Region and strategy in britain and japan business in lancashire and kansai 1890 1990 (routledge international studies in busin

Douglas A.Farnie is Visiting Professor at the Business History Unit, The Manchester Metropolitan University.. Tetsuro Nakaoka is Professor of History of Industry and Technology, Osaka Un

Britain and Japan have both achieved, in succession, a position of global economicprimacy Within each state, one region has served as an economic powerhouse Bothregions, dominated respectively by Manchester and Osaka, enjoyed a golden agewhich coincided with the golden age of their respective national economies.

A pioneering long-term comparison of the two regions of Lancashire and Kansai

is now undertaken in this work Adopting both an innovative and arguably uniqueperspective, each chapter is jointly written by a British and Japanese scholar who arerecognised authorities in their field Together they make a substantial contribution

to our understanding of the continuing importance of national and regionaldifferences in industrial development With chapters focusing upon big business,electronics, shipbuilding and textiles, the resulting study throws a welcome newlight on world economic history

Douglas A.Farnie is Visiting Professor at the Business History Unit, The

Manchester Metropolitan University Tetsuro Nakaoka is Professor of History of Industry and Technology, Osaka University of Economics David J.Jeremy is Professor of Business History at The Manchester Metropolitan University John

F.Wilson is Professor of Industrial and Business History, also at The Manchester

Metropolitan University Takeshi Abe is Professor of Business History at the

Graduate School of Economics, Osaka University

(Kanebo) for thirty-six years, rising to the status of president (1921–30) He became a leading pioneer in Japan of modern business management His published works fill nine volumes (1963–6, Tokyo, Shinjusha).

Region and Strategy in Britain

and Japan

Business in Lancashire and Kansai,

1890–1990

Ei Nichi Ryokoku ni okeru Chiiki to Keiei Senryaku

Rankasha to Kansai no Bijinesu, 1890–1990

Edited by Douglas A.Farnie, Tetsuro Nakaoka, David J.Jeremy, John F.Wilson and Takeshi Abe

London and New York

by Routledge

11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada

by Routledge 29 West 35th Street, New York, NY 10001

Routledge is an imprint of the Taylor & Francis Group

This edition published in the Taylor & Francis e-Library, 2005.

“To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please

go to www.eBookstore.tandf.co.uk.”

© 2000 Edited by Douglas A.Farnie, Tetsuro Nakaoka, David J.

Jeremy, John F.Wilson and Takeshi Abe The copyright to individual

chapters is held by the respective authors.

All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging in Publication Data

Region and strategy in Britain and Japan: business in Lancashire and Kansai, 1890–1990=Ei Nichi Ryokoku ni okeru Chiiki to Keiei Senryaku: Rankasha to Kansai no Bijinesu/edited by Douglas A.

Farnie…[et al.].

p cm.—(Routledge international studies in business

history; 7)

A collection of 10 comparative essays, each jointly written by a

British and a Japanese scholar.

Includes bibliographical references and index.

1 Industries—England—Lancashire—History 2 Lancashire (England)—Economic policy 3 Industries-Japan—Kansai Region- History 4 Kansai Region (Japan)-Economic policy I Farnie, D.A II Title: Ei Nichi Ryokoku ni okeru Chiiki to Keiei Senryaku:

Rankasha to Kansai no Bijinesu III Series.

HC257.R44 1999 338.09427’6–dc21 99–29578

CIP

ISBN 0-203-97832-3 Master e-book ISBN

ISBN 0-415-20317-1 (Print Edition)

Series editor: Geoffrey Jones

1 Management, Education and Competitiveness

Europe, Japan and the United States

Edited by Rolv Petter Amdam

2 The Development of Accounting in an International Context

A Festschrift in Honour of R.H.Parker

T.E.Cooke and C.W.Nobes

3 The Dynamics of the International Brewing Industry since 1800

Edited by R.G.Wilson and T.R.Gourvish

4 Religion, Business and Wealth in Modern Britain

Edited by David Jeremy

5 The Multinational Traders

Geoffrey Jones

6 The Americanisation of European Business

Edited by Matthias Kipping and Ove Bjarnar

7 Region and Strategy in Britain and Japan

Business in Lancashire and Kansai, 1890–1990

Edited by Douglas A.Farnie, Tetsuro Nakaoka, David J.Jeremy, John F.Wilson and Takeshi Abe

1 Region and history

DOUGLAS A.FARNIE AND TAKESHI ABE

1

2 Region and nation

DOUGLAS A.FARNIE AND TETSURO NAKAOKA

9

The collapse of the export markets of Lancashire, 1926–90 45

The transition from a manufacturing economy to a service economy 5

3 Comparisons between the development of big business in the

north-west of England and in Osaka, 1900–1990s

DAVID J.JEREMY, TAKESHI ABE AND JUN SASAKI

78

Barriers to understanding: the entrenched belief in the primacy of

manufacturing

120

8

The repercussions upon Lancashire, 1920–25 141

The establishment of Japanese primacy in Asian markets: the Dutch East

Indies and India

144

5 Labour management in the textile industry

KENNETH D.BROWN AND KINGO TAMAI

160

6 Electronics manufacturers in Osaka and Manchester: a comparison

of Matsushita and Ferranti

TETSURO NAKAOKA AND JOHN F.WILSON

178

7 A comparison of Cammell Laird and Hitachi Zosen as shipbuilders

TORU TAKAMATSU AND KEN WARREN

Postwar educational reform in Japan and the business response 238

10 Region and strategy

DOUGLAS A.FARNIE, TETSURO NAKAOKA, DAVID

J.JEREMY, JOHN F.WILSON AND TAKESHI ABE

303

Significant issues arising from the comparison of the Lancashire and Kansai regions

303

Frontispiece Sanji Muto (1867–1934) in 1931 He served Kanegafuchi

Spinning Company (Kanebo) for thirty-six years, rising to the

status of president (1921–30) He became a leading pioneer in

Japan of modern business management His published works fillnine volumes (1963–6, Tokyo, Shinjusha)

ii

Map 4 Kansai, 1990 2.1 Tomoatsu Godai (1835–85) At the end of the Edo period as a

principal officer of the Satsuma Han (now Kagoshima

Prefecture), he inspired the foundation of the Kagoshima SpinningMill, the first modern spinning mill in Japan After the Meiji

Restoration he played an important role in restructuring the

economy of Osaka which had suffered a collapse In Osaka he

founded not only many companies and factories but also such keyinstitutions as the Osaka Chamber of Commerce, the Osaka

