When I first came across the term zenkiteki shihon (lit. “early period capital”), I was confused. Early relative to what? It seemed to apply to a wide range of seemingly disparate historical phenomena - from the Dutch tulip craze to the slave trade in ancient Greece. I soon found that the term was a translation of Marx’s “antediluvian capital,” i.e. merchant and usury capital. In scholarship on the Tokugawa period, the concept of zenkiteki shihon seemed indelibly linked to evaluations of the role of major urban merchants, their guild organizations, and their relationship with the samurai lords. Naturally, I wanted to learn more.

I began with Yamaguchi Tetsu’s 1991 book on the history of commerce in the Edo period. Yamaguchi argues that early megamerchants (shoki gōshō), as representatives of “early period capital,” made their money through “commercial trickery” and “deceit,” exploiting accidental differences in regional prices to take control over markets during the early 1600s. Transformations in the structure of the Tokugawa economy over the course of the late 17th century, far from heralding the rise of the market economy, instead solidified the arbitrary and irrational nature of the price system - prices, after all, were still not determined by “fair” market mechanisms, but were fixed in place by the extraeconomic power of lords and guilds. True markets, he claims, did not exist in early modern Japan.

Urban merchant capital, Yamaguchi writes, found itself fully integrated underneath shogunal and lordly control through samurai domination of major cities. Moreover, the countrywide market was a market made by and for the needs of the samurai ruling class. As servants to and beneficiaries of this seigneurial economy, merchants could not play a meaningful role in the breakdown of the feudal system. And as the avatars of early period capital, Yamaguchi concludes, they contributed to the irrational, underdeveloped, and conservative nature of the Tokugawa economy.

What I found genuinely striking about this account was not just how far removed it was from my own sense of the inner workings of the Tokugawa economy, but also its intensely moral and moralizing character. I wanted to understand why historical judgments about the role of Tokugawa merchants seemed so intimately tied to ethical judgments about their trade. That meant I needed to go back further - to the scholar who first articulated a theory of “early period capital” in Japan.

It is to the historian Ōtsuka Hisao (1907-1996) that we owe the term zenkiteki shihon. Known as a pioneering modernization theorist who combined both Marxist and Weberian approaches to the study of economic history, Ōtsuka saw England’s path to industrialization as an ideal Japan had failed to meet, a failure with ultimately disastrous consequences for its economy and society. (For more on Ōtsuka, see this fascinating article by Sebastian Conrad. Mildly interesting fact: he was also the translator of Henri Pirenne’s “The Stages in the Social History of Capitalism” into Japanese.)

In his 1947 The Genealogy of Modern Capitalism (Kindai shihonshugi no keifu), Ōtsuka argues that merchant capital as early period capital did not play a decisive role in the transition to capitalist society. Rather, an internal, autonomous polarization of producers into industrial capitalists, on the one hand, and proletarians, on the other, was the key dynamic force in this process. Ōtsuka acknowledges, however, that early period capital did serve as a “mediator” in the transition through its role in the impoverishment of the basic unit of feudal society, the peasant smallholder, and by locking lords into an inescapable cycle of debt.

Unlike “modern” commerce, profits under early period capital, he writes, depended entirely on the random, the speculative, and the accidental. At best, a kind of “rule-based trickery” (hōsokuteki na giman) defined the conduct of trade. Confined to the realm of circulation, early period capitalists could not meaningfully expand the surplus value. They did not actively alter feudal modes of production. Early period capital was “progressive” only in the sense that it undercut the conditions of its own existence. By expanding the cash economy and the domestic market for goods, these merchants generated competition. This competition eventually transformed the price structure, gradually limiting the space for the accumulation of profit through the “accidental” and opportunistic exploitation of random differences in prices. Monopoly through the acquisition of special “feudal” privileges was the preferred solution of merchant capitalists to this problem.

