Editing Edo period (section)

===Economy and financial services===
[[File:Nihonbashi-Fish-Market-Prosperity-Ukiyoe-Utagawa-Kuniyasu.png|thumb|upright=1.2|Nihonbashi Fish Market Prosperity (Edo period) by Utagawa [[Kuniyasu]]]]
The Tokugawa era brought peace, and that brought prosperity to a nation of 31 million, 80% of them rice farmers. Rice production increased steadily, but population remained stable. Rice paddies grew from 1.6 million [[Japanese units of measurement#Length|chō]] in 1600 to 3 million by 1720.<ref name="chobu">One chō, or chobu, equals 2.45 acres.</ref> Improved technology helped farmers control the all-important flow of water to their paddies. The daimyos operated several hundred castle towns, which became loci of domestic trade.

The system of ''[[Sankin-kōtai|sankin kōtai]]'' meant that daimyos and their families often resided in Edo or travelled back to their domains, giving demand to an enormous consumer market in Edo and trade throughout the country.<ref name=":1" /><ref>Constantine Nomikos Vaporis, ''Tour of Duty: Samurai, Military Service in Edo, and the Culture of Early Modern Japan'' (Honolulu: University of Hawaii Press, 2008), 26.</ref> Samurai and daimyos, after prolonged peace, were accustomed to more elaborate lifestyles.<ref name=":2" /> To keep up with growing expenditures, the ''bakufu'' and daimyos often encouraged commercial crops and artifacts within their domains, from textiles to tea.<ref name=":2" /> The concentration of wealth also led to the development of financial markets.<ref name=":1" />

As the shogunate only allowed ''daimyos'' to sell surplus rice in Edo and Osaka, large-scale rice markets developed there.<ref name=":1" /> Each daimyo also had a capital city, located near the one castle they were allowed to maintain.<ref name=":0" /> Daimyos would have agents in various commercial centers, selling rice and cash crops, often exchanged for paper credit to be redeemed elsewhere.<ref name=":0" /> Merchants invented credit instruments to transfer money, and currency came into common use. In the cities and towns, guilds of merchants and artisans met the growing demand for goods and services.{{sfn|Totman|2000|loc= chapter 11}}

[[File:Keicho gold coinage Oban Koban Ichibuban 1601 1695.jpg|thumb|[[Tokugawa coinage]]: [[Ōban]], [[Koban (coin)|Koban]], [[Ichibuban]] (1601–1695).]]
The merchants benefited enormously, especially those with official patronage. However, the [[Neo-Confucianism|Neo-Confucian ideology]] of the shogunate focused the virtues of frugality and hard work; it had a rigid class system, which emphasized agriculture and despised commerce and merchants.<ref name=":0" /> A century after the Shogunate's establishment, problems began to emerge.<ref name=":0" /> The samurai, forbidden to engage in farming or business but allowed to borrow money, borrowed too much, some taking up side jobs as bodyguards for merchants, debt collectors, or artisans.<ref name=":0" />

The ''bakufu'' and ''daimyos'' raised taxes on farmers, but did not tax business, so they too fell into debt, with some merchants specializing in loaning to daimyos.<ref name=":2" /> Yet it was inconceivable to systematically tax commerce, as it would make money off "parasitic" activities, raise the prestige of merchants, and lower the status of government.<ref name=":0" /> As they paid no regular taxes, the forced financial contributions to the daimyos were seen by some merchants as a cost of doing business.<ref name=":2" /> The wealth of merchants gave them a degree of prestige and even power over the daimyos.<ref name=":2" /><ref>Sakata Yoshio, ''Meiji Ishinshi'' [A history of the Meiji Restoration] (Tokyo: Miraisha, 1960), 19</ref>

By 1750, rising taxes incited peasant unrest and even revolt. The nation had to deal somehow with samurai impoverishment and treasury deficits. The financial troubles of the samurai undermined their loyalties to the system, and the empty treasury threatened the whole system of government. One solution was reactionary—cutting samurai salaries and prohibiting spending for luxuries.<ref name=":0" /> Other solutions were modernizing, with the goal of increasing agrarian productivity.<ref name=":0" />

