The state as a regulator of business ethics in Edo Japan: the Tokugawa authority structure and private interests

Abstract: Throughout human history, institutions have remained very resilient. However, as this study finds, political institutions have been far more persistent than economic institutions or modes of exchange. From various sources, we can discern that economic institutions have adopted four different modes (manorial, market, entrepreneurial and mercantile) interchangeably without any predetermined sequence. Whereas the big ideas of capitalism, socialism or social democracy were not influential in institutionalizing stable economic institutions, business interests that affected the microeconomic decisions (or state interventions in the private sector) frequently changed the malleable economic institutions. Contrary to the stable political institutions, business ethics qua institutional ideas therefore changed frequently to justify one mode of exchange over another. As we find in this contribution, Japanese ethical discourses during the Edo period intended to justify individual and group interests within the realm of the state apparatus that resulted in changes in the economic institutions. Based on public archives on economic policies during the Edo period, we find that the central and local governments routinely or even whimsically changed their economic policies along the four modes exchange that John Lie proposed two decades ago. Whenever state policies were changed from one mode of exchange to another, they came with justifiable ethical support. Business ethics was therefore subsumed under business interests.