This study aims to discuss the significant role of “peasant society” in understanding the economic history of both modern and early modern Japan.

Independent peasant households proliferated in Japan in the seventeenth century, and from around the turn of the eighteenth century onwards they underwent a transformation into entities called ie, which owned family properties and bore responsibility for conveying these properties to the next generation. Although the development of the market economy also contributed to maintaining and activating the peasant society, the function of the labour market was strongly influenced by the strategy of peasant households to pursue the optimal utilization of slack labour generated by the seasonally fluctuating labour demand from agriculture. Under these constraints, peasant households tended to deliver non-agricultural employment opportunities to their members, forming a kind of barrier against mobilizing family workers outside the household. These barriers were supported by region-based industrial development such as a weaving industry adopting the putting-out system most suitable to the requirements of peasant households. Rural-based capital accumulation together with the workings of the regional financial markets contributed to maintaining particular peasant household behaviours by supporting region-based industrial development, which featured in Japan's path of economic and social development from the early modern to the modern period.