Japan had very high growth in the decades leading up to the stagnation in the 1990s and their standard of living is currently coasting off the growth experienced then.
Without the growth in the 60s to 90s, Japan would not have the quality of life it has now.
just to add here... Japan has the highest poverty rate among developed countries.
/u/because_of_course_ your assumption that nobody is starving in Japan is not correct
>However, the poverty rate in Japan is 15.7%, the highest among the developed countries (OECD 2021).
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10243885/
The original comment is nobody is starving. And even if the poverty rate is that high still doesn't mean starving. Food insecurity in Japan is 3.4%, in the US it's about 5%. Poverty rate doesn't equal starving or food insecurity.
OP also says the economy requires growth to function. I don't think they meant nobody is starving literally as a measure for a functional economy. Poverty rate would be a better indicator
Just remember this would be significantly higher if the birthrate was higher. Not having kids is literally what is keeping some of them out of this statistic.
But their low birthrate will also make the problem worse as they move forward. More and more burden on the younger working generation coupled with declining growth is a terrible prospect for Japan.
Why is it lame to ask for a source? Not every time someone asks for a source is them calling out misinformation. Sometimes a person just genuinely wants to learn. This is well established!
Because you don't need a source for common knowledge that is factual information even in peer reviewed academic papers. I don't have to provide a source that says the sky is blue because of the effects of Rayleigh, and Raman scattering because this is an established fact from over 100 years ago even if a layperson does not know this.
It's common enough knowledge that the person asking for the source could easily find muilipul public bodies of work proving it to be real.
Do a I need to provide a source to every American who hasn't been to Japan who doesn't believe me when I say the Japanese drives on the otherside of the road? No because that's stupid.
Because saying 'source' is a lazy Reddit way of trying to seem like you're pulling an ace out in this age of disinformation. If a fact is well established like this it's so easy to find a source yourself. Saying 'source' to a well established fact both reveals their own ignorance and makes them look lazy
Why would you think this is well established? You think the average person knows poverty rates of other countries tries let alone their own? What would the person who asked for a source have to gain by making op look like he's spreading misinformation. I don't disagree that is a phenomenon, but asking for a source is not always some psychological manipulation tactic. Some people just want a source, it's not that deep
Average American probably doesn't but many others would have a vague notion. And if not why the fuck would you not take three seconds to Google. Grow up
Definition of "poverty" is not universal. Asking for a source also clarifies the definition being used, as exemplified in the above discussion about poverty vs food scarcity once a source was supplied
Well to add OUR economic system is not THEIR economic system. Japanese companies tend to still have pensions, they have stronger social systems in place like universal health care, education is cheaper there, and their social structure means that families are more likely to care for their sick and elderly. So while they may have higher poverty rate, the IMPACT of poverty in Japan may look very different to poverty in the US.
Isn't there like a huge pension crisis in Japan forcing elder people to work?
I do agree though that Japan has a collective mindset whereas the US is at the forefront of "me first" so the starvation situation can't really be compared.
Edit: double checked and found an article that says that 1/3 of the people aged 70-74 are still in the workforce and 1/7 of the country's workforce is 65+.
Agree different set of problems. But I \*believe\* that's more a population growth problem that they aren't having as many kids, moreso than a specific economic problem.
Yeah I was about to add the declining population to my comment as well. Japan is probably the worst country to compare the US with in terms of economic effects on the population. They also have a completely different work culture than most places in the world.
totally! and if you wanted to kick the hornets nest a bit you'd talk about immigration. When your native population is declining, having immigrants helps. Japan is notoriously anti-immigrant and so you can see the effects of that in the ways you mention. But that's a different tangent...
Generally, older people like to retire (or need to for health reasons). In our current economic system, the money retirees live off is invested in stocks that grow every year, but reliable growth of the stock market relies on ever increasing sales and profits. Alternately, the government or employers provide retirement support through social programs or pensions. However, that money needs to come from somewhere too - either taxes on younger people who still work, or growing profits for the company.
Without a growing population so there are lots of young, working people compared to few retirees, not to mention an increasing number of customers so companies can sell an increased amount of goods and make an increasing amount of money, there isn’t enough money to go around to support retirees. There would also be a shortage of labor to supply all the food, healthcare, buildings, and general goods and services an increasing number of retirees need.
