The world’s first post-growth economy

POSTED BY ORHAN

Over at Make Wealth History there’s a post on Japan as the world’s first post-growth economy. In the eyes of economists, Japan is an economic disaster. GDP has been essentially flat since the early nineties. China’s economy outstripped Japan’s for the first time last year. “And yet”, says Jeremy:

“…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.”

Even though some economists are horrified at the lack of growth, others are thinking twice. If the goal of a state is to nurture and sustain its people, Japan may not be doing so badly after all. And it may turn into a model for other countries that are hitting the wall in terms of economic growth.

5 responses to “The world’s first post-growth economy

  1. Ah, nice one!
    After a certain level – growth is just the greed of the wealthy. It’s their addiction, so have mercy on them – they can’t help it.

    And it reminds me one of my favorite proverbs from the greeks:
    “If enough is too little, nothing is enough”.

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  2. Hmmm, wonder if this is called stability.

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  3. Woodstock,

    They call it stagnation . Japan’s population is among the oldest in the world. Which is why slow growth is tolerated . If they had a larger percentage of younger people you’d have riots like in the middle east . In 20 years China will be facing a similar generational crisis because of their one child policy .

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    • Stagnation is certainly what mainstream free market economists would call it – and going by the description of Japan, it sounds pretty good!

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  4. Ultimately I think slower growth will be an equilibrium. But the world has lots of poverty generally. Growth reduces that and eases others things that ‘liberals’ want reduced. Wealthy nations are generally much more open to protection of the environment for example. Wealth also generally reduces population growth, that tends to reduce growth in economic aggregates as well though not so much on a per head basis.

    I think economic growth should remain our goal for the next century at least. Beyond that maybe not so much, especially if population levels off as I think it ultimately will and must.

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