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Comment by roenxi | Hacker News Reader

The things that stand out to me about Japan:

* 3rd largest economy.

* 11th largest population (top 10 until recently, they basically tie with Mexico).

* If you look at a table of countries by area, they are there. Even in the top half, thanks to places like Tuvalu.

I think there is a very strong on-the-face-of-it argument that they just have too many people and not enough for them to do, economically speaking. If they could drop their population and keep the economy about the same (and if they have so many dead-end jobs and so few opportunities, they could) then they would be both a wealthy country and absurdly wealthy on a personal level.

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That's not how economy works.

There is no such thing in general as "too many people for the economy".

"The economy" is the sum of goods and services produced and consumed. Everyone who lives consumes, and could easily consume more. The economy is generally limited by the ability to produce, and is generally limited by the number of working-age people to do the producing. Unemployment can be result of production being bottlenecked by something else:

  * raw materials - but Japan never had an abundance of those even when their economy looked like it would dominate the world in the 80s
  * education - but the people the article talks about have university degrees
  * capital - again not something Japan lacks

So it's not one of those. I submit that it's organization - the Japanese society and economy is extremely rigid and maintains some egregious inefficiencies in the labor market, simply because it's always been done that way.

Companies would rather hire a new 22 year old graduate at full pay than give a 30 year old with an even better degree a chance at a 30% discount, not out of concerns over the 30 year old's skills being outdated but simply because hiring new graduates is what you do. They'll hire non-graduates only on temporary contracts when short of workers, but never in a million years consider promoting them and converting them to regular employees, no matter how good they are.

That is exactly how the economy works.

Demand and supply. Oversupply in labor results directly in diminishing incomes and the ability of employers to be extremely picky about who to hire (e.g. like you said nobody over 30).

Wrong because every person who supplies labor also generates demand for goods and services, which generates demand for labor. Simply "removing" unemployed people would not in fact fix the oversupply of labor.

I also explained that the problem is not just that employers are picky because of an oversupply, they are picky in ways that are actually not really in their own interest and which contribute to the oversupply problem.

Wrong. Additional demand beyond bare necessities is only generated if there is disposable income available which is not the case when there is a oversupply of labor driving down wages.

If employers would act systematically against their own interest by hiring only young people it would be easy for investors to come in eliminate them in the market. But they won't because they can't. Employers prefer young people because they are cheap and they hire them because they can.

Oh boy. The bare necessities of someone is already "additional demand" over that person not being present. Disposable income is a completely irrelevant factor here. In fact, disposable income is the part that doesn't generate the same level of economic demand because it can be saved rather than spent.

And no, it is not easy for investors to outcompete incumbents simply by being more efficient with their employment policies, especially not in a society like Japan. And my point is that employers are not hiring older people even though they could pay them less.

> There is no such thing in general as "too many people for the economy".

Sure there is. If nothing else, at some point you have more people than can be physically fed with the available land.

Each additional person uses up a certain amount of resources. If the marginal resource gain of adding another worker is smaller than that; then economically there are too many people. There is no principle saying that cannot happen.

I did explicitly explain that the economy can be bottlenecked on other things (which is where that "in general" comes from) and why the one that seems to apply in the case of Japan has nothing to do with there being too many people.

> If nothing else, at some point you have more people than can be physically fed with the available land.

The malthusian argument has been used since the old ages to argue for fewer people because of resource shortages (https://en.wikipedia.org/wiki/Malthusianism#Modern_Malthusia...). It has not eventuated.

The more people there are, the more minds there are at looking for solutions to problems, the more able the human race will be. But of course, these people need investment to obtain benefit - they can't just be empty mouths to feed.

What is the argument there, that I can't point to Japan as an example of Malthusianism because you don't believe in Malthusianism?

There is a physical limit somewhere. Just because we didn't find it in the last hundred years doesn't mean we won't in the future. Real growth in % terms eventually stops because it hits a physical limit; that isn't a controversial idea. It is almost too obvious to state. Humanity can't maintain 1% Year-on-year growth in crop yield indefinitely. At some point; the improvements stop. The longer the improvements have been going on for the more likely it is they will stop.

