[ Speech delivered at Shibusawa Eiichi Research Center
Central China Normal University, Wuhan on December 1, 2007 ]
From the nineteenth century until the present, the life and work of Shibusawa Eiichi left its mark in many ways. Here I would like to consider the scope and significance of his activities. Born in 1840, the year the First Opium War began in China, Eiichi was twenty-eight when the Meiji government replaced the Tokugawa regime in Japan in 1868, and he died at ninety-one in 1931, the year of the Mukden Incident (Manchurian Incident) that started the war between Japan and China. East Asia has been the scene of unceasing upheaval and change throughout the decades even since his death. One of the greatest changes, especially marked in recent years, has been the success, far greater than anyone expected, of Chinese economic development initiated under the leadership of Deng Xiaoping.
The rise of China, reflecting its vast territory and huge population, has utterly transformed the state of world affairs. The emergence of the socialist market economy in China, for example, completely altered the fundamental structure of post-World War II international relations, which had until then been shaped by the arms balance between the United States and the Soviet Union. Within China, too, radical changes to socioeconomic paradigms unleashed all at once energies toward growth and development that had long lain dormant among the people. As we watched, the concepts of creative destruction and new combination of production factors, theorized in the 1930s by famed Austrian economist Joseph Schumpeter as conditions for corporate growth, were demonstrated before our eyes on the grand stage of late-1970s China. Deng Xiaoping's outstanding leadership in launching and then personally steering his country through this great transformation would earn him an uncontested place in world history.
In 1980 and 1981, I visited China as a member of the Trilateral Commission, where I had the opportunity to witness Deng Xiaoping's dedication to introducing new concepts aimed at transforming China's social paradigm. Established in 1973 as a forum for intellectual exchange by David Rockefeller, Zbigniew Brzezinski of the US, and other influential individuals from the so-called industrialized democracies of North America, Europe, and Japan. The commission held annual meetings whose findings on world affairs and current issues attracted widespread attention as well as affected the national policies of many countries.
China's invitation for the Trilateral Commission to come to Beijing in 1981 was an unusual development, given that only a few years before it would have been unthinkable for Chinese leaders to welcome a group that represented, in effect, the core intelligentsia of the Western democratic camp. Responding to China's invitation, the commission dispatched an advance delegation of several Japanese to Beijing in 1980. The group, which included myself as well as Miyazawa Kiichi, a founding member of the commission and later prime minister of Japan, met with Deng Xiaoping in a candid and cordial session at the Great Hall of the People. Subsequently in 1981, numerous representatives of the North American, European, and Japanese groups of the Trilateral Commission arrived in China to confer with government and party officials for two days on a broad array of issues. Deng energetically participated in the succession of receptions, dinner parties, discussion sessions, and other events, revealing himself courageously determined to transcend old preconceptions and aggressively absorb anything that might help his country reform and develop.
As if reflecting Xiaoping ‘s commitment, signs of change in China were already evident back then to those of us from outside. In just the one year between our first and second visits, manners of dress shifted from Mao suits to more varied and colorful styles, and people's expressions and demeanor when interacting with foreigners, too, became friendlier and more open. These impressions appeared to be evidence that the progress of Deng Xiaping's “creative destruction” was proceeding according to his hopes. Only a few years later, the vigorous growth of township and village enterprises and the development of special economic zones marked the robust initiation of “new combinations of production factors” across China, propelling her toward rapid and far-reaching economic growth.
Deng Xiaoping's efforts are documented in detail in One Step Ahead in China: Guandong Under Reform (Harvard University Press, 1989) by Professor Ezra F. Vogel, whom we hope to invite to speak in this lecture series next year. Reaching into all aspects of Chinese life from city to village, agriculture to manufacturing, and society to politics, these comprehensive reformsﾑfirst implemented experimentally in Guandong province, and then, following much trial and error, throughout the country under the banner of the Four Modernizations were without exaggeration the last and grandest social experiment of the twentieth century.
Looking back more than 140 years, it becomes clear that Japan during the Meiji era underwent changes qualitatively similar to those experienced by China today and achieved the same kind of rapid and extensive economic growth. The collapse of the Edo shogunate and the feudal system it had maintained for nearly three centuries drastically changed the country's fundamental political and social paradigms, releasing long-contained energies in the direction of growth and development. As a result, Japan, like China later on, exemplified Schumpeter's concepts of “creative destruction” and “new combination of production factors.”
