by Alan Weisman
And now it will have a low population to match, making it a laboratory for the question we all will face if we decide—or if nature decides for us—that to reduce human impact for our safety and survival, we must reduce the number of people on the planet. If we were any other species, as long as our numbers didn’t drop low enough to endanger our gene pool, bringing our population into a more compatible balance with the rest of nature would be sufficient. But we are more complicated than that. We gather into societies, some as small as our own families, some as large as nations or multinational corporations, that thrive by trading with each other. Unlike nesting birds or pods of dolphins, however, we are not content with merely thriving. We always want more.
The measure of nearly every economy that humans have designed has been defined by whether or not it grows. The exceptions—potlatch societies of the Pacific Northwest; co-op communities—may have much to teach us, but they are so rare as to prove the rule. The business news judges how healthy the economy is by whether housing starts rose or fell this month: Never mind that each new house pushes sprawl ever farther, chews up landscape, and requires more resources to provide plumbing, sewers, electricity, and roads. That house represents profit for developers and real estate brokers, and jobs for carpenters, masons, plumbers, electricians, painters, carpet layers, landscapers, paving crews, and furnishers. Maintenance during its lifespan will create even more jobs. And the economy will grow on.
So what happens if there are fewer of us, needing fewer homes and fewer things? What happens during the transition to a smaller society, with fewer consumers every year—and fewer laborers paying into welfare coffers to support a surplus of unproductive, needy elderly people?
And what happens if we actually reach some optimum number of humans who can harvest and recycle resources at a replenishable pace, so that we achieve equilibrium with the planet that supports us? To maintain such an ideal level would mean never growing beyond it.
Can we do that? Can we have prosperity without growth?
Japan has no choice but to become the first modern society to try.
“Paradoxically,” says Akihiko Matsutani, “our shrinking situation could end up being beneficial. We have to change our business model. That usually takes a long time, but we can’t wait. This is the moment we have to change.”
Matsutani, professor emeritus at one of Japan’s premier economics schools, the National Graduate Institute for Policy Studies, has been saying things like this for years. Until recently, he’s gotten scant attention: No one has wanted to hear that Japan’s economy was demographically doomed to downsize. But now, events 180 miles north of his Tokyo institute have abruptly forced the entire nation to reconsider living beyond its means.
The moment Matsutani refers to is the aftermath of a 9.0-magnitude earthquake on March 11, 2011, off the Tohoku Peninsula in northeastern Japan, which pushed a tidal wave over the sea barriers at the Fukushima Daiichi Nuclear Power Plant. Three reactors exploded and melted down, and everyone living in a fifty-mile radius of the damaged facility had to evacuate.
That fifty-mile radius included some of Japan’s richest farmland: until the disaster, Fukushima was known as the Kingdom of Fruits. A bunch of Fukushima grapes would sell for ¥2,500—over US$30—that is, until they vanished from the market because no one would buy them. The same for its sweet akatsuki peaches and its apples, cucumbers, and turnips.
The tragedy also caused Japanese to ask if it was wise to build nuclear plants near seismic faults and coastlines—a description that applied to most of the fifty-four atomic reactors that provided nearly one-third of Japan’s electricity. In the building where Matsutani has his office, months later elevators were still off because of post-Fukushima energy restrictions, as were the air-conditioning and the electric toilet seats with their heated bidets, so beloved in Japan.
Akihiko Matsutani is shocked by the terrible losses his country has sustained, but not surprised. “People who keep saying that Japan should be like France, which gets most of its power from nuclear energy, forget that France isn’t in an earthquake zone. But now that this accident has happened, we have an opportunity to do something positive.” That something is learning to live within its limits, which both Fukushima and the shrinking Japanese population are forcing them to do. “This will actually be good for Japan,” he insists.
Matsutani is the author of a book whose title makes progrowth economists shudder: Shrinking-Population Economics: Lessons from Japan, a copy of which sits on his uncluttered desk. On a blank piece of paper he sketches the iconic symbol of demography: a pyramid, which he divides into three sections. “In most countries, the tip of the pyramid represents the elderly. The middle”—he shades this portion with his pen—“is the active portion of the population, the labor force. The base, the biggest portion, is the young people. Babies, children, students.”
Then he flips the drawing upside down. “This is Japan. Fewer children. Lots of elderly.” He points to the shaded middle zone. “As more of these move up, we’ll have fewer workers to replace them.”
Recently, a research group at Tohoku University warned that in a thousand years, Japan’s childbearing will cease—statistically anyway. They posted a simulated “Child Population Web Clock” showing that every one hundred seconds, the number of Japanese children drops by one—they’re not dying, but growing up, and fewer babies are replacing them. At that rate, they conclude, “Japan would have only one child in May 3011. By the next year, therefore, there would be no children in Japan.”
These kinds of horror stories about Japan’s subreplacement fertility are nonsense, says Matsutani. Japan is certainly top-heavy with old people, and becoming more so. But once the age bubble bursts with the old, high-fertility generations dying off, subsequent generations will even out, and the pyramid will become a cube as the number of children will be closer to the numbers who are passing on. People won’t stop having babies, and if fertility readjusts toward two children per couple—a reasonable outcome in a less-crowded world—population would stabilize.
