Introduction to Economics — The Dismal Science?

I have always heard that Economics is “The Dismal Science”, never really thinking about why it was called so.

So I started this post thinking of making a beginning to understanding economics, but like most things, I got sidetracked into wondering why it was called dismal (or for that matter why it is called a science).

The background to this got so interesting and illuminates so much about the way people think in economics that I think it is worth a post of itself.

The Reverend Malthus — The original dour Scotsman

In 1798, reverend Thomas Malthus came up with the idea that human beings are destined to misery and poverty as we will grow till we use up all the earths resources and end up starving to death. This in an era of unprecedented growth due to the industrial revolution and the plundering of the colonies! Clearly the good reverend was not one for sweetness and light.

Many people believe this is the beginning of the word “Dismal Science” to describe economics. But the reality is that the term was credited to another dismal character

Thomas Carlyle — Another curmudgeonly Scot

Here was a man who was bullied at school, suffered from ulcers and was infamously cranky (probably because of the ulcers). Its probably no surprise that he therefore decided to use supply and demand to justify why white men should own others as slaves.

The Dismal Science?

You would think, that’s why he called it the dismal science! Not at all. It was used because  people like John Stuart Mill, who dared to use the same science to show that it was far more profitable for society that men be free. Thomas Carlyle seemed to believe that the “gay science” that enabled men to write poetry was incompatible with the “dismal science” that enabled men like Mill to rationalise things like freedom!

So it seems to me that the Dismal Science is particularly ill named. While the one who came up with the name was known for trying to use economics to justify slavery, his specific use of the term was to discredit those who used the same science to justify liberty.

All in all, this worked out quite well as an introduction to Economics. Going forward, we will take a look at supply and demand, with detours through history, science and wherever the imagination takes us.

Edit: I only remembered J S Mill for “On Liberty”. TIL that he was an East India Company rep in charge of princely states and his support for freedom stopped at the white mans borden. Shows you that history needs context!

 

The Meiji Restoration II

Time to return to the 19th Century and Japan. So without further ado, we proceed right to the Meiji Restoration.

 Emperor is Divine — Shoguns are no longer fine!

The Japanese people were a bit upset with their shogun for giving away their honour and refusing to die bravely before the foreign invader. Thus a movement began to oust the shogun, and restore power to the Emperor, who was going to teach these foreign powers a real lesson!

You would expect the shoguns to be a bit irritated and refuse to budge. But no, these shogun were smarter than that! They said, “OK. We admit it. We screwed up. Let us bow down to the emperor, and regard him as our rightful overlord”

Of course, things were not quite so straightforward as that. On November 9th 1867, Takigawa Yoshinobo, premier shogun dude resigned from his position and gave back his power to the emperor Meiji, the new emperor. Of course, Takigawa was no fool…He gave his power up voluntarily so that he could still wield it behind the scenes. He knew very well that the emperor would have to toe the Western line as well, and hence saw no real issues with retaining his privilege, at the cost of losing a tiny bit of face.

But what he did not reckon with was Saigō Takamori, and Kido Takayoshi, both of whom were big powerful dudes. They decided that enough was enough, and in January 1868, these two chaps led their armies against the former head shogun. In a series of battles, they pretty much ended the power of the Takogawa’s ending their 240 year long rule.

The Shinto Religion — High Priest Meiji

The Shinto religion was revived..mainly because it insisted that the emperor was a god. While Buddhism and Christianity were not persecuted, Shinto was well….encouraged. A consequence of this of course was the need for a high priest for the religion. In steps in young Meiji, who as resident descendent of God, acted as high priest. What a job, emperor, and priest too!

Of course, this led to a few problems. There are only this many hours in a day, and you can’t do both jobs perfectly. And since a high priest can’t delegate his duties, most of the governing duties got delegated to regents and advisers…who co-incidentally happened to be the chaps who got young Meiji his new power as well.

The Japanese way– Equality for all and LOOK West

 The restoration documents and ideas did not just talk about the emperor being a god. They had many provisions, but they basically boiled down to 5 major points.

1. Involvement of all classes in governence

2. Revocations of class restrictions in employment

3. Establishment of government based on provincial Assemblies

4. Replacement of “Arbitrary laws” with “laws of Nature”  (don’t ask me what that means!)

5) An international search for knowledge to strengthen imperial rule.

The last one is the key that ensured that the emperor would not go back to the isolationist Japan policy. Soon, foreign teachers in everything from Engineering to Ball-room dancing started turning up.

