Comfort Women: The Economics of the Contracts and the Politics of the Dispute

Abstract

During the Second World War, fraudulent recruiters sometimes promised young Korean women factory jobs but sent them instead to war-zone brothels called "comfort stations." Western historians take it on faith that the Japanese military forced Korean women into brothels as well. Unfortunately, in doing this they do not just ignore the role that politics (Korean, Japanese, and Western academic) have played in the dispute. They also ignore the contracts that the rest of the -- not defrauded -- young women actually concluded.

In the article that follows, I examine the employee-level contracts in the market for sexual services within the Japanese empire. The contracts reflect the straightforward logic of "credible commitments" so basic to elementary game theory. Realizing that the brothel owners had an incentive to exagerrate 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 brothels demanded provisions that gave women incentives to work hard. Ultimately, the women and brothels concluded identure contracts that coupled a large advance with one or two year maximum terms, and an ability for the women to return early if they generated sufficient revenue.

Crucial to the current dispute, the Japanese military did not force -- or even recuit -- Korean women into prostitution. Instead, the brothels surrounding the bases began and remained as privately owned and operated enterprises. They employed contracts that reflected these game-theoretic principles of promissory credility. The women were poor, they were young, and they were born into the bad circumstances. But basic principles of market economics apply to poor young people too -- and we would do well to recognize how resourcefully the women used those principles to respond to their plight.

Keywords: Prostitution, Indentured Servitude, Japan, Korea

JEL Classification: J47, K12 K36, N15, N35, N45