Chapter 68: Industrialization Spreads East
In the mid-19th Century, two eastern empires were humiliated by industrialized powers. To avoid further humiliation, they both decided to industrialize themselves. In the late 19th Century, Russia and Japan went through rapid modernization. But which of the two succeeded would shock everyone, come 1905.
In this episode, we will cover:
The emancipation of the serfs in Russia
The Witte System
Japanese proto-industrialization
The Meiji Restoration
And the Russo-Japanese War
Sources for this episode include:
Ali, Faisal. “The Russo-Japanese War and its impact on Anti-Colonial Nationalists.” Medium. 22 Aug 2020. https://faisalahali.medium.com/the-russo-japanese-war-and-its-impact-on-anti-colonial-nationalists-24db8d3ee596
Duncan, Mike. “Revolutions.” Season 10. 2019-2022.
“Emancipation Manifesto: Russia (1861).” Encyclopaedia Britannica. Last updated: 5 Jun 2017. https://www.britannica.com/event/Emancipation-Manifesto
Jansen, Marius B. The Making of Modern Japan. Harvard University Press. 2000.
Smith, Thomas C. Native Sources of Japanese Industrialization, 1750-1920. University of California Press. 1988.
Stearns, Peter N. The Industrial Revolution in World History. 4th Edition. Westview Press. 2013.
Von Laue, Theodore H. Sergei Witte and the Industrialization of Russia. Aetheneum. 1969.
Walker, Brett L. A Concise History of Japan. Cambridge University Press. 2015.
Weightman, Gavin. The Industrial Revolutionaries: The Making of the Modern World, 1776-1914. Grove Press. 2007.
And be sure to check out this great podcast!
Full Transcript
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On January 15, 1856, Emperor Alexander II of Russia decided to sue for peace. Two years earlier, his father had gotten the country into the Crimean War. (Shout out Chapter 52!) Now, with Sevastopol taken and no way to turn the situation around, the new Tsar knew he needed to get his country out of that war.
Two and a half months later, the Russians signed the Treaty of Paris. It was a humiliating defeat. Russia would have to give up its Black Sea Fleet and its territorial claims in modern-day Moldova and Romania.
But the Crimean War also woke Russia up to the fact that the world was leaving them behind. The vastly superior technology and operational skills of the British and French forces were proof. As the Tsar’s brother supposedly lamented, “We cannot deceive ourselves any longer; we must say that we are both weaker and poorer than the first-class powers...”
The time for reform had come.
Over the next half century, Russia would modernize. The social organization of the empire was totally rearranged, while massive effort and resources were invested in economic development – namely for heavy industry to improve military capabilities. A defeat like the one in Crimea could never happen again.
Except, by the end of this half century, a military defeat would come again. This time it would not be to a great power like Britain or France, but to Japan – a country that absolutely nobody had on their radar as a great (or even a rising) power in the 1850s.
You see, as the war in Crimea was being waged, the Japanese were facing their own humiliation at the hands of an industrializing power. The United States was forcing open the long-secluded island empire. And it would set in motion Japan’s own program of modernization.
These efforts in Russia and Japan created once unthinkable advancement for both empires, until they came head-to-head against each other in a conflict that would have major consequences for decades to come.
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This is the Industrial Revolutions
Chapter 68: Industrialization Spreads East
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Alright, before we get started, let me cover a couple quick items.
First, I probably could have made this episode two or three episodes long. There is a lot of really interesting material that I just don’t have enough time to cover. Patreon subscribers at the Steam Engine level and higher will be seeing my book recommendations in the next few months, and if you’re interested in learning more about Russian and/or Japanese history in the late 19th and early 20th centuries, you will definitely want to check out these books.
Another reason I want to keep my episodes focused and moving forward is because I have a big change coming up in my life. My wife and I are expecting a new Industrial Revolutionary in August, so expanding my episode count is a bit unrealistic. My plan is to get one more chapter done before she arrives, but that will probably be the last episode I will be able to record for several months. But I am still hoping to wrap up the Gilded Age by the end of the year.
Finally, I want to thank everyone who continues to support the Industrial Revolutions financially. Special shout outs this time to Paul Shawkat and new patron Diego Huerta, as well as Andrej Andrejkovic, John Bartlett, Adam Bibby, Chris Bradford, Elizabeth Brooking, Harriet Buchanan, Jeppe Burchhardt, Tara Carlson, Britt Cleaver, "Dancer In The Dark", Michael Hausknecht, Madeleine Hill, Eric Hogensen, Alonso Ibañez, Naomi Kanakia, Paul Krasin, Kyle Laskowski, Ian Le Quesne, Brian Long, Andrew C. Madigan, Martin Mann, J.J. Marx, John Newton, Max Rickard, David Roberson, Brad Rosse, Joshua Shanley, Kristian Sibast, Jonathan Smith, Ray Squitieri, Tanner, Ross Templeton, and Seth Wiener.
Now, let’s get on with the show!
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The writer James Baldwin once noted that “Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.” Nowadays, this feels truer than ever. Being poor means paying hefty fees for mistakes like overdrawing your bank account or missing a child support payment. It means having to purchase inferior products that are soon useless to you. It means you do not have the time or resources to go shopping and prepare a holistic meal – so, instead, you eat fast food or heavily processed foods which cost you more in the long-run, especially when you take the health care implications into account. Often times, trying to climb out of poverty will only leave you further impoverished.
This can be as true for countries as it is for individuals. And from the end of the Crimean War right up until the First World War, this was the hole in which Russia found itself unable to escape. The massive empire had largely failed to industrialize thus far. Now they would discover just how difficult it would be to catch up.
