 What's interesting about Asia is how poor Asia was very, very recently. Asia is, Eastern Asia is a place that up until certainly, so if you think about it coming out of World War II, China went Communist Weimau and kind of solidified its poverty, at least until the 1980s. Japan was basically flattened, it was completely destroyed, and people don't know this, but before he was human agasaki, every single major Japanese city had been firebombed. In Tokyo, there were at least a million people who were homeless. The Japanese industrial base, the Japanese economy was completely destroyed. When you go today to Tokyo, almost every building that you see, not every building, but almost every building that you see, was built after World War II. There are a few places, certainly the Empress Palace and the Imperial area, which was preserved purposefully by the Americans. But pretty much the rest of Tokyo was flattened, as were every single major city in Japan. So Japan had nothing at the end of World War II. Korea of course had always been a poor place. It had been colonized by the Japanese and made a part of the Japanese Empire in 1910. And then after World War II when it achieved its independence, it kind of was split into two, a northern part which was controlled by the Soviet Union, a southern part that was controlled by the West or by the U.S. And ultimately that led to a war in 1950 when the North Koreans invaded South Korea, a war that lasted three years, a war that completely devastated the Korean Peninsula. So Korea, South Korea, which was poorer than North Korea at the end of the war, was again completely devastated. There was nothing there, nothing. I mean, these were some of the poorest people on planet Earth were living in Korea. Japan less so. Of course it had a real civilization and industrialized and in many respects westernized, but it had been destroyed. It had nothing. And then if you go to Taiwan, which was a brand new country, if you will, of refugees from mainland China and ruled by North Korean, again, devastatingly poor, Hong Kong I've often described as a fishing village. I mean, that you'd have to go further back for it to be a fishing village. And by the end of World War II was still a very small place ruled by the British, Singapore was nothing. I mean, the whole area was, I mean, Asia, Asia was synonymous with adjunct poverty, with horrors of poverty. And yet all these countries in a matter of 70, 80 years, but really in a shorter matter we'll get to that in a minute, have achieved fantastic levels of wealth as compared to most of the rest of the world, definitely achieved levels of wealth comparable to Europe. And you know, have today Korea has Korea and Japan have some of the highest life expectancies in the world. They it's stunning, it's stunning to visit a city like Seoul and see just the level of development, the amount of development in Tokyo is just amazing. I mean, Tokyo has no one downtown, they have several downtowns, skyscrapers everywhere, office buildings, condo, beautiful condo buildings, just a whole array of construction that is relatively modern. And if you think about it, for both Japan and the rest of Japan, of course, coming out of World War Two, immediately reindustrialized, you know, they unleashed by unleashing freedom in Japan, and taking the entrepreneurial spirit that the Japanese, I think to some extent have had for a long time, and allowing for political freedom, Japan just started flourishing right out of the gate and started building what today are these, you know, some of the greatest corporations in history, you know, Honda and Toyota and Mitsubishi and on and on and on. You know, these massive, successful businesses that were created during the 19, many of them were created during the 1950s, and then flourished during the 1960s, primarily originally by both copying American designs, but also innovating on American designs and making them more efficient and making them more productive. So by the 1970s, Japan was kicking American butt in terms of in terms of automobiles, in terms of TVs, in terms of VCRs, video players, in terms of almost every enterprise, Japan was on a roll, steel production, and that really lasted into 1980s. Japan, from 1945 until 1989, achieved unprecedented economic growth, just stunning amounts of, stunning amounts of, what do you call it, wealth creation and production and efficiency and innovation and cameras. Yes, Thomas says cameras as well. Absolutely. And of course, Sony, how did I not mention Sony, one of the most innovative companies for many, many decades in the world. And you know, it's just, it's just stunning to visit Tokyo and to realize how much of that, you know, and of course, I think there would be, there could have been even more successful and competitive, if not for some of the protectionist policies of the United States, which sustained an auto industry in the United States that really probably shouldn't exist. But the Japanese, that Japanese model of growth and economic prosperity and wealth creation sustained itself until 1989. And again, the Japanese economy grew at unprecedented rates during that time. So it took it what 40, 44 years to attain just an almost a Western-like level of economic prosperity. And then if you look at Korea, Korea didn't start really developing until maybe the 70s, really the 80s. Korea did not become a politically free place until I think 1987, when presidents were finally elected. And it is just exploded in terms of economic growth. And again, you know, that period of about 40 years, 40 years has sustained massive economic growth in Korea. And today, Samsung and Kia, you know, and Samsung, both in electronics, Kia and Hyundai, in automobiles, but in many other