Chapter 94: The Economy of 17th Century Japan
A core tenet of Oda Nobunaga’s vision for his united Japan was that projected mercantile power rivaling that of European powers like the Netherlands, Portugal, and Spain. Trade expansionist policy and incentivization by successive Oda chancellors facilitated Japan’s trajectory towards such a status, transforming the realm’s economy throughout the 17th century and making it far more globalized and expansive than it was in previous centuries. As a result, Japan was the 8th largest economy in the world by 1665 [1]. Associated economic changes facilitated the growth of regional industries, from cash crops to handicrafts, and made each province interconnected with one another. They would even serve as the spark of Japanese proto-industrialization, particularly in the latter half of the 17th century. All of this in turn provided fuel for newfound population growth. Despite being embroiled in overseas conflicts and 2 civil wars at home, Japan’s population stood at 20 million people by 1665. Notably, a lot of this growth took place in Japan’s booming urban centers, making the realm one of the most urbanized societies in the world.
Most representative of Japan’s new economy and societal shifts was the rise and stabilization of Sakai as one of Asia’s foremost trade centers. It brought together foreign merchants with goods and products from across the realm, coming through Japan’s overland routes or coastal trade routes connecting into the port. Sakai was also increasingly becoming a major financial center with all the money and goods flowing in and out and getting exchanged, with certain merchants beginning to use their wealth to give loans to other merchants and even certain daimyo in some clans. The most prominent of these new banking merchants was the Yodoya family (淀屋家) whose wealth came from Sakai’s rice market. The influence and wealth Sakai merchants wielded meant that despite the city’s oversight by Azuchi, they largely ran its commercial affairs of Sakai independently and through its official urban council established through the Kanei Reforms. Saidaniya Gonpei, the Yodoya family, Yasui Kuhei (安井九兵衛), and the Konoike family (鴻池家) counted themselves among Sakai’s biggest merchants and the former even demonstrated the fact that merchants were powerful enough to influence national politics.
Depiction of 17th century Sakai
The increasingly mercantile realm would also see the samurai class get involved, both through governance and direct enterprise. Initially after the unification of Japan, the various samurai clans stayed out of direct mercantile activities, continuing to focus on the agricultural productivity of the interior lands, the facilitation of economic activity through internal improvements, and the overall prosperity of the clan and the people they ruled over. However, as trade expansionism occurred rapidly out of the hands of the daimyo, the samurai class began to look on with interest. Daimyo controlling important ports would emulate Azuchi’s policies and invest in the expansion of their maritime outposts. Notable examples of such ports included Kagoshima in Satsuma province, Shimonoseki in Nagado province, and Sunpu in Suruga province.
The first clan to take the next step in terms of mercantile involvement, however, was the Miyoshi clan. Awa province had seen indigo production in the 16th century as the population grew and more people were able to engage in activities beyond subsistence agriculture. As the dye rose in value and desirability in the 17th century among not only domestic markets but even among interested Ming and European traders, Miyoshi Yasutaka saw an opportunity to capitalize upon his domain’s famous industry for the clan’s profit. To that end, he established the first ji-shoukai (侍商会), or samurai clan enterprise, in the realm with the Awa Shoukai (阿波商会) in 1633. This enterprise was tasked with negotiating agreements between the indigo farmers and the clan administration and essentially took over the external trade of the dye. The Awa Shoukai was not only run by clan retainers but talented individuals from the lower classes trained in the usage of the abacus, allowing it to quickly begin generating profit for the clan. These profits in turn would fund the subsidization of indigo production in Awa province, increasing its output dramatically and raising the prestige of not only the dye but also the clan itself. After its consolidation over the indigo trade, the Awa Shoukai would begin to also dabble into other products, including handicrafts and the sudachi (酢橘), a green citrus fruit found almost exclusively in the province. This mercantile branch of the Miyoshi clan would become an integral part of the clan and indispensable in its recovery after the death of Miyoshi Yasunori and many other Miyoshi samurai during the Manji War, enabling the clan’s transition from a military-centric powerhouse to one more centered around its cash crops and mercantile prowess. Furthermore, it made Awa province the wealthiest province in Shikoku.
