neurs at all levels and developed with speed and efficiency a modern capitalistic economy.
When we look below the surface of Chinese political centralization and Japanese feudal division, we find that there were good reasons for this difference in the response of the two countries to the economic challenge of the West in the nineteenth century. The very centralization of power in China and the omnipotence of the central government had always discouraged any entrepreneurial activity that required long-range investments, because an all-powerful government was also likely to be an arbitrary one. Those with capital normally sought quick returns on their money through usury or trade or else put their capital into agricultural land, the one relatively safe type of investment.
Such a situation, which inhibited long-range investments in industrial production, was common throughout Asia, but in China it was made even more extreme by a factor that at first we might think would have had the opposite effect. This was the relatively egalitarian nature of Chinese society. The Chinese had a snobbish disdain for all commercial activity, as did most other Asians, including the feudal Japanese, but they also believed that political leadership, which stood at the top of their social pyramid, should be open to all those who showed superior talents. A family of wealth, regardless of its origin, could gain respectability through the ownership of land and the education of its members, and within a few generations its more brilliant and better educated descendants might reach the highest pinnacle of political power and social prestige through the government bureaucracy. Thus, the centralized bureaucratic state not only discouraged long-range entrepreneurial activities by its arbitrary power but also exercised a positive pull on all those with ambition and ability, away from economic enterprise and toward government service.
The situation in feudal Japan was very different. Here the class lines between the military elite and the common people could not be easily crossed. The peasants, artisans, and merchants had no hope of making themselves or their descendants powerful political leaders or even socially acceptable by the ruling class. If men of ability and ambition from these classes were to excel, it had to be in their own traditional fields of farming, manufacture, or trade, but not in government. And just because they were excluded from political leadership, they compensated by building up ideals of high economic achievement and the acquiring of money as ends in themselves. In other words, these feudal restrictions led them to develop some of the economic drives that Max Weber has attributed
