An Economy in Need of Reform

Portrait of Yoshimune

From the onset of the Tokugawa era, the Japanese economy was defined by a system of honbyakusho.  This system relied on farmer peasants who worked on the land of daimyo to “perpetuate their economic existence” [1]. It allowed feudal landowners to efficiently utilize their land and collect taxes from the peasants who worked there.

As the 17^th century progressed, a new form of commerce shifted the economic landscape of Japan. A form of economy emerged, called the “ryōshu keizai taisei”. It allowed each ruler to maximize control over his domain by selecting a handful of “whole-salers” and permitted them to oversee the commerce within their domain[2]. As inter-domain trade gained momentum, the monopolies of the daimyo began to generate unbelievable surpluses and allowed the honbyakusho population to expand[3]. This took place from 1688 to 1703, and was better known as the Genroku period. It is often regarded as one of the peak of economic efficiency in the Edo period[4]. However, after this period came to an end, overexpansion and a purely cash-based economy left the economy vulnerable.

With the arrival of Tokugawa Yoshimune in 1716, taxes had increased to offset the cost of existing debt connected with expansion operations within the domains. The tax ratio had grown to 50 percent of income for peasants[5]. Socioeconomic inequality grew as an inevitable consequence. Furthermore, increases in the number of peasants and merchants coupled with Tokugawa Tsunayoshi’s reforms to “tame the samurai” led to a decrease in samurai authority[6]. To add insult to injury, Yoshimune was faced with the great “Kyoho famine” of 1732, which was a consequence of hordes of locusts feeding on Japanese crops. Therefore, “beginning in the early 1700’s, chronic debt and a belief that the regime faced a moral as well as a fiscal crisis sparked the first of several official drives to reform” [7].