This weekend the New York Times published an article about the stagnant economic situation in Japan. (You can read the entire article here.) Over and over, the assumption of the writer is that there is nothing more important in life than having lots of money. And it is a mainstream view. Someday this era is going to be regarded as one of the most deeply deluded in human history.
The Japanese “enjoyed a level of affluence two decades ago that was the envy of the world.”
A Japanese man is quoted as saying “Japan used to be so flashy and upbeat, but now everyone must live in a dark and subdued way.”
Japan has been “shriveling from an economic Godzilla to little more than an afterthought in the global economy.”
Japan is currently seen by many economists as “a dark vision of the future.”
Fortunately, Americans have a “greater tolerance for capitalism’s creative destruction.”
Indeed, “In America, the bet is still that we will somehow find ways to get people spending and investing again.” That is, unless we fall into “the same deflationary trap of collapsed demand that occurs when consumers refuse to consume…”
Just two decades ago, Japan was a “vibrant nation filled with energy and ambition, proud to the point of arrogance and eager to create a new economic order…” But “Japanese consumers, who once flew by the planeload on flashy shopping trips to Manhattan and Paris, stay home more often now, saving their money…”
Young Japanese men are “widely derided as ‘herbivores’ for lacking their elders’ willingness to toil for endless hours at the office…”
“Consumers see it as irrational or even foolish to buy or borrow.”
“Bartenders say that the clientele these days is too cost-conscious to show the studied disregard for money that was long considered the height of refinement.”
The head of a consumer marketing research institute has a name for Japanese in their 20s. He calls them “consumption-haters.” “Their habits of frugality will have cost the Japanese economy $420 billion in lost consumption.” “‘There is no other generation like this in the world…These guys think it’s stupid to spend.’”
While this is all about the Japanese, the American writer is entirely sympathetic with those who despair over the young not being willing to chase after wealth or to be “consumers.” I think the point of view reflected in this article is way off the rails.