Obviously everyone in Japan and around the world, is still waiting to see what the full impact yesterday’s earthquake and ensuing tsunami will be. My heart goes out to those affected by the disaster. Given the shear size of both the quake and the tsunami I would say that it is a miracle there weren’t more casualties, except it wasn’t a miracle at all. Japan’s strict building codes did a huge amount to mitigate the disaster.

However, there are still a huge number of people who need help. Fortunately, there are many different ways you can do so. Before I get to them, I just want to give two brief reminders. First, please only give to registered charities. As sad as it sounds some people do try to take advantage of situations like this to exploit people’s good nature. Second, if at all possible please send money rather than other items. Charities generally speaking have a better idea what the people on the ground need. Not only can other items be useless, they can slowdown or even prevent the delivering of needed supplies. To understand this a little better please refer to the economist’s article, Too Much Of A Good Thing.

Now on how you can help today. I highly recommend you visit The Huffington Post’s How To Help Japan: Earthquake Relief Options page. They outline many great charities that you can give to today. However, the easiest option is to consider donating to your local Red Cross: US, Canada, UK, Australia and New Zealand.

The people of Japan need your help, so any monetary donation to a registered charity working on the relief effort will be appreciated.

I know it has been a really long time since I have posted anything. I still need to post the amazing pictures my wife took during our honeymoon in Japan almost 8 months ago. In the mean time here is a really great short film about the life of a salaryman:

You can find out a little more about Salaryman 6 at imdb.

Last month I got married and my wife and I decided to spend part of our honeymoon in Japan. This was the first time I had been back in Japan in almost 3 years and while most of it was the same a few things seemed different. So I decided to do, what many lazy bloggers do, and write a list of the similarities and differences between Japan today and the Japan I remember of 3 years ago.

First the things that were pretty much the same.

5. The Trains/Public Transportation

I was very happy to see that the trains still ran on time and that Japan still has some of the best public transportation available anywhere in the world.

4. Level Of Service

Overall, the level of service still seemed very high (with one or two notable exceptions). It still amazes me that I can get better service in a restaurant in Japan than almost anywhere else on earth and I don’t have to tip for it.

3. Number of Convenience Stores and Vending Machines

I was happy that I never had to walk more than a few hundred meters to find one or the other. This made buying beer, coffee and pocari sweat that much easier.

2. Getting Involved in Weird English Conversations

This is perhaps one of the things I remember most clearly about living in Japan 3 years ago. People often came up to me to practice their English. Until, this trip my weirdest experience was having Kennedy’s inauguration address recited to me outside Osaka Castle. This time my wife and I got roped into critiquing this old man’s English sentences in Kyoto. Some of the best included “He took one look at her and walked away” and “I hitched my horse to a post.” I am not sure when he was ever going to get a chance to use these but he seemed happy with our help.

1. The Smell Of Trains and Subways

Japan’s public transportation has a very unique smell which I don’t think I noticed when I was living there. However, I noticed it almost immediately after leaving the airport. It is not a bad smell just unique and it very quickly brought back many of my memories of Japan.

The Differences

5. The Smell of Sewage

It seemed to me that there was a far stronger smell of sewage in many of the Japanese cities we visited than I remember. I am not sure if it was just the time of year but there was some serious stink going on.

4. More Vacancies in Buildings And Emptier Restaurants

Although not immediately apparent I noticed that many buildings had signs looking for commercial tenants. These were mostly on the upper stories of buildings, but it seemed like there were more of them. Also, many restaurants (except the cheapest ones) that we visited seemed emptier than I would have thought they would be. I assume both of these are a result of the current global economic problems.

3. Extreme Variation Of Prices

Another difference I noticed was the extreme difference in prices for different things. For example, we managed to get a curry rice meal set with a salad and miso soup for 380 Yen each, which was cheaper than I remember being able find anywhere last time I was there. However, we also manged to pay 900 yen for two takeaway coffees at Tokyo station. Basically, the cheap was cheaper than I remember, but the expensive was more expensive.