Yes (and you can take that argument to deliciously absurd levels by pointing out that eventually humanity would have to form a sphere whose radius expands faster than light speed).

But concerning the actual topic at hand, Japan's labor market problems have nothing whatsoever to do with a resource or land shortage.

They probably have something to do with that. At the moment, for Japan has a tiny handful of iron mines [0]. So if they want to produce a steel widget, they have to justify someone transporting the iron either through the Chinese mainland or up the coast, past a lot of people who are learning to do wonderful things with steel. They import a lot of coal from Australia but China has relatively easy access overland from provinces like Inner Mongolia.

I'm not sure how much of an advantage they gain from having very easy port access by virtue of being an island (probably quite a big one, I assume). But it is hard to accept they wouldn't be having a much easier time if they had easy access to something like the Saudi oil fields, the US oil fields, the Chinese coal fields, etc etc. They are a long way away from the good sources of natural resources.

And they struggle to be self sufficient in food in the first result I found [1]. That is pretty different from somewhere like the US. There is a real risk of war in East Asia, so I imagine they'd be quite uncomfortable with that.

They have completely different resource-use problems than the economies that are larger than they are. The idea that the US would have to exert itself to be self sufficient in food is rather weird, as is the idea that China would struggle to justify transporting resources to the country from Mongolia, etc. It is obvious to me what could be done with more people in the US or China. In Japan there is probably something, but it does require actual ability to find instead of just "dig more, grow more, build more, forge more" that their competitors for the best-economy crown can manage.

Japan needs transformative technological improvements to grow. The US needs warm bodies. China needed to stop the Great Leap Forward and put competent leaders in charge. The Japanese challenge is much greater.

[0] https://en.wikipedia.org/wiki/List_of_mines_in_Japan

[1] https://en.wikipedia.org/wiki/Agriculture,_forestry,_and_fis...

Japan in the 1980 didn't have any better access to natural resources than it has today, yet it didn't have the labor market problems described in the article. Many, many other countries don't have a lot of natural resources and are not having these problems.

My basic argument is Japan (might have, I did see a few convincing counters in other parts of the thread that were convincing) too many people for the amount of land they have.

Your counterargument is that they didn't have a problem in 1980, when they had less people and the same amount of land. I can't disagree with that, but it isn't relevant.

> Many, many other countries don't have a lot of natural resources and are not having these problems.

They have the 3rd largest economy in the world. It goes US, China and then Japan. 30% higher GDP than the next contender, Germany. If there are any non-linear economic effects at all between size and labour market, Japan is going to find them first.

Japan has a smaller population now than they had in 1980, and a much smaller working age population:

https://en.m.wikipedia.org/wiki/Aging_of_Japan

You may have misread the numbers slightly; population of ~117 million in 1980 and a population of ~ 125 million today.

And the chart in that article shows that they basically stopped having children in 1980 which would be consistent with a "running out of resources" hypothesis as a root cause. If they hit a wall in economic carrying capacity circa 1980 that chart would supporting evidence.

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

Well, water shortages in some places are coming dangerously close to the Malthusian problem eventuating.

Drought has contributed to the Syrian civil war and Egypt threatened Ethiopia with war over their megadamming project on the Blue Nile. Places like Yemen have an order of magnitude more people than in 1950 while relying on the same water resources.

This is not an easy problem to solve, water is too heavy to transport in significant amounts to places like Sanaa (elevation 7000 ft, over a million people, mild desert climate).

Like others having lived there for a short period of time, I agree with this observation. The cultural premium on risk, that may merely inconvenience someone, is unreasonably high (by my standard, anyway). Ever have to pay a bribe to a landlord to rent an apartment as a matter of accepted business protocol? Look up "reikin". Then you'll realize why some think it's totally reasonable to live out of an internet cafe.