industries, Korea has become a dominant player. And again, the quality of life, the standard of living, the wealth creation in Korea is truly stunning. And Korea, of course, was joined in that by Taiwan and by Hong Kong and by Singapore, the Asian Tigers. And all of that in a span of 40, 50 years, they attained the same wealth levels as the United States. So it's truly stunning the energy, the hard work, the work ethic, the entrepreneurship that at least some within these societies have. And the success that all these economies attained so quickly is fantastic. And it's not just economic success. These countries, you know, Taiwan was a dictatorship for a long time. And it is today a free country, free politically. Singapore is still, you know, this mixture of a lot of freedom and a lot of authoritarianism. Hong Kong, unfortunately, has been taken over by China. But South Korea, Japan and Taiwan remain free countries, remain countries with amazing, amazing, amazing quantities of wealth and amazing, amazing standard of living and quality of life. And the other thing about Japan and Korea, and I don't know if this is true of Taiwan, but certainly of Japan and Korea, is that they are both just unbelievably safe. I mean, a number of people have told me you could leave anything, you could leave your computer, you could leave your phone, you could, and you could walk away for hours and come back and still be there. People don't steal stuff. Violent crime in Japan and Korea is almost non-existent. It is, it is, it is, I think the safest places on planet Earth in terms of violent crime. So the quality of life, if you consider the toll that crime and generally and violent crime take on people, if you take that onto account into the quality of life, the quality of life here is very high and, and inspiring. I mean, wouldn't it be fantastic if we could live anyway and, and be able to not worry about, about crime, particularly this is kind of in your face at a time where violent crime in the United States is, is increasing, increasing substantially. So that's kind of the history, a little bit of the history, economic history, and so as a development, Japan hit a wall in 1989, its stock market collapsed, it, it, it, it created during the 1980s while there was real production and real wealth creation. They also created this massive bubble because of government intervention, because of the behavior of the Japanese central bank, a bubble in real estate and a bubble in the stock market, a bubble in real estate and stock market like we'd never seen, I don't think anywhere in the world ever. The stock market really hasn't, I don't think recovered its levels from back then, even today. So there was a massive collapse. Since 1989, the Japanese economy has been growing, but growing very tepidly, very slowly. Troy, thank you for the support, really appreciate the five hundred Australian dollars. That is fantastic. Thank you. So the Japanese economy has been growing at one percent a year, sometimes less, sometimes a little more, but, but not significantly which is, which is a shame. I think standard of living, quality of life isn't in, in, you know, with, with the rise of technology and the improvement of technology. I don't think GDP, as we've talked about many times on the show, GDP doesn't really capture the true growth rate, if you will, the true progress that is being made, but it does capture something. So the Japanese economy has hit a wall. The Korean economy, I'd say during the financial crisis, hit a somewhat wall. And again, growth in Korea has been quite tepid over the last decade or so with very little signs of dramatic recovery. Again, COVID has really taken a toll, I think, on all the economies of Eastern Asia. And I don't know about Taiwan. I know less about the economy of Taiwan. I haven't visited Taiwan, but the, the, the, there is this dramatic economic slowdown. So there is an Asian economic development model, which is to free up the economy somewhat, the government to control the banking sector and incentivize exports over imports that worked in Japan and worked in Korea. But in all those cases, that limited level of economic freedom and that government involvement, particularly in banking and particularly in the government, in cronyism, in the government preferring certain businesses and, and, and particularly preferring large businesses, that halts, limits the, the, the level of growth and the level of sustained economic growth that is possible in these economies. And that certainly happened during the, at the end of the 1980s in Japan. If you think about the Japanese model, you had the government controlling the banks, the banks, then very involved in businesses. The government basically telling banks which businesses should be supported, which not, but generally the, the, the government encouraging the banks never to allow for bankruptcy. So bankruptcy happens in Japan, but it was relatively rare. Japanese banks prop up Japanese businesses supported by the Japanese government. The same to some extent happens in Korea. And you have these models of very, very, very diversified businesses that in every single business possible in Korea. In Korea, Samsung is in everything. It builds cars. It builds obviously TVs and electronics and phones and things like that, but it also owns, I think, real estate and it, it's in every business possible, steel and other things. So, and that is the model. The model is to build these massive conglomerates even though it's been proven over and over again that it's not an efficient economic model. That is the model that the Asians have adopted to build these massive conglomerates and then for those conglomerates to basically be protected from competition by government and