Stock Exchange and the Osaka Commercial Training School

17

2.2 Takeo Yamanobe (1851–1920) in Manchester in 1879 He served

Osaka Spinning Company (Osakabo) for thirty-two years and itssuccessor, Toyo Spinning Company (Toyobo), for two more

years, rising to the status of president (1898–1916) He acquiredthe technology of cotton spinning and weaving in Lancashire in1879–80, and became a leading engineer in the modern Japanesecotton industry

57

2.3 John Whittaker in 1996, the chairman of Peel Holdings plc and

the pre-eminent entrepreneur of the Lancashire region

61

3.1 The Hartford New Works of Platt Bros at Werneth, Oldham, c.

1900 The ‘New Works’, equipped with labour-saving machinetools, were built adjacent to the railway from 1845 onwards Attheir apogee they comprised 38 blocks of buildings extending

over 60 acres and employing over 12,000 people

82

3.2 Coming from the mill, 1990: the Lily Mill, Linney Lane, Shaw,

Oldham A double mill, built in 1904 and 1917, it was purchased

in 1977 by Littlewoods Ltd and converted into an ultra-modernmail-order warehouse The conversion symbolised the transition

97

iixivx

from manufacturing to services in a leading mill-town The

workers coming from the mill may be contrasted with those

depicted by Lowry in his famous painting ‘Coming from the

Mill’ (1930)

4.1 The more-looms proposal in the Lancashire weaving trade, 1931 137

4.3 Great expectations were aroused in Lancashire by the Cotton

Industry Reorganisation Act of 1939 which was, however, shelved

on the outbreak of war

149

6.1 Konosuke Matsushita (1894–1989), the founder of Matsushita

Electric in 1983 at the age of 89

180

6.2 Sebastian Ziani de Ferranti (1864–1930) the founder of Ferranti

Ltd, robed in his doctoral gown in 1926 at the age of 62

180

7.2 HMS Ark Royal before its launch at Birkenhead in 1937 This

vessel was the third to bear the name first given to Lord Howard

of Effingham’s flagship which led the attacks upon the SpanishArmada in 1588 The aircraft carrier was torpedoed and sunk inthe Mediterranean in 1941

212

7.4 A Japanese supertanker constructed in 1971 at the Sakai Shipyard

of Hitachi Zosen on Osaka Bay during the great tanker-buildingboom of 1969–74 Its dead-weight tonnage of 238,588 was

tenfold the 22,000 tons of the Ark Royal.

219

2.1 Population of the cities of Manchester, Osaka, Liverpool and Kobe,

1871–1991 (thousands)

17

2.2 Employment in the North-west region of England, 1911–90 48

2.3 John Friedmann’s hierarchy of thirty world cities, 1990 55

3.1 Employment sizes of the fifty largest firms in the North-west and Osaka

c 1907, 1935, 1955 and 1992

79

3.2 Aggregate North-west employment of NW50 compared to UK

employment of UK50 and aggregate Osaka employment of Osaka50

compared to Japanese employment of Japan 50

80

3.3 Minimum sizes of the fifty largest employers in the UK and Japan,

1900–1990s showing North-west firms qualifying for inclusion on thestrength of (a) employee numbers in the North-west; and (b) UK

employees; and showing Osaka firms qualifying for inclusion on the

strength of (a) employee numbers in Osaka; and (b) Japan employees

81

3.4 Industrial activity of the fifty largest employers in the North-west by

firms and numbers (%) employed in the North-west; compared to

industrial activity of the fifty largest employers in Osaka by firms and

numbers (%) employed in Osaka, c 1907, 1935, 1955 and 1992 (using

UK Standard Industrial Classification, 1968)

83

3.5 Headquarters locations of the fifty largest employers in the North-west

and Osaka c 1907, 1935, 1955 and 1992 (%)

89

3.6 Numbers of firms among the fifty largest with 100 per cent of their

workforces within the region

89

3.7 Organisational forms of the fifty largest employers in the North-west

and Osaka

90

3.9 Survivors: firms present among the regional fifty largest employers,

3.11 The fifty largest companies in Osaka Prefecture, as measured by

employment within the region, in 1902, 1931, 1954 and 1993

108

5.1 Machine hours worked per year, 1953–63, in the British and Japanese

cotton industries

173

6.3 Domestic production of electrical appliances in Japan, 1950–70 194

7.1 Ships built with the support of subsidies under the Shipbuilding

Encouragement Act between 1897 and 1910

21

7.2 Ships launched in Japan, the United Kingdom and the world, 1936–38and post-Second World War, 1949–85 (thousand gross registered tons)

215

7.3 Tonnage of ships launched/completed by Cammell Laird and Hitachi

Zosen, 1950–95 (thousand tons)

7.6 Indices of labour productivity at Cammell Laird (Birkenhead) and in

the Hitachi Zosen Group 1957–80

9.3 Number of guidance, tests and other activities by Osaka Prefectural

Industrial Research Institute, 1953–70

268

9.7 List of private industrial research organisations in Osaka (at the end of

Takeshi Abe is Professor of Business History, Graduate School of Economics,

Osaka University

Kenneth D.Brown is Dean of the Faculty of Legal, Social and Educational

Sciences, The Queen’s University of Belfast

Douglas A.Farnie is Visiting Professor, Business History Unit, The Manchester

Metropolitan University

David J.Jeremy is Professor of Business History, The Manchester Metropolitan

University

Tetsuro Nakaoka is Professor of History of Industry and Technology, Faculty of

Information Management, Osaka University of Economics

Tamotsu Nishizawa is Professor of the History of Economic Thought, Institute

of Economic Research, Hitotsubashi University

Jun Sasaki is Associate Professor of the Economic History of Japan, Faculty of

Economics, Ryukoku University

Minoru Sawai is Professor of Business History, Graduate School of Economics,

Osaka University

Toru Takamatsu is Associate Professor of the History of Industry and

Technology, Faculty of Information Management, Osaka University ofEconomics

Kingo Tamai is Professor of Social Policy, Faculty of Economics, Osaka City

University

Geoffrey Tweedale is Senior Research Fellow, Business History Unit, The

Manchester Metropolitan University

Ken Warren was formerly Fellow of Jesus College, Oxford.

John F.Wilson is Professor of Industrial and Business History, The Manchester

Metropolitan University

This study in Anglo-Japanese business history originated in discussions held duringthe Anglo-Japanese Conference on Textile History held in Kyoto in 1987, the

proceedings of which were published in 1988 in a special issue of Textile History.

