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01 / 05
Modernization and the Loss of Japan’s Samurai Culture Benefited the Japanese People

Blog Post | Health & Medical Care

Modernization and the Loss of Japan’s Samurai Culture Benefited the Japanese People

Economic, technological, industrial, and other progress radically improved the life of the ordinary Japanese citizen.

Summary: In the mid-19th century, Japan’s feudal society underwent a profound transformation during the Meiji Restoration, embracing Westernization and modernization. The shift from isolationism to openness resulted in rapid industrialization and technological advancements, improving living standards, education, and social mobility for ordinary citizens. This article examines Japan’s journey from a closed society to a prosperous nation, dispelling romanticized notions of the “good old days” and highlighting the benefits of progress and innovation.


Imagine you’re a farmer in Japan in 1850. You pay homage to your feudal lord, wear clothes of plain cotton, eat rice and fish, and are mostly preoccupied with surviving the occasional famine and outbreaks of disease. You likely have no education. Fifty years later, life has changed beyond recognition. Farmers now have an education, have fertilizer to farm with, have access to vaccination, and can use the telegraph and the postal service. They have more money to spend, more leisure time, and access to mass media.

The 2003 movie The Last Samurai portrays Japan during this period of modernization. The film laments the loss of traditional samurai culture amid rising Westernization. The film is inspired by the Satsuma Rebellion, a revolt from disaffected samurai amid the loss of their privileged position in society.

Longing for a privileged past is not unique to Japan; many in Europe romanticize the medieval era as one of knightly chivalry. However, such portrayals usually look at history through rose-tinted glasses. The “good old days” is a common fallacy, with facts becoming more distorted the further one looks back in history.

What really happened in the era of The Last Samurai?

The period takes places after the Meiji Restoration, showcasing the Westernization of Japan. Before this period, Japan was ruled by Tokugawa shogunate, a military dictatorship that had dominated the island for over 260 years. It imposed the foreign policy of Sakoku—that is, one of extreme isolationism. Aiming to reduce the spread of Christianity and cement the power of the shogun, the islands of Japan became closed to foreigners. No one was allowed to enter or leave Japan, and foreign trade was virtually nonexistent. (There was some trade allowed from the Dutch through the island of Kyushu, notably in porcelain.) This period was one of peace, which many in Japan welcomed after the Sengoku Jidai (a period of civil war) of the 1500s.

Conservatives in Japan welcomed this closing of the country to foreign influence. At the time, Japan was dominated by the samurai class. Samurai, while traditionally warriors, had moved in peacetime to become aristocratic bureaucrats at the service of their daimyo, a feudal lord. Samurai had a monopoly on military force and controlled most of education. Merchants were seen as a lower class, even lower than farmers. Feudalism, a system where a lord would rent out land in return for labor from the peasantry, had ended in parts of Europe around 1500. Whereas competition among European powers had created the emergence of a middle class, Japan had remained socially, technologically, and militarily stagnant from 1639 onwards.

As described by Mitsutomo Yuasa in his study The Scientific Revolution in Nineteenth Century Japan:

The traditional society (feudalism) before the Meiji Restoration, namely the age of Edo of Tokugawa Shogunate, was based on pre-Newtonian science and technology, and on pre-Newtonian attitudes towards the physical world.

In 1853, Japanese isolationism came to an end. With the arrival of Commodore Matthew Perry demonstrating a textbook example of gunboat diplomacy, the United States forced an end to Japanese isolationism and the opening of Japanese ports to American trade. In the years that followed, Japan established diplomatic relations with the Western Great Powers and underwent a collapse of the ruling Tokugawa shogunate.

Japan then went through a period of rapid modernization, importing Western technology, ideas, and culture. Ian Inkster describes the impact:

By 1855, Western machinery and factory organization had been introduced at Nagasaki for the maintenance of warships, and a spurt of building began in 1860 under Dutch leadership. It was Englishmen who in 1867 constructed the first steam powered spinning plant, the Kagoshima Spinning Factory. . . . By 1882, the Osaka Spinning Company operated 16 mules, 10,500 spindles and was practically powered by steam. . . . From 1870 to 1872, 245 railway engineers arrived in Japan from Europe. . . . Telegraphic communication was also established by the British from 1871.

The industries that were revolutionized by foreign influence included the iron industry, mining, railways, electricity, civil engineering, medicine, administration, shipbuilding, porcelain, earthenware, glass, brewing, sugar, chemicals, gunpowder, and cement manufacture. Japan developed its staple industry and export product, silk manufacturing and spinning, under guidance from a Swedish engineer using Italian methods. The silk industry also employed a large amount of female labor in Japan, with more women in the industrial labor force in Japan than in any other country in Asia.

The development of technological innovations improved Japanese industry. Ryoshin Minami showed the growth in total horsepower between 1891 and 1937 was in the order of 13 percent annually. The figure below shows the growth rate of development of primary industries during the period between 1887 and 1920, as well as overall economic growth. In many of the years during that period, growth in private non-primary fixed capital was in the double digits.