2. Less Modern

Another thing I noticed about Japan was that it seemed less modern than I remember. Sure there are still all the neon lights but I also noticed rusting bridges, the large number of exposed overhead electrical wires and a fairly large amount of broken concrete. I don’t think it is actually that different from when I was living there but these issues were more evident to me this time. Also, the cell phones didn’t seem nearly as impressive as I remember.

1. More English

I came into contact with more people who seemed to be able to speak passable English than I remember being the case. This was really good since I had forgotten half of my already extremely meager Japanese. I am sure part of this seeming increase was the fact that we only visited large cities or tourist attractions; whereas I was living in a semi-rural area before.

However, one place I did notice a definite improvement was at the Toyoko Inns we stayed in. I had stayed in a few before and I did not come across any staff who I would say, spoke good English. However, this time every single Toyoko Inn had at least one person working who spoke decent English. It seems that they are trying harder to cater to foreign visitors, since there were a few staying at each one we visited.

Overall, Japan was more or less the same as I remember which is what you would expect after being away for only 3 years. Nevertheless, it was interesting to see how my memory compared to the actual experience. I am sure I will be back in Japan again at some point, but there are a few places I want to visit first.

The decision by the United States to drop atomic bombs on Hiroshima and Nagasaki at the end of World War II remains one of the most controversial topics in Japanese history. People both inside and outside of Japan continue to ask, were the bombings justified? As their 64th anniversary approaches and news this year revealing the existence of a double a-bomb survivor, I thought I would share my opinion on the subject.

To start, let’s review the main argument for and against using nuclear weapons in Japan in 1945. The main argument in support of the bombings is that they saved not only American lives but Japanese lives as well. The main argument against their use is the fact that the bombs were horrific weapons that largely targeted civilians.

These two arguments are not necessarily mutually exclusive or contradictory. For example, most people who think dropping the bombs was the right thing to do recognize the fact that the bombs were terrible weapons that did end up killing many civilians. However, they claim that the human cost of the bombings was the price that had to be paid to avoid the potentially far higher cost in lives that would have occurred had the US decided to invade the Japanese home islands.

This was my viewpoint prior to visiting Hiroshima and Nagasaki. But, after seeing the devastating impact of the bombs, I began to question my earlier beliefs. Was the desire to save lives the only factor when deciding to use the bomb? Did they have to drop two bombs so close together? Were there any other options? In searching for answers to these questions and other related questions I have come to change my opinion on the bombings.

The decision by the US to drop atomic bombs on Japan was based on three factors, only one of which is justifiable in my opinion. The first factor was the desire to save American lives, the second was revenge for the humiliation caused by the bombing of Pearl Harbor, and the third was to demonstrate and warn the Soviet Union of the power of the US military.

By bringing the war to an end quickly the US saved American lives. It may even have saved Japanese lives, but this depends on how long Japanese forces would have continued fighting once the Americans invaded. Estimates vary widely on how many Americans would have been wounded or killed in an invasion of Japan, but generally, they range from 1.2 to 4 million casualties – of which 250,000 to 1 million would have been fatalities.

As for the Japanese, it is estimated that anywhere from 5 to 10 million would have been killed during an invasion – assuming they resisted right until the bitter end. These estimates were largely based on the experience of Allied forces during the invasions of Iwo Jima (6,821 Americans killed compared to 18,300 Japanese deaths) and Okinawa (12,513 Allied deaths compared to 110,000 Japanese). Thus, if the estimate turned out to be true for the invasion of Japan as a whole, it would have been far higher than the estimated 220,000 killed by the bombs themselves.

Of course, saving Japanese lives was never really the goal of the bombs, but it has been used as a justification ever since. What we can say for sure is that the bombs did save American and Allied lives. This in my mind is a legitimate justification for using the bombs, but only if this was the only alternative. I will address this issue in greater detail below, but first let’s look quickly at the two other reasons why the US decided to drop the bombs.

The second reason I think the US decided to use nuclear weapons was revenge for the embarrassment at Pearl Harbor. The Japanese had launched a sneak attack against the US and they were going to get revenge for what was viewed as a cowardly action. I am not going to dwell too much on this issue, but I think American indignation at the attack is somewhat self-serving. First, this was not the first time Japan had launched a surprise attack, that honour goes to the attack by the Japanese against the Russians at the start of the Russo-Japanese war of 1904-1905. In that war, the Japanese victory was hailed as a great triumph and their innovative tactics were praised, so it should not have come as too much of a surprise that Japan would attempt something similar again.

