A shrinking population not all bad news

All I can hope for: No congestion on the highway!

I like the double house idea. A growing number of people look to the past and having a country home where they can live out the fantasy would be a huge relief from the frequent nightmare urban office worker life can be. Take some time to head back to the land, reconnect with what it means to be a person from a particular place, take up some traditional hobbies and content yourself with your national identity.

I've been saying for years that a reduction in population is a good thing. Not just in Japan either, but the world. We're over-populated. The main argument behind maintaining population levels is to maintain the status quo. People don't want to go through the pain of adjustment to a smaller population. But after that change, things will be better for everyone.

The big problem with a shrinking population is that ALL GOVERNMENTS need a continuous EXPANDING population, and the consequent expanding economy as the money is backed by debt. This "scheme" only works if the economy, and thereby the population, is expanding.

If it starts to shrink, there will be horrible economic problems, as the debt will become impossible to service (pay the interest on) with shrinking tax revenues.

At some point, the money will suddenly be worthless, and everybody will be absolutely screwed.

Another problem is that the ratio of retired people to working people will get bigger and bigger and the pension scheme will suddenly become bankrupt.

To be sure, absent any government cons, shrinking populations are perfectly fine. But since governments built their ENTIRE MONETARY SYSTEM on an assumption of a growing population, somebody's going to be left holding the bag.

I would think the popularity of electronic washlets have more of a positive impact on paper usage than a less than 1% drop in population.

If rural/farmer population drops by choice, this may provide an opportunity to consolidate farms into more efficient automated farms measured in square kilometers. This could dramatically reduce the cost of locally produced cash crops. Maybe get rice prices inline with the rest of the world without upsetting the farmers.

Once the economics of a capitolistic socitey are modified to compensate for a population drop (not sure how that will be done without some pain). The world will be a better place with fewer but happier people.

Obviously the intent of the article was to highlight the positive aspects of a shrinking population in Japan. So, given that, I would not have expected it to highlight the real economic issues associated with the double punch of a shrinking population and an ageing population over the next 30~40 years.

Clearly there will be some benefits/positive aspects, but I also think it will really challenge the country economically and socially. And, unfortunately, for most people, I am afraid the negatives will outweigh any positives over the next 20~30 years.

Now, for my son, who is 2, it is a little different. By the time he is in his 40s and I am in my senior years, he may be in a position to really enjoy the benefits of a smaller population in Japan. Maybe buy a huge spread of land and become a daimyo or something!

Each individual is urban on weekdays, rural on weekends and holidays – part salaryman, part farmer. Might that happen in Japan too?

Nice concept that works great where I am from but VERY DIFFICULT in Japan, 2 main reasons:

How many in Japan can bolt their last day of the week to the cottage, then drive back 2nights later in time for the start of work without enduring high costs & often lots of driving.

I not saying it cant be done, however I have known some who have done this & typically use of the cottage/besso drops dramatically even by the 2nd season. And if you want onsen in your place & live where there is snow, VERY EXPENSIVE!

And the rural farming bit, as one who has a sizable yard & a plot about 20-30m one word come to mind WEEDS!! If your not constantly keeping them in check they WILL over run you in no time flat!

My solution was to make my house my cottage/besso, bingo, snap my fingers & I am instantly THERE! Year round, my plot is nearby so most of the time I stay ahead of the weeds & enjoy lots of veggies, but every once in a while I cant & its a LOT of work to get back to where the weeds aren't winning LOL!!

Now obviously you cant do this in most city environments, BUT if you can even get to the edges there are options!

Well, Gokai is totally gay, so this does not concern me directly. But the fact that politicians don't have a clue about why young people don't get married and have lots of kids and what to do about it is quite stunning. They live in a completely different world from ordinary people.

"The big problem with a shrinking population is that ALL GOVERNMENTS need a continuous EXPANDING population"

And, this planet can handle only so many people...

Another plus to the shrinking population is someday I might be able to get a good standing position on the morning train.

This is a financial problem for Japan but once the majority of baby boomers pass away, the population pyramid doesn't look so bad. As much of a disaster as this is for Japan, it pales in comparison to what China will face in around 20 years. I suspect people will turn their attention to that looming crisis in about 5 years or so.