Of all the things that made Russia look like a backwards civilization, there was one thing that really stood out: Serfdom. Russia was the only European country still practicing this Medieval social arrangement. And Russian serfdom was especially problematic – it was basically slavery in all but name. And even though it was on the decline in many parts of the empire, more than a third of Russians were still living in serfdom by the end of the Crimean War.
It wasn’t just that serfdom was viewed as immoral (though to many it was); it was also understood to be an impediment to progress and development. Economic thinkers going back to Adam Smith had long argued that such forms of bondage hampered productivity.
And with economic freedom expanding in the West, Russians could see how this argument played out in practice. In the UK, France, Germany, and elsewhere, peasants were leaving the countryside to join an urban Proletariat, churning out all kinds of goods in modern factories. This new working class contributed to an ever-growing rate of production, which not only meant higher material standards of living, but also greater tax revenue and greater military preparedness for the states in which they lived. Russian serfs, meanwhile, were tied to the land, unable to seek such opportunities in the cities.
But though ending serfdom had long been an aspiration of the Tsars and other reformists, the project was always easier said than done. After all, serfdom was the bedrock of Russian society.
The only comparison I can try to make in contemporary America is the idea of reparations for slavery. Many of you probably know that this is something I personally support, but I will freely admit that making such reparations would inevitably set off a firestorm of contentious questions. How do you determine exactly who is entitled to reparations? (Only those who can prove they had enslaved ancestors? Only those individuals whose ancestors were enslaved in this country?) How do you distribute the reparations? (Through vehicles like education subsidies? Or via direct cash payments?) And who should pay for them? (All taxpayers? Even Black taxpayers? Even recent immigrants and their children? Even white Americans whose ancestors never held slaves? Should it even be done with tax-dollars at all, or should it be by some other mechanism?) Such questions touch on basic concepts of fairness and would thus divide even the strongest supporters of reparations.
Similarly, most Russians understood that serfdom ought to be abolished. But what that would look like in practice raised some uneasy questions. Just because human bondage was wrong didn’t mean the Western Proletarians were living such great lives, after all. And unlike their counterparts in the West, Russian peasants were almost entirely uneducated. How were they expected to survive independently in the harsh modern world? How would it affect agricultural production? Serfs were key instruments of food output, and nobody wanted to accidentally cause a famine. What about its effects on the Russian financial system? After all, serfs were key assets of the gentry, and the gentry often mortgaged these human beings to keep up their glamorous lifestyles. So, wouldn’t the gentry need to be compensated for this loss of property? Perhaps most importantly, would emancipation lead to political instability? Would the dispossessed gentry attempt a coup? Would the former serfs adopt the revolutionary ideas that had long destabilized countries like France?
Despite all these concerns, Alexander II decided the handwringing had to come to an end. The serfs had to be freed. And he would be the Tsar to free them. In a speech to the nobility on March 30, 1856, he announced the time had come. Over the next five years, his ministers drafted a plan – the Emancipation Manifesto – to get it done. At last, the serfs were officially freed on March 3, 1861.
To ensure that emancipation didn’t lead to mass unemployment or mass starvation, it was decided that the former serfs would need to get at least some of the land they worked on for themselves. Of course, between land and serfs, the state was taking an awful lot of property away from the gentry, so the gentry would definitely need to be compensated. To do it, the state would pay landowners / people-owners a lump sum for their losses. But, remember, the Russian state was also very poor. So, this sum would need to be paid back to the state. By whom? That’s right, the freed serfs. And these “redemption payments” – or the “soul tax” as they were sometimes called – were to be collected for the next 49 years at 6% interest.
But just because the former serfs got land doesn’t mean that individual serfs got individual parcels of land. I mean, some did, and gradually some peasants did build substantial landholdings for themselves. But, for the most part, the land went to the mir. The mir was a rural village; a peasant commune. And even though each household in the mir would be allotted certain parts of the land, the land was owned by the mir collectively. What’s more, the mir was largely self-governed according to local traditions.
Why did the Russians do it this way? Well, it had a lot to do with their religion. The Russian Orthodox Church was very disdainful of the Western churches – both Catholic and Protestant – and the mores of their adherents. The church viewed the reforms in these countries as socially destabilizing and sinful. Many Russians viewed private property rights, in particular, as characteristic of a toxic individualism that put profits before all else.
The serfs were free though. And over the next half century, more and more of them would head to the growing cities to find work. Now, it never happened quite at the same rates as in France and Germany, for example, and many peasants only did so seasonally or for as long as they needed to for their families. But an urban industrial workforce was starting to grow.
Other reforms were introduced as well. Under Alexander II, Russia’s judicial system was overhauled and new systems of administration were established. Throughout the country, elected bodies were formed for local government. These zemstvos, as they were called, were deliberately designed to give most power to the nobility, but they did manage to bring a small degree of democracy to Russia. As a result, they tended to be much more liberal than the central government, even though they were largely representing landed interests.
And then there were all the empire’s financial reforms. Among other things, a new Central Bank was established and a new law was passed to guarantee a unified budget for Russia. Tasked with overseeing these reforms and promoting economic development was the Tsar’s Finance Ministry. Before long, the Minister of Finance was the most important position in government.
The ministry faced five interrelated challenges:
Strengthening (or, rather, stabilizing) the ruble
Building up the country’s bullion reserves to improve international trade
Balancing the imperial budget
Bringing foreign capital to Russia (since Russia had so little capital of its own), and
Financing industrial development – particularly, by building railroads.