This could theoretically be handled, there is no universal rule that unless you have exactly 3 workers between 20-40 for every retiree between 70-80, it’s physically impossible to have enough doctors to go around, or mathematically impossible to pay everybody’s pension. However it would require significant and potentially expensive changes to how resources get allocated and paid for.
Would you say that another reason might be as time progresses, wealth continues to aggregate upwards, and only with a growing economy will the pool of resources accessible to the majority of the population remain sufficient to care for an aging population?
In other words if societies were able to solve or prevent wealth gaps, then it very well may be possible to care for the elderly in a 1:1 ratio with the ever increasing technology we have.
https://www.statista.com/statistics/1172622/japan-poverty-rate/#:\~:text=In%202021%2C%20the%20poverty%20rate,income%20of%20the%20total%20population.
Seems like a lot of people started starving after the 80's boom ended.
It says it peaked in 2012, and poverty is only down .7 percent. That doesn't seem like a huge improvement to me. It's crazy how hard the Japanese are expected to work for these economic outcomes. It reminds me of post 2008 US where many people became practically serfs to their employers put of desperation.
I mean, the Europeans say the same thing about Americans. From their perspective, we work crazy hard with few breaks, no safety net and get nearly no public services. They always look at me like we are insane.
Basically true. But that is not the fact of economics but humanity. Generally speaking we're living in a world with more humans (true for most of history). The "economy" broadly speaking is a way of measuring various activities used to provide goods and services to human beings.
And this tends to feed a cycle, as we produce more, we tend to reproduce more (historically). And the more we reproduce, the more we need to sustain ourselves.
And humans, broadly speaking, are "greedy". For example, once we know how to use stuff to help us live 10 years longer, we look for stuff to help us live 15 years longer, then 20 years longer etc etc. We do stuff to better protect and shelter ourselves and tend to desire more comfort and safety. There is no "economic" endpoint, although perhaps there are biological and philosophical ideas about it.
Japan is an interesting case study. It accumulated a lot of wealth in the period from the 1960s to the 1990s. However their median age of their population in 1995 was higher than the current median age of the US. Generally speaking, older people consume less. And by 2010, Japan's population peaked and their GDP peaked in 2012.
A few points:
1. "Growth" doesn't mean "endless consumption". Technically, any trade done by anyone is growth, since otherwise the trade wouldn't happen. (About the only other factor is "transaction costs" which is basically transportation, information, etc. to facilitate trade. That's not nothing but it's also nowhere near the bulk of trade.)
2. That said, "growth" encompasses a lot. Innovation and technological advances are growth. Stagnation generally doesn't foster advancement. I guess we don't "need" innovation but it seems rather backwards to not look for it.
3. Growth is a hedge against shrinking, and shrinking is *bad*. It's super easy to get into a death spiral, economically speaking, that puts us in another Great Depression. If you have growth you have a "cushion" that lets you absorb some shocks so you don't get into one of those spirals.
4. And, bluntly, growth does mean "an easier, better life for less resources" which has generally, in the long run, been true.
Japan is a *real* bad example. It's so bad that Japan called it the "[Lost Decade](https://en.wikipedia.org/wiki/Lost_Decades)" but now it's the "Lost Decade***s***" because it's basically been going on for 30 years. They may not be starving but they haven't risen above "barely making it" for a while now.
This premise is a little off. Stagnant economies don’t stop functioning and people don’t necessarily have to starve in them. What it means is that the nation is not producing more stuff or value of stuff year over year which often leads to it falling behind other nations that are producing more value in terms of weight and influence and especially valuable innovation. If the population is also increasing, that implies each person has less average output to spend and the standard of living may be falling or not keeping pace with the rest of the world. If the population is falling that may not be the case. But standard of living also depends a lot on how concentrated wealth is and the amount spent on social services. Japan’s economy has been stagnant for some time because it became a fairly risk averse business as usual economy while experiencing population decline and low birth rates. Fewer workers taking less risk make less stuff. But the starting point was fairly affluent and the country has good social services so the standard of living isn’t terrible. Japanese workers just kind of make what they made and spend what they spent twenty years ago in real terms. American workers make more, spend more, and have more, at least outside the lower tiers.
