Why Scotland’s economic strategy is a little like that of Putin’s Russia

If we would not take it from him, he added, then we should look at the state of opinion among the citizens of our own countries. Many had come out against immigration, against open borders for refugees and against the ever more exotic positions that sexual liberation assumes. Multi-culturalism was in general “no longer tenable”. Westerners themselves were turning back to traditional, national ways of life and rejecting the idea that, within a particular territory, no norms should be set for the whole population, perhaps with sanctions if they did not obey.

Alas, I was not in Osaka to cross swords with Putin myself. But a while ago I did have the chance of an exchange of views with a group of Russians from what might be called their foreign policy establishment. These were members of Moscow think tanks and the like who make it their business to understand developments in Western countries and, presumably, to supply the fruits of their labours as inputs for Putin’s public statements, among other things. And they came to have a look at Scotland.

The existence of these Russian think tanks is significant in itself. In the UK we have think tanks too, but so far as I know none regard it as their business to study, say, France or Germany. If we want to learn about these countries we just go and see for ourselves, and talk to the people we meet. Though Russia is no longer largely closed to us, nor we to it, even so it takes something of a mental leap for the two sides to get on terms with each other. Common understanding cannot be assumed, but needs to be worked on. Of the many differences, let me concentrate on two kinds, the economic and the political.

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After 1989 Russia abandoned the socialist system of central planning which by then was ceasing to function anyway. It would not be quite true to say the economy has since gone over instead to free markets, because there is still a high level of state influence, not least in the form of a commercial oligarchy of people closely connected with the government.

They all enrich one another, but at least their collective conduct has some degree of economic rationale rather than being irrational, as socialism had become. And indeed there are a number of undoubtedly capitalist countries round the world where a kleptocratic ruling class acts in much the same way.

In politics, we and the Russians remain far apart. They preserve an authoritarian regime, though no longer one as brutal as in the past. To all intents and purposes they have a one-party state, despite regular elections and a national assembly for public representatives to sit in. All the same freedom of speech and opinion are by no means universally respected, while systematic opposition may be intimidated by persecution or even murder.

Breaches of human rights are hard to redress. The long-suffering people can do little but put up with all this. It has been going on since the Russian state was founded four centuries ago, and the main effect of modernity has been to make it more efficient or now, under Putin, more cunning.

Our Russian guests in Scotland offered two justifications for this present state of affairs. One was that they had all suffered a searing experience for a full decade after the collapse of communism in 1989. Industries closed down, job losses mounted and living standards plummeted. Symptoms of demoralisation appeared in widespread alcoholism or drug addiction, and life expectancy actually fell. The people tended to blame Mikhail Gorbachov and Boris Yeltsin, justly or not. In any event, Putin decided he just had to get the economy moving again if he, and the country, were to survive. He was doing so by means of free markets (though I guess his conception of a free market and mine are a little different). So, amid the gloom, there were already glittering islands of conspicuous consumption by successful people in his system, by the oligarchs in other words.

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In politics, on similar grounds, Putin had concluded a democratic regime on Western lines was not the first priority. It would waste too much time on talk when the imperative was to get on with the job of reform and revival. The experience of China, our Russians claimed, had been convincing. China ran an authoritarian system including a capitalist sector but without democratic rights for its citizens. Yet it had enjoyed in recent years the highest growth rate in the world. It was this, not personal freedom, that offered a stable future. Russia could follow the same road.

The problem is that this Russian anti-liberal course has so far failed to produce anything like Chinese results. China’s economic growth rate in 2019 is forecast to be about 6% – well down on the annual 15% in the best of recent times, but still far ahead in a world which may be poised on the brink of recession.

If recession does come, it will be all the worse for a Russian economy now limping along with growth of 0.5%, even worse than Brexit Britain’s. At least in our case a boom had preceded the bust. Russia has never enjoyed a boom.

Theresa May met Vladimir Putin at the G20 Summit

In the Western world we would still on the whole conclude that economic and political liberalism go together, as nothing much has happened to shake that long-standing conviction. In this scheme of things, a society geared to innovation in industrial and commercial life finds a counterpart in a political system open to the competition of ideas among individuals and parties. It is from entrepreneurship in both spheres that we maintain our prosperity and our progress. Given that in any case our economics and our politics are so intertwined, it is hardly possible to have full freedom in the one and no freedom in the other. Perhaps we too should worry about the Chinese example. But we don’t really need to worry yet.

Still, one of the exciting things about living in Scotland at the moment is to see the nation steadily awakening up to the fact that there is, beyond horizons long bound by London, a world to connect to that is also interested in hearing from us. Where would we fit into the scheme of greater or lesser liberty in the respective economic and political spheres?

Perhaps we are less typical of the Western world than we might assume. After all, the Scottish Government believes that in economic matters it is in principle omnipotent, and all it needs to achieve any particular purpose is to pass an appropriate law or other form of regulation. While it does recognise that enterprise is likely to come out of the world of business rather than from the civil service, it still expects entrepreneurs to conform to various official codes of conduct, at least before they get any help in cash or kind through the public sector.

Our system would be recognisable to the Russians. Perhaps it is time for Nicola Sturgeon to pay a visit to Vladimir Putin.