Conclusions and Implications

In this chapter I have argued that despite the wrenching changes brought on by the introduction and adaptation of Western technology and institutions in Japan over the period 1880-1920, the structure of the labor market as measured by intersectoral differentials in labor productivity and in wages did not experience sudden and dramatic upheaval. Indeed, what is most striking about the labor market is how strong is the continuity running from the late Tokugawa period into the period around World War I. However, while the composition of employment in terms of gender and wage levels relative to agriculture does not exhibit dramatic change, the size of industrial enterprises employing workers does. As a result of an increase in the number of large firms employing workers, especially in mining and in textiles, there was a gradual breakdown in the health-enhancing institutions built into labor markets during the late Tokugawa period. As these institutions crumbled there was a growing potential for a widening of the gap in population quality between various socioeconomic groups within the population of Japan.

Map 1.
The Regions and Prefectures of Japan

Map 2.
Percentage of Males Examined for Military Service Who
Are Short (4 Shaku or Less) in Each Region of Japan, 1918

Moreover, the central government was not eager or able to step in and—through regulation and a program of centralized entitlements—redress the disparities in population quality that by the Meiji period were becoming increasingly apparent. The legacy of Tokugawa Japan played a decisive role in determining the course government intervention would take. Hence during the first half century of industrialization the central government concentrated its efforts on importing Western knowledge in the areas of public health and medicine and on setting standards for medical personnel, focusing its attention on supply side policies rather than on the demand side entitlement policies pioneered by Bismarckian Germany.

But the breakdown in the population quality-enhancing institutions of the market coupled with a legacy of balkanized entitlements that was becoming increasingly irrelevant for the new challenges of industrializing Japan was not to go unchallenged by the poorer and less economically favored groups in Japan. Moreover, after 1920 balanced economic growth disappeared. A surge in heavy industrial production occurred in the wake of World War I in part because embargoes of shipments to Japan among the belligerent countries acted as a nontariff barrier to imports of manufactured goods, thereby stimulating the rapid expansion of heavy industry. With the emergence of dualistic or unbalanced growth the potential for an even greater widening of socioeconomic and geographic differentials in population quality loomed increasingly large. The result was rebellion in the countryside and pressure for the creation of a new system of entitlement insurance to replace the defunct Tokugawa entitlement institutions. The story of emergent unbalanced growth and the attendant political struggle over entitlements is the subject of the next chapter.