Lever of Empire: The International Gold Standard and the Crisis of Liberalism in Prewar Japan

Lever of Empire: The International Gold Standard and the Crisis of Liberalism in Prewar Japan

Lever of Empire: The International Gold Standard and the Crisis of Liberalism in Prewar Japan

Lever of Empire: The International Gold Standard and the Crisis of Liberalism in Prewar Japan

Synopsis

This book, the first full account of Japan's financial history and the Japanese gold standard in the pivotal years before World War II, provides a new perspective on the global political dynamics of the era by placing Japan, rather than Europe, at the center of the story. Focusing on the fall of liberalism in Japan in late 1931 and the global politics of money that were at the center of the crisis, Mark Metzler asks why successive Japanese governments from 1920 to 1931 carried out policies that deliberately induced deflation and depression. His search for answers stretches from Edo to London to the ragged borderlands of the Japanese empire and from the eighteenth century to the 1950s, integrating political and monetary analysis to shed light on the complex dynamics of money, empire, and global hegemony. His detailed and broad ranging account illuminates a range of issues including Japan's involvement in the economic dynamics that shook interwar Europe, the character of U.S. isolationism, and the rise of fascism as an international phenomenon.

Excerpt

In early 1920, during the full rush of the May 4 movement in China, Thomas Lamont of Wall Street’s J. P. Morgan and Company traveled to Asia to promote an American-led international banking consortium that would monopolize foreign loans to China. The greatest obstacle to American plans was Japan, which had aggressively pushed its own unilateral loans in China during the great European war. Consequently, an important part of Lamont’s trip (and the only part that would bear commercial fruit) was his visit to Japan in February 1920.

On his return to America, Lamont was treated as an authority on Asian matters and was several times called to speak on the subject. In a short piece for The Nation magazine in February 1921, Lamont wrote about “The Two Japans”:

There are two schools of thought in Japan and the cleavage is a deep one. In
general the men of affairs—manufacturers, great merchants, and bankers—
are liberal in their ideas…. The other party in Japan, the militarists … still
think the world is ruled by force rather than by ideas.

For Thomas Lamont, the liberal, idea-driven Japan was personified by his chief Japanese contact, Inoue Junnosuke, governor of the Bank of Japan. In a March 1922 letter to Inoue, Lamont repeated his “two Japans” idea, with the flattering specification that Inoue’s group was like Lamont’s own elite Wall Street circle (“representing in each instance, we will say, the great commercial interests of our two countries”). Inoue too was working for a world ruled not by force but by ideas. And among the great ideas that ruled the world envisioned by Inoue and Lamont was that of a worldwide web of credit and debt, with accounts settled in a unitary global money—gold— which should flow freely across international boundaries.

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