Why does the economy need to continue to grow, especially in countries such as Japan where population is declining?
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This is an inherent feature of capitalism, not of markets or the economy in general. With the way that capitalism works, more and more money will be funneled to a small group of people. This causes income inequality which puts more strain on social safety nets. Those social safety nets have to be paid for by a “strong” middle class, or otherwise they will not have the funds. While in theory the rich should just pay more taxes to fund these safety nets, it does not factor in the lost capital of being processed by all the middle men. It is far more economical for the system to put money directly into the hands of the working class instead of first into the rich, then into the tax bureaucracy, then into the hands of working people.
Now with that said, how does population play into this. Well if we understand that money will be funneled to the few inherently within the system, how do we make sure there is enough left for the “strong” middle class? Well the economy has to continue to grow. If it stops growing, the upper class will not stop their consumption of assets within the system. So eventually they will self-cannibalize their own economy, leaving no one to consume their goods.
TLDR: Dragons will always take gold, so gold for normal people has to come from somewhere else.
EDIT 1: To expand on this, it is not just with individuals, it can apply to entire countries working within the global economy. A country must continue to grow or otherwise they will no longer have the capital to compete against the larger foreign economies for hoarded goods.
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