Why does the economy need to continue to grow, especially in countries such as Japan where population is declining?
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You have a lot of answers already, but none of them seem to directly answer the question “why does the economy need to continue to grow?”
The short answer, which you got, is that it hypothetically doesn’t.
The longer answer, which I didn’t see, is that our current economic model relies on infinite growth. It’s built into the idea of capital, and capitalism is an economic system based on the concept of capital.
What is capital? In short, it’s growth. Capital is whatever you can invest in to expect a greater return later. Traditionally, that’s land through the promise of rent (which capitalism inherited from feudalism, as landlords are a feudal practice). Capitalism expanded this to natural resources, human labor, currency, intellectual property, and essentially everything else at this point. Today, you can invest in just about anything (or nothing, as is the case with imaginary assets like crypto and NFTs) in the hopes of a future return. That future return is the expectation of growth, and without growth, you don’t have capital and thus you don’t have capitalism.
So, in short, not all economies require infinite growth, but our economic system (capitalism) either grows infinitely or collapses. To have an economy that doesn’t require constant growth would require an alternative system to capitalism, and that’s been the main barrier to achieving that.
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