Japan: A Rare Natural Experiment

Economists lament the dismal situation in Japan since 1990: Japan can’t jack up their inflation enough to grow. They are doomed, because they can’t latch on to infinite growth.

All economists and practically everyone else equate economic success with growth. If your economy, personal or national, is not bigger than it was last year, you are failing.

Japan has a diminishing population.

Absurd as it seems to those who think about it, this was a perfectly useful ideal when our population was, say, 1.5B. But if our progeny are not to have a future characterized by catastrophic disasters and widespread misery, we will either find ways to back off from the limits of our sweet blue planet, or life will be increasingly difficult.

As many have noted, the only thing on Earth that grows without limit is cancer, which is only checked by death of the host. Most of us would prefer that not to happen, whether the host is ourselves or the planet we live on.

But Japan has entered a condition that may tell us what we will have to do to bring our numbers under control, gradually reduce them, and learn how to live within the means that mother nature provides.

Japan may teach us how to live within our means.

Japan was starving both before and after WWII, and the present population is much greater than it was at either of those times. Post-WWII saw a baby boom, which collided with food shortages. People were starving. Mothers were desperate to feed their children. Soon, the government approved of birth control and abortion for health and economic reasons, and the stage was set for the present-day scene: below-replacement birth rate with life expectancy at the top of the chart.

The result, of course, is a top-heavy population, with so many more elderly than young that new kinds of problems and conditions have arisen. This situation is seen in a number of countries, but Japan is unique in that it does not have the level of immigration that countries like Germany and the US have to shore up “growth” and population—keeping our non-sustainable societies on life support. Thus, Japan has become an involuntary natural experiment in how to live within our means with a falling population and no economic growth.

Japan has no choice but to deal with this declining population and aging demography. Then the March 2011 earthquake and tsunami struck, and radioactivity ruined one of the major food growing areas, thrusting the country backwards.

Japan has no choice
but to deal with declining population
and aging demography.

This situation may seem like disaster, with “growth” now an impossibility, but in the long run, Japan will probably offer us valuable lessons in how to live well without relying on the endless, cancerous “growth” that guarantees disaster for the rest of us. Such growth requires infinite increase of “things” of all sorts, and endlessly greater consumption, both obviously an impossibility on our finite planet. Infinite increase has brought us more inequality, more misery and poverty, and ever-worsening physical conditions globally.

Rather than feeding everything into the ever-increasingly voracious mouth of “growth” economics, Japan has no choice but to redesign its business model to produce only enough, not endlessly more, and its lifestyle to something that does not rely on limitless consumption and increase.

This means that the new prosperity must be based on quality of life, not accumulation of stuff. Tokyo, the world’s largest city, has a decreasing population, as does the whole country, all because the birth rate is well under the replacement rate of 2.1 children per woman. It will take decades, but in time the older generation, as well as the one that followed, will die off, leaving Japan with a considerably reduced but more balanced population. Although theoretically the entire population could simply die off and there would be no more Japanese, the population will most probably stabilize considerably smaller than it is now, with better quality of life. We should pay close attention.

Japan’s new prosperity
must be based on quality of life.

Meantime, however, a declining population creates excesses of practically everything but food, all of which must in time be dealt with. Look at Detroit and New Orleans, both of which have large areas of decaying housing and infrastructure. Japan is the same, and all of this excess must be gradually retired and disassembled. That’s not easy to do, because it’s a huge need, and it comes at a time already characterized by an inadequate work force.

There are many challenges that Japan will have to meet as it morphs from a high-consumption, unsustainable society to one that has learned to live well, within its means, without the endless and mindless “growth” that characterizes the world today.


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