‘Japan’s decline’: an unhelpful diversion?

Author: Gerald L. Curtis, Columbia University

The debate surrounding whether or not Japan is in decline is a diversion.

In some respects Japan is declining, but in other important ways it is not. It is well known that Japan’s relative standing in the hierarchy of the world’s economies has declined, ceding the number two position to China. But if you think about living standards — the quality of the air you breathe, the water you drink and the food you eat, the health care and other social services you receive, and the number of years you can expect to live — it is clearly preferable to live in a ‘declining’ Japan than a rising China.

More pertinent is whether Japan’s diminished stature as an economic superpower is a matter of decline or the consequence of other countries having grown richer. The share of global GNP occupied by both the United States and Japan has declined thanks to the emergence of other countries from abject poverty. That is good news not only for the people of those countries, but for the United States and Japan as well, which have access to inexpensively priced goods and new markets for their exports.

The declinist narrative exaggerates Japan’s economic so-called decline because it fails to take into account the one indisputable aspect of Japan’s decline — the decline in population. Japan’s economy has not performed notably worse than other advanced economies over the past 20 years, especially if you compare GDP growth per capita or per employee. Over two decades of ‘stagnation’ Japan has grown, living standards have continued to increase and unemployment has been kept low.

While inequality has increased, the gross disparities that we see in the United States have no parallel in Japan. Japan is not as economically prosperous as it might have been had it chosen a different mix of economic policies, but now that the rest of the industrialised world is contending with high unemployment, huge budget deficits, intense pressure to cut back on welfare, and the risk of deflation, Japan does not look so bad. If it is in decline it is not alone.

Then there is the nation’s social health. In terms of social cohesion, sense of community and general civility, the Tohoku disaster showed the world how strong Japan is. Whatever political problems were revealed by the government response to the Tohoku tragedy, they pale in comparison with the self-discipline, restraint, outpouring of goodwill and cooperation that Japanese people showed each other — and the welcoming attitude with which they accepted foreign assistance. And it is not only in rural areas like the Tohoku disaster zone in which these social bonds are strong; in urban Japan cleanliness, low crime rates and basic good manners still make cities like Tokyo some of the world’s most comfortable, civilised places to live.

Talk of an increasingly inward-looking Japan, particularly in relation to young people, is an especially puzzling observation. More people are comfortable in English and non-Japanese settings today than ever before. The number of Japanese who go abroad to study has not declined as a percentage of their age group. What gives the impression that Japanese young people are increasingly inward looking is that their total number has declined and that fewer of those who do venture abroad go to the United States. Instead, they are going to China, South Korea and to English-speaking countries where tuition and living costs are lower than in the United States and where the competition to get into university is not as intense. Japan’s problem is that too many people in the older generations remain inward looking, robbing young people of the incentive to take risks and do unconventional things.

The declinist debate does not shed much light on Japan’s role internationally. Japan’s ability to contribute militarily to its own defence and to regional security has not declined. Its defence budget has gone down every year for the past 11, but the roles and missions of the Self-Defense Forces have grown, as has their ability to carry them out.

Economically, Japan is still one of the world’s great trading and investing nations. Globalisation and a strong yen have led Japanese companies to move more and more of their production out of Japan and hire more foreign nationals to help run their companies. Of course Japan has economic problems. The once-fabled Japanese electronics industry, to cite just one example, is on the ropes: just look at the problems that beset Sony, Sharp and Panasonic. Japanese industry and government no doubt need to make some bold policy changes. But then, what country does not?

Demography may be robbing Japan of some of its vitality now that Japan is rapidly becoming more and more a country of older people; alas, elderly people rather easily get tired. But this too is hardly a uniquely Japanese problem. Immigration brings vitality to the United States, but most countries in Europe, as well as South Korea, China and many others, face a demographic reality similar to Japan’s.

What can we conclude from deciding that Japan is or is not in decline? Japan is not alone in having lots of problems to contend with. It is probably a good idea to focus on what they are, how they might be resolved, and what the strengths are that the society has to bring to bear in grappling with them, and put the declinist debate to rest.

Gerald L. Curtis is Burgess Professor of Political Science at Columbia University, Director of the Toyota Research Program at the Weatherhead East Asian Institute, and Senior Research Fellow at the Tokyo Foundation.

This piece originally appeared here on Asia Unbound.