to be, to, to be encouraged to primarily export that business model, that governance model can work up to a point. And I think there's no question Japan hit that point in the early 1990s. Korea probably hit that point about 10 years ago. Taiwan has hit that point. Although Taiwan, I suspect, has a free economy in many respects than South Korea or Japan. So, you know, all of these economies are now just floundering. They're kind of slow growth. They're kind of just holding their own, but they're not growing. They're not creating wealth. They're not increasing quality of life and standard of living. And anyway, close to the rates, A, that they're capable of and B, that I think that they have generated in the past. And as a consequence, there's a certain sense of stagnation. There's a certain sense of pessimism. There's a certain sense of this is it. We've reached, we've peaked. We're not going to get any better than this. You know, add to that what I definitely sense across this entire region is real fear and a rising fear of China. We talked a lot about China. So I'm not going to go through the Chinese history, but China has also hit a growth barrier. China has turned into much more authoritarian, much more statist, and much less economic growth and economic prosperity. So China is struggling, China is struggling with COVID, China is struggling with economic growth. China is struggling in every dimension. And a lot of these countries here are looking at Russia and seeing what happened to Russia when it struggled, how it started diverting attention overseas and how it became much more aggressive in its overseas plans. And they're really a fate. They're really afraid of Chinese aggression. They're really afraid of Chinese aggression against Taiwan. But if if the Chinese aggress against Taiwan, that gives them a lot of control over the the the sea lanes that are necessary for both Korea and Japan in terms of trade, it gives them control over much of the this part of the Pacific. If they go to Taiwan, I think particularly in Japan, but I think also in Korea, what is to stop them from going to from expanding into Japan? There's also a lot of angst. Can the Koreans and the Japanese trust Americans? I think they're literally encouraged by the support that the United States is providing Ukraine, but post-Trump administration, they're not convinced that that support will be there in the future. Now, I foreign don't think they should get that support. You know, they should not get American direct military support. I think we should leave Korea. We should leave Japan. But what do they do then? So there's real discussion in Japan about changing its constitution. Its constitution written by MacArthur limits the scale of the Japanese military, makes it a defensive force and and limits the the scale and scope of it. While Japan has one of the best navies in the world today, it doesn't have much of a military beyond that. Of course, it doesn't have nuclear weapons. And the Japanese are now talking about changing that constitution in order to build up a military. I think the South Koreans, I would encourage them if they're not already thinking about doing this, is significantly increasing the amount of spending they have on military. So as to reduce the independence in the United States and ultimately to be in a position that when the United States leave Korea, which I think is inevitable at some point, that they can defend themselves, defend themselves not only against the North Korean threat, but also ultimately against China. I think both Japan and Korea are well positioned to fight China. I think they are quite competent and quite able. They're more technologically advanced than China is. They are smaller in terms of population, smaller in terms of total wealth. But they're free. And as we can see in Ukraine, free countries have an enormous advantage over authoritarian governments. And I think both these countries should be investing heavily in their militaries to face off, to face the potential Chinese threat in the future. And I for one, don't think China, I think China is learning lessons from Russia. And one of the lessons is you don't beware about these invasions. They don't quite happen as easily and as quickly as you might think they will. I think if Russia is defeated in Ukraine, which I think will ultimately happen, China will be very hesitant to go after Taiwan. I think the other thing that the war in Ukraine has done is that it's at least given an indication that the West can have a United Front and support in supporting Ukraine and maybe supporting Taiwan if it came to that. So I don't think China is going to be aggressive anytime soon. I don't think they can afford to be. I think they've got too many internal problems right now. But it is a real threat to these countries. Of course, what Japan and South Korea really need is they really need a boost to their economic prospects, a boost to their economic growth. And they really need to find ways to break a system that encourages conformity. Because at whatever level the conformity is, level of masks, or level of opinions about certain things, level of fear, that conformity spills over into life. And that means conformity means less entrepreneurs. It means less innovation, less ingenuity. It means less progress. And it means a duller, more boring, simpler life, culture. What both countries need is to reinvigorate the individualistic spirit that got them to where they are. Now, it was never totally individualistic. But whatever allowed for the great economic progress was the individualism of some people. Thank you for themselves, innovating, creating, building, organizing. That takes real thought, real effort, and real individualism. So what these