While the west complains about immigration and the issues arising from it, here's the other side of the problem.
Japan has not grown significantly in the past 20 years and it won't grow again. http://www.tradingeconomics.com/japan/gdp
Japan has not grown significantly in the past 20 years and it won't grow again. http://www.tradingeconomics.com/japan/gdp
You mean, Japan won't grow again this year? Or ever?
Interestingly, back in the 1980s, we Americans thought Japan was going to take over in every market: automotive manufacturing, high tech and consumer electronics, software, even space travel eventually. They were buying up iconic American properties like Rockefeller Center, and Japanese culture was all the rage.
Then something strange happened in the '90s: the Internet. Suddenly the Americans (and some Europeans) roared back into first place and left Japan just idling by the side of the road. It was a remarkable turnaround.
By the same token, I would expect Japan eventually to bounce back from its current doldrums. China is a huge challenge to Japanese manufacturers, but they are still incredibly clever and innovative. Their aging population may do a number on that innovation, though; a new baby boom is probably their best hope.
You're right about Japan getting behind after the internet. I guess their way of working is not compatible with the velocity demanded by this new field. Can you imagine Salaryman getting the latest on the new Angular.js version? (or even JS for that matter?)
The Internet had nothing to do with it. Japan was simply in the midst of a titanic property bubble which subsequently popped:
Yeah, and a lot of that was phony growth caused by debt and unsustainable asset price rises.
People routinely conflate GDP growth and GDP per capita growth. For example, US GDP growth seems high relative to other rich countries because the US has more immigration and a higher birth rate. This leads to more GDP, though not necessarily GDP per capita.
So, Japan could actually get richer (per person) as their economy shrinks.
This also means that defining recession only in total GDP terms may be misleading.
Population expansion is in no way necessary for economic expansion. The people arguing for immigration on the basis of it being required for meaningful economic growth are pushing propaganda, the facts easily prove them wrong.
Productivity gains, new inventions, new processes, stability, science, R&D, sound monetary and fiscal policy - all far more important than merely increasing your population. There's endless proof of this, see: Sweden, Denmark, Norway, Netherlands, Finland, New Zealand.
Or better yet, see: Japan 1974, to 1994. 10% population growth, 1000% economic growth. If population were an integral factor, their growth would have been pathetic over that time.
Japan's growth problem is debt, it's destroying the capital that would otherwise be available for investment and business formation. The collapse of their savings rate has gone in tandem with that, and has further removed capital required for investment to generate productivity gains across an economy. Most of Europe and the US are mirroring that exact outcome, having loaded up on massive amounts of debt, they now find they can't grow beyond extremely low levels. China is in the process of joining that club as well. You can have growth or tons of debt, you can't have both together for long.
However I don't see this happening in Japan right now.
I agree with the debt commentary
You mention debt destroys growth by reducing available capital. This is because the government's borrowing of money increases the demand for capital. The government's increased demand for capital can drive up the price of capital to the point where many private enterprises can't afford it. This is called crowding out.
The price to borrow capital is the interest rate. If you look at the problem in Japan and most of the developed world you find remarkably low interest rates. This tells us that we don't have a scarcity of capital and a surplus of opportunities but a glut of capital and a drought of opportunities. We have a large supply of capital and not enough places to use it.
If capital was like any other good it would fall to market clearing levels. The problem is that there is an arbitrary price floor on capital. You can't charge anyone less than 0% interest. Which gives you a price floor of a real interest rate of 0% - inflation. This is why so many countries are trying to get inflation. Because if we can get an inflation of 4% we can have a real interest rate of -4% and reduce the price floor on capital.
However we did successfully create a housing boom/bubble, while the Japanese are deflating theirs.
Also as others have mentioned GDP can be an amazingly stupid measure where crime or an poorly organised health care system give higher output while harm.
Japan is a wealthy country.
Maybe Japan is intelligently embracing these 'growing pains' (by which I mean the pain resulting from a shrinking population, which the west will have to face at some point) now, by investing in robots and automation. I think they are getting a head start in a race against ageing that we will all (all of us with birthrates below 2.1, that is) have to compete in at some point.
A number can grow infinitely. Tree or human population can not.
GDP approximates perceived value prodced by society. In capitalism, saying GDP cannot grow anymore is essentially saying humans don't want anything you can buy with money to be better in any perceivable way. Give average guy huge amount of money, if he burns it for shits and giggles, then GDP cannot grow anymore.
No, two different things. But just the same, neither can grow infinitely.
> A number can grow infinitely.
Especially if it's a measure of a scale that's constantly adjusting itself.
Your explanation of economic growth sounds like how American capitalists justify the existence of growth economies. Economic growth cannot be infinite, just like physical growth. Economic growth depends on resources just like any other kind of growth. When the resources run out, the everything stops. You can't math your way out of that.
The only way to sustain our current economic burn at our current (and growing) population is to move off-planet.
That's a point from ... long past.
Dollar, yen, euro, bitcoin(!) have no direct relation to resources.
So, I agree with your opponent that economic growth is not limited in principle.
Made up numbers (ie the value of the dollar, bitcoin, etc) need to be reconciled at some point. The value doesn't come from nowhere. If the bitcoin value GOES UP it's because people are putting money into it. The price doesn't go down when people buy it, it goes up. That's a currency exchange, it's not creating value from nothing.
That's what I'm referring to as a "resource." Not just iron or silicon.
The entire 2008 crash happened because people were trying to create massive amounts of value from nothing.
The idea that any system needs resources to grow isn't an opinion, it's a universal constant.
If you mean that GPD can't grow "infinitely" as infinitely high value, then I agree. If you claim it can't grow for infinitely long time, well at some point sun is going to swallow earth or heath death happens, I agree again. If you claim that GDP doesn't necessarily grow exponentially, I agree again. I'd say the last one is even likely.
But my point was that there is no known inherent phenomena, that would force economic growth to end in the timescale of human life. End of oil could be it, or it could be offset with different energy sources, different types of consumption and more energy efficiency.
Sure, if we convert to solar and maintain our population, then we can sustain ourselves until the sun explodes, but that is not growth no matter what our GDP says.
My point is that if GDP, as a measure, somehow indicates that economic growth can be sustained indefinitely (barring acts of God of course) then it is flawed.
But it's answering a completely different question. It's trying to answer the question "has the system we call economy optimized itself during the time span we are looking". The "optimized" here is referring to Pareto efficiency more than anything else. But GDP is not that good tool even for this. I chose it to have something definite to discuss.
https://en.wikipedia.org/wiki/Pareto_efficiency
Personally I see capitalism as quite shitty tool for distributing and managing resources. But in globalized and interconnected world we have to operate in low trust environment. With such mutual lack of trust, capitalism is suddenly the best possible system for doing stuff.
EDIT: Theoretically perceived value can be added to system with constant amount of resources. You would probably gladly pay 10$ for very fine stamped shovel that light weight. If there is 15$ crude, rusty, heavy welded shovel right next to it, it doesn't look all that appealing. You normally don't perceive situations like this because the system is working so well. Any product out there could be optimized for slightly less material usage while not making it worse in any way, that would directly increase the profit margin. That would show in GDP.
Currently we don't do that, because engineers are busy doing other stuff. But if there would be price increase in materials, the picture changes automatically.