By the 1890s, Japanese textiles dominated the home markets and competed successfully with British products in China and India. Japanese shippers were competing with European traders to carry these goods across Asia and even to Europe.

The Satsuma Rebellion occurred in 1877, as Japanese government restricted the ability to carry a katana (long sword) in public. Regardless of one’s thoughts on the right to bear arms, the reduction in the power of the samurai class was a win for ordinary Japanese people. Having access to modern medical techniques, transportation, and goods benefited the whole society, rather than just feudal elites. Indeed, many of the samurai were able to adapt to their new roles in a modern Japan, working in business or government. In the 1880s, 23 percent of prominent Japanese businessmen were from the samurai class. By the 1920s, the number had grown to 35 percent.

By 1925, universal manhood suffrage had been implemented, a stark contrast from the Tokugawa shogunate. The social structure had loosened, allowing societal advancement far more easily than in the feudal era. By 1897, 95 percent of citizens were receiving some form of formal education, in contrast to 3 percent in 1853. With a more educated population, Japan’s industrial sector grew significantly. Of course, the new system still had its problems, such as labor strikes and industrial unrest. However, Westernization brought far more economic freedom to the Japanese people. Attitudes to commerce changed. Merchants rose from being the lowest class to becoming a vital part of the burgeoning middle class.

In Japan, progress was seen in economics, science, technology, education, consumer goods, industry, and social mobility. Society and the traditional order had been uprooted, in an example of Schumpeterian “creative destruction.” The inflow of new ideas, of new ways of doing things, allowed people to become freer, wealthier, healthier, and better educated. The opening of Japan was fundamentally an opening to progress. By isolating itself, Japan fell behind the rest of the world. As it opened itself to competition, it was able to catch up, and in some cases, surpass other countries. And the ordinary citizen of Japan was better for it.

Buenos Aires Times | Macroeconomic Environment

Milei Cools Argentina Wholesale Inflation to Lowest Since 2020

“Argentine President Javier Milei notched another economic victory Tuesday after data showed wholesale prices declined in May for the first time since the height of the pandemic, adding to his momentum before October midterm elections. 

The producer price index fell 0.3 percent from April and rose 22.4 percent on the year, according data from the INDEC national statistics bureau. It’s a sharp turnaround from December 2023, Milei’s first month in office, when wholesale monthly prices soared 54 percent. The libertarian often uses the indicator to warn that Argentina was nearing hyperinflation due to his predecessor’s policies. 

Local prices stayed constant while prices for imported products fell 4.1 percent, according to the monthly report. Economy Minister Luis Caputo celebrated the good news on X.

Discounting pandemic data that saw demand plummet, the May print is the lowest in the series, which begins in 2016, Caputo wrote.

In May, monthly consumer price increases also cooled to their slowest pace in five years to 1.5 percent.”

From Buenos Aires Times.

Blog Post | Innovation

Cardwell’s Cage and How to Break Free

History's cycle of progress and stagnation can be broken.

Summary: Throughout history, cities and nations have repeatedly sparked extraordinary—but relatively brief—periods of innovation. Cardwell’s Law is the idea that creative peaks are historically short-lived. Can any society sustain innovation over the long term? The conditions that support progress are fragile, but by identifying and safeguarding them, we can break out of this historical cage.


Donald Cardwell, a British historian of science and technology, famously observed that “no nation has been very creative for more than an historically short period.” Known as Cardwell’s Law, this dictum haunts many people concerned about the future of innovation. Can the United States, or any other country, break free of the cage of Cardwell’s Law and create an environment that fosters innovation indefinitely?

To better understand this challenge, it helps to zoom in from the level of nations to that of cities, which often function as engines of innovation. While intended to describe whole societies, Cardwell’s Law scales down well to the level of individual urban centers. After all, city-states were the first states and served as the sites of institutional experimentation. And for a long time, it was cities, not larger nations, that commanded loyalty.

A grim message from my otherwise uplifting book, Centers of Progress: 40 Cities That Changed the World is that a city’s creative peak tends to be—as Cardwell noted—brief. As the British science writer Matt Ridley observed in the foreword to the book, “Global progress depends on a sudden series of bush fires of innovation, bursting into life in unpredictable places, burning fiercely, and then dying rapidly.”

Are there any exceptions to that rule? Have any cities managed to maintain longer-than-expected golden ages of innovation, and what can we learn from them?

The cities from earlier eras that I profiled in my book tend to be featured for their achievements over longer periods of time. That is, unfortunately, because in the distant past, progress was often painfully slow—not because someone had cracked the code to break Cardwell’s Law.

Writing, for example, developed over multiple generations, as simple pictographs that accountants invented for record-keeping purposes evolved into a symbolic script and eventually into highly abstract, cuneiform characters. The birthplace of writing was Uruk, an ancient Sumerian city. The most noteworthy part of Uruk’s history lasted for many centuries, but only because the city’s great achievement took generations to accomplish. We should hardly want to emulate a society that advanced at such a pace.

