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These are five pictures of Tokyo put together to form a panorama. They were taken in the 1860s. At the time, cities like London, Paris, and New York looked like this, with factory steamboats and railroads. While industrialization was in full swing in Western Europe and North America, Japan was essentially still a medieval society with lords called daimyo, knightly orders such as Samurai, and feudal houses. Yet, just 80 years later, Japan had cars, trams, trains, aircraft carriers, cargo ships, and a vast Colonial Empire. By the 1940s, the average Japanese was about as rich as the average Italian. Japan was the first country that managed to catch up with the developed nations of its time and became an example for others to follow. Countries like Korea, Taiwan, or Greece looked at Japan as an example of how they could do the same. This is a trend Japan has had for over a hundred years: it’s often ahead of other countries, and the world looks at Japan to see how they have to fix their own issues. It is therefore important to learn Japanese history to better understand our own futures. So, how did Japan get so rich? Well, in this video, we will look at the rise and fall and rise of Japan.
The time before Japan’s industrialization is called the Tokugawa period. In this period, Japan isolated itself from the rest of the world. Its people weren’t allowed to leave Japan; most foreigners were banned, and foreign trade was heavily restricted. But they didn’t seclude themselves entirely. Here in southern Japan, in Nagasaki, they allowed Dutch ships to trade with Japan. Japan had established embassies with Korea and would often buy various texts on the latest inventions from foreigners. For example, look at this design for a clock made in Japan in the 18th century using Dutch tax on modern technologies such as clockworks to make one themselves. By the 1850s, Japan had their own clock based on the Japanese calendar used at the time. Japan was isolated yet fully aware of the outside world, such as in 1852 when the Dutch informed them that a fleet of warships was sent to Japan from the USA. They arrived the next year with fully armed steam-powered battleships. They carried special cannons able to shoot explosive shells, which were specially designed to set wooden structures on fire. It just so happened that the Japanese capital was almost entirely built of wooden houses. The U.S. Commander gave a list of demands to Japan, diplomatically informed the government that he would return in one year, and if Japan didn’t agree to the U.S. demands, their capital would be fired upon. Japan had built defenses around its capital for decades to prevent exactly this from happening. But because Japan never industrialized, their cannons had a shorter range than those of Western powers. Thus, foreign ships could simply stay outside of Japan’s striking range and bombard their cities from a distance. This realization was very scary to the island nation. Then, a month after the U.S. ships left, the Russians arrived with their own battleships and made very similar demands, followed shortly by a British fleet, who also told Japan, “I’ll be back.”
But why were all these countries suddenly showing up in Japan in the 1850s? Well, look at this map showing U.S. trade routes in the 19th century. There is a lot of trade in manufactured goods with Europe, slave trade with West Africa. But if you look at trade routes going to East Asia, you will notice something interesting: a lot of them were going around Africa rather than going through the Pacific. This is in large part because the Pacific Ocean is so big and there were very few ports between the USA and China, making it hard to restock on supplies. And if there was no wind, you would be stuck in the middle of the ocean with no support. But luckily then, the steamship was invented. It became possible to propel a ship using coal. There was one problem: ships would often run out of coal within two weeks or so. So, if you wanted to cross the Pacific Ocean reliably, you needed ports all along your route to refuel every week or so. Japan was located right next to China. So, the USA argued that if they could travel from North America to all the U.S. colonies in the Pacific and eventually make it to Japan, they could reliably send cargo ships to trade with China. China, at the time, had just lost the Opium War and was forced to allow foreigners to have essentially unlimited trade with the gigantic Chinese markets. So, China was seen as the next big market for global trade, and everybody wanted in on it. But in order to trade, everybody needed coal for their trade ships. And so, they all came to Japan with the following idea: if these European and North American nations could force Japan to sell coal to their trade ships, then it would allow them to travel to Chinese ports a bit easier, earning them more money. Japan just so happened to have a lot of coal and was located right next to the U.S. trade routes going to China and European trade routes going to Northern China. So, in essence, the reason everybody came to Japan in 1853 and 1854 was because they all wanted to make trade with China a little bit more profitable. They didn’t care about Japan itself, only their coal.
