Viewed through the telescope, human history repeats birth and awakening, dissolution and transition in cycles of 80 to 100 years, like the seasons of spring, summer, fall and winter. According to Neil Howe, author of "The Fourth Turning" and an American macro-historian, we are now in the winter season. If the winter of the last century was the 1929 Great Depression, the winter of the 21st century began with the 2008 financial crisis and continued with the pandemic, wars, recession and a crisis of democracy.
This winter of creative destruction is expected to end in 2030, or by around 2035 at the latest. Who will seize control of the system in the new spring that follows?
As we pass through a period of upheaval in energy, technology and finance, both the stature and the pretense of established great powers are being stripped away, one by one. Chasing frontline knowledge signals from the global publishing market, I have recently turned my attention not to the English-speaking world but to China and Japan, drawn by their unique grit in weathering the century's winter.
The China trilogy comprises interviews in turn with Huan Yan of "I Am a Courier in Beijing," PD Jeong Yong-jae of "War for Talent—China Obsessed With Engineering, Korea Obsessed With Medicine," and Den Wang, author of "Breakneck," which covers the systems war between a nation of engineers, China, and a nation of lawyers, the United States. Seen through the triangular angles of a Chinese, a Korean and an American, China was too big, too fierce and changing too fast. Where the ambitions of the central government and the grassroots sentiment were headed seemed less like socialism than a paradise of opportunism.
Japan appeared almost the polar opposite of China. The excitement that rose when looking at China's overwhelming scale of desire calmed when looking at Japan. Japanese intellectuals looked like elegant, unambitious commanders who detour around this massive war for capitalist hegemony.
After the high-growth era came the lost 30 years, earthquakes and disasters, and entry into a nation of the elderly. Without optimism about the future, they looked like sturdy adults who press on without wavering.
The Japan trilogy interviews include Chikauchi Yuta, a philosopher of the gift who threw down the gauntlet to capitalism's exchange economy with "Why Do I Feel Joy When I Give Gifts," Naito Izumi, a doctor who recommends home hospice in "I Decided to Die as Myself," and today's Interstellar protagonist, Dauchi Manabu of "The Delusion That Money Makes You Anxious."
At a time when global attention is fixated on AI and semiconductor stocks, Dauchi Manabu, as if teaching cattle, incisively lays open and shows the true nature of "the delusion that money makes you anxious," "the delusion that you make money through investing," and "the delusion that such money guarantees your old age."
This social financier argues that anxiety about old age and anxiety about old-age funds should be separated, and that inflation driven by shortages of caregiving and productive labor is not a problem individuals can solve with money. Having handled trading at Goldman Sachs for 16 years, he argued that because most stock trading is resale among investors, very little of the money individuals invest flows into corporations.
"For corporations, it is far more appreciated when you buy their products than their stock, and the reason Japan has been able to grow so far is not because individuals have actively invested but because many people made deposits at banks," he said.
With the mindset of equipping psychological live rounds to survive the onrushing AI and an aging society, I began a conversation with Dauchi Manabu. On universal truths missed by financial capitalism and the exchange economy, including the supercycle, the lost 30 years, the man who made 10 billion yen, and the essence of investing.
-Your message arrived as the KOSPI surged in a short time and stock prices whipsaw on the boom in tech corporations. We're passing through the middle of a "supercycle" where all 60 million citizens feel anxious whether they make money or not. How is Japan?
"The KOSPI breaking through 8,000 in Korea overlaps in some ways with Japan's NISA (tax-saving stock account) frenzy. In Japan, when the new NISA (a groundbreaking tax exemption promising no taxes on stock revenue for life) began in 2024, a mood spread that 'I'll fall behind if I don't invest too.' However, even if the KOSPI rises, whether that is enriching the lives of the Korean people is a separate question.
Japan's Nikkei average is also hitting record highs, but real wages have been negative for four straight years. There's a gap between indicators and daily life. Moreover, in Japan, the entity that calculates the Nikkei average, the stock index, is a major financial newspaper (Nihon Keizai Shimbun).
It's structurally difficult to cover news that 'there is a disconnect between the real economy and stock indexes,' and that's another issue we shouldn't overlook."
-Do you really think "being anxious because of money" is a delusion? What's your basis?
"It's undeniable reality that more people are struggling because they lack money. However, the real reason Japan is suffering lies elsewhere. Japan's share of elderly is higher than Korea's, with about 30% of the population age 65 or older.