It's not a bribe. That's your negative spin. The positive spin is it's just 2/26th pre-payment of the rent for 2 years. You then pay 1/26th every month for 2 years, repeat when you renew your contract. Do I like having to pay 2/26th up front (2 months rent?) no. But I also would prefer not to have to put down payments on cars/houses.

If it truly were a pre-payment, it would be partially refunded when the rental contract terminates early.

No, it wouldn't. It would just be your non-refundable downpayment. Plenty of other things have non-refundable up front payments in the USA and other countries.

Then don't try to spin it as "pre-payment". It is not.

You are wrong. Those fees are added to the normal rent, they are not part of it. I choose my current appartment in part because there was no additional "gift money" to pay. Each time one moves place those have to be paid, which makes moving quite costly.

I'm not wrong. Different apartments give different offers just like everything else in the world.

I think gfxgirl's point is that you can mentally model the gift money as added on the rent, and use that number when comparing apartments.

Ex. 50/mo + 240 gift money (for a 2 year lease) == 60/mo without gift money.

Loads of countries have something functionally equivalent to reikin - just they call it a "background check fee" or "credit check fee" or "administration charge" or "inventory fee"

Calling it a bribe is seriously misleading. A bribe implies illegal or dishonest behavior. But reikin is perfectly legal, and is typically fully disclosed up front in the rental listing.

It’s basically just a one-time fee that is paid up front - something which is not at all uncommon in the world of commerce.

On HN when people discuss CS/privacy/programming the conversation is very thorough and interesting.

When the discussion is about economics (the topic I have studied at uni) most comments are just plain wrong and show a complete ignorance about the topic.

If one wants a counter argument to "too many people for the economy" one can start here : https://www.jstor.org/stable/2523702?seq=1

"Using data from the Current Population Survey, this paper describes the effect of the Mariel Boatlift of 1980 on the Miami labor market. The Mariel immigrants increased the Miami labor force by 7%, and the percentage increase in labor supply to less-skilled occupations and industries was even greater because most of the immigrants were relatively unskilled. Nevertheless, the Mariel influx appears to have had virtually no effect on the wages or unemployment rates of less-skilled workers, even among Cubans who had immigrated earlier. The author suggests that the ability of Miami's labor market to rapidly absorb the Mariel immigrants was largely owing to its adjustment to other large waves of immigrants in the two decades before the Mariel Boatlift."

There are many causes explaining unemployment some due to macroeconomic factors such as the monetary policy, others due to regulations of the labor market, others due to the lack of innovation, ..... They have been studied in depth. But "too many people for the economy" is not one of them.

> If one wants a counter argument to "too many people for the economy" one can start here : https://www.jstor.org/stable/2523702?seq=1

Or you can just point out that, well, if there are too many people, just (virtually) split the country down the middle: voila, fewer people in the country.

A more sophisticated argument brings up density. But it's usually the sparsely populated parts of a country that are poorer.

Ah the "snap" strategy.

> When the discussion is about economics (the topic I have studied at uni) most comments are just plain wrong and show a complete ignorance about the topic.

I think curating a discussion board to have knowledgeable discussion about many things is a really hard task. On many professional boards, discussions about other subjects are put into an OT corner. HN doesn't split discussions into topics so I guess expectation of comments' quality carries over.

I would just make a mental note: Oh this is not about CS/privacy/programming and adjust accordingly.

I suppose it's one of the reasons one should acquaint themselves with people from a variety of backgrounds and don't run away when others are not as knowledgeable about CS/privacy/programming. Actually

HN's issue with broad topic knowledge is considerably worse than just the difficulty of curation.

For example, I emailed the staff with regard to the prevalence of COVID-19 misinformation on HN and the response was that it is policy not to remove COVID-19 misinformation (including raving conspiracy theories) but also to allow flagging by the 'community' to remove posts pointing out that something is misinformation.

Tacitly allowing the platform to be used to give a mouthpiece to spread misinformation and allowing users to bully people for injecting some degree of factual reality does not encourage good discussion.