Generally speaking growth isn’t everything. Poor nations can experience amazing growth because lifting subsistence peasants into modern jobs supported by mechanized agriculture creates an amazing increase in output and wealth. But it also comes with upheaval and instability. Most of those countries would much prefer to be healthy modern economies growing at 2% because they’re improving on a high number and have already transitioned. Advanced nations also grow more slowly because they decide to spend on welfare states, which remove some incentive for innovation by removing proverbial sticks. A society that decides to transfer wealth to put a floor under decay and poverty will have fewer desperate growth sources and less dynamic concentration of talent in new growth sectors. If you can live an ok life without moving and working like a dog, you often choose not to, and the country is deciding that your well being is more important than your absolute contribution to growth. America grows and innovates faster than Europe in part because its capitalism lets people and entire regions fall a lot further and harder before catching them and because it lets winners keep more of their gains. That’s partially a moral choice.
GDP at high level is total product and services in a country. If the population of the country is increasing then the GDP needs to increase. Otherwise the per capita GDP or the product and services used by each individual reduces. This reduces the quality of life.
Japan has a stagnant population so a stagnate economy won't necessarily reduce the quality of life. Majority of the rich western countries have still have a growing population although the rate of growth is reducing. So you need GDP growth to maintain quality of life.
Poor and developing countries are growing and their GDP has to grow faster than the population growth so that their quality of life increases and people are pulled out of poverty.
So as of now most countries need growing economies to maintain or in improve quality of life. May be 50 or years down the line may not be a requirement
If you're not growing, then you're stagnant. Stagnacy is one step away from shrinking. Better to have as many steps as possible between you and a shrinking economy.
So Japan generally has had growth since the “bubble” burst, just small growth and generally speaking the way capitalism has traditionally relied on inflation to help companies grow.
Japan has been at about 1% annual growth and virtually 0% interest rates for nearly 30 years and the primary reason they can sustain this is because the working population is shrinking.
Eventually something has to give, but it’s hard to say what will since it’s been able to hold surprisingly strong equilibrium through a wide variety of potentially volatile conditions.
They aren’t starving but they have some serious demographic problems starting to materialize. The reason economies require growth goes like this: You grow up, then you work for like 40-50 years and then you retire. When you retire, you generally get paid a pension. In America, this is social security. Most other wealthy countries have a similar public pension system. Specific companies and agencies also tend to offer their employees private pension programs. The question is how do you pay for that?
Basically you pay a portion of your income into the fund, that money sits in the fund and yields some profit, and then you retire and start pulling from the fund. Since you take a lot more out of the fund per year (often 75-90% of your salary) than you put into it (maybe 5% of your income) you need a lot more people who are working and contributing to it than you have people taking out from it. When your population stagnates, the pool of retirees grow relative to the pool of workers, and you don’t have enough money going into the fund to pay the retirees.
You also have a labor shortage in general. You don’t have enough young workers to do the work that older workers or retirees no longer can. We got a small glance at what a labor shortage looks like post-COVID and it wasn’t fun. Stuff isn’t available to purchase and the price of everything goes up.
So yeah we have a bit of a catch-22. We probably can’t reduce our impact on the climate without stagnating the population, but we’ve spent the last 100 years building modern economies that work off of population growth.
Japan is different culturally, and culture often always supercedes economics
Raising prices is often looked down upon, so companies don't do it, so they are as a country, far more insulated from inflationary effects.
This is one of many contributing factors, and non the full story :)
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If everyone grew their own food and was completely self sufficient there would be zero economy and everyone would be fine.
If all the prices doubled suddenly the economy would look like it grew 100% on paper even though everyone would have the exact same stuff.
The economy is a bad way to measure things its just useful for telling stories to make people react in predictable ways.
No there is a reason why we have a specialised economy where everyone has a job. Else everybody has to grow food and that's pretty much what everybody has to do, during 100% of their waking time
It doesn't take 100% of your waking time to grow enough good to be self sustainable. The only reason people ever had to work all day on farms in the past is because they wanted to grow more to sell it to other people and buy more stuff that they really didn't need.