Second, there are ongoing debates as to how much the US government and Roosevelt knew prior to the attack and the timing of the Japanese breaking off diplomatic negotiations. So, even though the attack on Pearl Harbor was technically difficult, it should not have come as a surprise that they would at least try to attack the America’s Pacific Fleet. However, the way Japan went about it ultimately shocked and galvanized American public support for the war. This also meant that there was not going to be a large initial public outcry over the use of the bomb.

In the end, revenge is not a legitimate justification for a decision-whether in times of peace or war. This is especially true if you claim (as the US did) that you are upholding higher values such as peace, justice, and democracy.

The final reason I think the US decided to drop the bombs was to demonstrate their power to the Soviet Union – their former ally and emerging rival. During the war with Japan, the US had already showed the power and range of the B-29 bomber, which were responsible (among other things) for the fire bombings of Tokyo on March 10th, 1945 which killed over 100,000 civilians. Incidentally, this is generally believed to be more than the immediate deaths from either Hiroshima and Nagasaki.

At the Potsdam Conference, which took place from July 16th to August 2nd, Truman revealed to Stalin that the US had a “powerful new weapon.” However, Stalin was not too surprised to hear about it, most likely because he had spies who had already informed him of the bomb’s existence. Nevertheless, the US wanted to show off the real-life power of the new weapon. The result were the bombings of Hiroshima on August 6th and Nagasaki on August 9th.

The timing of the bombs was also determined by the rapidly changing relationship between the US and USSR. On August 8th, 3 months after V-E day, the Soviet Union declared war on Japan. The US saw the situation that was developing in Europe and preferred not to face a similar situation in Japan. In the final days of the war, the USSR managed to invade south Sakhalin island, which Russia lost during the Russo-Japanese war. This was in addition to far greater gains achieved against the Japanese puppet state of Manchukuo and their protectorate in the northern part of the Korea peninsula.

The US feared that the Soviet Union would invade Hokkaido before they began their invasion of Kyushu. This meant that they not only needed to get Japan out of the war, but in a way that prevented possible Soviet land grabs. It just so happened that the a-bomb fulfilled both objectives. Even though I can see the logic of this from a purely strategic military viewpoint, I still don’t think this justifies the decision. In my mind, killing innocent civilians with a horrific bomb to serve geopolitical ends is not a legitimate justification, no matter how much sense it may make from a purely military point of view.

But of the three main factors leading to the ultimate decision, only one-dropping the bomb to limit casualties-was legitimate. The goal in any war is to achieve your objectives, while doing whatever possible to reduce casualties and deaths. The Americans accomplished this by using the bomb. But while this may have been a legitimate reason, I still don’t think that the way in which the bombings were carried out was justified because there were other alternatives.

The most powerful argument against using the a-bomb is the terrible nature of the weapon itself. I don’t think I need to go into much detail here, since I can’t do the topic justice. You should visit the memorials in Hiroshima and Nagasaki in person if you live or plan on visiting Japan. Alternatively, you can read accounts in books such as Hiroshima by John Hersey or visit websites about the bombs themselves such as: The Hiroshima Peace Memorial Museum, AtomicBombMuseum.org, and The Nagasaki City Site For Peace & The Bomb. After seeing and reading about the effects of the bomb, I am sure you will/already agree that such weapons are terrible and should ideally never have been used in the first place.

There were two plausible alternatives that the US should have at least attempted before ultimately deciding to drop the bomb. The first of these would have been to include two extra points in the Potsdam Declaration Defining The Terms Of Japanese Surrender issued on July 26th, 1945. First, it should have explicitly mentioned the successful test of a nuclear device on July 16th, 1945 and that if Japan did not surrender, another would be used against them. Second, the Potsdam Declaration should have assured the Japanese that the Emperor would be allowed to remain in power (which is what ultimately happened anyway). Keeping the Emperor in power was important not only as a way for the Japanese not to lose face, but also as a way to sell any peace plan to the public.

