Russian, Chinese and American economic narratives

Some convince with numbers, most with stories.  When stories turn into national narratives, history is made.

Narratives turn complexity into simplicity, and give identity and purpose.  Individuals can be conflated into a nation state akin to a single person: “China will”, “Iran is…”

Even preposterous narratives convince if they feel right.  They can motivate people beyond their individual limits, for good or ill.  “Good” narratives can focus on a country’s living standards and global citizenship. “Bad” narratives can strip people of their individuality, create double standards of morality between in and out-groups, and encourage win: lose competition between countries.

Russia, China and America all have greatness narratives.

Russia is crumbling internally.  It has high morbidity, low fertility and risks population collapse.  It is deindustrialising.  It depends for exports on military and space technology and natural resources, not complex civil market products.   Elites control its wealth.

Russia’s malaise results from its lack of market memory and its autocratic history.   Market exchange requires respect for customers as individuals – economic autocracy does not.

Russia’s inability to develop a market economy and supporting institutions can be traced to Ivan the Terrible’s destruction of the boyar class.  Russia never developed a strong middle class that demanded property rights and the civil and political rights arising from them.  There was no Russian Magna Carta.

The 1917 Bolshevik revolution swept away Tsarist autocracy, however Russia did not have deep enough market roots for a modern economy to build from.  Coercion rather than market forces drove economic development.

Some Bolshevik leaders such as Bukharin, Rykov and Tomsky favoured a New Economic Policy based on market liberalism.  Bukharin was a keen botanist, an accomplished poet, and had deep cultural interests.  He split with Stalin in 1929 over collectivisation, fearing it would lead to military-feudal exploitation.  His advice to peasants was” “enrich yourselves”.  His thinking on “market socialism” was influential among Chinese communists, and helped lay the groundwork for Deng Xiao Ping’s reforms.

Placed on trial for opposing Stalinism, Bukharin pleaded guilty to the “sum total” of crimes in the abstract, but denied specific crimes against particular individuals.

From the late 1920s, Stalin destroyed the kulaks, using famine as a weapon.  In doing so he crippled Soviet agriculture, despite its huge resource base and economic potential.  This is notable, because autocratic narratives impoverish even countries with huge resource advantages.  Mugabe created a famine in the bread basket of Africa!  Chavez created a petrol shortage in Venezuela, a country with the world’s higher per capita oil endowments!  Such tragedies occurred because populist and autocratic narratives replaced individualism and market exchange.

Putin has sought to recreate national pride through an imperial narrative expressing power over non-Russians.  He has courted Orthodox Church spiritual support, Solzhenitsyn’s cultural validation and Great Patriotic War history to support his narrative.  He shows no interest in economic advancement and lifting Russia’s own population out of degradation.

Arguably, China of all countries has had the longest historical periods in which it was the world technological leader with the highest per capita income and the most stable continuous polity.  Its market memory stretches back for centuries.  Much was suppressed by Mao Zedong’s communist government, but remained latent.  Even under Mao, Zhou en-lai drew on China’s cultural and market heritage to moderate communist excesses.

Zhou served as Premier from 1949 to 1976.  He acquired a life-long passion for Chinese literature and opera from his adoptive mother.  He supported liberal reforms that he saw beneficial for China.  He prevented Beijing from being renamed “East Is Red City”, and the Chinese guardian lions in front of Tiananmen Square from being replaced with statues of Mao… The 1966 Cultural Revolution destroyed cultural artefacts, but failed to destroy cultural narrative.

The Chinese people had subtle ways of signalling their views, even with limited civil rights.  Zhou’s death in January 1976 triggered nationwide grief for a leader seen as exemplifying cultural continuity, economic hope and supporting narrative.  The April 5 1976 Tiananmen Square incident saw about two million Chinese commemorate Zhou’s death with flowers, poems and prayers, rather than communist slogans.

Deng Xiaoping built on Zhou’s liberalising tendencies.  Though purged twice during the Cultural Revolution, he led China from 1978 to 1989 and liberalised China’s economy.  Zhou and Deng were Chinese patriots who used central planning as tools for China’s development, not for ideological ends.

Xi Jinping’s father, Xi Zhongxun was known for moderation, empiricism rather than ideology, empathy with cultural minorities, and economic pragmatism.  He influenced Deng Xiaoping’s early experiments with market liberalisation, including the creation of special economic zones.

Key Chinese leaders learnt from other countries, and integrated that thinking into a Chinese cultural and economic context.   Xi Jinping was profoundly influenced by his 1985 visit to America to study agriculture, and to stay for a time with an American family.

China’s economic growth and dynamism comes from a powerful idea – China has been great, and will be great again.  Chinese leaders and people, including minorities within China share this narrative.  It has deep cultural and intellectual as well as economic roots, and connects to individual motivations.  Xi wants young people to “dare to dream, work assiduously to fulfil the dreams and contribute to the revitalisation of the China Dream”.

China liberalised its economy through learning by doing and thinking in time, not rigid ideology.  Chinese leaders characterised the process as crossing a river and “feeling for the slippery underwater stones”.  China opened the windows to let fresh market air in, but “kept the fly screens up” to avoid such destabilising forces as international financial crises.  It adopted a “bird-cage” strategy, liberalising within a framework based on China’s wider interests, and including a core role for the state.

China’s bureaucracy is meritocratic.  China has been innovative in its state-owned enterprise sector, in local government and private sector joint ventures, and in using state power to adopt and extend international technology.  Open debate and pluralism is welcome in China, but attacks on the Communist Party’s political legitimacy are not.