The project has been financed by a substantial grant made by the Economic andSocial Science Research Council of the UK It has also been supported by the JapanSociety for the Promotion of Science, by the Union of National EconomicAssociations in Japan, by The Manchester Metropolitan University, by Osaka CityUniversity, by Osaka University and by the Osaka University of Economics Itspurpose is to study the history of modern business in an industrial context and tofocus upon the two leading textile regions of Lancashire and Kansai Those twomajor regions have been made the object of detailed comparative study in the beliefthat such research may yield insights denied to the students of a single society, evenover a long period of time The time-span extends over the century from 1890 to

1990 and includes the classic period of Anglo-Japanese relationships In this way itseeks to illuminate, by means of a new approach, the history of the world economyduring the twentieth century

The structure of the book combines four general chapters with six chaptersdevoted to key sectors of the economy of the two countries Each chapter, it must

be emphasised, is a joint product, written in close co-operation by a British and aJapanese scholar Each scholar is a leading authority in his own respective field Theoriginal pioneers of the project were David J.Jeremy in Manchester and TetsuroNakaoka in Osaka Professor Nakaoka has been able to call upon the assistance ofeminent scholars from such centres as Osaka University, Osaka City University,Shimonoseki City University and Hitotsubashi University In Britain ProfessorJeremy secured the willing aid of scholars from the Universities of Oxford,Manchester, Leeds and Belfast The process of collaboration between six British andseven Japanese authors has entailed prolonged and intensive consultation in anexercise which may be unique in the annals of scholarship In addition to the normalchannels of communication, six successive international conferences have been held

in order to promote the project Those conferences were held in Osaka in 1990 and

1993, in Manchester in 1991 and 1994, at Hagley in 1992 and in Glasgow in

1997 To all the participants in those conferences and to their organisers aconsiderable debt of gratitude is owed The British editors wish to record their

thanks to their Japanese co-editors and especially to Takeshi Abe, without whoseenthusiastic collaboration the work would never have been completed Theygratefully acknowledge the encouragement offered to them by Professor Clive H.Lee

of Aberdeen All the editors believe that this work is original in its combination ofsubject matter and method, in its comparative and regional approach, in itsextensive use of statistical data, in the blending of text and illustrations, in thestructure of its chapters, in its conclusions and, above all, in the joint authorship ofits separate chapters

Map 2

Map 3

.

1 Region and history

Douglas A.Farnie and Takeshi Abe

During the century between 1890 and 1990 the population of Kansai increasedfourfold as fast as that of North-west England Its wealth increased in even greaterproportion As late as 1958 per capita GDP in the North-west region was treblethat in Kansai By 1990 per capita GDP in Kansai was double that in the North-west region The purpose of this book is to explain how and why thattransformation occurred Its approach is both comparative and regional.Comparisons provide of course the very core and framework of any serious study.They remain however very rare because it is difficult for any single person who is no

‘Renaissance man’ to become thoroughly versed in the sources relating to more thanone period, place, or subject That obstacle has been overcome by the creative device

of joint authorship The chronological limits of the comparison have beendetermined by the peculiar significance of the decade of the 1890s in both Britishand Japanese history The territorial limits of the comparison are clear Kansaicomprised the six prefectures of Osaka, Hyogo, Kyoto, Wakayama, Nara and Shiga.The term ‘Kansai’ (‘west of the three barriers’ at Suzuka in Ise (now MiePrefecture), at Fuwa in Mino (Gifu Prefecture) and at Achira in Echizen (FukuiPrefecture)) has been preferred to such alternatives as ‘Kinki’or ‘Kinai’, because ofits historical significance The north-west region of England comprised the twohistoric counties of Lancashire and Cheshire as they existed until 1974, although theinfluence of ‘Lancastria’ radiated outwards in all directions.1

The use of the region as a category of analysis may however require more extensivejustification The two particular regions selected for study merit examination intheir own right Both became the seat of urban, entrepreneurial, commercial andindustrial societies Both exerted an influence upon the outside world out of allproportion to their size The emphasis upon the region moreover harmonisescompletely with the powerful regional renaissance which has taken place since the1950s It remains essential to set the region in as wide a context, both national andinternational, as possible and to do so, wherever appropriate by using thecomparative mode of analysis

The origins of the region

Three elements combined to create the region, geographical location,physical endowment and human settlement The region proper was formed byNature herself, in all her variety, and predated the State Regional sentiment becamethe bond linking inhabitants to their ancestral abode ‘Of all the bonds unitingmen, the strongest is the bond of locality, for it creates a community of purposesand interests…The similarity in the mode of life, family connections, friendships,participation in the same local institutions—sporting, philanthropic, educational —lead to the creation of a living bond.’2The most overt sign of such a bond lay in theemergence of a regional mode of speech and in a regional literature Regionallanguages and literature were created within every society in the world, save forRussia, with its extensive uniformity of geographical features Such local solidarity wasfurther reinforced by the influence of a similar way of life, of religion and of a sharedsystem of values The strength of regional sentiment varied in proportion to theantiquity, density and duration of human settlement and in proportion to thebarriers to communication, to trade and to migration Where such barriers werestrong, a locality inevitably generated a deep attachment to the place where peoplewere born and reared and with which they were most familiar Its capacity to inspireloyalty remained immense, as Scott had recognised in 1805 ‘This is my own, mynative land.’ Such territory became part of the personality of its inhabitants and wasloved and cherished, as an essential foundation of daily life The power of tradition,maintained amongst ‘the people who have always been there and belong to theplaces where they live’, impregnated them with distinctive social and culturalpatterns.3

Region and State

Until the nineteenth century the states of Europe remained unintegrated anddecentralised structures Both Greece and Italy made their greatest contribution tocivilisation through their city-states In the modern era both Switzerland and theUnited Provinces preserved a federal structure and reaped therefrom enormousbenefits During its five formative centuries Spain became ‘Las Espanas’ rather than

a unified Espana Until the nineteenth century Germany remained divided amongstsome 300 separate states and conferred the greatest of benefits upon civilisation beforethe year 1871, when ‘the German mind’ was uprooted ‘for the benefit of theGerman Empire’ From the fifth century to the 1860s Italy remained, in the phrase

of Metternich, a mere ‘geographical expression’ After the unification of thepeninsula the industrialisation of the North created an intractable regional problem

‘The problem of the South…is none other than the problem of the State itself.’4

France remained the classic realm of the pays and before the Revolution was, in theopinion of Napoleon expressed in 1808, ‘rather a union of twenty kingdoms than asingle State’ The USA became a loose federation of many regions, whose vitality wasstimulated rather than depressed by the Civil War The rise of the nation-state took

place at the expense of the historic regions of Europe and enlisted the support ofsociety’s educated elite, especially amongst historians and especially in Germany.

