Shibusawa Eiichi (1840-1931), the "father of capitalism" in Japan

(Posted on June 14, 2023)

NHK, Hihon Hoso Kyokai or the Japan Broadcasting Corporation, aired a yearlong historical drama featuring Shibusawa Eiichi in 2021. Shibusawa was a farmer, Shogunate’s samurai, government official, business tycoon, educator and more. He became a viscount. In commemoration of his feat, a new 10,000-yen note with his image printed will be circulated next year, in 2024. Let’s take a closer look at Shibusawa’s life and achievements.

Shibusawa hailed from a wealthy farming family in now Saitama prefecture.

As he grew, he helped his father particularly in making and marketing indigo materials, which was profitable. As many other youngsters practiced at that time, Shibusawa attended a local class for youngsters where he learned basic Confucius philosophy and the history of Japan.; also, he practiced swordsmanship with his friends. By sheer coincidence, Shibusawa became a Shogunate’s samurai.

 

Japan participated in the Paris Exposition of 1867 for the first time. The shogunate dispatched Tokugawa Akitake, the younger brother of the shogun at that time, as the head of the Japanese delegation to the Expo. Shibusawa was one of the delegation members. During his stay in France and subsequently other European countries for nearly a year and half, he was impressed with the might of European technology, and the effectiveness of their economic systems, institutions and business practices in general. Perhaps, it was the system of capitalism itself (calling for cash from investors, investing in a project, and distributing profits subsequently) that drew his interest most. Actually, Shibusawa carried out capitalistic business activities in Japan later on.  

 

The Meiji Restoration took place in 1868, soon after Shibusawa returned. This time, the new government recruited Shibusawa as a high ranking official for the Ministry of Finance. During his tenure at the ministry for a mere four years, he participated in many fundamental reforms and the establishment of new systems and institutions covering virtually all fields of political, judiciary, economic and educational matters that also affected the lives of ordinary people: from applying the Gregorian calendar to the metric system, new notes and coins and more. Then, Shibusawa turned to private business, in which he was one of the instrumental figures.

 

Shibusawa first established a bank that provided essential capital for creating and operating new industries in various fields. Eventually, it was Shibusawa who helped establish more than five hundred companies, thus he was referred to as the father of capitalism. It is interesting to note that Shibusawa refrained from owning companies with the exception of his family business of moderate capacity. So, Shibusawa did not become one of the powerful “Zaibatu” or conglomerates like Mitsubishi, Mitsui, Sumitomo among others. How did he manage? Perhaps, his Confucius knowledge coupled with his own trading experience as a young farmer instilled a principle of carrying out business activities for the benefit of the public, rather than for himself or his family. 

 

 

 

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