Japan’s Politics of Decline: Lessons from One Island to Another

In 1962, The Economist published a seminal article about a growing economic powerhouse emerging on the coast of the western Pacific. ‘Consider Japan’ argued that the Land of the Rising Sun was experiencing an economic ‘miracle’, shattering growth forecasts thanks to a thriving export market, marking the start of Japan’s modernising image as the envy of the western world. If that narrative sounds familiar, that’s because it is. For over 75 years, Japanese society has served as a blueprint for modern urbanism. Fast trains, clean streets, and high educational attainment have all been marvelled at by foreign tourists and investors alike. From an outsider’s perspective, Japan is the ‘it girl’ of the G7. 

The rose-tinted glasses with which the Japanese archipelago is viewed by others, though, is fundamentally at odds with how the nation views itself. Beneath the veneer of cherry blossom trees and Harajuku fashion, Japanese citizens believe their country to be in deep peril. The ‘economic miracle’ which dominated the 1960s and 1970s eventually culminated in a market crash, which Japan has still not fully recovered from. Paired with this is an aging population and declining birth rate, both of which are putting a strain on the job market. In 2024, Japan’s economy grew by just 0.1%. Its population declined by c. 850,000. Far from the economic miracle of the mid-twentieth century, Japan is on a painstakingly slow recovery from several ‘lost decades’. 

“The rose-tinted glasses with which the Japanese archipelago is viewed by others, though, is fundamentally at odds with how the nation views itself.”

Just as it did in 1962, the Japan of 2025 can act as a case study for British observers. The narrative of boom, bust, and stagnation has traced the economic histories of both countries following their respective financial crises yet despite recognising these profound similarities, both nations tend to think of the other as vastly different to themselves. If Japan is to be understood properly, though, the romanticised veneer must be dismantled.

Cool VS Cruel Japan

Few countries have better branding than Japan. Whether it’s the cultural phenomenon of anime; the ubiquity of matcha; or the photos of Mount Fuji which feature on all your friends’ Instagram stories. Japanese culture and technology have a profound impact on modern society, with the nation often serving as a point of comparison for the western world. If a Japanese train is delayed by five minutes, a public apology is issued and a delay certificate is given to every passenger. In the UK, if a train is delayed by only five minutes, those on it should buy a lottery ticket and thank their lucky stars that the locomotive showed up in the first place. 

This romanticisation is a deliberate exertion of Japanese soft power, masking internal anxieties through the promotion of ‘Cool Japan’—a foreign policy initiative proudly advertised on the cabinet office website. 

“This romanticisation is a deliberate exertion of Japanese soft power”

The approach seems to be working. Upon asking some British research participants to describe Japan in three words, ‘clean’, ‘modern’, ‘organised’ and ‘futuristic’ were chosen the most. ‘Fun’, ‘trendy’, ‘rich’, and ‘modern’ are also words which respondents cited. The praise wasn’t unanimous—‘depressing’, ‘individualistic’, and ‘strict’ would suggest a recognition that Japan’s ‘clean’ image comes at a cost. By the same token, ‘fetishised’ and ‘vain’ point towards how ‘Cool Japan’ can be seen as exploitative. 

These small hints at dissatisfaction speak to a broader issue: life in Japan can be extraordinarily difficult. Wages are stagnant. Costs are soaring. Suicide rates—especially among schoolchildren—are exceptionally high. According to anthropologist Anne Allison, many Japanese people feel like “refugees in their own country”, lost to the point of dislocation. At a time when tourism rates reach record heights, many Japanese citizens instead feel trapped.

Articulating This Anxiety

For a country which faced such a meteoric rise in significance, the stalling economic climate has been a source of much discontent. Callum Matthews currently studies at Oxford but lived in Japan for five years between 2017-22 as an English teacher on the JET program. He spoke to me about how the economic situation was understood by Japan’s citizens during his time there. 

“Japanese people are … very acutely aware of the fact that the yen is weak,” he explains. “When I arrived in Japan, the VAT was 8%, going up to 10%. As a result of that, every restaurant went up in price. That was very much within the consciousness of Japanese people when I arrived.” 

