From 1859 and 1869, Japan had been subjected to a number of unequal treaties forcing a liberal trade policy on it, in which tariffs had to be kept below 5%.Lord Keynes goes on to describe how the effects of the Unequal Treaties were undone by the interventionist policymaking of the Meiji Emperor and his government, what would come to foreshadow the formal theoretical and practical development of ISI. Namely, the Meiji government (though bound by artificially-low tariffs imposed from without by the Unequal Treaties): a.) invested heavily in public infrastructure (post, rail, telegraph); b.) created modern industries, mines and weapon and textile factories; c.) sheltered glass and cement industries until they became viable and could be sold off; d.) subsidised key industries and raised tariffs once the treaties expired; and e.) wrested control over monetary policy away from the daimyos, and created a national bank and three public banks to direct credit to fledgling industries. Only after these things were accomplished did Japan’s economy really begin to take off, to the point where it could compete with the West.
It is quite bizarre to see libertarian ideologues normally so insistent on opposing force defending trade liberalisation imposed by European and American coercion. In fact, the Japanese opposition to the “Unequal Treaties” (as they were called) was a major reason for the Meiji revolution in 1868 that overthrew the Shogun.
- Anglo-Japanese Friendship Treaty, signed October 14, 1854 in Nagasaki.
- Ansei Treaties or the Ansei Five-Power Treaties, signed in 1858.
- Treaty of Amity and Commerce or the Harris Treaty between the US and Japan, signed on July 29, 1858.
- Treaty of Amity and Commerce between France and Japan followed on October 9, 1858.
- The Anglo-Japanese Treaty of Amity and Commerce, signed on August 26, 1858.
Bright governance (meiji, 明治) indeed.
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