Last year I published a paper on the advantages of declining population trends - there are many. To see this article is like a breath of fresh air.

@M3M3M3:

Spot on with your comment. Actually, the demographics across most OECD countries are pretty scary over the next 30 years, but, indeed, China holds he most concern, not the least of which because it is the most populous nation in the world, with growth ambitions and a totalitarian political system.

By 2050, when my son is in his late 30s, I imagine Japan might be a great place to be.

I wish I had the optimism of some posters BUT you need to remember Japan needs to SURVIVE while seniors suck up resources at unprecedented rates, its bad already right now, the pain is going to be a lot more than people suspect as their numbers climb higher. Daily we see how horribly many seniors ALREADY ""live""

IT IS GOING TO GET WORSE, MUCH WORSE!

Who knows what Japan will look like after the oldies have died. I bet when its getting bad the birth rate will plummet to newer & newer lows, so I don't think the population pyramid will be all that nice looking down the road.

Japan is the test case & it doesn't look appealing to me & yeah China is going to hell, perhaps for more reasons than population problems......

I truly feel sorry for young people of Japan today, they are going to live in EXTREME times.

**I think a Shrinking population is not a problem but a symptom of a world phenomena, of over grown self love, and lose of basic connection abilities between people. In Japan it doesn't appear the same way it does in western countries, where we come to feel like superstars in our own eyes, taking hundreds of selfy FB photos. The environmental conditions in Japan have brought people to disconnect themselves emotionally from society, bringing any form of communication to the necessary minimum (Work, shopping, video games), and invest most of time in building a small self concentrated world, of little pleasures that play as a wall to hide from the outside world.

Although it seems that there are few advantages in a shrinking society, those will last for very short period of time. Why? Because Man is a social creature, it cannot live happily when isolated, and cannot replace a pleasure from a healthy human connection, with any other form of pleasures such as we might get when buying a new smartphone. The combination between the needy part in us for human warmth, integration, in one hand, and the growing isolation in hearts in other hand, will sooner than later lead to unpleasant events in Japan society.

This is something that no prime minister, emperor, or other political figure can fix (especially not them) , but only us, the people, can make an effort to realize the real state we are in, and work together for better connection between us. **

The big problem with a shrinking population is that ALL GOVERNMENTS need a continuous EXPANDING population, and the consequent expanding economy as the money is backed by debt. This "scheme" only works if the economy, and thereby the population, is expanding.

Government entitlement programs are all essentially ponzi schemes, and terrible ones at that. Most people will receive only a fraction of the money they pay into these programs. Had they had the option of simply keeping the money in a savings account, or buying a life insurance policy, they would be much better off. Funny that an insurance or private retirement account can give you a positive return on the money you put in, but the government programs cannot.

You are correct, unless an ever growing number of people subscribe to the national pension plan, it cannot remain solvent.

To be sure, absent any government cons, shrinking populations are perfectly fine. But since governments built their ENTIRE MONETARY SYSTEM on an assumption of a growing population, somebody's going to be left holding the bag.

This is also true. Government spending plans and budgets always assume a certain amount of growth, and this growth is supposed to drive inflation. A great amount of the of the government's budget is funded by deficit spending, money is borrowed to pay for anything over the amount of the revenue collected in taxes. This will work when there is inflation, as over time even small amounts of inflation can significantly devalue the debts the government occurs, without them having to do anything. The 2015 budget was created assuming there would be 2% inflation, but for the past 4 months inflation has been nil. If inflation remains at 2% for the rest of the year (not likely), there will shortfall, and more money will have to be borrowed (printed) to offset the difference.

But without inflation. the opposite happens, instead of becoming devalued over time, the debt becomes larger over time. Without a growing population to drive inflation, Japan's ability to deal with it's current debts decreases. The problem with printing money or the government selling bonds to itself is that the inflation and resulting devaluation of the national debt is erased by the extra debt incurred to cause the inflation.