Time and time again, a new Minister of Finance was appointed, he would craft a strategy to address these challenges, and – before his strategy could take root – some crisis would come along undermining everyone’s faith in him. This could be a foreign financial crisis that adversely impacted Russia, or a weather-induced famine, or whatever. And then the cycle would repeat itself. In soccer terms, it was the equivalent of coaching Chelsea Football Club.
But even though most imperial reform efforts either stalled out or were conspicuously reversed – especially following the 1881 assassination of Alexander II at the hands of socialist revolutionaries – Russia never abandoned its efforts to modernize economically.
Which isn’t to say these efforts were not threatened. In 1891, a devastating famine hit Russia, taking some 400,000 lives and upending the economy. After years of redemption payments and high taxes to subsidize industrial development initiatives, the peasantry had no real savings to fall back on. Millions relied on aid – much of it foreign – for their survival.
In the wake of this disaster, the Finance Minister was replaced yet again – this time by the man who would make more progress toward industrialization than anyone else so far.
Sergei Yulyevich Witte was born in Tiflis – what is today the Georgian capital, Tbilisi – in 1849. His father – a descendent of Baltic Germans – moved his family around the Russian Empire as he took up different civil service jobs. Eventually, the family wound up in Odessa, where Sergei earned his degree in mathematics in 1870. Though he was interested in a career in academia, a friend of the family – the Communications Minister, Count Bobrinkskii – encouraged him to find employment with the railroads, which were in desperate need of capable men.
For nearly two decades, then, Witte built a successful career on the railways – both private and public – where he proved to be an adept manager. In 1889, he was asked to create a Railway Department within the Ministry of Finance, where he would oversee freight tariffs and the planning of a “railway through Siberia.” And when the famine hit, not only was he charged with alleviating the situation along the Volga River, he became the frontrunner to replace his boss at the head of the Ministry of Finance.
Tsar Alexander III appointed Witte Finance Minister in August 1892. But despite complaints that the peasants were overtaxed, and that the push to industrialize had maybe gone too far, Witte made it clear that he intended to double down.
As he wrote the next year:
“Our fatherland overflows with all kinds of natural riches, but it has not yet utilized those riches to any degree desirable for the increase of its wealth. Financial policy should not fail to pay attention to the undesirable effects of excessive thrift in meeting the growing demands, but on the contrary, should give reasonable assistance to the development of the productive forces of the country.”
And like the ministers who came before him, Witte believed the key to industrialization was railroad construction. Not only would the railways help transport goods and passengers, the construction of them would also boost demand for heavy industry, especially mining and iron production. Increased output would then have a multiplier effect, raising demand for other goods and services.
At the heart of this program was the Trans-Siberian Railway. Running some 5,400 miles through the mostly unexplored eastern territories of the Russian Empire, it would be the longest railway in the world. Building it posed an enormous challenge – Russia did not have the money nor the labor power needed – but the government had been determined to do so for years now already. And as Witte saw it, the railway would allow Russia to dominate European trade with China and the Far East, open up the Siberian frontier to migrant peasant families – sort of like Russian homesteading – and tap the many mineral resources of Sibera, including coal, iron ore, copper, lead, silver, and gold. (And gold would be especially important for shoring up the country’s bullion supply and creating a trade surplus.)
In the end, the Trans-Siberian Railway produced mixed results. Due to its limited budget, construction was haphazard, and so the trains had to move slow on it with limited traffic per day. And profits fell way, way short of expectations. But it did facilitate greater trade with China, it did lead to nearly a million peasants settling in Siberia, and it did help boost the growth of Russian heavy industry. And it was a great feat symbolically.
But perhaps more importantly, railroad expansion in western Russia also boomed during these years. By the turn of the century, thousands of miles of track were laid down – some by private companies, the less lucrative lines by government – creating a dense rail network. This helped Russia export agricultural goods to the rest of Europe and created a more mobile workforce, as more peasants could now work seasonally in their home villages and the rest of the time performing industrial labor at mines, factories, construction sites, etc. Plus, the railroads directly employed some 400,000 workers, helping stimulate the economy broadly. Between private and public financing, some 3.5 billion rubles were spent on rail construction during the Witte era – equivalent to over $50 billion today.
But there would be other components of his strategy, known today as the Witte System. It included industrial loans issued by the State Bank, and more widespread banking generally. It included a looser regulatory environment for joint stock corporations, a new patent law, and a robust investment in primary education. Controversially, it included the adoption of the gold standard. And to pay for all the stimulus programs, it included even higher taxes.
This tax revenue would be generated first and foremost through tariffs. You see, Witte was a devoted disciple of our old friend, the political economist Friedrich List. As I’m sure you’ll remember from Chapter 40 (published over 4 years ago), List believed that tariffs were critical to development in less industrialized countries. Because how could you get the textile industry off the ground in Russia if it was being flooded by cheap textiles from the UK, where the industry was already fully developed? And that’s not a hypothetical question – that’s literally one of the challenges Witte was facing. So, tariffs addressed both the industrial development problem and the state budget problem.
Buuuut, they also weren’t enough. The deficit continued to grow. And so, excise taxes were imposed on everything from alcohol and tobacco to kerosene, sugar, and more. And, again, this is all on top of the redemption payments the former serfs were forced to pay.
Plus, Witte radically reorganized the Finance Ministry, changed the culture of the place – placing a lot of trust in the help of academics and business advisors – and expanded its bureaucratic reach. He became by far the most powerful politician under the Tsar.
So how did it all work out?
First of all, Russian rail infrastructure grew by some 46% – faster than anywhere else in Europe. Of course, due to the immense size of the empire, they still lagged behind the West in terms of rail density, but they were catching up. As a result, freight traffic grew considerably, never lacking for demand. This was particularly true for grain exports, booming thanks to the opening of Siberia and allowing Russia to keep pace with American grain output. Passenger traffic was also significant, with over 127 million tickets sold in 1902.
