Contracting for Sex in the Pacific War

Contracting for sex in the Pacific War
J. Mark Ramseyer1

Abstract
The protracted political dispute between South Korea and Japan over the wartime brothels called "comfort stations" obscures the contractual dynamics involved. These dynamics reflected the straightforward logic of the "credible commitments" so basic to elementary game theory. The brothel owners and potential prostitutes faced a problem: the brothel needed credibly to commit to a contractual structure (i) generous enough to offset the dangers and reputational damage to the prostitute that the job entailed, while (ii) giving the prostitute an incentive to exert effort while working at a harsh job in an unobservable environment.

Realizing that the brothel owners had an incentive to exaggerate their future earnings, the women demanded a large portion of their pay upfront. Realizing that they were headed to the war zone, they demanded a relatively short maximum term. And realizing that the women had an incentive to shirk, the brothel owners demanded a contractual structure that gave women incentives to work hard. To satisfy these superficially contradictory demands, the women and brothels concluded indenture contracts that coupled (i) a large advance with one- or two-year maximum terms, with (ii) an ability for the women to leave early if they generated sufficient revenue.

1. Introduction
As the Japanese army advanced and retreated across East Asia in
the 1930s and 40 s, it encouraged private entrepreneurs to establish
semi-official brothels next to its bases. Venereal disease had
wreaked havoc on its Siberian expedition in 1918, and it needed
that risk under control. From the cooperating brothel owners, it
demanded that the prostitutes undergo regular medical examinations.
In exchange, it promised to forbid its men from patronizing
brothels anywhere else.

To staff their brothels, the cooperating entrepreneurs hired
women primarily from Japan and Korea. All else equal, the soldiers
preferred Japanese women. Among the non-Japanese staff, they
preferred the Koreans. Korea was part of the Japanese nation, after
all (Japan had annexed the peninsula in 1910), and most Korean
women spoke at least some Japanese. The army called the cooperating
brothels ¨comfort stations¨(ianjo). It called the prostitutes
¨comfort women¨(ianfu).



Consider the contracting problem. To staff these brothels,
entrepreneurs needed to recruit young women. They obviously
needed to promise the women extremely high pay. Even in the
best of circumstances, prostitution is harsh and dangerous work
and exacts a major reputational penalty. Women will take the job
only if they expect to earn income both high enough to offset these
costs, and significantly higher than their next-best alternative.
For work indistant wartime locations,the entrepreneurs needed
to promise pay substantially higher even than in the Tokyo or Seoul
brothels. To the standard travails of prostitution, the comfort stations
added the risk of warfare. They added the cost of living in
a foreign environment. The women would be away from friends,
allies, people to whom they could turn for help should the brothel
Somehow, the entrepreneurs needed to make their promises
of high pay from this incentive-based wage contract credible. To
entice a woman to take this contract, an entrepreneur needed to
convince her that she would earn high wages. Yet she knew that
he had every incentive to exaggerate her potential earnings, and
he knew that she knew. Some women would have doubted their
own capacity to generate high earnings. In some jobs, a woman
might have experimented for a short period to learn how much
revenue she could earn. Given the reputational hit she took simply
for entering the occupation, she could not do that here.
To recruit women to brothels on the military front, the
entrepreneurs and women faced contractual problems harder by
orders of magnitude. Most obviously, the women faced all the dangers of
war – fighting, bombing, and rampant disease. The women
also faced far more serious risks of brothel non-performance.

Should a brothel owner in Tokyo try to cheat on the contract, a
prostitute could complain to the police. They would not all be sympathetic,
but some would. She could sue the brothel owner in court
for nonperformance. Some did exactly that, and won. She could
walk out of the brothel, and disappear into the anonymity of the
Tokyo metropolis. In a distant foreign country, she faced the risk
that she might not be able to do any of this.

The entrepreneurs and the women addressed these problems
with a multi-year indenture agreement that bundled an up-front
advance, additional cash compensation, a maximum term, and
the right to quit early if a woman generated enough revenue. In
the article that follows, I detail the economic logic to these contracts.
I compare the sexual service contracts the entrepreneurs and
women negotiated (i) for the comfort stations, with the contracts
they negotiated (ii) for domestic Japanese brothels, (iii) for domestic
Korean brothels, and (iv) for the non-comfort-station war-time
brothels across Japanese-governed East Asia
try to cheat them. And they raised the difficulty of absconding
should the brothel try to cheat, and the price of returning home
if they stayed their term and retired at the end.