However, he warns, reshaping demographic geometry from triangular to rectangular in a country with such long life spans takes at least a century. Either way, stable or shrinking, the population would not be growing, which raises a big question:
What happens to the economy?
Traditional economics preaches perpetual growth as a self-evident truth, even though nothing, save God or the universe, can possibly be perpetual—and there’s some doubt about the universe. But assuming an ever-expanding economy were possible, there are only two ways to achieve it: keep inventing more new products (or new versions of old ones) and keep finding new consumers.
Being endlessly creative is hard. Being endlessly competitive to win all the customers works only as long as there are still more customers left—unless, of course, a growing population keeps giving birth to more new consumers. This is one of two reasons why most economists traditionally favor population growth. The other is bigger labor pools: the more workers competing for jobs, the less companies have to pay them.
Unfortunately for those economists—and for us, as long as the system works their way—on a finite planet, an economy dependent on constant growth is no more perpetual than a chain letter or pyramid scheme, which always needs more people buying in. Eventually, there aren’t any more, and everything collapses. Or the raw stuff to make whatever’s being sold grows scarce, and the substitutes aren’t as good, or they run out, too.
Akihiko Matsutani is convinced that his shrinking country can and will have a viable economy, because Japan has no other choice. But it isn’t as simple as fewer people needing fewer things. Although Matsutani agrees that a smaller population means less pressure on resources and land, he cautions that the transition to fewer people will place different strains on the environment.
“Suppose you have a sewage treatment plant for a million people,” he says. It’s an example he knows well; along with his economics degrees, he has
a doctorate in civil engineering. “Then suppose the population drops to nine hundred thousand. You can’t just remove 10 percent of the pipes. Even if population drops by half, you still have to maintain 100 percent of the infrastructure. That won’t be easy when we have fewer laborers.”
An economical alternative might be to abandon huge treatment facilities in favor of individual purification tanks for each house. “Centralized sewage treatment is probably better for the environment, but it will be impossible to maintain. So we may have to revise our standards, and accept a dirtier environment.”
But he’s encouraged that personal lifestyles need not suffer in a Japan with fewer people. A leaner economy, he says, will bring its own advantages.
“In the beginning, companies will try to save by cutting wages or workers, but they’ll soon realize that laborers will have become more valuable, and they’ll want to keep the ones they have. So lowering wages won’t work. What will work instead is higher pay, but fewer hours. Right now, we work long hours for lower pay. Laborers will be pleased to have more leisure time. Since World War II ended, we’ve been obsessed with gross domestic product. But GDP has no direct bearing on living standards in a shrinking population economy.”
The hope he sees is the chance to define prosperity by people’s quality of life rather than what money can buy. In this paradoxical nation, where the world’s most populous metropolitan area—Greater Tokyo, with 35 million people—coexists with the fastest-shrinking population, he sees a perfect opportunity for the country to decentralize.
“We’ll have to think in terms of smaller systems, not a big government taking care of everything with big infrastructure. Smaller cities will make more sense. When population grows, prosperity means going to Disneyland once a month, and buying too much and throwing away too much. When population shrinks, prosperity is going on picnics, or taking your children camping. You don’t throw things away—your values change from constant new things to things that last.”
What will inspire investors in a shrinking world? Before he started teaching, Matsutani spent twenty-seven years in Japan’s Finance Ministry. “Just like sewers, finance will get worse until we learn to adjust to a smaller scale. We will go to perpetual bonds—in a sense, we’re already doing it. Japan’s debt is trillions of yen. It’s impossible to repay, so we just pay the interest. Perpetual bonds would work like that. We won’t be as wealthy as when population was growing, but that doesn’t mean we can’t have profit. Total productivity will be less with fewer workers, but per-capita productivity won’t change. The number of workers drops 10 percent, so do sales, and so do profits. But per person, it all remains the same.”
In fact, something that traditional economists have ignored—especially those in Europe wringing their hands over declining populations—is that both Japan’s and Germany’s economies began recovering from a decade of slump and recession in the early years of the new millennium, at the same time their populations began to contract. By 2010, Germany had record economic growth, more than twice the rest of the European Union.
In Russia, precipitously dropping numbers predating even Japan’s have panicked economic advisors to the Kremlin. Russia’s birthrate began its descent with the 1991 collapse of communism and the loss of the Soviet Union’s cradle-to-grave assurances of work, education, and shelter. Add to that Russia’s high divorce rate, and since the USSR dissolved, Russia’s population has dropped by 5 million. But even more significant than low fertility is the grim state of Russian health. Russia’s incidence of syphilis is several hundred times higher than in western Europe. Its HIV rates are the world’s fastest growing; by 2020, up to 10 percent of the population could be infected. Cardiovascular deaths are at epidemic levels, and the incidence of mortal violence and accidents is a dozen times higher than Britain’s. Both heart disease and fatal injuries are linked to the Russian addiction to vodka, a national rate of alcoholism unmatched anywhere, which has only worsened since communism ended. Russia’s life expectancy is about the same as Pakistan’s, which is lower than most of Africa’s.