Realistically, I don’t think this would have been enough to end the war. Many people would disagree based on quotes from people like Eisenhower who stated in November 1963 that, ” [...] The Japanese were ready to surrender and it wasn’t necessary to hit them with that awful thing.” However, based on what I’ve read about Japanese wartime thinking, they would have assumed such a declaration was a lie designed to get them to surrender. Nevertheless, it should have been attempted for the sole reason that it may have worked and would have saved hundreds of thousands of lives.

But assuming the revised Potsdam Declaration did not succeed in ending the war, the second alternative would have been to drop a bomb on one of the many small uninhabited islands that surround Japan. Once the Japanese had observed the destruction, I would have given them one week to let the impact of destruction sink in before obligating them to decide whether to surrender.

This plan would have involved some risk. Obviously, telling the Japanese where the bomb was going to be dropped could potentially have allowed them to shoot down the plane (although the Americans could easily have picked a location where they clearly had air superiority). The second risk is what might have happened if the bomb did not go off. If that were to occur, the Japanese would have convinced themselves that the whole atomic bomb program was a hoax. Again, given the destructive nature of the bomb I think the risks were worth the price of saving civilian lives.

If the Japanese chose not to surrender – even after being told about the bomb and seeing its destructive power – then and only then would I have authorized its use on a Japanese city. This would have been the last of the three bombs originally built and would have meant that the US would have been unable to drop any more right away. But, the Japanese would not have known this and the US ended up in this position anyway after Nagasaki. At this point, I am sure the Japanese would have decided to surrender, albeit without the additional deaths of the second bomb.

Therefore, while I think dropping the bombs saved both American and Japanese lives (especially when compared to the likely cost of a full scale ground invasion), I don’t think the decision was justified because of the way in which it was carried out. Revenge for Pearl Harbor and a desire to show the Soviets who was boss in Asia caused the situation to unfold differently than it should have.

The fact that the US did not declare that they had the bomb before using it meant that the Japanese had no way of knowing about its existence. Thus, it came as big a surprise to Japan – just as Pearl Harbor did the for US. At, the very least, the Americans should have allowed more than 3 days to pass before using the second bomb. Its destructive power was unbelievable and I am sure this would have taken some time to sink in. Ideally, the US should have proceeded in a staged approach before ultimately using it against targets where it was widely known many civilians would be killed and injured.

Finally, I want to end with some general thoughts about the conduct of the Pacific War as a whole. I think Curtis LeMay’s statement on the conduct of the bombing of Japan as retold by Robert McNamara’s in the documentary the Fog of War sums up it best: “LeMay said, if we’d lost the war, we’d all have been prosecuted as war criminals. And I think he’s right. He, and I’d say I, were behaving as war criminals.” This quote specifically refers to the killing of civilians during the firebombing of Japanese cities in the spring of 1945. But, if the firebombings were considered war crimes, then using the horrific a-bomb should be as well. Japan started the war, but the a-bombs dropped on Hiroshima and Nagasaki won it for the Allies. As McNamara asked, “What makes it immoral if you lose, and not immoral if you win?”

The fact that, over six decades later, the decision and justifications for dropping the bombs on Hiroshima and Nagasaki continues to be debated shows that it remains a controversial topic. I have given my reasoning why I don’t think the US was justified in the way it went about dropping the bombs, but I recognize that you may not share my opinion. Therefore, I encourage you to leave your comments, either in support or against what I have said, below.

I finally got a chance to watch Departures (Okuribito) a few weeks ago and I highly recommend it. For those of you who haven’t seen it, Departures is about Daigo (Masahiro Motoki), a cellist in a Tokyo based orchestra, who loses his job and returns to his home town with his wife Mika (Ryoko Hirosue) to become an encoffineer. It was directed by Yojiro Takita. I won’t go into more plot details here because Wikipedia offers a pretty good summary.

Surprisingly, this is the first Japanese winner of the Academy Award For Best Foreign Language Film, since the award become permanent in 1956. It also upset Waltz with Bashir, which had widely been expected to win the award and is in my opinion a far more original movie. More surprisingly, Departures did extremely well at the Japanese box office, earning more than the equivalent of $60 million USD. The reason this second point is surprising is due to the subject matter of the film itself.