In education, health care, caregiving, construction, agriculture—across the board—there's a shortage of workers, and productive capacity itself is falling. In this situation, even if people race to stash money, inflation advances even more. The idea that 'money alone solves problems' was limited to times when there was sufficient labor."
-You separate anxiety about old age from anxiety about old-age funds. That reportedly started with the announcement of a '20 million yen shortfall in retirement funds,' which seems a very important point.
"The '20 million yen retirement shortfall' was a 2019 report by Japan's Financial Services Agency. This news amplified fear around the specific figure of '20 million yen.' The question 'Why can't pensions alone guarantee retirement anymore?' got blocked. The fundamental problem wasn't money but demographic change.
Fewer people working and more elderly. Because pensions are structured so the working generation's premiums support the elderly, it's only natural they become unsustainable when the structure changes. At first glance it seems that if money collected from the working generation isn't enough, adding individuals' savings might make it work somehow.
But if a shortage of workers leads to an initial shortage of goods and services, savings can't solve it. In fact, what started as '20 million yen is enough for retirement' has now shifted to talk that even double that, 40 million yen, is insufficient.
Even so, both the media and financial institutions skipped the discussion of demographic structure and turned it into a problem for individuals to shoulder, saying, 'Let's each save another 20 million yen.' Behind that, the financial industry likely wanted to sell investment products. The 'illusion' I refer to is right here. A problem that originally required society's collective strength to solve was replaced with a personal money problem."
-I thought that if I steadily saved a set amount there would be little to worry about in old age, but there's always another hill to climb.
"Because the standard for peace of mind in old age becomes not 'saving a certain amount' but 'saving more money than others.' Suppose there's a shortage of caregiving workers. If everyone rushes in with money, prices will rise, right? Then only those with more money can secure caregiving services. It's literally a game of musical chairs.
If I succeed in getting a seat, it means someone else couldn't. If the number of chairs doesn't increase even as everyone boosts savings, society will inevitably leave someone standing. While it's rational for individuals to grow their money, at a societal level we absolutely need efforts to 'increase the number of chairs' themselves."
-Let's talk more about money. As the perception spreads that stock investing is the best way to build wealth while hedging inflation and growing corporations, financial mentors are revered in Korea these days. Much like how Robert Kiyosaki of Rich Dad Poor Dad created a money craze in the 1990s.
"There's a truth we need to pin down first. The expectation that more active stock transactions will grow corporations is an illusion. Most stock transactions are resales between investors. The money individuals invest in stocks hardly flows into corporations, and funds that were asleep simply go back to sleep in another account.
In fact, for corporations, it's far more appreciated when you buy their products than their stock, and the reason Japan has been able to grow so far is not because individuals have actively invested, but because many people made deposits at banks. In that context, there's something missing in the logic of Robert Kiyosaki, author of Rich Dad Poor Dad. It's the perspective of 'Who will buy your rising stock at a high price?'
It may look rational at first glance, but at a national level, investment gains come out of someone's wallet. Think about it. If everyone becomes an investor, who does the work? If output falls short, inflation inevitably follows. That's why a society that reveres 'investment mentors' is dangerous.
The ones to revere are not those who profit by riding market price swings but entrepreneurs who create new value."
-Still, isn't long-term investing that looks to future value beneficial for everyone?
"You often hear the claim, 'If you invest long-term, you can surely make a profit.' But there are major premises here: that the economy will continue to grow and that the number of young investors entering the market later will keep increasing. Those two.
When the Nikkei average hit its bubble-era record high of 38,915 yen in Dec. 1989, suppose someone began investing monthly in a dollar-cost averaging plan from then. The time that person could have realized a profit was around 2013. They carried losses for about 24 years. If they had retired and needed to cash out along the way, the loss would have been fatal."
-You assume the worst-case scenario!
"No. In the era ahead, a major risk factor for long-term investing is also population decline. It operates as a risk on two levels. First, its impact on corporate revenue. As Japan's population rapidly shrinks, it becomes harder for corporations doing business only in the domestic market to keep growing profits. Fewer customers means it's harder to increase sales. Corporate profits will at some point hit a ceiling, and stock price gains will be harder to expect.
Second, its impact on the supply-demand balance of stocks. For long-term investing to work, when you want to sell stocks in old age, you need young investors who will buy them. But in a shrinking population, the number of young people starting to invest falls well below the number of elderly reaching retirement. With fewer buyers, stock prices tend to fall. It's an inescapable structure.