Second, rail construction did lead to more heavy industry. Russian coal production more than doubled and iron production more than tripled – although even this could not keep up with demand. Ukraine became a major metallurgical region, and the empire surpassed the French in terms of pig iron yield. The oil industry around Baku (shout out Chapter 61!) was the strongest in the world. The production of ceramics, chemicals, sugar, cotton textiles, and metal tools and equipment all nearly doubled. Though still small, Russia notably grew its share of the world’s manufacturing output. The rates of household savings and consumption grew as well.
By extension, private enterprise grew. The number of new joint stock companies registered per year nearly tripled. Albeit most of these were very small businesses, employing fewer than 50 workers.
Remember, though, “how extremely expensive it is to be poor.” All this economic development took a heavy toll on Russia.
For starters, the conversion to the gold standard had much the same effects it did in the U.S. and Germany during these years. Held in Treasury reserves, the gold wealth was not redistributed. So, it was great for long-term international trade prospects, but very hard on Russian workers and peasants.
Tariffs had a similar effect, not just by keeping prices for consumer goods high, but also industrial products. Iron tariffs, in particular, drew complaints that they drove up the costs of modern agricultural tools and machinery. As a result, Russia’s agrarian sector – still the bedrock of the economy – couldn’t catch up its foreign competitors, especially the bonanza farms of the American Midwest. Yet, even with the tariffs, domestic enterprise was constantly threatened by the growth of foreign capital in Russia – another key design of the Witte System.
Thus, the Witte System appeared full of contradictions. It certainly did not seem to address peasant poverty. If anything, it made it worse, as did numerous crop failures during these years. And this stagnant rural poverty was a drag to Russia’s economic development, not to mention its tax revenues. This, in turn, made it difficult for the empire to boost military spending and stay on par with its rivals. Witte was well aware of this problem and was a fierce advocate for peace during these years, knowing Russia still needed time to industrialize before it could compete militarily. Of course, this was not easy, seeing as the eastward expansion of Russian imperial influence was a critical component of the project.
Witte did have some ideas for how to address the problems of peasant poverty. Namely, he wanted to create a more capitalist form of Russian agriculture.
To do it, Witte believed, peasants needed private property rights. He argued that collective ownership and taxation through the mir discouraged productivity and innovation. The peasants needed large tracks of land which they could farm individually – as well as access to credit and education. Indeed, following the Revolution of 1905, many of these ideas were adopted in the so-called “Stolypin reforms.” Furthermore, Witte argued that deregulation was needed at the local level. Regulation of the agrarian sector should be concentrated within the central government, not the zemstvos or village elders who infringed on peasants’ economic freedoms.
In fact, the zemstvos were frequent critics of Witte System. Tracts written by their liberal allies undermined the Finance Minister. So too did the growing number of worker strikes. So too did the Panic of 1893, which short-circuited the flow of international credit to Russia well into the 20th Century.
So too did Russification. Much like how Otto von Bismarck sought to Germanize the new Reich, the Russian government made a concerted effort to unify the empire’s national identity. They pushed the Russian language, Russian norms and customs, and the Russian Orthodox Church, all at the expense of the others in their empire: Finns, Poles, Armenians, Tartars, indigenous Siberians, and – most especially – Jews.
Spurred along by the antisemitic new Tsar, Nicolas II, Jews in the Russian Empire faced a growing number of pogroms against them, forcing many to flee to countries like the U.K. and U.S. Not only did Witte abhor these acts on a personal level, he found them a nuisance to his efforts to raise capital from the West. Many of the bankers he worked with were from Russia’s new ally, France. And many of them, including our old friends the Rothschilds, happened to be Jewish.
Finally, in August 1903, with the promises of the Witte System still unrealized – and after having made many enemies – Sergei Witte was promoted to the post of Chairman of the Committee of Ministers. As a result, he was forced out of the Finance Ministry, losing a position of real power in exchange for a largely ceremonial role.
But it was not the end for Witte. He would later become the first Prime Minister of Russia, following the country’s disastrous war against Japan.
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It’s a story that many of us know quite well.
In July 1853, four giant black ships anchored at the small fishing village of Uraga, Japan. Now part of the city of Yokohama, the village shared a bay with the Shogunate capital at Edo. The ships were larger and faster than any vessels the stunned local fishermen had ever seen. Onboard one of these ships was American Commodore Matthew C. Perry, carrying a letter from his president, Millard Filmore.
For over two centuries, Japan had cut off most contact with the West. Foreigners who landed on the island – including shipwrecked sailors from Europe or the Americas – were harshly punished by the Japanese government. Some were even killed for it. The same went for Japanese civilians who left the island nation or made contact with Westerners. But as he expressed in his letter, President Filmore hoped to establish new relations with Japan.
“I have directed Commodore Perry to assure your imperial majesty that I entertain the kindest feelings toward your majesty’s person and government, and that I have no other object in sending him to Japan but to propose to your imperial majesty that the United States and Japan should live in friendship and have commercial intercourse with each other.”
Perry hardly expressed the friendly sentiments of the letter though. He famously had blank shots fired from 73 cannons on his ship, ostensibly in celebration of America’s Independence Day, the date of which had passed about a week earlier. After some frank back-and-forth diplomacy, he managed to deliver the letter to the Japanese authorities. Now, it was clear that the Americans misunderstood Japan’s political arrangement – the emperor was more of a holy figure in Japan, all governmental power rested with the Shogun – but the Japanese finally agreed to accept the letter. Then Perry warned that he would return within a year to hash out a treaty opening Japan to the West.
