Where Did Japan Go?

This post is a follow-up to this posting:

Demographics of Japan

In that post, I was talking about that there was a time in the 1980s when Japan’s GNP was 60% of the United States and people were talking about Japan’s economy outgrowing the United States by the year 2000, 2010 or 2020. Now…..we know that did not happen. The following chart, measuring GDP (Gross Domestic Product) shows this change of fortune rather dramatically:

In 1995, Japan’s GDP was $5.449 Trillion while the United States was $7.664 Trillion. Japan’s GDP was 71% of the United States and it looked to be closing. Now, in 2017 it was 25% of the United States ($4.872 versus $19.391). This is a hell of a change in fortune. Not near as bad as the collapse as the Soviet Union, but pretty damn significant in the larger picture.

Let us look how this developed over time (figures are from the World Bank):

Year       Japan GDP     U.S. GDP     Percent

1960         .044307          .5433             8%

1965        .09095             .7437           12%

1970        .212609         1.076             20%

1975        .521542         1.689             31%

1980       1.105              2.863             39%

1985       1.399              4.347             32%

1990       3.133              5.98               52%

1995       5.449              7.664             71%

2000       4.888             10.285            48%

2005       4.755             13.094            36%

2010       5.7                 14.964            38%

2015       4.395             18.121            24%

 

That is a trip. If the percentages were graphed out, it might start looking like a bell curve. I don’t have the depth of knowledge on the Japanese economy to pontificate as to why this developed this way.

So, we have seen a political and military challenge after World War II from the Soviet Union. They went from claiming that “We will bury you” (1956) to dissolving (1991). We have seen an economic challenge from our ally Japan, and it certainly impacted our car industry and consumer electronics. This has gone in only two decades from a point where the economic growth trajectory lines of Japan seemed to be on track to surpassing the United States to a point now where Japan’s economy is a quarter of our economy. And…..it still does not appear to be growing much. It makes you wonder about the next political, military or economic challenge…..and how that will play out.

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Christopher A. Lawrence
Christopher A. Lawrence

Christopher A. Lawrence is a professional historian and military analyst. He is the Executive Director and President of The Dupuy Institute, an organization dedicated to scholarly research and objective analysis of historical data related to armed conflict and the resolution of armed conflict. The Dupuy Institute provides independent, historically-based analyses of lessons learned from modern military experience.
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Mr. Lawrence was the program manager for the Ardennes Campaign Simulation Data Base, the Kursk Data Base, the Modern Insurgency Spread Sheets and for a number of other smaller combat data bases. He has participated in casualty estimation studies (including estimates for Bosnia and Iraq) and studies of air campaign modeling, enemy prisoner of war capture rates, medium weight armor, urban warfare, situational awareness, counterinsurgency and other subjects for the U.S. Army, the Defense Department, the Joint Staff and the U.S. Air Force. He has also directed a number of studies related to the military impact of banning antipersonnel mines for the Joint Staff, Los Alamos National Laboratories and the Vietnam Veterans of American Foundation.
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His published works include papers and monographs for the Congressional Office of Technology Assessment and the Vietnam Veterans of American Foundation, in addition to over 40 articles written for limited-distribution newsletters and over 60 analytical reports prepared for the Defense Department. He is the author of Kursk: The Battle of Prokhorovka (Aberdeen Books, Sheridan, CO., 2015), America’s Modern Wars: Understanding Iraq, Afghanistan and Vietnam (Casemate Publishers, Philadelphia & Oxford, 2015), War by Numbers: Understanding Conventional Combat (Potomac Books, Lincoln, NE., 2017) , The Battle of Prokhorovka (Stackpole Books, Guilford, CT., 2019), The Battle for Kyiv (Frontline Books, Yorkshire, UK, 2023), Aces at Kursk (Air World, Yorkshire, UK, 2024), Hunting Falcon: The Story of WWI German Ace Hans-Joachim Buddecke (Air World, Yorkshire, UK, 2024) and The Siege of Mariupol (Frontline Books, Yorkshire, UK, 2024).
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Mr. Lawrence lives in northern Virginia, near Washington, D.C., with his wife and son.

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4 Comments

  1. I expect the next challenger will be China. They have been touted as overtaking the USA before but imploded during the Great Leap Forward and the Cultural Revolution. Currently the Chinese government seems relatively stable but there is still the possibility of major internal dysfunction with separatist and pro-democracy movements.

  2. Does Japan come off better when looking at GNP (also known as GNI) rather than GDP (since GNP would include remittances from all of those Japanese businesses in Brazil, USA, etc.)? While GDP limits its scope to the economy within the geographical borders of the country, GNP extends it to include the net overseas economic activities performed by its nationals.

    Also, how does the competition look in per capita terms?

    Also, consider real versus nominal measures.

    https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=US-JP

    In terms of per capita GDP (real), Japan didn’t do a bad job in competing with the USA (but with a much more erratic track record). Same goes for GNP (real).

    https://data.worldbank.org/indicator/NY.GNP.PCAP.CD?locations=US-JP

    Here’s the big reason for the country difference for total GDP (real) or GNP (real):

    https://data.worldbank.org/indicator/SP.POP.TOTL?locations=US-JP

    Japan’s population hasn’t kept pace with the USA.

    However, since you can’t take it with you, Japanese win when it comes to living longer to enjoy the fruits of their labor (and capital as well as land):

    https://data.worldbank.org/indicator/SP.DYN.LE00.IN?locations=US-JP

  3. A key, though not the only reason is demographics, GDP will almost certainly go up as population goes up given what it measures. In 1995 the USA had about 266 million people, in 2015 about 321 million, approx. a 21% increase. Japan in contrast had about 125 million in 1995 and about 127 million in 2015, less than a 2% increase. Also whilst both have been aging, Japan has been aging a lot more going from about 14% of population to 26% in 2015 over 65 years of age. In contrast the USA has gone from about 12% to 15% over the same period.

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