Change was in the air, and by jove, things were moving fast

Cliques and Concerns

The emperor was reduced to figurehead, while all authority now flowed from his advisers. While in theory, all men were equal before law, some were made more equal. The clique of advisers began the changes that would transform Japan forever. First and most laudably, they decided in 1871 to set up an education ministry, and in 1873 made 6 years of education compulsory. They also set up factories, railroads, telegraphs and all the other accoutrements of modern society. Of course, all this took up money, and the peasants and commoners were incredibly taxed, with taxes on everything from property to education fees.

At the same time, the factories were controlled by cliques and firms, which gained huge power and resources. Mitsubishi is an example of a firm that gained power then…and still retains a heck of a bit of it!

What about the Samurai? Takamori commits sepukku (of a sort)

In all this, we would be wise to wonder what happened to the traditional military arm of Japan- The Samurai. They were a privileged class, entitled to chop off the heads of all those that disrespected them. Suddenly, the new constitution stripped away most of their authority. For one thing…no more chopping heads off with the old family sword!

But this was only the beginning. Soon, the emperor ruled that carrying of swords by non-army members was illegal. So your basic samurai could not even carry his sword around any more. As a sweetener, the government promised to pay Samurai a fixed pension.

Most samurai saw the giving up of a sword for a pension as a no brainer. Money in the bank was the general consensus. But the government was not completely dumb. Consider that there were 1.9 million Samurai, which is a whole lot of people with pensions. Soon, the government said, “forget the monthly pensions, we will offer you a one time settlement, and the settlement will be in government bonds!”

At the same time, conscription became the norm, and every male was supposed to serve in the military. From being a privileged militay class, the Samurai were now the average Joe Nakamura on the street.

Of course, this was not exactly appreciated by the Samurai. Chief amongst them was Saigō Takamori, who had led the original change over. He was fine with reforms, but gradually as he felt his own samurai powers disappear, he rebelled. In 1877, he led a rebellion where 25000 Samurai tried to hold on to the past.

Against 300000 Japanese troops, now armed with the latest American guns and tactics, he did not stand a chance. His rebellion was crushed, and perhaps most gallingly, the Japanese army was mainly composed of former Samurai who chose the winning side! Poor Takamori got one of his lieutenants to chop his head off rather than be captured and “apologize” to the emperor.

There were other samurai rebellions…but they were half hearted things, after seeing the fate of the most powerful of the, most decided that discretion was the better part of valour.

But Takamori’s death was not completely in vain. The cost of raising the army to defeat him almost beggared the  government. Land prices crashed, inflation set in, and the government was forced to lower taxes in order to stay in power.

Calls began to grow for greater representation as well. It was all very good to proclaim all men were equal, but those provincial assemblies promised in the agreement were not really up to scratch. The Satsuma rebellion led to the protests on the style of governance and the drawing up of the constitution in 1889.

The Japanese Constitution — Prussia revisited.

The Japanese looked at various options. The Americans were first looked at, and hastily abandoned by the Japanese for being “too liberal”. The British system was claimed to be too unwieldy and made the emperor too much of a rubber stamp. Finally, the writers settled upon the Prussian way, which seemed to emphasise structure, while retaining the emperor at the top of the pecking order. The posts of chancellor, and ministers for left and right (no clue whose left and right) were abolished, and a privy council took its place. In addition, there was a Council for War, which had extraordinary powers, and reported directly to the emperor, bypassing almost all protocol.

This constitution had many weaknesses, and was regarded by many observers as one of the reasons for Japan’s extraordinary military aggression till the second world war

Japan — World Power

Emboldened by its constitution, and technology, the Japanese began to wage a series of battles to prove their world power status. Korea and Taiwan soon fell. And China practically became a protectorate of Japan before Western powers wised up and ganged on Japan to give way and let the others have their share as well.

Russia was the worst, making Japan give up a key claim to north China, and then invading it themselves! The Japanese were a bit ticked off by this underhand tactic, and handed the Russians a real whipping1904, which led to Japan controlling vast swathes of frozen Northern Asia.

At its heart, the military expansion of Japan was its desire to make up for lost time and claim its place on the world stage. Well…it finally would, but that would be far later, and to disastrous consequences.

Conclusion

In 1912, emperor Meiji went back to his ancestors, and the era officially ended. But it was one heck of an era. In five decades, Japan was transformed from an agrarian and backward state into a world power. Even today, the speed of transformation and the scale are unprecedented. The cost–Japanese culture changed from wildly xenophobic to wildly xenophilic. Western values were embraced, frequently at the cost of Japanese values, and an era was lost forever. The Samurai vanished, to reappear only in poetry and song. But a new World Power had arisen, and the world would never be the same again.

Japanese History — The Meiji Restoration I

Yesterday, I spent about 6 hours watching Rurouni Kenshin (Kenshin the wanderer). It is a Japanese Anime set in the Meiji Era…of which I knew Zip. So this morning, a quick visit to Wikipedia, and some refreshing of my memory bank with Glimpses of World History (still my favourite history text) got me to the topic of this post.

