With the end of the daimyo domains, the government
needed to establish a new system of land ownership that
would transform the mass of the rural population from indentured
serfs into citizens. To do so, it enacted a land reform
program that redefined the domain lands as the private
property of the tillers while compensating the
previous owner with government bonds. One reason for
the new policy was that the government needed operating
revenues. At the time, public funds came mainly from
customs duties, which were limited by agreement with
the foreign powers to 5 percent of the value of the product.
To remedy the problem, the Meiji leaders added a
new agriculture tax, which was set at an annual rate of
3 percent of the estimated value of the land. The new
tax proved to be a lucrative and dependable source of income
for the government, but it was quite onerous for the
farmers, who had previously paid a fixed percentage of
their harvest to the landowner. As a result, in bad years,
many taxpaying peasants were unable to pay their taxes
and were forced to sell their lands to wealthy neighbors.
Eventually, the government reduced the tax to 2.5 percent
of the land value. Still, by the end of the century,
about 40 percent of all farmers were tenants.
With its budget needs secured, the government turned
to the promotion of industry. A small but growing industrial
economy had already existed under the Tokugawa.
In its early stages, manufacturing in Japan had been the
exclusive responsibility of an artisan caste, who often
worked for the local daimyo. Eventually, these artisans
began to expand their activities, hiring workers and borrowing
capital from merchants. By the end of the seventeenth
century, manufacturing centers had developed in
Japan’s growing cities, such as Edo, Kyoto, and Osaka. According
to one historian, by 1700, Japan already had four
cities with a population over 100,000 and was one of the
most urbanized societies in the world.
Japan’s industrial revolution received a massive stimulus
from the Meiji Restoration. The government provided
financial subsidies to needy industries, foreign advisers,
improved transport and communications, and a
universal system of education emphasizing applied science.
In contrast to China, Japan was able to achieve
results with minimum reliance on foreign capital. Although
the first railroad—built in 1872—was underwritten
by a loan from Great Britain, future projects were
all financed locally. Foreign-currency holdings came
largely from tea and silk, which were exported in significant
quantities during the latter half of the nineteenth
century.
During the late Meiji era, Japan’s industrial sector began
to grow. Besides tea and silk, other key industries
were weaponry, shipbuilding, and sake. From the start,
the distinctive feature of the Meiji model was the intimate
relationship between government and private business
in terms of operations and regulations. Once an
individual enterprise or industry was on its feet (or sometimes,
when it had ceased to make a profit), it was turned
over entirely to private ownership, although the government
often continued to play some role even after its direct
involvement in management was terminated.
Also noteworthy is the effect that the Meiji reforms
had on rural areas. As we have seen, the new land tax provided
the government with funds to subsidize the industrial
sector, but it imposed severe hardship on the rural
population, many of whom abandoned their farms and
fled to the cities in search of jobs. This influx of people in
turn benefited Japanese industry because it provided an
abundant source of cheap labor. As in early modern Europe,
the Industrial Revolution was built on the strong
backs of the long-suffering peasantry.
World History
