Japan’s experience with modern capitalism and finance is characterized by a remarkable combination of shocks and adaptation. After being steamrolled by Western institutions and financial technologies, the country attempted to retaliate against this intrusion. However, regaining financial sovereignty proved a protracted process of trial and error. In the 1880s and 1890s, under the auspices of Matsukata Masayoshi, Tokyo seemed to get it right. The establishment of the Bank of Japan and related institutions, on the one hand, and the adoption of the gold standard, on the other, appeared designed to lift Japan out of its peripheral status. In reality, however, they mostly served to emphasize its role as an enabler of the British-led international order. Only in the 1930s, during the worldwide Great Depression, would it break with this role, if only to find that its autonomy had been compromised from the very beginning. Japan’s disastrous loss in World War II drove the country into the arms of the newly arisen global hegemon: the United States. In the early 21st-century, Japan remains a linchpin in the still surviving American-led world order and the corollary “dollar standard.”
