The Concentration of Economic Control

Abstract

Contemporary accounts of the present economic system of Japan leave the reader with two apparently inconsistent interpretations of her industrial and financial structure. On the one hand, we are informed that her major industries are operated on a large scale, in plants with up-to-date equipment by huge vertically integrated concerns, and that coordination has been achieved among merchants, manufacturers, financiers and officials to such an extent as to make possible the formulation of a common policy with regard to both production and foreign trade. Indeed, it is sometimes said that Japan has attained the modern stage of ‘monopoly-capitalism’ without passing through a period of economic liberalism with which Western countries were familiar in the nineteenth century. On the other hand, there are observers who state that outside the heavy industries the major part of Japan’s manufacturing activity is conducted in small workshops, and that most of her industries have successfully resisted governmental attempts to rationalise them. The implication is, of course, that modern capitalistic methods have penetrated only a small part of her economic life.

First published in the Economic Journal (June 1937) under the title of ‘The Concentration of Economic Control in Japan’.