It seem to me that Kuroda and the BOJ are like hamsters running on a wheel, no matter how fast they run, they aren't going to get anywhere.

two homes, one holder like in sweeden? i cant believe the do that there. thats a disaster. waiste of land, waist of space. the beauty of the future living will be destroyed by then. there are so many people out there in the world that need a place to live and these guys want two homes. how about make tall denser buildings like in shanghai, cherrish japan's lovely crowded cities and stick to the futuristic living bc were not into ancient living habbits. save ur space in the sky and not the floor that could be used for business or more buildings for more people to live

I expect Takahiko Furuta will feel a great sense of public responsibility should this rosy scenario not come to pass?

Pure unadulturated nonsense. Let's look at some of these potential benefits logically":

Some obvious advantages of a thinning population immediately come to mind – less crowded facilities, a less frenetic, more relaxed pace of life.

Huh? The article states that the cities will get even more crowded, as the young people flee the countryside. And, with the incredibly high social welfare costs heaped on the young people by the aging population, they will be working even harder just to keep their heads above water, after all the taxes they pay. The only ones who might see this "less frentic, more relaxed way of life" are the retirees, who are not working, and can get out of the citiies to enjoy the deserted countryside towns.

Nor would growth necessarily wither. Furuta cites toilet paper by way of homely example. Population shrinkage has already caused a noticeable drop in demand. Undaunted, producers vie with each other to make the softest brand, or the one most attractive in terms of design. Consumers are willing to pay higher prices in return for quality – at least when it comes to some items – and competition flourishes. What’s true in one sector will be equally true in others, if not in all.

Paying more for something as basic as toliet paper is not "growth". That is simply inflation brought on by big companies wanting to somehow keep their sales as high as possible. Please explain to me how this "growth" helps the average Joe who is struggling just to make ends meet due to the high tax burden (see above.)

Owning two homes – one in the city, another in the country – became standard as city-dwellers bought up vacant rural properties for a song. By now the old urban-rural distinction scarcely applies. Each individual is urban on weekdays, rural on weekends and holidays – part salaryman, part farmer. Might that happen in Japan too?

Again, a huge Huh? Most young people in Japan cannot even afford one house -- actually they cannot even afford rent, as many live at home still. Where is all this money to own two houses going to come from?

Meanwhile, the article avoids one competely predictable outcome, which is a significant drop in the yen. With Japan becoming a smaller market, there will be less and less demand for the yen from outside investors, so its value will decline. Which raises the cost of imports even more. And with no young people still in the countryside to man the farms, Japan will likely become even more dependent on food imports.

Sure, some of those rosy predictions could happen, but not without some significant structural changes to Japan to make them happen. And sitting on their collective hands, which is all Japan is currently doing, isn't the answer.

"IT IS GOING TO GET WORSE, MUCH WORSE!"

So where's the crisis? I don't see one. The poverty and homelessness? Where? It's much worse in most other Western countries.

Japan socio-economically has actually gotten better, quite a bit better, in my long years here. Japan was kind of dull and underwhelming in the early days, with awful housing, zero urban design considerations, and so-so infrastructure. Schools and hospitals used to look like dusty prison buildings. The homeless had sprawling gypsy camps inside Shinjuku and Osaka stations until about 15 years ago.

Those have all improved considerably. School grounds in my area are getting things like grass yards, spanking new hospitals are being built and the city's amenities continuously improve. And don't worry, the improvements will surge in the lead-up to the Olympics.

The "crisis is at hand" doomsayers have been at it now for nearly 2 decades. At some point, you guys need to get something right.

There is no population decline crisis. The crisis is a faulty economic model (Ponzi scheme) that depends on eternal population growth (an impossibility). Citizens in developed countries around the world have bought into promises built on this model.

Now, rather than face up to the inevitable crash, politicians tell us we need more babies.

The fact is, a population decline is a good thing. We are overpopulated now, and putting great strains on our resources and environment. So I wish people would stop worrying about the population, and start worrying about the economic disaster their governments have laid out for them.

Canada, with a population of 35 million, compared to Japan's 127 million, seem to be doing OK. It's gonna hurt, but once the balancing is over, things will be much better here. And lets hope they decide to start building houses that will last for more than 35 years and rise in value.