‘World-history is, and always will be, State history.’5 That elite dismissed anyevidence of local dissent with pejorative phrases first coined during the 1870s inItaly, Spain, France and England, viz.: ‘regionalismo’ ‘régionalisme’ (1875) and

‘regionalism’ (1881) In turn they suffered excoriation themselves for the betrayal ofthe ideals fundamental to their profession.6

A tradition of centralisation had however developed earlier in such states asBritain, France and Japan England was already in the twelfth century, in theopinion of Maitland, a much-governed country The historic county wasnevertheless used for parliamentary representation as well as for administrationthrough the shire-reeve It became the basis of the county regiment, the countyhistory, county cricket and a host of associations, especially in the West Country,the Midlands and North-east England The county was ignored in the new PoorLaw Unions created after 1834 but became the basis for the county councils created

in 1888 and located in the county town Under the pressures of war England was split

in 1918 into seven administrative divisions and the UK was placed in 1939 undertwelve Regional Commissioners, on the model of the Anglo-Saxon Heptarchy, therecreation of which had once been favoured by Socialist intellectuals.7

The region and scholarship

The region provided the basis for a range of intellectual disciplines, includinggeography, economic history, anthropology and sociology In the field of geographythe study of regions was developed during the eighteenth century in France, theNetherlands, Italy and especially in Germany by the historian J.C Gatterer (1727–99).8‘The regional concept constitutes the core of geography’.9 The pioneeringsociologist Frédéric Le Play provided in 1855 a recipe for the regional survey basedupon three categories, Lieu, Travail, Famille That triad was ranked by PatrickGeddes (1854–1932) as the ‘prime movers of civilisation’ and was translated as

‘Place, Work, People/Folk’ From 1887 Geddes preached his gospel, inspiringgenerations of geographers, and in 1914 established the Regional Survey Association.One disciple, C.B.Fawcett (1883–1952) divided England into twelve separateprovinces, using the large city as a central criterion He noted that the modern unity

of the Lancashire province was reflected in ‘a very strong and distinctiveindividuality’ and that ‘Lancashire is likely to be a leading province in a FederalBritain’.10 In France Edmond Demolins investigated in 1901 the way of life of suchregional types as the Breton and the Provençal In the USA Frederick JacksonTurner (1861–1932) studied the seminal role in American history of the frontier

(1893) and of sections (1932) while Howard W.Odum (1884–1954) created in The Southern Regions of the United States (1936) regional sociology.

The intellectual rejection of the region

The aspiration to categories of universal validity came naturally to deracinatedintellectuals especially in the fields of modern economics and sociology Theregional approach was even denounced as unsystematic and unscientific bytwo geographers, by G.H.T.Kimble in 1951 and by E.A.Wrigley in 1963.11 DrWrigley combined his criticism with an iconoclastic onslaught in 1962 upon thetraditional identification of the Industrial Revolution with the cotton industry.Together with a whole generation of progressive thinkers, he believed that theIndustrial Revolution had made regions an anachronism, relegating them to ‘therubbish-heap of history’ He favoured the suppression of the regional approach bythe demographic and statistical method, using the triad of People, Work and Placewherein ‘Place’ was degraded from pole position to third place He incurredhowever criticism from fellow-geographers as ‘radically wrong’.12 An Oxfordgeographer demonstrated that the Industrial Revolution had not undermined theregions but had been in essence a regional phenomenon and had intensified regionalloyalties.13

The resurgence of the region

From 1965 the British government began to publish a regular annual series ofregional statistics Eminent historians such as J.D.Marshall and Sydney Pollard(1925–98) validated the role of the region in the study of British and Europeaneconomic and social history.14 Above all, Clive Lee placed the subject upon animpregnable basis for posterity by using population and employment as proxies inorder to measure long-term regional change A Cambridge geographer used Lee’sstatistics in order to generate a whole series of incomparably enlightening essays.15

In France the members of the Annales School followed the example set by their

founder, Lucien Febvre in his study of Franche-Comté (1911) and produced theirfinest work within the field of regional history ‘Development Studies’ werepioneered by Schumpeter and elaborated from 1958 by Myrdal, Hirschman andIsard who recognised that an ideal region for all purposes could not exist From the1960s ‘regional science’ experienced a renaissance within the field of geography.That revival was inspired by W.Christaller (1893–1969), formulator in 1933 ofcentral-place theory, and by A.Lösch (1906–45), who extended the theory ofindustrial location first elaborated by J.H.von Thünen in 1826 and by Alfred Weber

in 1909 It inspired the foundation of some eight separate journals (1965–91).Within Europe the formerly ‘prohibited nations’ began to re-emerge, especially inthe mountain fastnesses of the Pyrenees The Occitanian revival began in the 1960s,the Catalan and Basque renaissances in the 1970s and the Flemish and Lombardrenaissances during the 1980s A rising tide of decentralisation swept through Italy,Belgium, Spain, France and Hungary after 1965, extending even to India andChina That tide reached high-water mark in the largely unpredicted ‘GreatTransformation’ of 1989–91, when Germany was reunited upon a federal basis in

1990 and the vast Soviet empire collapsed in 1991.16 Germany became a model forthe world in its federal structure The German language acquired in 1980 the newword of ‘Regionalismus’, which was wholly free from the pejorative overtones of theearlier ‘Partikularismus’ (1843).17 The Council of European Regions was established

in 1986 Even Britain was forced to make grudging concessions to Ulster, toScotland and to Wales As states relinquished some of their traditional functions and

as regions became more autonomous the differences between countries and regionsbecame increasingly differences in degree rather than in kind ‘Countries have inimportant respects become more like regions, and regions more like countries.’18

‘Bio-regionalism’ was placed firmly upon the progressive agenda byenvironmentalists.19

The pre-eminence of Osaka in the regional historiography of

Japan

The Meiji Restoration remains the central event in modern Japanese history and thesubject of a never-ending debate The new regime established a centralisedgovernment on the Prussian model in order to unite the nation in the face of theforeign challenge to its way of life The new government claimed a total competenceover society and assumed most of the functions formerly performed by feudal lords

It established a new capital in Tokyo, although the old regime had been overthrownlargely by a powerful coalition of the Satsuma and Choshu clans in south-westJapan

After the Meiji Restoration local and regional loyalties remained strongthroughout the country, excepting only in Tokyo itself Those sentiments werebased upon antiquity of settlement, upon continuity of residence in the ‘homeland’and upon inherited tradition From the 1890s they inspired local historians andlocal governments to undertake intensive research into local history and to writeaccounts of every prefecture, county, city, town and village Within the academicworld however the subject remained comparatively neglected until the 1950s.Scholars apparently preferred universal theories of history to parochial issues orperhaps discovered that regional history presented a challenge of an unusual order