The rapid development of Meiji Japan that began quite suddenly in the context of late-nineteenth-century world affairs had much more profound external reverberations than even Japanese themselves were aware. The achievement of dramatic growth by a non-Western state through adoption of Western methods and approaches began to change the apparatus through which the West had dominated the world based on its monopoly of modern science and technology. Entering international affairs in East Asia in an era of imperialist partitioning and rule, Japan found itself, for better or worse, a key player on a world stage crisscrossed with the competing interests of the Western powers.
While Japan was the only non-Western country to independently adopt a modern state system and engage in global power struggles based on that foundation, this was not as propitious as it may have seemed at the time. Indeed, it proved the source of many later difficulties and tragedies, as history would go on to show. Yet considering how other regions such as Africa, South Asia, and the Middle East endured protracted stagnation under de facto Western control until World War II ended in the middle of the twentieth century, there may have been some benefit in the fact that Japan was able to participate assertively in changes in world history and take steps to determine its own fate.
Employed from shortly after the Meiji Restoration in the planning of public policy for the new government of Japan and after 1873 as a leader of the new mode of corporate enterprise, Eiichi was an instrumental force in many of the historic reforms of the Meiji era, active sometimes as instigator, sometimes as sponsor, and at other times as advocate and promoter. The following outlines his career, considering how, against a backdrop of growing national might, the presence and activities of one private individual came to affect the larger course of history.
Eiichi was twenty-nine when, in the fall of 1869, he was appointed by the new Meiji government to serve in the Ministry of Popular Affairs as chief of the Tax Office and the newly established Reform Office. This latter office was in effect a command post for economic reform, charged with planning and executing a coordinated government-led drive to spur creative destruction and new combination of production factors (again to borrow the terminology of Schumpeter) and draw up a blueprint and road map for turning Japan into a modern nation-state. Although Eiichi had greatly benefited from having spent a year in France, he was essentially a young upstart from a rural area of a former domain that had no previous connections to the new regime. His appointment to this crucial position was an indication of the Meiji leaders strong commitment to achieving reform.
This sense of urgency stemmed partly from a strong sense of crisis inspired by the outcome of the Opium War in China three decades earlier. The possibility that Japan might be similarly invaded by the Western powers awakened a theretofore little-recognized sense of national consciousness among Japanese, paving the way for the transformation of the country into a modern nation-state. In particular, the younger members of the samurai class who had spearheaded the transfer of power from the shogunate all shared an ardent desire for reform, and that zeal was reflected in the future-oriented policies of the new Meiji government. Like Deng Xiaoping, who once reportedly claimed that “It doesn't matter if a cat is black or white, as long as it catches mice,” the leaders of the Meiji government 150 years ago were eager to embrace anything and everything that would promote reform.
The Shibusawa Eiichi Memorial Foundation is currently developing a digital database of the 68-volume Shibusawa Eiichi denki shiryō (Sibusawa Eiichi Biographical Materials) of which the greater part of the table of contents was completed this fiscal year. According to this resource, Eiichi's projects as head of the Reform Office extended over some thirty-five topics encompassing all the concerns necessary to establishing a modern nation-state, among them the standardization of weights and measures, the surveying of Japan's national territory, the creation of a postal system, railroad construction, the protection and subsidization of the sericulture industry, and the setting of tariffs. Following the abolition of the feudal domains, the office also worked to phase out the old domain currencies (hansatsu), proposing a program to exchange them for the new national currency at market rates and arranging for the required 100 million yen in notes to be printed in Germany. Even more challenging, meanwhile, was the question of how to secure the livelihood of the former samurai class, suddenly to be deprived of income they had received by hereditary rights guaranteed to them under the feudal system. In many ways paralleling problems in recent Chinese reforms involving the loss of favorable work benefits (known as iron rice bowl reforms) traditionally enjoyed by the employees of state-run enterprises, the issue was a crucial one that could, if mishandled, have brought down the nascent Meiji government.