countries need to do is both break a culture of conformism, break a cycle of fear. And I think you can see that with COVID is the fear, which is debilitating, and encourage, or at least get out of the way to sustain economic growth and all those things are tied together. So like everywhere, I would say that the first thing you have to reform, the first reform you should engage in is educational reform. It's the educational, it's the schools where conformity is encouraged, conformity is taught, conformity is sustained. Now, again, I think Japan in particular has made a lot of strides away from that conformity. But I'm disheartened by the mask wearing in Japan right now and the extent to which that is prevalent. But Japan has such potential. There's so much beauty in Japanese culture, in the design, in the attention to detail, in the caring about aesthetics, caring about beauty. I mean, I've talked a lot about on the show, right, about create your own space, make it beautiful. And the Japanese are very good at that. And Japanese culture very much emphasizes that and draws on it. I mean, some of the most beautiful hotel rooms I have stayed in the world, certainly in Asia. Asia has the best hotel rooms in the world. But many of them have been in Japan. I mean, the hotel I stayed at just now in Japan was fantastic. I mean, the room was gorgeous. It was beautiful. There's just the little aesthetic touches and just the combination of modern with a certain level of Japanese aesthetic, just fantastic. So what we need in all of the world, and certainly what Japan and Korea need is they need educational reform. And the best way to achieve educational reform is by privatizing education, by creating some kind of system of vouchers or education saving accounts or some kind of way in which the Japanese can liberate entrepreneurship, liberate innovation in education, bring Montessori to Japan and Korea and encourage competition. And let's see how we can foster both knowledge and thinking skills as well as individualism, as well as initiative, as well as entrepreneurial thinking, ingenuous thinking. So it's what we all need everywhere, and I think more than anybody, the Japanese and the Koreans need. And then of course, they need to get rid of the system of cronyism. They need the government to step back from, in a sense, running the banking system. Again, we in the United States need the same thing, but it's worse here. They need to allow for real competition. There's no Uber, really. Here, and the reason is again, to protect the taxi drivers, they need to allow for real competition, they need to allow new entrants to challenge the large businesses, the large corporations, the diversification. They need to allow financial innovation to allow the breakup of some of these conglomerates. Conglomerates are not healthy businesses. They're not efficient. They're not productive. They would run a lot better as individual companies focused on different things rather than one entity focused on everything. Focus is important in life and every aspect of life, including in business. So there are some basic, simple reforms that these countries have to engage in. If they want to continue their economic progress, if they want to continue their economic growth and continue their path towards... They've got such a great foundation of a society with no crime, a society with huge level of trust, a society that is hard workers, people who value education. They've got the basics and they've got the basics at some level. But then what they need is the underlying... And they've got the beginnings of this individualism. I mean, you can see it in the fact that they want to be, they're trying, they're making an effort in the way they dress and in the things they like and they're passionate and they have emotions. You can see that in the Korean dramas and they value it and you can definitely see it in Japan as well and all the things that they enjoy and they love and they like. They've got the basics of individualism and what they need now is the intellectual foundations of it and they need now is that economic freedom to allow that to translate into real dramatic significant sustainable economic progress. And I think all of that is possible and all of that can happen. I'm encouraged by the fact that there is an active objective group in Japan and the books are being translated. I'm encouraged by the fact that there are objectivists here in Korea, although it seems at least like most of the objectivists in Korea are American expats. But the books are in Korea and there is definitely a free market movement in Korea. That's why I've been invited to this conference. I wouldn't have been invited otherwise. So there's definitely forces trying to bring about these changes in both Japan and Korea. And of course, I think both countries need to build up their militaries to provide them with a kind of defense and do it now before you've got your back against the wall with a more aggressive China. If you build up your military now, maybe you'll discourage China from ever engaging in military adventurism, as they sometimes call it. All right. One other aspect I want to talk about that I think is important for both cultures, both the Japanese and the Korean culture, certainly, but it's also a problem in China and a problem in much of Eastern Asia. And that is dramatically declining birth rates. I think that Korea has the lowest birth rates in the world. They're well under one. So I think it's 0.85, something like that. That is population collapse kind of levels. That is real decline. And it would be, it is kind of sad. And it is reflective of the fact that I think that there is real angst. In Japan, I think it's 1.2. It's a little higher than