Facilitating knowledgeable discussion across a broad range of topics starts with attracting people who are knowledgeable in many areas, and that cannot happen in an environment where the administration allows mob bullying--through the very thin veneer of the downvote/flag system--of people who actually know things.

> When the discussion is about economics (the topic I have studied at uni) most comments are just plain wrong and show a complete ignorance about the topic.

Imagine how little they know about the topics you haven’t studied.

The overall quality of comments here is the same as every other niche discussion forum. OK on the original topic. Pretty poor on everything else. The only advantage is that this place at least has some moderation.

> most comments are just plain wrong and show a complete ignorance about the topic.

This seems to be a problem inherent to many such forums on the internet. When the discussion is controlled by a certain subset of that population, usually via comments, submissions and voting, that subset tends to self-select and alienate alternative viewpoints. Participants are rewarded with a sense of validation for things that appeal to the group but aren't necessarily true or accurate(or humane, fair, respectful, etc).

I think this topic needs a whole lot more analysis and public debate as more and more opinions are solidified in these balkanized communities. I quit reddit over these issues and am hanging on to HN by a thread. At this point I'd rather pay to hear opinions and analysis of experts than be influenced by, and participate in, internet echo chambers.

You have to become an expert to evaluate the expertise of "experts".

The workaround is to try to get better at using methods to pool the wisdom of "experts", to evaluate their claims based on external attributes (eg. looking at the journal that published the paper, looking at other claims of the expert, looking at the methods used to arrive at the claims, examining the used statistical methods, etc.), see also how prediction markets force "experts" to support their confidence with their money - and of course these markets are not infallible either.

see also: Malthus.

We already have a solution to the too many people problem. It is called inflation. Inflation rewards future economic activity. It means you can't sit on your savings. You have to keep working for yourself or let someone else work by investing your money.

The Japanese central bank has been trying to increase the inflation rate for years, with limited success.

Economies not only produce, they also take. For example, two free people could engage in free trade where one is holding a gun and the other voluntarily gives up their wallet. At scale we call that a Trade Agreement.

I'm unsure where you're going with this comment?

I'm saying an empire's wealth in large part is a function of it's military - in modern times, that would be the USA aircraft carriers parked off the persian gulf and china https://news.usni.org/category/fleet-tracker

>That's not how economy works. >There is no such thing in general as "too many people for the economy".

I think you have it wrong as well. The size of the economy doesn't really matter. We don't say Norway isn't viable because its size is only a fifth of that of the UK. There is no point in doubling the size of the population to make the economy twice as big when each person is no better off. Especially when we are increasingly bumping up against ecological limits.

I watch NHK US a bit. Every night they have some show with a westerner riding some train line or riding a bike around and the landscape - which is pretty thin on people. Train lines manned by retired workers just to keep them going. Cyclist stops at at famous peach or strawberry orchards and there is some 90 year old on their knees weeding, kids are all in the city. Of course, it will all become industrial agro-farming once they're gone, but is that the best cultural, social, economic solution?

It reminds me of western Ireland. Hiking around for hours through the country and not seeing a living soul. Expensive (holiday I assume) houses with slate roofs on a couple of hectares and empty.

This sounds interesting, I'd love to watch it, could you link to one of those videos? I see lots of video results for NHK US, but a lot don't seem to be of the type that you're talking about.

NHK is just a national broadcaster, like NBC in the US. I assume the grandparent means semi-promotional documentaries about the Japanese countryside, like this.[1]

[1] https://www.youtube.com/watch?v=s6yhndEdqrI

YT has mostly clips, not the full shows. These are broadcast on HDTV and probably some cable markets.

Cycling shows: https://www3.nhk.or.jp/nhkworld/en/tv/cycle/ Train: https://www3.nhk.or.jp/nhkworld/en/tv/japanrailway/

The best series is Document 72 Hours: https://www3.nhk.or.jp/nhkworld/en/tv/72hours/

Some can be seen on demand, others, they’ll give a repeat date. These are fascinating, and be warned, they can swing from happy to gut wrenching. There’s one episode where they’re in a Home Center talking to kids about their projects and the next they’re talking to a guy about kitchen tiles. He talks about his wife always wanting a new kitchen, but he was always too busy... and now she’s dead. So he’s working on the kitchen in her memory.

