Traps Embraced or Escaped: Elites in the Economic Development of Modern Japan and China

Countries commencing industrialization with relatively low levels of agricultural productivity, hence low wages, enjoy advantages that can also prove host to daunting challenges. The chief advantage is a relatively elastic supply of labor for manufacturing; the chief challenge is how to free up farm labor for factory employment through the raising of labor productivity in farming. Key to raising agricultural labor productivity is providing incentives to increase effort levels including hours worked -- access to markets being crucial -- and improving the quality of labor as measured by health indicators and educational attainment. The willingness of elites to promote improvements in infrastructure -- physical infrastructure in the form of roads and railroads and hydroelectric systems; human capital enhancing infrastructure augmenting the educational attainment and health of populations in rural areas; and financial infrastructure -- and to invest directly in factories is crucial to the process by which labor is transferred from farming to manufacturing activities. During the period 1850 to 1935 elites in China tended to resist the requisite changes while elites in Japan did not. This legacy played a crucial role in shaping the nature of post-1950 economic development in the two countries.

This book explores economic development in East Asia between 1870 and 1953 in terms of escaping or succumbing to four interrelated traps: demographic; political; economic; and cultural. Demographic traps include Malthusian traps and poor health and longevity (measured by anthropometric indicators and life expectancy). Political traps include both domestic traps corruption, internal conflict and external traps, namely geopolitical traps involving foreign powers. Economic traps include poor infrastructure (banks, harbors, roads, railroads, steam shipping, hydroelectric power) or raw materials, or glaring regional variation in per capita income all significant barriers to industrialization. Cultural traps include restrictions on permissible knowledge , and linguistic barriers to the culture of discourse in science and engineering which restrained the absorbing and diffusion of knowledge from foreign sources. Using Japan and China as examples, this book demonstrates how the four types of traps dynamically interact with one another, and how one of the two countries Japan was able to escape from the traps earlier than the other country, China. The book also explores the implications of the argument for post-1950 economic development in East Asia.