Driven by a strong sense of crisis, Eiichi reportedly worked for days with hardly any sleep to draft a several-thousand-page outline of emergency measures. Although he was not yet thirty years of age, his remarkable energy and ability were widely recognized within the government, and he won the close friendship and trust of top leaders including Itō Hirobumi, Inoue Kaoru, and Ōkuma Shigenobu.
While assured of a brilliant career as a top-ranking bureaucrat, Eiichi chose to return to the private sector, resigning his post in 1873 to become Director of the just-established Dai-ichi Kokuritsu Ginkō (First National Bank), Japan's first private Western-style financial institution. He remained in the private sector for the next sixty years, never again assuming an official position or involving himself in politics.
Given the extraordinary power and privilege accorded to public officials at the time, to forsake a position in the bureaucracy for a private career must have seemed to many tantamount to renouncing the world for the priesthood. Yet Eiichi chose this path, I believe, out of his strong conviction that only by promoting industry and drawing on the collective power of private enterprise and by fostering a financial sector capable of supporting such growth would new combinations of production factors truly be able to take place. He had, in other words, anticipated as many as fifty years earlier Schumpeter's assertion that the most important agent of economic development is the entrepreneur, the creator of new value, the growth of whose enterprises are enabled by financial institutions and the credit they grant.
Behind Eiichi's decision to devote himself to enterprise rather than to civil service was his unswerving resolve that Japan should break out of its long-entrenched tradition of reverence for officialdom and the government while looking down on the people and the private. Having lived under the old institutions of shogunal rule for his first twenty-nine years, Eiichi had firsthand experience in a society that privileged the samurai class, and with the way it had stifled personal freedom and hopes for self-actualization. He was convinced such a society bred only frustration, despair, and corruption.
In fact, the young Eiichi had been so stirred by discontent over the status quo that in 1863 he even, then twenty-three, joined like-minded young men in a plot to overthrow the Tokugawa shogunate by force. This passionate ambition to remake society remained with Eiichi long into his later years, and throughout his life he persisted in fighting for any reform he believed necessary no matter how long or arduous the road might be. This passion, in fact, was the source of the charisma that distinguished him from other leaders of his generation.
Fortunately or not, the uprising planned by Eiichi and his friends was aborted. Still, in danger of arrest as a rebel, Eiichi left his family and fled to Kyoto. In those days Kyoto was a hotbed of revolution, and Eiichi established contact with many young members of the samurai class seeking to topple the Tokugawa regime. Then, unexpectedly, he was given a post in the administration of the Hitotsubashi family (a branch house of the ruling Tokugawa clan), where he distinguished himself for his innovations in strengthening the household's finances. This success, in turn, earned him a place on the Japanese delegation to the 1867 World Exposition in France.
This was great good fortune, for opportunities to travel abroad were exceedingly rare for Japanese at that time. In contrast to many of his fellow delegates who found it difficult to open up to Western culture, Eiichi did his best to observe and understand how societies and economies were structured in the advanced countries of Europe. He discovered that discrimination on the basis of class had been to a large extent overcome and that the status of public and private, quite different from the case in Japan, was more or less equal. He was also impressed by the efficiency of the joint-stock system whereby national and local governments gathered private capital to lay gas, water, and other infrastructure while providing returns to investors from utility charges. During his brief one-year sojourn Eiichi endeavored to see as much as he could of these and other institutions of the West, in addition receiving hands-on practice with the Western economic system through trading stocks and French and other bonds to help cover the costs of the delegation's stay in Paris.
From the time he left his hometown at age 23 until his transition to the private sector at age 33, Eiichi gained a remarkable wide range of experiences. He acquired firsthand knowledge of Western socio-economic institutions and also took part in extensive reforms of society launched by the Meiji government. Looking at his early career, one cannot help but think that destiny itself must have lent a hand in molding Eiichi into a new type of leader, one previously unseen in Japan or East Asia.
