AHC: Japanese Economy doesn't stop growing

In the 1980's during the Japanese Economic Miracle, some thought that Japan would become the second world superpower, and some hopefuls even thought that Japan would surpass the US in terms of economy. While that might be a stretch, I have a challenge. Prevent the 1991 Japanese Economic Crash and have the Japanese Economy keep growing, thus tremendously increasing Japan's influence and making them the firm #2 most powerful country in the world after the United States.
 
In a short run (avoid the Crash, or better, transform OTL Crash in a more normal downturn), BOJ should have started to act by mid-1987 in order to deflate the huge asset bubble that was on formation. In OTL BOJ expressed worries about a overheated economy in 1987 but took little action, especially after the 1987 Black Monday. By a tightening of the monetary policy and maybe parallel actions to control speculation and predatory lending by Japanese banks, maybe the 1991 Crash would become a more normal recession, for which Japan could be back on tracks by 1993 - 1994, somewhat similar to OTL US.
For the long run (the Japanese Lost Decades), major topics would be needed to be touched, like the emergence of China as a major Asian competitor, the comfy and dangerous connections between Japanese banks and its corporate conglomerates, which filled the banks with billions of Non Performing Loans, which turned such banks in zombies and a kind of tech gap that started to emerge by the late 1990s and endures until today, when Japan wasn't able to create its equivalent of Internet-focused companies like Google, Apple or even Alibaba....
 

trurle

Banned
In the 1980's during the Japanese Economic Miracle, some thought that Japan would become the second world superpower, and some hopefuls even thought that Japan would surpass the US in terms of economy. While that might be a stretch, I have a challenge. Prevent the 1991 Japanese Economic Crash and have the Japanese Economy keep growing, thus tremendously increasing Japan's influence and making them the firm #2 most powerful country in the world after the United States.
The continued growth would require increased worker`s productivity or exponential growth of workforce.
Increase of productivity has become difficult as infrastructure companies (including transportation) has grown increasingly lucrative and monopolistic (hence ineffective), stifling the growth. Forced breaking of Japan Railways in 1987 was too little and too late. Also archaic banking system which survived to today in form of numerous "zombie banks" did not help.
Regarding growth of workforce, this was already problematic by 1991, as birth rates has already started to plummet since 1974, thanks mostly to stifling regulations related to housing. Many housings built before 1970 were actually made illegal by new safety-based rules. Actually Japanese stagnation is well coincident with the first drops in admissions to career positions. Japanese politics did again too little to import skilled workers, a debate which linger to 2018 at least.

Therefore, for longer economic growth, i propose following:
1) Earlier dissolution of JR and Japan Post.
2) No government support for ailing banks
3) Prevention of the implementation of strict safety codes regarding housings and factory building. Will be a lot of excess deaths, but hundreds times more excess births too.
4) Less of nature conservation, more of forest plantations (to drive down construction material costs a bit)
5) Larger inheritance tax and land tax revised to speed turnover of land lots (to build higher-density cities, industrial zones and reduce road transportation overhead). Also, larger tax on parking lots based on footprint area, promoting high-density city layouts.
6) Promotion of wide-scale immigration, allowing newcomers to compete in all sectors and keep wages low.
7) More reliance on nuclear energy, combined with more sensible power plant site selection (this is related to (5)). Growing economy does mean growing power consumption, while oil-fired plants generally have much more air pollution problems.
 
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The continued growth would require increased worker`s productivity or exponential growth of workforce.

Japan's labour productivity has grown quite well. Check out these figures from the OEDC on GDP produced per capita.

I totally agree about Japan needing more population growth for the economy to continue its rise. Your point about housing is very interesting. Do you know of any papers where the state of Japan's housing and population growth is examined in more detail?

fasquardon
 

trurle

Banned
I totally agree about Japan needing more population growth for the economy to continue its rise. Your point about housing is very interesting. Do you know of any papers where the state of Japan's housing and population growth is examined in more detail?

fasquardon
It is more like personal experience. You can see that abandoned properties which became illegal or non-insurable. You can even encounter some regulation-driven technological regress like disused personal monorails and cablecars at former hillside properties, and pattern is different from simply countryside flight i seen in other countries in that the abandoned properties are at more urban settings. Low turnover of real estate due low inheritance tax is mixing here too though.

