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'As Close as Lips and Teeth' The Daiichi Ginkō and Megata Tanetarō in Korea


  • Schiltz, Michael


It is by now established knowledge that Japanese interventionist policies versus Korea cannot have been motivated by economic profits. Literature in this respect instead points to socio-political, perhaps military explanations of this instant of Japanese imperialism. Whereas this insight is certainly more satisfying, it does not pay attention to the role of a series of monetary and financial reforms both the Japanese government and the Government-General in Korea sought to implement immediately after the peninsula had been turned into a protectorate. In this paper, we will turn to the pre-history of Korea's annexation; we will highlight a number of inconsistencies at the core of Japanese policies vis-à-vis Korea, and demonstrate that financial and economic considerations eroded the very strategy of establishing Korea as a mere political 'line of interest'. Instead, the very alliance between politicians and people of high finance only reinforced the employment of finance and monetary matters as instruments in facilitating Korea's societal transformation. We will demonstrate how the 'Megata reform', as it came to be called, factually turned Korea into a subsidiary of the Japanese economy. It was a tool aimed to relegate the position of Korea in the Japanese Lebensraum —to which later generations of politicians would refer as the Greater East-Asian Co-Prosperity Sphere (dai tōa kyōeiken 大東亜共栄圏). The Megata reform was thus not an economic answer to an economic problem in the conventional sense. Instead, it was developed in reaction to a strategic need.

Suggested Citation

  • Schiltz, Michael, 2007. "'As Close as Lips and Teeth' The Daiichi Ginkō and Megata Tanetarō in Korea," MPRA Paper 7099, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:7099

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    References listed on IDEAS

    1. Rubinstein, Mark E, 1973. "A Mean-Variance Synthesis of Corporate Financial Theory," Journal of Finance, American Finance Association, vol. 28(1), pages 167-181, March.
    2. Carlo Alberto Magni, 2007. "Project valuation and investment decisions: CAPM versus arbitrage," Applied Financial Economics Letters, Taylor and Francis Journals, vol. 3(2), pages 137-140.
    3. Magni, Carlo Alberto, 2002. "Investment decisions in the theory of finance: Some antinomies and inconsistencies," European Journal of Operational Research, Elsevier, vol. 137(1), pages 206-217, February.
    4. Dybvig, Philip H & Ingersoll, Jonathan E, Jr, 1982. "Mean-Variance Theory in Complete Markets," The Journal of Business, University of Chicago Press, vol. 55(2), pages 233-251, April.
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    More about this item


    money doctoring; colonialism; Japanese empire; Korean money and finance;

    JEL classification:

    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N4 - Economic History - - Government, War, Law, International Relations, and Regulation

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