Published in Nikkei Asia on December 1st 2021
It will be a sad day when banknotes disappear, to be replaced by Central Bank Digital Currencies in the brave new world of the cashless society. For well-designed banknotes can be artworks in their own right, telling a compelling story about the country that issues them.
So it was exciting news when, some weeks ago, the Bank of Japan took to Twitter to unveil its new series of notes, due to come into circulation in 2024. Particularly interesting was the 10,000 yen note, which features the portrait of Eiichi Shibusawa, known as “the father of Japanese capitalism” and currently the subject of a year-long drama series broadcast by NHK, Japan’s public TV channel.
The 10,000-yen note, worth $85 today, is Japan’s most valuable banknote in circulation. It was first introduced in 1958, just as Japan was embarking on its decade of super-charged economic growth. The solemn figure on the front then was the legendary 6th century administrator, Prince Shotoku, who is closely associated with the spread of Buddhism in Japan.
By reaching so far back in history to a time of harmonious relations with China, Japan was signalling its transformation into a peaceful, modern nation.
Prince Shotoku remained on the note until 1984, when he was ousted by Yukichi Fukuzawa, the 19th century intellectual and educator. Fukuzawa was a strong proponent of Westernization, exemplified by the article “On Leaving Asia”, attributed to him, which recommended departing the ranks of Asian countries and joining “the civilized nations of the West.”
There could be no better symbol of Japan’s total commitment to membership of the Western bloc than Fukuzawa.
By 2024, Fukuzawa will have held the job for 40 years, considerably longer than Prince Shotoku, but his time is now up. In today’s world, categories such as “Asia” and “the West” no longer make sense. Undoubtedly a great man who lived in a dynamic and dangerous time, Fukuzawa became more cynical in his later years, concluding that “might is right” was the basic ideology of the “civilized nations” and that Japan had no choice but to become a colonizer too.
Shibusawa was born five years after Fukuzawa, but outlived him significantly, passing away in 1931 at the age of 91. An inveterate entrepreneur-investor-networker, he set up or helped set up 500 companies, many still thriving today, and more than 600 organizations equivalent to today’s non-governmental or non-profit organizations, as well as business schools that later became prestigious centres of learning, such as Hitotsubashi University.
He was already a mini-entrepreneur at the age of 14 when he volunteered to take over the indigo trading business from his father in a rural part of what is now Saitama Prefecture. That was a dozen years before the Meiji Restoration in 1868 ushered in a flood of Western knowledge.
From top-knot to top hat – in a few brief years
Unlike Fukuzawa, Shibusawa was primarily a doer not a public intellectual – concerned with business, rather than geopolitics. Unlike Yataro Iwasaki, founder of the Mitsubishi group, he did not create a zaibatsu (industrial conglomerate), but sold down his stakes in successful companies and used the money to seed new start-ups. In today’s terms, he was a venture capitalist, perhaps the greatest of all time.
Certainly, Peter Drucker, the doyen of management gurus, thought very highly of Shibusawa. In 1974, he wrote “the rise of Japan in this century to economic leadership is largely founded on Shibusawa’s thought and work…. Shibusawa’s Confucian ideal of the “professional manager” in the early years of modern Japan has become reality. And so has Shibusawa’s basic insight that the essence of the manager is neither wealth nor rank, but responsibility.”
Indeed, in his later years Shibusawa stepped back from his commercial activities to devote himself to the union of economics and ethics. Like British and American philanthropist-businessmen such as the Cadbury family, the Lever brothers and Josiah Wedgwood, he believed that business had to make a contribution to the public welfare.
Where he differed from them was basing his vision not on organized religion, but on his own brand of neo-Confucianism. This he disseminated through his Confucian school-cum- think-tank Ryumonsha (“Dragon Gate”, still extant today under the name of Eiichi Shibusawa Memorial Foundation) and books such as The Analects and the Abacus, which he published in 1916. Always keen to put his ideas into practice, he set up third-party bodies that could intervene and arbitrate in labour disputes.
With radical world-changing movements such as Marxism, militarism and imperialism on the rise, Shibusawa’s pragmatic approach was drowned out in the march to war. Yet, as Drucker suggests, Shibusawa’s ideas became highly influential in Japan’s post-war corporate culture, particularly the strategy of aligning the interests of management and workers via company unions. By the end of the 1970s, Shibusawa had comprehensively defeated Karl Marx.