Launching and managing moder private enterprises was no easy task. One of Japan's first manufacturing ventures, Shōshi Kaisha (later known as Oji Paper), was founded in 1873 based on Eiichi's vision. The company aimed to meet demand for paper to print banknotes, government bonds, newspapers and periodicals, and the like. The project thus took a similar approach to an “import substitution growth strategy typically adopted by post-World War II developing countries at the initial stages of their economic development. Starting with capital of 15,000 yen, Oji Paper constructed a mill in the Ōji area of Tokyo in 1875, hiring foreign advisors at high salaries and importing all its equipment. Yet the company could not overcome the technological hurdles required to produce paper of marketable quality no matter how hard it tried, and Eiichi was soon placed in a difficult position. The first fiscal year resulted in a loss of 40,000 yen, and deficits continued annually.
In modern society, promoting growth in developing countries is considered an economic priority, and various mechanisms are in place through which developed countries actively assist them toward this goal. Institutions such as the World Bank or Asian Development Bank stand ready to make up shortages in capital, and in terms of technology and human resources, too, countries can take advantage of favorable aid packages from other national governments or the United Nations Development Programme. China likewise received large-scale financial and technological assistance from Japan and the West to develop its infrastructure since launching its gaige kaifang (Reform and Openness) policy. By contrast, such frameworks indeed, the very notion of international assistance itself did not yet exist in the mid-nineteenth century, when Japan and other developing countries seeking to modernize had no choice but to procure all the necessary technology, know-how, and human resources on their own in return for exorbitant sums.
In the case of Oji Paper, it was several more years before the company could make a profit. Ōkawa Heizaburō was sent for training in the United States, and after his return, he finally turned the company around, ten years after its founding. Even Eiichi, it is said, was hard put to explain himself to investors in the meantime. The shareholders showed faith in his integrity and vision, however, remaining patient through years without dividends and continuing to supply additional capital to compensate for losses. Eventually the company established the new technological base needed to begin production, and from then on it grew into one of Japan's leading corporations. This is perhaps a timely opportunity to mention that Oji Paper is now set to invest 200 billion yen in a new plant to be built in Nantong in China's Jiangsu province, and that the plans have already been approved by the Chinese government.
Operating from his base at the First National Bank, Eiichi participated in the founding and management of some 500 businesses throughout his life. From papermaking, spinning, mining, and manufacturing to railroads, maritime transport, public works, life insurance, hotels, theaters, and even vacation resorts, these enterprises covered every sector of Japan's nascent modern industry.
Eiichi generously supported anyone seeking to begin a new business. He advised entrepreneurs on such points as how to apply for bank loans and prepare proper financial statements. Once a company was ready to be established, he placed his name on the list of founders and supplied part of the capital out of his own funds. As soon as he had determined that a firm had safely taken off, however, he would sell off his shares, using the money to sponsor yet another business. He showed little desire in personally owning a company or gaining wealth from it; his goal was well beyond that he sought to aid and promote the progress of Japanese modernization itself.
Eiichi also funneled his energies into building networks for the business world through establishing such bodies of what are now the Japanese Banker's Association, the Tokyo Chamber of Commerce, and the Tokyo Stock Exchange. His intentions were twofold: One, he sought to create frameworks for entrepreneurs to improve their own business environment by collaborating to overcome shared problems and, when necessary, lobby the government. And two, through these activities he hoped entrepreneurs would develop a heightened awareness of international affairs and other socioeconomic factors and issues affecting Japan as well as acquire a sense of self-reliance and determination to forge their own destiny.
People in the Japanese business world of the time, however, from top management down to workers, were so steeped in the old feudalistic patterns of thinking of the Edo period and were initially resistant to his Eiichi's proposals. The records of Eiichi's activities from this period show how he attended one gathering or meeting after another, day after day, devoting countless hours and what seemed like inexhaustible energy explaining his ideas and patiently soliciting support.
Eiichi's perseverance was rewarded, and in due course people's attitudes changed. The number of people in management positions who had been educated at newly founded universities such as Waseda and Keio increased, and an elite composed of leaders of the business community known as the Zaikai gradually came into being. These developments ushered in the emergence of a new private-sector power center in Japan previously dominated by government officials.
