University of Cambridge > > Global Economic History Seminar > Understanding Japan’s competitiveness in the global cotton market in the early 20th century’

Understanding Japan’s competitiveness in the global cotton market in the early 20th century’

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If you have a question about this talk, please contact Gareth Austin.

This presentation has as its starting point the changing fortunes of Britain and Japan in the global cotton market during the early decades of the 20th century. From accounting for over 70% of world cotton and cotton piece goods exports in 1909/13, Britain’s share had fallen to 27% by 1936/8. Over the same period Japan’s share grew from just 1.4% to nearly 40%. A recurrent explanation within British (and other Western) commentary on these shifting positions was that Japan was engaged in ‘unfair’ competition, engaging in the exploitation of sweated labour as well as excessive protectionism. By contrast much of the subsequent academic literature has tended to focus on issues such as entrepreneurial ‘success’ and ‘failure’ and the extent to which industry leaders on both sides were making rational decisions given their situations and the constraints that they were facing. My objective here is to build on the existing scholarship with a view to moving away from any generalised assumptions about cheap labour or about entrepreneurial leadership, and to think about understandings at the time in relation to what we now regard as the substantive realities of Japan’s competitive advantage. I focus on two main questions. The first is what evidence do we have that British leaders had a shared understanding of Japan’s cotton industry and the competitive threat that it posed? Secondly, was labour cheap and, if so, how far was low cost labour just one factor in Japan’s ability to increase its global market share? Following a brief overview of the existing historiography on the British cotton industry and its approach to Japan, I consider some of the most important contemporary British reports and individuals involved in the debate. The evidence shows that while, as suggested by previous scholarship, it was possible for industry leaders to be well-informed about what was going on in Japan, there was far less unanimity about the extent of any threat posed by Japan, and how it might be approached. I then consider briefly the historiography on the Japanese side, and the approach of Japanese industry leaders. I suggest that while the very different structures of the two industries – something recognised by contemporaries – have been well documented, it was these differences, many of them largely shaped by Japan’s position as a late developing economy, that functioned in particular ways to enhance Japan’s comparative advantage in global markets. While wages may have been low, this was not always the case with overall labour cost. More important was not only the need to focus on markets in low income countries, but also approaches to the organisation of production, manufacturing operations and technology and the building up of institutions and organisations the allowed competition to coexist with cooperation and coordination.

This talk is part of the Global Economic History Seminar series.

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