INTRODUCTION

“I see the world in very fluid, contradictory, emerging, interconnected terms,” Jerry Brown once observed, “and with that kind of circuitry I just don't feel the need to say what is going to happen or will not happen.”

Life is subtle. Life is complicated. Life is hard. But Jerry Brown notwithstanding some things are less subtle, less complicated, less hard than they first seem – and the relationship between legal rules and economic performance is one. Legal rules structure institutions, and institutions determine economic growth. Rules that clarify and enforce rights to scarce resources tend to promote efficient growth, and those that muddy those rights tend to retard it.

In imperial Japan (1868 to 1945, though I largely end my discussion with 1930), these connections between law and growth raise at least two questions: what role did law play in Japanese economic growth; and what caused the Japanese government to adopt the law that it did? In this chapter I begin with the argument about the first of these questions and follow it with a more tentative hypothesis about the second. In later chapters I focus on the legal rules themselves and on the ways people manipulated those rules by private agreement.

Accordingly I begin this chapter by outlining the theoretical relationship between legal regimes and economic performance (Section 1). I describe the Japanese regime in place during the first half of this century, and explain how it tended to promote efficient growth (Section 2).