GLBL ST 1 Lecture Notes - Lecture 8: Common External Tariff, Louis Hartz, Meiji Restoration
Week 4, Lecture 2: The US and Japanese Industrial Revolutions
The Expansion of the Global “Core” to the US (1820-1920) and Japan (1868-1945)
● Possibilities of achieving competitive advantage in the world economy
● Industrialization born in the two countries in two different cases
○ Prior japan had been closed off, but suddenly emerged as a resource-poor set of islands and became an
industrial powerhouse
○ What did the two countries have in common?
■ Export-oriented manufacturing vs. import substitution
USA (First country to challege European domination of world economy)
● Two periods 1820-1860--building capacity and 1860-1920--industrial power
○ 1820-1860 key words: GOVERNMENT PROTECTION AND STIMULATION
1. Political independence-- had been a resource economy
2. 1816 (“Dallas”) Tariff--encouraged import substitution, protected infant industries, particularly
cotton textiles in New England; opposed by southern states-- they exported raw materials
3. Federal government--common currency (“Greenback”) limited trade barriers between states,
common external tariff created economies of scale within the coutnry as a whole: political gridlock
over whether agrarian economy based on slavery and industrial economy based on free labor
could co-exist in the same country
4. Chronic shortage of skilled labor--major incentive for technological development
5. Dominant political ideology was “liberal” (in 19th century sense)--individualism, enterprise,
country of refugees from religious and poltiical persecution, no history of feudalism--”born
modern” (Louis Hartz”
● 1860-1920 key words: TRUSTS and IMMIGRATION
1. Northern victory in US Civil War
2. Emergence of very large firms (“Trusts”)
a. M&A and the Robber barons, carnegie, Rockefeller, Vanderbilt, Stanford, etc.
b. Sherman Anti Trust act of 1890 but apart from breaking up Standard oil not really
implemented
c. Reason for concentration of ownership of entire sectors (railroads, steel, oil, etc):
economies of scale at firm NOT just plant level and high costs of R&D in an economy
where capital substituted for labor
3. Investment banks and stock markets: speculative finance/futures--risk-taking plus future
orientation: new forms/sectors
a. FINANCING all these sectors
i. Financing itself became profitable; financing capital!
4. Massive immigration 1870-1920, primarily from Europe; suppressed wages of unskilled
5. Emergence of the US manufacturing belt: Boston to Chicago--immigrant waves, labor organizing,
and by 1910, crisis in mass production
■ Concentration of manufacturing and specialization within the belt
Japan
● 1605-1868 key words: ISOLATION AND CENTRALIZATION
○ After early colonial incursions by portuguese and dutch during japanese’s civil war period, once central
rule from Edo (Tokyo) re-established foreigners restricted
○ During 1850s isolation challenged by US and others
■ After1868, systematic attempt by Japan’s gov to industrialize to meet foreign challenge (so-called
Meiji Restoration); limited resource base
○ Two periods of industrialization: 1868-1919
■ 1868-1919: governmetn at the center of development of new industries but after 1895 these are
run privately through giant forms
● (Zaibatsu: huge, integrated companies)-- Mitsubishi, Mitsui, Sumitomo, Yasuda
● Japanese colonialism in Korea. Wars w/ China and Russia (Japanese success)
find more resources at oneclass.com
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Document Summary
Week 4, lecture 2: the us and japanese industrial revolutions. The expansion of the global core to the us (1820-1920) and japan (1868-1945) Possibilities of achieving competitive advantage in the world economy. Industrialization born in the two countries in two different cases. Prior japan had been closed off, but suddenly emerged as a resource-poor set of islands and became an industrial powerhouse. Usa (first country to challege european domination of world economy) Two periods 1820-1860--building capacity and 1860-1920--industrial power. 1820-1860 key words: government protection and stimulation. Investment banks and stock markets: speculative finance/futures--risk-taking plus future orientation: new forms/sectors: financing all these sectors. Financing itself became profitable; financing capital: massive immigration 1870-1920, primarily from europe; suppressed wages of unskilled, emergence of the us manufacturing belt: boston to chicago--immigrant waves, labor organizing, and by 1910, crisis in mass production. Concentration of manufacturing and specialization within the belt.