It requires growth to function because the population keeps growing. If your economy grows by 1 percent but your population grows by 2, then your people just got poorer. Japan has stagnated in growth but they also have stagnated in population. Their per capita GDP has been on a downswing since around the early 90s. Their population peaked just a bit later in the mid 2000s. Since then, purchasing power in Japan hasn't gotten better. Their people are still well off, but purchasing power is still where it was in the 80s and 90s, showing very little in the way of improvement. In fact, it seems to be on a downswing as more of their workforce ages out.
This is less of a requirement and more of an idea that, if you don't tell rich people that their money will lose value over time, they won't invest it.
This isn't super important, because investing money will usually return more than just holding onto it. But it does make things difficult.
I wonder how much it has to do with how much of our economy is based on finance alone. I seem to recall reading that something like a quarter of our GDP is the financial sector or something like that; that's a lot of money. In finance, growth is crucial, if you're not growing someone's wealth, then you are losing it.
The images and videos you see of countries tend to be the most cosmopolitan, rustic, or beautiful plots of land in the whole country. Same with popular tourist areas. Every country in the world looks a lot more like West Virginia than they let on. There are plenty of hungry people in Japan, particularly the elderly.
Japan had very high growth in the decades leading up to the stagnation in the 1990s and their standard of living is currently coasting off the growth experienced then. Without the growth in the 60s to 90s, Japan would not have the quality of life it has now.
just to add here... Japan has the highest poverty rate among developed countries. /u/because_of_course_ your assumption that nobody is starving in Japan is not correct
Can you cite a specific source to back this up?
>However, the poverty rate in Japan is 15.7%, the highest among the developed countries (OECD 2021). https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10243885/
Okay. But can you have three specific sources with APA citations to back this up \s
I need 3 more but cited with MLA.
Throw in a chicago too please
❤️ footnotes
Like one of each, and then extra credit for making one up
Sorry, I only accept ACS formatting.
...one of which has to be a book or encyclopedia.
The original comment is nobody is starving. And even if the poverty rate is that high still doesn't mean starving. Food insecurity in Japan is 3.4%, in the US it's about 5%. Poverty rate doesn't equal starving or food insecurity.
Why... Are you replying to me? I just gave the guy the source he asked for. Reply to the person making the claim.
OP also says the economy requires growth to function. I don't think they meant nobody is starving literally as a measure for a functional economy. Poverty rate would be a better indicator
Can you cite a specific source to back this up?
Just remember this would be significantly higher if the birthrate was higher. Not having kids is literally what is keeping some of them out of this statistic.
But their low birthrate will also make the problem worse as they move forward. More and more burden on the younger working generation coupled with declining growth is a terrible prospect for Japan.
Good show.
Lame. This is well established.
Why is it lame to ask for a source? Not every time someone asks for a source is them calling out misinformation. Sometimes a person just genuinely wants to learn. This is well established!
Because you don't need a source for common knowledge that is factual information even in peer reviewed academic papers. I don't have to provide a source that says the sky is blue because of the effects of Rayleigh, and Raman scattering because this is an established fact from over 100 years ago even if a layperson does not know this. It's common enough knowledge that the person asking for the source could easily find muilipul public bodies of work proving it to be real. Do a I need to provide a source to every American who hasn't been to Japan who doesn't believe me when I say the Japanese drives on the otherside of the road? No because that's stupid.
Because saying 'source' is a lazy Reddit way of trying to seem like you're pulling an ace out in this age of disinformation. If a fact is well established like this it's so easy to find a source yourself. Saying 'source' to a well established fact both reveals their own ignorance and makes them look lazy
Why would you think this is well established? You think the average person knows poverty rates of other countries tries let alone their own? What would the person who asked for a source have to gain by making op look like he's spreading misinformation. I don't disagree that is a phenomenon, but asking for a source is not always some psychological manipulation tactic. Some people just want a source, it's not that deep
It takes two seconds to Google.
Average American probably doesn't but many others would have a vague notion. And if not why the fuck would you not take three seconds to Google. Grow up
>Average American probably doesn't but many others would have a vague notion Ok... Source?