To this general rule the Osaka region presents the one splendid exception Its manyexcellent scholars produced outstanding works within the field of regional history.They were inspired by the memory of the political primacy enjoyed in the past byKansai (as Kinai), by its rich cultural heritage and by the rapid expansion of theeconomy since the 1880s From 1901 the city of Osaka sponsored the publication

of a civic history Osaka-shi-shi (A History of the City of Osaka) became the first real

local history to be compiled in the whole of Japan Five substantial volumes werepublished between 1911 and 1915, covering the entire period from ancient timesuntil the Edo era (1603–1868) The most important contributor to the collectivework was Shigetomo Koda (1873–1954), who became the real pioneer of scientific

research into the local history of Japan After the first Osaka-shi-shi had been

published, the city of Osaka continued to support the extension of the work

forwards to include the modern and recent periods of history Koda left Osaka aftercompleting his task but his work served as an inspiration to such scholars as EijiroHonjyo, Wataro Kanno, Iwao Kokusho, Heijiro Kuroha, Yasuzo Horie and MatajiMiyamoto, most of whom were graduates of Kyoto University, founded in 1897.They examined all aspects of the history of the city and published a series of works,which remain a wide-ranging and invaluable intellectual heritage To this day OsakaUniversity, Osaka City University and Osaka University of Economics, to whichsome of the above-mentioned scholars belonged, remain centres of active research intothe history of Osaka Later historians followed their example They extended theirhorizons into the modern era after 1868 and their range of interests into such fields

as commerce, industry, agriculture, management, labour problems, regional policy,etc

In the postwar era many scholars embarked upon the empirical study of localhistory The high speed of economic growth from 1955 stimulated a prodigiousintellectual investment in regional history, in sharp contrast to the neglect of thesubject elsewhere in Asia Many socio-economic historians in the 1950s discussed thedevelopment of local indigenous industries, such as weaving and silk reeling, andsought to relate their expansion to larger international trends In 1960–61 the

Chiho-shi Renraku Kyogikai [the Association of Local History], compiled Nippon Sangyo-shi Taikei [Japanese Industrial History] (Tokyo, 1961) The City of Yokohama published between 1958 and 1982 Yokohama-shi-shi in thirty-two volumes

(Yokohama), a monumental work upon local socio-economic history During thepostwar era the Institute of Economic Research at Hitotsubashi University, also in

Tokyo, compiled an important series of Estimates of Long-Term Economic Statistics of Japan since 1868 The preliminary results of that study appeared in 1953 and

fourteen substantial volumes were published (1965–88), presenting aggregate

statistics for the whole of Japan The thirteenth volume was devoted to Regional Statistics and included sixty valuable tables covering the period 1889–1906 That

volume appeared in 1983, almost as an afterthought

Quantitative methods were increasingly introduced from the 1960s into localstudies, especially into historical demography and into the history of wages andprices Homage to the essential unity of the State continued to be paid by Western

scholars, even where they made use of regional comparators in Britain The Cambridge History of Japan similarly felt compelled to exclude from its purview,

published in six volumes, all of ‘the riches of local history’ Recently ‘The Potential

of Regional History’ [Chiiki-shi no Kanosei] has, however, been examined in eleven

articles, comprising a special issue of Kindai Nippon Kenkyu [The Journal of Modern Japanese Studies], 19, 1997.

The challenge posed by a new approach to regional economic

history

When economic history was born in the 1890s it offered an understanding of theemergence of modern civilisation, modern society and the modern State By the

1950s it had become one of the most productive of academic fields During the1960s it underwent, however, a complete revolution in method and in purpose, aswhat Lance E.Davis proudly called in 1961 ‘the New Economic History’ burst uponthe scene The emergence of the new school in the USA was followed by certainconsequences First, it offered to its practitioners intellectual and material rewards aswell as prestige The romance of cliometrics understandably intoxicated all historicaleconomists Secondly, a sharp decline occurred from the 1970s in the number ofcourses on economic history offered in American universities Thirdly, a reactiveinterest developed in England from the 1960s in such non-cliometric fields associal, urban and labour history Fourthly, the number of members of the EconomicHistory Society in the UK declined from its peak level of 1975 by 40 per cent by

1998 Apparently students were deserting the subject in droves and voting withtheir feet They preferred to seek an understanding of the world in other disciplines.The Anglo-American editors of a leading textbook, forged within the new tradition,expressed their own faith in economic history as ‘an exciting subject, a subject full

of problems and controversy’.20 Students however wanted something more thanmere controversy and would have appreciated the judgement passed by Macaulay in1828: ‘our historians practise the art of controversy but neglect the art of narrative’.Modern masters of the written word have long regarded the subject of economichistory, new or old, with suspicion and disdain They have epitomised theircontempt in such imaginary thesis titles as ‘The Domestic Industries of Brabant inthe Middle Ages’, ‘The Economic Influence of the Development in ShipbuildingTechniques, 1450 to 1485’ and ‘The Wool Trade in Cricklade, 1536 to 1546.’21

The authors of the present work are well aware that the subject of economic history

is in a condition of self-induced crisis They have therefore avoided any attempt togenerate erudite mathematical models, the product of an academic pastime satirised

by Hermann Hesse in The Glass Bead Game (1943) They have simply sought to

study ‘mankind in the ordinary business life’, in the tradition of Alfred Marshall ofCambridge They have tried to avoid the dangers of superficiality22 and to set thetwo regions firmly in a national and global context

3 N.Lewis, The World, the World (1996), 293.

4 F.W.Nietzsche, The Use and Abuse of History (1873) Carlo Levi, Christ Stopped at

Eboli (1946) R.Rocker, Nationalism and Culture (Los Angeles, 1948), 433.

5 Oswald Spengler, The Decline of the West (1918).

6 Julien Benda, La Trahison des Clercs (Paris, 1927), translated as The Great Betrayal

(1928).

7 Fabian Society, The New Heptarchy (1905).

8 L.D.Stamp (ed.) A Glossary of Geographical Terms (1961), 392.

9 Annals of the Association of American Geographers (1952), 195, P.E.James.

10 C.B.Fawcett, Provinces of England—A Study of Some Geographical Aspects of Devolution

(1919), 232.

11 G.H.T.Kimble, ‘The Inadequacy of the Regional Concept’ in L.D.Stamp and

S.W.Woolridge (eds.), London Essays in Geography (1951) E.A.Wrigley, ‘Changes in the Philosophy of Geography’ in R.J.Chorley and P.Haggett (eds.), Frontiers in

Geographical Teaching The Madingley Lectures for 1963 (1965), 3–20.

12 R.E.Dickinson, Regional Concept: the Anglo-American Leaders (1976), 376.

13 John Langton, ‘The Industrial Revolution and the Regional Geography of England’,

Transactions of the Institute of British Geographers, N.S.9, 1984, 145–67.