The Arrival of the Black Ships is often remembered as the starting point for Japan’s modernization. But, for many Japanese, the political and economic system had been broken for decades, if not longer. Perry was merely the straw that broke the camel’s back.
Japan, as a singular civilization, had existed for at least a millennium by this point. It had an unbroken imperial house going back to that murky period when history and legend are difficult to distinguish. Legend had it that the emperor was a descendant of the sun goddess and, indeed, imperial rituals and customs were wrapped up with the country’s polytheist/animist Shinto religion. During the First Millennium, Confucian and Buddhist beliefs and practices were imported from China as well. And Confucian influence would lead to higher-than-normal rates of literacy later on.
Much like the Medieval caliphs had done with the sultans and the popes had done with, say, the Holy Roman Emperors, the Japanese emperor maintained spiritual and constitutional authority while effectively delegating civil and military authority to a different type of monarch: the Shogun. Still, Japan was a very feudal society, largely decentralized and organized by vassalage more than by modern nation-state-type institutions. And for much of that period, the Japanese nominally showed deference to the Chinese emperor – albeit this was mostly for diplomatic purposes so China would leave them alone.
The first Western contact came in 1543, when the Portuguese arrived. They established a new port at Nagasaki to engage in trade and missionary work. The Portuguese sold Japan muskets while taking many of its people – particularly women – as slaves. These developments, along with the Jesuits preaching a religion that flew in the face of so many key cultural and political norms, seriously shook up Japanese society. Then came a brutal civil war between Japan’s great houses. Eventually the Tokugawa clan triumphed in 1600. Three years later, they declared their leader to be the Shogun, established a court at Edo – away from the imperial capital in Kyoto – and expelled the Portuguese. Moving forward, contact with the outside world would be pretty much limited to China, Korea, and the Netherlands.
Also moving forward, the houses that had allied with the Tokugawa in the civil war were given almost permanent prestige and political power. Christianity was strictly forbidden. And the warrior class – the samurai – were largely removed from the lands they had controlled for centuries. To the winners go the spoils, so they say, and much of the land was consolidated by a small number of victors. The rest of the samurai were ordered to take residence in the booming castle towns across the empire, especially Edo and Osaka. Instead of drawing large incomes from landed estates in exchange for performing military service, samurai now drew small incomes from the state in exchange for performing policing and bureaucratic roles.
This was a deeply frustrating arrangement for the samurai. For one thing, they were performing tasks that did not meet the level of honor they held for themselves. For another thing, they felt like they were doing much more for the sake of good governance than their bosses were. The bakufu – that is, the central government in Edo – was seen as irredeemably corrupt and unaccountable. Meanwhile, the daimyo – heirs to the great houses and leaders of the feudal domains – were coddled and spoiled from the time they were children, making them completely inept as adults to lead as local administrators.
It was also during these years that Japan experienced its own process of proto-industrialization. And while there were many ways it was distinct from the Industrious Revolution back in Europe, there were many similarities too.
Most importantly, there was something of an agricultural revolution going on. As the estates became too large for the landholders to oversee themselves, tenant farming families found more and more freedom for their own economic expansions. New farming manuals spread throughout the countryside, outlining scientific methods of crop cultivation and how to optimize the productivity of harvests. These manuals emphasized the importance of profit as an outcome, not only to enrich the family unit, but – by extension – to enrich the empire. It was not unlike Adam Smith’s description of his “invisible hand.” (Shout out Chapter 10!)
Disciplined time management among peasant families allowed them to expand their operations, not only by producing mass-scale harvests, but also taking up all kinds of cottage industry for by-employment. They would set up spinning and weaving operations, using silk and cotton, made furniture, mined for salt and coal, and produced an expanding number of consumer goods like paper, pots and pans, candles, sake, and more. Mind you, a lot of this activity was illegal. These were trades that were supposed to be monopolized by urban guilds. But the power of the guilds diminished as the samurai were holed up in their towns rather than in rural villages.
Similarly, with the samurai in the towns, there was almost no reassessment of rural taxes for over 200 years. So, while the peasants were producing ever greater surpluses – except during the several devastating famines throughout the Tokugawa period – their taxes pretty much stayed the same. It allowed for a good deal of pre-capitalist capital accumulation.
With an expanding food supply came an expanding urban population. By 1750, the population of Edo was over 1.2 million, with another 410,000 in Osaka and 370,000 in Kyoto. Now, those populations did decline a bit in the century to come – as urban dwellers more and more realized there was more freedom in the countryside, away from the samurai – but even by the time of Perry’s arrival, these cities supported huge merchant communities.
What’s more, many merchants were becoming quite wealthy, thanks to the economic growth underway. Samurai frequently complained about how the merchant class was living so luxuriously while the warrior class was clearly becoming impoverished.
In retrospect, it’s easy for us to point to these developments as having laid the groundwork for Japanese success in the industrial age. And when compared to Russia, where attempts to grow the economy came from top-down projects, this was a process clearly coming from the bottom-up. It helps explain how Japan caught up to or even surpassed Russia by 1905. Yet, in the Tokugawa period, these changes were very destabilizing.
Then there were the foreign crises.
The most immediate concern was encroachment by the Russians, who were reaching the same northern Pacific islands the Japanese were beginning to colonize. Then came the news of the First Opium War (Shout out Chapter 32!), when the British used steam-driven gunboats to dominate imperial China, as well as an ominous letter to Japan from the King of the Netherlands a few years later, suggesting this would be Japan’s fate if they did not voluntarily open trade with the West. And finally, the threatening American steamers in Edo Bay hastened the end of the isolationist policy.
