Download Japan`s Modern Economy

Japan’s Modern Economy
September 11, 2007
Economics 272
Models of growth
• Extensive growth
– Expansion of margins
• Constant returns to scale; quantitative not qualitative
• Intensive growth
– Higher output per inputs
• Labor productivity
– Y/L: Y is GDP, L is pop or LF
• Total factor productivity
– Relative to inputs of labor and capital
Why growth?
• Solow capital intensive
– Hits diminishing returns, cf. old USSR
• Smithian growth
– Specialization and trade
• Leads to higher productivity
• “Division of labor is limited by the extent of the market”
• Schumpeter technology-led growth
– “Modern” growth
• Historically all fought against Malthus!
Dfn “Modern” = ?
• Smithian “division of labor”
– Non-farming population, esp urbanization
– Commercial agriculture
– Within monetary economy
– Transportation / extent of market
– Public order
Government role
• Government taxation paid for urbanization
– Created a huge (cash) market
– Edo was world’s largest city from by 1700
• the Edo “bakufu” fostered navigation
– port and lighthouse development
– maps etc. all by around 1720
• formal financial markets promoted
–
–
–
–
rice futures market in Osaka by 1720
transferring money in place of in-kind taxes
insurance markets (esp. casualty)
local (rural) finance by 1800s
Market-oriented economy
• especially intense development in several regions
– cash-crop farms around Osaka (farmers bought food!)
– large urban consumer market
• commercial elite for whom political advancement was
foreclosed (cf. English Dissenters)
• education spread.
– ukiyoe were for mass-market (wedding presents…)
– lots of agricultural handbooks - 200+ titles in print
Specialization by the “kuni”
(export products)
• Silk, cotton, salt, lumber, paper, fish
• Some regions largely industrial
• Seasonal “proto-industry” often accompanied
by regional migration
• Both men & women active in wage labor
outside the home
Standard of Living
• transformation of consumption
– various rough fibers replaced by cotton; silk worn by more than just
elite
– new (and better foods). peppers, sweet potatoes / taro, corn, etc.
– new and better housing: tatami mats off the ground
– vast increases in protein-laden soybean-related consumption (miso,
soy sauce)
• Education
– Literate society, perhaps more so than England!
– Vast outpouring of books, circulated through lending libraries
– Even nascent “western” studies, esp. in 1800s
Mid-16th Century Han
(“countries”)
Shipping Routes after 1720
Loom (karabikibata)
c. 1770
Agriculture Outgrows
Population
Tokugawa Population & Agriculture
50 .00
46 .00
42 .00
38 .00
34 .00
30 .00
26 .00
22 .00
18 .00
14 .00
10 .00
1600
1650
Population (millions)
1700
1720
1730
1750
Arable Land (100,000 í¨)
1800
1850
1872
Agricultural Output
Osaka as an Entrepot (1714)
Principal non-Rice Imports / Exports
Imports
Marine products
Agricultural items
Clothing & textiles
Oilseed
Mining products
Fertilizer
Wood products
Misc Imports
Tea & tobacco
Tatami
Kyoto crafts
Total (Ag value)
20.2%
19.5
15.4
12.9
7.5
6.4
5.9
4.1
2.8
2.0
0.9
286,561 kan
Exports
Oil & beeswax
36.4%
Clothing & textiles
25.2
Misc tools
7.5
Misc exports
7.3
Processed food
6.1
Accessories & decorations 5.8
Lacquerware & pottery 4.6
Seedcake (fertilizer)
3.4
Furniture
0.5
Weapons
0.5
Arts & crafts
0.4%
Total
95,800 kan
Growth of a National Market
Rice Price Movements Converged in the 17th Century
Structure of
National Output
– 1874 –
• shortly after “opening”
to the West
• before significant
structural change from
– new technologies
– convergence of domestic
& international prices