How Japan Succeeded in Its Economic Takeoff (and China Didn't)

This article explores the economic development strategies implemented by Japan and China in the 19th century, focusing on the reasons for Japan's success and the difficulties encountered by China. It examines theories about Europe's enrichment, including colonial exploitation and technological advancements, before diving into the specific plans adopted by each nation. The analysis highlights the importance of cultural and institutional reforms, drawing on the Japanese example and drawing parallels with the influence of Protestantism on economic development in Europe.

The Chinese Challenge: How to Catch Up with the West? ▶ 0:00

In the 19th century, Imperial China, once the center of the world, faced unprecedented humiliation at the hands of Western powers. After the Opium Wars and the Sack of the Summer Palace, the Qing Empire was forced to recognize its military and technological weakness. The emperor then entrusted his mandarins with a crucial mission: to understand the foundations of Western power and develop a plan to enable China to catch up and regain its dominant position. This challenge was not simply military; it was about understanding the deep mechanisms that had allowed Europe to enrich itself and develop at breakneck speed. The task was immense, as it involved questioning centuries of traditions and certainties. Chinese leaders had to analyze the strengths and weaknesses of their own system, identify the key elements of Western success, and devise a strategy adapted to the Chinese context. The central question was how to transform a thousand-year-old empire into a modern power capable of competing with Western nations.

Map of Europe with sailing ships, symbolizing Western maritime power

Escaping the Malthusian Trap: The Economic Imperative ▶ 2:29

For millennia, human societies were trapped in a cycle of economic stagnation known as the Malthusian trap. Any increase in productivity led to population growth that canceled out gains in per capita wealth. Thomas Malthus, in the 18th century, believed that humanity could never escape this trap. To escape it, economic growth would have to be so strong that it outstripped population growth over several generations, a prospect that seemed unimaginable at the time.

Yet, in the 19th century, some European countries managed to break this cycle. They experienced unprecedented economic growth, significantly increasing the living standards of their populations while experiencing strong population growth. This transformation enabled these nations to acquire considerable economic and military power, allowing them to impose their will on the rest of the world. For China, the goal was therefore not only to modernize its army, but to find a way to escape the Malthusian trap and enter an era of sustained economic growth. This was an immense challenge, which made the military question secondary. China had to identify the factors that had allowed Europe to enrich itself and adapt them to its own context.

Colonial Exploitation: A Sufficient Explanation? ▶ 5:00

An explanation often put forward for Europe's economic development is the exploitation of colonies and the use of slave labor. The idea is that Europeans accumulated resources through the colonization of the New World and the triangular trade, resources that they then invested in armies and industries, creating a virtuous circle of enrichment. This thesis seems appealing because it links two striking aspects of European history: the industrial revolution and slavery. However, a deeper analysis reveals that the reality is more complex. England, for example, was not the largest colonial empire at the start of the industrial revolution. Spain and Portugal possessed larger and richer empires, but their economic growth was much slower.

Spain, despite its vast possessions in America and its silver mines, experienced modest GDP per capita growth between 1500 and 1700, and even declined economically at the time of the industrial revolution. Portugal, which played a central role in the slave trade, became one of the poorest countries in Western Europe. These examples suggest that there is no direct correlation between the size of a colonial empire and economic prosperity. Moreover, maintaining a colonial empire requires considerable military expenditure, which can weigh on a country's economy. While colonial exploitation may have enriched certain individuals and companies, it did not necessarily benefit the entire population. For China, adopting an imperialist policy would therefore be risky and potentially counterproductive. The potential economic benefits would be limited, while the military and administrative costs would be high. China must therefore explore other avenues to stimulate its economic growth.

The Chinese Self-Strengthening Movement: A Technological Approach ▶ 14:07

Faced with the Western threat, Chinese leaders implemented a self-strengthening plan aimed at modernizing the country. This plan was based on the idea that Western success was due to international trade and technological advances. The top priority was therefore to modernize the army by adopting Western technologies. European engineers were recruited to build armaments factories, Western weapons were purchased for study, and students were sent to Europe to train in science and engineering. At the same time, the government encouraged the adoption of Western technologies in civil society, such as railways and industrial factories. Modern coal mines were opened and Western steam engines were imported. This plan was financed by a tax reform and by exports of silk and tea.

