Monday, December 27, 2010

On Spike Japan

Spike Japan, maintained by Tokyo blogger Richard Hendy, is one of the more interesting blogs out there, certainly among the more original blogs taking a look at the intersection of demographics with economics. Documenting his travels to areas of Japan outside of metropoli like Tokyo in acute essays and well-chosen photos, places that are slowly (or quickly) falling apart owing to a combination of two decades of slow-to-no economic growth and ever accelerating depopulation, Hendy got some international attention via this article from The Guardian written by Chris Michael earlier. How did he start? He describes Spike Japan's genesis in his introductory essay "Down the benjo: The ruin/nation of Japan".

It may come as a shock to almost all of you living outside of Japan, and to some of you living in the center of its big cities, that as we approach the summer of 2009, swathes of the country are in ruins. It came as a shock to me, too, I have to confess, having lived for almost all of the last decade in the bubble of central Tokyo and only venturing outside occasionally to get to the airport, nearby beaches, and old friends in the mountains.

As the financial results came in for Japanese companies for the last quarter of 2008, in late January and early February, they were suggestive of a complete cessation of activity in certain sectors of the economy. My interest in what happened outside of the bubble I live in was only really piqued, though, by a report in the Financial Times that many of the Brazilian emigrants to Oizumi, the town in Japan with the highest percentage of such residents, were ready to pack for Sao Paolo. I went out to investigate and was fascinated and amazed by the combination of immigration, industry, bleakness, and normality. A series of e-mails I had anyway been writing to a friend gained traction from this visit, and developed into a series titled “Down the benjo”; “benjo” is a no longer particularly polite Japanese word for “bog” or “john”. I owe inspiration for the title from a reference early in the year by Willem Buiter, Professor of European Political Economy at the London School of Economics, on his maverecon blog at the Financial Times, to the Icelandic economy having been flushed “down the snyrting”. Much the same, it struck me when I read his post back in January, was happening to the Japanese economy.

The visit to Oizumi led to another, this time to Hitachi, the home of the multinational conglomerate of the same name, which prompted a longer e-mail essay, which in turn prompted a ramble down a recently abandoned railway line less than an hour from Tokyo, which resulted in a 15,000-word essay that took the best part of a month of free time to put together.

Hendy has visited rural areas and small cities, two stand-out travelogues being his extended exploration of the northernmost and most recently settled major island of Hokkaido, and his recent sojourn to the
Amakusa islands off the west coast of Kyushu. Whether in Hokkaido, Amakusa, or elsewhere, the regions of Japan that Hendy visits are all areas located away from its prosperous industrial and urban centres, substantially rural, blighted economically and scenically by Bubble-era constructions, lacking in innovative local enterprises, heavily indebted, and sharing in the general drain of the young to the cities. After the recent financial crisis, the prospects that these regions might receive the investment that might turn things around--making them destinations for retirees, say--are trivial. The dream of a return to the land is ridiculous.

According to the Rural Depopulation Research Association, "There are probably a lot of people who would like to move to the countryside if the conditions were right, (but) it's difficult to see how the number could increase with the present situation. The local communities need to maximize their areas' resources."

The "I-turn" movement (moving from the city to the country) and the "U-turn" movement (people from the country heading to the city, then back again) have been around since the 1980s. However, the things that discourage more young people from moving to the countryside are the same as ever.

"As things are," says Yuzawa. "Even if people want to go back the countryside, often there is nowhere for them to work and nowhere for them to live."

[. . .]

A survey by the Rural Depopulation Research Association in 2000 found that "company work" is the most popular choice for those that have already moved to the countryside. In other words, they avoid the shortage of work by commuting to the city. Relatively few work in the government construction industry, which plays a major part in the rural economy. Other U-turn and I-turn employment ranges from tourism to geriatric care to traditional crafts.

With the help of the help of the organization, local governments try and match jobs to candidates; but the right work isn't always available, and sometimes idealism isn't enough to persuade young people to give up city salaries.

But the Japanese country needs help from somewhere.

In a 2000 survey, more than a third of Japan's municipalities were classified as depopulated more than half Japan's land area. All had lost more than a quarter of their residents since the 1960s.

The thing is, what's happening to rural and marginal Japan is going to happen to urban and core Japan sooner or later. Trend economic growth, as Hendy observes, is inexorably trending downwards towards nothing, as the workforce continues to contract, the dependency ratio tips crazily, productivity stagnates and foreign competition grows and infrastructure ages.

It might just be, however, that despite recent evidence to the contrary, Japan has embarked on a vicious demographic spiral, in which a variety of complex feedback mechanisms set to work: aging results in declining international competitiveness, which results in greater economic hardship at home, which results in a suppressed birthrate; aging results in ballooning fiscal deficits, which in the absence of debt issuance must result in higher taxes or cuts to government spending, which cause economic pain, driving down the birthrate; aging, as the elderly dissave, results in a decline in the pool of domestic savings on which government borrowing is an implied claim, reducing room for fiscal maneuver and resulting in less ability to withstand exogenous shocks; aging further entrenches conservative attitudes to everything from pension reform to immigration, resulting in greater government outlays and smaller government receipts; aging leads the electorate to fear for the future of the pension system, resulting in more saving by the economically active, depressing consumption, which drives manufacturers offshore and raises unemployment, which is strongly correlated with the birthrate.

Japan might be an extreme case, not least because of its lack of immigration--South Korea has become much more of an immmigrant country in a shorter period of time--but it's certainly not the only global economic power out there with lowest-low fertility. There's Germany, say, and certainly the various descriptions of the former East Germany's rapid population aging and shrinkage doesn't sound out of kilter with what Hendy has been writing about and photographing.

Spike Japan is one of those blogs that works on two different levels, as a personal travelogue and as an extended meditation on the existential economic problems of post-growth societies. Visit it for both of these reasons.


Anonymous said...

Walking in South End, in Boston, US, I was struck by the same feeling. Buildings are derelict. Apartments' windows are broken, stores' ons are planked. I doubt that means the whole US is decaying.

Randy McDonald said...

True, but different societies. Most of the municipalities of the US aren't losing population, for instance.

Anonymous said...

Is this also true of the Midwest. I would expect that that area is losing population