this post was submitted on 21 Mar 2025
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Economics Explained has an interesting video on the topic. After WWII, Japan became the first country in Asia to undergo an industrial revolution and soon became the second largest economy after the US and was by many accounts set to match or even overtake the US. They then suffered an economic collapse due to unchecked growth and speculative markets and decided to never again speculate on the future and just stick to tried and true methods.
Since the 1990s, Japan's economy has barely changed while other nations have seen huge growth. You'd assume that would mean Japan is now far behind, but they aren't. They seem to have mastered keeping everything the same for decades without the normal decline that comes with it.
I spend at least a month in Japan every year and the tech there is great for the most part. All of the critical parts infrastructure tech is brilliant and incredibly stable.
The lack of risk taking is very noticeable though especially when it comes to contemporary software and UX. There just so much broken tech because everything moves so slowly - for example to pick up a reserved train tickets you need to bring the same physical card you made you payment with and thats the only way. So if you used a virtual card or forgot your card at home you're screwed.
And that, actually, is a great thing. You don't want explosive growth, you want stability. This is a lesson the US is learning right now
After WW2? Industrialization during the 20s/30s was the whole reason they attempted to conqueror the Oceanic island states and the Chinese/Korean/Indochinese mainland.
The Japanese Economy was undone by The Plaza Accord and The Louvre Accord, which western nations used to devalue their currency and undermine Japanese export prices. The downturn, followed by a financialized corporate consolidation and expropriation of revenues through foreign investment, permanently crippled the Japanese economy in the aftermath of the 90s Asian recession.
What sets countries like Japan, Korea, and the Philippines apart from China is the domestic control of their industries. Their markets are dominated by private equity and fixated on steady profit margins rather than long term public investments. Consequently, the capital cities are flooded with cash and industrial development while the rural areas are devoid of commerce. There's no shortage of speculation, but its rooted in the private equity markets and focused largely on fictitious capital - debt instruments and their derivatives - rather than real capital or technology.
Chinese investment in the periphery and its rising tide of middle class wage earners is what propels them into the 21st century. They're the ones building out new transit lines, new public housing projects, new universities, and blue sky research. The Xi Government is openly hostile to speculative investment, doesn't bother to bail out failing financial institutions, and focuses primarily on expansion of utilities, trade corridors, and mixed us developments.
Japan is on the verge if major economic collapse if they do not increase the population
No, they're absolutely not. Their GDP will majorly decline, but their QOL will stay the same or even improve and their GDP per capita also won't see much change.
Birtherism is bullshit.
I'm interested to know how you believe the elderly will be cared for? Let's assume for a moment they have no issues financially supporting the elderly, but physically who is supposed to care for them? Who will make up the nurses, doctors and caretakers now that their population pyramid looks like a chicken drumstick?
Japan has a large amount of unused labor in the current demographic breakup of 29% elderly, Japan has a large number of educated inviduals, and Japan has a large amount of capital even without infinite growth shenanigans.
Any failure to take care elderly even at 38% or even 50% would be a failure of the state as a result of greed or corruption. It's a relatively simple task to accomplish. The year is 2025, automation replaced most other jobs a long long time ago.
Their nation needs tax revenue. That depends on having people to tax. If the population declines too much they cannot afford to maintain social services and QoL will decline.
None of this is particularly controversial or surprising.
The services' costs are dependent on the number of recipients. They're already in the slump of elderly being a drain on the system, it can only get better not worse.
The only concern of the population decline that I can see is the decrease in funding available for Military Expenses.
And, if things get really bad, all they have to do is open up for immigration and able bodied workers will magically appear.
You are the only person I have seen claiming the elder population of Japan is decreasing or that there is light at the end of the tunnel.
https://www.ipss.go.jp/pp-zenkoku/e/zenkoku_e2023/pp2023e_PressRelease.pdf
Japan might not get the right immigrants at the right time. They shouldn't count on skilled labor appearing when they need it.
If Generation A has a higher number of people than Generation B then when Generation A dies off there will be a lower number of elderly. It's a temporary slump. It might last a decade or more, but it is temporary.
According to your source the Percentage of people aged over 65 peaks in 2042 or 2043 at about 38% if the government does nothing, compared to the 29.6% currently.
Right now a lot of skilled workers are fleeing to the EU, so Japan could totally capitalize on that. Or it can just educate its population to be skilled labor and give all the low skilled labor (if that even exists) to immigrants. Immigrants work hard for lower wages and are less prone to crime, there is no good faith argument against that.
The projected population of elderly people is projected to be 40% of the total population within 50 years unless substantial shifts happen. They are not replacing workers fast enough.
Japan has never wanted more immigrants and soon they will need a LOT of immigrants. Japan's traditional xenophobia might prevent them for getting enough people.
They'll survive it, their markets and investments aren't overvalued like ours are. They'll crash, re-evaluate their societal priorities, and start to build again
That's an incredibly optimistic outlook.
hard to function with a negative outlook
I mean every society has to rebuild after a crash, I'm just optimistic that they'll do it faster
You might want to look into the population studies on Japan. They are pretty bleak
Got a summary? I know the onus is on me, but I'm not likely to dig much further
Within 50 years the population will shrink to 70% of current levels with 40ish percent of the total population being elderly.
Within 50 years, the whole world population is going to shrink dramatically, and it will have nothing to do with declining birth rates.
That’s an interesting claim. Where are you getting that idea? Are you suggesting climate change will do this without decreasing birth rates?
Yeah, but that's only a problem if elderly orderlies is an underpaid job that no one wants, and if people can't afford to live on it when choosing such a profession.
If the economy adjusts or society adjusts such that caring for the elderly is a highly sought out and secure job that can easily pay a mortgage, what's the issue?
This is what I mean when I say they will crash and their economy will adjust.
There aren’t enough tax payers paying into the system to sustain the end of life care, retirement funds/pensions/social security equivalents that an elderly population that large. when you have a 1:1 ratio of people paying in vs paying out your assistance levels will be extremely weak.
No nation can sustain that large of an elder population. It’s not economically viable.
Under the current system. All retirement vehicles dependent on the investment market will crash horribly. Anyone with retirement funds in such a crash is doomed. Which will force a reset and a switch to a new financial system (see: Turkey's various resets over the last 50 years, or Greece in the last 10). Money will be lost. The system will reset, re-valuate the demand for such services, and people will be paid in a new currency to plug the supply.
This has nothing to do with retirement funds in a stock market.
The issue is entirely one of taxation. You need 2-3 people working for every retired person taking payments from the system. If you have 1:1 you cannot afford to do this which means either a massive die off of the elderly or a growing massive national debt.
Or you reset the currency, like Turkey has done many times before no? You swear off your debts, print new money.
No, because the issue is supply based. Changing the currency will never create a larger amount of money coming in than us leaving. Changing your currency also has very bad outcomes for your future ability to obtain loans which are critical for most nations.
That'd require significant societal change to an environment where having children is actually manageable
Which is why this is a problem
Honestly, sounds great to me. I know they've had "issues" (is it really an issue for me if my money becomes more valuable?) with deflation, but I'd be OK with that if it meant no more speculation.
I hate inflation based economics. So ngl, japan seems really nice in that regard