Penelope Francks Japan Summary

In these two chapters Penelope Francks discusses the macroeconomic role of agriculture in the developmental process of Japan. Francks portrays how Japanese agriculture created the base for Japan to fund her industrial aspirations. She also problematises the dual sector growth model and argues that the interrelations between various sectors of the economy don’t allow us to segregate the role of any sector into watertight compartments in the development of a nation. A large part of the total population of developing is working and living in rural areas and is engaged in primary activities especially farming. The share of agriculture in gross domestic product has been minimal and this fact emphasises on the low productivity of agriculture. The

The transfer of capital from agriculture to industry could be achieved by; taxing the farmers and investing the generated revenue to fund the industrial sector, the rich farmers investing their profits in industrial enterprises, enabling the farmers to produce export crops to generate foreign exchange which would help in importing capital goods. Agriculture was to transfer its surplus and disguisedly employed labour to industry to create an industrial workforce. The surplus generated from agriculture was to feed these industrial workers. The superior productivity of industrial work increased output and incomes and helped in transforming the

Nakamura attacked these very data and argued that the farmers in the Meiji era didn’t give correct details to the officials. They deliberately concealed the actual output and undervalued their agricultural produce to evade taxation. Thus the official records were flawed and the farmers enjoyed the benefits of an already achieved very high level of agrarian development. The taxation methods became efficient with time and reduced tax on agriculture incentivised the farmers to reveal the actual output levels. Thus, these increased output figures were misleading and gave the impression of increase in actual productivity of agriculture. The dual sector growth of Japan was thus a “statistical illusion”. Nakamura opined that Japan had followed the typical pattern of industrialisation where industrial development was preceded by an agrarian revolution. Nakamura’s views forced the economists to study other indicators of output levels like calorie intake etc. Nevertheless, Nakamura also believed in the idea that transfer of resources from agriculture to industry was indispensable for the industrial development of Japan. However due to the lack of complete data one cannot forcefully point out the exact contribution of agriculture to Japan’s industrial