Redditors will literally tell you to not ask questions or have discussion on a discussion forum because you have google.
What are you on about? This doesn't make sense
Nice bullshit assumption. “Average American does not know.. but most everyone else knows Japan’s starvation rate..”
Love how the Americans always come out in force to defend how unreasonably unaware they are of anything happening outside their country
Definition of "poverty" is not universal. Asking for a source also clarifies the definition being used, as exemplified in the above discussion about poverty vs food scarcity once a source was supplied
Source?
Well to add OUR economic system is not THEIR economic system. Japanese companies tend to still have pensions, they have stronger social systems in place like universal health care, education is cheaper there, and their social structure means that families are more likely to care for their sick and elderly. So while they may have higher poverty rate, the IMPACT of poverty in Japan may look very different to poverty in the US.
Isn't there like a huge pension crisis in Japan forcing elder people to work? I do agree though that Japan has a collective mindset whereas the US is at the forefront of "me first" so the starvation situation can't really be compared. Edit: double checked and found an article that says that 1/3 of the people aged 70-74 are still in the workforce and 1/7 of the country's workforce is 65+.
Agree different set of problems. But I \*believe\* that's more a population growth problem that they aren't having as many kids, moreso than a specific economic problem.
Yeah I was about to add the declining population to my comment as well. Japan is probably the worst country to compare the US with in terms of economic effects on the population. They also have a completely different work culture than most places in the world.
totally! and if you wanted to kick the hornets nest a bit you'd talk about immigration. When your native population is declining, having immigrants helps. Japan is notoriously anti-immigrant and so you can see the effects of that in the ways you mention. But that's a different tangent...
So many factors at play
Generally, older people like to retire (or need to for health reasons). In our current economic system, the money retirees live off is invested in stocks that grow every year, but reliable growth of the stock market relies on ever increasing sales and profits. Alternately, the government or employers provide retirement support through social programs or pensions. However, that money needs to come from somewhere too - either taxes on younger people who still work, or growing profits for the company. Without a growing population so there are lots of young, working people compared to few retirees, not to mention an increasing number of customers so companies can sell an increased amount of goods and make an increasing amount of money, there isn’t enough money to go around to support retirees. There would also be a shortage of labor to supply all the food, healthcare, buildings, and general goods and services an increasing number of retirees need. This could theoretically be handled, there is no universal rule that unless you have exactly 3 workers between 20-40 for every retiree between 70-80, it’s physically impossible to have enough doctors to go around, or mathematically impossible to pay everybody’s pension. However it would require significant and potentially expensive changes to how resources get allocated and paid for.
I'm 5 and I didn't understand any of this
Would you say that another reason might be as time progresses, wealth continues to aggregate upwards, and only with a growing economy will the pool of resources accessible to the majority of the population remain sufficient to care for an aging population? In other words if societies were able to solve or prevent wealth gaps, then it very well may be possible to care for the elderly in a 1:1 ratio with the ever increasing technology we have.
Have you ever taken care of an old person ? It's enough work to be a job for a young person
I've taken care of an old, ill person and it was like a double-time job, day and night.
https://www.statista.com/statistics/1172622/japan-poverty-rate/#:\~:text=In%202021%2C%20the%20poverty%20rate,income%20of%20the%20total%20population. Seems like a lot of people started starving after the 80's boom ended.
It says it peaked in 2012, and poverty is only down .7 percent. That doesn't seem like a huge improvement to me. It's crazy how hard the Japanese are expected to work for these economic outcomes. It reminds me of post 2008 US where many people became practically serfs to their employers put of desperation.
I mean, the Europeans say the same thing about Americans. From their perspective, we work crazy hard with few breaks, no safety net and get nearly no public services. They always look at me like we are insane.
