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Skip to 0 minutes and 8 secondsThe Japanese teenager, Mitsuhito, who became the Meiji Emperor in 1868, probably had very little understanding of economics, and may have known very little of the policies that were enacted in his name. But his succession marked two major turning points in the nation and global economic history. A militarily weak, technologically backward, feudal, agricultural country was taken over by a modernising, ambitious elite. And within a remarkably short period of time, it was transformed economically and socially. Four decades later, Japan had joined a select group of industrial countries, and despite the aberration of empire and war, it's progressed to be one of the world's richest and most successful.

Skip to 1 minute and 2 secondsThe methods adopted by the new Emperor's advisors became more of a template for subsequent, more recent economic developments in Asia, in Korea, and Singapore, then China, then Vietnam, and indeed, the rest of the developing world. The event that triggered the so-called major restoration was the arrival of the American Admiral Perry, exposing the chronic weakness of the previous regime, the Tokugawa shogunate. Japan had, from the 17th century, largely cut itself off from the outside world. The country was ruled by hundreds of feudal lords, and while the Japan of that time was relatively sophisticated and literate, it was no match for the Western powers, who were able to control its trade, as they already did with China.

Skip to 1 minute and 54 secondsThe ruling elite was split as to whether to close Japan entirely to foreigners, or to modernise and embrace Western technology and institutions. And it was the latter faction that won and imposed rule by the Meiji Emperor. The modernizers were already aware of what was happening in the West, but key figures travelled there, better to understand the countries they wanted to emulate-- Prussia, then become part of the United Germany, and Bismarck, which of course in 1870 had conquered France in war. Germany and the United States were the two countries seen as the most relevant to Japan's needs. Now, radical reforms centred initially on the abolition of feudal rights and privileges, and this opened up opportunities for the socially mobile.

Skip to 2 minutes and 48 secondsThere was also a rapid expansion of education at all levels, land taxation to generate revenue for central government and provide the basis for fiscal stability, the creation of a national army, a big programme of expansion of technical education, banking, postal services, railways, and a government department committed to industrialisation. And the last of these involved capital goods, cement, and chemicals, as well as textiles, of which Japan was a major exporter. Now, in order to finance this programme without relying excessively on overstretched government funding, factories were sold to private businessmen, and they became the zaibatsu, the corporate building block of future industrialisation.

Skip to 3 minutes and 38 secondsNow, statistics about Japan at that time are poor, but they do improve, and they show a very rapid period of expansion of industrial production in the 1880s and beyond. And by the time of the First World War, Japan had a strong, centralised government with some embryonic democratic institutions. It had a powerful army, which fought successful wars against China, gaining Taiwan as a colony, and then Russia. The comprehensive defeats of Russia sent shock waves, not only through Russia, it was one of the events that presaged the eventual collapse of the Tsarist regime, but also in the West, which struggled to come to terms with an industrialised and militarily successful Asian power.

Skip to 4 minutes and 26 secondsIndeed, the lack of respect and recognition for Japan's achievements was one of the factors which underlay the aggressive nationalism, which led Japan into a disastrous war with the United States and its allies after Pearl Harbour. Japan is now a highly developed, technologically advanced economy, the third biggest in the world, after the United States and China. And the origins of that success lay with the Meiji Emperor. And it's a success story which has served as a model for many other countries seeking to modernise.

The Meiji Emporer

The first Meiji emperor, Mutsuhito, likely had very little understanding of economics or perhaps even the policies enacted in his name. Nonetheless, his accession marked a turning point in Asian, and global, economic history.

In the film, Sir Vince Cable introduces the Meiji emperor and explains how Japan was transformed from a militarily weak, technologically backward, feudal, agricultural country into one of the select few industrialized countries. The reforms introduced in the Meiji emperor’s name laid the foundations for the highly developed and technologically advanced economy which Japan has become today.

Please comment below which reform(s) you think were most critical to the success of Japan. Which other countries which have emulated Japan’s success?

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This video is from the free online course:

The Politics of Economics and the Economics of Politicians

The University of Nottingham

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