In contrast, when we turn to modern history, the pace of progress accelerates—but the creative window narrows. Manchester, the so-called workshop of the world, led the way during the Industrial Revolution, but only for a few decades. Houston’s heyday helping drive forward space exploration also only lasted a few decades. Today, the youngest living person to have walked on the moon is 89. Tokyo went from being a world capital of technology in the 1980s to decades of economic stagnation. The San Francisco Bay Area that birthed Silicon Valley and the digital revolution has lost its crown, with many technological breakthroughs now occurring elsewhere. In the modern era, the golden age of innovation in any locale tends to last only a few decades, or even less.

To understand why this pattern repeats so consistently, consider the underlying conditions that support—or sabotage—sustained innovation. The economic historian Joel Mokyr, in an illuminating 1993 essay, describes the narrowness of the path that societies must walk to promote creativity, a veritable tightrope where one wrong move can lead to everything crashing down. “In retrospect, the most surprising thing is perhaps that we have come this far,” he concludes.

What causes the downfall of centers of progress, making Cardwell’s Law so seemingly prophetic? While world-changing innovations have come from an extraordinarily diverse set of places, from Song–era Hangzhou to post–World War II New York, sites of creativity almost always share certain key features. It is the loss of those factors that spells their doom. These feature are: conditions of relative peace, openness to new ideas, and economic freedom.

Free enterprise and healthy competition encourage innovation, and the freedom to trade across borders plays an important role by increasing that competition. At the same time, free exchange across borders must not be confused with the total dissolution of borders: vast empires under centralized control tend to stagnate technologically, and complete integration of countries under a global government would in all likelihood be a disaster. A certain type of international competition can be beneficial—just not the kind of rivalry that leads to war.

War redirects creative energies toward making deadlier weapons and away from technologies aimed at improving living standards. And, of course, losing a war can lead to a society’s complete destruction.

Moreover, war prevents innovators from collaborating across borders, and even thinkers within the same country often cannot put their heads together due to the secrecy inherent in war. While some credit WWII with speeding up the creation of the computer, a case can be made that the conflict actually delayed the computer’s invention by preventing collaboration between many innovators, from Konrad Zuse in Berlin to Alan Turing in Great Britain. Even in peacetime, innovation can be stifled when freedom and openness are curtailed.

In short, progress is threatened when peace is lost to war, openness is stifled by the suppression of speech, and freedom is undermined by restrictive or authoritarian laws.

Hong Kong provides a recent and illustrative example of how quickly the conditions for progress can disappear. During its whirlwind economic transformation in the 1960s, Hong Kong rose from one of the poorest countries in the world to one of the wealthiest. It accomplished this feat through policies of “noninterventionism”: simply allowing Hong Kongers to freely compete and collaborate to enrich themselves and their society. But the city’s proud tradition of limited government, the rule of law, and freedom has been abruptly extinguished by a harsh and unrelenting crackdown from the Chinese Communist Party.

Despite sobering examples such as that of Hong Kong, there is reason for hope. Centers of progress are often short-lived, but the fact that throughout history most societies remained creative for only a short time should not discourage us. To defy Cardwell’s Law, all that is needed is a clear-eyed willingness to learn from the mistakes of the past and to fiercely protect the conditions needed for further progress.

This article was published at Econlib on 5/17/2025.

World Bank | Quality of Government

Côte D’Ivoire’s Land Reforms Are Unlocking Jobs and Growth

“Secure land tenure transforms dormant assets into active capital—unlocking access to credit, encouraging investment, and spurring entrepreneurship. These are the building blocks of job creation and economic growth.

When landowners have secure property rights, they invest more in their land. Existing data shows that with secure property rights, agricultural output increases by 40% on average. Efficient land rental markets also significantly boost productivity, with up to 60% productivity gains and 25% welfare improvements for tenants…

Building on a long-term partnership with the World Bank, the Government of Côte d’Ivoire has dramatically accelerated delivery of formal land records to customary landholders in rural areas by implementing legal, regulatory, and institutional reforms and digitizing the customary rural land registration process, which is led by the Rural Land Agency (Agence Foncière Rurale – AFOR).

This has enabled a five-fold increase in the number of land certificates delivered in just five years compared to the previous 20 years.”

From World Bank.

Buenos Aires Times | Macroeconomic Environment

Inflation in Buenos Aires City Slows to Monthly 1.6 Percent

“Consumer prices in Buenos Aires City rose 1.6 percent in May, lower than the expectations of most analysts and a slowdown from the previous month.

The news will be welcomed by President Javier Milei’s national government, which is awaiting the publishing of the INDEC national statistics bureau’s national figure later this week.

According to data from the Buenos Aires City Statistics Office, prices in the capital were up 1.6 percent, down from the 2.3 percent recorded in April. Most private consultancy firms expected a rate of around two percent.

Inflation so far this year in the capital totals 12.9 percent – a massive drop on the 48.3 percent recorded over the same period in 2024.”

From Buenos Aires Times.