One morning in 1904 Eiichi received an unexpected visit from General Kodama Gentarō, who later became the chief of general staff of the Japanese Manchurian Army in the Russo-Japanese War. Kodama informed Eiichi of the impending military clash with Russia and courteously sought his help in rallying the business community behind the governments decision to go to war. Kodama's words signified a recognition of the business community as an important stakeholder (to put it in today's terms) in the country, something that would have been unthinkable in previous times, when all national affairs were decided unilaterally from above. This recognition would continue down through the years to the post-World War II era and the present day, as clearly manifested in the influence exercised over government and public opinion by such networks as Nippon Keidanren, the Japanese Association of Corporate Executives, and the Japan Chamber of Commerce and Industry.
Eiichi's involvement with Chinese leaders and events in East Asia began with the February 1913 visit to Japan of Sun Yat-sen (Sun Wen), who was then fresh from the success of the Chinese Republican Revolution of 1911. Sun was forty-seven at the time, and photographs show his round, ruddy countenance glowing, despite long years of hardship, with the refinement and dignity of a person singled out by history. Many in Japan greatly anticipated his arrival, and he was welcomed in various quarters with a succession of meetings and receptions, many of which Eiichi also attended.
Memories of the Meiji Restoration half a century past were still vivid in the minds of leading members of Japanese society, and they, comparing the Chinese revolution to that earlier conflict and the Qing dynasty to the Tokugawa regime, were eager to support Sun in his endeavors. Sun, for his part, had been a frequent visitor to Japan over the years and he had numerous acquaintances and ardent backers from even before the revolution, as is well known.
On February 21, Sun, together with He Tianjiong and other associates, visited Eiichi at his office in the Kabutochō area of Tokyo. Sun detailed circumstances in China since the revolution and asked Eiichi for his help and support of the country's economy. Eiichi was deeply impressed by Sun's passion and commitment, and thought how wonderful it would be if such a man could work to modernize China. He took the opportunity to encourage Sun, while arguing that the times called for him to boldly put politics aside in favor of fostering private enterprise.
Eiichi sincerely explained, "Many people aspire to politics as a shortcut to power, but few are willing to commit to the steady effort of economic development. However, it is precisely in the realm of economic endeavors—where the temptation of profit is great—that individuals with high ideals are most needed. What your country needs most right now is the modernization and growth of its economy."
Sun, who is said to have been a most open-minded and receptive person, showed his appreciation for Eiichi's words and expressed his intention to devote his energies in support of business. Eiichi immediately set in motion plans for a joint Sino-Japanese enterprise, contacting other financial leaders and government officials and conferring with Sun nearly every day, and by March 3 the articles of incorporation had been drawn up for the Chugoku Kogyo Kabushiki Kaisha (which translates as China Development Corporation), with Sun and Eiichi as cofounders.
Sun concluded his stay in Tokyo on March 8 and started for home by rail from Shinbashi Station, where many gathered to give him a splendid farewell. He had only traveled as far as to Kobe, however, before he received a telegram from China informing him of the assassination of fellow revolutionary Song Jiaoren. Sun straightaway wrote Eiichi a long letter describing his dismay at the situation, and concluding that under the circumstances he could not leave politics to concentrate on business as Eiichi had counseled. He nevertheless expressed his confidence in how valuable the China Development Corporation would be to the Chinese people and urged Eiichi to continue with the project, assuring he would arrange matters with the Yuan Shikai regime. Eloquent and full of feeling, the letter greatly moved Eiichi, who carefully treasured it until it was unfortunately destroyed in the fires following the Great Kanto Earthquake of the autumn of 1923.
In 1916, Eiichi resigned from the Dai-ichi Bank, which he had headed for forty-three years along with numerous other corporate positions. He decided to dedicate himself in fields other than business in fields such as social welfare, education, and international relations. Eiichi's devotion to social work reached back to 1876, when he initiated a project to revive poverty-relief programs that had been established by the Tokugawa shogunate. The resulting institution, called the Tokyo Yōiku-in, became an important part of poverty relief services in Tokyo, and Eiichi served as its president for fifty years, making monthly rounds of its branches; he also worked with disabled children and the homeless. Ever active in his support of public-service endeavors both inside and outside Japan, he further participated on the boards of over 600 hospitals, schools, orphanages, nursing homes, and other such organizations.