So, let’s look at it from the Japanese perspective. For the last century, foreigners have every so often arrived in Japan, and Japan would send them away again, such as in 1778 when the Russians requested a trade treaty, only to be refused and sent home, or in 1808 when a British ship hunting a Dutch ship went to a Japanese harbor, only to be chased away by Japanese warships, or take 1837 when the U.S. wanted to open trade and return some shipwrecked Japanese sailors, only to be fired upon and forced to turn back. But now, these foreigners had ships so powerful they could set whole cities on fire while not a single Japanese cannon could hit back. This was a complete and total disaster for the Japanese government. They could either choose to be set on fire or be forced to end their isolation, and they chose the second option. In total, Japan was forced to sign 11 treaties with different European and North American powers. In general, these treaties allowed the foreign powers to establish an embassy in Japan. Certain ports would be open to trade, foreigners were allowed to live and work in certain Japanese cities without restrictions, foreigners didn’t have to abide by Japanese laws, and if they did break any laws, they would be sent to a special court of their own country rather than a Japanese court. Japan wouldn’t be allowed to levy taxes on trades. Just imagine if your country was forced to sign such a treaty: foreigners could break any laws they wanted, your government wasn’t allowed to decide its own tax policy, and you weren’t even allowed to say who was and wasn’t allowed to enter your country anymore. These treaties were a complete and total humiliation for Japan and showed that their government was too incompetent to protect itself or its country. For 15 years, this resentment grew as the government was forced to sign one humiliating treaty after another until, in 1868, the government was overthrown. The old leadership had failed their country, and a new one, which set things right, emerged. The emperor was to have greater power in this new government called Emperor Meiji. This era was named after him and is therefore called the Meiji Restoration. This new government essentially only had one goal: survive. They did not want to end up like the Aztecs, the Indians, or the Ottomans—beaten, colonized, and divided amongst foreign powers. They were determined that Japan would remain independent.
But how? Look at this steam engine. It was designed by a Japanese inventor named Tanaka Hisashige in 1853. When the Russians came to Japan to demand a trade agreement, they showed a demonstration of an engine. Mr. Tanaka used a few Dutch reference books and managed to construct his very own steam engine, the first one ever created in Japan. He would later improve upon the design to create the first Japanese-made locomotive and steam-powered warship. His workshop was turned into an engineering company, which merged with another corporation in 1939 to form a new corporation that you might have heard of: Toshiba. But why is this story so important? Well, according to the Japanese leadership, the reason that other powers could trample on Japan’s rights as a nation was because of their technological superiority. So, if Japan wanted to remain independent, it had to adopt those new technologies themselves. And so, Japan set itself the ambitious goal of catching up with the technologically advanced nations of Western Europe and North America. They would do so by copying as many of their institutions as possible. They abandoned isolationism; from now on, foreigners and foreign ideas would be welcomed. They created a new central government and developed an economic development plan to make Japan great again.
Today, we have various economic models for developing countries to become wealthy, from China to the Soviet Union to Greece. But Japan was the first and had to figure everything out on their own. So, the first thing they did was look at what was available to them. There was one thing Japan had a great abundance of: entrepreneurs, people like Tanaka Hisashige, who had the knowledge and drive to create a modern industry in Japan. These professionals often didn’t have enough money to build a factory. As a pre-industrial society, buying machinery was very expensive because Japan didn’t have valuable manufactured goods to trade for those machines. This left Japan with only one single organization able and willing to afford industrialization: the government. While the professionals didn’t have the money, the government didn’t have the expertise. But together, they managed to build up modern industries and established a network of factories, transportation, and logistics to make the country as industrialized as possible. Within a few years, Japan became a relatively advanced industrialized society.
One of the first things Japan did was create a massive infrastructure project. They wanted to improve their port cities, create new railways, and expand the economy. But Japan had a problem. In order to build new railways, they needed to know how to build the rails themselves. They needed to import rails from abroad at first, which meant they needed more trade and had to depend on others for their infrastructure. So, Japan needed to quickly learn how to build their own rails. It took time, but eventually, they became able to produce their own rails domestically. They would also copy the European way of doing things, for example, their factories and their education system. All this development happened incredibly fast, with their railways and factories opening in record time. Japan had caught up with Western Europe and North America very quickly, becoming a first-world country just 50 years after the isolation ended.