I fully support this article! Population will increase or decrease because of the physical livability of the environment. There has been too much overpopulation in the city that makes people stressed, resources (land, clean air) scarce and less conducive for reproduction. The only reason for the drive for a replacement population is to have enough consumers to spur an economy to support the taxation requirement. Taxation required to repay the interests of national debt (via bonds). The bonds benefactor are bankers then individual investors. Small investors will likely pour their profits back into the economy but the rich will only be rich because they horde those 'values' (monies). So if there are less people, with less demands for employment and less demands on production and less demands on public health care (this is a long separate topic) in the long term, the state don't have to spend so much and the tax revenue need not be higher to service the debt. We need to reduce the old population by reducing the population overall! If we are so righteous and high moraled and will people to live longer, then the society has to be conducive for older population to remain active. It need not be economically like when they are young. But elderly can continue to contribute back to society in a leisurely way. Keeping healthy by engagement, connection with younger society. When they are active, they will be healthier, less demands on health care. All these have to be planned early in the mindset of the society. Japan is the ideal culture to demonstrate it will work. Love the house share. It's F.R.I.E.N.D.S silver version, Japanese version. :)

The article is a bit like someone on the Titanic saying Hey, the ship is sinking but its not all bad, well probably be famous 80 years from now when James Cameron makes a movie about this.`

While undoubtedly you can find a few good things to say about Japan with a smaller population, these are so overwhelmingly overshadowed by the negative consequences for the economy as a whole - not in the abstract but in terms of what they mean for actual people - that they become laughingly insignificant.

It isn`t just about the need to raise taxes to pay off debt, though that is a big one. A contracting economy will see unemployment increase, wages decrease, capital moving overseas (allowing the wealthy to protect themselves but leaving the other 90% screwed).

The "crisis is at hand" doomsayers have been at it now for nearly 2 decades. At some point, you guys need to get something right.

I cant speak on behalf of all doomsayers but obviously for the majority of those 2 decades the population was still increasing and for the past 7 years it has only been decreasing at a miniscule rate that is barely perceptible. Thirty years from now when, barring major changes, the population is shedding more than a million people a year as I belive the math says we are on course for (again, barring drastic changes) then well see.

Basically everything Jerseyboy said above is correct - the article is in lala land.

As more old folk leave employment and retire there are less people paying taxes. Those working are going to have to pay for all the old folk. Like it or not that is the reality. Remember back 9 years ago the LDP tried to "lose" 100,000 pension accounts mysteriously. They wanted to see if "losing" pension accounts can lose their responsibility of paying them. Well with a lawsuit and a ruling by the Supreme Court the answer was "NO". Then they lost the gov't control in 2009 because of it. Hatoyama and company paid in full the "lost" accounts. One reason the DPJ won in 2009 was the restoration of the accounts.

Now today, the money paid into the pension system isn;t just used for pensions it is actually used by the government as tax money. Paying for bridges, more concreting of green lands, expanding a military for Japan, new runways in Okinawa, paying off their Zaibutsu pals, driking party with the Yaks, and so forth. As the tax money lessens then higher taxes all sround for the working people.

By 2030, what is the tax burden going to be? The pols and bureaucrats are not going to lessen their appetites. 50%, 60% of income sound about right? Someone is going to pay and it isn't going to be Abe-kun and company. It is going to be you and I who pay taxes. And the monster is only going to get hungrier.

The meaning of shrinking population is one - WE DON'T WANT TO LIVE - . It is not a decision made by one person, but by a public as a whole. A public that doesn't have faith in its own continuation. Even though its individual parts might feel sometimes happy or temporarily satisfied, all of them carry this statement within, unconsciously, saying- we rather be an End. We rather the story of life to end with us. Of course there is nothing to blame us with. The circumstances we were born to brought us to this inner calculation. But We have the power to change things for better, to overcome ourselves and bring back faith in the connection between us, To slowly build a better environment that gives true meanin for us and for our children. Otherwise, we can just close our eyes and enter the longest Seppuku ceremony of a whole nation, provided by nature itself.

