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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.

International Labour Organization | Income Inequality

Wage Inequality Declined in Most Countries Since Start of 21st Century

“The Global Wage Report 2024-25 finds that since the early 2000’s, on average, wage inequality, which compares the wages of high and low wage earners, decreased in many countries at an average rate that ranged from 0.5 to 1.7 per cent annually, depending on the measure used. The most significant decreases occurred among low-income countries where the average annual decrease ranged from 3.2 to 9.6 per cent in the past two decades. 

Wage inequality is declining at a slower pace in wealthier countries, shrinking annually between 0.3 and 1.3 per cent in upper-middle-income-countries, and between 0.3 to 0.7 per cent in high-income countries”

From International Labour Organization.

World Bank | Income & Inequality

Remittances to Poor Countries Reached $685 Billion in 2024

“Officially recorded remittances to low- and middle-income countries (LMICs) are expected to reach $685 billion in 2024. The true size of remittances, including flows through informal channels, is also believed to be even larger. The growth rate of remittances in 2024 is estimated to be 5.8 percent, significantly higher than 1.2 percent registered in 2023…

It is notable that remittances have continued to outpace other types of external financial flows to low- and middle-income countries. Remittances have even surpassed FDI significantly (figure 5). The gap between remittances and FDI is expected to widen further in 2024.”

From World Bank.

Blog Post | Food Prices

Thanksgiving Dinner Will Be 8.8 Percent Cheaper This Year

Be thankful for the increase in human knowledge that transforms atoms into valuable resources.

Summary: There has been a remarkable decrease in the “time price” of a Thanksgiving dinner over the past 38 years, despite nominal cost increases. Thanks to rising wages and innovation, the time required for a blue-collar worker to afford the meal dropped significantly, making food much more abundant. Population growth and human knowledge drive resource abundance, allowing for greater prosperity and efficiency in providing for more people.


Since 1986, the American Farm Bureau Federation (AFBF) has conducted an annual price survey of food items that make up in a typical Thanksgiving Day dinner. The items on this shopping list are intended to feed a group of 10 people, with plenty of leftovers remaining. The list includes a turkey, a pumpkin pie mix, milk, a vegetable tray, bread rolls, pie shells, green peas, fresh cranberries, whipping cream, cubed stuffing, sweet potatoes, and several miscellaneous ingredients.

So, what has happened to the price of a Thanksgiving Day dinner over the past 38 years? The AFBF reports that in nominal terms, the cost rose from $28.74 in 1986 to $58.08 in 2024. That’s an increase of 102.1 percent.

Since we buy things with money but pay for them with time, we should analyze the cost of a Thanksgiving Day dinner using time prices. To calculate the time price, we divide the nominal price of the meal by the nominal wage rate. That gives us the number of work hours required to earn enough money to feed those 10 guests.

According to the Bureau of Labor Statistics, the blue-collar hourly wage rate increased by 240.2 percent – from $8.96 per hour in October 1986 to $30.48 in October 2024.

Remember that when wages increase faster than prices, time prices decrease. Consequently, we can say that between 1986 and 2024 the time price of the Thanksgiving dinner for a blue-collar worker declined from 3.2 hours to 1.9 hours, or 40.6 percent.

That means that blue-collar workers can buy 1.68 Thanksgiving Day dinners in 2024 for the same number of hours it took to buy one dinner in 1986. We can also say that Thanksgiving dinner became 68 percent more abundant.

Here is a chart showing the time price trend for the Thanksgiving dinner over the past 38 years:

The figure shows that the time price of a Thanksgiving dinner for a blue collar worker has gone down since 1986.
The figure shows that the time price of a Thanksgiving meal has decreased, while population, the nominal price of the meal, and hourly earnings have all increased.

The lowest time price for the Thanksgiving dinner was 1.87 hours in 2020, but then COVID-19 policies struck, and the time price jumped to 2.29 hours in 2022.

In 2023, the time price of the Thanksgiving dinner came to 2.09 hours. This year, it came to 1.91 hours – a decline of 8.8 percent. For the time it took to buy Thanksgiving dinner last year, we get 9.6 percent more food this year.

