Bio Shibusawa Eiichi - The Father of Japanese Capitalism

The Father of Japanese Capitalism

Shibusawa Eiichi (渋沢 栄一, 1840-1931) was born in the village of Chiaraijima in modern-day Saitama Prefecture. Although Shibusawa's family consisted of small farmers with only a few hectares of land, his father became the wealthiest man in the village by dealing in indigo and silk. Influenced by Confucianism, he provided Eichii with a better education than usual for a man of his class.

Shibusawa's youth was shaped by the political and social turmoil brought about by the arrival of Commodore Perry 's black ships in 1853. In 1863, he left his family, not only to join the sonnō jōi (尊皇攘夷, "expel the barbarians; revere the emperor") movement but also with dreams of becoming a person of influence. He enlisted as a samurai of the Hitotsubashi Domain, a branch family of the Tokugawa, in 1864, and, in 1867, became an aide-de-camp to the shōgun 's younger brother Tokugawa Akitake (徳川 昭武, 1853-1910), who led the Japanese delegation to the International Exposition of 1867 in Paris. While visiting France, Shibusawa was so impressed by Western civilisation that he returned to Japan hoping to establish factories, banks, and corporations in his country.



Upon his return to Japan a year later, he found himself a member of a deposed regime. Thanks to his knowledge of Western society, he obtained financial support from the Meiji government. He founded a trading company, Shōhō Kaishō (商法海商), one of Japan's first joint-stock companies. In 1869, he was appointed as a ranking official of the Ministry of Finance. As a protégé of Ōkuma Shigenobu (大隈重信, 1838-1922) and Inoue Kaoru (井上薫, 1836-1915), he played a crucial role in establishing the government-operated Tomioka Silk-Reeling Mill as well as a modern bank system in 1872.

Shibusawa resigned from the Ministry of Finance a year later because his proposals to trim the budget had been rejected. As an assistant to the vice-minister, he had been able to secure the presidencies of the Dai-ichi Bank (株式会社第一銀行 Kabushiki-gaisha Dai'ichi Ginkō, later Dai-ichi Kangyō Bank). The Ōji Paper Company, then known as Shōshi Kaisha (抄紙会社), was one of these, and he had persuaded the Mitsui and other trading houses to set up as corporations. In the bank boom between 1877 and 1880, Shibusawa was consulted by other entrepreneurs, and other national and private banks emulated his business model.

In 1882, he founded the Ōsaka Cotton-Spinning Company (大阪墓石会社 Ōsaka Boseki Kaisha) by soliciting capital from leading business people and former daimyō . Employing 10,500 spindles, the new company made profits in the first year of its operation, while many smaller mills suffered from technical and financial problems. Companies modelled on the Ōsaka Mill and other ventures, such as railway companies promoted by Shibusawa, burgeoned between 1886 and 1890. During this period of rapid industrialisation, Shibusawa was involved in establishing more than 36 enterprises, including the Tōkyō Chemical Fertiliser Company, the first of its kind in Japan. During the second industrialisation phase (1895-1897), Shibusawa founded over 23 companies. During his lifetime, he was associated with more than 300 enterprises, most of which were organised in corporate form, a model Shibusawa firmly believed would benefit Japan most.



Influenced by Confucian teachings and Christian values, Shibusawa has always been described as a decent human who believes business should follow ethical principles. Impressed by the Christian concept of charity, he engaged in philanthropy, founding educational institutions and welfare projects.


After the Russo-Japanese War of 1905, he was very concerned about the deterioration in Japanese-American relations. He attempted to improve the situation by heading a committee on bilateral ties and a goodwill mission to the United States. He kept close ties to the Tokugawa family during his lifetime. Still, he was, at the same time, honoured by the Meiji administration, which awarded him the title of viscount (子爵 shishaku). Unlike many others who deserted Confucianism after the Meiji Restoration , he adhered to its teachings all his life.

In April 2019, the Japanese government announced that the new 10,000-yen banknote to be issued in 2024 would feature Shibusawa Eiichi. This decision was criticised by parts of the South Korean media, who denounced Shibusawa as a representative of Japanese imperialism for his role in establishing the Gyeongin and Gyeongbu Railways in Korea.

Link:

• Shibusawa Eiichi Memorial Foundation (in English and Japanese)
• Home of famed Meiji Era industrialist moved to Tokyo (Asahi Shimbun, 15 April 2024)

References:

• Nussbaum, Louis-Frédéric, Japan Encyclopedia, Harvard 2005