It may not be all bad, but in the short term, it's horrible news for businesses that depend on younger demographics.

The meaning of shrinking population is one - WE DON'T WANT TO LIVE

This may be one of the stupider comments I've read on this site.

@ifd66, I'd be interested to see your paper .... is it accessible online? Sounds interesting. If you can post the link ... Thank you!

The meaning of shrinking population is one - WE DON'T WANT TO LIVE - . It is not a decision made by one person, but by a public as a whole.

So people having slightly fewer children than they used to = group suicide in your mind?

Japans birthrate isnt much different from those in other developed countries. When a society gets rich enough children cease being valuable as a source of labor and start being a cost which most people cant afford to have a lot of. This doesnt mean much more than the fact that kids are expensive....

we are living in a real world,you can not ignore the reality by counting advantage of a certain issue, who will pay for the welfare of the senior citizens,how you can keep the maintenance of the gigantic infrastructure of japan, japan would not be able to contain their international states especially business and economy, a weak economy and a small country will have a lot of problem while facing china, Russia and korea.

Japan will be fine. Eventually the whole 'Gaijin' Mindset will fade, more immigration will take place to a more welcoming native populace. Sure, Japan has a couple of pretty rough edges (points to Dolphins) but every country on the planet has it's faults. It's one of the best countries on Earth. No way it's going to jump into a 'Black Hole'. Stop it.

So where's the crisis? I don't see one. The poverty and homelessness? Where? It's much worse in most other Western countries. Japan socio-economically has actually gotten better, quite a bit better, in my long years here

JeffL,

Wow rose coloured glasses! Japan has been in serious decline over 2 decades now, the Japan I see now compared to the beginning of the 90s is VERY different.

Socio-economically gotten better you say...........WT....... Wages have stagnated so have decreased in value, child poverty is way up, full time jobs with benefits going the way of the dodo. More & more J-companies steadily moving more & more of their operations OUTSIDE Japan.

A populace & politicians that wont even acknowledge problems/issues let alone attempt to deal with them.

Japan is going down, & not so slow, the confidence everyone REAKED of when I washed up here is pretty much become extinct!!

The seniors are ALREADY consuming a massive amount of our current taxes & this amount will skyrocket further as the population of seniors spikes, it will a massive drain on the country.

I agree Japan would be better with fewer people, but this topic is about the coming spike of seniors in our ranks & whether Japan's people, businesses can survive it!!

Its not going to be pretty & I bet a great many will curtail having kids even more because there will be no way in hell many will be able to afford them, that is ALEADY happening as well now!

I've been saying for years that a reduction in population is a good thing. Not just in Japan either, but the world. We're over-populated.

Are you volunteering?

The premise of the article - that shrinking populatioon is not all bad - is certainly worth discussing. however alot of the content is puerile rubbish with bad examples and totally unreal;istic outcomes. truth is that shruinking populace doesn't work with the current growth, borrow economic model, especially when democracy allows people to vote themselves ever cushier benefits. so the model needs to either change (fat chance), collapse (more likely) or we need to accept ever increasing people on the planet. at some stage that will mean greater immigration to Japne.

There is a global problem which is a symptom of capitalism favouring unit productivity at the expense of headcount; global supply chains at the expense of local investment and extreme inequality of wealth distribution at the expense of average and less income earners. The result is a growing demand for higher skilled people rather than sheer numbers of workers. Japan has simply reached the problem threshold earlier than the other leading economic nations.

Wake up! The reality will be one man or woman to look after two really old and sick parents; takes lots of love, sacrifices, costs, inconveniences, etc. without much pension, without much salary. The country and most families are going to be broke and poor.

I probably should not tell my little known secret.

Invest in companies that make adult diapers. You will make a killing.

In 1718, Japan’s population was 30 million. Seventy years later, owing to a series of famines, it had fallen by 3 million.

The problem for Japan is not an existential population decline, but a decline combined with an uneven population distribution weighted heavily towards the geriatric end.

Toilet paper? Is that all you got?

Tear down the vacant collapsed house, connect ones property to it and turn the space into a yard and enjoy the outdoors more. Stop hanging out in the living room.