JAPAN: AND THE LAST SHALL BE FIRST^365
This precocious development of pre-factory industry (what some
economic historians would call proto-industry) paid off in the mid-
nineteenth century, when the opening of the country to foreign goods
exposed Japanese manufacture to the machine-made products of the
West. The spinning branch crumpled, but weaving, using imported
yarn, held up against foreign cloth. And then, as in Britain, cotton
spinning became the leading sector of Japan's industrial revolution,
building on a preexisting network of machine shops and skilled labor.^22
Regional specialization, again as in England, depended on a unified na
tional market—unified spatially and between town and country. Com
mercial agents scoured the villages for labor and commodities;
successful rural entrepreneurs found their way to urban centers; busi
nessmen took up residence in villages. Here we see the unintended ef
fects of sankin kotai (alternate residence). The movement of several
hundred daimyd, plus retainers and their families, from provincial han
to Edo and back made for constant stir, an exposure to strange places
and new commodities, a rapid proliferation of travel accommodations,
a large demand for liquid funds and remittance facilities, a multiplica
tion of crafts and shops and services.
Edo, a fishing village at the end of the sixteenth century, was the
largest city in the world in the eighteenth, with over 1 million people
out of perhaps 26 million for the nation as a whole. Like London in
England, Edo became the heart and lungs of the country, pumping and
renewing the economic life blood, drawing people in and out, pro
moting division of labor and the diffusion of wants, knowledge, and
know-how.^23 Edo was the great marketplace, where samurai competed
in conspicuous consumption and enriched a swarm of craftsmen and
tradesmen. This was a shopkeeper's heaven that boasted the world's
first department stores. But to say this is not to overlook the older busi
ness center: alongside Edo and much larger at first stood the Osaka-
Kyoto duo, seat of the emperor and his court, hub of industry,
banking, and trade.^24
These two primary centers and their network of provincial connec
tions fueled new techniques of buying (including futures trading), of
distribution (much of it by coastal shipping in specialized vessels), and
of remittance (bills of exchange, transferable warehouse receipts, clear
ing), much as in Europe's commercial revolution of the Middle Ages
and early modern period, only more so.^25 And faster. This island econ
omy was changing swiftly along Smithian lines of specialization, divi
sion of labor, and growing demand. But then it had some real