At the same time, Russia’s economy, fueled by its vast oil and gas reserves, has grown vigorously in the new millennium, resulting in the curious anomaly of Moscow, capital of the country with, until recently, the world’s fastest-falling population, having the world’s highest population of billionaires.2
Such numbers confound the conventional wisdom that having fewer people spells doom for robust economies. Nevertheless, Akihiko Matsutani’s book about how shrinking Japan can remain prosperous has attracted scant attention from his country’s financial circles and other economists.
“They’d rather translate American and European books about how to generate growth. They talk about rebuilding the fishing ports destroyed in the typhoon—except it will take up to twenty years to do that, and in twenty years only a quarter of the fishermen will still be alive, so three-fourths of the port facilities won’t be necessary. Such simple discussion isn’t taking place. People don’t want to accept that things they know have changed. Some will say, okay, we can let more immigrant labor in. But at this point, we would need 24 million immigrants by 2030 to maintain our workforce at today’s size. That won’t happen.”
What will happen, he says, is what’s already happening. Not just to Japan, but to the world. “World population is still growing, but agricultural output isn’t. Output from the seas is shrinking. Add those two together, and we get famines.”
He looks at his glass-fronted bookshelves, filled with copies of his book. “In the animal world, when population exceeds its limits, species start reducing. Probably that is what will happen to us humans. Maybe we’re lucky here in Japan, because we’re not waiting until disaster reduces our population.”
In the island city-state of Singapore, one of the world’s most developed nations with one of the world’s lowest birthrates—1.1 children per fertile woman—August 9 is celebrated as National Day, marking independence. In 2012, Mentos Singapore, a division of the multinational mint manufacturer, launched a promotion declaring the evening of August 9 to be “National Night”—during which, televised commercials urged, men should “raise the flag” and married couples should “go all the way for Singapore.” Singapore had already sweetened this call to patriotic pillow duty with the world’s most lavish baby bonuses: $4,000 apiece for a couple’s first two children, and $6,000 each for the third and fourth. The government also matches, dollar for dollar, parental contributions to a child’s savings account, up to $6,000 apiece for the first and second child, $12,000 for the third and fourth child, and $18,0003 for each child thereafter.
During the 1970s, Singapore’s government, fearing that the city-state would become overcrowded, had tried to convince everyone to “Stop at Two.” That succeeded so well that by the mid-1980s they were trying to reverse it, and have been ever since. But to no avail: not even the extravagant baby bribes have tempted Singaporeans to have more children.
The Mentos campaign, set to a rap song—“it’s National Night, so let’s make fireworks ignite, let’s make Singapore’s birthrate right”—would have had even less chance in Japan. Each year, not only the number of babies but the number of Japanese marriages drops, further depressing childbirth in a culture where having a child out of wedlock is almost unknown. The falling marriage rates are often attributed to the disappearance of assured lifetime employment, once a staple with Japanese corporations. Without that security, fewer are willing to risk starting a family. Government projections now assume that 36 percent of the current generation of young Japanese women will never have children.
On the eighth floor of an apartment tower in Takanawa, a posh central Tokyo neighborhood, Keiko, a thirty-five-year-old mother of a two-year-old daughter, greets her visitors. Two are friends who have brought their own daughters for a playdate; the third, who is unmarried, is a Spanish-language court interpreter (the accused are mainly Latin American drug mules). Keiko, round-faced with short dark hair, wears a gr
ay T-shirt, capri pants, and a platinum wedding ring; Nanako, her daughter, is a miniature of her mother.
It is a Monday afternoon; Keiko’s husband, an investment counselor at a finance company, left at 7:00 a.m. and won’t return until 10:00 p.m. Keiko also used to work there. They had been married ten years when Nanako was born. “We didn’t think we needed a child. We were having fun. Raising a kid is so much work, and none of my friends wanted the responsibility. But we decided to give our aging parents a grandchild.”
They have no regrets—nor any intention of having more, she says, hugging Nanako, who’s joined her on the charcoal gray couch. The apartment they own has maple floors and white shag rugs, but just two rooms, plus a compact kitchen. “It’s hard enough with three of us. The size of a house pretty much limits the number of children.” Most of her friends have just one. “A few have two. But more have none.”
She hands Nanako a rice ball from a bowl on the granite coffee table, sends her back to her playmates, and confesses the extreme form of birth control she and her husband use to assure that they don’t have another:
“Not having sex.”
It’s not as radical as it sounds, she says. “Frankly, Japanese people don’t have sex much anymore.”
That would definitely guarantee population decline. But surely there are other ways in Japan to prevent conception? “Of course,” says Junko, the court interpreter. “But not having sex is the most common. Women here don’t like Western medicine—I would never take pills, because of the side effects. And many women believe that an operation changes their hormones. Some use condoms, but young people don’t like to. So either they abort, or do without sex.”
“It’s more than that,” says Keiko. “Sex isn’t how to prove affection in a marriage. When we were dating, we needed to do it to confirm our love. But when people are married and become a family, they affirm their love just by living in the same house, eating the same food.”