Although they needed to promise the women high pay, the
entrepreneurs could not just offer a high monthly wage. They
were hiring women to perform unpleasant work in impossible-to-monitor
surroundings. If they promised a fixed monthly wage, they
gave each woman an incentive to be sufficiently unpleasant that no
one asked for her at the front desk. Necessarily, they needed a wage
contract that rewarded effort.

Sandakan Brothel No. 8 (#1)
by Yamazaki Tomoko, Karen Colligan-Taylor (Translator)

Abstract: This is a pioneer work on karayuki-san, poor rural Japanese women sold into overseas prostitution between the 1860's and the 1930's. Sandakan Brothel No. 8 presents the life story of a former karayuki-san, Osaki, as related to the author. (This is the first book in Tomoko's karayuki-san trilogy; Sandakan Brothel No.8 1972, The graves of Sandakan 1964 and The Song of a Woman Bound for America 1981.)


I know of no source detailing how often the upfront payment
went to the woman herself, how often it went to her parents who
kept it on her behalf, and how often it went to abusive parents who
kept it for themselves. Note, however, that prostitutes were not
prisoners. In cities like Tokyo, they could easily leave their brothels
and disappear into the anonymous urban environment. If they
did, the brothel would then sue their parents on the cash advance
(a prostitute’s father typically signed the contract as guarantor).
That this only happened occasionally suggests (obviously does not
prove) that most prostitutes probably chose the job themselves;
they probably did so because – in their minds – it made the best of
a bad situation.

(b) The contracts as applied. In practice, the prostitutes repaid
their loans in about three years and quit. Surely, historians sometimes
insist, the brothels must have manipulated the charges for
food and clothing to keep prostitutes mired in perpetual debt. At
least on a large scale, however, they did not do this. Probably,
the brothels – established institutions with a large capital investment –
realized that cheating on their initial contract would raise
their future recruitment costs. Not only did the brothels specifically
promise a woman she could quit debt-free at the end of six years
regardless of the revenue she generated, they generally kept their
promise.

If brothels manipulated charges or otherwise cheated on their
terms to keep prostitutes locked in debt, the number of licensed
prostitutes should have stayed reasonably constant at least up to
age 30. The minimum age for licensed prostitutes was 18. In 1925,
there were 737 licensed Tokyo prostitutes aged 21, and 632 aged
22. There were only 515 aged 24, however, 423 age 25, and 254 age
27 (Fukumi, 1928: 58–59).

Similarly, if brothels were keeping prostitutes locked in debt ¨
slavery,the ¨ number of years in the industry should have stayed
constant beyond six. Yet of 42,400 licensed prostitutes surveyed,
38 percent were in their second or third year, 25 percent were in
their fourth or fifth, and only 7 percent were in their sixth or
seventh (Ito, 1931: 208–11; Kusama, 1930: 281). On a workforce of
about 50,000 licensed prostitutes, 18,800 women registered as new
licensed prostitutes in 1922 and 18,300 de-registered (Yamamoto,
1983: 388; Ito, 1931: 211–13). Consistent with a general tenure
of about three years, in other words, one third of the work force
replaced itself every year (Keishi, 1933: 96–98; Kusama, 1930:
227–28).

(c) An example. Consider some simple calculations (Keishi, 1933:
96–98; Kusama, 1930: 227–28). In 1925, customers made 3.74 million
visits to the 4,159 licensed prostitutes in Tokyo. Aside from
payments for food and drink, they spent 11.1 million yen. Of this
amount, prostitutes kept 31 percent, or 3.4 million yen – 655 yen
per prostitute. Under the standard arrangement, the prostitute
would have applied 60 percent of this amount (393 yen) toward
the repayment of her loan, and kept the rest (262 yen). She would
have repaid her initial loan of 1200 yen in about 3 years. The average
adult factory wage (both sexes; room and board not provided)
in 1925 was 1.75 yen per day, and in 1935 was 1.88 yen per day
(Shakai, 1936: 53; Ohsato, 1966: 68). To earn their income, the
prostitutes in 1924 served a mean 2.54 customers per night(Keishi,
1933: 96; Kusama, 1930: 220–21; Uemura, 1929: 492–501). They
worked about 28 nights per month (Keishi, 1933: 96–98).