And so, Japan managed to learn from the past and set its own future. They remained an independent country by adopting the best practices from Western countries and adapting them to their own needs. And this has been a key feature of Japanese development throughout history. It’s a pattern of rapid adaptation and learning from others that has allowed Japan to rise so quickly and maintain its position on the world stage.
Their goal for Japan was to make sure that it would never threaten the USA ever again, and they thought that the best way of preventing Japan from starting more major wars in Asia was to make Japan’s government more like the USA’s government. After all, the USA has never started major wars, colonized other peoples, or committed crimes against humanity. So, they forced Japan to become democratic again, like it was in the 1920s. They purged 200,000 people from the government they deemed anti-democratic and gave more authority to local governments. But the USA didn’t understand Japan, its people, or its language well enough to enforce their own laws and had to rely on what was left of the Japanese government. As a result, little changes were made to how the government operated, and they instead focused on removing radical Marxist and ultra-nationalist forces from power and replacing school textbooks with pro-democratic teaching material. This left proponents of democracy in power who put up very little opposition to the U.S. reforms. So, for the first five years of the occupation, the emphasis wasn’t on making Japan a more liberal democracy.
But then the Cold War became an important issue in East Asia. North Korea became a Soviet puppet state, China was taken over by Communists, and Vietnam was fighting a socialist revolution—all of which were located close to Japan. While Japan was willing to sell military equipment to the USA, they were too weak to do anything about it themselves. So, the USA switched its strategy. They argued that if Japan had a powerful economy again, they could use that economic power to fight communism. Therefore, the new strategy was this: in order to assure that Japan would remain an ally of the USA, it would only be allowed to have a small military for self-defense. The USA would then station their own troops in Japan and make the Japanese pay 75 percent of their cost. This was a good deal for the USA, who now had a cheap army in Japan, made Japan dependent on the USA for protection, and ensured that Japan couldn’t create a new empire. Instead, Japan would focus on developing their economy and using this wealth to counter communism in East Asia. Now that they no longer had colonies to get their resources from, they would instead have to buy them from the USA and their allies, including various former Japanese colonies who had aligned with the USA in the Cold War. As a result, Japan abandoned their imperial system of economics and adopted a more U.S.-style capitalism by buying resources from other countries, turning them into manufactured goods at home, and selling them to other capitalist countries across the world. This was a great deal for Japan—they got to develop their economy, gain access to resources from across the world, and be able to sell to most of the large economies in the world. All they had to do was talk a bit about how great free trade, democracy, and human rights are. In 1952, the USA ended their occupation, and Japan could decide its own future again.
In order for Japan to develop economically, they wouldn’t be able to develop all sectors of the economy and instead focused on industries Japan was good at. They called this policy “priority production,” although today we know it by a different name: comparative advantage. In short, it’s the idea that you focus on the things you are good at, sell those products to other countries, and use the profits to buy everything else you don’t produce yourself.
But then the next question becomes: what should the Japanese economy focus on? Well, for that, let’s look at geography. If you look at Japan, you will see that the country is a series of long, thin islands, meaning that wherever you are in Japan, you are always close to the sea. But it’s also mountainous, so the people are forced to live in a few parts where building cities is easy. Japan used this to their advantage, producing a lot of heavy things like machinery, sending it to the nearest port, and from there transporting goods all over the world. Since then, Japan has created some of the most densely industrialized pieces of land in the world. To set all this up, Japan first focused on vital industries—coal, fertilizer, and electricity. Once they had enough fuel, food, and power, they could move their focus towards other industries, such as construction, steel production, and heavy industry. These are things that were heavy and difficult to transport, but Japan could ship easily and cheaply due to their access to the seas and oceans all around them.
