Tokaido "Highway"
Proto Industrialization
Economic historians have noticed that certain areas of Europe (say, Flanders in Belgium and Lancashire in England) were "industrialized" in the 17th-18th centuries, even before the Industrial Revolution began in the UK. This industrialization was characterized by rural, family-based production of textile and garment without modern machinery (often brokered by urban merchants).
The concept of proto-industrialization was proposed to explain why this happened, and why it was observed in certain areas only (proto means primitive or early). The proponents advance a hypothesis to explain rural industrialization from the unique interaction among agriculture, population and commerce. Population growth is often considered given in economic modeling. But in the hypothesis of proto-industrialization, population dynamics is a crucial endogenous factor. F.F. Mendels and P. Deyon, who proposed this idea, define proto-industrialization as the phenomenon satisfying the following three conditions:
--It is a manufacturing activity for market sale, not for home consumption.
--It is undertaken by peasants in a rural area (where soil is poor and plots are small).
--It is located near an area of commercial agriculture with large farm size and high productivity.
Proto-industrialization begins as a side job in villages where agricultural productivity is low. They can sell cloth and garments to nearby rich villages where agricultural productivity is high. It is a sort of specialization (or division of labor) within a relatively small geographical area: villages with fertile soil produce farm products and villages with poor soil produce manufactured goods, and they exchange output with each other (they also sell products to the outside world too).
Furthermore, the hypothesis of proto-industrialization is demographically dynamic, as follows:
(1) For some reason, villages with poor soil face a population increase, leading to food shortage.
(2) Poor peasants engage in the production of garments for sale to relieve population pressure.
(3) This increases their income, and they start to get married sooner and have more children.
(4) Population growth continues to keep the peasants just as poor as before even though they are more "industrialized."
(5) Supply of cheap labor is increased in this way, and rich farming villages and urban merchants continue to accumulate wealth.(This widening income gap may possibly generate capitalists and landless farmers which leads to industrialization under full-fledged capitalism. However, such historical linkage is not convincingly proven statistically.)
According to Prof. Osamu Saito (Hitotsubashi University), Japanese data in the Edo period does not support the hypothesis of proto-industrialization as stated above. There is no evidence of systematic population change in the areas where peasants engaged in pre-modern manufacturing. On the contrary, it is said that farmers practiced birth control (sometimes even killing new-born babies) to cope with the population pressure.
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Tokaido "Highway" |
The Bakufu designated five official highways and opened major sea lanes. But private inns, restaurants, shippers, baggage carriers, etc. provided the necessary service. Farming villages near the highway were required to provide horses when necessary (part of their nontax obligation). Sankin kotai (bi-annual commuting by daimyos) also stimulated the development of the road system. At the same time, due to military reasons, Bakufu did not encourage free movement of people and merchandise. At major check points, sekisho (passport controls) were created. Some rivers were left without bridges, intentionally and for military reasons. Hans were not allowed to build ships or maintain navy.
As noted above, from the beginning, the Edo tax system presupposed a nationally unified rice market. Development of cash crops and handicrafts also stimulated nationwide commerce. Osaka was the commercial center with many rich merchants and money lenders, while Edo was a political center and consumption city. Naturally, the sea lane between the two cities was well developed. In Osaka, the futures market in rice emerged (this is said to be the first futures market in the world).
The Bakufu's policy towards commerce and industry was variable and inconsistent. Sometimes the central government tried to control and tax private businesses. Other times free economy was permitted. Cartels were sometimes imposed and other times prohibited. Among historians, opinions differ as to whether the Edo economy was more dynamic under free market policy or pro-cartel policy. Prof. Tetsuji Okazaki (Tokyo University) tries to show that estimated GDP grew faster during the time when cartels were permitted than when they were banned. He argues that trade cartels were a positive factor for the development of the Edo economy rather than an impediment. However, his data and regressions may be too crude to be decisive.
Toward the end of the Edo period, many hans and local cities developed economically. As a result, direct trading among them (without the intervention of Osaka merchants) began. The center of economic activity gradually moved eastward, from Kansai (Osaka, Kyoto) to Edo and Eastern Japan. Many markets (not just rice, but almost everything) were nationally integrated.
