Why Russia is not China

The secret of successful reforms is not in the nationality of people, but in how they lived before they began.

Forty years ago, serious economic reforms began in China, turning a half-starved country, which suffered greatly from the consequences of Maoist experiments, into a global industrial workshop, into a world leader in economic growth. And now, for at least thirty years, we have been talking about whether it was possible for Russia to follow the Chinese path in reforms.

Sometimes jokers answer this by saying that we have too few Chinese for the Chinese way. Such an answer is, of course, incorrect in both form and substance. There are no peoples who are inclined to build an efficient market economy and who are not. Success depends on the rules of the game established in the country (on institutions, if in a scientific way), and not on nationality. The same China was very unsuccessful in the economy both before the arrival of Maoism and after. But after the departure of Maoism, he suddenly succeeded, because the rules of the game changed radically.

Nevertheless, in a sense, the above joke is correct, since it hints at the fact that there were some very important objective differences between Russia and China.

The problem is not in the nationality of people, but in how they lived at the beginning of the reforms, what they did - in Russia and in China.

China was almost entirely an agrarian country, Russia was mostly an industrial one. In China, the peasants could starve, but in Russia there was no famine, and the people suffered only from a shortage of goods. In China, the state did not take on any social obligations, while in Russia there were pensions, sick leave, and bread with pasta and cereals for everyone at artificially low prices. Therefore, both the expectations of the reforms and the goals of the reforms were fundamentally different.

The Chinese peasants, who constituted the overwhelming majority of the population, wanted (in order not to starve) to work for themselves, and not for the commune. In fact, they were opponents of state regulation, although they hardly thought in such terms. And when they got the coveted right, they got to work rolling up their sleeves. Simplifying somewhat, we can say that it was not we who went the Chinese way in reforms, but the Chinese ours, if we recall what the NEP reforms were carried out in that era when Russia was as much an agrarian country as China.

The bulk of Russian citizens could no longer imagine life without state paternalism. When enterprises were given freedom, society demanded guarantees from the state, that is, various monetary payments that would at least maintain the standard of living that was before. Moreover, agriculture also demanded guarantees: the country must feed its peasantry, as one well-known agrarian lobbyist said.

Here is the paradox. Since the power of the Communist Party remained in China, it sometimes seems to us that state regulation was stronger there than in Russia. However, in fact, most of the vast peasant country worked for survival without the help of the state, but also without interference from it. In our country, in order to satisfy its philistine voter, the state helped those who themselves did not produce competitive products, and hindered (by collecting high taxes) those who, in a different situation, could work extremely successfully.

If we went the Chinese way, then the state would have to say to millions of people in the nineties: turn around as you know,

there will be no subsidies, no pensions, no salaries for a significant part of state employees ... It is clear that such a Chinese path would cause even greater rejection in Russia than the policy that we have in practice. Although with such "animal capitalism" we could perhaps achieve the same economic miracle that China has created.

This miracle consisted in the fact that China flooded the whole world with extremely cheap products that defeated foreign ones in the competition. And the cheapness of production was determined by low wages and low taxes. In our country, for such a low salary as in China, neither the worker nor the collective farmer wanted to work. And the state, dependent on workers and collective farmers, did not want to reduce taxes. Instead of an economic miracle, they ended up with economic stagnation.

And one more thing distinguished us from China. Attracted by cheap labor force, foreign capital actively went there with its technologies. And the Chinese did not shout that they were being enslaved, but rejoiced at the jobs created by this capital. In our country, wages were high compared to China, the screams were loud, and the quality of the workforce (with a tendency to kiss the bottle) was poor. So before losing to China in the competition in the world market for goods, we lost to it in the competition for investment.

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