This strategy worked. By 1955, Japan’s economy became larger than before the war. But to have a high-tech economy, you need a highly skilled workforce. Before the war, university students mostly came from the upper classes, a privilege preserved for the rich. But a modern economy needed a lot more educated people, so many young people began applying for college. However, the schools weren’t designed for so many people; there simply weren’t enough classrooms, teachers, and colleges for them all.
To show why this is a problem, let’s look for a moment at modern India. They are facing a similar problem. Due to high population growth, they now have 260 million children attending school, more than any other country ever has. But the schools simply cannot keep up. Only about 70 percent of children in India attend secondary school. Half of 10-year-old students cannot read a story designed for six-year-olds, and just a quarter can do simple divisions. A person who can’t do math well will never be able to get an engineering or econometrics degree—two fields that are vital for making industrial processes run smoothly. As a result, these students are far less likely to find a high-paying job, create a successful business, or help develop the country for the next generations. If you’ve ever wondered why so many people doubt whether India can become a superpower, this large population and lack of basic skills that should have been taught at primary schools is one of those reasons. In short, you do not want to end up like India.
So, how did Japan avoid this? Well, they realized this problem fairly early on and spent a lot of money to make sure everybody who wanted to go to school could go to school. Japan simplified its education system: students would spend six years in primary school, three in middle school, and three in high school—similar to many Western countries. High school students were encouraged to go to college to become highly trained professionals with well-paying jobs. And it worked. In the 1950s, less than 50 percent of students pursued formal education beyond middle school. By 1975, this was well over 90 percent, becoming on par with other developed countries. But the education people received was often segregated by sex. While both men and women were better educated, most men finished four years of college, while most women only did two years. For the men, their education also didn’t stop once they left college. They would be sent abroad to learn the latest advancements in their industries and bring this know-how back home.
Japan would put import restrictions on various products, making it more expensive to buy foreign-made goods. As a result, when those highly skilled people returned home, there were plenty of companies ready to hire them to sell those products to the Japanese themselves. Eventually, they became so good at it that Japanese products were often cheaper than foreign products, and Japan became an export economy, selling all sorts of high-tech products such as televisions, VCRs, or cars.
But by the 1970s, other nations soon caught on to what Japan was doing and forced them to open their markets to companies from Western countries, hoping that European and North American businesses could make a lot of money on the ever-increasing wealth of Japanese consumers. And here a funny thing happened: Western Europe and North America had, for a long time, been the only rich places on Earth. But they also have a similar culture. So, if a French company wanted to sell wine in Canada, they didn’t need to change their products and marketing too much because of the similar culture. But Japan was the first real exception. So, when Western companies tried Western marketing in Japanese culture, those Japanese weren’t interested and stuck with Japanese companies instead. As a result, Japanese businesses barely had to worry about foreign competitors and could reliably use profits at home to export more goods abroad. This allowed Japanese businesses to focus on selling to other countries and making their product lines ever more efficient. In fact, by the late 20th century, Japan had one of the most efficient economies in the world.
Firstly, the terrain forces the people to live in a small area of the country, meaning that public services are cheaper to provide—from tram lines to sewage to fire trucks that don’t need to travel as far. The Tokyo area, in particular, is very efficient. It has a nearly uninterrupted industrial zone around Tokyo Bay with three steelworks, 13 oil refineries, six petrochemical plants, 12 other chemical plants, 10 shipyards, two automobile factories, and 14 electrical power stations, with thousands and thousands of smaller industrial facilities. These smaller facilities are exactly the reason why Japan became one of the most efficient economies in the world by the late 20th century.
You see, because everything is so close in Japan, it meant that industrial processes could become far more specialized. So, instead of having one factory make most of its own parts and turn those parts into products, Japan created a system where a bunch of factories each would produce a small amount of parts. Other factories would then buy all of these parts from all the various factories and then turn them into a new product. This system is much more efficient because if your entire industrial process is targeted towards making one type of product, such as, for example, screws, then you can make a more efficient system than if hundreds of factories each made their own screws. As a result of being cheaper, most of the other factories eventually chose to buy from you instead of making it themselves. Japan had essentially perfected this process in the late 20th century. As a result, the Japanese economy became one of the most efficient ones in the world, and many other countries have followed Japan’s example. The reason why the rest of the world today has this same system is that they all looked at Japan, saw how effective it was, and all wanted to do the same.