An important aspect of this plan was the desire to preserve Chinese culture. Confucian philosophy and traditional political institutions were maintained. The motto was "Chinese learning for the essence, Western learning for the application". In other words, China retained its cultural identity while adopting Western technologies. This plan enabled China to make significant progress. By 1894, the country had a modern army, equipped with Western weapons and warships built in Germany and Great Britain. Modern industrial centers were created. However, when China went to war with Japan in 1894, it suffered a humiliating defeat. Despite its numerical superiority and modern equipment, the Chinese army was defeated by a smaller but better organized and better commanded Japanese army. This defeat revealed the limitations of the Chinese self-strengthening plan.

Graph showing the share of US energy consumption since 1776, illustrating the evolution of energy sources

Meiji Era Japan: A Cultural and Institutional Revolution ▶ 16:41

Unlike China, Japan experienced remarkable success in its modernization. As early as 1905, Japan managed to defeat the Russian Empire in a conventional war, an achievement that stunned the entire world. More importantly, Japan had already emerged from the Malthusian trap and was experiencing economic growth comparable to that of the major Western nations. This success was due to a strengthening plan initiated in 1868, which transformed Japan into an international power in a matter of decades. What distinguishes Japan from China is its ability to understand the true mechanisms of Western success. The Japanese intellectual Yukichi Fukuzawa played a key role in this understanding. During his travels to the United States and Europe, Fukuzawa was struck by the importance of social equality and individual responsibility. He found that Western societies were more dynamic and prosperous because they allowed everyone to focus on improving their living conditions without being hampered by rigid social hierarchies. Fukuzawa was also impressed by the influence of religion on Western society. He understood that the ideas and values conveyed by religion could have a profound impact on the economic behavior of individuals. Based on these observations, Fukuzawa and other Japanese reformers implemented a series of radical reforms aimed at transforming Japan's culture and institutions.

The first step was the destruction of social classes. The status of the samurai was abolished, and a new social order based on competence and economic utility was created. The second step was the importation of Western ideas, such as individual responsibility, equality of dignity, scientific reasoning, and respect for the law. The third step was the transformation of Japanese institutions and laws to align them with Western standards. A constitution inspired by Prussia was adopted, the law was reformed on a German basis, the administration was inspired by France, and the financial system was modeled on Belgian and Dutch models. These reforms made it possible to create a genuine capital and credit market, and fostered the emergence of modern large-scale enterprises. Finally, Japan modernized its army by studying Western military doctrines in depth.

Culture and Economic Development: Lessons from Japan and Protestantism ▶ 26:57

Japan's success shows that economic development depends not only on the adoption of Western technologies, but also on a profound cultural and institutional transformation. Japan understood that to compete with the West, it had to adopt its ideas and values, such as equality, individual responsibility, and respect for the law. This transformation made it possible to unleash the creative energies of the population and create an environment conducive to innovation and entrepreneurship. The example of Japan is not isolated. There is a strong correlation between Protestantism and economic development. At the beginning of the 20th century, the richest countries in the world were historical strongholds of Protestantism, such as the United States, Germany, England, Switzerland, and the Netherlands. On the contrary, countries that resisted the influence of Protestantism, such as Spain and Italy, experienced economic stagnation.

Map of Europe showing the distribution of the Protestant Reformation between 1545 and 1620

Protestantism conveyed ideas about work, saving, investment, and entrepreneurship that were particularly compatible with the development of capitalism. It also promoted values such as equality and individual responsibility, which fostered innovation and economic growth. The real secret of the Europeans was therefore to create, without really doing it on purpose, a culture that allows and legitimizes the full exercise of capitalism. France, for example, experienced significant economic development after adopting ideas and institutions more compatible with capitalism.

Conclusion: The Importance of Ideas and Culture ▶ 30:01

The history of Japan and China in the 19th century teaches us that economic development is not limited to the adoption of technologies or the exploitation of natural resources. It also depends, and perhaps above all, on the ideas, values, and institutions that shape a society. Japan succeeded in its modernization because it understood the importance of transforming its culture and institutions to make them more compatible with capitalism. China, on the other hand, failed because it sought to modernize its country while preserving its traditional culture and institutions. The example of Protestantism shows that ideas and values can have a profound impact on economic development. Societies that adopt ideas favorable to innovation, entrepreneurship, and economic growth are more likely to prosper. Ultimately, economic development is a complex process that depends on many factors, but ideas and culture play an essential role.

---\n\nThis article is based on the YouTube video "How Japan Succeeded in Its Economic Takeoff (and China Didn't)" from the Thinkerview channel.