Economic Thought

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From the 1870s to the turn of the century, there arose fierce debates among leading Japanese politicians and journalists over the purpose of industrial development policy. The dispute can be represented by two eminent figures whose opinions were diametrically opposed: Yukichi Fukuzawa stressed the necessity of transplanting large-scale modern industries to Japan, whereas Masana Maeda (former Deputy Minister of Agriculture and Commerce) advocated the protection and promotion of indigenous industries.

Fukuzawa was impressed by the cotton-spinning industry which exemplified a successful case of import substitution, and urged that the government should refrain from interfering in private companies.

Maeda, on the other hand, emphasized the importance of helping indigenous industries to become active exporters of their products and argued that the prosperity of indigenous industries could contribute both to increasing the nation’s wealth and to broadening the domestic market.

Discussing this dispute, one of the study group’s specialists identified an aspect of indigenous industries that has been hitherto neglected, namely the fact that they made an important contribution to the successful introduction and smooth operation of modern transplanted industries.