Upheaval: Turning Points for Nations in Crisis

by Jared Diamond

  A second set of strengths of Japan, besides those economic ones, is its “human capital,” i.e., the strengths of its human population. That population numbers more than 120 million and is healthy and highly educated. Japanese life expectancy is the highest in the world: 80 years for men, 86 for women. The socio-economic inequality that limits opportunities for a large fraction of Americans is greatly reduced in Japan: Japan is the world’s third-most egalitarian nation in its distribution of income, behind only Denmark and Sweden. That’s partly a result of Japanese government school policies: schools in socio-economically disadvantaged areas have smaller classes (more favorable teacher-to-student ratios) than do schools in richer areas, thereby making it easier for children of poorer citizens to catch up. (In contrast, the American school system tends to perpetuate inequality by packing more students into classrooms in poor areas.) Social status in Japan depends more on education than on heredity and family connection: again, the reverse of U.S. trends. In short, rather than investing disproportionately in just a fraction of its citizens, Japan invests in all of them—at least, in all of its male citizens. (I’ll say more about Japanese women below.)

  Literacy and attained educational levels in Japan are close to the highest in the world. Enrollment of Japanese children in both kindergarten and secondary school is almost universal, although neither is compulsory. Student testing in nations around the world shows that Japanese students rank fourth highest in math and science functional literacy, ahead of all European countries and the U.S. Japan is second only to Canada in the percentage of its adults—nearly 50%—who go on to higher education beyond high school. Offsetting these strengths of Japanese education is a frequent criticism by the Japanese themselves that it puts too much pressure on students to focus on test scores, and places insufficient emphasis on self-motivation and independent thinking. A result is that, once Japanese students escape the pressure-cooker atmosphere of high school and reach university, their dedication to studying declines.

  While there is no easy way to measure cultural strength, national identity, and quality of life, there is much anecdotal evidence about these characteristics in Japan. As foreign visitors to Japan quickly notice, its capital Tokyo rivals Singapore as the cleanest city in Asia, and is one of the cleanest in the world. That’s because Japanese children learn to be clean and to clean up, as part of their responsibility to preserve Japan and to hand it on to the next generation. (Interpretative texts at Japanese archaeological sites sometimes proudly point out site evidence for Japanese cleanliness already in ancient times.) Visitors also notice the safety and low crime rates of Japanese cities. Japan’s prison population is far smaller than that of the U.S.: about 80,000, versus nearly 2.5 million, respectively. Rioting and looting are rare in Japan. Ethnic tensions are low compared to the U.S. and Europe, because of Japan’s ethnic homogeneity and very small ethnic minorities. (As discussed below, that’s another example of an advantage that carries disadvantages along with it.)

  Finally, Japan’s strengths include big environmental advantages. Japanese agricultural productivity is high because of Japan’s combination of temperate climate, freedom from tropical agricultural pests, high rainfall concentrated in the summer growing season, and fertile volcanic soils. That contributes to Japan’s ability to support one of the highest average human population densities in the industrial world, calculated with respect to the small percentage (12%) of Japan’s land area in which the population and the agriculture are concentrated. (Most of Japan’s area consists of steep forests and mountains supporting only small human populations and little agriculture.) Nutrient run-off from those fertile soils makes Japanese rivers and coastal waters productive of fish, shellfish, edible seaweeds, and other aquatic foods. Japan is the world’s sixth-largest producer of seafood, formerly obtained just in Japanese coastal waters, although now caught all over the world by ocean-going Japanese fishing fleets. As a result of all those environmental advantages, Japan was unusual in the ancient world in that, already at least 10,000 years before the adoption of agriculture, Japanese hunter-gatherers had settled down in villages and made pottery, rather than living as nomads with few material possessions. Until Japan’s population explosion within the last century-and-a-half, Japan was self-sufficient in food.

  Let’s now turn from Japan’s strengths to its problems. Asked to name Japan’s most serious problem, economists are likely to answer, “Its government’s huge national debt.” The debt is currently about 2.5 times Japan’s annual GDP, i.e., the value of everything produced in Japan in one year. That means that, even if the Japanese were to devote all of their income and efforts to paying off their national debt and produced nothing for themselves, it would still take them two-and-a-half years to pay off the debt. Worse yet, the debt has been continuously rising for years. For comparison, while American fiscal conservatives are greatly concerned by the U.S.’s national debt, it’s still “only” about 1.0 times our GDP. Greece and Spain are two European countries notorious for their economic problems, but Japan’s debt-to-GDP ratio is double that of Greece and four times that of Spain (as of the moment at which I write this sentence). Japan’s government debt is comparable to that of the entire eurozone of 17 countries, whose aggregate population is triple that of Japan.