Death is always a difficult subject to deal with, no matter your racial or cultural background. And from my experience, this is epically true in Japan. Departures shows in great detail, the ceremony that can go into Japanese funeral arrangements. For those off you who don’t know, ceremonies typically include (among many other things) putting chopsticks straight up in rice, which is why you should never do this at a restaurant because it is a reminder of funerals and death.

Moreover, people involved in the funeral industry are viewed as being unclean by Japanese society at large. Traditionally, this meant that people performing these tasks were separated from the rest of Japanese society and are collectively known as the the Burakumin. In the past, the Burakumin faced extreme discrimination in all aspects of their lives. This officially came to an end with the Meiji restoration, but even today, people from Burakumin backgrounds still face informal discrimination in the workplace and can find it more difficult to find marriage partners.

Departures touches on the issue of the taboo of performing funerals, but does not deal (at least as far as I could tell) with how this has related to the plight of the Burakumin. However, the fact that any Japanese movie, especially one with as much commercial success as Departures, has managed to tackle the issue of death and funerals head on is still impressive. More impressive still is the fact that it manages to do so with both tenderness and humour at the same time.

This is largely accomplished by the great cast who really make their characters come to life and feel totally real and believable. The real standout, besides Masahiro Motoki, is Tsutomu Yamazaki who plays Daigo’s boss Shoei Sasaki. He comes across as being both mournful and humours often in the same scene and is perfectly cast as a fatherly figure for Daigo.

The other major highlight of the movie is its music and scenery. As you would expect, given that Daigo is cellist, there is a lot of cello music played throughout. I found it worked really well with the film as a whole because it can be both sad and uplifting depending on how it is played. The scenery is just beautiful and is a good reminder that most of Japan is not big cities, but rugged countryside.

The only real negative thing I have to say about the movie is that some of the character realizations and conversions seemed a bit too perfectly planned. For me it made the movie a little predictable, but doesn’t detract anything from the many positives of the movie. Overall, I highly recommend you go see or at least rent Departures if you have the chance.

Still not sure? Then watch the trailer.

Since my last 3 posts were somewhat serious, I thought I would lighten things up with a random movie trailer for the Japanese remake of Sideways. I have heard about Japanese movies being remade for Hollywood, but never the other way around. Does anyone know how common this is in Japan?

Now just to warn you the trailer is entirely in Japanese (no subtitles), but if you have seen the original you can probably follow it.

For more on the remake please see:
Sideways (2009) @ IMDB
The Official Website

This is the final part of three part series. You can read part 1 here and part 2 here.

In the first two parts this article, I have written as if Japan’s demographic decline is a given, which of course it is not. Essentially, Japan has 3 potential options to solve this issue. The first is to do nothing and try to mange the decline as best as possible. The second is to allow mass migration to Japan. This would the easiest and fastest option (and the one I would personally recommend) but I don’t think this is a likely option given the mood of the Japanese society. This leaves rapidly increasing the birthrate back to replacement level.

Since I think option 1 is the most likely outcome but option 3 is the most desirable (since I do not foresee mass immigration becoming a politically viable option anytime soon), I will give recommendations on what should be done now to deal with population decline and how to move towards increasing the birthrate.

The first thing that needs to be done in Japan is to increase the age at which retirement benefits start and move away from mandatory retirement. It makes absolutely no sense for workers in one of the longest lived and healthiest workforces in the world to be forced to retire at 60 or 65 whether they want to or not. This is not to say that people can’t or shouldn’t still retire, but just that there is no longer really a need to do so at 65.

The second thing to be addressed is defense policy. Japan should keep its pacifist constitution and refrain as much as possible from foreign entanglements. Japan’s low defense burden has been a blessing to its economy despite what some politicians would have people believe. It would be insane at this point for Japan to start playing a more active military role in the world when it can least afford to do so.

