Is it only the portraits that change?
Good day. I'm Mike, a lawyer living in Hong Kong.
From 2024, the portrait on the 10,000 yen note will be changed to Eiichi Shibusawa. I thought it was only a short while ago that Prince Shotoku was replaced by Yukichi, but that was nearly 40 years ago. You can tell how old I am by what I remember.
This change from Yukichi to Eiichi is not just about issuing new notes, but the more I think about it, the more I feel that it implies a shift in global capitalism.
Yukichi was born in 1835 and was 34 years old at the time of the Meiji Restoration in 1868. He was born into a samurai family, so of course he had studied the Analects of Confucius, but when he went to the United States on the Hamrin Maru and was exposed to modern Western culture, he realized how far behind Japan was. In 1972, he published a book entitled " Gakumon no Susume" (Encouragement of Learning ), in which he argued that people are born equal and free, and that it is learning that makes the difference. Study!
What Mr. Yukichi means by " learning " here is the useless Confucianism and Chinese studies (that's what he says), where you only learn difficult Chinese characters, read incomprehensible ancient texts and enjoy waka and poetry. (That's not me!). ), but " practical learning ", i.e. the natural sciences and modern engineering that created modern civilisation. At this time, Japan had just entered the Meiji era, and its military and economic power was still weak. There must have been a great sense of urgency to either become a colony of these powers, or to evolve Japan into a democracy with national power equal to that of the West. The reason why Japan is so far behind is because of Confucianism, which for hundreds of years had been a leisurely study of morality and literature, and it is time to learn something more useful and push for economic and cultural modernisation. He believed that Confucianism was a hindrance to modernization.
As an Enlightenment philosopher, Yukichi did not get involved in business, but the liberalism, egalitarianism and encouragement of practical learning that he advocated in his Encouragement of Learning provided the ideological basis for Japan to become a modern capitalist economy on a par with Western countries.
Eiichi, on the other hand, was born in 1840 and was five years younger than Yukichi. He was born a farmer, but he had a lot of money, so he learned a lot of things. Like Yukichi, he was sent abroad (to the Paris Expo) before the Meiji Restoration to experience the modern West. However, he was called back to Japan after the Meiji Restoration. However, the modernity he witnessed in Europe was enough to awaken Eiichi.
On his return to Japan, Eiichi first became a bureaucrat in the Ministry of Finance, where he was involved in all the reforms needed to modernise the country. However, in 1873 he left the bureaucracy to pursue a career in business. In those days, learning was a noble thing for government officials (shi) to do, while learning was not necessary for business people (farmers, industrialists and merchants), and it was despised as a lowly way of handling money. Upon hearing of Eiichi's resignation, Tamano Sekitori, another elite bureaucrat, strongly opposed it.
Tamano: "We can both be Secretary and Minister in the not too distant future. As officials, we should serve the nation! But to become a merchant, blinded by lowly money, is a failure!
Eiichi: "That's not true! It is true that there are many areas in Japan that need to be reformed for modernisation, such as politics and education. But the most lagging area is commerce. If business is not good, the country will not be wealthy. We cannot have a nation if we say that money is vulgar. I'll do business all my life with what you call noble learning! Both the government and the people are precious!
Eiichi published " The Analects and the Calculator " in 1916, when he was 76 years old. This is the culmination of his management philosophy. It contains everything about Eiichi: why he left the bureaucracy to enter the business world, what his ideals were, what he believed in and practised, and what he would pass on to future generations. It is Eiichi's brilliant insight that, at a time when the idea of the "government and the people" was deeply entrenched (which is still the case with many politicians today), business is as precious as learning and should aim for both ethics and profit.
Eiichi, who connected business with the Analects of Confucius, believed that a company is a public good. Profits from business should be returned to the public interest and not to private interests. In other words, he believed that companies do not exist for the benefit of shareholders, but for the public good. This is different from the typical "capitalism", which is based on liberalism and in which large capitalists monopolise the profits of the business. Therefore, Eiichi did not agree with Yataro Iwasaki. Yataro invited him to join forces with him over a drink on a houseboat, but Eiichi firmly refused and disappeared with a geisha he knew.