It’s an introspection on a society that is fraying at the edges. The producers seem to be trying to communicate that. As Krugman says, if you want to know our future, look to Japan.

Western Ireland has been like that since the Great Potato Famine in 1840. Beautiful country; I've ridden from Carna to Galway on horseback. Not good farmland, though.

what a ridiculous assumption that there could be too many people and not enough for them to do.

in the last decade japanees workforce grew despite overall population decline/getting old. mainly due to women participation increase. If there was not enough to do it wouldn't be possible.

almost all on-the-face-of-it arguments are oversimplification of largely complex issues. Sadly most(all of them?) government interventions are done by politicians on the basis of such arguments...

> I think there is a very strong on-the-face-of-it argument that they just have too many people and not enough for them to do, economically speaking.

Japan's greatest problem is that they have a geriatric population, coupled with low fertility rates, and an extremely unhealthy work ethic/culture. But, as usual with demographic stuff, the nasty effects won't really appear visible for decades - and by then it may very well be too late.

Their population will drop. Each couple only has something like 1.2 kids. Lack of people to pay down their debts will be the long term problem.

Most of the debt is held by the Japanese themselves. They control their own currency. It isn't likely to be a problem for them.

Even still, the debt is held by people who eventually expect to use it to find their retirements. They can avoid external driven shocks, but at some point a smaller population can’t produce enough care for a larger one. That will play out in the debt markets, either with defaults or inflation.

The BOJ has been trying to raise inflation for like 30 years now and has epically failed. Inflation will not be the problem. The velocity of money in Japan is criminally low.

It is going to be a problem because in an inflationary monetary system, you need to give out loans at a constantly increasing rate in order to pay off the debt of the previous generation. If the new generation is not growing fast enough, they will not be able to afford to take out enough new debt to buy assets from the previous generation (thus allowing the previous generation to pay of their debts from the sale or lease of real estate), then prices could crash quickly when the previous generation starts defaulting on their loans.

It's also why real estate prices are so high in Japan. The older generation needs to squeeze out as much as they can from each member of the younger generation since there are so few of them in numbers.

I’m wondering what you mean by “real estate prices are so high in Japan”? Relative to other countries? Or some point in the past in Japan?

My assumption is that declining population is leading to surplus housing and declining real-estate prices in most of the country.

And even in the Tokyo area where demand is still strong, homes are still more affordable than in other large cities like New York and London.

I suspect it’s a historical observation. They used to be crazy high. (I lived in Tokyo over a decade ago. Prices were crazy then, but they’re roughly the same now. Meanwhile SF has gone up at least 3X in that timeframe)

There was a boom but this pre-dated the debt issue we are discussing in this part of the thread.

You can buy a detached house in the Tokyo Metropolitan area for less than a 1 bedroom condo in Vancouver, Canada. An old house for significantly less. This broad observation is easily confirmed by browsing real estate listings.

E.g. random hit: small 3LDK house in Kashiwa built in 1981:

https://house.goo.ne.jp/buy/uh/detail/4/12217/37091100002300...

6000000 yen ~= $60K USD.

It’s the opposite, no? In an inflationary environment your debt is worth less. (More money is printed to pay it off) That’s why countries inflate it away.

Yes, if there is a shortage of young labor then young labor can simply demand higher wages.

People here are disagreeing with you, but I actually think you're exactly right about most modern economies: too many people and too few jobs leads to all sorts of social issues from wealth inequality to excessive hours to crazy house prices.

So Malthus was in a sense right, as the “too many people” issue has showed up constantly since he wrote his stuff. And before anyone comes and tells me that “he was wrong because the Earth can sustain 8-9 billion humans, like it does right now”, I’ll say that there’s no way Earth’s actual ecosystem can sustain a major part of that population regularly eating beef, or regularly flying, or having scattered individual houses instead of buildings with tens or more flats each etc.