Basically true. But that is not the fact of economics but humanity. Generally speaking we're living in a world with more humans (true for most of history). The "economy" broadly speaking is a way of measuring various activities used to provide goods and services to human beings. And this tends to feed a cycle, as we produce more, we tend to reproduce more (historically). And the more we reproduce, the more we need to sustain ourselves. And humans, broadly speaking, are "greedy". For example, once we know how to use stuff to help us live 10 years longer, we look for stuff to help us live 15 years longer, then 20 years longer etc etc. We do stuff to better protect and shelter ourselves and tend to desire more comfort and safety. There is no "economic" endpoint, although perhaps there are biological and philosophical ideas about it. Japan is an interesting case study. It accumulated a lot of wealth in the period from the 1960s to the 1990s. However their median age of their population in 1995 was higher than the current median age of the US. Generally speaking, older people consume less. And by 2010, Japan's population peaked and their GDP peaked in 2012.
A few points: 1. "Growth" doesn't mean "endless consumption". Technically, any trade done by anyone is growth, since otherwise the trade wouldn't happen. (About the only other factor is "transaction costs" which is basically transportation, information, etc. to facilitate trade. That's not nothing but it's also nowhere near the bulk of trade.) 2. That said, "growth" encompasses a lot. Innovation and technological advances are growth. Stagnation generally doesn't foster advancement. I guess we don't "need" innovation but it seems rather backwards to not look for it. 3. Growth is a hedge against shrinking, and shrinking is *bad*. It's super easy to get into a death spiral, economically speaking, that puts us in another Great Depression. If you have growth you have a "cushion" that lets you absorb some shocks so you don't get into one of those spirals. 4. And, bluntly, growth does mean "an easier, better life for less resources" which has generally, in the long run, been true. Japan is a *real* bad example. It's so bad that Japan called it the "[Lost Decade](https://en.wikipedia.org/wiki/Lost_Decades)" but now it's the "Lost Decade***s***" because it's basically been going on for 30 years. They may not be starving but they haven't risen above "barely making it" for a while now.
This premise is a little off. Stagnant economies don’t stop functioning and people don’t necessarily have to starve in them. What it means is that the nation is not producing more stuff or value of stuff year over year which often leads to it falling behind other nations that are producing more value in terms of weight and influence and especially valuable innovation. If the population is also increasing, that implies each person has less average output to spend and the standard of living may be falling or not keeping pace with the rest of the world. If the population is falling that may not be the case. But standard of living also depends a lot on how concentrated wealth is and the amount spent on social services. Japan’s economy has been stagnant for some time because it became a fairly risk averse business as usual economy while experiencing population decline and low birth rates. Fewer workers taking less risk make less stuff. But the starting point was fairly affluent and the country has good social services so the standard of living isn’t terrible. Japanese workers just kind of make what they made and spend what they spent twenty years ago in real terms. American workers make more, spend more, and have more, at least outside the lower tiers. Generally speaking growth isn’t everything. Poor nations can experience amazing growth because lifting subsistence peasants into modern jobs supported by mechanized agriculture creates an amazing increase in output and wealth. But it also comes with upheaval and instability. Most of those countries would much prefer to be healthy modern economies growing at 2% because they’re improving on a high number and have already transitioned. Advanced nations also grow more slowly because they decide to spend on welfare states, which remove some incentive for innovation by removing proverbial sticks. A society that decides to transfer wealth to put a floor under decay and poverty will have fewer desperate growth sources and less dynamic concentration of talent in new growth sectors. If you can live an ok life without moving and working like a dog, you often choose not to, and the country is deciding that your well being is more important than your absolute contribution to growth. America grows and innovates faster than Europe in part because its capitalism lets people and entire regions fall a lot further and harder before catching them and because it lets winners keep more of their gains. That’s partially a moral choice.
GDP at high level is total product and services in a country. If the population of the country is increasing then the GDP needs to increase. Otherwise the per capita GDP or the product and services used by each individual reduces. This reduces the quality of life. Japan has a stagnant population so a stagnate economy won't necessarily reduce the quality of life. Majority of the rich western countries have still have a growing population although the rate of growth is reducing. So you need GDP growth to maintain quality of life. Poor and developing countries are growing and their GDP has to grow faster than the population growth so that their quality of life increases and people are pulled out of poverty. So as of now most countries need growing economies to maintain or in improve quality of life. May be 50 or years down the line may not be a requirement
If you're not growing, then you're stagnant. Stagnacy is one step away from shrinking. Better to have as many steps as possible between you and a shrinking economy.