America has led the world scientifically, technologically and economically for the last century. It has unchallenged military capability.  America is still great, and does not have to revive an imaginary “lost greatness”.  However, individuals in Rust Belt zones and in low socio-economic groups do not feel great when they compare themselves with others, and benchmark themselves against past American “high expectations” narratives.

America’s current turmoil reflects conflicts between narratives.

One narrative is America as a melting pot where anyone can aspire to go from rags to riches, from log house to White House, or college drop-out to unicorn start-up entrepreneur.  America is an endless frontier of unbounded optimism, a City on the Hill.  Dreams come true if you want them to.

A Charles Koch variant is that America is the land of free business entrepreneurship involving a profit and loss system which creates opportunities for most, even though gains are unevenly distributed.  It concedes that some lose out, in relative if not in absolute terms.

This narrative is intellectually and socially libertarian.  Broadly, it resonates with the thinking of the late Milton Friedman, and of Tyler Cowen and Deirdre McCloskey.  This narrative supports free trade, and despises corporate welfare and vested interests (including coercive forms of trade unionism) that impede opportunities for others.  It is consistent with strong competition policy, however government’s role focuses largely on public goods rather than economic leadership.

This narrative supports helping the downtrodden through second chances, whether through prison reform or new entrepreneurial opportunities and the jobs and wealth coming from them.  It is humble enough to concede that the American free enterprise system failed indigenous Americans and Afro-Americans, but is deeply sceptical of stronger central government.

The American “liberal narrative” is a variant of European social democracy.  Its intellectual leaders include Paul Krugman and Joseph Stiglitz.  It supports a market system, but with a more prominent role for, and confidence in government.  It aims to replicate in the American economy the best features of the German and Scandinavian market systems, with their risk-buffering macro-economic and social policy devices.

Another American narrative thread is state and individual rights to counter perceived federal government over-reach. Its origin myths include the American War of Independence and the Constitution (selectively interpreted).  Its historical manifestations include attempted secession of the southern states during the Civil War, and the later overhang of Jim Crow policies.  Enduring cultural expressions include Gun Rights and the Tea Party.  Other American narratives are even more inchoate, or so divisive they speak only in code…

Donald Trump’s rise gives insights into facile, plausible narratives.  Such narratives typically have a core of truth. They are most powerful when their core of truth has been suppressed by those in elitist positions.  Stating truths that others have suppressed legitimatises a mass of subsequent falsehood.

President Trump is a master-singer of subtly false narratives, credentialed with uncomfortable truths.  Iraq was not developing nuclear weapons.  The Iraq invasion and its aftermath created a power vacuum ISIS filled.  America’s infrastructure is degraded.  That someone states these truths means false contentions about climate change and free trade are believed.

The difficulty with the Trump narrative is the inherent conflicts woven into its fabric.  There is no affinity of interest between the far right Republican establishment and the embittered Rust Belt.  The Trump narrative is supported by millions of American voters who would lose badly if the Affordable Care Act was repealed, or taxes on the rich reduced in a way that shifts the long-term burden to blue collar workers.  Trump’s trade, defence and climate change policies will damage America’s industrial base, erode its security, and forego massive opportunities from sustainable energy technologies.

However, damaging narratives such as the Trumperian patchwork can be challenged and co-opted.  Attitudes to single sex marriage improved when they were personalised as being about love, not abstract human rights.  American Muslim women can wear stars and stripes headdresses…

America has deep local democracy, intellectual pluralism, and effective constitutional checks and balances.  The tension between America’s federal and state government systems impedes central action.  However it also allows real-time experimentation between competing state policies.

America will meander before it develops a narrative it can rally around.  This narrative will have threads from Lincoln, Martin Luther King, Obama, and from market liberalism.  When it comes together, America will feel as well as be great.

However, true greatness for America, China, Russia and other big powers depends on their international as well as domestic contributions. This means shared narratives relating to global environmental, health, communication and security public goods, and to international rules fostering trade and international law.  Only then will these powers be authentically great; as they see themselves, and others see them.




About Peter Winsley

I’ve worked in policy and economics-related fields in New Zealand for many years. With qualifications and publications in economics, management and literature, I take a multidisciplinary perspective to how people’s lives can be enhanced. I love nature, literature, music, tramping, boating and my family.
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One Response to Russian, Chinese and American economic narratives

  1. David Lillis says:

    Hi Peter.

    A very interesting piece from you – as always! However, while Trump may assert that Iraq was developing nuclear weapons (at least, that’s what I deduce from your reference to Iraq), originally the lie was told by others prior to him (though possibly those others believed it).

    I have two more links for you – both from Wolfgang Mozart. I hope that you can find the time to get to know these works. I find that I need several hearings to appreciate music properly and I hope that you can hear these recordings more than once. These masterpieces of Mozart demonstrate his godlike genius.

    Note the painting of Mozart in his favourite red jacket. In recent months I have derived immense pleasure from hearing that man’s music over some hundreds of hours and devouring every book on him that I can find. In particular I hope that you enjoy the lovely second movement of his 16’th piano sonata. So simple, and yet only he could have produced it! For me the greatest man of his era!


    Mozart – The Piano Sonata No 16 in C major 1. Allegro 2. Andante 3. Rondo []

    [Kocsis-Ránki] Mozart- Sonata for Two Pianos in D,




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