Indigo production in Awa province today conducted in the traditional fashion
Other clans would establish their own ji-shoukai. Most were scaled-down versions of the Awa Shoukai, although the Mōri clan’s Kanmongumi (関門組) [2] notably focused on trade route maintenance due to its geographic location and its strong ties with the Joseon kingdom stronger even compared to Azuchi. However, central and eastern Japan’s clan lagged behind in the creation of their own ji-shoukai due to variety of factors, including the economic dominance of merchants in Sakai, Azuchi, and Gifu, the devastation of the Furuwatari and Manji Wars, and the relative underdevelopment of specialized industries compared to western Japan. Meanwhile, the far north saw the growing fur trade continue to predominate, limiting the size and viability of such entities due to the impossibility of regulating its “production” in the same way crops and crafts could be. Although the emergence of ji-shoukai in 17th century Japan aided economic and mercantile growth and even heralded the very beginnings of Japan’s proto-industrial phase, it also highlighted the east-west divide in the realm.
Despite Japan’s greater economic focus and dependence on maritime trade and mercantile activity, agriculture, specifically the production of rice, remained the backbone of the realm. A large majority of the population were rice farmers and despite the proliferation of ji-shoukai, samurai clans continued to rely on rice for the distribution of samurai stipends. Within the century, rice production would nearly double due to not only steady population growth and land reclamation in the aftermath of conflicts but also better technology to control the flow of irrigation into rice paddies. As a result, there was much surplus rice, driving the creation of large-scale rice markets throughout the realm. In addition to Sakai, such rice markets existed in smaller cities like Shimonoseki, Gifu, Kamakura, and Yonezawa. A certain subtype of merchant, the rice broker, would rise in importance at these rice markets, charging clans money to store rice in large warehouses and even transport them from castle towns to these central rice markets. In many cases, daimyo would even take out loans from these rice brokers.
17th century depiction of the Tsurugaoka Rice Exchange (鶴岡米会所) in Kamakura
Bireitō’s economy was also highly dependent on trade, with Iriebashi being the primary port on the island. Due to how the island became incorporated into the realm, local rule was more centralized under the provincial governors atop their Japanese, Chinese, and indigenous Bireitoan vassals. As a result, a ji-shoukai equivalent already existed in both Bireizen and Bireigo, initially focused on tropical fruit production. Shortly after the Iberian-Japanese War, however, sugarcane was introduced to the island, and it quickly became the island’s most prized commodity, its output eagerly accepted by the home islands and providing the realm with a native sugar industry. Rice production also boomed in the lowlands, especially in the predominantly Chinese villages governed by Japanese magistrates. However, a surplus market would not emerge like it did in the home islands due to the smaller rice farmer population, a greater emphasis on cash crop agriculture, and rice being a smaller part of the diet of indigenous Bireitoans.
In contrast, the province of Luson possessed a more feudal economy despite the centralized rule of governor Kanbe Tomoyoshi and his successors as Japan’s focus was on Luson as a military buffer with a loyal peasant population. Nevertheless, Luson like Bireitō exported sugar and exotic fruits like coconuts and mangos. Additionally, the port of Awari had extensive trade connections with parts of Southeast Asia and even the Indian subcontinent, being a particular hotspot for Malay and Siamese merchants. Meanwhile, Ezo and other Japanese possessions in the far north were heavily dependent on the fur trade, with only Ezo having any population of sedentary farmers growing crops like rice. One thing it had in common with Bireitō and Luson, however, were similar interactions between the Japanese and the indigenous peoples there who often traded their traditional clothing and crafts as exotic products.
The economy of 17th century Japan was representative of a newly mercantile realm simultaneously retaining many feudal trappings it dealt with as a result of Japan’s own evolving political structures away from the days of the Sengoku period. Inevitably, these contradictions would clash and even cause economic difficulties for Japan but for the time being Japan’s expanding relations and steady population growth led the way towards greater prosperity and diversification of industry.
[1]: The 7 countries with larger economies than Japan were the Ming, the Mughals, the Ottomans, France, Russia, Spain, and Poland-Lithuania.
[2]: Named after the Kanmon Straits (関門海峡) that surround the key port of Shimonoseki.