101 111 117 122 160 167 187 188 190 195 196 233 246 247 248 264 285 286 306 307

LIST OF TABLES 1.1. Structure of labor in manufacturing sector (1920). 1.2(a). Agricultural and non-agricultural products in Japan (1874). 1.2(b). Number of gainful workers by industry and occupation (1874) (Classified by the Meiji government). 1.3. Production forms of the weaving industry in Japan (1905). 1.4. The apportion of labor within a peasant's household (1901, in Senboku-gun, southern part of Osaka Prefecture). 1.5.1. Ratio of self-employed workers to total workers. 1.5.2. Sectorial transition of self-employed workers. 2.1. Changes in the number of gainfully occupied workers in the entire traditional industrial sector. 2.2. Marginal contribution rate of each category against the increase in the total number of workers. 2.3. Prefecture-specific changes in the number of persons operating retail sales. 2.4. Distribution-related indexes. 2.5. Prefecture-specific changes in the number of persons operating businesses in the contracting industry (civil construction contracting industry and contracting labor). 2.6. Change in management indexes of contracting industry in Japan. 3.1. Newly transferred industries and leading early factories. 3.2. Early factories of brush industry. 3.3. Button factories in Osaka. 3.4. Brush producers in Osaka City. 3.5. Decline of soap factories in Tokyo. 4.1. Raw silk production in Japan. 4.2. Machine-reeling mills in Suwa (1924). 4.3. Subcontracted basins under large reeling firms (1) (1914–1918). 4.4. Subcontracted basins under large reeling firms (2) (1919–1931). 4.5. Basins of Katakura's Kawagishi Mill (1927). 4.6. Operation status of small reeling mills (1914–1927). 4.7. Data of establishment of reeling mills serving the domestic market. 4.8. Occupations of the heads of reeler's families. 5.1. Workers classified by their place of birth (residence), February 1914–January 1924.

6 8 8 13 17 20 24 48 54 57 61 64 67 78 80 83 83 84 96 100 103 104 106 107 107 114 124

xi 5.2. Employment age and employment terms of workers, February 1914–January 1924. 5.3. Number of power looms each weaver operated from 21 January to 18 March 1917. 5.4. Number of weaving days, 21 January–18 March 1917. 5.5. Output, wages and earnings of weavers, 21 January–18 March 1917. 5.6. Typology of the double shift, 21 January–18 March 1917. 7.1. Number of local trade associations by type of business (1920). 7.2. Number of manufacturers' associations by type of manufacturing industry (1931). 7.3. Destinations of exported pottery (1900–1937). 7.4. Output value of main pottery-producing districts (1909–1937). 7.5. Output of straw goods by prefecture. 7.6. Output of straw goods by gun (county). 7.7. Demand, import and export values of straw goods by prefecture (1931). 7.8. Local trade associations in the main producing districts (1931). 7.9. Results of inspections (1937). 8.1. Japanese production and export of raw silk. 8.2. Production and equipment of silk-reeling industries in Nagano Prefecture, 1876–1930. 8.3. Raw silk sold to Yokohama trading companies in the Oct.–Dec. period, 1880–1889. 8.4. Basic wage and performance of female workers in Kasahara's factory (OLS). 8.5(a). Fine equation (2SLS). 8.5(b). Wage equation (2SLS). 9.1. The amount of Japanese pottery exports in the Meiji period. 9.2. Demand for Japanese pottery in 1891. 9.3. Employers and employees in pottery-producing districts in 1891. 9.4. Amount of pottery production in the Meiji Period. 10.1. Content of expenditure. 10.2. Content of textile consumption in Japan. 10.3. Clothiers and looms in Isezaki region. 10.4. Disposal of returned commodities in September 1917. 10.5. Content of mortgage. 10.6. Types of newcomers. 10.7. Content of textile consumption in Japan.

126 128 129 132 135 158 159 161 161 168 170 171 173 175 185 189 191 201 202 202 220 224 225 226 245 246 249 255 259 261 262

xii 10.8. Amount of silk textile production in Sawa-gun (county). 10.9. Financial situation of Kakiage brokerage firm. 10.10. Stock prices of brokerage firm. 11.1. Weavers in Kawamata and villages in Date-gun 1894. 11.2. Production scale and number of weavers in Kawamata, 1899. 11.3. Councillors and presidents of the Trade Association, 1896. 11.4. Distribution of power looms amoung the workshops in Kawamata town (1912). 11.5. Income brackets of export silk cloth weavers. 11.6. Two opposing factions of the Trade Associations in 1914. 11.7. Major investors in the Kawamata Credit Cooperative of Production and Sales 1911. 11.8. Outstanding loans of Kawamata Cooperative of Credit, Purchase and Sales. 12.1. Occupational distribution of property owners with the assets of more than 500,000 yen. 12.2. Distribution of traders by taxation (Niigata Prefecture 1898). 12.3. Balance of Oku (Inner account) of the Hamaguchi family. 12.4. Share investments in Oku (Inner account) of the Hamaguchi family.

