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Japan: The World’s First Post-Growth Economy?

by Jeremy Williams on 1st February 2011

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One of the problems with the post-growth movement is that it can appear theoretical. More of the ideas have been tried than you might think, but certainly they haven’t all been tried at once as a deliberate strategy. No matter how confident we might be, we lack proof that a post-growth economy is possible.

Or do we? Perhaps the world already has a post-growth society, albeit an unintentional one.  Here’s what Japan’s GDP has been up to for the last twenty years:

As far as economists are concerned, this is a tragedy and a disaster. How the mighty have fallen. Japan’s GDP is essentially unchanged since the early nineties, its share of global GDP falling from 17 to just 4%. China overtook it last year to become the world’s second largest economy, and now it limps along as a economic failed state, a cautionary tale for students of capitalism.

And yet, the lights are still on, everything still works. Literacy is high, and crime is low. Life expectancy is better than almost anywhere on earth – 82 years to the US’ 78. The trains run to the second. Unemployment is only 5%, and levels of inequality are enviable. Real per capita income growth matches America’s at 0.7% over the past decade. It’s hardly a basket case. In fact, it is living proof that growth isn’t necessary to deliver a high standard of living.

That’s not to say that Japan is to be envied or emulated. A legacy of failed stimulus ideas has left it with big debts, and the future is as uncertain as it is anywhere. Neither is it a steady-state economy in the way that matters most – in its materials. Japan consumes considerably more than a one-planet share and is not sustainable in that sense.

The point is that for well over a decade, one of the world’s most important economies hasn’t grown. And at the end of that stint, it’s still a great place to live.

So maybe Japan isn’t a failure. Maybe it’s just ahead of its time – not ‘stagnating’, but settling into the plateau of ‘enough’.

After 15 years of fretting, maybe it’s time Japan embraced its post-growth state and told the economists where to stick their theories. Professor Norihiro Kato recently suggested that Japanese youth culture was doing just that, downsizing and taking a more measured approach to consumerism. Japan’s population had already levelled off, he noted. He even suggested Japan was entering a post-growth era. “Japan is a small country” people are saying, “and we’re O.K. with small. It is, perhaps, a sort of maturity.”

The Economist declared this “one of the saddest things I’ve read in a long time” in an article entitled ‘Pity Japan‘, but the Economist has not yet entered the 21st century. Kato’s comments certainly struck a chord with others. Environmnental campaigner Junko Edahiro agreed that young Japanese are beginning to aspire to “a kind of prosperity not based on resources.” You might expect that from Adbusters magazine, but how about this from the Financial Times: “If the business of a state is to project economic vigour, then Japan is failing badly” wrote David Pilling. “But if it is to keep its citizens employed, safe, economically comfortable and living longer lives, it is not making such a terrible hash of things.”

Japan, whether it likes it or not, is the world’s first post-growth economy. It won’t be the last, and I suspect several other countries are dropping onto a growth plateau, perhaps including the UK. If so, let’s work with it. Japan proves that growth isn’t necessary to safeguard the things that matter most in life. There’s nothing to fear in levelling out, and if the alternative is boom and bust, then the plateau is a far safer place to be.

(cross-posted at Make Wealth History)

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avatar Jeremy grew up in Madagascar and went to school in Kenya, and his international background has given him a passion for global issues and a compulsion to write about them. This he does, working three days a week for a small publisher, and dividing the rest of his time between writing and activism, reading books, growing vegetables, and boring his wife with post-growth economics. Jeremy lives in Luton, just north of London, where he is a founding member of Transition Luton, part of the Transition Towns network, a grassroots community response to climate change and peak oil.

Jeremy has written 9 posts on Post Growth Institute. Contact Jeremy

{ 4 comments }

avatar Alan Zulch February 2, 2011 at 15:25

Hi Jeremy,

I concur with theme of your article, that Japan could indeed by the world’s first post-growth economy. I’ve been musing about this scenario for some time on my blog, Satoyama Spirit (http://satoyamaspirit.org) and go even farther to suggest that Japan may well be the first developed country to make the transition to becoming truly sustainable, relocalized and ultimately self-sufficient.