Restaurants would often post updates on their social media platforms to forewarn their customers of rising prices and apologise for them, explaining to their followers why the business had to shift costs onto the consumer. Even amidst an unfavourable economic climate, the spending habits of Japanese citizens did not change. “People still love to go eating,” Callum told me. “The culture of settai is incredibly important there. Businesspeople like to entertain their prospective clients through wining and dining, and that trickles down to regular employees who enjoy catching up with friends over a meal.” Whereas eating out in the UK is an occasion, in Japan it is woven into the duties of being a citizen. “Japanese people are very aware of the difference between self and role [...] even if their ‘self’ is aware that the country is not doing well, they have a ‘role’ to project that it is.” 

The division between ‘self’ and ‘role’ in Japanese society has a profound effect on how anxieties are articulated. Often, it can result in social withdrawal (hikikomori). One reason for this may be a poor sekentai—a person’s reputation in their community— with this disconnect between ‘self’ and ‘role’ then prohibiting people from breaking this negative feedback loop. 

A person’s ‘role’ extends towards their community. Japanese people feel a sense of duty towards each other, reinforced by the myth of ethnic homogeneity that was perpetuated by the Japanese state to unite the disparate islands of the archipelago. This amae (unity) bleeds into how Japanese people view themselves in relation to their peers. Despite one in five Japanese households having no savings at all, up to 90% of the population consider themselves to be middle class. Few want to consider themselves as being any different from the norm. Those who are different, hide it: whether through hikikomori, or as net cafe refugees who sleep in internet cafes to save money on rent. If Japan’s citizens are playing a role, there is only so much time before they are no longer able to use their wallet as a prop.

Political Shifts at Home and Abroad

Financial frustration has led Japanese citizens towards the ballet box. In May 2025, Japan’s Prime Minister warned that the country’s economic situation may become “worse than Greece’s”. In July, his party faced a bruising defeat in the House of Councillors elections. For the first time in decades, the ruling Liberal Democratic Party (LDP) lost its majority in both chambers of parliament to various parties, reflecting public dissatisfaction with stagnation, rising living costs, and political scandals.

Monumental political shifts resulting in disillusionment with a long-standing political party is a familiar narrative both at home and abroad. Yet the bigger headline is the far-right’s ability to capitalize on economic frustration born directly from decades of neoliberal policies—policies that have hollowed out public services, increased inequality, and driven up living costs. 27% of voters would choose Nigel Farage as their Prime Minister were a snap election called today. In Japan, the far-right Sanseito party achieved a breakthrough in this year’s election with a slogan of ‘Japanese First’. ‘Sanseito’ itself translates to ‘do it yourself’ in Japanese. Its rhetoric maintains that Japan must tackle its problems on its own, preserving ethnic homogeny and ending a reliance on foreign workers. The number of foreign residents living in Japan at the end of 2024 reached a record high of 3.77 million people. While this is much lower than the UK, for whom 7 million foreign-born workers comprise around 20% of the workforce—in both countries, the far right have successfully redirected public anger away from neoliberal economic failures and toward scapegoating immigrants and foreign workers.

“In both countries, the far right have successfully redirected public anger away from neoliberal economic failures and toward scapegoating immigrants and foreign workers.”

The increasing cultural capital associated with Japaneseness in Britain is fundamentally at odds with how these phenomena are perceived internally. Getting beyond this image is important if other countries are to avoid making the same mistakes. Both countries have developed similar right wing movements that channel public anger about soaring costs into xenophobic narratives that shift the blame for these issues onto foreigners.

Towards the Future

Japan is set to receive over 40 million tourists over the course of 2025. For many, the polished image is compelling, and Japan’s cultural capital has perhaps never been more valuable. Yet beneath the surface is deep discontent. The narrative of political shifts emerging from boom, bust, and stagnation reads all too familiar to a British audience. Japan may be seen as a ‘futuristic’ nation with a time-zone that feels like they’re eight years ahead rather than eight hours ahead. However, when it comes to their economic health and political discourse, both countries are playing catch up.