This book is a superb analysis of the kō, or cooperative insurance and loan funds, that were created by Japanese farmers during the early modern era, the core ethos and practices of which have carried over into the contemporary economy. Their emergence, sophistication, ubiquity, and endurance are powerful refutations of views that Japanese commoners were simply the endlessly enduring victims of exploitative governments, on the one hand, or of Mother Nature, on the other. By the middle of the Edo period, at the latest, the people had come to the realization that all types of natural disasters were inevitable, that help was not going to be forthcoming from the government, and that if crop failures, disease, fire, and other crises were not to automatically cause famine, poverty, and misery, then the people were going to have to devise some collective method of breaking that causal chain themselves. That method was the kō.

The kō did not develop in a vacuum: by the eighteenth century, many writers were articulating views that, in a sense, codified existing commoner values and, further, justified calculated economic behavior that was designed to fulfill those values and ensure survival at the same time. The indivisibility of morality and economics, egalitarian and cooperative commitment to collective goals (including, primarily, survival), and, crucially, the importance of money in general and commerce in particular were all argued by a variety of commoner authors. Money was an essential weapon in the battle against poverty, and commerce—if pursued fairly and aimed at the collective good—was not dirty, nor even just permissible, but essential to a moral life.

Which came first—the kō or their justification—is unclear, but in any case, by the late eighteenth century, villagers throughout Japan had created a wide variety—in terms of goals, techniques, and memberships—of groups in which people pooled their contributions and, either in rotation, by application, or in times of crisis, made withdrawals. There were basically three types of kō: simple mutual insurance schemes, pools of what one might call venture capital, and quasi-lotteries. Many villagers were members of several at once. They all shared detailed contractual (albeit informal) commitments, careful calculations of obligations and benefits, finite time frames, and underlying acceptance of both rational survival strategies and the moral imperative of village social intimacy.

Following an exposition of commoner economic views and the emergence of the kō, Tetsuo Najita presents the epitome of the early modern kō, the Hōtoku movement, which began in the mid-nineteenth century and soon spread nationwide. The Hōtoku movement continued the theme of mutual aid through systematic contributions to cooperative communities, but grew to include sophisticated multivillage arrangements, detailed long-term agricultural and economic planning, rigorous budgeting, and the determined creation of surpluses for the purposes of promoting both agriculture and commercial by-employments. Hōtoku groups even confronted the feudal authorities, in some cases promising the rehabilitation of rural economies in return for formal commitments to limit taxes.

This interface with the powers that be continued after the Meiji Restoration. The new regime wanted to incorporate the Hōtoku movement into its modernization strategy, hoping that as part of a national credit and loan system, it would help turn peasants into capitalistic, entrepreneurial farmers and loyal subjects, thus damping the wave of rural bankruptcies and popular protests that accompanied industrialization. The movement would have nothing to do with this, however, arguing that mutual aid and collective welfare should take precedence over cut-throat, Darwinist capitalist competition. The movement was by no means hostile to profit—just to its elevation over human and social considerations.

The Hōtoku movement in particular and the kō in general did, however, manage to transition into more modern forms, albeit without deserting their values. Their new manifestation (which existed alongside its predecessors) was the mujin corporation, a sort of hybrid of the traditional kō and a modern savings and loan credit union. The mujin were not large, but were critically important sources of capital for small-scale, capital-poor entrepreneurs (rural and urban) with little collateral. Their source of funds was the membership, which was also their beneficiary. Their goal was profit with mutual benefit, and they grew by leaps and bounds: a government survey of 1933 found some 450,000 (including kō) nationwide. The government had moved to regulate them much earlier, in 1915, but allowed them a surprising degree of freedom, which recollects the freedom of action that enabled the kō in the largely autonomous Tokugawa village.

Neither military rule, nor war, nor occupation obliterated the mujin or the kō. Indeed, amid reconstruction, their provision of small-scale and often subprime loans grew, and in the postwar years, the kō proliferated and total deposits in mujin credit unions grew. They remain to this day, under a variety of new titles, a mechanism for the blending of moral and economic rationality. They missed a postwar opportunity, according to Najita, to influence Japan more broadly: there was a significant movement early on to establish a cooperative basis for Japanese democracy, but it was overwhelmed by the forces of high-growth economics. Still, in the citizens' movements of the 1970s and later, and the outpouring of voluntarism following the Hanshin earthquake, he discerns an ethic of egalitarian, mutual cooperation that can be traced back two centuries.

I would argue that Najita is too modest, that this ethic is even more alive today. There is a world of difference between contemporary capitalism as it is practiced in France and Japan, on the one hand, and in the United States, on the other—a difference that is entirely consistent with the ethic of the kō. This difference brings up another way in which Najita is perhaps too modest. He notes that the kō and its underlying ethic are neither uniquely Japanese nor some sort of traditionalistic feudal residue: similar groups can be found in other, and in contemporary, societies. In fact, both groups and ethics are even more widespread in both time and space than he argues: both are typical of the “friendly societies” found in Europe since the nineteenth century and among immigrants to the United States today. There is nothing “traditional” or “modern” about marginal groups who expect endemic crisis but not governmental assistance being able to help themselves.

But such comments as these are, at worst, praising with faint damnation. Critics are supposed to criticize, but Najita, in bringing self-aware, morally, and economically rational Japanese commoners into the light, has done students of Japanese and comparative social and economic history a great service, and I recommend this book to them all.