Between 1986 and 2024, the US population rose from 240 million to 337 million – a 40.4 percent increase. Over the same period, the Thanksgiving dinner time price decreased by 40.6 percent. Each one percentage point increase in population corresponded to a one percentage point decrease in the time price.

To get a sense of the relationship between food prices and population growth, imagine providing a Thanksgiving Day dinner for everyone in the United States. If the whole of the United States had consisted of blue-collar workers in 1986, the total Thanksgiving dinner time price would have been 77 million hours. By 2024, the time price fell to 64.2 million hours – a decline of 12.8 million hours or 16.6 percent.

Given that the population of the United States increased by 40.4 percent between 1986 and 2024, we can confidently say that more people truly make resources much more abundant.

An earlier version of this article was published at Gale Winds on 11/21/2024.

Blog Post | Income & Inequality

Myths About American Inequality | Podcast Highlights

Chelsea Follett interviews John Early about popular misconceptions around inequality in the United States and the measurement errors behind them.

Listen to the podcast or read the full transcript here. To see the slides that accompany the interview, watch the video on YouTube or the Spotify app.

So, let’s start with your book, The Myth of American Inequality: How Government Biases Policy Debate. Why is everything that most people think they know about income, inequality, poverty, and other measures of economic well-being in America dead wrong?

In some ways, this is perhaps a somewhat boring answer about facts, but that’s what makes it important; we have to get the facts straight. The numbers that people’s opinions are based on are not correct. There are various ways in which they aren’t, but two big ones.

The first is that when the US census measures income, it doesn’t count two-thirds of what are called transfer payments, or money that the government gives to people for not doing anything. In other words, a transfer payment is not what we pay civil servants or the military. Transfer payments are things like food stamps or Medicaid, which are also two examples of things that the census does not count. They also don’t count 88 percent of the transfer payments that go to people who are classified as poor. They don’t count Medicare for the senior population. They don’t count what is called Supplemental Security Income. They don’t count many state and local transfer payments to poor people. They count some housing subsidies, the so-called Section 8 subsidies, but they don’t count others.

When you add all the pieces up, two-thirds of the total amount of transfer payments aren’t counted. So that’s one big piece.

The other big piece is they don’t adjust for taxes. At the bottom end of the income scale, people pay about seven and a half percent of their income in taxes, mostly sales taxes and excise taxes. At the upper end of the income scale, people pay between 35 and 40 percent of their income in taxes, mostly income taxes. So, if you don’t adjust for those taxes, you end up with a very skewed view of the income distribution.

The census splits US households into five groups based on income. The bottom quintile has the least income, and the top quintile has the most. Using the official census definition of income, the ratio between the top and the bottom is 16.7 to 1, so the top quintile has 16.7 times more income than the bottom.

Now, the first thing we did was ask what income was missing. Well, the first thing we found that was missing was capital gains. Capital gains are not counted as income for reasons that aren’t clear. That, of course, is missing mostly from the top half of the income distribution. At the low end of the distribution, there’s all sorts of income misreporting. Not terribly large, but there is some, people just don’t report all their income. And in the middle, employer-paid benefits are missing. So, adding all that earned income data made the ratio between the top and bottom much bigger. The top quintile earns 60 times more income than the bottom quintile.

But we’re still missing two-thirds of the transfer payments. If we add all the transfer payments, the difference between the top and bottom drops to 5.7 to 1.

So that’s all the money coming in, but the census also ignores the money the government takes through taxes. If we compare after-tax income and after-transfer payment income, the difference drops to only 4 to 1.

So, we’ve gone from 16.7 to 1 to 4 to 1 after counting all the money. We didn’t have to redefine anything.

Let me hit a couple of other points here.

It’s not only that the difference between the top and the bottom became smaller after adding all the income data and accounting for taxes. The differences between the bottom, the next to the bottom, and the middle virtually disappear. The bottom 60 percent of Americans all have almost the same amount of income. Let me explain that a bit.

