In this edition, Janet Hunter, the Department's first specialist in Japan's economic development, talks about how the subject has changed from being a niche topic to an important area for students studying comparative economic development:
You know you are being reminded of your age when you are asked to talk about ‘the changes you’ve seen’ during your career. Or when you are sorting out stuff and come across a yearbook produced by the 1994-5 cohort of MSc Economic History students. If any members of that cohort are reading this piece, then you may, or may not, wish to be reminded of what you might have written in that yearbook. For me it was certainly a welcome reminder of the joys of teaching, the extent to which I have learnt from students and their questions, and the pleasure of getting to know so many interesting and able individuals over more decades than I care to say. I like to think that at least some of you remember fondly my attempts to make you more aware of Japan’s economic history and why it might have a broader significance.
When I started studying Japanese economic history Japan was a niche topic. Although Japan had in the early 1950s become a US ally and a bastion of the capitalist camp in Cold War Asia few in the West could forget or forgive the appalling excesses of the country’s war record in East and Southeast Asia and the Pacific. Many of the economic reforms imposed during the postwar Occupation were conceived of primarily as punishment rather than as means of ensuring economic recovery, and the country struggled with economic problems in the late 1940s and early 1950s. When development economists such as W. Arthur Lewis began to take a major interest in Japan it was to the existence of ‘unlimited supplies of labour’ in the prewar and late 19th century Japanese economy that they looked, rather than any reflection of the country’s contemporary position. Such analysis did, however, lay the groundwork for theories of Japan as a development model. Although by the late 1950s signs of significant growth were apparent, Japan remained in effect a ‘developing economy’ whose per capita income levels were well below those of most European countries, let alone those in North America. It was hard to find texts on Japan’s economic history beyond the many studies undertaken by G.C. Allen, Professor of Political Economy at University College London, who had first visited Japan in his youth, teaching in Nagoya 1922-25. Little of the abundant Japanese economic history scholarship was available in English, not least because of its widespread use of Marxist conceptual frameworks. By the early 1970s in the wake of the first Oil Shock, however, the economic transformation that had been taking place in Japan was becoming apparent to all. The need for a greater understanding of how Japan’s economy was developing and how it had got there was increasingly widely recognised, if only to try and comprehend better the nature of Japan’s international competitiveness. Books such as Ronald Dore’s British Factory Japanese Factory (1973) and Ezra Vogel’s Japan as Number One: Lessons for America (1979) helped to move Western studies of Japanese economic history away from the older Western-centric tropes that viewed Japan and other developing economies as 'catching up’ and ‘copying’ their more industrialised Western counterparts, framing their analysis within broader dynamics of development, whether capitalist or Marxist. New scholarship acknowledged the autonomy of many aspects of Japanese development, even suggesting that the West did indeed have things to learn from Japan. The evident success of Japan’s ‘economic miracle’ gave added weight to this trend, but somewhat paradoxically also suggested that the rise of Japan to become the world’s second largest economy was in some ways an anomaly. The phrase ‘economic miracle’ did not merely suggest that the country’s economic success was unexpected; it suggested that the whole phenomenon of Japan’s growth was the result of some kind of deus ex machina. As other countries sought to cope with the impact of Japanese competition in global markets and the significant investment flows out of Japan, too often Japan’s success and competitiveness were attributed to ‘unfair’ competition (as they had been in the 1930s) and, associated with it, to nebulous and undefined aspects of Japanese ‘culture’. This concept of ‘culture’ as the secret of Japan’s success was also emphasized in triumphalist fashion by a number of Japanese commentators, eg. Matsumoto’s Rise of the Japanese Corporate System (1991). Culture became the residual in the equation; it implied that Japan’s experience was resistant to rational explanation and could not be replicated by other developing economies, something that was subsequently shown to be blatantly untrue.
These assumptions still prevailed when I started teaching at LSE in the 1980s, when Japan’s export dominance and foreign investment flows were near their peak. The acknowledged global importance of Japan’s economy was more than sufficient to persuade all involved of the importance of understanding the nature of Japan’s development, and where necessary of probing and challenging some of these widespread assumptions. This led to our teaching of Japan’s modern economic history both as part of a comparative course (some of you may remember the famous second year BSc course comparing Russia, India and Japan which predated my arrival and was compulsory not only for all single honours economic history undergraduates, but for one of the big BSc Economics programmes as well) and as a special subject at undergraduate and postgraduate levels. That Japan mattered to us all was obvious.
Like all booms, however, the Japan boom did not last for long. In the early 1990s Japan’s Bubble Economy burst, overinflated asset prices collapsed, and the country entered a period of stagnation referred to initially as the ‘Lost Decade’, but progressively extended to become the ‘Lost Decades’. Deflation, very low growth, reduced consumption spending, an ageing population (and hence labour shortage) as well as the increasing competitiveness of other Asian economies are among the factors that have contributed to persistent and wide-ranging economic problems. The contemporaneous rise of China within the global economy has shifted scholarly analysis away from what is often seen as a ‘declining’ economy towards what are seen as more urgent issues. The number of scholars in UK universities specialising in Japanese history pales into insignificance by comparison with those working on China, and there is not to my knowledge a single specialist economic historian of Japan teaching that country’s economic history in a UK university (please correct me if I am wrong, I would be delighted!).
And yet I would argue that understanding better Japan’s economy, past and present, still matters to us all. Its economic history is innately as interesting as that of any other country or region. The rich historical sources and data allow us to locate economic issues within the broader interdisciplinary approaches that are sometimes needed. It remains the fourth largest economy in the world (by GDP), and its historical trajectory as the first non-Western industrial economy and the forerunner of the other Asian tigers underlines its importance for all students of comparative economic development. I think that I am right in saying that I was the first specialist in Japan’s economic development to be hired by the Economic History Department at LSE. I hope that I will not be the last.
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