Japan

The mechanism that brought Japan into international trade was the Meiji Land & Tax Reform, which abolished the rice tax paid to feudal lords & replaced it with a money tax paid to the central government, used for financing the industrial revolution (Harrison 1983). This tax did not achieve social justice, however, because it gave landlords a tax advantage over owner-cultivators since it also captured wages. The tax was inflexible & made no provision for lean years. To ilustrate, the government revenue obtained through this tax fell from 72% in 1872 to only 15% prior to WWI. Under Allied occupation, the Japanese were pressured to pass the Second Agricultural Land Reform act, which broke up agricultural estates, ended absentee landholding, created many smallholders, & improved the position of farm tenants. However, it did not apply to natural resources, allowed land speculation, & did not capture the unearned increment of land. Measures were adopted between 1988 & 1992 that discouraged speculation & moderated the inflated market. Although the 1990 downturn & recession shed a bad light on the land-value tax, the underlying cause of the recession was the contraction of credit. L. A. Hoffman