There were at least two reasons for the speed of Japan's modernization: the employment of over 3,000 foreign experts (called o-yatoi gaikokujin or 'hired foreigners') in a variety of specialist fields such as teaching English, science, engineering, the army and navy etc.; and the dispatch of many Japanese students overseas to Europe and America, based on the fifth and last article of the Charter Oath of 1868: 'Knowledge shall be sought throughout the world so as to strengthen the foundations of Imperial rule.' This process of modernization was closely monitored and heavily subsidized by the Meiji government, enhancing the power of the great zaibatsu firms such as Mitsui and Mitsubishi.
Hand in hand, the zaibatsu and government guided the nation, always borrowing technology from the West. Japan gradually took control of much of Asia's market for manufactures, beginning with textiles. The economic structure became very mercantilistic, importing raw materials and exporting finished products - a reflection of Japan's relative poverty in raw materials.
Following her defeat of China in Korea in the Sino-Japanese War (1894-1895), Japan broke through as an international power with a victory against Russia in Manchuria (north-eastern China) in the Russo-Japanese War of 1904-1905. Allied with Britain since the Anglo-Japanese Alliance signed in London on January 30, 1902, Japan joined the Allies in World War I, seizing German-held territory in China and the Pacific in the process, but otherwise remained largely out of the conflict.
After the war, a weakened Europe left a greater share in international markets to the U.S. and Japan, which emerged greatly strengthened. Japanese competition made great inroads into hitherto European-dominated markets in Asia, not only in China, but even in European colonies like India and Indonesia, reflecting the development of the Meiji era.
The major institutional accomplishment after the Satsuma Rebellion was the start of the trend toward developing representative government. People who had been forced out or left out of the governing apparatus after the Meiji Restoration had witnessed or heard of the success of representative institutions in other countries of the world and applied greater pressure for a voice in government.
A major proponent of representative government was Itagaki Taisuke (1837-1919), a powerful Tosa leader who had resigned from the Council of State over the Korean affair in 1873. Itagaki sought peaceful rather than rebellious means to gain a voice in government. He started a school and a movement aimed at establishing a constitutional monarchy and a legislative assembly. Itagaki and others wrote the Tosa Memorial in 1874 criticizing the unbridled power of the oligarchy and calling for the immediate establishment of representative government.
Dissatisfied with the pace of reform after having rejoined the Council of State in 1875, Itagaki organized his followers and other democratic proponents into the nationwide Aikokusha (Society of Patriots) to push for representative government in 1878. In 1881, in an action for which he is best known, Itagaki helped found the Jiyuto (Liberal Party), which favored French political doctrines.
In 1882 Okuma Shigenobu established the Rikken Kaishinto (Constitutional Progressive Party), which called for a British-style constitutional democracy. In response, government bureaucrats, local government officials, and other conservatives established the Rikken Teiseito (Imperial Rule Party), a pro-government party, in 1882. Numerous political demonstrations followed, some of them violent, resulting in further government restrictions. The restrictions hindered the political parties and led to divisions within and among them. The Jiyuto, which had opposed the Kaishinto, was disbanded in 1884, and Okuma resigned as Kaishinto president.
Government leaders, long preoccupied with violent threats to stability and the serious leadership split over the Korean affair, generally agreed that constitutional government should someday be established. The Choshu leader Kido Takayoshi had favored a constitutional form of government since before 1874, and several proposals for constitutional guarantees had been drafted. The oligarchy, however, while acknowledging the realities of political pressure, was determined to keep control. Thus, modest steps were taken.
The Osaka Conference in 1875 resulted in the reorganization of government with an independent judiciary and an appointed Council of Elders (Genronin) tasked with reviewing proposals for a legislature. The emperor declared that "constitutional government shall be established in gradual stages" as he ordered the Council of Elders to draft a constitution.
Three years later, the Conference of Prefectural Governors established elected prefectural assemblies. Although limited in their authority, these assemblies represented a move in the direction of representative government at the national level, and by 1880 assemblies also had been formed in villages and towns. In 1880 delegates from twenty-four prefectures held a national convention to establish the Kokkai Kisei Domei (League for Establishing a National Assembly).
Although the government was not opposed to parliamentary rule, confronted with the drive for "people's rights", it continued to try to control the political situation. New laws in 1875 prohibited press criticism of the government or discussion of national laws. The Public Assembly Law (1880) severely limited public gatherings by disallowing attendance by civil servants and requiring police permission for all meetings.
Within the ruling circle, however, and despite the conservative approach of the leadership, Okuma continued as a lone advocate of British-style government, a government with political parties and a cabinet organized by the majority party, answerable to the national assembly. He called for elections to be held by 1882 and for a national assembly to be convened by 1883; in doing so, he precipitated a political crisis that ended with an 1881 imperial rescript declaring the establishment of a national assembly in 1890 and dismissing Okuma.
