The other thing that stirred my mind lat week was also prompted by the news but it wasn’t about news per se, it was about long term prospects of the modern civilization. As the title says, it happened in the East, specifically in Japan.
I don’t know why but the news of Bank of Japan announcing negative interest rates got mentioned on the first page of my local paper. There are a lot of technicalities involved depending on the type of funds and what not but, basically, Bank of Japan would pay you the interest rate if you borrow from them – quite opposite of the what the banks usually do.
The idea is to stimulate domestic business activity there. If we use carrot and sticks analogy then negative interest rates are both. For those who keep their money in the bank it’s a stick because instead of adding interest to your funds they’ll be deducting it and your funds will grow smaller and smaller every year. For those who start a business it’s a carrot because when you borrow the money you don’t have to pay it back in full plus interest, as usual, you pay minus the interest. Basically, Bank of Japan pays people to start businesses instead of saving their money.
Historically, the negative interest rates to spur economic activity has been a hit and a miss and no one is sure how the policy would work in Japan, they still keep their “Quantitative Qualitative Easing” or whatever they call printing money these days, too. In short, they print money and pay people to take it but how long can they do it before they’ll be forced to give up is anyone’s guess. Abenomics did wonders for corporate bottom lines and stock market but the effect on real economy so far has been negligible. Japan is still in stagnation/deflation and not growing anywhere. This is what prompted me to think about long term future.
I think Japan is a perfect example of what is going to happen to the rest of the western world even if technically it’s not a western country. After WWII it was drawn into a western sphere of influence and was rebuilt according to western models of capitalism and democracy, and in many ways Japanese did it better than the original. They don’t invent stuff so much but they pick up western inventions and run away with them, implementing them a lot better than westerners themselves. They did it with cars, consumer electronics, computers etc and this model of development then spread to Korea and China, and Singapore and Taiwan, and now is pursued by Vietnam and Myanmar. Japanese themselves almost retired, however. They still keep an edge in car making but everything else is done faster, better, and cheaper elsewhere, often with Japanese money.
They’ve build a very nice, prosperous, rule based society for themselves, a source of envy for all their neighbors. They were the trailblazers and everyone looks up to them. Westerners might not care about Japan so much but the fact is Japanese are on par or ahead of them in many areas, too – general level of development, rule of law, social policies, and all the problems that come with western model of development.
Every western country is going to face the same problems but Japanese did it first. They are the fastest aging society, the fastest shrinking society and so on. In Europe Germany is probably the closest. They are both technologically advanced, both very orderly and well managed, and face same demographic problems of shrinking population. Old people don’t die and young people don’t breed. They both are also very heavy into porn. In case of Japan porn substitutes people’s sex lives altogether and they are just not interested in meeting real people in real life, their online fantasies are so much better than messy human relationships.
Another thing Japanese are at the front of is internet and internet on mobiles. They had their 3G and 4G phones years ahead of the west, for example, the smartphone revolution first happened there. As a result they’ve altered their lifestyles first, too. What it means is that a little device in their hands is all they need for successful and fulfilling lives. It’s a source of news and entertainment, it’s a source of and platform for maintaining relationships, it’s a distraction from stress, it’s a hideaway from personal problems, it’s a substitute for friendship and families, it’s the focal point of their lives. Nothing else matters.
Combine this with affluence and you can easily see why Japanese people can’t be bothered to go to the bank, borrow money, and start businesses. What for? They don’t have kids to support, they don’t even have wives or husbands. They don’t need bigger houses and bigger cars, they are perfectly content with only basic necessities and rich online experience. The other notable news from Japan I’ve seen in the paper is their new trend of absolute minimalism – a one bedroom studio with no furniture whatsoever.
It’s good for simple living and high thinking, even though they use it to watch porn and read anime, but it is not good for capitalism and I believe that’s why Japanese economy has been stuck in neutral gear for a quarter century now. They simply do not have the impetus to work more, produce more, and consume more. They don’t want to grow, not in their personal lives and, as a result, not as a society either.
This is the bug that has been eating away at all other westernized countries, too. People just can’t be bothered to make an effort anymore. People used to work themselves to exhaustion for the sake of their kids but with family planning no one is going to commit themselves to such a life anymore. People used to move mountains for their loved ones but their relationship have been reduced to plain sex which they prefer to get without commitment so that they don’t have to get off their behinds. As a result the old normal growth rate of 4% is unthinkable anymore, 2% is the new high and 0% is a new normal.
They’ve been trying to break this dry spell and they blamed it on the aftermath of 2008 financial crisis but it’s a structural problem that is not going away. It rather eats away at the very foundation of western societies. They have no reason to exist anymore. It used to be about ideals and achievements and changing the world but the mode of passion has gone and it’s not coming back. Much of the western world is still in the mode of goodness but without passion their capitalist economy cannot be sustained and without constant growth they can’t meet all their debt obligations, either to other countries or to their own citizens.
Last year Greece was the bad boy with unsustainable debts but Japan’s debts are a lot higher than Greece’s. Japan is able to get away with it because it owes to its citizens rather than foreign banks and governments, but, unlike institutions, people need to be paid when they need the money and when they need the services. The services also needs to be provided by someone but they have very few people of working age left, maybe not enough to sustain even themselves what to speak of caring for those annoying ninety year olds. Lack of services also means they become more expensive, which means even higher expenditures by the government to fulfill their obligations.
For now it still looks good and wholesome but it’s only an illusion, the eventual doom of western civilization, starting with Japan, is rather near, many of us are going to see it in their lifetimes. It’s also unfixable and there’s no way for us to save our bodies, only our souls, and only by chanting Hare Kṛṣṇa.