How Reciprocal was the Business–Government Relationship? The Wedge of Competition in Early Industrializing Japan

Abstract

The literature on early industrializing Japan characterizes the business–government relationship in antithetical terms of “cooperation” or “independence.” The first position advances that interaction between these actors is largely covert and mutually beneficial and the second characterizes business as ever chary of government interference. These positions have been brought under the framework of “Reciprocal Consent” where government accords business control of industry while retaining its jurisdictional remit. It is argued that this arrangement observed in Japan's energy industry emerged because government was not a financial stakeholder. By contrast, in the iron and steel industry under study here, government was the primary stakeholder. The Shingikai or Councils of Deliberation records show that in the early development of this industry, economics played a central role in shaping the business–government relationship and setting the limits of “reciprocity”.