[Japanese Side] The Controversial Figure of the New 10,000 Yen Note: 'Shibusawa Eiichi'

Japan Emphasizes Ethical Management as 'Father of Capitalism'
Outstanding Management Skills but Criticized for Korean Peninsula Invasion and Womanizing

Japan will start using newly designed banknotes from July next year. It has been 20 years since Japan issued new banknotes with new designs. The Japanese Ministry of Finance and the Bank of Japan (BOJ) plan to issue new designs for the 10,000 yen, 5,000 yen, and 1,000 yen bills.

With the change in the new banknote designs, the figures featured on them have also changed. The main figure on the highest denomination 10,000 yen bill is Eiichi Shibusawa (澁澤榮一), who is called the "Father of Capitalism" in Japan. While he is praised as a great person in Japan, in South Korea he is strongly criticized as someone who led the economic exploitation of the Korean Peninsula.

Today, we will look into who Shibusawa was and examine his merits and faults.

A photo of Shibusawa Eiichi during his lifetime. (Photo by Shibusawa Eiichi Memorial Foundation)

Born as the child of a wealthy farmer... embraced Western culture and became a businessman

Shibusawa was born in 1840, at the end of the Edo period, as the child of a wealthy farmer. His parents earned money by raising silkworms, which provided a stable livelihood. As a child, he studied classical texts such as the Analects, and when he became a young man, he went to Edo to continue his studies.

In 1866, Shibusawa accompanied a delegation to the Paris Exposition Universelle in France, where he witnessed the advanced science, technology, and infrastructure of Western countries. It was also at this time that he learned about financial and economic systems.

At the age of 29, he established Japan's first joint-stock company, the "Sh?h? Kaisho." This joint-stock company system was also learned from France. It combined a trading company responsible for selling goods and banking operations that provided loans secured by merchandise. As Sh?h? Kaisho rapidly grew, the Japanese government appointed him to a position. Based on what he had seen and heard during his European mission, he joined the Ministry of Finance (then called the Daj?kan), which plays the role of today's Ministry of Finance, and helped design the foundations of Japan's currency, financial, and tax systems. The ministry highly valued his abilities and offered him a senior bureaucratic position, but he resigned and fully entered the market.

Afterwards, Shibusawa was directly involved in founding 500 companies, including Japan's first bank, the Dai-Ichi Kokuritsu Gink? (predecessor of today's Mizuho Group), Kirin Brewery, the Imperial Hotel, and Tokyo Marine & Fire Insurance. The Tokyo Stock Exchange was also established through Shibusawa's efforts. He actively engaged not only in profit-seeking enterprises but also in social contribution projects such as founding universities and hospitals. It is said that he established 600 public interest organizations.

One notable aspect is his management philosophy called the "Unity of Morality and Economy." This philosophy combined Confucian ideas he learned from the Analects in his youth with his business views. In his book Rongo to Soroban ("The Analects and the Abacus"), Shibusawa emphasized that "economic activities and morality are not contradictory" and that entrepreneurs must have a sense of public responsibility. He argued that companies should not pursue profit alone but that management should be based on moral values.

He also stated that corporate profits should not be monopolized but returned to society and shared by all. Because of this, he famously said, "An entrepreneur should hold the Analects in one hand and the abacus in the other." Peter Drucker, known as the founder of modern management, praised Shibusawa as "the first person in history to mention the 'social responsibility' of corporations."

Statue of Shibusawa placed at the Shibusawa Eiichi Memorial Foundation. (Photo by Shibusawa Eiichi Memorial Foundation website)

Economic exploitation of the Korean Peninsula and womanizing... criticism even in Japan

Given Shibusawa's significant role in the Japanese economy, why has his inclusion on the new banknotes sparked controversy?

First, in South Korea, he is criticized as a figure involved in the economic exploitation of the Korean Peninsula. Shibusawa established the Jeil Bank in Joseon (Korea) in 1873 and became its first president. When the Jeil Bank was authorized to issue Japanese currency in 1902, he appeared as the model on the 10 yen, 5 yen, and 1 yen banknotes. The Jeil Bank notes emerged after the Korean Empire blocked the circulation of Japanese banknotes, and Japan sought to control Korea's economy through this bank.

He also served as president of the Gyeongin Railway Joint Stock Company and the Gyeongbu Railway Joint Stock Company, overseeing the construction of the Gyeongin and Gyeongbu lines. These railways were operated for military purposes at the time and ultimately used as tools for the invasion of Joseon.

Moreover, the news that Shibusawa would be featured on the new banknotes came out in 2019, during the administration of former Prime Minister Shinzo Abe, known for his far-right views. This led to criticism in South Korea that the Abe government’s historical revisionism was reflected in this decision.

Shibusawa is not universally respected even in Japan. His womanizing is a persistent issue. He had multiple concubines and many hidden children, and there were controversies about his inappropriate relations with household maids. When he was 85 years old, an 18-year-old woman gave birth to his child, causing further scandal. Officially, he had 13 children, but it is widely speculated that he had many more children not registered in the family registry.

Japanese media have also pointed out that "while he played with courtesans and changed concubines multiple times, he loudly preached morality to the world." In fact, Shibusawa was once considered as a candidate for the 10,000 yen bill but was dropped, and it is said that this issue may have been a stumbling block.

Eiichi Shibusawa, who founded 500 major companies and 600 public interest organizations, was undoubtedly an outstanding businessman. However, his leading role in the invasion of the Korean Peninsula and his flaunting of womanizing, while verbally emphasizing the importance of morality, reveal clear limitations. While Shibusawa is recognized as a business leader in Japan, there is a growing atmosphere of reflection on how to overcome the contradictions and limitations he embodies.