Income in the second quintile is only 8 percent larger than in the bottom quintile. And yet there are 2.8 times more people working in second quintile households. And when they work, they work 1.8 times more hours. They work nearly 40 hours, and people in the bottom quintile work less than 20. And in the middle quintile, there is 32 percent more income, but over three times more people are working, and they work more than twice as many hours. They put out a whole lot more effort and don’t get much more income.

Now, there’s another important wrinkle: adjusting households for size. Households in the bottom quintile tend to be single individuals, retired individuals, people who’ve just graduated from college, and so on. Households become larger as you go up the income scale. When you adjust for size, the bottom quintile actually receives 5 percent more income than the second quintile does. And only 7 percent less than the middle.

There’s also the issue of change over time. There’s something called the Gini coefficient. It’s a measure that’s set up so that at zero, you have perfect equality. Every household has the same income. And at 1, all the income is in one household. The census publishes this measure, and it has risen over the long term. When President Obama or Chuck Schumer says income inequality is awful and it’s getting worse, this is what they’re referring to. But they don’t count all the transfer payments, which have gone from being like 10 percent of our federal budget to 75 percent over time. If you count all the transfers and take away the taxes, the Gini coefficient has actually fallen.

There’s also the question of economic mobility. In a previous paper, you found that two-thirds of children reared in the lowest quintile at some point escape to a higher quintile as adults. I don’t think people realize just how economically mobile Americans are.

Your last point there is really important. Almost all income distribution data are a slice in time. So, the statement that “the poor are getting poorer and the rich are getting richer” is just wrong because these categories are not static: people who were poor ten years ago are rich today, and some previously rich folks have fallen into lower income levels. Now, there are studies that track the same people through time, and during one’s lifetime, you generally move up. Almost everyone’s income goes up, except for those who choose not to participate in the labor force. Although their income goes up too because we keep raising the transfer payments.

The same also applies to income groups. In 1967, the top quintile of households were those that made around $60,000 or more in 2017 dollars. The people in the bottom quintile made between zero and $15,000 in 2017 dollars. In 2017, 77 percent of the population was making incomes that would have placed them in the top quintile 50 years earlier. That’s inflation-adjusted. And fewer than 2 percent of the people in the bottom quintile in 2017 would have been in the bottom quintile 50 years ago. So, throughout the income distribution, we’re all a whole lot better off.

Now, are we better off than five years ago? Well, some of us are, and some of us aren’t, but the overwhelming majority of us are better off than our parents and grandparents were. Far better off.

What is another hopeful fact about the US economy right now that people may not be aware of?

If you measure it right, the share of Americans in poverty has dropped from about 14 percent back when the war on poverty began to 1.1 percent.

So, when Lyndon B. Johnson declared the war on poverty in 1964, the poverty rate had declined from over 30 percent in the 1940s and 50s to around 17 percent. Now, what happened after that? Well, poverty continued to decline at the same rate for another four or five years. Then, it stopped going down and started rising and falling with the business cycle.

Why do you suppose that happened?

Mismeasurement.

Exactly. We declared a war on poverty. We started giving people a lot of money, but we didn’t measure that money as income. And so, it bounced between 11 percent and 15 percent, back and forth, back and forth. It dropped below 11 percent last year, but it’s still in the same range. But if we count all the transfer payments, it’s only 2.5 percent. And if we correct for the CPI overstating inflation, poverty would be less than 2 percent.

So, poverty has virtually disappeared. The people in that 2 percent are people who are especially challenged, either mentally or physically, and they may need help. But most people who are called poor are simply getting lots of money from the government, and they’re not poor anymore.

Johnson had two objectives for the war on poverty. One was to alleviate the suffering of those who were poor, but the other was to enable them to become productive citizens. We completely failed at that one. Only one third of work-age adults in the bottom quintile have a job. Back when Johnson started the war on poverty, two-thirds of them did.

Why? The government’s paying them to do nothing. So, they do nothing.

Get John Early’s book, The Myth of American Inequality: How Government Biases Policy Debate, here.