I think a similar thing is happening in the West at the moment. In the 1980s the right wing administrations - and the two I know most about are Reagan's and Thatcher's - put out some half-baked propaganda about economics, which really didn't make sense. For example Reagan famously attributed America's economic ills to 'welfare queens' - young black single mothers who were supposedly draining the economy. This story, and the wider narrative about government spending, gained a lot of popular traction. However Reagan's economic programme (steered by cleverer men than him) was not based on this narrative. It was based on running up international debts, backed up by Military pre-eminence. Similarly Thatcher had some narrative blaming the working class, but her actual programme was to fund tax cuts through sell-offs and the deployment of North Sea oil revenue, and deregulate the financial sector. In both the US and the UK the economic strategy was bound to crash eventually (and both now have) but they were functioning strategies, based on the real world.
But something seems to have happened lately. I am not sure whether it's because the right wing parties are now run by people who grew up under the fake narratives of Reagan and Thatcher and somehow believed them, or whether people have been driven insane like the guy in Colditz by faking insane narratives.
For example the narrative of the right in the UK is that the private sector can run things better than the public sector. There are many obvious examples in the UK which contradict this narrative: the NHS and the BBC are the two most distinctive. So, the right are trying to force public organisations to fail, to match the narrative. For example I was talking to someone recently who works for the National Audit Office (NAO). They are being replaced by private auditors. In order to make NAO fail, she and her colleagues aren't being given any work to do. They are getting paid, and forced to sit idle. This is an insane strategy, and it's going on all over our country right now. Some public sector people are being given impossible amounts of work to do, so that they will fail, and others are being forced to do nothing, so that they will fail. Each person feels isolated and helpless. It's deliberate wrecking, imposed from above.
In a time of national crisis, forcing additional failure is insane, in my opinion.
Which brings me to America, and the Tea Party Republicans, who are currently literally trying to destroy their own economy. Here is an article in today's Observer, by Will Hutton about the breakdown of budget talks in Washington between Obama and the Republican majority in Congress. The leaders of the right are threatening to renege on repaying the US debt.
The biggest economy on Earth will default... The US government will have to start to wind down: soldiers' wages and public pensions alike will be suspended. But in the financial markets there will be mayhem. Interest rates will shoot up and there will be a flight from the dollar. Banks, uncertain about their expected income from their holdings of US Treasury bonds and bills, will call in their loans, creating a second credit crunch. Some may collapse.
This would have serious implications for all of us. At present there is a stand-off.
Obama has tried to fashion a bargain with a collection of rightwing politicians that most in Washington regard as both mad and dangerous. Yet, after months of talking, the Republicans will not offer to bargain... It says a lot about American politics and culture that such a passionate minority believes that it can defy not just American political tradition but also the normal terms of trade that define human association... Nor do many of their number want to build political careers. They have been sent by God and their electors to bring down Washington.
I feel there are people with power who don't realise how fragile and precious human society is, and how vulnerable the systems which sustain us are. Capitalism is going wrong. If we co-operate we could save ourselves, and keep it going while we develop new systems to sustain life. But there is a significant group of people who are trying to hasten the end. Some because they think this will make god come, or the free market will save them. I think it's insane vandalism.