14 S.Pollard, Marginal Europe: the Contribution of the Marginal Lands since the Middle

Ages (Oxford, 1997).

15 C.H.Lee, Regional Economic Growth in the UK since the 1880s (1971) British Regional

Employment Statistics, 1841–1971 (1979) The British Economy since 1700 (1980),

which devoted one-tenth of the text to ‘Regional Growth’ R.Martin, ‘The Political

Economy of Britain’s North-South Divide’, Transactions of the Institute of British

Geographers, N.S 13:4, 1988, 389–418 R.Martin, P.Sunley and Jane Wills, ‘The

Geography of Trade Union Decline: Spatial Dispersal or Regional Resilience?’, idem,

N.S., 18:i, 1993, 36–82.

16 Ryszard Kapucinski, Imperium (1995) Paul Kennedy, Rise and Fall of the Great

Powers: Economic Change and Military Conflict from 1500–2000 (1988), like almost all

contemporary intellectuals, failed both to foresee and to forecast ‘die grosse Wende’.

17 Celia Applegate, A Nation of Provincials (1990).

18 Peter Maskell et al (eds.), Competitiveness and Regional Development (1998).

19 Kirkpatrick Sale coined the phrase in 1993.

20 R.Floud and D.McCloskey (eds.), The Economic History of Britain since 1900 1:1700–

2 Region and nation

Douglas A.Farnie and Tetsuro Nakaoka

The primacy of commerce in the initiation of global economic

change

The leading role of commerce in economic development was an article of faith to thefirst generation of economic historians Its supreme importance has always beenrecognised by the historians of America and of Asia, by historians of the MiddleAges in Europe and, above all, by historians interested in the emergence of a ‘worldsystem’ during the early modern era It should therefore be unnecessary to reiterate atruism, to the effect that the growth of trade initiated a process of fundamental andglobal social and economic change The primary transition from an agricultural to

an industrial way of life was undoubtedly stimulated by a remarkable growth ininternational trade Between 1800 and 1913 the value of world trade not merelyincreased at a rate fivefold as fast as the growth in world population: it alsodeveloped upon a multilateral basis, so conferring maximum benefits upon allparticipants That trend did not however continue unchecked From 1914 a sharpreversal of trend occurred as the ratio of world trade to world production began todecline and continued to do so for sixty years From 1930 the absolute value ofworld trade sank by 60 per cent (1929–38) and bilateral trade increased in favour atthe expense of multilateral trade Economists diverted their interests away from thesubject of international trade to that of the business cycle and national income.1

From 1945 international trade began to increase once more, especially betweenindustrial states The rate of its expansion soared (1950–90) to treble the rateattained in 1800–1913 and to one nearly sixfold the rate of world populationgrowth

During the nineteenth and twentieth centuries two states have played a dominantrole in international commerce The golden age of each state as a world powerbroadly coincided with their era of supremacy in world trade Thus Britaindominated world trade from 1787 until 1940 The extension of British commerce

to the world of Asia encouraged Japan to respond to the challenge to its nationalidentity embodied in the influx of alien goods into its ports in the 1860s

Whether the elite of Meiji Japan had any long-term plan in mind when theybegan the process of political change remains a highly debatable issue It remains

certain however that in one fundamental aim they remained united, namely in theirdetermination to preserve their independence, both economic and political In order

to fulfil that purpose they decided to remodel their country into a modern style industrial state In 1870 they established the Ministry of Public Works(Kobusho) and embarked upon an ambitious scheme of industrial development.The scheme was based upon the establishment of new government enterprises,including nine mines, an oil well, an iron manufacturing plant, two shipyards, threemanufactories, two railway lines and a telegraph network In order to guide thedevelopment of these enterprises 580 Western advisers were recruited In 1871 thenew government decided to abolish the feudal system At the close of the year itdespatched a large delegation of forty-eight members, including five importantleaders of the new government under Prince Tomomi Iwakura (1825–83), upon aprolonged tour of the major Western states, which were visited in succession Theofficial purpose of the delegation was to undertake diplomatic negotiations for therevision of ‘the unequal treaties’ of 1858 but the real aim was to study the political,social, economic and industrial system of each country as a possible model for theirdesign of a modern state When they returned to Japan in 1873 after a year and tenmonths abroad they discovered that the project of industrialisation by means ofstate enterprises had encountered serious difficulties Railway constructionconsumed far more money than had been expected The financial returns generated

Western-by most enterprises remained aWestern-bysmal Most of the Western advisers, except for afew of high calibre, proved to be only a financial burden upon an impoverishedstate The government was moreover facing a crisis arising from mountingdissatisfaction among the samurai, who had lost both their function and their highsocial status upon the abolition of the feudal system The crisis reached a climax in

1877 when the Satsuma rebellion occurred The balance of foreign trade meanwhileremained adverse from 1869 to 1881 That cumulative imbalance, coupled with ahuge deficit in public finances, generated a serious inflation, which caused muchsuffering The government followed up its victory in the civil war against Satsuma

by undertaking a whole series of drastic changes in policy in order to cope with thegrave economic crisis Financially, ministers adopted a policy of strict retrenchmentand made every effort to restore equilibrium in public finance and in internationaltrade The Bank of Japan was founded in 1882 and was given the exclusiveresponsibility for the issue of paper currency It called in inconvertible papercurrencies and burned all of the notes, in order to reduce the disparity betweeninternal and external prices and to facilitate the adoption of the silver standard.Within the sphere of industry, they recalled Japanese students who were studyingabroad and employed them as substitutes for Western advisers In 1880 theydecided to sell off all government enterprises to private entrepreneurs, with theexception of the arsenals, the Mint and some important gold and silver mines In

1881 they created a new Ministry of Agriculture and Commerce and in 1885 theyabolished the Ministry of Public Works Those drastic changes in policy broughtabout a serious deflation, which lasted from 1881 until 1885 From 1886 theJapanese economy began however to expand vigorously

