Beyond Myths and Fairy Tales: Reclaiming Rationality in Global Trade
Why multilateral cooperation is the only path forward.
Beyond Myths and Fairy Tales: Reclaiming Rationality in Global Trade
Why multilateral cooperation is the only path forward.
Pasquale Lucio Scandizzo
The chaos surrounding international tariff talks makes more sense when we consider the extent to which they ignore economic reality and how deeply instead they’re shaped by myths and fairy tales: narratives that increasingly define both national identity and global politics. Though they often blur together, these two forms of storytelling play distinct roles. Myths are rich, symbolic tales built around heroic figures and moral battles, offering meaning through characters like the strongman leader or the nation under siege. Fairy tales, by contrast, focus on symbols as key features of reality and simplify the world into neat cause-and-effect ethical stories, making complex global systems feel more manageable. These narratives don't just entertain: they shape how people understand the world. Instead of engaging in rational analysis, societies often make sense of global events through these emotionally charged frames. At heart, this reflects a deeper divide: whether history is made by powerful individuals (agency) or shaped by large-scale forces beyond any one person’s control (structure). Understanding the mythic aura around Trump, or the fairy-tale logic behind calls for protectionism, return to a golden age, or liberate the American spirit, helps explain why today’s economic policy so often follows storylines more than strategy.
As an imposing narration, myth appears at first sight the prevalent form of discourse. It possesses historiographical features: it is circumstantial, specific, often chronological. His heroes have precise genealogies; they move in scenarios that have been explored and drawn with systematicity and apparent accuracy. His characters have individual and collective features: they belong to peoples, tribes, and social groups that identify them and identify with them. At the same time, and perhaps in partial contrast to these historiographical characteristics, the myth has a courtly tone, epic resonances, elements of terrible or even just extravagant "superhumanity". Some stylized facts are pushed to excess, magnified beyond measure: the deeds of the heroes, the magical, supernatural element, the unpredictable events, the "deus ex machina" are all techniques that at the same time reveal the mythical nature of the story, and enhance its arcane meaning, the hidden resonance, its archetypal value.
Myth is therefore a product distinct from the historiographical account, in the sense that, despite its specificity and claim to realistic detail, it moves away from reality in a conspicuous way by using the tools of hyperbole and imagination in a deliberately aggrandizing way. Economic myths intermingle historical verisimilitude and symbolic exaggeration to produce compelling narratives. They provide specific timelines, agents, and social categories, such as the rational agent or virtuous entrepreneur, with ostensibly factual corroborations. Nonetheless, these figures and events often are stylized or idealized beyond recognition. Such narratives play archetypal roles, representing economic action as moral agency, fate, or inevitability. The efficient market agent, the genius innovator, and the rational economic man reflect these hyperbolic ideals. Such myths create public understanding and policy in the face of nullification by empirical evidence. They also specify the “tribes” in the economics arguments: productive vs. idle, poor vs. rich, taxpaying citizen vs. receiver of the dole. These simplifications play psychic and political rather than explanatory roles. Like the classic myths, they endure not because they’re correct, but because they stir emotions.
Myths also play a central role in shaping how we think about political action, especially in the sphere of imaginative or surprising leadership. Economic myths rely on stylized fact and archetypal figures, and political myths create leaders in terms of heroes who save the day, cunning tricksters, or destructive menaces. These myths overplay individual action, representing the leaders as “deus ex machina” figures who come decisively down in history to save or to destroy it. The myth of the charismatic leader, a visionary reformer, for example, or the strongman restorer of order, reduces complex political processes to moral tales with identified protagonists and outcomes. Such myths often emerge in the moment of crisis, where indeterminacy invites inspiring interpretations in the form of the symbolic body of the leader endowed with gifts. For example, figures such as Churchill or Mandela come to be mythologized as bearers of national will or moral purpose, and figures such as Trump or Putin subjects of myths of disorder, rupture, or populist sensibility. In either case, unpredictability becomes part of the myth: evidence of genius, authenticity, or menace. These myths help us to make sense of action defying institutional reason by representing extreme choices in terms of familiar story structures. Political myths transgress the boundary between explanation and enchantment, confirming group identities and emotional loyalties whilst usually effacing structural causes and limitations. They do not just describe leadership: they create its symbolic life.
Trump’s threat to impose a 30% tariff on European goods is a perfect example of the manner in which myths and fairy tales may be used to shape the economic reality perception of the public. This mythical story has the U.S. as the victim of unfair European trade policies, and an ideally noble leader (e.g., Trump) who will set it aright with tariffs and protection policies. For some of the US citizens and European sympathizers, this works as an emotionally satisfying fable that is skeptical of hard facts in favor of an inspirational saga of the country's restoration and a leader’s capacity. It is an agency-based story: the belief that history has created an inequitable disparity and dramatic leadership on the behalf of the strong leader will somehow "cure" it.
But the legend is grounded on a myth developed from distorted realities. The seeming trade surplus is misleading because of three major reasons. First, the USA actually has an enormous services surplus with the EU, which balances most of the goods’ deficit, but that is often excluded from the discussion, as services are intangible and hard to dramatize. Second, much of the apparent product that is considered an EU export to America is U.S.-made components. If this is taken into account by measuring trade in terms of value added, the actual European surplus is far, far smaller. But the fairy story is premised on simplified cause-and-effect thinking “we buy, they win”, that is oblivious to world supply chains. Third, up to 39% of U.S.-EU trade is intra-firm, or within transnational corporations, and not between national economies. Intra-firm trade flows inflate the gross trade figures but represent no imbalance in reality. Still, the fairy tale takes all the exports as if they represented victories of the countries, sustaining the illusion of one-way loss.