Ōtsuka is rather vague on the exact timing of the transition from early period capitalism to capitalism proper, with the exception of the paradigmatic English case. He sees England’s 1648 “Puritan Revolution” as marking the first victory of industrial capitalists over merchant capitalists and the arrival of a decisively new stage in economic history. 1648 forms a direct contrast to the Dutch Revolt against the Habsburgs. Their “revolution” was instead a victory for merchant capital linked to absolutist-feudal forces, blocking that country’s path to capitalist modernity. Back in England, the Glorious Revolution of 1688 soon dealt the final blow to the forces of early period capitalism, making England the only country in the world to autonomously transition away from the domination of merchant monopolists.

But Ōtsuka does make clear, however, that early period capital coexisted alongside the initial stages of “true” capitalism. It is to the “rule-based trickery” and almost piratical character of early period capital that he attributes colonization, child and elderly labor, the slave trade, and so on. The brutality and use of force characteristic of this period of “early” (not primitive) accumulation is therefore not “modern” or “capitalist” but a hangover from early period capital’s reign of deceit. For Ōtsuka, the Dutch East India Company is not a forerunner to the modern corporation but a classic example of early period merchant capital. “True” capitalism could only be a positive development.

Writing against then-dominant arguments for the central role of merchants in the transition to modern capitalism, Ōtsuka is also quick to write off merchant capital as essentially a passive rather than active force, asserting that early period capital “lacked within itself the independence to determine its own direction, rather perpetually molding itself to changes in objective conditions (particularly the conditions of production).” Any examples that might be raised of merchants investing in and forming industrial enterprises of their own are dismissed as one-off, coincidental, and fleeting, meeting their end “much like how a river suddenly disappears amid the desert sands.” Early period capitalists’ reliance on trickery and force made them unsuitable main characters in the story of the emergence of the modern economy.

Ōtsuka argues instead that middling producers - the yeomen and small masters - were the real autonomous force behind the transition to industrialization. Entrepreneurial farmers and masters, filled with a Weberian spirit of capitalism, competed on the market as commodity producers. Their relationship to the market was independent from merchant capital. Through this competitive process, some worked hard and succeeded, becoming industrialists, while others failed, forming the new industrial proletariat.

It is not hard to find traces of the idea of zenkiteki shihon all over the historiography on the Tokugawa economy. The contrasting depiction of urban merchants as pro-feudal, reactionary, and opportunistic, a regressive force locked in a declining urban sector, and of middling rural entrepreneurs (gōnō) as key drivers of Japan’s economic modernization is a case in point.

Near the end of the third essay in The Genealogy of Modern Capitalism, Ōtsuka acknowledges a particular intellectual debt to Max Weber. Ōtsuka’s use of zenkiteki shihon, he notes, directly follows and expands upon Weber’s “pariah capitalism” (Paria-Kapitalismus, pariah glossed explicitly as senmin or outcast). In The Protestant Ethic and the Spirit of Capitalism Weber writes of “pariah capitalism” as follows:

The Jews stood on the side of the politically and speculatively oriented adventurous capitalism; their ethos was, in a word, that of pariah-capitalism. But Puritanism carried the ethos of the rational organization of capital and labour. It took over from the Jewish ethic only what was adapted to this purpose.

In this way, Weber coined the term “pariah capitalism” to contrast a modern and “rational” Puritan capitalism with a premodern “speculative” Jewish capitalism. Ōtsuka then laundered this “pariah capitalism” into his definition of “early period capitalism,” which in turn took on a role of central importance in the historiography of early modern Japan. Perhaps this Weberian connection explains the intensely moralistic, judgmental cast to some historians’ evaluations of Tokugawa merchant capital.

This also raises the questions of how Ōtsuka’s zenkiteki shihon might fit into the broader history of antisemitism in Japan, and how Weber’s ideas, born of a desire to draw a sharp line in the sand between Puritans and Jews, may have mapped onto the domestic anxieties, biases, and critiques surrounding Japanese merchants - from Ōmi peddlers to zaibatsu conglomerates - over the course of the 20th century. This is more of a research agenda than something that can be covered in a blog post. But it points to a truly global history of prejudice, one worth further study.