So, this is a fact: we cannot grow exponentially for very long. Also a fact: humans have survived the vast majority of human history with near zero population growth, if we consider human history to be 200 millennia old and population growth to be a factor of a million during that time, average growth is 0.007% per year.
Economic growth is also the wrong thing to measure. Surely something else, like quality of life, would be more appropriate. You say that "no amount of economic/financial manipulation has helped [Japan]" but does Japan really need help, or are their citizens enjoying a relatively high quality of life?
Economic growth in developed countries is driven by population growth, and this is why they all have a decent amount of immigration, to sustain that growth. In developing countries, they can grow by development - adding more subsistence farmers doesn't really grow the economy.
Australia has just taken the record for the longest period without a recession (26ish years), and this has been done on the back of immigration - since 1999, we've increased our population by a quarter, and our birthrate is only replacement-level. Population growth in developed countries != population growth globally.
[1] The only large Western nations with higher immigration rates are Spain and, surprisingly, Norway.
Right, and both are unsustainable long-term.
To me, the question is: can their high quality of life be maintained if there is no economic growth? Is it possible to print money/borrow indefinitely to support this quality of life?
Especially with regards to the article, I think these are valid questions.
My question is: why do you suspect that economic growth is necessary for quality of life? What is the exact connection there that you are thinking about?
If they were to stop borrowing money without a substantial leap in technological progress, would the economy go into a deep recession? I do not know enough about economics to say, but I am basing my assumptions around this reasoning. Am I missing something?
I'm then assuming that if the country went into a deep recession, that quality of life for the average person would decrease.
How so?
From where I sit, Japan's borrowing is funding infrastructure rebuilding and quantitative easing. The infrastructure, including energy production, is necessary for future economic and human activity. Quantitative easing combats deflation and keeps monetary policy functional when interest rates are low. This borrowing looks neither unsustainable nor does it look like a measure to artificially prop up the economy.
> If they were to stop borrowing money without a substantial leap in technological progress, would the economy go into a deep recession?
If you suddenly stop borrowing money, it would cause economic turmoil, just because everything is economically connected and everyone's economic forecasts would change. The borrowing is being used to support QE which causes inflation, without it Japan could be at risk of deflation. Deflation would mean that goods and services would get cheaper (and maintaining quality of life would also get cheaper), but there are also negative consequences—people who save money win, people who borrow money lose, people who invest money have a hard time making good investments, lack of investment causes problems down the road, etc.
To reiterate, the question was:
Why do you think quality of life is tied to economic growth? What do you base that assumption on?
Why do you need to print or borrow money to sustain a quality of life?
I've heard this same argument made using energy instead of mass. That article correlated economic growth with increased energy usage. It does make sense, our universe might be expanding but it is finite.
However, what if this is a social and not a physics problem? Maybe more and more new people are required to keep human social structures functioning optimally. Maybe the solution is virtual reality.
If you look at technology, then I think "yes!" it has improved the economy. Look at engines and trains and telecommunications. The first world economy today, per person, is rip-roarin' compared to 100 years ago.
Many western economies haven't noticed the decline in the birth rate yet because of so many immigrants. Japan is unique in that they are a modern country, with a declining birth rate, but very low immigration.
You don't have to even wait for population decline, we already have more unoccupied homes in the US than homeless by an order of magnitude, but all those homes are in "dead" areas where industry or resource extraction came and went. Now those houses and all the infrastructure around them decay without use, while elsewhere infrastructure is overburdened with concentrated people.
If anything, declining population means more per-capita expense on infrastructure, and the per-capita costs of maintaining current infrastructure (at least in the US) is out of control.[1]
[1]: https://www.strongtowns.org/journal/2017/6/4/this-is-why-inf...
Why do you think politicians say they will sort out immigration, but then encourage even more immigrants? They want more workers.
I am not so convinced, given that our jobs are all supposed to be automated soon, we shouldn't have to rely on more humans to grow economically.
In the UK they claim we need mass immigration for growth, but jobs that teenagers used to do are now being done by grown adults, so I don't believe it. We also apparently have terrible productivity compared to other countries. I think that if we stopped relying on extra humans, productivity would suddenlg rocket.
Those companies are growing or at worst sustaining at globally satiated production, to the best of my understanding few go hungry, technological adoption is extremely high, and homelessness and crime are low. Per-capita they keep ending off better off year over year by staying put while everything else gets cheaper. Their whole economy looks like it is contracting with the population decline but nobody is suffering a lack of supply availability to meet their demands for it. Top it off with the giant entertainment sector amount of culture they output globally and that does not ring of doomed society.
- they were an easy place to get beer before convenience stores sold alcohol or became open 24/7 (this is a bit before my time so maybe someone else can elaborate)
- a vending machine requires less space than a store.
- there is not a large difference in price buying from a vending machine or convenience store (10 yen or so).
- It is very hot in summer and very cold in winter, so people like having access to a hot or cold drink.
- a lot of people operate on a tight schedule, so their only "free time" might be when they are walking between places (home and train station, train station and work etc)
- vending machines are useful in a disaster. I believe they will give out free drinks in an emergency.
The can had a plastic lid with coins in it, returning the amount I had deposited, and the cardboard can contained an instant cold pack, presumably to assist me with managing the heat while finding another vending machine.
The catch is that the increased production is not distributed equitably. For the average (more productive) worker, the things that they need such as health and housing are not any 'cheaper'. So where is their 'share'?
As productivity increases, credit expands to capture it. This is how, ultimately, those with the capital end up with the increased productivity.
Just a thought.
According to Hans Rosling we've reached "peak child", meaning we're almost at 2 children per woman globally. This means population will continue to grow for a few years as globally there are more children than adults but will stabilize after that around the ~11 billion mark. And as long as we stay at that "peak child" number we won't go any further. I really recommend his videos if you haven't seen them.
It's literally a pyramid scheme: the population pyramid is supposed to have a broad base, but today it's upside down.
You don't seem to present any arguments as to why it wouldn't happen without population growth. It has been rather self-sustaining.
(A different questionis whether we should aim for economic growth - given our biggest problem now is climate change).
But when you introduce the time dimension, the system works. The money supply is a 'stock' of some quantity, but payments (principal and interest) occur over time, making them a 'flow'. Those payments will then generally be spent back into the system, which circulates (all expenditure is someone else's income). This circulation is measured as the 'velocity of money'.
So interest isn't a problem ultimately, but the increasing accumulation of wealth by the most wealthy may become more and more of an issue.
If you live in Greece then, yes, this is a bit of an issue. The solution there is likely to be some form of writing down of the debt.
is that sustainable or even reasonable by any standard - the answer is an obvious "no". but it benefits the powerful.
Japan has been in a situation like that for a while now. Instead of poo-pooing it as a long recession, maybe the rest of the world should try to learn from it.
It seems to me that real sustained economic growth cannot happen without population growth, at least the way things work right now. Efficiencies gained through technological innovation and financial manipulation cannot sustain growth indefinitely, they just smooth out the bumps and with population growth help increase the rate of economic growth. And without economic growth, we are going to keep running into these issues and others brought up in the article.
Look at Japan, no amount of economic/financial manipulation has really helped them. Their main economic issues stem from the fact that there are not enough young people.
Aside from epidemics/catastrophes, there has almost always been sustained population growth through human history. It is in our nature to multiply and expand. I feel this is why so many people are fascinated with space and space colonization.
The current demographic trends in western society is unprecedented and in my estimation, I do not think it will end well unless someone finds another solution, or these demographic trends are reversed.
Feel free to rip apart my theory. I would love to hear what someone with a better understanding of this area has to say.