Marxian economists in Japan have studied the credit system theoretically and developed Marx’s incomplete theory of credit found in Capital Vol.3, Part 5, “The Division of Profit into Interest and Profit of Enterprise”, to explain the logical development of banking credit on the grounds of relationships of commercial credit. The dominant theoretical method has been named “the differentiation and development method” (DDM), in which credit relationships are regarded as developed through the functions of individual industrial capitalists. However, current financial phenomena are undermining these conclusions as financial transactions have expanded irrespective of industrial growth. Meanwhile, recent analyses based on the DDM have proven unable to explain contemporary financial issues, and have been reduced to confusing discussions of market organization.

This article aims to reconstruct the basic framework of the credit theory of Marxian economics with a focus on its banking theory, the standard being analysis of actual phenomena. Section 1 examines earlier studies and considers their latent methodological fallacies.

Section 2 dives into the text of Capital Vol.3, Part 5 to discuss two key concepts, “banking capital” and “fictitious capital”. In particular, it examines the text of Chapter 29, “Banking Capital’s Component Parts”, and focuses on the importance of Marx’s attention to the net worth of banks for understanding the concept of capital in the banking industry.

Section 3 explores the concept of capital and defines it as reserves for non‒performing loans. Banks try to maintain and reinforce their credibility on the basis of this capital, thereby enlarging the scale of their assets with respect to the competition. The growth of such assets leads to an increase in profits even where the interest rate is constant. Financial booms boost the growth of bank assets without maintaining the banks’ credibility, with the result that the banking assets become vulnerable.

The article ends by proposing that banking be theorized within studies of “the transformation of money into capital” rather than investigated within the DDM framework. This would enable the proper analysis of market organizations in relation to the actions of industrial capitalists.

This article examines the economic significance of companies’ relationships to local communities in the area of raw‒materials procurement. The discussion is based on a case study of the brick industry, which had factories in agricultural areas. This research investigates ways of sourcing dirt given that it was not an established market, and considers the sorts of relationships that were built with local communities in the process.

The first example, Kanamachi‒Seiga, built a factory in Kanamachi Village on the outskirts of the major consumer market that was Tokyo, did not buy dirt but rather the commonly traded asset of land from which it extracted dirt. However, until the end of the first decade of the 1900s, the company bought land from absentee landlords or those with whom it had personal connections. After that, it began buying land from landlords residing in the village but even then, it could not conduct purely economic transactions in land but rather had to adapt to the customs of local communities.

The second example, Nihon Renga Seizo, built its factory in Fukaya, Saitama, an area of high‒quality dirt, and was able to establish a trade in dirt with local contractors as intermediaries, meaning that the direct connections in local communities made up for absence of a market in dirt. At the time of its founding, Eiichi Shibusawa envisioned procuring dirt for free from the area around the factory. The company, however, was wary of this plan because it depended heavily on the favor of local communities, so the company chose instead to transactions based on payments. The labors who mined dirt were not employed directly by Nihon Renga Seizo but worked for contractors in the local communities. In this way, too, the relationship between the company and local communities made up for the undeveloped nature of the labor market.

In conclusion, this study shows that relationships with local communities supported the activities of companies not only in financing, as has been shown in previous studies, but in various other situations as well. This does not mean, however, that companies were the only ones to benefit. From about the end of the first decade of the 1900s, local communities in Japan began increasing their demands of companies, and the transactions were subject to constant negotiation.

This paper explores how tea became Britain’s national drink beginning in the mid‒nineteenth century, with a focus on the tea‒tax reduction of 1853. Tea had been spreading in Britain since early in the eighteenth century, but there was a critical turning point in tea consumption around the mid‒nineteenth century as seen in changes in historical per capita consumption. Many reasons are apparent for the increase in tea consumption in the latter half of the nineteenth century, including tax reform, expansion of colonial plantations and developments in advertising and sales methods. Among these, the tax reform of 1853 was the driving force in affecting the timing of the change in consumption patterns. Previous studies have not elaborated on this subject, but the background of the tax reform and its relation to tea consumption merit detailed explanation.

By examining the report of the Select Committee of the House of Commons in 1847 concerning the tea‒tax reduction and parliamentary debates, this paper reveals three factors affecting the changes in consumption pattern : economic interests in the China market, ideological developments regarding working‒class consumers, and political considerations pertaining to the public as consumers.

Firstly, in the late 1840’s, British manufacturers became involved in the tea market by way of the barter trade involving British products and tea in China. This affected tea prices in the British market while at the same time accelerating political action on behalf of tea‒tax reduction by those with interests in the Chinese market.

Secondly, from the mid‒nineteenth century, working‒class tea consumption was supported by the middle‒classes, which shared ideological views on the importance of free trade, temperance and improvement of working‒class conditions. In addition, Chartists who tried to take the initiative in political reform for the working class also promoted working‒class tea consumption in the course of their activities. Thus, these ideologies and movements formed a public opinion favorable to the mass consumption of tea and contributed to the realization of a reduction in the tax on tea.

Finally, reflecting the demands of the middle and working classes, it became increasingly important for politicians of the time to develop policies with mass consumers in mind. Implementation of the tea‒tax reduction was thus a symbol of this change in awareness among politicians.

From the above it can be concluded that the steady increase in the consumption of tea from the mid‒nineteenth century on, and the eventual establishment of tea as a national beverage, were due to the fact that a broad swath of society including middle class, working class, and politicians agreed, for both economic and ideological reason, on the desirability of expanding the consumption of tea by the masses.