Japan

Has Japan "Aged Out of Its Economic Miracle"?

Maybe, maybe not, but its immigration and economic policy are clearly to blame for much of its 25-year-long "Lost Decade."

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Via Instapundit comes a link to this interesting dilation on the former economic tiger known as Japan.

Writing at IEEE Spectrum, Vaclav Smil recaps Japan's post-war rise to global wealth and runs through that country's long decline, which has culminated in a "Lost Decade" of economic lassitude that is now entering its 25th year. Smil concludes:

In the long run the fortunes of nations are determined by population trends. Japan is not only the world's fastest-aging major economy (already every fourth person is older than 65, and by 2050 that share will be nearly 40 percent), its population is also declining. Today's 127 million will shrink to 97 million by 2050, and forecasts show shortages of the young labor force needed in construction and health care. Who will maintain Japan's extensive and admirably efficient transportation infrastructures? Who will take care of millions of old people? By 2050 people above the age of 80 will outnumber the children.

Read the whole thing.

There's a lot to unpack here but let's begin by noting that age—and population—ain't nothing but a number. Seriously.

There are plenty of countries with younger-than-average populations that perform poorly and there are relatively elderly places where things are going just fine. A growing population often helps to increase the size and scope of economic activity but nothing is written in stone, either. We might also ask why Japan's population is declining and aging so rapidly, which is not the simply the predictable result of richer countries having fewer babies. Japan's notorious xenophobia and unwillingness to open its culture and economy—not to mention its citizenship—to newcomers play a leading role. Indeed, despite the open hostility to immigrants displayed by many of the GOP's presidential candidates, immigrants are the major driver of population growth for the U.S.

Which leads also to a related area of isolationism: Japan's political and economic institutions. Japan's economic went flat in the start of the 1990s, when the ink was still wet on all the books pronouncing its inherently superior production and managemet methods. Since then, the Japanese government has pursued a virtually uninterrupted policy of zombification of all sorts of market and financial businesses, with the predictable result that the economy can never touch bottom and push back up to the sky.

There is no question that Japan's population is aging and acting strangely in its dotage. I highly recommend Jonathan Last's What to Expect When No One's Expecting, which fully documents global declines in population and attendant battiness. For instance, he charts the decline of Ogama, Japan, whose eight remaining residents sold the village to a company that turned it into a landfill. Then there's the parasaito shinguru, or "parasite single." These are "college-educated, working women who live with their parents so they can spend more of their wages on clothes and other amenities." Such weirdness is not confined to Japan of course, but it's the richest country that is facing the starkest reversal in raw numbers and as such may well be the canary in the coal mine for the rest of the planet.

But is demography destiny? Please. Persistently stupid public policy, from restrictionist immigration policy to failed fiscal and monetary policy are far more operative in Japan's long, slow, sideways move to nowheresville. Which, it's worth pointing out, is still pretty great in terms of living standards.

Related: "Turning Japanese: Is the US Creating its Own Lost Decade?"

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  1. Who will maintain Japan’s extensive and admirably efficient transportation infrastructures?

    Repurposed sex robots?

    1. The sex robots will run a train?

      1. Well, your mother sure as hell does!

    2. Fist-san, hentai desu yo.

      1. Well, your mother sure as hell does!

  2. Vaclav Smil?

    Parents really shouldn’t name their kids using the Ian Fleming Villain Name Generator.

    1. It would be even better with an “e” at the end.

    2. Vaclav is the Czech name for Wenceslaus as in ” Good King”.

      1. See! Wake up people!

  3. Is there nothing that Gillespie can’t turn into a plea for open borders?!?

    1. You know, there are things between open borders and extremely restrictive immigration rules.

      1. You mean like a big border fence?

        1. HIYOOOOOOOO!

        2. Kind of beside the point for an island nation.

  4. Talk about a population bomb.

  5. Do they have a big safety net, or did all these old people prepare for their eventual retirement? If the latter, there really won’t be much of an issue. Life will be great for the young who can easily get jobs, and life will be great for the old who have comfortable retirements.

    1. Do they have a big safety net?

      yes and no, apparently.

  6. “college-educated, working women who live with their parents so they can spend more of their wages on clothes and other amenities.”

    Sounds good to me! I don’t think my dad would mind my becoming one of these – he once proposed buying the land right next to his house so I could live there. His HOA is all old people, though, so that means all kinds of dementia-fueled rules.

  7. But it should be noted that the Japanese social security system, like ours, has a Ponzi-like structure that involves paying current beneficiaries with taxes on those currently working. That’s one thing when each worker is supporting 1/8th or 1/12th of a a retiree. It’s quite another thing when each worker is supporting one retiree.

  8. This a great point against the immigration restrictionists. Hey assholes, your ideas don’t work. They failed in Japan and everywhere else they were implemented.

