ABSTRACT
Introduction This chapter has been written as a study in economic policy, not in economic theory as such (see Smethurst, 2007). The subject, Takahashi Korekiyo (1854-1936), served seven times as Japan’s Finance Minister between 1913 and 1936, and is most famous as ‘Japan’s Keynes’, or ‘Keynes before Keynes’. John Maynard (later Lord) Keynes (1883-1946) was born later than Takahashi and died even later. Takahashi had introduced expanded fiscal spending using borrowed money to stimulate the economic recovery in the summer of 1932, three-and-a-half years before the first publication of John Maynard Keynes’ The General Theory of Employment, Interest and Money in February 1936 and not much after Keynes’ former student and later collaborator, Richard (later Lord) Kahn (1905-1989), had introduced the ‘multiplier’ to economic parlance. In fact, Takahashi had already written about fiscal spending working ‘twenty or thirty times over’ in a pre-Kahn 1929 essay, in which he invited the nation to go to a ‘geisha-house’ and spend wastefully (morally) and productively (economically). Barry Eichengreen (2015) has dubbed his actions ‘Takahashi’s Revenge’, since he reversed the actions of his ‘contractionist’ predecessor as finance minister and challenged the fiscal orthodoxy of the times (Eichengreen, 2015: 253-258). The point of this contribution will be that – although we cannot find a ‘smoking gun’, that is, a direct connection between Keynes’ idea of a spending policy to bring economic recovery during the depression and Takahashi’s policies – it is clear that Takahashi was a ‘modern’ economic statesman who spoke and read English fluently and could easily have learned Keynesian, or more to the point, proto-Keynesian ideas during his long policy apprenticeship and acted as if he had done so.1
