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Comparative Analysis of the Social Origins of Entrepreneurs in Britain and Japan

 

Why and how did industrialisation come to Britain first? The answers vary and are complex, and stretch back far into history. It is easy see, though, that there was rapid development in technology and the growth of income starting in the 1700s. For one, important inventions - from celebrated personalities, including Jethro Tull, Abraham Darby, or famers such as Viscount Townsend - were instrumental in production. Japan, meanwhile, has its own version of luminaries, but preferred to stay low-key. As Marx said, "men make their own history, but they cannot choose the circumstances from which it is made." This essay attempts to discuss the elements and factors that led to the industrial revolution in Britain and Japan, and set up a comparative analysis to gain understanding on entrepreneurship and social background.

Britain, in the 1700s, remained a highly aristocratic society, although religious conflicts, which occurred in the previous centuries, allowed for a higher degree of religious tolerance in social mobility. It was possible for some people to "better themselves," the middle classes, who had been involved in trade as merchants began to establish new ways of creating wealth through ingenuity and effort. "...making money was the main activity of the middle class: those that made enough passed into the ranks of the gentry: the failures went to swell the numbers of the labouring poor." (D. Marshall, "Eighteenth Century England," Longmans, 1964). There is much continuity, it seems, between the putting out merchant system of pre-industrial Britain and the entrepreneurs of the industrial revolution. Capital was often provided for enterprise by rich merchants. It was the profit motive that encouraged both; many entrepreneurs began economic life by joining a father's or a grandfather's trading business, and subsequently moving into manufacturing or similar bourgeois profession. "If this suggests evolutionary change, rather than social revolution, nevertheless the transformation was a substantial one." (H. L. Malchow, "Gentlemen Capitalists," Macmillan, 1991).

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The Meiji state, after 1868, rapidly set about creating the conditions (and in some cases, directly started new enterprises) for economic growth. Western legal codes and political frameworks were mirrored, and there were significant numbers of Western businessmen imported to kickstart industrial revolution. Banks and stock companies were established and vast amounts of capital were spent with the end of bringing Japan in line with the Western world. In the late 1880s, for example, 40% of the education budget was spent on importing Scottish (especially) technologists to educate the Japanese about the different aspects of the burgeoning revolution in the fields of science and engineering. To some extent, then, this meant that many of the pioneers in Japan were actually British.

While the state, however, was very important within the Japanese and Meiji industrial development, it needed entrepreneurs to close the gap between Japan and the West. Most of the Japanese industries were based around small units of production; to reach highly technological levels of manufacture, individual initiative was necessary, to which the state could only encourage. It was from the disenfranchised Samurai clique (they were never really a "class" as such), the warriors of ancient imperial Japan, that many of the entrepreneurs came. Like the British non-conformists, there was a degree to which frustration against the establishment became impetus for determination in industry. "Many of them were former Samurai, who found an outlet for their aggressive instincts in the predatory exploitation of the economic opportunities opened up by Japan's contact with the West." (M. Sumiya & K. Taria, "An Outline of Japanese Economic History: 1603-1940," University of Tokyo Press, 1979). However, as these authors emphasise, their numbers were few. They were not also as individualist as British entrepreneurs - while the Confucian tradition reflected some of the values of the Protestant ethic in Europe, Japanese businessmen, it is argued, had a strong sense of national loyalty, particularly loyalty to the emperor. To some extent, therefore, there was a romantic, irrational approach to enterprise in Japan, but it was the motive for profit which, at least in the short term, drove Japanese entrepreneurs as it drove their British counterparts.

The importance, too, of the zaibatsu, which were large scale, family-based economic units, has to be emphasised. These large families often had capital to lend and there was thus a dual economy operating in Japan, with the state and the zaibatsu (that financed many of the entrepreneurs) working in relative harmony. M. Sumiya and K. Taira, however, strongly attacked the notion that entrepreneurs had much importance in Meiji Japan: "...the scarcity of entrepreneurship ... resulted in a premature concentration of economic power in a few houses of business, the zaibatsu, with the collaboration of the government." The entrepreneurs that did operate had a firm base in Tokagawa Japan (in the same way that the British innovators often came from merchant or trading backgrounds); "It is important to understand that during the Tokagawa era, there were already outstanding "public" entrepreneurs working to enrich and strengthen the han economy."

Entrepreneurship, therefore, is seen as coming from those groups of people for whom money is generally something plentiful enough to enjoy and re-invest, but scarce enough to motivate the desire to work and amass a larger fortune. The Samurai in Japan had been a ruling class before 1868, and many lost large amounts of money, despite being heavily compensated in the form of government bonds by the Meiji regime. In Britain, those who lost out under feudalism but stood to gain under capitalism were the ones who led the industrial development process. Both groups of people had religious and/or cultural ideologies to reinforce their economic goals. By the fact that Japan industrialised at a later stage, and could thus borrow from the already established and tested ideas from Britain, Germany, France and the United States principally, changed the circumstances to some degree, but entrepreneurship emerged as a logical process forced into being by the surrounding circumstances of the times. In Japan, this process was somewhat castigated by the desire of the government to industrialise quickly, but the essential origins of entrepreneurs and entreprenurship have much in common in these two supposedly very different countries.

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