Korea is experiencing an even lower birthrate than Japan. If you believe the line 'Long-term investing is safe' based only on past data, you'll overlook the fundamental shift in demographic structure. That's the message I wanted to convey."
-Frankly, this is the first work I've seen that ties population decline to the 'money' issue and presents it with such concrete, everyday feel. It was shocking. For example, when Taiwan's TSMC opened in the Kumamoto area, is it true that it siphoned off working-age people and local schools lacked staff?
"The teacher shortage caused by TSMC's entry into Kumamoto was reported in the news. A semiconductor plant may seem positive at first glance because it creates jobs. It's also a plus in terms of GDP. But that's the story in a situation where there's a surplus of people. When there's a labor shortage, the story is entirely different.
In Kumamoto, the rapid expansion of semiconductor production is drawing talent to higher-paying semiconductor-related corporations. The problem is that teacher salaries are fixed and can't easily be raised. So teachers stopped coming.
The most important investment—education—was pushed to the back burner. If you leave everything to the market economy, activities most vital to society wither, even if they don't show up in GDP. What's happening in Kumamoto will happen across Japan. That sense of crisis was one reason I wrote this book."
-How did you first discover that the bigger problem isn't money but 'a shortage of hands'?
"Because I worked at Goldman Sachs as a Japanese Government Bonds trader, I thought about fiscal issues every day. A frequent question then was why debt-laden Japan wasn't seeing yen weakness and could hold on without raising interest rates.
To simplify a lot, the reason lay in Japan's high supply capacity. As long as you have supply capacity, money doesn't flow out easily. You can produce needed goods and services domestically. That also means the premise changes if supply capacity weakens.
In the book I frame this as the constraints of people, goods and money. But now the constraint is shifting from money to people. I believe we are in a transition that is fundamentally changing the economic structure that has existed since World War II. The unending yen weakness is one of the signals. Japan has already fallen into a vicious cycle where, as a result of weakened supply capacity, it relies on imports and money flows out abroad."
-We've talked continuously about labor shortages from population decline, but the reality is that AI is pushing up joblessness among college graduates, and tech corporations are unhesitant about mass layoffs.
"That's happening in Japan too. But it's limited to white-collar jobs. Japan is now experiencing an overwhelming labor shortage. According to calculations by Recruit Works Institute, by 2040 there will be a shortage of 11 million workers. That's about 20 percent of Japan's entire workforce.
Jobs that AI takes and areas where labor shortages worsen won't necessarily be the same. AI is good at data processing and standardized tasks. But work requiring human hands and bodies—caregiving, health care, childcare, construction, agriculture, transport—cannot be replaced by AI. And Japan is facing a severe shortage of people to do those jobs. The more essential the labor, the more acute the shortages will be."
-Some say essential labor will soon be replaceable by physical AI.
"Technically, that future may arrive. But it will take time. And likely before that, we will hit another wall: securing energy and resources.
Robots need electricity to move. AI data centers consume huge amounts of power. With the spread of generative AI, global electricity demand is surging, and demand for fossil fuels is, if anything, rising. For resource-poor Japan, this is a headwind, not a tailwind.
Anxiety that AI might take our jobs and anxiety that society might grind to a halt due to labor shortages seem like separate issues, but they are fundamentally connected. Neither can be solved with money. These are anxieties created by shortages of the 'real'—people, goods and energy."
-You joined Goldman Sachs in 2003 and for 16 years handled trading in Japanese Government Bonds, yen interest rate financial derivatives and long-dated foreign exchange transactions. Tell us about the biggest shocks and lessons you experienced there.
"The most shocking was the true story of the 'man who made 10 billion,' which I also wrote about in my book. From that experience I learned two things. First, that almost all the 'easy ways to make money' circulating in the world are mirages. No one teaches you methods that really make money. Second, if someone in the market is making 'abnormal profits,' you should start by being suspicious.
-Did that lead to your transformation into a social financier?
"Becoming a social financial educator wasn't a decision made in a single moment. But my sense of unease about the retirement fund issue had a big impact. I felt, 'This isn't an individual problem. It's a problem for society as a whole,' yet all I heard around me was, 'Asset management is important.'
I also felt the same unease during my long years in the financial market. As a bond trader, I conducted transactions with institutional investors every day. I, wanting to sell even 1 yen higher, and the counterparty, wanting to buy even 1 yen lower, negotiated at length, and depending on the price, 100 million yen in profit and loss swung back and forth.
But thinking it over, in the end it was only a matter of whether that 100 million yen came to us or went to them. From society's standpoint, it didn't matter. When asked, 'How much does your work affect the real economy?' there wasn't much to say.