https://www.japantimes.co.jp/news/2...ell-bargains-opportunity-knocks/#.XBAZPzj7T-k
 

RousseauX

Donor
In the 1980's during the Japanese Economic Miracle, some thought that Japan would become the second world superpower, and some hopefuls even thought that Japan would surpass the US in terms of economy. While that might be a stretch, I have a challenge. Prevent the 1991 Japanese Economic Crash and have the Japanese Economy keep growing, thus tremendously increasing Japan's influence and making them the firm #2 most powerful country in the world after the United States.
there's a cap on how much your economy can grow very fast because at any given time there's technological limitations on how much a person can produce, Japan's current per capita income is around 2/3 of the US. And the US is an exceptionally productive economy. So at most you are looking at a Japan with an economy roughly 1/3 larger than it current is.
 

RousseauX

Donor
In a short run (avoid the Crash, or better, transform OTL Crash in a more normal downturn), BOJ should have started to act by mid-1987 in order to deflate the huge asset bubble that was on formation. In OTL BOJ expressed worries about a overheated economy in 1987 but took little action, especially after the 1987 Black Monday. By a tightening of the monetary policy and maybe parallel actions to control speculation and predatory lending by Japanese banks, maybe the 1991 Crash would become a more normal recession, for which Japan could be back on tracks by 1993 - 1994, somewhat similar to OTL US.
For the long run (the Japanese Lost Decades), major topics would be needed to be touched, like the emergence of China as a major Asian competitor, the comfy and dangerous connections between Japanese banks and its corporate conglomerates, which filled the banks with billions of Non Performing Loans, which turned such banks in zombies and a kind of tech gap that started to emerge by the late 1990s and endures until today, when Japan wasn't able to create its equivalent of Internet-focused companies like Google, Apple or even Alibaba....
Japan is currently the world's 3rd largest economy if you abort the rise of China Japan -would- be the world's 2nd biggest
 

RousseauX

Donor
The continued growth would require increased worker`s productivity or exponential growth of workforce.
Increase of productivity has become difficult as infrastructure companies (including transportation) has grown increasingly lucrative and monopolistic (hence ineffective), stifling the growth. Forced breaking of Japan Railways in 1987 was too little and too late. Also archaic banking system which survived to today in form of numerous "zombie banks" did not help.
Regarding growth of workforce, this was already problematic by 1991, as birth rates has already started to plummet since 1974, thanks mostly to stifling regulations related to housing. Many housings built before 1970 were actually made illegal by new safety-based rules. Actually Japanese stagnation is well coincident with the first drops in admissions to career positions. Japanese politics did again too little to import skilled workers, a debate which linger to 2018 at least.

Therefore, for longer economic growth, i propose following:
1) Earlier dissolution of JR and Japan Post.
2) No government support for ailing banks
3) Prevention of the implementation of strict safety codes regarding housings and factory building. Will be a lot of excess deaths, but hundreds times more excess births too.
4) Less of nature conservation, more of forest plantations (to drive down construction material costs a bit)
5) Larger inheritance tax and land tax revised to speed turnover of land lots (to build higher-density cities, industrial zones and reduce road transportation overhead). Also, larger tax on parking lots based on footprint area, promoting high-density city layouts.
6) Promotion of wide-scale immigration, allowing newcomers to compete in all sectors and keep wages low.
7) More reliance on nuclear energy, combined with more sensible power plant site selection (this is related to (5)). Growing economy does mean growing power consumption, while oil-fired plants generally have much more air pollution problems.

Housing policy might be a part of it, but demographic transition (declining fertility rates as country gets richer) is a thing all across Europe and Americas too (only cancelled out by immigration in the latter), Japan actually has higher fertility rate than Italy. As income per capita increases fertility rate drops.


6) Promotion of wide-scale immigration, allowing newcomers to compete in all sectors and keep wages low.
the problem with the logic of this is that lower wages probably means lower income per capita, maybe population is higher, but that's offset by lower per capita income.

