Saito Renho on Japanese economic growth, ‘Abenomics’, redistribution, and more | Hacker News Reader

Saito Renho on Japanese economic growth, ‘Abenomics’, redistribution, and more

hks.harvard.edu

62 pointsmooreds44 comments

Very insightful and thought-provoking.

I really appreciated this insight, that governments had (quote) an understanding that if you just leave young people to be, they will go and get married. They will have children. They will be able to have a family and there will be no problem there. You just need to let them go ahead and do that, which is a very naive way of looking at it

The next 100 years is going to be very interesting for demographics. I've heard it said that China needs to grow rich before it grows old, and that saying could apply to many Asian countries right now. Fully expect to see much more support for having a family in countries across the world.

If you want to see the demographic disaster many countries are heading toward, can't recommend Peter Zeihan enough.

https://www.youtube.com/watch?v=GNvdBRjRno8 is a good intro

Disunited Nations is his most recent published book: https://zeihan.com/disunited-nations/ (a new one is coming out in June)

Frankly, Zeihan is a crackpot when it comes to geopolitics. If you rely on him for geopolitical insights, you will be massively misled on virtually every issue.

In particular, it is ridiculous to talk about long-term demographics in a vacuum. We are no longer in the phase of human history where you need millions of young people to be working hard 70 hour weeks. Economic productivity is no longer a function strictly of animal (human) muscle mass. We are, just barely, in the age of automation.

From Disunited Nations:

"Germany will decline as the most powerful country in Europe, with France taking its place. Every country should prepare for the collapse of China..."

LOL

We may not need as many producers but we do need consumers...

Maybe we can just have people consume twice as much.

Interesting. Who would you recommend reading instead?

Michael Hudson on global economics - https://michael-hudson.com/2022/02/america-defeats-germany-f...

Benjamin Norton on Latin American geopolitics - https://multipolarista.com/

Pepe Escobar has fantastic & entertaining insights on the Eurasia region if you can stomach the occasionally pro-Russian hagiography - his main site (+ other great analysts) is down to DDOS right now - http://thecradle.co/

The difference between these guys and Zeihan, is these guys are actually on the ground (or spent their careers on the ground), whereas Zeihan is a desk jockey that makes pretty charts and ridiculous, baseless extrapolations from them.

I'm not sure what's so LOL worthy about this. Germany does seem to be in decline and China does seem to be a house-of-cards in many aspects.

"seem" is doing a lot of heavy lifting here.

That statement from Zeihan is absolutely hilarious to anyone with a passing knowledge of 21st century history and ongoing trends...

Seem can be a weasel word, I'll definitely grant you that. My receptiveness to the idea that China is on shaky ground comes from what I was reading about Evergrande coupled with how analysts are reporting that their official numbers are heavily manipulated. I don't think the PRC will collapse into some successor state, but it would probably end up in a Great Depression and lose a large amount of power and influence. Temporarily at least.

German GDP is outpacing the French. One of Germany’s premier global industries is autos and they are successfully transitioning to EV’s. France is in no way overtaking.

Zeihan's been predicting for a decade that Russia's collapsing demographics would force it to quickly act (before it can no longer do so) to expand its borders/security zone. It's tough to call the Ukraine invasion anything else.

If you think Russia invaded Ukraine primarily because of "demographic issues" i.e. territorial expansion for resources, I have a bridge to sell you.

Looking at Chechnya, the Georgian-Ossettian-Russian war, and observing that the entirety of Eastern Europe lurched into camp West around that time period, you don't have to be Nostradamus to imagine that Russia's desire to keep as much of the Soviet empire with it as possible will manifest sooner or later.

Which has nothing to do with its demographics, and everything to do with its politics.

... Also, Ukraine is facing the exact same demographic stresses as Russia. Also, demographics don't matter as much as, broadly speaking, industrial capacity in modern wars. They aren't about throwing an entire generation of men into million-casualty-offensives over no-man's-land.

Fully agree. Zeihan takes a singular issue, and then projects it far into the future under the ridiculous presumption that absolutely nothing else will ever change.

Already right now, half our economy is made-up, bullshit jobs to produce bullshit items, keeping each other busy on the back of monetary stimulation.