263 265 265 275 276 278 286 287 289 292 293 302 303 312 314

LIST OF MAPS 1 Map of Prefectures. 4.1. Suwa district and nearby areas. 5.1. Banshū, a semi-urban area covering Taka-, Katō- and Kasai-gun in Hyōgo Prefecture (Abe 1989: 208). 5.2. Place of birth (residence) of workers, February 1914–January 1924. 9.1. Location of pottery-producing districts in Meiji, Japan.

xiv 99 123 125 222

xiv

xv

(Name of prefecture) 1 Hokkaidō 2 Amomori 3 Iwate 4 Akita 5 Miyagi 6 Yamagata 7 Fukushima 8 Ibaragi 9 Tochigi 10 Gunma 11 Ciba 12 Saitama 13 Tokyo 14 Kanagawa 15 Niigata 16 Nagano 17 Yamanashi 18 Toyama 19 Ishikawa 20 Fukui 21 Shizuoka 22 Aichi 23 Gifu 24 Mie 25 Shiga 26 Kyoto 27 Osaka 28 Nara 29 Wakayama 30 Hyōgo 31 Okayama 32 Hiroshima 33 Tottori 34 Shimane 35 Yamaguchi 36 Tokushima 37 Kagawa 38 Ehime 39 Kōchi 40 Fukuoka 41 Ōita 42 Saga 43 Nagasaki 44 Kumamoto 45 Miyazaki 46 Kagoshima 47 Okinawa

NOTES Japanese names are expressed in Western order, that is, first name followed by family name.

LIST OF CONTRIBUTORS Masayuki Tanimoto, Graduate School of Economics, University of Tokyo, Tokyo Takanori Matsumoto, Faculty of Economics, Seikei University, Tokyo Johzen Takeuchi, School of Economics, Zhejiang University, Hangzhou Satoshi Matsumura, Faculty of Economics, Kanagawa University, Kanagawa Jun Sasaki, Faculty of Economics, Ryukoku University, Kyoto Jun Suzuki, Graduate School of Humanities and Sociology, University of Tokyo, Tokyo Kazuhiro Ōmori, Faculty of Economics, Surugadai University, Saitama Masaki Nakabayashi, Graduate School of Economics, Osaka University, Osaka Takehisa Yamada, Faculty of Business Administration, Tezukayama University, Nara Hisami Matsuzaki, Junior College, Urawa University, Saitama Futoshi Yamauchi, Faculty of Economics, Kyoto Sangyo University, Kyoto

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PART I Introduction

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1 The Role of Tradition in Japan's Industrialization: Another Path to Industrialization MASAYUKI TANIMOTO

1. Statement of the Problem This volume explores the role of “indigenous development” in Japan's industrialization, focusing on what may be identified as “traditional” or “indigenous” factors. In this volume we will use the words “tradition” and “indigenous” with rather broad meanings. In general, “tradition” and “indigenous” are used to indicate goods, technology or institutions whose origins were other than “modern” or “transplanted”, but the definition of the words often depends on the contexts. The essential point is to indicate the existence of a particular industrialization process that is different from the factory-based industrial process, that is usually seen as the essence of what is viewed as “modern industry” or industries based on technology transfer. The papers in this volume tackle this issue from the perspective of industrial history. Since our interest is focused on alternatives to factory-based industrialization, these papers do not deal directly with the industrial sectors that are commonly identified as the driving force of industrialization such as cotton spinning, railroads, or the iron and steel industries. Rather these papers argue that “traditional” or “indigenous” production systems in small-scale industry also played a significant role in the industrialization of Japan. In making this statement, we do not deny that technology transfer from industrialized western countries played a major role in Japan's early industrialization. Technology transfer, which included the transplanting of factory-based production systems, was a major pillar of the Meiji government's development strategy. Government leaders viewed the importation of the workshop equipped with modern machinery, that is, the “factory system of organization,” as one of the fastest ways to “catch up with and overtake” Western industrialized nations. The Meiji government actively promoted a variety of industrial sectors in the early 1870s. Government efforts focused not only on defense-related industries such