As agriculture and commerce grew, pre-modern manufacturing (handicrafts, food processing) also began to develop. For example, the following products were produced:
tea, tobacco, wax, indigo, salt, knives, sword, pottery, lacquer ware, silk, cotton, soy sauce, sake, paper, stone cutting, medicine, chemicals
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Cotton weaving factory in Owari (Nagoya). No steam engines or electricity yet, but division of labor was underway. |
In order to enrich local population and increase tax revenue, many hans promoted local industries, and some even succeeded (S. Nishikawa and M. Amano, 1989). For example,
Tokushima han (indigo): Farmers produced indigo along the Yoshino River and their output gradually grew. But indigo distribution was monopolized by Osaka merchants who imposed high interest on loans. In order to protect local farmers and encourage local merchants, the han government created an indigo exchange and provided financial and distribution services. But the Bakufu objected to this move, prohibiting such official support (the Bakufu wanted to protect Osaka merchants who contributed financially to the central government). So the han privatized the indigo exchange and other services.
Takamatsu han (sugar): The Takamatsu government issued han's paper money to promote various industries but failed, and its money depreciated. After many such failed attempts, the han finally succeeded in research on sugar production (from sugar beets) and commercialized the technology. As sugar production greatly increased, the han promoted inter-han trade (direct trade between hans). But again, the Bakufu tried to discourage such trade not brokered by Osaka merchants.
Satsuma han (military technology): This han in southern Kyushu imported new technology from the West and produced blast furnace, cannons and western ships. It was also engaged in illegal trade with Ryukyu (Okinawa), which was very profitable. By increasing wealth and military capability, Satsuma han later played the key role in toppling the Bakufu government and establishing the Meiji government.
These are just a few examples. Many other hans were engaged in industrial promotion, including Choshu han (paper, wax), Yonezawa han (safflower, lacquer wax), Akita han (silk and silk dress), Hizen han (pottery, coal), Higo han (lumber, silk), and so on. But we should not forget that there were many hans which were less successful and deeply in debt. They borrowed money from big private merchants but never repaid.
At any rate, proto-industrialization seems to assume a rather peculiar population dynamics which may be applicable to certain European regions in certain periods, but not in the rest of the world or other periods. However, the idea of population growth responding to the process of early industrialization is an interesting one.
On Proto-Industrialization in Europe:
http://www.grips.ac.jp/teacher/oono/hp/lecture_J/lec02.htm
The concept of proto-industrialization became an influential one in economic history in the 1970s and 1980s. The term refers to a system of rural manufacture that was intermediate between autarchic feudal production and modern urban factory production. Variously described as rural manufacturing, domestic manufacture, cottage industry, and a "putting-out" system, it was a dispersed system of production that used traditional methods of production and extensive low-paid rural labor to produce goods for the market, both domestic and international. Unlike modern capitalist manufacturing, proto-industrialization did not depend on rising labor productivity as a source of higher profits; instead, merchants increased the scale of their businesses by extending production to additional households and workers.
What are the chief economic characteristics of a stylized proto-industrialization system of production?
In order for rural industry to develop on a large scale in a region, several factors needed to be present: extensive demand for manufactured goods by concentrated populations and developed patterns of trade; a concentration of merchant wealth; and a population of under-employed rural householders who could be recruited into sideline manufacturing employment.
The regions where proto-industrialization developed earliest, according to Peter Kriedte, were in western Europe:
The first regions of relatively dense rural industry had developed in England, the southern Low Countries, and southern Germany in the late Middle Ages. The decisive thrust which brought about the phase of proto-industrialization came at the end of the sixteenth and in the seventeenth centuries.... Quantitative changes in supply and demand combined to produce a cumulative process which led to a new phase. (23)
PI is described as transitional because its economic possibility was created by the political situation of feudal cities -- specialized manufacture in cities under a regulated guild system, self-production in the countryside. And, it is sometimes claimed, proto-industrialization prepared the ground for a full modern systems of capitalist industry. The "transition" scenario might be framed along these lines:
Proto-industrialization is a significant historical phenomenon, we might say, because it represented a large and marked change in the organization and volume of production of goods from the medieval period to the early modern period. Towns and cities were already economically active locations, representing both concentrated demand and concentrated production. But the rural population was almost entirely involved in farming and sideline production for home use. The emergence of a significant level of production in rural hinterlands was a shift, and so it is worth asking why this change occurred in the circumstances in which it did. The change dynamics Kriedte, Medick, and Schlumbohm describe include population change; urban economic regulations; incentives for feudal rights-holders to transition to cash obligations; and the existence of inter-regional trade and markets that extend beyond the local village.