Japan daycare and housing is way cheaper than most western countries and I don't see any problem in declining population, who said we need to grow population all the time. It is a country of more than 100 million on a tiny island with no resources, they don't need more people.

> I've heard it said that China needs to grow rich before it grows old, and that saying could apply to many Asian countries right now.

Asian countries are quite diverse in the economics demographics.

Japan's already rich, but aging. Japan is stuck in the 1980s in many regards including soft power.

China's not aging yet, but it's on Japan's trajectory. Bad with soft power.

South Korea is similar to China, but it's already rich. Japanese may disagree but South Korea is arguably the strongest in soft power in Asia.

Vietnam has a young population, but it is still developing and might be subject to the middle income trap if automation for otherwise low cost labor ramps up.

Taiwan has its silicon shield, but software engineers are paid pretty bad. There just aren't many high paying salaries there. It also has a big welfare system despite not having many job/career opportunities.

Hong Kong there is an exodus of young people and white collar people.

Japan probably has the most affordable housing in the list, relative to the average income. I'm currently living here. I've been looking at real estate in Taiwan, but it just makes zero sense. It makes Manhattan condos seem reasonable given how old and units in Taiwan are.

The interesting thing for me with Japan and babies is in the 80s when houses were the most expensive in the world, the birth rate was much higher than now when houses are the cheapest in the developed world.

Isn’t the correlation obvious? Growing population means higher demand for housing, shrinking population means less demand and prices go down as units aren’t needed. It goes to show that the cultural forces are more important than the cost when choosing whether to have kids.

There are also confounding factors of increasing number of financially independent women and more convenient, more foolproof birth control methods.

>China's not aging yet

Yes they definitely are, and faster than almost any other country. China's median age is already well into middle age, and their birth rate has peaked and is falling quickly.

https://en.wikipedia.org/wiki/Aging_of_China

> Yes they definitely are, and faster than almost any other country.

I know what you mean, but I find the notion that the Chinese are ageing faster than everyone else amusing.

South Korea provides an evidence that this understanding is not only naive but also actively damaging the society. SK's fertility rate hit the record low of 0.84 in 2020 (compare with Japan's 1.36 in the same year), primarily because increasingly more people chose not to marry. There are a multitude of reasons, including pervasive misogyny which acts as a negative feedback to prevent further marriages. But regardless of the reasons, there is no reason to believe the fertility rate will recover by its own without active policies (of which SK crucially lacks).

South Korea just had an election which may change its direction in that regard.

You probably wouldn't have known but I watched the whole vote counting process all the night (6:50 am here). And Yoon, the president-elect, is not really known for his gender equality policies---he is a polar opposite to say the least.

Yes, and because gender equality suppresses fertility [1], that would do the opposite.

[1] citation needed, and given Asian fertility rates, highly questionable

Oh yeah, a forced marriage will do a great job. (Thank you for the footnote by the way, I was a bit nervous at the first!)

Its kinda amazing to see Ukraine fighting Russia - both have rapidly shrinking populations even before the war.

This is a good example of culture acting in often invisible ways--a force that you don't notice at work until it's gone. There's a lot we assume to be universal about human behavior that's actually the product of cultural forces transmitted through generations.

My dad spent his career on maternal health and family planning issues. He's in the group of folks that's the reason that Bangladesh's fertility rate has fallen from almost 7 per women in 1975 to just over 2 today. There was a generational effort in Asia to basically change the culture to discourage having large families. The notion that national prosperity is associated with population control was deeply impressed upon Asians--to the point where my dad thought it a little weird when my wife and I decided to have three kids. I suspect that's part of the reason why fertility rates in east asian countries have dropped not only below replacement rates, but down to under 1 in several countries.

In a class for my Masters in Public Health, we saw evidence that really nothing affected the average number of kids women had in any country or the average age they had their first child except for one factor: the education level of the women. That is, as education went up for women, the average # of children went down and the average age they had their first child went up.

If this is still true, the flip of that is that as countries climb up the relative ladder and women have greater access to education, expect to see population #s dwindle without having really any levers to affect it otherwise.

https://ifstudies.org/blog/research-debunks-myth-that-econom...