Maybe what I was doing wasn't helping anyone. Feeling that unease, I decided to step outside the market. The question I kept asking in this book—'Is that profit a reward for helping someone?'—was originally a question directed at myself."
-Even if you try to steady your mind, hearing that 'everyone is making money from investing' is enough to shake your mental state.
"I was the same as a trader. Anyone's heart will waver when they hear 'I'm making money from investing.' It's nothing to be ashamed of. It's a natural human reaction. But there's an 'identity' to this wavering.
Social media and video platforms are awash in posts and videos claiming, 'I made 100 million yen investing,' 'I multiplied my assets tenfold in half a year.' Posters believe it was their skill or effort, but in reality they just happened to ride the market's flow. People see that and believe, 'If I work hard, I can get the same result,' but market timing doesn't repeat.
There's no guarantee you can get the same result next year with the same method. Losers are silent, so you'll find few failure stories on social media. The landscape where 'everyone is making money' is close to a mirage. Emotional turmoil is natural, but it isn't grounded in fact."
-What did you feel as you uncovered the secret of the man who made 10 billion?
"When the truth about the 'man who made 10 billion' came to light in the form of an arrest, I realized two things. First, 'The reason I couldn't find a way to make 10 billion wasn't my lack of ability, but that such a method doesn't exist in the first place.' Almost all the 'easy ways to make money' circulating in the world are mirages.
Second, the boundary between the legal and the illicit in markets is shakier than you think. That person profited through illicit means, but there are countless ways to profit within the bounds of legality by exploiting information asymmetry. When pros and amateurs compete in the same market, can they really fight on equal terms?
Behind almost every flashy money-making method, someone's wallet is nearly always being picked. Then can you be sure your wallet alone won't be? That experience later became one of the motivations to write this book."
-Is the question 'Whose wallet did the money come from?' really necessary?
"You can't grasp the essence of investing with the explanation 'you bet on risk and earn profits' alone. The reason the question 'Whose wallet did the money come from?' matters is that it's the key to telling whether it's investment or gambling. There are two kinds of investment profits.
The first is 'reward for having helped someone.' A corporation makes good products and earns profits, and a portion of those profits is returned to shareholders as dividends. Rental income is similar. This is sound investing that supports our lives as the result of creating new value in society. Deposits can be viewed the same way. Through banks, deposits are used as funds for someone to build a new factory or a house. Therefore, interest on deposits is also 'a reward for having helped someone.'
The second is 'money targeted at other investors.' Speculation seeking price appreciation, cryptocurrencies, FX—these are investors taking each other's money and don't create new value for society. It's close to gambling. Asking 'Whose wallet did the money come from?' lets you distinguish the two.
-Does that question also help with personal money management?
"It helps in the sense that you can protect your assets. The question lets you see through investment scams. When tempted by claims like 'Guaranteed profits,' '10% monthly returns with no risk,' ask, 'Whose wallet is that money coming from, exactly?' If you don't get a convincing explanation, it's almost certainly a scam or gambling."
-Inequality and the gap between Main Street, the producer of the real economy, and Wall Street, the stock market, are serious in the United States too. When capital income outpaces labor income, people lose the motivation to work, and only anger grows.
"There's one more point I want to clarify regarding the claim that 'investing is more advantageous than working.' 'The more financial capital you have, the more advantageous it is.' That's indisputable. If someone with 100 million yen in assets manages it at an annual 5% rate, they receive 5 million yen a year without moving. That exceeds most workers' annual salaries. The polarization structure Thomas Piketty presented as 'r>g' is reality itself.
But we need to separate the discussion. The statement 'Those who already hold assets have the advantage' and the question 'If you have no assets and start now, where will your efforts be better rewarded—investing or working?' are entirely different issues.
Comparing assets and labor as targets of effort, I clearly think labor is more likely to reward effort. The investing world is an arena where well-paid, well-capitalized pros battle daily. No matter how much an individual studies, it's hard to beat average returns (3% to 5% annually), and even if they do, luck plays a big role. Even with moderate investing, the expected value isn't much different.
Work is different. If you hone your skills, build experience and sharpen your observation, you can beat the average wage growth rate. As an outcome of effort, it's highly reproducible. Skills you learn this year will remain your strengths next year and the year after."
-How can we get out of the money game of staking money to win money and raise the value of our labor?