In the field of education, Eiichi's attention initially concentrated on business education and education for women. He worked to expand the Shōho Kōshūjo (Commercial Training School) first as a higher school and then as an institution specializing in commerce, a goal that proved, however, excruciatingly difficult to accomplish. Many at the time stubbornly resisted granting university status to an institution specializing in business education. Their thinking, fixed by old notions of class, was that merchants had more need of on-the-job, practical training than formal education. Eiichi continued his efforts to persuade people for forty years, and in 1920 the Tokyo Shōka Daigaku (Tokyo University of Commerce), today known as Hitotsubashi University, at last became a reality. In womenﾕs education, Eiichi took part in the founding of Tokyo Jogakkan (currently Tokyo Jogakkan Schools for Women) in 1889 and Nihon Joshi Daigaku (Japan Women's University) some years later. He worked not only as sponsor but also as administrator, becoming president of Tokyo Jogakkan from 1924 and of Japan Women's University from 1931.
From around the start of the twentieth century, Eiichi began to grow increasingly concerned about Japan's relations with the outside world, particularly China and the United States. Despite advancing age, Eiichi visited China at the invitation of Yuan Shikai's government 1914. Between 1902 and 1923, he took travelled to the US four times meeting with four presidents (Theodore Roosevelt, William Taft, Woodrow Wilson, and Warren Harding), and interacted with many people across the country in an effort to foster private diplomacy.
In 1920, Eiichi welcomed numerous American entrepreneurs, journalists, and politicians mostly from the East Coast of the United States to Tokyo to attend the international conference called the Nichi-Bei Yūshi Kyōgikai (Conference of Concerned Japanese and Americans). Relations between Japan and the United States were strained over difficulties surrounding Japanese immigrants on the West Coast, an issue with which Eiichi was also deeply involved. However, at the conference, Eiichi urged those attending not to be preoccupied with this limited problem but to discuss larger issues, such as how their countries could cooperate in assisting Chinese economic development or in establishing an international framework to promote prosperity among the nations of the western Pacific. In so arguing, he called for the same kind of private intellectual exchanges that, following World War II, would be spearheaded by the Trilateral Commission and other such groups, revealing his early recognition of the value and viability of such approaches.
In the summer of 1931, Eiichi, living quietly at home at the age of ninety-one, came out of retirement for one last project. Unseasonably long rains throughout China that year had caused the Yangtze, Yellow River, Pearl River, and other major waterways to overflow their banks one after another from July, causing unprecedented floods. An estimated 34 million people had been affected by the disaster; 17 percent of the country's arable land had been lost, with total damages said to reach up to 200 billion yuan. In Japan, the Chamber of Commerce lost no time in leading the establishment of a Chūka Minkoku Suisai Dōjōkai (China Flood Sympathy Fund), and Eiichi was selected the chair. Motivated in part out of gratitude for the 2.6 million yen's worth of donations sent from China following the 1923 Great Kanto Earthquake, numerous other groups including the Japanese Red Cross and the Industry Club of Japan joined in the cause, and on September 6 Eiichi delivered a radio message earnestly petitioning the public for their goodwill.
The response was immediate, and the fund used the money to buy massive amounts of relief supplies that were loaded onto a ship named the Amagi Maru, which was scheduled to reach Shanghai on September 20. Two days before that date, however, Japanese military forces in Manchuria seized on an explosion outside Mukden as the pretext for occupying the city and from there proceeded to advance on the rest of Manchuria. This event, known in history as the September 18 Incident, marked Japan's first, momentous step forward on an irretrievable path to aggression and ultimately defeat. Naturally, attitudes toward Japan within the Kuomintang regime hardened, and along with serious protests, Chairman Song Ziwen of the Flood Relief Fund in China gave notice that the Japanese aid supplies soon to arrive would not be accepted.
On October 16, the Sympathy Fund issued a letter addressed to donors in Eiichi's name reporting on these sad developments and asking for their understanding over the return of their contributions. Meanwhile, Eiichi himself was on his deathbed. The sturdy constitution that had stood by him for ninety-one long years finally failed, and he died peacefully in the early morning of November 11, 1931. It was certainly unfortunate that Eiichi's last effort in the field of international exchange to which he had dedicated himself so earnestly should have been disappointed. But the wheels of history had already begun to turn faster and more powerfully than he or anyone could stop.