    1. If everyone is fed, clothed, has shelter, and technology keeps increasing, what’s the problem?

      1. That they won’t have much a workforce to support their aging population, or to replenish the massive savings that the aging population will spend.

        Also, ‘fed, clothed, sheltered, and ‘increasing tech’ is a low bar to clear.

    2. Hasn’t “failed” in Japan yet. They still restrict the hell out of immigration, and are doing fine. It’s all guesstimates about the future.

      1. No they are clearly no doing fine. They have a staid economy and and a staid statist political culture much worse than America’s. Your immunity to evidence is remarkable.

    3. Actually, they worked perfectly in Japan. Japan is still Japan and hasn’t had its culture and way of life changed by an influx of foreigners. Something that Americans and Europeans in the near future will greatly regret not having done also.

      1. Ding. Ding.

        1. I mean, apart from the total upending, radical reformation, and drastic historical revision of their culture, the Japanese are practically devoid of influence from foreigners…

      2. Japan is still Japan and hasn’t had its culture and way of life changed by an influx of foreigners.

        I, uh, what?

        1. Japan has gone through many periods of major cultural change arising from contact with foreigners. Much of their oldest cultural artifacts come from China, and they have been through (at least) 3 major cultural shifts resulting from contact with Europeans (Nanban trade, Meiji Restoration, and post-World War 2). To connect back to the larger argument, Japan would be a resourceless backwater third-world shithole if not for the cutural exchange with foreigners.

      3. Moreover, when you focus on Japan in the past few decades, it’s impossible to extricate their current situation from the ongoing US military presence there. Not only are they heavily influenced by American culture, but their cultural attitudes are shaped by not having to worry overmuch about their neighbors. Who, by the way, all have longstanding grievances with Japan that they would like to “work out”.

      4. Well America IS a culture of immigrants. As John Winger said Americans have been kicked out of every decent country on the planet. We’re mutts. Look our nose is wet!

        BTW it seems Christmas has become a big holiday in Japan.
        http://japan-magazine.jnto.go……stmas.html

        Their Christmas Eve meal is KFC.
        http://www.vox.com/2014/12/24/…..-christmas

  9. “By 2050 people above the age of 80 will outnumber the children.”

    At least the diaper industry will be relatively stable.

    1. #WINNING

  10. Seriously, though, robotics may overcome whatever economic inertia is lost to a lower population.

  11. What Japanese economic miracle? The one that ended 25 years ago?

    Srsly?

    1. With their legendary closed system, all the research for this article had to be done via 1980s sci-fi films that were predicated on the 2010s being dominated by an ascendant Japan.

  12. Japan’s notorious xenophobia and unwillingness to open its culture and economy?not to mention its citizenship?to newcomers play a leading role.

    It’s not xenophobia or racism when non-white non-caucasians do it. Then, it’s just called “cultural pride.”

  13. Experiments have shown that mice in a closed environment become withdrawn or psychotic when they overpopulate. They become catatonic, murderous, suicidal, or engage in strange, erratic behavior. They also stop reproducing.

    Japan’s problem isn’t that they don’t have open borders. Its that they have too many people already.

    1. Honk Kong and Singapore don’t have this problem.

      Japan needs massive amounts of immigration.

      1. Hee hee… “Honk Kong.”

    2. They do have an awful lot of people. Especially when you consider that most of the land is mountainous and relatively sparsely populated.

  14. These are “college-educated, working women who live with their parents so they can spend more of their wages on clothes and other amenities.”

    Could that be said of any young population that chooses to live at home because the high cost of living is prohibitive?

    When you put it into precise terms of what the individual living at home is buying- the same could probably be said of any culture.

  15. “the economy can never touch bottom and push back up to the sky.”

    Nice turn of phrase, Nick. It’s all poetic and shit. You’re a pretty good writer today.

  16. Presumably at some point world population will stabilize and probably shrink a bit. At some point people will have to deal with how to manage a decreasing and aging population.

    I’m as open borders as anyone, but I think that in some circumstances solutions other than continued growth will be appropriate.

    Of course, i don’t think it is a matter for government policy to address. Individuals should do what they want.

    1. Presumably at some point world population will stabilize and probably shrink a bit. At some point people will have to deal with how to manage a decreasing and aging population.

      Woodchippers.

  17. They really need to end their Battle Royale program if they want kids around.

  18. And yet, despite all this aging, Japan has one of the greatest economies in the world, and they have kept their culture.

    If they opened the borders, their economy would completely tank and they’d turn into Japanistan.

    1. Unlikely that their economy would tank. More likely they’d see a marginal increase in GDP. But the Japanese have made the sound decision that a marginal increase in GDP isn’t worth trashing their entire society and culture.

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