Rejecting the British model, Iwakura and other conservatives borrowed heavily from the Prussian constitutional system. One of the Meiji oligarchy, Ito Hirobumi (1841-1909), a Choshu native long involved in government affairs, was charged with drafting Japan's constitution. He led a Constitutional Study Mission abroad in 1882, spending most of his time in Germany. He rejected the United States Constitution as "too liberal" and the British system as too unwieldy and having a parliament with too much control over the monarchy; the French and Spanish models were rejected as tending toward despotism.
On its return, one of the first acts of the government was to establish new ranks for the nobility. Five hundred persons from the old court nobility, former daimyo, and samurai who had provided valuable service to the emperor were organized in five ranks: prince, marquis, count, viscount, and baron.
Ito was put in charge of the new Bureau for Investigation of Constitutional Systems in 1884, and the Council of State was replaced in 1885 with a cabinet headed by Ito as prime minister. The positions of chancellor, minister of the left, and minister of the right, which had existed since the 7th century as advisory positions to the emperor, were all abolished. In their place, the Privy Council was established in 1888 to evaluate the forthcoming constitution and to advise the emperor.
To further strengthen the authority of the state, the Supreme War Council was established under the leadership of Yamagata Aritomo (1838-1922), a Choshu native who has been credited with the founding of the modern Japanese army and was to become the first constitutional prime minister. The Supreme War Council developed a German-style general staff system with a chief of staff who had direct access to the emperor and who could operate independently of the army minister and civilian officials.
When finally granted by the emperor as a sign of his sharing his authority and giving rights and liberties to his subjects, the 1889 Constitution of the Empire of Japan (the Meiji Constitution) provided for the Imperial Diet (Teikoku Gikai), composed of a popularly elected House of Representatives with a very limited franchise of male citizens who paid 15 in national taxes, about 1 percent of the population, and the House of Peers, composed of nobility and imperial appointees; and a cabinet responsible to the emperor and independent of the legislature. The Diet could approve government legislation and initiate laws, make representations to the government, and submit petitions to the emperor. Nevertheless, in spite of these institutional changes, sovereignty still resided in the emperor on the basis of his divine ancestry.
The new constitution specified a form of government that was still authoritarian in character, with the emperor holding the ultimate power and only minimal concessions made to popular rights and parliamentary mechanisms. Party participation was recognized as part of the political process. The Meiji Constitution was to last as the fundamental law until 1947.
In the early years of constitutional government, the strengths and weaknesses of the Meiji Constitution were revealed. A small clique of Satsuma and Choshu elite continued to rule Japan, becoming institutionalized as an extraconstitutional body of genro (elder statesmen). Collectively, the genro made decisions reserved for the emperor, and the genro, not the emperor, controlled the government politically.
Throughout the period, however, political problems were usually solved through compromise, and political parties gradually increased their power over the government and held an ever larger role in the political process as a result. Between 1891 and 1895, Ito served as prime minister with a cabinet composed mostly of genro who wanted to establish a government party to control the House of Representatives. Although not fully realized, the trend toward party politics was well established.
Japan emerged from the Tokugawa-Meiji transition as the first Asian industrialized nation. Domestic commercial activities and limited foreign trade had met the demands for material culture in the Tokugawa period, but the modernized Meiji era had radically different requirements. From the onset, the Meiji rulers embraced the concept of a market economy and adopted British and North American forms of free enterprise capitalism. The private sector - in a nation blessed with an abundance of aggressive entrepreneurs - welcomed such change.
Economic reforms included a unified modern currency based on the yen, banking, commercial and tax laws, stock exchanges, and a communications network. Establishment of a modern institutional framework conducive to an advanced capitalist economy took time but was completed by the 1890s. By this time, the government had largely relinquished direct control of the modernization process, primarily for budgetary reasons.
Many of the former daimyo, whose pensions had been paid in a lump sum, benefited greatly through investments they made in emerging industries. Those who had been informally involved in foreign trade before the Meiji Restoration also flourished. Old bakufu-serving firms that clung to their traditional ways failed in the new business environment.
The government was initially involved in economic modernization, providing a number of "model factories" to facilitate the transition to the modern period. After the first twenty years of the Meiji period, the industrial economy expanded rapidly until about 1920 with inputs of advanced Western technology and large private investments. Stimulated by wars and through cautious economic planning, Japan emerged from World War I as a major industrial nation.
After the death of the Meiji Emperor in 1912, the Taisho Emperor took the throne, thus beginning the Taisho Period.