Abstract

"Debt, Merchants, and the State in Early Modern Japan"

John D'Amico, Yale University (john.c.damico@yale.edu)

A rich body of scholarship has understood the relationship between state, society, and economy in 20th century East Asia under the rubric of the “developmental state.” Japan, the first non-Western country to industrialize, is in many respects seen as a pioneer for this model of state-society relations.

But in its early modern period (1600-1868), Japan was ruled by a hereditary warrior class famous for its indifference, if not outright hostility, to commerce. Scholars have pushed back against this stereotyped image, demonstrating the importance of collaboration between merchants and samurai in the making of mercantilist policies. Still, the question remains: how could merchants gain access to the halls of power in a society governed by a warrior elite?
Merchants did this by leveraging the power of debt. The samurai depended on merchant credit to finance mercantilist schemes. Yet how merchants managed to enforce debts owed by the samurai state in a society that did not offer ready legal remedies for collecting unpaid loans, especially from one’s social betters, remains an area of active debate.

This paper argues that merchants could enforce repayment (1) by forming a coalition of lenders capable of punishing recalcitrant lordly debtors and (2) by lending in the name of prominent samurai houses or temples, turning the logic of the early modern status hierarchy to their advantage. In exploring the limited but real influence of merchant lenders over their samurai overlords, the paper offers a concrete look at the power of private capital on the eve of Japan’s modernization. It demonstrates how chronic budget deficits drove the increasing financialization of the early modern state, putting key levers of economic policy into the hands of merchants. Moreover, it shows how the Tokugawa status system – long seen as a constraint on mercantile power – in fact facilitated this transformation.