The third thing that needs to be done is quickly start balancing the budget. Japan’s debt burden is far too large already and if it is not fixed very soon it could spell economic disaster. Unfortunately, this will almost certainly mean higher taxes, but this could be offset somewhat if they increase the age at which people get retirement benefits and would allow workers to continue working longer. It will also require an end or at least a large reduction in subsides to agriculture and industry. The longer the Japanese government waits, the more painful these changes are going to be when they are made.

Finally, on the topic of increasing the birthrate back to replacement level. Even if this were to happen tomorrow it would still not fix the problem. It will take at least 20 years for those born today to start entering the workforce. But that doesn’t help us with getting back to replacement level. Japan is by no means the only country to be facing this problem; it is just the most extreme example.

The only way things are going to change is if Japanese society changes – taking care of kids has to become a more equal burden. Basically, men will have to do more to take care of kids or the government will have to provide options for taking care of kids. Essentially, Japanese women shouldn’t be punished for choosing to have children. More egalitarian Western societies tend to have higher birthrates compared to more male dominated ones.

A more egalitarian society would also have another hugely important benefit; it would allow more women to enter the workforce. Increasing female participation in the workforce is critically important if Japan wants to avoid the worst effects of a shrinking workforce. Essentially, more women working would offset some (but not all) of the decline in workers as well as increasing the tax base. This is true whether or not Japan is able to bring its fertility rate back up to replacement level.

So there we have it, the demographic issues facing Japan are its biggest problem by the simple fact that they touch on almost all other policy areas, from economic growth and public debt, to things such as defense policy and even gender politics. All of them have or will be impacted by Japan’s aging and shrinking population.

As I mentioned earlier the easiest, fastest and (in my opinion) best option to solve the crisis would be to allow large scale immigration to Japan, even if it were only a temporary measure until it could get its birthrate back to replacement level. However, since I don’t think this will happen, Japan is left with many difficult tasks ahead. It is going to have to become ever more automated, shifting resources away from labour and into machines and robots, while also providing retirement benefits to an ever increasing group of people, all while (hopefully) not adding too much to its debt.

Will Japan succeed? Only time will tell, but given what they have manged to overcome in the last 200 years, I would be somewhat reluctant to bet against them.

This is the second part of a three part series. Read part 1 here. or skip ahead to part 3 here.

The first problem with Japan’s shrinking and aging population is the actual structure of the population. At the end of World War II, Japan (like the much of the rest of the world) experienced a baby boom. This meant that during the miracle years of the late 1950s and early 1960s many, many children were born. However, as I mentioned in the first part of this article, the fertility rate began to fall, permanently falling below replacement level in 1975.

In the short term, this posed no problem for Japan’s economy. Those born during the miracle years entered the workforce during the 1970s and the bubble years of the 1980s. Thus, most of the Japanese baby boomers began working when things like lifetime employment actually meant something in Japan. Those who lost their jobs or failed to find jobs during the “lost decade” (really two now) were the younger workers born at the end of 1960s and into the 1970s.

At the time, this was viewed as a temporary measure; younger workers would enjoy lifetime employment once the economy picked back up again. But on the whole, this has not happened and during this time, the baby boomers have gotten older and older and closer and closer to retirement.

Now we are left with the situation as it exists today. Japan’s workforce one of the most productive in the whole world, now faces a tidal wave of retirement among older workers – many of whom are able to keep working but will be forced out due to the mandatory retirement packages many companies have. These workers will no longer be contributing to the economy, unless they can find alternative employment options.

Worse still, is the fact that younger workers will have to pay for the increased costs for government programs such as health care and pensions due to the aging population. Moreover, both of these will be extremely costly due to the longevity of the average Japanese citizen. The problem is that these younger workers do not have the money to pay for these programs, since they have largely been denied the golden careers of their parents. Those careers assumed lifetime employment with pay increases based on seniority.

Making things even more difficult is the fact that the ratio of workers to retirees is going to decrease, due both to the retirement of the baby bloomers and the fact that not enough babies were born after 1975 to keep the size of the workforce stable. Some projections see the ratio falling to 1.4 workers for every retiree by as early as 2020. So what we are left with is a system where there are too few workers, making too little money to realistically be able support everyone.

