An Asian Route to Capitalism: Religious Economy and the Origins of Self-Transforming Growth in Japan

Abstract

Modern capitalism is a self-transforming dynamic that proliferates market niches, new products, and techniques. The industrial revolution could take place only in the context of preexisting agricultural capitalism; that, in turn, required a breakout from the obstacles constituted by agrarian-coercive societies. Organizational conditions necessary for self-sustaining capitalist growth included markets not only for commodities but for all factors of production (land, labor, and capital), combined under control of entrepreneurs motivated by an economic ethic of future-oriented calculation and investment. Weber was mistaken in holding that the capitalist breakthrough occurred only in Christian Europe. I propose a neo-Weberian model in which the initial breakout from agrarian-coercive obstacles took place within the enclave of religious organizations, with monasteries acting as the first entrepreneurs. The model is illustrated by the case of Buddhism in late medieval Japan. The leading sector of monastic capitalism spread into the surrounding economy through religious movements of mass proselytization which narrowed the gap between clergy and laity. Confiscation of Buddhist property at the transition to the Tokugawa period transferred the capitalist dynamic to the secular economy of an agricultural mass market, opening the way for a distinctive Japanese path through the industrial revolution.