The eighth Tokugawa shogun, [[Tokugawa Yoshimune|Yoshimune]] (in office 1716–1745) had considerable success, though much of his work had to be done again between 1787 and 1793 by the shogun's chief councilor [[Matsudaira Sadanobu]] (1759–1829).<ref name=":2" /> Other shoguns debased the coinage to pay debts, which caused inflation.<ref name=":2" /> Overall, while commerce (domestic and international) was vibrant and sophisticated financial services had developed in the Edo period, the shogunate remained ideologically focused on honest agricultural work as the basis of society and never sought to develop a mercantile or capitalistic country.<ref name=":0" />

By 1800, the [[commercialization]] of the economy grew rapidly, bringing more and more remote villages into the national economy. Rich farmers appeared who switched from rice to high-profit commercial crops and engaged in local money-lending, trade, and small-scale manufacturing. Wealthy merchants were often forced to "lend" money to the shogunate or daimyos (often never returned).<ref name=":0" /> They often had to hide their wealth, and some sought higher social status by using money to marry into the samurai class.<ref name=":0" /> There is some evidence that as merchants gained greater political influence in the late Edo period, the rigid [[class division]] between samurai and merchants began to break down.<ref name=":0" />

A few domains, notably [[Chōshū Domain|Chōshū]] and [[Satsuma Domain|Satsuma]], used innovative methods to restore their finances, but most sunk further into debt. The financial crisis provoked a reactionary solution near the end of the "Tempo era" (1830–1843) promulgated by the chief counselor [[Mizuno Tadakuni]]. He raised taxes, denounced luxuries and tried to impede the growth of business; he failed and it appeared to many that the continued existence of the entire Tokugawa system was in jeopardy.<ref>{{Cite book|last=McClain|first=James L.|url=https://archive.org/details/japanmodernhisto00mccl|url-access=registration|title=Japan, a modern history|date=2002|publisher=W.W. Norton & Co|isbn=0-393-04156-5|edition=1st|location=New York, N.Y.|pages=[https://archive.org/details/japanmodernhisto00mccl/page/5 5]–108|oclc=47013231}}</ref>

====Agriculture====
[[Rice]] was the base of the economy. About 80% of the people were rice farmers.<ref>Susan B. Hanley and Kozo Yamamura (1977) ''Economic and demographic change in preindustrial Japan, 1600–1868'', pp. 69–90</ref> Rice production increased steadily, but population remained stable, so prosperity increased. Rice paddies grew from 1.6 million chō in 1600 to 3 million by 1720.<ref name="chobu" /> Improved technology helped farmers control the all-important flow of irrigation to their paddies. The ''daimyo'' operated several hundred castle towns, which became loci of domestic trade.

Large-scale rice markets developed, centered on Edo and Ōsaka.{{sfn|Totman|2000|loc= chapter 11}} In the cities and towns, guilds of merchants and artisans met the growing demand for goods and services. The merchants, while low in status, prospered, especially those with official patronage.<ref name=":2" /> Merchants invented credit instruments to transfer money, currency came into common use, and the strengthening credit market encouraged entrepreneurship.<ref>{{cite journal|author=Tetsuji Okazaki|title=The role of the merchant coalition in pre-modern Japanese economic development: an historical institutional analysis|journal=Explorations in Economic History|year=2005|volume=42|issue=2|pages=184–201|url=http://www2.e.u-tokyo.ac.jp/cemano/research/DP/documents/coe-f-33.pdf|doi=10.1016/j.eeh.2004.06.005|url-status=dead|archive-url=https://web.archive.org/web/20120510095959/http://www2.e.u-tokyo.ac.jp/cemano/research/DP/documents/coe-f-33.pdf|archive-date=2012-05-10}}</ref> The ''daimyo'' collected the taxes from the peasants in the form of rice. Taxes were high, often at around 40%-50% of the harvest.<ref name=":2" /> The rice was sold at the ''[[fudasashi]]'' market in Edo. To raise money, the ''daimyo'' used [[forward contract]]s to sell rice that was not even harvested yet. These contracts were similar to modern [[futures trading]].

It was during the Edo period that Japan developed an advanced [[forest management]] policy. Increased demand for timber resources for construction, shipbuilding and fuel had led to widespread deforestation, which resulted in forest fires, floods and soil erosion. In response the ''shōgun'', beginning around 1666, instituted a policy to reduce logging and increase the planting of trees. The policy mandated that only the ''shōgun'' and ''daimyo'' could authorize the use of wood. By the 18th century, Japan had developed detailed scientific knowledge about [[silviculture]] and plantation [[forestry]].<ref>{{Harvnb|Diamond|2005|pp=297–304}}</ref>