Historical Context– Castaway and St. Francis

In 1542, a bunch of Portuguese Sailors were trying to get a good deal in China for a bunch of skins they were selling. In trying to make some extra speed, they decided to dice with the monsoon winds. They bet wrong, and their ship broke up in Japan, and left these hapless fellows stuck here.

Once the Portuguese knew that Japan was an inhabited island rather than just another rock, the missionaries jumped in. And not just any missionary. We are talking about the heaviest of the heavy guns. St. Francis Xavier, who previously was well known as converting more men (and women) than any 10 others before him (barring St. Paul) decided that this represented a true test of his calling. I have to say, the Portuguese colonists were not entire devastated to see him go. He had been making nasty cracks about them taking 3 or 4 wives, and he was making some very uncomfortable statements about the Inquisition, and the Portuguese wanted to see the back of him before he started boiling the oil, and getting the rack readied.

Now, you would ask…how the heck would our young Francis do any preaching? Does he know Japanese. He did not, but that never stopped a true missionary. Off he went, grabbing a local samurai on the run, and got him to translate a bit of the catechism. Conning…err Converting the local leadership was a piece of cake for an experienced man like Francis, and he soon started preaching all over the place, and more missionaries started joining the party.

A few years later, the Ruling Japanese guys got irritated with the missionaries telling them to lay off the drinking and attending mass every 7 days, so chucked the whole lot out. In fact, they were so irritated with the whole process that they said, “Bugger this whole outside world rot. I would rather sit at home.” So visitors were now encouraged to vanish…else they would be disappeared.

Commodore Perry– Japan opens up..but not by choice

From the early 1600’s to the middle of the 18th Century, only the Dutch were allowed to trade with Japanese…and even that in a tightly regulated manner. One speculates that the Dutch were let by only because they were slightly less rigid than the Portuguese about the whole “sinner shall be burnt at the stake” issue.

But in the mid 1840’s the US of A began to look towards the Pacific Nation. China had already been taken by Britain, and Japan was the only really virgin market left for expansion. (The Dutch did not count because they were only Tulip fanatics…and everyone knows Tulips are silly). A few merchants wandered up to Japan, only to be met with swords and axes.

In 1852, the Americans decided enough was enough. In wandered Commodore Perry of the US Navy, who had the latest in War Technology in the form of a steam boat with more guns than could be counted, and he insisted that he be berthed. The Japs had no choice now. Either they looked polite, saved some face and let Perry in…or they fought him, be beaten up, and still have Perry in.

Finally they did let him in, but Mr. Perry wanted more. He also wanted a trade treaty. And here, the Japanese showed their amazing skills at Bureaucracy. They fobbed him off with minor official after minor official. He finally lost his patience…delivered a letter and said he would return in a year. But he did leave with a final warning…”When I come back, I will return with more than just one ship!”

The Japanese were now in a bit of a quandary. National Pride meant that what they wanted to do was wave their swords about and scream defiance. However, they knew that their cities were coastal towns…and Commodore Perry would only have to open up for a couple of hours before their domain would be one big smoking ruin.

The Shogun who ruled Japan were not sure what to do. But one of the chief Shoguns, Abe Masahiro knew that trying to take on the Americans directly would only lead to humiliation bullied his way to signing a treaty which was fundamentally a surrender. But he did not stop with America. He continued to sign treaties with other European powers, even the English! This led to a lot of heartburn within the Shogun…but the die was cast. Japan was now open.

Signing the Treaty: Drunk as Skunks!

The signing of the treaty opened the Japanese Eyes (At least some of them). They saw the wonders of modern technology with model steam engines and stuff. But champagne was the real deal maker for them. I guess after 3 centuries of drinking sake, they would have settled for anything.

So the treaty signing with the Americans was more like a fair than anything else, what with toy steam engines and drunk Japanese officials busy making honking noises as they barrelled along the rails!

But the Japanese were not so drunk as to be totally stupid. They also got deals to make a Morse Telegraph system set up, and modern technology working. Factions of the Japanese wanted to open up the Japanese economy. These were led by the Samurai, the warriors of the Japanese society, who saw the benifits that cannon and guns could get them. The Shoguns did not quite like this, and as the real powers of the country, their word was law.

But times were changing, and soon the samurai began to fret. They figured that the Shoguns had their time, and went to the history books to check whether the shoguns really deserved their power. And amazingly, they found that the real power was supposed to be held by the emperor, with whom lay the power to tell the Shogun to go to hell! But the emperor was just a figurehead at this time.

It was time to restore power to the emperor. The Meiji restoration was about to begin.

Stay tuned for Part II. I promise it will happen…eventually!