I base my assertion on the fact that Japan’s traditional sense of oneness with nature – suppressed as its been over the last 150 years of industrialization – is nonetheless alive not so far under the collective surface of consciousness. Once modern Japanese consciously re-establish the links between their economic well-being, cultural sustenance, traditional reverence for nature (think Shintoism and Buddhism) and ecological dependence, I believe there will be a growing, powerful revitalization of things past. A sort of neo-Edo way of life, if one took it decades hence.

Indeed, stirrings of this sort are already occurring not just in Japan’s burgeoning interest in farming among urbanites, but even in the government, as in Japan’s Satoyama Initiative that they rolled out last fall during the COP10 biodiversity conference in Nagoya. The Satoyama Initiative aims to identify (in Japan and around the world) and support the biodiverse socio-ecological production landscapes that occur where forests and sea are carefully managed by humans, giving rise to unique cooperation with nature and the flowering of culture.

As you point out, there is already much hand-wringing in some quarters about the loss of “animal spirits” among Japanese youth, and decreasing desire for material consumption. These anecdotal evidences will undoubtedly become more widespread if my hunch is accurate.

I’d love to have Japan serve as an example for the rest of the developed world…though because most (all?) other developed countries lack Japan’s deep roots of collectivism and cannot easily draw upon an indigenous oneness with nature, I won’t be holding my breath that Japan’s eventual post-growth harmony with nature can be exported.

Some in Japan say their aim is to become an Asian Switzerland. That isn’t such a bad vision, either. However things unfold, it will be interesting and instructive to watch.

Alan Zulch
Palo Alto, California

avatar Cole Thompson February 3, 2011 at 15:32

Good analysis and I think you may be right. I hope that what ultimately happens is that more and more of the developed world’s economies will settle into a steady state, in an unintentional way.

avatar ahimsa February 16, 2011 at 16:17

Hi Jeremy,

That’s a nice graph of Japan’s GDP over the past 20 years. You neglected to accompany that with a graph of Japan’s sovereign debt(rising steadily over the past 20 years) or savings rate(falling steadily over the same period) or national savings(falling steadily for the last 10 years) or imbalanced demographic induced pension burden. Japan has been showing strong growth over the past 20 years mostly in debt, not in GDP.

I hate to burst Japan’s post-growth bubble, but it’s an enormous debt bubble(I mean massive – way more than the US or UK, Greece, Ireland etc.).
http://golemxiv-credo.blogspot.com/2010/12/japan-is-going-to-blow.html

Japan experienced it’s own property and bank debt bubble back in the 90’s, and guess what, they opted for ‘bail-outs’. Thing is, at the time there was lots of real money within the japanese system(unlike USA) in the form of private savings which they started tapping, only now the well is starting to run dry. Put another way, the government has been kicking the proverbial debt can down the road for the past 20 years now by just putting everything on the national credit card, racking up more and more debt in the process. Is this starting to sound familiar?
http://golemxiv-credo.blogspot.com/2010/09/debt-madness.html

It’s unsustainable and a debtbomb waiting to go off, sooner or later(and sooner is more likely).
http://golemxiv-credo.blogspot.com/2010/10/japan-and-debt-event-horizon.html

I’m all for economics not based on growth but I wouldn’t be so quick to point out Japan as a shining example.

-peace


“After this, there is no turning back.
You take the blue pill – the story ends,
you wake up in your bed and believe whatever you want to believe.
You take the red pill – you stay in Wonderland
and I show you how deep the rabbit-hole goes..”

avatar Tony June 7, 2011 at 09:24

The graph seems to be Japan’s GDP growth rate, not Japan’s GDP. Japan’s GDP still grow as growth rate is positive most of the time.

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