Feudalistic Capitalism
It was the Tokugawa's first shogun, Ieyase, who created a centralized feudal system that seems almost the antithesis of the decentralized feudalism that once existed in Europe.
As the national economy developed during the Tokugawa period, villagers around the daimyffs castle in each fief, or in the more developed parts of rural Japan, shifted their energies from subsistence farming to the processing of foodstuffs, silk, and other agricultural products. In the late eighteenth century, there was a remarkable outburst of entrepreneurial activity in rural Japan. During this period, the Tokugawa promoted the teaching of Confucian philosophy and historical studies, so that virtually the entire samurai class became literate. For that matter, most merchants and the richer peasants and craftsmen also became literate and developed themselves in mathematics. The abacus was widely used in merchant activities, and the younger generation was trained intensively on this calculating instrument in temple schools. This practice may well have contributed to the development of the strong mathematical ability of the Japanese.
The rapid growth of intellectual activities in the Tokugawa period was greatly enhanced by the intellectual cross-fertilization that resulted from the hostage system, which required the daimyo to alternate residences between their fiefs and their families in Edo. With the daimyo came a large flow of teachers and students with scholarly materials between Edo and the various domains. Just as Japan had developed into a single economic unit, so the country became a unified intellectual nation in a way unprecedented in Asia.
The Tokugawa feudal system remained strong through the first half of the nineteenth century. However, its strongest wall of defense—isolation—was threatened by the European maritime powers, which had subjugated India, taken over much of South east Asia, and penetrated the important coastal ports of China. In addition, the Russians had extended their hold over all of Siberia and were ambitiously pushing southward into the islands north of Japan. American ships frequented Japanese coastal waters in search of whales. All in all, in 1853 and the following years, these various Western powers compelled Japan to open its doors.
Finally, in 1858, the Tokugawa authorities lost their stand on isolation and Japan was fully opened. The administration was shaken to its foundations, and the whole feudal structure, which controlled all the daimyo so effectively, began to disintegrate. Some of the greater daimyo, especially the Choshu clan, turned against the Bakufu and openly defied the Tokugawa authority. Thus the weakened Bakufu rapidly lost control over the "outer" lords. Then a coalition of Satsuma, Choshu, and other "outer" daimyo seized the order of the Imperial Court, which had held only a nominal sovereign position for some centuries. In the name of the Emperor, the coalition troops—the so-called Imperial Army—announced the restoration of direct Imperial rule on January 3, 1868. Eventually, the troops also seized Edo Castle, putting an end to more than two and a half centuries of Tokugawa feudalistic rule.
The new government was led by Imperial princes, court nobles, and feudal lords (former daimyo'), but the actual execution of policies fell largely to a group of able reformers from the Satsuma and Choshu clans.
With the old feudal domains replaced by new prefectures, Japan was remodeled and administered by officials appointed by the central government. The samurai were deprived of all their special privileges, and Japan embarked on a great social reformation. Education and personal achievements became important factors for gaining social status, and great efforts were made to modernize the economy. During this period, government bureaus and other functional organizations were established. Need less to say, a functional organization is a social unit designed to achieve certain objectives effectively. It is quite different from the village-type community and can integrate human efforts to achieve its goal.
Unfortunately or fortunately, Japan leaped into the modern era without experiencing capitalism, socialism, or industrial revolution. The explosive Meiji civilization whipped the Japanese to a gallop on the track of Westernization. Nevertheless, the Western influence could not eradicate the traditional base of feudalism in such a hurried transition period. On the contrary, the visiting culture was incorporated into the feudalistic framework of the Tokugawa era. Thus the traditional culture remained within the modernized Meiji systems. The coexistence of modernity and feudalism had begun.
What a contrast this is to the West, where feudalism was destroyed when capitalism was introduced! This is why a Japanese government bureau or business company today has a double character: it is both a modernized functional system and a feudalistic community. In other words, every Japanese organization contains the characteristics of what the Germans call Gesellschaft and Gemeinschaft.
Despite the flood of Western ideologies, there was little chance for Western individualism to bud and grow in the Meiji era. The reason was quite simple. Japan had to rise to a national consensus if it was to catch up with the West. When the nation opened its doors, the Japanese found themselves surrounded by Asian countries that had already fallen prey to Western colonial ism. The people knew they were vulnerable to the Western invasion and could easily be swallowed by it. Thus the whole nation bound together to protect itself. There was no room for selfish behavior or individualistic action. The slogan "Rich nation, strong army" was adopted as the basis for national consensus, and politics and economics were welded together. With a social structure composed of both modern and old-fashioned elements, Japan began to construct a national economy.
On April 27, 1891, seven Russian ships entered Port Nagasaki in Kyushu Island and passed through the inland sea to Port Kobe, where they anchored. It was a show of force against Japan. Two months later, the Chinese fleet came into the Bay of Tokyo (Tokyo was the new name for Edo) and stunned the long-isolated Japanese nation with the roar of its salute guns. At the time, Japan had only a small army and a few wooden battleships. However three years later, when the Sino-Japanese War broke out, Japan had a fleet of 55 steel ships (61,300 tons in total) and defeated the Chinese fleet in the Yellow Sea. The one-sided victory was recorded.
Ten years later, in 1904, the Japanese navy under the command of Admiral Heihachiro Togo, with 152 ships (265,000 tons in total), won a resounding victory over the Russian Baltic fleet in the Japan Sea. The world was astonished at the tremendous growth of Japan's economic and militaristic powers. Even the growth of the Japanese automobile industry, which produced the first car in 1936 and made successful inroads into the American and European markets in the late 1970s, is less spectacular by comparison. These achievements were the result of Japan's ability to establish a single national consensus and to assimilate capitalism into the feudalistic society. It should be emphasized again that the basic cultural trait of the Japanese is "competitiveness." Consensus is simply a tool for channeling competitiveness toward a single national goal.
Japan Incorporated
As stated above, Japan was an economic latecomer. In the early Meiji era it was underdeveloped and, more seriously, had almost no natural resources. The people were aware that social stability and progress depended on the development of a national economy. They also recognized that the combined efforts of government and business enterprises were necessary to realize the industrialization that Japan needed to respond quickly and successfully to the challenge of the superior Western powers.