TLDR The opportunity cost of having children in affluent society is too damn high.

Really interesting to see an alternative view from the prevailing narrative that it's all about the direct costs (housing, childcare etc).

It seems to be such a multi-factor problem that I don't see any governments managing to come up with "solutions" to it, especially as most that are put forward are single factor and rarely amount to much more than fiddling around the edges.

That post misrepresents its own source.

"It’s worth noting that a 2018 poll of individuals who have chosen not have children found the most frequently-cited reason for their decision was a desire for more leisure time."

... "more leisure time" is a link to a NY Times article[1]. The chart in that article shows economic reasons[2] collectively cited much more frequently than a desire for more leisure time.

1. https://www.nytimes.com/2018/07/05/upshot/americans-are-havi...

2. "Child care is too expensive", "worried about the economy", "can't afford more children", and "waited because of financial instability" all score more highly than "want more leisure time". These are all economic[3] reasons. "Want more time for the children I have" could be seen as economic also, given that the most likely reason for not spending as much time as desired is having to have employment.

The list goes on: "not enough paid family leave" and "no paid family leave" are the next highest-scoring reasons. Also economic reasons.

To me this chart cumulatively reads as "I/we are forced to spend more time than I/we desire in pursuit of income/financial security, with unsatisfactory results." It confirms that "economic reasons"[3] is the primary cause of low fertility.

3. "Economic" comes from oikos and noum-, "household" and "budgeting/regulation", so all of the reasons above are economic reasons.

I kind of have a hard time believing this. Especially since the causation could run the other way. Declining birth rates are probably due to a lot of factors, the biggest being use of birth control, discouraging women from having children, societal attacks on traditional gender roles, obesity, lower testosterone/sperm levels in men due to lack of exercise/chemical pollutants/cultural factors.

I'd be very interested to see this research. I have a hard time believing that anything positive will be done about the birth rate if this is what they are teaching at a masters level.

I also think the cost of having children is completely overblown, people just simply aren't willing to make the sacrifices.

> the education level of the women

educators in the WEIRD schools teach this, for sure. They also teach a lot of other things that have not stood the test of time.

I got the impression that the two main things holding back Japan economically were overwork and a social signaling of "loyalty" arms race. Both are divorced from actual productivity efficiency and effectively make a minor martyr culture where the emphasis is more on sacrifice than results. I cannot speak to actual conditions, only observed tropes which may be outdated. Even before COVID-19 forced changes.

Regardless limits to extreme hours and more robust enforcement to better avoid off the book hours would probably be more effective there.

tl;dr: Japan, as the Asian Tiger economy most distant from the rising China, is viscerally experiencing the inadequacies of neoliberal policies. They know they will become the "sick man of Asia", isolated and weak, if they keep the current trajectory -- a massive reversal from just 50 years ago.

The four tigers were Hong Kong, Singapore, Taiwan and Korea. Japan was never one of the group.

True, Japan was the "proto Tiger" but not one of the following Four that it inspired. My point stands

What are inadequacies of neoliberal policies?

TFA explains them succinctly -- lack of investment in public goods leads to a high cost of living which has many long-term negative effects, including low childbirth rates.

Neoliberal policies tend to optimize for GDP in a shallow sense and neglect other indicators.

> They know they will become the "sick man of Asia", isolated and weak, if they keep the current trajectory -- a massive reversal from just 50 years ago.

Better to have a culture worthy of defense than to defend a cultural wasteland.

Population growth figures aren’t a good indicator of societal healthiness. We can’t afford to mistake wealth for safety.

If Japan is the “sick man of Asia”, the whole world is sick.

What does cultural preservation have to do with any of this...?

Japan is the world’s most advanced major society by a number of metrics: public safety, technological and educational achievements, natural and architectural beauty, a perfectly preserved and closely associated cultural tradition. I can’t do it justice — truly, I can’t speak highly enough of Japan.

What do you suggest Japan does to “reverse course” if not sacrifice the very things which create its remarkable culture?

Perhaps it’s the rest of the world’s cancerous, unsustainable focus on growth which is the problem here, not countries like Japan which don’t overvalue economic might at the cost of social cohesion.

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