Korea. But remember, that replacement is just over 2, 2.1, I think. So you need 2.1 for replacement, both Japan and Korea, way, way below that. So they're both shrinking populations, very much older populations. What you're getting now is the real injustice of older people, massive numbers of old people retiring and placing and because of the government pension system, because the government supports healthcare system, putting a massive, massive financial burden, just a massive financial burden on younger generations. So you've got a huge and growing transfer of wealth from young Asians to old Asians. This is bad in the United States now with the baby boomers retiring. But this is even worse here partially, you know, much worse here, partially because this population is, they have fewer young people to share the burden, right? That's also a real drag on economic activity. And another reason why just from purely economic perspective, they have to liberalize the economies if they want to keep up and if they want to be able to sustain the quality of life and standard of living as the population decreases. But also I am a strong believer that if these countries boost their military spending and they gain a certain confidence in their sustainability and their ability to resist Chinese aggression in their ability to sustain themselves long term, if they liberalize their economies and increase the prospects of economic growth, people start feeling like they can get richer, they can create more wealth, they can sustain themselves economically. I think if you get that, and on top of that, you gain that sense of individualism, that sense that their life is their own and their pursuit of happiness is okay, which I think you have in Asia. I think both rates will go up. I think these things are not deterministic. I don't think populations have to collapse. I don't think population growth, population has to go to below one. I think that populations can recover. And what you need to recover is a belief in the future. What you need is that sense of optimism. What you need is that sense of confidence in the sustainability of your culture, the sustainability of your country, and the prospects for a better, freer, more successful future than the present. So I think these economies, I think these cultures can recover from very, very low both rates, but only if they adopt a more positive, optimistic view, and both Japan and South Korea desperately need this. Because if you go to somebody, Kodaba says Japanese fertility rate is 1.37, I think that's up a little bit. But yes, 1.37 is still very, very low. Russia's in the same ballpark, Italy's in the same ballpark, Spain is in the same ballpark, much of Europe is in the same ballpark. I think devastating to the future, given the burden that we have placed on young people to support old people. Maybe that'll be part of the spur towards more individualism. Maybe there will be a rebellion of the young against, you know, rebellion of the young against this massive redistribution of wealth and the rebellion of the young in favor of more freedom and more liberty from an economic perspective. So I think, again, both countries have hope in that respect. And then finally, the other aspect of the demographics is both countries need immigrants. Both countries need immigrants should allow for immigration. I think both countries have strong cultures that would allow for assimilating those immigrants. I think you see that to the extent that you see immigrants in Japan and Korea, they love it here, they enjoy it here, they assimilate, they adopt a culture, they adopt many of the cultural norms. But you know, if they are going to be successful, if they are going to grow, if they are going to be innovative dynamic cultures, then they should allow for immigration. There are plenty of people in Asia who would love to come to where it would be relatively cheap for them to move to Japan or to Korea, where it's from a place like Cambodia and Thailand and Indonesia and Malaysia. There's no shortage of relatively poor countries than Japan and Korea who would like to come here. Many of them would just like to come and work and go back home. After they make some money, some of them would like to integrate into the Japanese and Korean cultures. So no question, whether they like it or not, that is the solution. 0.85 birth rate will ultimately lead South Korea to become this tiny little country of insignificance to be swept away by history, by some other culture that all dominated. Much better to allow for immigration and to allow for large-scale immigration while you are strong, while you have a culture that you can assimilate people into. Hopefully that will happen. It's already starting in Japan. They are slowly opening up paths for foreigners to come into the country and have dramatically expanded the opportunities for people to come and work in Japan. They don't have enough people working. It's just the reality of it. So they need more young people. They need more young people, partially, so that they can subsidize all the old people. And both countries realize that in both countries. I think certainly Japan has already started on the process of importing of increasing immigrants. I wouldn't be surprised if Korea followed suit. All right. Thank you for listening or watching The Iran Book Show. If you'd like to support the show, we make it as easy as possible for you to trade with me. You get value from listening. You get value from watching. Show your appreciation. You can do that by going to iranbookshow.com slash support by going to Patreon, subscribe star locals, and just making a appropriate contribution on any one of those channels. 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