Thus far, Japan has escaped dealing with this issue largely by borrowing money (admittedly mostly from its own people) to finance various attempts to revive the economy after the bubble burst in the early 1990s. But this option is quickly becoming less viable. Japan’s debt to GDP ratio stands today at a staggering 170% and may rise to 200% by the end of next year due to fiscal stimulus packages. As Japan’s population shrinks, the burden of the debt that falls on each person will increase. And since Japan’s population is aging even faster than it is shrinking, the share on each worker is increasing at an even faster rate.

At some point, there will have to be a day of reckoning. Right now the debt servicing costs (interest paid on the debt) are manageable largely due to the fact that interest rates in Japan have been incredibly low for a long time. This makes it seem as though things are okay. But just like a low teaser rate for a credit card, the interest rate on Japan’s debt has no where to go but up. And the fact that they keep pilling it on means debt servicing costs are going to eat up more and more of the government’s revenue.

So we have now seen that Japan faces rising costs from an aging population due to things such as increases in the number of pensions and an increase in the cost of providing health care at exactly at the same time it can least afford it, due to its ever mounting debt burden. However, these are not the only problems an aging and shrinking workforce creates. The overall Japanese economy will find it increasingly difficult to even stay the same size, let alone grow.

The most important part of most economies is the value of the work performed in it. Often, countries are compared on the basis of GDP per capita, which just takes the size of an economy and divides it by its total population. A more accurate measure though it output per worker, since these are the people actually doing the work. So the most important part of any economy is the sum of all the output created by each worker.

Thus broadly speaking, if there are fewer workers then that means that means each one has to produce more value just to keep the total size of the economy the same. Now for a long time, Japan didn’t have to worry too much about this – it had a growing workforce that was able to become more efficient and thus produce an ever greater amount per worker. This is why it went from total devastation at the end of World War II to the world’s number 2 economy in less than 2 generations.

However, the Japanese economy can now no longer rely one of those two pillars. Economic growth going forward has to come from increasing productivity. Moreover, for the economy as a whole to grow, the increase in productivity has to be greater than the decrease in size of the working population. Whether or not Japan will be able to do this remains to be seen.

What will have to happen for this to succeed in the long run is a massive shift in the labour-capital ratio. The labour-capital ratio is an economic term that simply refers to how much labour and capital (machinery, tools etc.) you need to produce something. For example, say you want to produce 100 t-shirts. If labour was really abundant and hence cheap, maybe you would hire 100 people with just a few sewing needles and thread to produce your shirts. However, if labour is scarce (read expensive) it may be cheaper just to hire 1 worker to use a t-shirt producing machine to do the same job.

So what Japan has to do is constantly shift production, by using less labour to using more capital. This is part of the reason why Japan has been a leader in automation and why Japan has by far the largest number of robots. Robots are a perfect example of shifting work from person to a machine. However, the problem is with today’s technology is you can only do this up to a point. It is every easy to have an ATM give you money versus a bank teller, but it is a lot more difficult to create a robot doctor.

Thus, the industries in Japan that will be the hardest hit by the demographic shift are those that are the most dependent on cheap labour with no easy automated replacements.

Finally, I have so far only focused on the impact Japan’s aging and shrinking population will have on economic matters, but I should also point out that this will in turn impact on other factors. As one example, Japan’s political and military clout in the world will likely further diminish.

For the size of its economy Japan has played a disproportionately small role in world affairs in the post World War II era. Part of this is due to its pacifist constitution which forbids overseas military engagements. This has also meant a very low burden of military spending relative to GDP for Japan.

However, as the memories of World War II have begun to fade (at least in Japan), many would like to see it play a more active role in the world. This is somewhat ironic given that Japan is going to be less and less able to do so. First, of all a smaller population means there are fewer people who can potentially join the military. Second, China will soon overshadow Japan in the size of its economy just as it does now in the size of its population. This in turn limits Japan’s ability to become even a regional player let alone a global one.

By 2050, Japan will only be the world’s 17th most populous nation, down from 10th today and 5th in 1950. Moreover, its economy will most likely be smaller than China’s, India’s and remain behind that of the the United States. Therefore, its military will not be able to grow due to both population and economic constraints.

