I haven't read Saito's books, or looked too deeply into degrowth as a movement. I just read this article and thought it made some good arguments against what it claims are Saito's understandings of Marx. I'm not sure I agree with everything, but I thought it was interesting enough to share.
I think you are confused about what de-industrialization means.
When we’re talking about de-industrialization/re-industrialization, we’re not just talking about the manufacturing sector, you know. Service economy is part of the industry too, as it contributes to the real sector of the economy, which is defined by the production of real goods and services.
America is de-industrialized not just because of the loss of its manufacturing jobs, but the fact that its economy has been largely eclipsed by the non-productive sector (finance, insurance, real estate, or the FIRE sector as Michael Hudson calls it). These are not service industries because they contribute nothing to the real sector of the economy. The so-called “post-industrial” service economy in the US pales in comparison to the non-productive FIRE sector. (Some of the tech companies are harder to define because their business model relies on rent extraction as well, such as paying for subscriptions for what is essentially the same content over time, just like paying rent for living on a piece of land somebody else owned)
That’s where the danger of de-industrialization lies, because it has transitioned into a rentier economy where rent extraction (unearned income) accounts for much of its economic activity (GDP). If you’re paying 30-40% of your monthly income on rent or mortgage, that money that could have been spent on real goods and services to stimulate the local economy, is now being funneled to the top 0.1% of the country.
And this is bad because the working class is being reduced to debt slaves rather than the proletariat of the 19th to early 20th century industrial capitalism, where their labor was tied to production rather than debt or land. This is also why the revolutionary potential in the Western de-industrialized countries is so low.
Now, can a fully service based economy work for a socialist country? That’s another question, but the answer is probably not, not just because you would have to rely on supply chains that you have no control over (unlike the US with its global institutions that enforce neoliberal free trade order), but because there will always be demand for consumption that drives domestic industrial production within the country if the people get to choose what they want to produce.