The first real threat to the Japanese economy came in the 1980s when China opened its markets to the world. All of a sudden, low-cost manufacturing, like textile industries, moved away from Japan and towards China—a country with a larger labor force and lower salaries. Japan’s profits in these industries plummeted. But the government had a plan. Japan knew a lot about making and selling clothes in a global capitalist society, while the Chinese did not. So, why not provide Japanese know-how to Chinese businesses? In just a few years, Japan became China’s largest trade partner, and Japan had a completely new industry it could focus on. Over time, life in Japan significantly improved. They had larger houses, access to a wider variety of foods, making them healthier, and life expectancy grew from just 47 years in 1935 to 68 in 1960, to 78 in the 90s, and to 84 in 2019—although, as always, women tend to live longer than men.
As people lived longer, the population increased from 32 million in 1853, to 70 million in 1935, to 100 million in 1968, and 123 million in 1990, reaching its peak in 2010 with 128 million people. Eventually, Japan became the first industrialized country to see their population shrink due to a low birth rate and aging population. But whereas most other countries hire people from abroad to take over the jobs of pensioners, Japanese society is rather xenophobic and barely allows foreigners to come and work in their country. As a result, it’s not uncommon for Japanese to work 60 hours per week or more. If you’ve ever wondered why the most xenophobic political parties in the West never really seemed to put a lot of effort into closing their borders, no matter how much they say they hate immigrants, it’s because they’ve looked at Japan and realized they will lose a lot more votes if people have to work longer every single day rather than just letting foreigners have some of the jobs. This is another example of countries looking at Japan to see how they should do things themselves.
Because Japan didn’t have enough workers, more women got jobs after World War II. It was mostly men who worked while women stayed at home. They were seen as caretakers of the household, with nearly complete control over the budget, children’s schooling, and maintaining the family’s status in the neighborhood. When their children left home, these women found themselves with a lot of free time, and many of them used that time to fight for societal issues such as public safety, environmentalism, and women’s issues. For example, when the government wanted to put restrictions on abortions, it was mostly these women activists who created movements, protests, and strong resistance against such policies—which I might cover more in the upcoming abortion rights video. By the late 20th and early 21st centuries, these women rejoined the workforce while younger generations of women were less likely to quit their jobs after having children. They soon discovered that because women were less likely to have a job, nearly all positions were taken by men, and the male-dominated workspace perceived women joining the workforce as unwelcome competition. Women were often put in jobs that were seen as less prestigious. Gender-based hiring, paying, and promotion became commonplace. There were a myriad of policies implemented across Japanese businesses to prevent women from reaching the same level as men. This is often referred to as the glass ceiling. By the 1990s, only 10 percent of Japanese management positions were held by women, for example. As a result, the Japanese economy lost out on a large portion of competent people working in high-skilled and high-level jobs due to their sexism. These men were, and often still are, holding women back from positions with a higher salary and more authority, and this is an issue facing Japan all the way up until today.
In the 1990s, Japan had reached the end of its rapid economic growth. It had caught up with the developed countries. If it wanted to keep growing, it couldn’t simply copy other countries anymore. They now had to figure out for themselves how to keep growing their economy with new technologies, systems, and ways of doing things. As a result, Japan’s economy has barely grown in the last 30 years. But nobody has been able to identify why Japan’s economy has barely grown over the last 30 years, while other countries that are also developed tend to keep growing. While there are several theories, the field of economics simply hasn’t advanced enough to understand why Japan stagnates while other developed countries keep growing.
So, this is where we will end for today. Japan has come a long way in the last 160 years, from a poor country to a powerful empire to the third-largest economy in the world today. If you liked this video, then please smash that like button, smash the subscribe button, and smash the notification button. Patrons got to see this video a week early, and these three people got a drawing of themselves in the video. If you would like me to personally draw you or see the videos early, then go to my Patreon and pledge 5 euros or more per month. This was Avery from History Scope. Thank you for watching.