Shrinkage

Population, that is

Posted by David Roberts at 11:34 AM on 27 Nov 2006

Read more about: population | green living | Japan | Italy

It's conventional wisdom that economic growth requires a growing population; thus the gnashing of teeth over shrinking numbers in, e.g., Italy. Last week, Fred Hiatt took a look at Japan, where the birthrate is down to 1.25 (2.1 is required to maintain a stable population) and the population shrank by about 21,000 last year.

Somewhat surprisingly, the Japanese don't seem to be fighting the trend. Instead, they seem intent on showing that shrinking population and economic growth are compatible:

The trick will be "innovation," [Prime Minister Shinzo] Abe said, and economic reform. In fact, robots and other ways to improve productivity are one of four possible routes to economic growth despite an aging population. The others would be making better use of women; immigration, which has increased slightly but remains unpopular in this ethnically cohesive country; and keeping the elderly working longer. ...

Not every old person is going to work. But, Ogawa said, "there will be some adjustment. Japan's not going to fall apart."

Let's hope not. The world is in dire need of a demonstration that human beings don't have to breed like rabbits to survive.

Of course, this is just prelude to the deeper and more important question: could a country like Japan allow a controlled contraction of its economy and remain comfortable?

"It brings you to a very tough question," [demographer] Toru Suzuki says. "What is happiness? Can we be happy without economic growth?"

Good question.

(See also: Mike Wendling's piece on the vexations of shrinking population.)

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8 Comments | Post a Comment

Questionable

Letting women work as they wish always sounds good ... requiring women to work at the expense of their own preferences (see polls of working mothers regarding how the majority would spend their time if they felt they had a choice, for example) is another matter. Ditto for the elderly. Immigration is good for all ... except if you're arguing from a population reduction ideology; requiring others to "breed like rabbits" so you don't have to does not a solution make. And robots. Robots? This is our globally sustainable option for population control?

I'm not exactly coming away heartened.

by Liquesce at 1:07 PM on 27 Nov 2006

happiness

The Great Transition Initiative has just released a paper series by scholars from around the world, on a variety of very interesting subjects. Especially relevant to this post would be #10 ... on The Role of Well-being in a Great Transition.

The Great Transition, by the way, is the term used by the Tellus Institute for the time period during this century during which the human species has a chance to evolve to a more advanced (or at least more sustainable) civilization. Very cool stuff.

Deborah Byrd Earth & Sky Radio Series "A clear voice for science."

by Deborah Byrd at 5:31 PM on 27 Nov 2006

Japan is a boundary.

Inside this boundary is a culture. If Japan needs to make cars but cannot find enough laborers inside this boundary, they will build them someplace else, like Indonesia, Mexico, or Indiana. Having no choice, they will spread the wealth around, but that is a good thing. Japan will show the world how it is done and the economists will then explain in hindsight how they did it. Half the world lives on less than $2 a day. Potential employees are a dime a dozen.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

by biodiversivist at 10:07 PM on 27 Nov 2006

...limits to growth...

"Can we be happy without economic growth" you/Suzuki ask. Just ask those in Vanuatu - the happiest folk on the planet according to the New Economics Foundation!

I like your line of thinking David. This is similar to a post of yours a while back.

That post set me to thought (as a non-economist) and I commented accordingly on a green blog here in New Zealand. My self-discovery there was almost as revealing as the Tellus Inst. info above - thanks Deborah!

Mike

by Mike Frew at 11:26 PM on 27 Nov 2006

Economic Growth and Mature Age Structures

Early next year, Population Action International will publish "The Shape of Things to Come," a report analyzing the connections between population age structures and development, including economic growth (as well as civil conflict and governance type). We've found that countries with a "mature" age structure, such as Japan, in which 15-25% of the population is age 60 or older, had a fairly low average GDP growth of 2.4% between 1970-99. Because these countries have nearly all achieved upper-middle or high income status, it's not surprising that their better developed, diversified economies don't achieve the rapid rates of growth evident in developing countries.

It's important for these governments to take heed of the economic impact of aging, which is already seen in strains on the pension systems and, in some cases, higher rates of unemployment. However, they should not neglect the needs of young people, such as strengthening a support system for their childbearing decisions. As others have commented, the impact of migration policies on workforce needs should also be considered.

by Elizabeth Leahy at 7:21 AM on 28 Nov 2006

the Europeans, and immigration

Whatever the Japanese are up to, good for them.

The situation of the Europeans is not quite analogous. EU countries have been receiving immigrants from Africa, the Middle East, and other countries once part of their colonial empires. For different reasons, in the original great immigrant-receiving countries, (West) Germany, France, the Netherlands and the UK, those immigrants have got certain valuable benefits to be sure, but have not been integrated satisfactorily into full citizenship or into society.

Ironically, Italy and Spain, which themselves used to send impoverished migrants northwards, are receiving many immigrants from Africa especially, also from Eastern Europe, and elsewhere. Possibly, for purely economic reasons, the Italians, with one of the lowest birth rates in the world, are well advised to accept as many immigrants as they can. But on the other hand, their country is full of cultural treasures which require a solid tradition of public will to support them. It is not at all clear that Italy's immigrants, the Muslims in particular, have any disposition to maintain that degree of commitment. It is already notorious that a fresco of the Last Judgment in a church in Bologna, inspired by Dante's Inferno and showing the Prophet Muhammad in Hell, has been targeted by offended Muslims, and needs to be defended by a security guard.

Needless to say, all this is very much in Pope Benedict XVI's mind as he visits Turkey.

Chickens deserve our true friendship! So do fish! So do other sentient beings! Let us learn to be kind.

by caniscandida at 8:15 AM on 28 Nov 2006

Japan and Immigrants

There are many immigrants in Japan, they are just not recognized as such. The government basically pretends they don't exist. (A great movie about the immigrant community is Swallowtail Butterfly). There are Africans, Chinese, Iranians, Koreans, people from all over.

patrick

by bookerly at 2:38 AM on 03 Dec 2006

Duh!! What about GDP-per-capita growth?

We need to forget GDP growth and look at GDP growth PER CAPITA.

If your population is stable, and your GDP growth is 2% (say, something like Europe now), then your average income is going to go up at 2% per person every year.

If your populaton is growing 2% and your GDP growth is 2% (roughly like the US recently), then your average income is NOT GROWING.

If your population is falling 2% and your GDP growth is 2% (as in Japan now) your average income is growing at about 4%.

Who is better off?

What is this dunderheaded idea that you must have population growth to have GDP growth? You can have negative GDP growth while your population explodes. Like Zimbabwe. And the opposite -- high GDP growth while your population stagnates, like China.

Sure, more workers make it easy to have GDP growth despite the fact that you have made no productivity growth, no improvements, no technological progress. You just sit on your but, technologically. But, that gets you NOWHERE as an individual anyway, because your per capita GDP just stays flat, anyway. More resource use, more pollution, more people -- meanwhile, everyone is at the same income as before.

They say you need population growth to get economic growth buy, in every case, countries with high population growth are poor and rich countries have low population growth.

Hmmmmm.

Every rich country has gone through a period of population growth decline and most of them, other than the US, are getting ready to go into a period of actual population decline.

All the better for per capita GDP growth, which is what is important, anyway.

Jan VanDenBerg

by Janvdb at 11:35 AM on 05 Sep 2007

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