  Why didn’t the Japanese government collapse or default long ago under this burden? First, most of the debt is not owed to foreign creditors, but to bond-holding Japanese individuals, Japanese businesses and pension funds (many of them owned by the government itself), and the Bank of Japan, none of which play tough with the Japanese government. In contrast, much of Greece’s debt is owed to foreign creditors, who do play tough and press Greece to change its fiscal policies. Despite all the debt that the Japanese government owes to Japanese themselves, Japan is a net creditor nation for other countries, which owe money to Japan. Second, interest rates in Japan are kept low (below 1%) by government policy, in order to keep a lid on government interest payments. Finally, Japanese as well as foreign creditors still have so much confidence in the government’s ability to pay that they continue to buy government bonds. In fact, that’s the main way in which Japanese individuals and companies invest their savings. But nobody knows how much higher the debt can rise before Japan’s creditors lose confidence and the government has to default.

  Despite those low interest rates, the sizes of the debt and of Japan’s aged and retired population mean that debt interest and health and social security costs consume much of the government’s tax income. That reduces government funds that would otherwise be available to invest in education, research and development, infrastructure, and other engines of economic growth that could stimulate tax revenues. Exacerbating that problem, Japanese government tax rates and hence government income are relatively low by developed world standards. Ultimately, the debt is held mainly by older Japanese people, who invested their money either directly (by buying government bonds) or indirectly (by receiving pensions from pension funds heavily invested in government bonds)—while those Japanese people ultimately paying the interest on the debt are mainly younger Japanese still working and paying taxes. Hence Japan’s debt in effect represents payments by younger Japanese to older Japanese, constituting an inter-generational conflict and a mortgage on Japan’s future. That mortgage is growing, because Japan’s young population is shrinking while its older population is growing (see below).

  The solutions proposed to reduce the debt include raising tax rates, reducing government spending, and reducing pensions of older Japanese. Those and all other proposed solutions prove to be fraught with difficulties. Thus, Japan’s government debt is a big problem that is widely acknowledged in Japan, that has been around for a long time, that has been continuing to get worse for many years, and for which no agreement on a solution is in sight.

  The other fundamental problems most often acknowledged by Japanese people themselves are the four linked issues of women’s roles, Japan’s low and declining birth rate, its declin
ing population size, and its aging population. Let’s start with the role of women.

  In theory, Japanese women and men have the same status. The Japanese constitution of 1947, drafted by the U.S. government of occupation and still in force today, contains a clause (drafted by an American woman) proclaiming gender equality. That draft clause was adopted over fierce Japanese government opposition, and some Japanese lawmakers still want to change the clause.

  In reality, Japanese women face many societal barriers to equality. Of course, the barriers that I’ll now describe also exist in countries other than Japan. But those barriers are stronger—and the gender gap in health, education, and participation in the workforce and in politics is greater—in Japan than in any other rich industrialized nation except South Korea. I speculate that that’s because Japan is the rich industrialized nation in which a woman’s role was until recently most subordinate and stereotyped. For instance, while walking in public, a traditional Japanese woman was expected to remain three steps behind her husband. For purposes of brevity I’ll describe the societal barriers to women as generalizations, but of course they vary within Japan’s population depending on location and age: e.g., stronger in rural areas than in Tokyo, and stronger for older than for younger Japanese.

  At home, the gender division within Japanese married couples is often referred to as the “marriage package.” An inefficient division of labor prevails, whereby a Japanese husband puts in the work hours of two people outside the house and thereby sacrifices time that could be spent with his children, while his wife stays at home and sacrifices the possibility of a fulfilling career. Employers expect employees (mostly men) to stay late in the office and to go out for drinks with one another after work. That makes it difficult for Japanese husbands to share household responsibilities with their wives even if they want to. Japanese husbands do less housework than do husbands in other rich industrialized nations: e.g., only about two-thirds as many hours per week as American husbands. Japanese husbands with working wives perform no more hours of housework than do husbands whose spouses are full-time housewives. Instead, it is predominately the wives who care for their children, their husbands, their own elderly parents, their husbands’ elderly parents—and manage the household finances in their remaining spare time. Many Japanese wives today swear that they will be the last generation of Japanese women to be saddled with those responsibilities.

  In the workplace, Japanese women have low participation and low pay. Participation declines steeply with increasing level of responsibility. Whereas women account for 49% of Japanese university students and 45% of entry-level job holders, they account for only 14% of university faculty positions (versus 33%–44% in the U.S., United Kingdom, Germany, and France), 11% of middle-level to senior management positions, 2% of positions on boards of directors, 1% of business executive committee members, and less than 1% of CEOs. At those higher levels Japan lags behind all major industrial countries except (again) South Korea. There are few women in Japanese politics, and Japan has never had a woman prime minister. Japan’s male/female pay differential for full-time employees is the third highest (exceeded only by South Korea and Estonia) among 35 rich industrial countries. A Japanese woman employee is paid on average only 73% of a man employee at the same level, compared to 85% for the average rich industrial country, ranging up to 94% for New Zealand. Work obstacles for women include the long work hours, the expectation of post-work employee socializing, and the problem of who will take care of the children if a working mother is expected to stay out socializing, and if her husband is also unavailable or unwilling.