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The Role of Tradition in Japan's Industrialization: Another Path to Industrialization

as munitions and shipbuilding, but also on industries designed to produce consumer goods and inputs for both the domestic and export markets, including such industries as cotton spinning, silk-reeling, cement, glass and beer. These government-established factories were equipped with machinery imported from industrialized countries and employed foreign engineers and skilled workers who were paid high salaries to instruct Japanese workers in the manufacturing the most up-to-date technologies and techniques. During the 1880s, the Meiji government faced serious budget deficits and was forced to sell many of the factories it had established to the private sector. Many of these ex-government factories eventually developed into major business operations, as exemplified by Mitsubishi Shipbuilding in Nagasaki and Kawasaki Shipbuilding in Hyōgo (Kōbe), and some then became core units of what later became known as the “zaibatsu” group of capitalists. The factories were acquired at quite favorable terms by Japan's leading capitalist entrepreneurs with the purchase prices considerably below what would have been the start up costs for investment from scratch. The only early factories that remained under government control were munitions factories. Under a similar scheme, what was to become Japan's largest steel mill, the Yahata Steel Mill, was launched in the early twentieth century as a government operation. In all of the above cases the government assumed the initial risk, and all of these cases fall in the category of industries based on the transfer of technology and production systems from more advanced industrialized countries. A similar pattern of technology-transfer-based development can be found in the mechanized cotton spinning industry, although private entrepreneurs—rather than government bureaucrats—took the initiative. While the first governmentsponsored cotton-spinning mill was equipped with only one British spinning machine with the capacity of 2,000 spindles, one of the pioneering private cotton spinning companies—Osaka Spinning Company (Osaka Bōseki Kaisha)—started operation in 1883 with more than 10,000 spindles, and became the first commercially successful cotton spinning company in Japan. During the late 1880s and 1890s, many more cotton spinning companies with tens of thousands of spindles were established as a great boom in investment in cotton spinning swept the nation. The newly-founded spinning mills drove English and Indian imported yarn out of the domestic market, and started to export to foreign markets, primarily Korea and China, as early as the late 1890s. The accounts I have given to this point stress what has often been regarded as Japan's main path to industrialization—that is, the development of modern industry based on technology transfer from the West. This path seems to represent a major break with the indigenous industrialization process, since Japanese domestic textile production in the 1870s had made use of handspun cotton yarn produced by peasant households as a sideline industry.

The Role of Tradition in Japan's Industrialization: Another Path to Industrialization

5

There is still a question, however, as to whether the story of Japanese industrialization can be adequately covered by a focus only on technology transfer and the development of the modern factory system. One way to approach this question is to consider the relative contribution of the modern industrial sector to overall Japanese production. Since it is difficult to estimate the relative weight of the modern sector in value-added terms, we will use the contribution to employment as a way to approach this problem. The first national census of population was carried out in 1920, thirty years after the boom in the establishment of modern cotton spinning mills. Table 1.1 shows the proportion of the working population employed in different production units at the time of this census. The total working population engaged in manufacturing sectors was approximately 4,560,000. The breakdown of the total was 3,168,000 employed as workers, 236,000 as salaried workers, and 1,162,000 as “employers”. Official statistics of private factories (Kōjō Tōkei Hyō) in 1920, using a definition of “factory” as a workshop employing more than 5 workers, estimated that 1,486,000 people were working as “factory” workers. Therefore, regarding employees in government-run factories, approximately 160,000, as “factory” workers, 1,522,000 workers (3,168,000–1,486,000–160,000) might have been employed in small workshops which would not usually be regarded as factories. Adding to this, the greater part of those classified as “employers” should be considered as “self-employed workers” working in non-factory workshops, since these statistics suggests that there were only 45,806 “factories”. Even assuming that all salaried workers were employed in units that can be classified as “factories”, 62.9 percent of the total working population engaged in the manufacturing sector was working in non-factory workshops. The number of workers in the factories that employed more than ten employees was still smaller. How do these numbers compare with other industrializing nations? According to Kinghorn and Nye, the proportion of workers in factory units that employed one to five workers was 37 percent in France and 33 percent in the United States around 1910 (Kinghorn and Nye 1996, pp. 106).1 France is usually regarded as one of the industrialized nations in which small-scale production played a major role (O'Brien and Keyder 1978). As we can see from these statistics, the proportion of small workshop workers in Japan was higher than that of France. From this we can see that the western style factory system played a comparatively limited role in the process of Japan's industrialization. This evidence suggests that we need to look more closely at the role of small scale and indigenous industry in Japan's industrialization. Recent research on Japan's pre-modern (Tokugawa era) economic history has shown that economic development had already started before the

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The Role of Tradition in Japan's Industrialization: Another Path to Industrialization

Table 1.1. Structure of labor in manufacturing sector (1920) (Breakdowns)

A

B

C

D

4,565

3,168

236

1,162

Factory with >5 employ- Ratio of ocees cupied population Wage work- Number of at the worker factories shops