Why did the West want to force Japan open? A few reasons stand out. In addition to his appeals for “friendship” and “commerce” in his letter to the emperor, President Filmore notes two other key objectives of the American mission. One was the protection of shipwrecked sailors. In this period before electrical engineering, people needed whale spermaceti for artificial light. (Shout out Chapter 36!) American whaling ships frequently hunted across the Pacific Ocean, and there were stories of their mistreatment by the Japanese when they shipwrecked.
But the second reason is even more telling. Filmore writes:
“The United States of America reach from ocean to ocean, and our Territory of Oregon and State of California lie directly opposite to the dominions of your imperial majesty. Our steamships can go from California to Japan in eighteen days… we understand there is a great abundance of coal and provisions in the Empire of Japan. Our steamships, in crossing the great ocean, burn a great deal of coal, and it is not convenient to bring it all the way from America. We wish that our steamships and other vessels should be allowed to stop in Japan and supply themselves with coal, provisions, and water.”
Upon discovering that other Western powers had their own plans to force Japan open, Perry returned sooner than he originally promised, this time with even more ships. After threatening to bring another hundred ships – which the Navy did not actually possess at the time – Perry managed to arrange the necessary diplomatic meetings.
The Americans brought several gifts to demonstrate the benefits of trade: The Colt revolver (shout out Chapter 33!), the telegraph (shout out chapter 35!), a camera for daguerreotypes (shout out Chapter 37!), clocks, tools, whiskey, and more. But by far the most memorable was a small locomotive and carriages that ran on a small, circular track.
As one American later put it:
“…the car was a most tasteful specimen of workmanship, but so small that it could hardly carry a child of six years of age. The Japanese, however, were not to be cheated out of a ride, and as they were unable to reduce themselves to the capacity of the inside of the carriage, they betook themselves to the roof. It was a spectacle not a little ludicrous to behold, a dignified mandarin whirling around the circular road at the rate of twenty miles an hour, with his robes flying in the wind. As he clung with a desperate hold to the edge of the roof, grinning with intense interest, and his huddled body shook convulsively with a kind of laughing timidity, while the car spun rapidly around the circle, you might have supposed the movement… was dependent rather upon the enormous exertions of the uneasy mandarin than upon the power of the little puffing locomotive.”
The introduction of the steam locomotive was a big hit. But within Japan’s governing class, there was huge disagreement about how to engage with the foreigners, who were considered barbarians. Some believed that any capitulation was dishonorable and unforgiveable. A few were welcome to opening up trade. But the most popular position was to make limited concessions, learn as much about western technology as possible, and later harness it to defeat the Westerners and cast them off yet again.
Thus, Japan agreed to an unequal treaty with the United States – much like the Chinese had done with the British – opening two new ports to trade. Similar agreements came with the British, Russians, and French before the end of the decade.
The capitulation set off a chain of events that would lead to the Shogunate’s collapse 14 years later.
For starters, there was a massive ideological shift underway. Writers began lamenting the centuries of Chinese influence in Japan. They were something of Shinto nationalists, who saw the introduction of Confucian and even Buddhist thought as weakening Japan’s glory. And while the Tokugawa shoguns had Zen Buddhism greatly intertwined with their court rituals, it was the emperors who were descended from the Shinto sun goddess. Thus, they believed, the Shogun held an illegitimate office – all sovereign authority ought to rest with the emperor. Additionally, these writers more and more abandoned Confucious for Western ideas of progress.
One, a teacher named Yoshida Shoin, hatched a plan to overthrow the Shogun under the battle cry, “Revere the emperor, expel the barbarians!” He was captured and beheaded in 1859, but his battle cry lived on, especially in Satsuma Province and the Choshu Domain. Over the next several years, the Bakufu found themselves dealing with numerous rebellions.
All this history is a bit too complex for me to cover in great detail here, but it is pretty fascinating. If you’d like to learn more, I recommend listening to “The Fall of the Samurai” series on the History of Japan podcast.
By the mid-1860s, Choshu had sent several of its young men to Britain to learn the ways of the West. They also joined the Satsuma to arm up and ally together to resist Shogunate reforms. When the final Shogun, Tokugawa Yoshinobu, took office in 1866, he found he was unable to affect change within a constitutional order that was bleeding to death. At the advice of representatives from the Tosa domain – who were moderate allies of Satsuma and Choshu – Yoshinobu agreed to resign. From there, the emperor would form a new national council of government that Yoshinobu would chair.
Except, once he resigned, the new emperor – Mutsuhito – had other ideas. In January 1868, he announced “We shall henceforward exercise supreme authority in all the internal and external affairs of the country.” It was the start of the Meiji Restoration.
Over the next year and a half, the emperor and his allies defeated the former shogun and his allies in a swift civil war. Edo was seized by imperial forces and renamed “Tokyo” or “Eastern Capital.” Feudal domains were returned to the emperor, giving him total sovereignty over the land. And the emperor formed a new government that radically changed Japanese society. In fact, I have seen many comparisons between this moment in Japanese history and the French Revolution in French history. Some describe the Meiji Restoration as “the French Revolution without the guillotine.”
This government – made up of the Japanese aristocracy – abolished feudal dues and privileges, replacing them with taxes and a merit-based system for bureaucratic office holding. They instituted compulsory military service for all citizens, stripping the samurai of this exclusive role. They established a system of universal public education. They obliterated the old class system – no longer would peasants have to prostrate themselves any time they saw a nobleman. In effect, there would be no more distinction between peasants, merchants, craftsmen, samurai, and outcasts – all were now citizens under the emperor. By 1890, they had adopted a constitution and formed an elected Imperial Diet.