The ability of japanese society to absorb immigrants is....shall we say questionable.
 

trurle

Banned
Housing policy might be a part of it, but demographic transition (declining fertility rates as country gets richer) is a thing all across Europe and Americas too (only cancelled out by immigration in the latter), Japan actually has higher fertility rate than Italy. As income per capita increases fertility rate drops.
Yes, it was very high social pressure to keep 3 kids per family. Therefore, then demographic transition has happened in 1974, it was pretty abrupt because the families were already stressed.

the problem with the logic of this is that lower wages probably means lower income per capita, maybe population is higher, but that's offset by lower per capita income.
Yes, for domestic consumption driven economics low income per capita stifles economic growth. For processing (import/export) economics like Japan this consideration is less relevant.

The ability of japanese society to absorb immigrants is....shall we say questionable.
I would rephrase statement as "questionable Japanese willingness to admit immigrants". Even internal migrants as happened in the aftermath of WWII (significant fraction of internal migrants was driven off to South America as result of government policies post WWII). The average Japanese have an unremarkable xenophobia levels, but government policies were quite bizarre in last century, do not have an idea why. Some Malthusian-related meme may be?
 
Other relevant item is that, IMHO, Japan lost a bit of traction to move to a Post-Industrial economy (e.g: Dot.Com). Although one of most technological countries in the world and maybe the second soft power in the world (manga, anime, japanese cuisine etc), seems that Japan never really got the Internet train. Why we never heard about a Japanese Yahoo (90s), Google, Alibaba, WeChat, WhatsApp, Lenovo ou Apple is almost a mystery to me....any thoughts?
 

trurle

Banned
Other relevant item is that, IMHO, Japan lost a bit of traction to move to a Post-Industrial economy (e.g: Dot.Com). Although one of most technological countries in the world and maybe the second soft power in the world (manga, anime, japanese cuisine etc), seems that Japan never really got the Internet train. Why we never heard about a Japanese Yahoo (90s), Google, Alibaba, WeChat, WhatsApp, Lenovo ou Apple is almost a mystery to me....any thoughts?
Japan was never in the forefront of Internet development, mostly because of quasi-underground early internet societies been shunned in Japan. Most notably, the Bitcoin. Although likely invented by men of Japanese descent, the inventor never publicly endorsed his authorship, probably because that internet-related invention was considered bad for social image.
 
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Other relevant item is that, IMHO, Japan lost a bit of traction to move to a Post-Industrial economy (e.g: Dot.Com). Although one of most technological countries in the world and maybe the second soft power in the world (manga, anime, japanese cuisine etc), seems that Japan never really got the Internet train. Why we never heard about a Japanese Yahoo (90s), Google, Alibaba, WeChat, WhatsApp, Lenovo ou Apple is almost a mystery to me....any thoughts?
There was a thread on here that dealt with Japan's issues involving the internet. Pretty much computers passed them by (Japanese universities are notorious for lack of internet hookup): businesses still use paper filing vs databases, computer classes are not a priority, native habits and cultural realities (Japan outside the cities is VERY rural), etc. I wish I could find the thread. It was very informative regarding Japan's computer issues.

Side-fact: South Korea became obsessed with pc gaming due to a distrust for Japan who was the predominant console maker.

Edit: Found the thread.
 
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Misread as Touhou. Zun does have a similar fascination with regurgitating myth to Disney corporation.

Not sure about the effects of Reimu beating up a folk-tale-heroine before a tea party.

Incidentally the role of the “other” world as disreputable may have a role in the limited uptake of software production in Japan. While jargon-bofh-“hacker culture” has staked a mythic claim to centrality that belies corporate code 1940-2000; hacker cultures were given a free reign in culturally safe spaces in the west. Go over there and make us a Unix. I’m not sure Japan can sustain that. It seems like how cultural permissiveness works is important for the interface between University, start up, corporate and “new economy” corporate in the West. USENET was more than the comp. hierarchy.

Economic production in Japan is too serious a business for maid cafes or cat image macros. Until they’re completely sanitised. In comparison a “permitted opposition” is more readily incorporated into US economic production. Perhaps due to 70s counter culture. Not that suitless offices are any less dysfunctional than suited, but the heroic hacker corporation mythology seems common to the US. Not so to Japan. Whither Sony’s permitted opposition?
 
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