The role of the State in Japanese economic development will always remain asubject for debate The elite of Meiji Japan undoubtedly took the originalinitiatives The success of the new policy was however fully attributable to itsreorientation away from high-cost heavy industry towards agriculture and relatedlight industries and to the self-restraint of the government in anticipating positiveresponses to its own initiatives from farmers, businessmen and merchants After theopening of the country’s ports the traditional economy of Japan entered upon a newstage of development under the powerful influence of international trade.2 Themost remarkable expansion occurred in sericulture and silk-reeling, in tea cultivationand processing, in the manufacture of ceramics, in response to the growth ofWestern demand, and in cotton cultivation and weaving, which were stimulated bythe import of new materials and techniques The purview of the Ministry ofAgriculture and Commerce embraced all of those fields: its actions proved successful

in encouraging initiatives among farmers, merchants, private entrepreneurs andinvestors From those sectors two important light industries, silk and cotton,emerged: those industries continued to support the Japanese economy until 1935.Throughout the period 1873–88, while the elite was struggling to overcome thecrisis and to implement new policies, its main concern lay in the preparation of theconstitution of Japan In 1889 the constitution was promulgated amidst a period ofvigorous economic growth, so creating in effect a new designer-state The country wasremodelled ‘as it were on the field of battle and in front of the enemy’.3 The new statemay have been based upon the accumulation since 1871 of an unexampled array ofinformation about modern Western states but it proved to be slightly more despoticthan its Western counterparts and considerably more aggressive in its relations withthe neighbouring states of East Asia That particular disposition may perhaps haveoriginated in the recruitment of the elite of Meiji Japan largely from the ranks of thesamurai Their aggressiveness played an important positive role in preserving theindependence of Japan but it acquired a negative function as the new state enlargedits powers The Sino-Japanese War, the Russo-Japanese War, World War I, a series

of wars waged against China and World War II were related inextricably to thedemographic and industrial development of Japan

Under the new regime the elite once more gradually strengthened, from 1895onwards, the powers of the government and also reverted to the policy of promotingheavy industry The industrial development of Meiji Japan was accompanied by arapid increase in the import of machinery and of intermediate goods, in a mannercommon to latecomers in the process of economic development The extension ofcapacity for machine-making became a principal means of maintaining a satisfactorybalance of trade through the technique of import-substitution After the Sino-Japanese War the government subsidised the shipping and shipbuilding industries.4

The government also established in 1901 a large State enterprise for themanufacture of iron and steel, namely the Yawata steelworks, a pre-cursor ofNippon Steel, which became in 1975 the world’s largest steelmaker After the Russo-Japanese War it nationalised the main lines of the private railway companies and,under the leadership of the National Railway, undertook the domestic manufacture

of locomotives Around the turn of the century newly emerging engineering firmsbegan however to produce munitions.5 That tendency was substantially reinforcedduring the interwar period Most engineering firms, especially those equipped withhigh technology, became more and more involved in munitions manufacture Thehyper-development of heavy industry thus created a serious imbalance in industrialdevelopment Only after the postwar destruction of the munitions industry couldthe machine-making capacity of heavy industry serve in full as a propelling agency

in the industrial development of Japan

Throughout the fifty years from 1885 to 1935 it was the cotton industry and thesilk industry which provided the main pillars of the Japanese economy Thatjudgement may be confirmed from the course of international trade Japan had firstacquired a staple export during the 1860s, as disease ravaged the silk cocoons ofEurope That trade in raw silk was buttressed by the export of tea, also to the USA,and from the 1870s by the shipment of bunker coal by Mitsui to the ports of Asia.Such commerce in primary produce supplied the initial impetus to the expansion ofexports, which accelerated when shipments of machine-spun cotton yarn began inthe 1890s Between 1870 and 1935 Japan expanded its exports at a rate tenfold asfast as the rest of the world Between 1950 and 1990 that rate was twice as fast asthe rest of a rapidly developing world During most of that long era two regions hadbeen keen competitors for the world market, Lancashire and Kansai

The most famous of economic treatises has tended to mislead later generations in

so far as it focused in 1776 upon the wealth of nations rather than upon the wealth

of regions.6 Economic development has always been regional rather than national inits incidence City-regions have always been the powerhouses of economic life,serving as such in both Britain and Japan Manchester played a dominant role in thetextile trade of the nineteenth century Its function was inherited in the twentiethcentury by Osaka The impact of industrial expansion upon the regions controlled

by those two cities revolutionised their way of life during a period which must berecognised as a defining era in the history of the world That transition was much morethan an economic phenomenon and may well be compared to those epoch-making

transformations chronicled by Jacob Burckhardt in The Civilisation of the Renaissance in Italy (1860), by Ferdinand Lot in The End of the Ancient World (1927) and by Johan Huizinga in The Waning of the Middle Ages (1924) The Industrial

Revolution in Kansai differed however fundamentally from that in Lancashire in sofar as it formed an inseparable part of the systematic remoulding of national lifewhich took place after the ‘opening up’ of Japan

A comparison of Manchester and Osaka

The rise to prominence of Manchester and Osaka was the result of deep-seatedgeographical and socio-cultural factors: it was not the product of historical accident.Both cities served their dependent regions primarily as centres of commerce ratherthan of industry Both lay open to the seaboard and were linked to the oceanhighways through the intermediary of a great port Both had access to abundant

supplies of the water essential for the processing of textiles Both enjoyed a humidclimate, dominated by south-westerly winds and favourable to the easy spinning ofcotton fibre Both cities had developed, from the sixteenth century onward, themanufacture of cotton and both had discovered, in the manipulation of that fibre, akey to prosperity Both made textiles into a staple trade and became swarming hives

of industry, enterprise and innovation Both came to serve as the focus of a highlyintegrated but diversified structure of industry, comprising a host of smallenterprises as well as a clutch of giant firms A central role in the process ofintegration was played by the development of facilities for transportation andcommunication Both cities had exploited the advantages of cheap water-bornecarriage, especially by means of canals Those canals became the nuclei of a densenetwork of transportation facilities and made Osaka into ‘theVenice of Japan’ or

‘the City of Bridges’ while Manchester earned the label of a ‘Venice in Hell’.7 Thusthe two cities extended their influence over their hinterland and created a mutuallyadvantageous division of labour between town and country Each city-regiondeveloped not only a wide range of manufacturing industries but also an immensearray of ancillary trades, including engineering and chemical manufacture Suchindustries generated external economies in abundance, permitting firms to thriveupon a small scale of operations and to serve as sub-contractors to the staple trades

of the region Both cities thus became organising centres for the industry of a vastenterprise zone As such they supplied the central market for the products of theirmanufacturing hinterland and served as the powerhouses and supreme co-ordinators

of their respective regional economies Each city became a metropolis and, in time,the hub of a whole system of cities