The government also pursued a concerted policy of industrialization.
In the years following the Perry Expedition, Japanese entrepreneurs were quick to adopt western industrial technologies. New iron foundries were established in Izunokuni and Kamaishi, new shipyards were set up in Kagoshima and Saga, and various new mills, kilns, and factory sites went into operation throughout the country.
But thanks to the centralization of the imperial regime, in the initial years of the Meiji Restoration, it was the state that took the lead in industrialization. With the creation of the new Industry Ministry in 1870, government bore the costs of building new textile and steel mills, new coal mines, new arsenals, new ports, and new public works projects like paved streets and street lighting.
Japan’s first telegraph line, from Tokyo to Yokohama, was completed in 1869. The country’s first railroad was completed between those same two cities in 1872. Telegraph and rail networks spread across the country over the next few years. By the late 1880s, the State Railway Bureau had completed some 640 miles of track through difficult terrain – and then that number more than tripled by the mid-1890s. Also by the mid-1890s, Japan was manufacturing its own steam engines.
Virtually all of these projects were completed with the help of foreign expertise, such as the Scotsmen Richard Henry Brunton and Thomas Blake Glover, who worked on a variety of business and engineering projects. Among the railroad-builders there were the grandsons of our old friend, the locomotive inventor, Richard Trevithick. But they were also driven by key Japanese leaders, like Industry Minister Ito Hirobumi – a Choshu native who studied the sciences and economics in the U.K. and U.S. before the Meiji Restoration, and who later crafted Japan’s constitution and served several stints as Prime Minister.
To make all this industrialization possible, a new Bank of Japan was established. Using Belgium’s Société Générale as a model, it both functioned as a central bank and invested in industry. And a new national currency – the yen – was adopted as well.
Once industrial operations were up-and-running, the government would sell the entities to private sector players. Some, like the Sumitomo and Mitsui families, hailed from the old merchant community. Others formed entirely new companies, like Yasuda and Mitsubishi. Such groups were known as zaibatsu – “financial cliques”. These were huge, vertically integrated conglomerates, with a single family or small group of shareholders who controlled a bank, financing several industrial companies under their auspices. Despite the growth of large corporations in the West, the zaibatsu were unmatched in their importance to a single nation’s economy.
Mass production became the order of the day. New methods of mining, manufacturing, brewing, and construction were introduced. This was helped along not only by the introduction of Western technologies, but also by Japanese cultural factors. Writing about feudal Japanese views toward time management, for example, historian Thomas C. Smith writes “time was regarded as fleeting and precious, and great moral value attached to its productive use… Time was not a personal possession, but belonged primarily to families and, through them, to kin, neighbors, and villages.” Smith argues that this approach was put to use in the factories, not in the service of kin or community, but in the service of the zaibatsu. “Indeed, it appears that time thrift in the Japanese factory was not imposed unilaterally by management but was a joint creation with workers.”
Now, there’s a lot, lot more I could say about the concept of time in Japan during these years, and the fascinating ways it affected clock makers and watch makers. However, I need to worry about my own time management, as it relates to this episode, so I won’t be covering it here. Luckily for you Patreon subscribers, it will be included in the footnotes today instead.
Although Japanese workers were ready and willing to implement time discipline in the factories, and although traditional class distinctions were largely leveled early in the Meiji Restoration, industrial conditions would soon produce new socio-economic divisions, even worse than those in the West.
The Japanese language didn’t really have a word to adequately describe the new Proletariat, but by the 1880s or so, the word “shokko” had become the standard for “factory worker.” It was highly pejorative, associated with poverty, but without the sense of honor that the peasantry were once afforded under Confucian wisdom.
The shokko mostly lived in dense, polluted, and crime-ridden slums. They were terribly mistreated by their employers, who demanded long hours – often 18 to 20 hours per day – and berated them for the smallest mistakes. One Japanese engineer who spent years working in the U.S. and U.K. was shocked when he returned to Japan in 1907 and saw workers on their knees, prostrating themselves before their managers.
The stigma of being a shokko eventually created the fault lines for worker resistance. Because of the stigma, factory hands often walked to work in their street clothes and changed into their uniforms at the factory – and, at the end of the day, they would change back into their street clothes before heading home. When factories began demanding their employees walk to work in their uniforms, it created such a sense of shame that many felt paralyzed or even suicidal.
This environment was contradictory to older Japanese cultural norms. Workers believed they had a responsibility to be loyal and obedient, but that employers had a responsibility to be fair, just, and humane. As far as the workers were concerned, only they were upholding their end of the bargain. And so, they began to organize worksite groups that would, in time, evolve into labor unions. Coal miners in particular, were largely responsible for bringing Trade Unionism, democratization, and even socialism to Japan.
As the shokko gradually adopted Western methods of worker resistance, they also gradually adopted Western ideology – namely, the concept of “rights”. This was woven into the existing cultural beliefs about status and the benevolence that those at the top owed to those at the bottom. The “right to benevolence” became the foundational principal of the Japanese labor movement.
The country’s first strike came in 1899, when railway engineers argued that – because they worked with “dangerous machines” that were so vital to the prosperity of the nation – they were entitled to greater dignity. Workers usually did not strike for shorter hours, but instead for better overtime pay and opportunities for advancement within the company.
