Colonial and Early Post-Colonial Economy of East Asia

 

 

The “trio” of colonial development: Japanese state, state-controlled banks, and state-controlled Zaibatsu.

 

  1. Agricultural development: the prevalence of traditional landlordism in Korea versus entrepreneurial peasant-landlords in Taiwan. Higher productivity in Taiwan, lower tenancy rates in Taiwan. Japanese control over the rice export – higher in Taiwan (90%) than in Korea (60%), for the Taiwanese agriculture was more developed and productive (although the market size was bigger in Korea). Result – “underdevelopment” of the countryside in Korea, and far stronger nationalistic anti-colonial impulse (communist movement, guerilla struggle in Manchuria). Concretely – percentage of irrigated land was higher in Taiwan (60%) than in Korea (30%). Crop output growth was faster in Taiwan (200% for 1915-1939) than in Korea (145% for the same period). Korean rice farmers had hard time competing for the Japanese market with the Taiwanese. Taiwan – serves to economize Japanese expenses for sugar import (which accounted for 50% of the Japanese trade deficit in 1896-1904). In the late 30th – Taiwan accounts already for 90% of Japanese sugar imports (the aim of self-sufficiency achieved). Taiwan always (after 1910) run large positive trade balance; in Korea, in 30th , trade balance with Japan was negative (decrease in rice prices). Higher rate of savings in Taiwan (Bank of Taiwan loans funds to Japanese companies), four times higher investment in agricultural construction in Taiwan, than in Korea.

-         one of the roots of the plight of tenants in colonial Korea – the manner in which “Land Survey” was conducted by the Japanese in the 1910s. Traditional relationship of “hereditary tenancy”, under which poorer families had a kind of unwritten hereditary rights to patches of landlords’ land (sort of traditional communalism), were totally disregarded in favor of “exclusive ownership rights” – of course, of the privileged village elite, able to prove their ownership. As a result – lots of poorer peasants were virtually dispossessed of their traditional ways of survival. In addition, lots of communal village lands was “privatized” by the inventive landlords who found ways to “prove” their “ownership”. The results of the “Survey” – strengthening of landlordism, expropriation of huge part of the arable land by the Government-General (former Korean “court lands”, etc.), and great increase of Government-General’s land tax income ( 2 times throughout the 1910s; land tax revenues – 40% of the overall revenue of the colonial government in 1930 ). Comparison with Taiwan – Japanese land registration program there (1898-1903) considered much less deleterious to the peasant agriculture.

-         Japanese efforts to increase rice production/export in Korea in 1926-1934 – mixed effect, close to general failure. Crop output did increase by 40% for this period, due to the improved irrigation and wasteland clearing, but the governmental subsidies to the irrigation cooperatives were inadequate, and that caused increases in water prices and new burdens for peasant economy. Then, most of the increased output was exported to Japan; Korean rice consumption, unlike that in Taiwan, continued to drop throughout the colonial period. 

-         Under the “all-out mobilization system”, from 1940 onward Japanese started simply to expropriate the rice output, except for the seeds and minimum for peasants’ own consumption. The percentage of rice expropriated from the peasantry in Korea – 42% in 1940, 60% in 1945. Result – permanent “semi-hunger” in the villages. Rural poverty – enormous even before the war: in 1931, 25% of rural populace were classified as “full paupers” (segungmin), and 46% were suffering from chronic deficit and debts. 6% of the whole populace – had to leave the villages and turn to primitive slash and burn agriculture in the mountains.

Consequence – stronger discontent among the Korean peasantry than among the Taiwanese, bigger opportunities for the development of radical leftist movement in Korea.

  1. Industry – quicker development in Korea than in Taiwan. Taiwanese manufacturing growth rate in 20th – 30th – only 6%. Smaller mineral deposits primarily responsible. Metal production in Taiwan – mostly government-promoted aluminum production (as compared to iron in Korea). Prevalence of food-processing in Taiwan – 73% of the general industry output (as opposed to 27% in Korea). The patterns – the same: concentration of industry (market share of 30-40 biggest enterprises – 70-80%), government-planned and guided selective development with militaristic aims, based on cheap labor, cheap energy and imported technology. Semi-peripheral pattern.

-         Prodigious growth of the Korean railways: one-third of all railways in China to the end of colonial period. Annual number of passengers – about a half of the whole Chinese system. Huge profits, and also military importance. But – all railways in Korea were owned by Japanese semi-governmental SMRC (South Manchurian Railway Company), which repatriated all the profits to Japan and not reinvested them in Korea.

-         Main force of the highly militarized industrial growth  in Korea in the 1930s – Japanese zaibatsu, lured by absence of tariffs and governmental subsidies. Noguchi Jun – development of hydroelectricity and chemical industry (nitrogenous fertilizer). Japan Steel Corporation – development of iron ores and steel industry in the northern part of Korea. Mitsui – exploitation of Korean coal, production of paper. As a result, Japanese owned up to 90% of all Korean industry in 1940. So, colonial Korea became a relatively industrialized society (industrial output’s share in the general output – 40% in 1940), but it did not mean that any serious international-level native capital was developed.  Taiwan’s share of industry in the island’s general output – 15% in 1940 – less industrialization than in Korea. Still, the same patterns of predominantly Japanese ownership. These patterns made it easier for the post-colonial regimes to either nationalize the industry (North Korea) or expropriate the Japanese properties for the benefit of government-connected corporations (South Korea, Taiwan). 

  1. Consumption pattern – deterioration of rice rations in both Korea and Taiwan (worse in Korea, where 48% of the rice output was exported in 1933). Growth in life expectancy in both Korea and Taiwan (up to 40-45 years), due to better medical facilities. Taiwan – death rate cut by nearly a half during the colonial period (greater improvement than in Korea) Still, educational level and social mobility opportunities remain much lower for the “natives” than for residential Japanese in both cases. “Two-track society”, “assimilation” of the natives into the lowest stratum of Japanese society.  Discrimination – in economy – the well being of the Japanese in Korea was incomparable with the conditions of the “natives”. Practically all Japanese households in Korea had electricity, but less than 10% of Korean households could afford it. Discrimination in wages – wage of a Korean worker was always lower than that of the Japanese, even in the manual labor. Result – growth of nationalism, especially strong in Korea.
  2. “Administrative guidance” and corporative model – reappears in both Koreas and Taiwan after the de-colonization. “Interpenetration of state and private interests”. Extreme military-like exploitation of underrepresented labor (especially female). 
  3. Importance of the colonies for Japan – Korea in the end absorbed 34% of all Japanese exports. In this aspect, colonialism was a “breeding ground” for the Japanese capitalism. Still, many things were not available in Korea and Taiwan (petroleum, most of metallic ores, textile fibers, etc.), and this stimulated Japan’s further overseas expansion, which led to the Pacific War.

 

First modern buildings in Seoul

 

First electricity in Seoul

 Honoring old yangban: Government-General, Seoul, 1925. 

 

Killing for fun – the Japanese in China

Rebuked by a Japanese official (colonial Korea, 1935)