Malthus’ argument fits your later points, but not why a sub-population is experiencing unemployment. Unlike food, jobs don’t grow on trees.

I'd say this is effectively the opposite of Malthus, since too much food (or rather too many products in general) kills jobs, and more fundamentally, kills the ability to earn rent from investments.

I don’t think that’s how economies work, but I accept I am likely to have a very flawed understanding of the field.

More people means more potential consumers, surely? So the only way there could be “too many people” is if the market is dominated by goods which have a high one-off cost and trivial per-unit costs, such as software or other digital goods?

You're awfully pessimistic and ignoring human creativity. And also human capacity for accepting compromises.

When Malthus lived, there were about 1 billion people. It's hard to estimate, but I'd guess at most 10% of those were living non-miserable lives, so about 100 million people at most.

Now the world middle class is 4 billion (40x) and the world upper class is probably around half a billion people (5x). I'm willing to bet that each and every one of those middle class individuals live better lives than the upper class of his time. We've been able to scale that 40x in 200 years. Despite wars, natural disasters, social strife, etc.

We're pretty resilient.

> You're awfully pessimistic and ignoring human creativity. And also human capacity for accepting compromises.

Sure we might manage to live with 10 billion people on the planet, maybe even more. But why would we want to? I see no value in having more people on the planet. If anything it only reduces the value of each individual.

I'm not saying that I want more people (or fewer people) on the planet.

It's just a fact. We're 8 billion and we'll probably be 11 billion when we reach peak population.

> I see no value in having more people on the planet.

I have to point out that you say this as a person on this planet :-)

> I see no value in having more people on the planet. If anything it only reduces the value of each individual.

Does it? A group of people who just know how to raise and care for nerfs may not be worth anything to me. But add a bunch more people who know how to turn nerf wool into a high-quality textile and I start to value the nerf herders a lot more.

We have also incurred some ecological debt.

Which as things get more extreme we'll pay off. At this point we're at the "asking nicely" phase, but it will become "at gunpoint" if this doesn't work out.

Let us hope so. Your comparison is apt, but let us not forget that even at gunpoint, some people aren't in a position to pay and their bodies later get dumped into the harbor by the mob.

Where there is a debt, there might be a later bankruptcy.

Have you head of the Plant Kingdom?

They just stand around doing nothing the whole day.

But not just quantity of work, but also quality; the US is infamous for having millions of bullshit jobs with bad pay, poor working conditions, and no future prospects.

This was pretty bad with sub-minimum wage pay jobs (restaurant / bar industry, tipping culture) and people having to work multiple jobs to make ends meet, but it's gotten worse with the race-to-the-bottom gig economy, 0-hour contracts, prison labor/slavery, no changes in minimum wage or worker rights, de-unionization / union discouragement, etc.

I also agree with you. I feel that if there were a real shortage of labour (as opposed to our current shortage of cheap labour), a lot of bullshit jobs[1] would become a huge waste of resources.

[1] https://www.youtube.com/watch?v=kehnIQ41y2o

> too many people and too few jobs leads to all sorts of social issues from wealth inequality ...

You have causation exactly backwards.

If poor people had higher incomes they would spend them. (In the jargon: "marginal propensity to consume declines with income".) That spending would create jobs and sustain incomes for other people like them. I know in my own case, if I had more money I would hire a personal shopper to buy my clothes, a cleaner, a personal trainer,...

Wealth and income inequality lead to stagnant societies where nobody is happy and most people are miserable.

The population of Japan is shrinking. A lot. The population peaked in 2011 and is down about 2 million since then. Outside of Tokyo, Osaka, and Nagoya, Japan is emptying out. Japan does not have too many people.

India, though...

India's birth rate has been deceasing for 30 years now.

I love how you are exposing the cognitive dissonance between too many people for the economy/world and immigrants do not depress wages. How can someone hold these two views simultaneously are they not the same, just at a different scale?

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