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Merchants and the Tokugawa Political Order

By Craig Wright | 22 Nov 2021 | Economics

The Tokugawa political order was maintained by a system that some researchers have referred to as centralized feudalism. The structure had feudal lords with their own domains, but acted as a centralised state with the shogun at the head. Such a political system differed significantly from the European feudal structure, where barons held significant power. It would be more closely analogous to the French authoritarian system implemented by Louis XIV. In constructing Versailles, the French monarch centralised power in the French kingdom. Analogously, the shogun acted as a de facto ruler at the emperor’s order, but ran the country as a hereditary military leader [1].

Tokugawa Ieyasu brought an end to the political disorder, and gained effective control of the entire country. As he went from being a daimyo to controlling around 250 other daimyo, the Tokugawa house centralised the system that maintained feudal powers. Such a structure shows further similarities to the French court at Versailles, whereby such centralised feudalism, known as the sankin kôtai, or alternate attendance system, involved the lords’ or daimyo’s spending alternate years in the capital [2]. The French system of rule at Versailles required that the barons or lords spent time in the French capital where Louis XIV could oversee them. Every other year, each daimyo would be required to live in the city of Edo. At the same time, a hostage was permanently maintained in the capital. The heir to the daimyo’s estate would be required to live permanently in the city, which is similar to the requirement of the French lord’s heir having to stay in Versailles [3].


The French state under Louis XIV became very authoritarian, and the implications of the French state’s centralised structure at the time changed the history of Europe. Analogously, the restructuring under Tokugawa Ieyasu changed the nature of Japanese history. After 1700, every daimyo was born and raised in Edo, becoming a native or citizen of the city. It changed trade throughout the country as large numbers of samurai and their lords moved back and forth every year, commuting between Edo and the various estates ruled by the daimyo [4]. The moving had massive economic effects as not only the groups’ journeys were involved, but it was necessary to feed the retinues and support staff of the daimyo in Edo. The daimyo was required to broker a deal for the rice and other goods needed to continue their support. The richer areas, such as Osaka, brokered deals and cash payments to cover the expenses of such travels and movements. The result were large-scale circulations of cash throughout the country [5].

As explained, the French Bourbon dynasty started with Louis XIV creating an analogous regime with the provincial lords having to assemble at Versailles. It was not indeed a feudal system as seen from the tenth to fourteenth centuries in Europe, but rather a system more analogous to the European systems of the period from 1600 to 1800. As such, it led to a structure that helped to hold together a society that otherwise would likely have dispersed and been at war. It can also be seen as a system forming an early modern structure of political control [6].

Rice and Greedy Merchants

It is a common practice to blame scarcity on merchants. When prices rise, the people buying rice experience the increased price, and think that it is a direct consequence of the actions of the merchants selling the rice to them. The Kaitokudō, the Osaka merchant academy during the Tokugawa period, was established along with the Dojima, which acted as the world’s first well-established futures market [7]. Grain was collected throughout the country and converted into silver through a clearing house process. In times of scarcity, as would be the result of poor harvest, the amount of grain collected for redistribution would be less than many families needed to survive, forcing them into further debt [8].

The consequence meant putting the blame on the merchants, who were seen as profiting at the expense of the farmer. Yet, it was not the merchant and their perceived greed that would cause the shortage. It was the development of the Osaka markets and the economic educational process that occurred in the region that allowed Japan to store grain using forward contracts and sell back the collected produce at a later time. When merchants lose money storing grain in times of plenty, few consider their losses. Yet equally, when their planning pays off, few thank the merchants who have effectively saved the nation from starvation.

The merchants are looked down upon and seen as a lone class. It is in error. It is the commercial activity and the risk-taking of such merchants that have protected the Japanese people in times of famine. It was, in part, the same system that has allowed Japan to grow from around 12 million people in 1600 to over 30 million people later in the Tokugawa period [9]. A process of ensuring rice storage during the good times that integrates with the merchant’s commercial system will enable the government to benefit in times of famine [10]. The famines that ensue are all avoidable. Efficient commercial practices are being developed in Osaka, and the integration of them throughout the country will deliver economic benefits to both the government and the people.


[Image: Artist: Utagawa Yoshitora. Title: Comical Warriors: New Year’s Rice Cakes for the Reign of Our Lord (Dôke musha miyo no wakamochi). Date: 1847–52]

[1] Vaporis, C. N. (1997). To Edo and back: Alternate attendance and Japanese culture in the early modern period. Journal of Japanese Studies, 23(1), 25–67.

[2] Tsukahira, T. G. (1966) Feudal control in Tokugawa Japan: the sankin Kōtai system. Brill.

[3] Jones, Colin. (2003) The Great Nation: France from Louis XV to Napoleon: The New Penguin History of France. Penguin UK.

[4] Ravina, Mark. (1998). Land and lordship in early modern Japan. Stanford University Press.

[5] Aphornsuvan, T. (2011). Merchant Capital in Tokugawa Japan. Thammasat Review, 14(1), 77–98.

[6] Bornmann, G. M., & Bornmann, C. M. (2002). Tokugawa Law: How It Contributed to the Economic Success of Japan. Journal of Kibi International University: School of International and Industrial Studies, 12, 187–202.

[7] Wakita, S. (2001). Efficiency of the Dojima rice futures market in Tokugawa-period Japan. Journal of Banking & Finance, 25(3), 535–554.

[8] Hanley, S. B., & Yamamura, K. (2015). Economic and demographic change in preindustrial Japan, 1600-1868. Princeton University Press.

[9] Farris, W. W. (2006). Japan’s Medieval Population: Famine, Fertility, and Warfare in a Transformative Age. University of Hawaii Press.

[10] Bassino, J.-P. (2007). Market integration and famines in early modern Japan 1717–1857. Paragraph 4,  5–45.