  Child care is a big problem for working Japanese mothers. On paper, Japanese law guarantees women four weeks of maternity leave before and eight weeks after childbirth; some Japanese men are also entitled to paternity leave; and a 1992 law entitles parents to take one whole year of unpaid leave to raise a child if they so choose. In practice, virtually all Japanese fathers and most Japanese mothers don’t take that leave to which they are entitled. Instead, 70% of Japanese working women quit work upon the birth of their first child, and most of them don’t return to work for many years, if ever. While it is nominally illegal for a Japanese employer to pressure a mother into quitting work, Japanese mothers actually are pressured. Little child care is available to Japanese working mothers because of the lack of immigrant women to do private child care (see below), and because there are so few private or government child-care centers, unlike the situation in the U.S. and in Scandinavia, respectively. The widespread Japanese view is instead that a mother should stay home, care for her small children herself, and not work.

  The result is a dilemma for Japanese women in the workplace. On the one hand, many or most Japanese women want to work, and they also want to have children and to spend time with them. On the other hand, Japanese companies invest heavily in training an employee, expect to offer a lifetime job, and expect in return that the employee will work long hours and will remain for life. Companies are reluctant to hire and train women, because they may want to take off time to have children, may not want to work long hours, and may not return to work after giving birth to a child. Hence women tend not to be offered, and tend not to accept if offered, full-time high-level jobs with Japanese companies.

  Japan’s current prime minister, Shinzo Abe, is a conservative who formerly did not display interest in women’s issues. Recently, however, he reversed course and announced that he wanted to find ways of helping mothers return to work—many people suspect, not because of his suddenly developing a concern for women, but because of Japan’s shrinking population and hence shrinking workforce (more about that below). Half of Japanese people in general, and of Japanese university graduates in particular, are women. Hence underemployment of Japanese women constitutes for Japan the loss of half of its human capital. Abe proposed that working mothers should be able to take three years of maternity leave with the assurance of returning to their jobs, that the government expand public child-care centers, and that businesses receive financial incentives to hire women. But many Japanese women, including some of my university-educated Japanese women friends with overseas experience, are opposed to Abe’s proposal. They suspect that it is just one more government conspiracy to keep Japanese women at home!

  The next of Japan’s set of linked population problems is its low and declining birth rates. The Japanese recognize this problem’s seriousness, but they don’t know how to solve it.

  Low and dropping birth rates prevail throughout the First World. But Japan has nearly the world’s lowest birth rate: 7 births per year per 1,000 people, compared to 13 in the U.S., 19 averaged over the whole world, and more than 40 in some African countries. Furthermore, that already low birth rate in Japan is still declining. If in recent years one had linearly extrapolated the decline from year to year, one would have predicted that Japan’s birth rate would hit zero in the year 2017, at which point no more Japanese babies would be born! Obviously, things didn’t get that bad, but it’s true that Japan’s already very low birth rate is still declining.

  An alternative way of expressing births is by what’s called the total fertility rate: i.e., the total number of babies born to an average woman over her lifetime. For the whole world that number averages 2.5 babies; for the First World countries with the biggest economies, it varies between 1.3 and 2.0 babies (e.g., 1.9 for the U.S.). The number for Japan is only 1.27 babies, at the low end of the spectrum; South Korea and Poland are among the few countries with lower values. But the average number of babies that a woman has to bear in order for the population to remain stable—the so-called replacement rate—is slightly more than 2. Japan along with some other First World countries has an average total fertility rate below that replacement rate. For other First World countries, that’s not a problem, because immigration keeps the population size constant or even growing despite low fertility. However, Japan’s near-absence of immigration means that Japan’s population is actually declining, as we’ll d
iscuss.

  Part of the reason for Japan’s falling birth rate is that Japan’s age of first marriage has been rising: it’s now around 30 for both men and women. That means fewer pre-menopausal years in which a woman can conceive children. A bigger reason for the falling birth rate is that the rate of marriage itself (i.e., the number of marriages per 1,000 people per year) is falling rapidly in Japan. One might object that the marriage rate is also falling in most other developed countries without causing the catastrophic drop in the birth rate that Japan is experiencing, because so many births are to unwed mothers: 40% of all births in the U.S., 50% in France, and 66% in Iceland. But that mitigation doesn’t apply to Japan, where unwed mothers account for a negligible proportion of births: only 2%.

  Why are Japanese people increasingly avoiding getting married and having children? When surveyed about this question, Japanese give several reasons. One reason is economics: it’s cheaper and more comfortable to remain single and live at home with one’s parents than to move out, marry, and have to pay for one’s own apartment plus the expenses of children. Especially for women, marriage and motherhood can be economically catastrophic by making it difficult for them to obtain or retain a job. Another reason offered is the freedom of being single, a consideration especially for women who don’t want to end up shouldering the responsibility of the household, husband, child care, their own elderly parents, and their husband’s elderly parents. Still another reason is that many modern Japanese, both men and women in equal proportions, consider marriage “unnecessary” to a fulfilling life.