Both Manchester and Osaka concentrated within a relatively small area an intensedegree of economic activity, a feature which remained typical of the great city-regions of the world.8 Both city-regions occupied a relatively small proportion of thetotal area of their respective states The North-west region of England had beenidentified as an administrative sub-division for the purposes of the Census of 1851:

it comprised the counties of Lancashire and Cheshire and had the smallest area ofall the eleven standard statistical regions of the UK The Osaka Prefecture wassimilarly the smallest of all the forty-seven prefectures of Japan: it occupied only 7per cent of the total area of the six prefectures of Kansai (Osaka, Hyogo, Kyoto,Nara, Wakayama and Shiga), which in turn covered only 7 per cent of the total area

of Japan Both Manchester and Osaka became, in consequence of the intensity of theirindustrial development, fertile centres of environmental pollution, acquiring aningrained negative image Thus Manchester seemed in 1903 to possess ‘all thedefects of a great city, in exceptional degree—the crowding, noise, vice, squalor andgrime’ while Osaka became ‘the metropolis of smoke’ and impressed one visitinghistorian in 1921 as ‘a hideous manufacturing town for all the world likeManchester.’9 To identify the two cities primarily as centres of manufacture ishowever largely to misunderstand their essential function and their historic role.The extent of misunderstanding may well be greater in the case of Manchester than

in that of Osaka because of its higher historic profile For long Manchester has been

misrepresented by an exaggerated emphasis upon its cotton mills, its social divisionsand its living conditions Thus it has been misleadingly depicted as ‘the firstindustrial city’ and as ‘the shock city of the age’.10 That particular emphasis wasalways misplaced The real function of Manchester, even during the era of its mostrapid industrial expansion, always remained commercial The city experienced itstrue golden age during the long nineteenth century, from 1790 to 1920 Thedominant figure in Victorian Manchester always remained the merchant, its centralinstitution the Exchange and its most typical building the warehouse.

Both cities prospered as centres of domestic commerce but developed in time athriving export trade Through their export-earnings they created opportunities foremployment upon a scale which could never have been satisfied from purely localsources Thus they became magnets for immigrants and centres of a process ofacculturation They became bustling hives of an industrious population imbuedwith a practical capacity, a work ethic and even with a quasi-spiritual exaltation,stemming from a profound belief in the possibility of human progress Both citiesbecame the seats of mercantile elites, quick to respond to opening windows ofopportunity in the outer world Both benefited from the market connectionsdeveloped by foreign merchants and became training schools in mercantile skills aswell as in business leadership Thus Chinese merchants supplied the original andindispensable link between industrial Kansai and the world market, providingespecially the essential connection between Osaka and Shanghai They had longacquired a considerable and diversified competence within the sphere of foreigntrade, in sharp contrast to the Japanese whose tradition of splendid isolation hadrestricted the development of relations with other states and had imbued them with

a distrust of foreigners The native merchants of Kansai nevertheless developed theirown capacity, resources and connections a generation after the admission of theChinese to Osaka in 1871 and the consequent stimulus given to the export ofconsumer goods to the markets of mainland China During the 1890s they provedable to reduce their dependence upon their mentors, especially after the Sino-Japanese War They increased their numbers in Shanghai to surpass those of anyother foreign colony, supported a service launched upon the Yangtze in 1898 by theOsaka Shosen Kaisha and even established branches in Lancashire itself ThoseManchester branches were established by S.Ishiyama, as manager of the KansaiTrading Company, in 1898 and by Yonekichi Matsumoto in 1900, in order tohandle the trade in machinery and textiles to China, Japan and Korea.11

Both cities fulfilled on occasion military functions but they became in the mainseats of a vibrant mercantile culture and, in time, cradles of a liberal world-outlook.Such a perspective, generated by plain living and high thinking, elevated economicsabove politics and nourished little respect for politicians It was best embodied in

the powerful provincial press represented by the Manchester Guardian (established in 1821), the Manchester Examiner (1845) and by the Asahi Shimbun (1879) and the Osaka Mainichi Shimbun (1888) Each city retained a sense of difference from, and

perhaps even of superiority to, the way of life of their respective capitals Bothcompeted for the great markets of Asia and especially for those of China and India

Both began to reduce their textile industries during the 1960s as competitors finallymade inroads into their traditional preserves Both regions achieved their peak share

in their respective national GDP at about the same time, North-west England in1966–67 and the Osaka Prefecture in 1969 Both suffered the loss of their exporttrade in textiles as their states became during the decade 1978–87 net importers oftextiles Both shifted the basis of their economy from manufacturing industry toservices Both suffered from the inhibiting competition of the metropolis, especially

in the supply of business services

Fundamental differences nevertheless remained between the two regions First,Lancashire lacked any claim to historic antiquity, comparable to Kansai It hademerged as a separate county only in 1168 and had remained a marginal regionuntil the seventeenth century.12 Nor had Manchester ever enjoyed any closeassociation with the national capital Osaka dated back to at least the seventhcentury, acquired imperial palaces, and flourished as a port for the China trade in theseventh century AD It had become one of ‘the three metropolises’ of TokugawaJapan, together with Edo and Kyoto, the imperial capital from 794 to 1868.Through its links with Kyoto and Nara it had developed a close association with thetraditional civilisation of the nation It had even been chosen by Toshimichi Okubo(1830–78), a principal architect of the Meiji Restoration, as a potential capital inplace of Kyoto, as it had been between 744 and 793: it had even served as theresidence of the Meiji Emperor for 44 days in 1868 Okubo’s plan was frustratedand in 1869–72 Osaka suffered a severe recession, after the seat of power shiftedeastwards to Tokyo and its elite paid the price for their support of the old regime.Secondly, the fertility of the plain of Osaka, one of the few plains in a mountainouscountry, created a highly productive agro-commercial economy Such productivitywas paralleled in the NW of England only within the Cheshire plain and contrastedsharply with the limited returns reaped upon the barren moorlands of EastLancashire Those moors supplied pasture for the sheep which were absent fromKansai Osaka also lacked the coal beds of South Lancashire but could import cheapcoal from North Kyushu Its industry was less dependent upon the supply of coal thanupon the supply of labour and upon facilities for transportation, especially by water.13

Moreover, Osaka lacked the rock salt deposits of Cheshire and had to rely upon theevaporation of sea water Thirdly, Osaka had surpassed Edo in the degree of itseconomic development during the Tokugawa era: it had built up the most advancedeconomy in all Japan and had served as its commercial and financial capital, with ahighly developed market-economy and money-economy It may never have rivalledEdo in the number of its inhabitants but it undoubtedly surpassed Manchester insize until the 1850s, mustering in 1680 fiftyfold its population (300,000 to 6,500)and in 1720 fortyfold its population (375,000 to 9,000).14 The foundations ofOsaka as a commercial metropolis were laid by private enterprise rather than by anygovernment action.15 The merchants of Osaka may have begun as retailers orbrokers but they prospered more than the samurai of the surrounding domains,becoming financiers to the State The commercial elite of Kansai had as its core suchold-established dynasties as Sumitomo, founded in Kyoto in the 1590s That firm