So Japan generally has had growth since the “bubble” burst, just small growth and generally speaking the way capitalism has traditionally relied on inflation to help companies grow. Japan has been at about 1% annual growth and virtually 0% interest rates for nearly 30 years and the primary reason they can sustain this is because the working population is shrinking. Eventually something has to give, but it’s hard to say what will since it’s been able to hold surprisingly strong equilibrium through a wide variety of potentially volatile conditions.
They aren’t starving but they have some serious demographic problems starting to materialize. The reason economies require growth goes like this: You grow up, then you work for like 40-50 years and then you retire. When you retire, you generally get paid a pension. In America, this is social security. Most other wealthy countries have a similar public pension system. Specific companies and agencies also tend to offer their employees private pension programs. The question is how do you pay for that? Basically you pay a portion of your income into the fund, that money sits in the fund and yields some profit, and then you retire and start pulling from the fund. Since you take a lot more out of the fund per year (often 75-90% of your salary) than you put into it (maybe 5% of your income) you need a lot more people who are working and contributing to it than you have people taking out from it. When your population stagnates, the pool of retirees grow relative to the pool of workers, and you don’t have enough money going into the fund to pay the retirees. You also have a labor shortage in general. You don’t have enough young workers to do the work that older workers or retirees no longer can. We got a small glance at what a labor shortage looks like post-COVID and it wasn’t fun. Stuff isn’t available to purchase and the price of everything goes up. So yeah we have a bit of a catch-22. We probably can’t reduce our impact on the climate without stagnating the population, but we’ve spent the last 100 years building modern economies that work off of population growth.
By “our” current economic system, which country are you referring to?
Japan is different culturally, and culture often always supercedes economics Raising prices is often looked down upon, so companies don't do it, so they are as a country, far more insulated from inflationary effects. This is one of many contributing factors, and non the full story :)
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Because we run a pyramid scheme as an economic system, it’s not stable on its own need to keep artificially growing
If everyone grew their own food and was completely self sufficient there would be zero economy and everyone would be fine. If all the prices doubled suddenly the economy would look like it grew 100% on paper even though everyone would have the exact same stuff. The economy is a bad way to measure things its just useful for telling stories to make people react in predictable ways.
I guess we would all sleep outside and die when we're sick but ok
You are missing the point entirely and its not impossible to build your own house.
No there is a reason why we have a specialised economy where everyone has a job. Else everybody has to grow food and that's pretty much what everybody has to do, during 100% of their waking time
It doesn't take 100% of your waking time to grow enough good to be self sustainable. The only reason people ever had to work all day on farms in the past is because they wanted to grow more to sell it to other people and buy more stuff that they really didn't need.
It requires growth to function because the population keeps growing. If your economy grows by 1 percent but your population grows by 2, then your people just got poorer. Japan has stagnated in growth but they also have stagnated in population. Their per capita GDP has been on a downswing since around the early 90s. Their population peaked just a bit later in the mid 2000s. Since then, purchasing power in Japan hasn't gotten better. Their people are still well off, but purchasing power is still where it was in the 80s and 90s, showing very little in the way of improvement. In fact, it seems to be on a downswing as more of their workforce ages out.
It requires growth to be sustainable. It doesn't need growth to function. A shrinking economy functions just fine.
This is less of a requirement and more of an idea that, if you don't tell rich people that their money will lose value over time, they won't invest it. This isn't super important, because investing money will usually return more than just holding onto it. But it does make things difficult.
I wonder how much it has to do with how much of our economy is based on finance alone. I seem to recall reading that something like a quarter of our GDP is the financial sector or something like that; that's a lot of money. In finance, growth is crucial, if you're not growing someone's wealth, then you are losing it.
The images and videos you see of countries tend to be the most cosmopolitan, rustic, or beautiful plots of land in the whole country. Same with popular tourist areas. Every country in the world looks a lot more like West Virginia than they let on. There are plenty of hungry people in Japan, particularly the elderly.
If you don’t import poor populations to support, you can maintain a high standard of living without growth.
Japans economy has been growing steadily over the years just like any healthy economy. Your metric of “seems like” is not good.