"There's no simple answer. I think 'observation' is the key. When people wanted faster horses and lighter carriages, Henry Ford focused on the essence—'faster movement'—and mass-produced the 'carriage without a horse' (the automobile). Observing and devising, and the power to move people, are what create true labor value.
There's one more thing I hope for. The tougher the economy gets, the more consumers spend centered on necessities. Then money will flow to those doing truly helpful work. Shortages of bus drivers, teachers and care workers are becoming more extreme. I believe an era is coming soon when the labor of those underpinning society—caregiving, health care, childcare, agriculture, making things—will be properly valued."
-I'm suddenly curious. Why do you think Japan, which surged into the 20th century with the Meiji Restoration, failed in IT and digital transformation?
"During the Meiji Restoration, Japan discarded the old samurai system and embraced Western technology and institutions with full force. Instead of hammering down protruding nails, it welcomed youth challenges as 'reforms needed by the times.' But after World War II and through the high-growth period, Japanese society put 'stability' first. Lifetime employment, seniority-based pay, industry protection. To preserve systems once built, it suppressed new challenges.
There are countless cases where new challenges were vetoed as 'abnormal' or 'bad manners,' such as the Livedoor case and the Winny case. Falling behind the world in mobile's Galapagos-ization, video streaming and music streaming all follow the same pattern."
-What do Japanese people think about the 'lost 30 years'?
"Many Japanese vaguely thought, 'Someday we'll return to the old days.' The glory of the bubble era lingered in their minds, perhaps making them hesitant to accept change. The causes of the 'lost 30 years' aren't just one thing. Failure to quickly deal with the bubble collapse, population decline, slow responses to globalization and digitalization—these are all intertwined. The biggest factor is 'the shift from the real economy to the money economy.'
From postwar recovery through the high-growth years, Japan became prosperous by 'making what people wanted.' Black-and-white televisions, washing machines, refrigerators, cars. Because corporate and consumer desires aligned, a healthy cycle took hold. But at some point people became materially satisfied. Then corporations poured energy into 'making people want things.'
As attention shifted from goods to money, corporations began satisfying consumer desires in the form of 'financial products.' I think that's the essence of the 'money economy.' Corporations and consumers, corporations against corporations, and consumers against consumers, all try to take from one another over money. The meaning of work and of life itself is measured in money.
The 'lost 30 years' were a time when, with money at the center of everything, human life was pushed to the back."
-In your view, what exactly does true investing look like? When does money exert its power?
"What I consider 'true investing' is letting money participate in the flows that move the real economy. When people hear 'investing,' many just think of buying financial products. But strictly speaking, that makes you a consumer of financial products, not an investor in the original sense. To repeat, most stock transactions are resales among investors, and the money doesn't flow to corporations.
What really matters is money flowing into the real economy and being used on the front lines where something is created. People who make new products, who launch new services, who support their regions—only when money reaches such people does investing show its power.
What's especially important is a society where young people can take on new challenges. As Steve Jobs started Apple in a garage, places where the young can begin to act are what create the future. Without people who act, money is just a money game."
-You have a question you always ask when you meet teenagers: 'Among love, companions and money, which do you think is most precious?' Which answer is most common?
"There's a set pattern to students' responses. Middle schoolers choose 'companions,' high schoolers choose 'money.' Few choose 'love.' They don't expect what's hard to obtain. It's a rational strategy befitting youth. But if you pursue money alone, you end up lonely. If the only people cheering you on are your parents, it's hard to get by unless your individual ability is extraordinary.
Conversely, people who excel at being loved and at finding companions can live on even if they're not exceptionally skilled. Those you can rely on in hardship are a strength money can never buy. Love, companions, money—finding balance among these three is important."
-Lastly, please share tips for living well without being defeated by anxiety about money.
"Capitalist society basically runs on anxiety as its engine. That's because it promotes problem-solving by 'buying products.' Health anxiety leads to health supplements, old-age anxiety to financial products, anxiety about children's education to education services. It's all a structure of 'solving' by spending money.
Moreover, the 'recommended' information flowing into your timeline is optimized not for our happiness but to keep us on the platform and ultimately to make us buy something. Aware of this environment and to free yourself from anxiety about money, my advice is simple.
First, consciously secure time at a distance from the flood of information. Put down your smartphone and take a walk, read a book or talk with your family. Second, think with your own head about what is precious to you, what you truly want to do in life, and imprint it.
Third, share 'that precious thing' with those precious to you. Anxiety about money is lonely, and what torments us is the fact we must shoulder that anxiety alone. Just sharing your anxiety with someone dear makes the world far more livable."