65, No. 1
During the period of high economic growth, there was considerable change in the environmental factors. Supermarkets expanded their operations aggressively in order to take advantage of the business opportunities. In the process, however, they followed a pattern of business behavior which contradicted the predictions of theorists of distribution revolution.
The vertical fund supplementation mechanism between the supermarkets and the wholesalers evolved around the axis of the wholesalers' function of financing. Supermarkets at this time were under pressure because they needed to maximize the benefits of chain operations, but they did not have sufficient funds. Of great significance in overcoming this shortage were the 'turnover variance funds' resulting from the differences between the accounts payable turnover and the merchandise turnover. The source of these funds was none other than the wholesalers.
In this article, the focus is shifted to the demand side of the circulation of funds. Two kinds of resources have been used: the Shomoncho, which is a file of copies of villagers' loan contracts, and account books about fund raising and loans belonging to a village system similar to a credit union. Both of them are official documents of the village.
We find that villagers procured money from many diverse lenders or institutions for the production of commodities. Consequently, we come to the conclusion that there was a competitive and widespread finance market which had come to link savings to investment after the 1840s.
The fact that a relatively low-level group of urban workers like this actually formed an association during the Tokugawa period is not well known. The association was strengthened by confrontations with other groups, such as stonemasons and well-diggers, and by disputes with fellow tetsudai in rural areas. As a result of the activities of the association, tetsudai were able to raise their social status and increase their independence.
When we discuss markets, we must take account of transaction costs. The fact that information has a price is the key to transaction costs, which consist of the cost of measuring the attributes of what is being exchanged, the cost of protecting rights and the cost of enforcing agreements. Only when the benefits of opening a market are larger than the transaction costs incurred in so doing, can a market be set up.
In the case of the Assam labour market, it seems that the benefits of opening the market exceeded the costs, and the market was indeed set up. However, we should pay particular attention to the fact that two types of merchants, sardars (bosses) and contractors, played important roles in cutting down the transaction costs. The former were able to cut transaction costs more efficiently than the latter. Therefore, the more sardars increased, the more rapidly the market extended.