Peasant economy in the edebate on Japanese capitalism f: Tenancy contract facing the eTurning point f

Masaki Nakabayashi

No 08-13, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: Japanese economy was losing its stability in the interwar period. Faced with the challenge, Moritaro Yamada gave an understanding that the stability of Japanese political economy before the First World War had been maintained by paternalistic institutions both of agricultural and industrial sectors, not based on thoroughly modern market mechanism. This then influential observation can still be supported by the classical dual economy model. However, as a scholar in the period of institutional change, Yamada failed to rightly predict the direction of change. While Yamada expected the change should lead to impersonal market mechanism, the real history showed people rather built a planned economy during the war and recovered stability. Yamada fs mistake was mainly in that he underestimated the significance of risk sharing in the paternalist organizations. At the gturning point h where labor changed into scarce resource from surplus resource, two vectors with opposite directions could exist. Riskier opportunities for higher wages would encourage people to accept market mechanism based on impersonal exchange. Dissolution of risk sharing in paternalistic organizations would make people call for the sate taking on the role as a large welfare state. In Japan, especially in the middle of the Great Depression, the latter factor became dominant.

Keywords: Peasant economy; tenancy contract; risk sharing; institutional change. (search for similar items in EconPapers)
JEL-codes: N35 N55 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2008-03
New Economics Papers: this item is included in nep-his
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