As the 20th century drew to a close, China embarked on a path of unprecedented on a path of economic growth, while Japan grappled with the aftermath of an overheated bubble economy perhaps more distended than ever in history. Around that time, over 70 years after his death, Eiichi's life and achievements began to attract renewed public attention in the Japanese media. I would thus like to conclude this presentation by reflecting for a moment on what modern-day Japan seeks to learn from Eiichi's example.
Defeat in World War II brought Japan into a renewed phase of “creative destruction” propelled under the Allied occupation. Although the policies of the Occupation were initially designed to be more punitive than creative, the Korean War and other consequences of intensifying U.S.-Soviet confrontation soon prompted a switch to the strategy of rebuilding Japan as part of the bulwark against communism. In this way, one after another of measures that had been impossible under previous domestic political dynamics, such as agrarian reform, dissolution of the zaibatsu, wholesale expulsion from public office of leaders over a certain age were enacted, this time functioning not to punish but to transform, and the way was opened for new combinations of production factors that led Japan from the 1960s onward into a second historic phase of rapid economic growth.
Buoyed by excessive pride in the business successes achieved during the 1970s and 1980s, Japanese were brought crashing down to earth by the collapse of the bubble economy in the 1990s. As they faced what appeared to be clear evidence of market excesses, many began to ask fundamental questions about for whom businesses existed, and to what purpose. Such conditions stimulated renewed interest in Eiichi and in the philosophy and worldview of this man who had successfully engineered Meiji economic development while also upholding such moral principles as harmony between ethics and business as expressed in his thesis on the Analects and the abacus.
The end of the bubble economy reignited debate over the relationship between government and private enterprise. While centralized government planning can drive rapid growth, it risks fostering government arrogance and citizen dependency, leading to systemic contradictions with strong criticisms towards the government.
Japanese also discovered that their government appeared no longer capable of responding to the complex and multifaceted needs that had arisen, in place of the single-minded drive toward economic growth, in the post-bubble period. As they studied their predicament, many began to focus on Eiichi's life and thinking, to look to his lifelong advocacy of private over public and to consider how he might have thought and acted in response to the crisis in Japan today, were he still alive.
The relationship between of the government and private enterprise is a concern confronted equally by all modern-day societies, whether socialist or free-market, and it would be unrealistic to expect even Eiichi to have had any readymade or foolproof prescriptions. In the end, the best solution, it seems, is for both sides to be sincerely willing to be humble and ethical in their actions. Perhaps in this light, the discipline and moral spirit embodied by Eiichi's life takes on new significance.
The recent economic rise of China and Southeast Asia has excited much discussion of the possibility of an East Asian Community. Given the way the countries of Europe are in the process of overcoming years of trial and error to join politically and economically into the European Union, it seems only natural that there should also be interest about developments in the case of East Asia. Yet whereas Europe shares certain internal values such as Christianity and respect for democracy at least to some extent, the reality in East Asia is that there is a much greater diversity of political systems ranging from communism to absolute monarchy and from military regimes to democracies, while in terms of religion, as well, the region is home to all the major faiths of the world side by side. If East Asia is to truly unite into a single community, it will thus need to begin by finding common spiritual and cultural values of some kind.
It may not be entirely fair to ask Eiichi, who passed away 76 years ago, about forward-looking international relations of this kind. However, Eiichi, with his profound knowledge of Eastern, particularly Chinese, classics and traditional culture, used these as a spiritual foundation for his efforts to modernize the nation. It is possible that he possessed a more earnest understanding and empathy toward the East Asian world compared to contemporary Japanese people. From this perspective, Shibusawa Eiichi Memorial Foundation aims to further study and analyze Eiichi's views on Asia and contribute, even in a small way, to realizing his aspirations.
Thank you for your attention.
Originally uploaded March 18, 2022. Original English translation by Center for Intercultural Communication 2011, revised by the Shibusawa Eiichi Memorial Foundation in June 2025.
Last updated on July 30, 2025
公益財団法人 渋沢栄一記念財団〒114-0024 東京都北区西ヶ原2-16-1Copyright Reserved by Shibusawa Eiichi Memorial Foundation
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