Although Yataro built a large conglomerate, many of the companies that Eiichi founded are owned by shareholders who give back to society. His investments were always based on what was necessary for Japan and what was in the public interest, and these companies include banks, electric power, gas, land and sea transport, insurance, paper and spinning. All of these companies were not immediately profitable, so they kept investing until they were profitable, and when they were profitable and sold their shares, they used the money to invest in the next business. He was also involved in a number of public projects in education and health care, and after retiring from business, he continued to work as the director of a nursery school until his death.
Eiichi is often referred to as " the father of modern Japanese capitalism ", but I think this is a misleading term. Rather than using the word ' capitalism ', Eiichi used the word ' synthetic capitalism '. If capitalism is a system in which capitalists invest money to make profits and increase capital, the principle of symbiosis is a system in which a large number of people invest money and human resources to make profits and share them with other people, in other words, to give back to society. Eiichi disliked the idea of monopolising profits.
It was in 1984 that Yukichi-san, who enlightened modern Western thought, became the portrait on the 10,000 yen note. In the world, the neo-liberal economy led by Milton Friedman became the mainstream, everything was regarded as a commodity to be traded, capitalists increased their capital further, shareholder capitalism was revered as absolute justice, and Prime Minister Margaret Thatcher said " There is no such thing as society There is no such thing as society". In 1979, Japan as Number One was published and the Harvard Business School studied the Japanese business model as a success story. After the Plaza Accord in 1985, Japan was at the height of its bubble economy. After the Plaza Accord in 1985, Japan was at the height of its bubble economy, when the liberal and egalitarian principles of Yukichi-san were reflected in the Constitution and capitalist society was at its peak.
During this period, the company existed for the benefit of its shareholders.
And now. For years now, we have been discussing the evils of the neoliberal economy and the limits of shareholder capitalism. The world is polarised between capitalists and workers, and the wealth of the world is concentrated in the hands of a handful of capitalists. The world's wealth is concentrated in the hands of a handful of capitalists, and Piketty 's massive data shows that the gap between capitalists and workers is widening ( r> g). Climate change, which is shaking the world, is also thought to be a result of excessive capitalism.
In recent times, there has been a groundswell of opposition to an economy that has been driven by shareholder capitalism: in 2019, the US Business Roundtable declared a shift from 'shareholder capitalism' to ' stakeholder capitalism '. The SDGs (which I have some doubts about, but that's a story for another time) are also catching on. There really is such a thing as society ", commented Prime Minister Boris Johnson on his release from a coronary infection.
In Japan, the debate has been going on for a long time. Professor Hirofumi Uzawa, who hated Milton Friedman, has been arguing for 50 years now that it is wrong to trade everything as a commodity under capitalism, and that there should be " social common capital " used for the public good (" social common capital "). Another prominent venture capitalist, Jojin Hara, has been advocating " public interest capitalism " for more than a decade, rejecting shareholder capitalism and arguing that companies are for the benefit of all stakeholders (" National Wealth Theory for the 21st Century "). The philosopher Kohei Saito argues that capitalism, which always aims for growth, has already come to an end and that we should return to a circular society based on local community (common), i.e. a society that serves the public interest of the members of the community (" Capitalism in the Anthropocene "). And then there's Eiichi's principle of the joint book.
A company belongs to everyone who is involved in it.
Until now, these ideas have been completely overwhelmed by shareholder capitalism. But now the tide has turned. It is time for Eiichi to finally see the light of day on a philosophy of corporate management that serves the public interest and capitalism that serves society, a philosophy that he has been advocating and practising for over 100 years.
I am convinced that by the time Eiichi is printed on the 10,000 yen note, the world will have become the society that the Analects and the Arithmetic Board aimed for.
See you next time.