By the 1920s, the Japanese labor movement was perhaps the most successful in the world – and Japanese ideological norms had a lot to do with it. For example, in 1913, the socialist academic Abe Isoo wrote an influential essay arguing that the “person-based” relations of hierarchy and authority – like we know so well in the West – should be replaced by an “enterprise-based” system of hierarchy and authority. All employees would be equal in rights and opportunity, serving not a boss but their company, which in turn would serve the nation. In theory, the only person being served in this national arrangement would be the emperor.
As one workers’ paper put it:
“It hampers the development of industry to treat clerk-technicians as lords and actual producers as vassals. If Japan is to win the world industrial war, workers must make capitalists and managers realize this. If we are to succeed, then an era of cooperation will come about that will increase the benefits of industry and strengthen the peace and prosperity of the country.”
In fact, all this reflected ideas going back to Yoshida Shoin and his teacher, Sakuma Shozan. A popular slogan of theirs is often translated along the lines of “Western techniques, Japanese spirit” or “Western science, Japanese ethics.” And although the impetus to “expel the barbarians” had died down, there was still a great deal of reverence for the emperor and a growing energy to win that “world industrial war.”
In this, they followed the West’s lead as it related to empire-building. In particular, they sought to wrestle influence over Korea away from China. When the western powers largely sided with China in the First Sino-Japanese War in the 1890s, though, many in Japan turned away from Western liberalism and toward an even more imperialist form of Japanese nationalism. This would set the stage for much of what was to come in the 20th Century – kicked-off with a war against Russia.
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By the start of the 20th Century, Russia and Japan had made significant claims in East Asia. Russia had taken control of Port Arthur, a warm water port in Manchuria with links to the Trans-Siberian Railway. Japan, meanwhile, had stripped China of its hegemony over Korea.
Now, both Russia and Japan had their eyes on Korea. And when the pro-Russian government in Seoul gave mining and logging rights to Russia, it roiled the Japanese. Still, nobody wanted war, so Japan proposed an agreement that would effectively give them control of Korea while recognizing Russian control of Manchuria. Negotiations got underway, but then a year went by without any serious progress. Japan became suspicious of Russian stalling tactics, and they decided to prepare for war.
Last time, I mentioned the global naval arms race of the Second Industrial Revolution. The U.K., U.S., and Germany had each tapped the ever-improving steel industry to expand their fleets of modern warships. Throughout the 1890s, Russia and Japan made their own advancements in this race. Despite Witte’s opposition to it, Russian naval expenditures increased by roughly 70% over his time in office. Around the same time, Japan added over a hundred warships to its navy. But the Japanese build-up was much more systematic and strategic than Russia’s. With their French and British suppliers, Japan strove for uniformity in their ships and naval arms. Russia, meanwhile, was haphazard in their approach, with corrupt naval bureaucrats leading the charge.
On February 8, 1904, the Japanese Navy launched an attack on Russia’s fleet stationed at Port Arthur. Three hours later, they formally declared war. The Russians were stunned that this small, Asian country would dare attack their great European empire.
As we’ll discuss more next time, this was an age when white supremacy was accepted as a fact of life. Sure, peoples from the global majority might have gone to war against white imperialists, but they always lost. And going into this conflict, hardly any observers predicted anything different.
Russia was able to hold Port Arthur for the time being, but they were under siege. The Russian ships did not have the firing range of the Japanese ones, and they were unable to break the Japanese blockade. Russian troops would need to be sent east, via the Trans-Siberian Railway, to relieve their compatriots. But due to the limitations of the railway, it took them weeks to get to Manchuria. By the time the soldiers did arrive, they were met by entrenched Japanese forces.
Finally, Russia decided to send its Baltic Fleet to break the siege. From October 1904 until May 1905, 38 Russian ships sailed through the Baltic Sea to the Atlantic Ocean, around the Cape of Good Hope, across the Indian Ocean, and through the South China Sea. Then on May 27, they met 125 ships of the Japanese Imperial Navy.
Although outmatched in terms of battleships, the Japanese fleet just laid waste to the Russians. They sunk 20 ships, including six battleships, producing over 11,000 Russian casualties (compared to just 700 Japanese). It was a devastating blow to the Russian Empire, which was now also in the throes of its 1905 Revolution back home.
With this victory at the Battle of Tsushima, Japan had won the Russo-Japanese War.
Make no mistake, news of Japan’s triumph sent shockwaves across the world. Nobody would have predicted an East Asian country claiming such a decisive win. U.S. President Theodore Roosevelt – who mediated the peace treaty to follow – called it “the greatest phenomenon the world has ever seen.” One British journalist noted “The era of inequality between the races is over, henceforth white and yellow man must meet on equal footing.”
And across Asia – even in countries adversarial to Japan’s sudden rise – there was great admiration for what they had accomplished. Mahatma Gandhi wrote “Our reading of the account of the Japanese War will have been fruitful only if we emulate to some extent at least the example of Japan.” Years later, Mao Zedong remembered a song taught to him by a Japanese teacher and said he “knew and felt the beauty of Japan, and felt something of her pride and might in this song of her victory over Russia.”
The Russo-Japanese War had profound consequences for its belligerents.
In its defeat, the Russian Empire faced turmoil on the home front, as revolutionaries used the moment to win major concessions from Nicholas II, including a constitution and the creation of a national representative legislative body, the Duma. And although many of the reforms would be rolled back in the years to come, this revolution served as a precursor to a more successful revolution in 1917.
And for Japan, the victory only strengthened imperial ambitions. Five years later, they would annex Korea, beginning a three-decade period of brutal exploitation. And the empire expanded its reach with colonies in China and the South Pacific during the lead-up to the Second World War.
But Japan was by no means alone in this. The Empire of the Rising Sun was one of many in this new Age of Empires. And that’s what we’ll be exploring next time on the Industrial Revolutions.
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