The Dojima Rice Exchange

The Dojima Rice Exchange of the Edo period (1603-1868), located in Osaka, Japan, is known among researchers as “the world’s first futures trading market.” Much as modern markets do today, the Edo-period Dojima market had a market for trading securities called rice certificates and an index futures market for trading indices derived from those securities. The market economy and the Exchange itself became extraordinarily dynamic, astounding observers of the time. But a dynamic market poses its own challenges, as we in our times know all too well. How did the people and government of the Edo period, who had no precedents to draw on, let alone economists to consult, contend with what was often a runaway market? The story of how the futures market developed and functioned at Dojima reveals the true nature of the “market economy.”