Japan’s aging and shrinking population poses a huge risk to the economy and thus what priorities the Japanese government is able to pursue. However, you may still be thinking that the potentially positive environmental impact may outweigh the enormous costs imposed by the shifting demographic structure of Japan.

While I think it is pretty hard to dispute the fact that having 27 million fewer people will mean an overall smaller impact on the environment, I think the decrease will be somewhat less than one might originally think. Japan’s population density in many ways helps it. All sorts of mass transit options are available at relatively affordable prices (certainly compared to driving). However, as the population decreases, density will also decrease and thus the price of mass transit will either have to increase, or, they will have to decrease service (or most likely a combination of both). This will most likely cause a shift away from mass transit towards more people driving cars.

Moreover, fewer people likely means that land prices will decrease. This in turn means people may opt for bigger apartments or houses. This means higher heating costs in winter and more air conditioning use in summer. Finally, the reduced environmental impact coming from Japan will pale in comparison to the vast increase in pollution that will come from India and China. In fact, the CO2 output per Japanese citizen is half that of an American, so we would be better off having fewer Americans than fewer Japanese from an environmental point of view.

In the final section I will address what could and should be done to solve some of these problems. Read part 3 here or read part 1 here.

This is the first of a three part series.

If I were to ask you what is the single biggest problem facing Japan today, what would you say? If you answered the current economic meltdown, Japan’s ballooning public debt, the rise of China or the threat from North Korea, you are way off. While, these are certainly extremely important issues and concerns for Japan, they pale in comparison to the real crisis it is now facing: that of demography.

Now this may seem like an hyperbole to you at first, but I am going to show you why Japan’s demographic structure – and specifically its aging and shrinking population – is by far the most important issue it now faces. I will demonstrate this by looking at a number of different issues including public debt, economic growth and international reputation. Finally, I will examine what, if anything, can be done about the current situation.

However, before I continue I think it would be useful to look at a few numbers to get an idea of the magnitude of the problem. According to the Japanese government’s statistics bureau, Japan’s population peaked in 2006 with 127,771,000 people. Since that time it has shrunk, with the UN estimating that by the end of next year Japan’s population will have fallen to just under 127 million people. This represents a loss of over 700,000 people in just 4 years.

If the current trend continues, the UN’s median variant estimate is that Japan’s population will fall to just over 100 million people by 2050, a loss of about 27 million people from its peak in 2006. To put that in some perspective, this is 5 million more people than currently live in the whole Kansai region of Japan. Or, to put this in a historical perspective, it means that by mid-century Japan will have roughly the same population it did in 1970.

Even more startling than this decline, though, is the decline in the size of the working age population (15-64 years of age) due to Japan’s aging population. Between 1996 and 2006 (the latest figures I could find), the size of the traditional working age population declined 3.4% – foreshadowing the decline in overall population that is now occurring. Worse still, if labour force participation rates remain the same for men and women, the total labour force will shrink 20% by 2030. Thus, Japan’s workforce is shrinking at an even faster rate that its population as a whole.

As you can see the numbers are large, so how did this happen? The answer is actually quite simple and has been know for a long time. After 1975, the total fertility rate for Japanese women dropped below 2.1; the replacement level needed to keep the population stable. And despite small recent increases (to 1.37 in 2008) it has stayed well below that level for the past 35 years. With little net immigration, it was inevitable for the population to start shrinking at some point.

Alright, so we have established that Japan’s population is aging and shrinking, so what? In some ways, a shrinking population might be good for Japan. It could mean a smaller environmental impact or more space for individual Japanese citizens. While these benefits may indeed occur with a smaller population, I hope to show that the downsides will dwarf these potential benefits in part 2 of my article.

To read part 2 please click here.

This Sunday I am going to be running a half-marathon here in Ottawa which I have been training for since the start of the year. It is going to be a huge event, with about 10,000 runners expected to compete. But, I bet there is not going to be anything like this at the finish line:

This video was taken at the finish line of the 2007 Tokyo Marathon. I really like Taiko drumming and I think it would be an amazing way to end any race. If I ever do another full marathon it will be this one.

For more information please use the following links:
Tokyo Marathon Homepage
Taiko @ Wikipedia