He is everywhere in today’s Japan. Statues of him abound, from the grounds of the Imperial Hotel to a leafy park within a stone’s throw of the Bank of Japan. You can buy Shibusawa coffee, Shibusawa sticky cakes, Shibusawa sugar and Shibusawa potato chips among many other items.
The NHK TV series makes a strong contrast between Shibusawa and Iwasaki, the Mitsubishi group founder, who is presented as a ruthless oligarch aiming to dominate whole industries through fair means or foul.
Arguing over dinner with the moustachioed Iwasaki
It is true that Shibusawa was on the right side of history on many issues. He helped set up women’s universities, had an enlightened attitude towards handicapped people, favoured foreign investment in Japan and warned about the deflationary consequences of adopting the gold standard.
As anyone who remembers the state-controlled Japan Railways will attest, he was right to oppose nationalization of the railway companies on the grounds that they would be run much worse under public ownership. He totally rejected the hidebound conservatism summed up by the four-character slogan 官尊民卑 – “respect bureaucrats, despise ordinary people.”
In 1904, in the midst of the Russo-Japanese war, Shibusawa gave a speech to the graduates of Keika Commercial School, one of the many he founded. “If asked whether business is central or peripheral, I would say it is central,” he asserted. “I would like to make this country prosperous, with business as the main activity and politics and the military assisting it.”
In 1915, he registered his alarm about Japan’s heavy spending on weaponry in a newspaper article. “It goes without saying that the country needs a strong army, but I don’t agree with sacrificing national prosperity for the sake of militarism.”
Shibusawa’s emphasis on the moral dimension of business makes him a progenitor of today’s ESG (“environmental, social and governance”) movement. Yet he was no secular saint. Like many powerful men of the era, he fathered a large number of children.
Dalliance with a maid – the real Shibusawa claimed that he was “always defeated by feminine beauty”
According to Teruko Craig of Tufts University, the translator of his autobiography, he had 11 children with his first and second wives and another 27 with various geisha and mistresses. Many of them lived in the large household he maintained, though the illegitimate offspring took no part in the regular family councils.
During his stay in France, Shibusawa reversed the Madame Butterfly story by telling a young French courtesan that their intimacy was important to Franco-Japanese relations and suggesting that she come back to Japan with him. Like Lieutenant Pinkerton in Puccini’s opera, he left without saying goodbye.
As a hot-headed 23-year-old of peasant origin, Shibusawa had been a fervent adherent of the “Revere the Emperor, Expel the Barbarians” cause of the early 1860s. He even planned what would now be termed a terror attack – storming Takasaki Castle and then burning down the foreign settlement in Yokohama. Recognizing the futility of the idea, he ended up working for the other side. Yoshinobu, Japan’s last shogun, sent Shibusawa on a two-year trip to France just as his own rule was about to crumble.
Meeting Napoleon Third in Paris
Shibusawa may have been the first Japanese to enjoy coffee, which he drank with milk and sugar on board the ship that took him to Europe in 1868. He was certainly the first to record his appreciation of it, which was noted in the published diary of his trip. Foreshadowing his later career, he soon became the first Japanese to invest in foreign securities when he bought stocks and bonds at the Paris Bourse with the cash reserves he had been given and made a solid profit.
Back in Japan, Shibusawa was drafted into the Ministry of Finance, just established by the new Meiji government. His knowledge of accounting, rare at the time, enabled his rapid rise to head of the tax bureau, but he left after one year and started Daiichi Bank, Japan’s first modern bank and the precursor of today’s Mizuho Financial Group. So began Shibusawa’s long career as a serial entrepreneur and champion of business and civil society.
So what story is Japan telling by putting the portrait of this brilliant and complicated man on its most prestigious banknote, following on from a legendary administrator and a West-obsessed intellectual?
Surely, it is a proud celebration of Japan’s own brand of capitalism. Commerce as an ethical practice that benefits buyer, seller and society at large (sanpo yoshi, “three-way merits”) is a Japanese concept that long predates Shibusawa. He simply walked the talk on a far greater scale than anyone else.
It is unusual but fitting that the great financier will soon be a fixture in Japanese wallets. Shibusawa deserves a multi-decade stint in the position. The question is whether physical cash will last long enough to let that happen.
Bust of Shibusawa at Hitotsubashi University