Against the hard facts of basically balanced trade flows, Trump's protectionist policies, like blanket tariffs on imports, are best understood within the myth of national rebirth, by which he is the saving leader recovering sovereignty. The myth locates naively defined bilateral trade deficits within the category of betrayal and elevates Trump's agency to redemptive force. It simplifies complex trade dynamics to a moral battle against foreign exploitation. As a response, U.S. trading partners construct their own counter-myths: the U.S. troublemaker, and they upholders of global order. These narratives make international trade a symbolic battle rather than policy. Key technical details are neglected, and tariffs are quantified in meaningless percentage terms, without any regard to their impact on the value chain, their incidence and their complex and uncertain economic impact. Myths on both sides make structure story, concealing interdependence behind sentimental simplification. They politicize public opinion by sentimentalizing economic change. Policy becomes pageant, driven by identity rather than appreciation. The result is an international trading system governed more by myth rather than strategy.
Fairy tales inject still another degree of distortion to an already convoluted and messy debate on tariffs and trade negotiations. Wherein myths give us cohesive, symbolic narratives with agency and identity as their focal points, fairy tales give us abstract, oversimplified narratives without historical moorings: always halfway between magic and reality. As economic arguments duke it out on tariffs, such narratives take on the semblance of common economic mantras: “Tariffs insulate American jobs,” or “Free trade always brings about prosperity.” They include a few stylized facts, inflated to imaginary and symbolic worlds of linear cause and effect.
Fairy stories differ from myth since they do not insist on specific and unambiguous villains and protagonists, or on basing events on definite time or location. They allow decontextualized, uncertain discourse that argues well without empirical corroboration. For the ongoing tariff controversy, they arrive pre-packaged as rationalizations, concise, moralistic parables that cloak structural complexity behind seeming common sense. While myths are open to censure as inflated or ideologically insidious, fairy stories avoid censure through vagueness and emotional familiarity. They appeal by virtue of structural explanation and vagueness of details and evidence; they are dangerous by virtue of how easily they might pass from lip to lip to justify policy without corroboration.
The contrast between myths and fairy tales demonstrates how both constructs engender miscomprehension in economics and political science, yet in dissimilar ways. Both play the role of narrative: they simplify, stylize, and emotionally charge complex realities. Their forms, purposes, and effects, nonetheless, differ. Myths are big stories with deep symbolic and often historic meanings. They are centered on agency: provide heroes and their genealogies, protagonists that determine futures to societies, and events with larger-than-immediacy meanings. Both economic and political myths provide long-term identities and worldview: the myth of the “heroic innovator” or the "great reformer leader" becomes the lens by which all newfound facts are viewed and interpreted. Myths magnify human agency, suggest that superhuman intervention infuse culture and assist in legitimating or justifying large structures as unique creations of human action: free trade, democracy, capitalism, or nationalism, usually appealing to archetypes and collective memory.
Fairy tales differ by being short, decontextualized, and more moralistic than historic accounts. In economics, fairy tales appear as based on structure rather than agency, deterministic models rather than free and unpredicted intervention, extremely caricatured cause-and-effect tales: “Lower taxes spur growth,” or “Immigration lower wages.” These tales conform to the structuralism idea of a polarized coordinates of reality: white or black, hard or soft, benevolent or malevolent. They sacrifice the historic and institutional richness of myths but function ideologically by appealing at a deeper, underlying, often elementary structure and thus appear more neutral or technical. Like the fable of the cicada and the ant used to teach about fiscal profligacy vs. restraint, they may embed moral censure in stylized contrasts of economics. In political science, fairy tales do the same by condensing complex political developments to short, didactic statements: “Populists rise because the people are fooled,” or “Democracies forever secure peace.” Rather than high-end theories, these are storytelling abbreviations allowing policymakers and publics to quickly attribute blame, praise, or direction.
Myths and fairy tales are closely related to the question of the determinants of history: leaders versus events, events versus leaders, which has been a longstanding divider among thinkers, and reappears with particular force today, as narrative-centric politics dominates the scene. Recall for example Leo Tolstoy, in particular through War and Peace, for whom history is a general, multiform movement composed of innumerable small decisions, cultural currents, and social conditions. Leaders, for Tolstoy, are symbols with meaning imposed after the event, not the first causes of events. Napoleon does not appear as a grand strategist but as a man carried along by the stream of history, spectacle, not cause. In stark contrast, Georg Friedrich Hegel held a diametrically contrary view: "World-Historical Individuals" like Napoleon are not actors, but the real embodiments of the Idea, carriers of the historical consciousness. In the work of Hegel, such leaders execute freedom and reason's required transitions for humanity. Rational, ex post facto, yet seemingly tumultuous, as they are a part of the progress of history’s dialectic.
In the case of economic discourse, we are assisting to its becoming fractured into viral fairy tales and myths, replacing institutional fact with memetic storytelling. As compelling economic narratives lose credence, simplified fairy tales dominate trade discourse, especially along the U.S.-EU axis. The myth of the vast U.S. trade deficit with Europe omits service surpluses, value-added integration, and intra-firm trade flows. But public discourse summarizes this into fairy tales of the sort "Europe wins, America loses," which stir emotion, not understanding. Just so, EU responses often symbolize resistance to U.S. dominance, rather than structural policy logic. Reality is now verified neither by facts, however, but performed, judged on resonance, rather than reason. This is the mark of an underlying shift from the rational consensus to crowdsourced belief. Myths, once tied to shared identity, dissolve into splintered slogans. Performance, rather than deliberation, becomes policy. Left is the polarized arena in which economic complexities are overshadowed by viral narratives.
Fables and fairy tales, translated into foreign trade, tend to rely on simple oppositions: country A and country B, exploiter and victim, deficit and surplus, wherein complicated systems become clearly moral and political extremes. These narratives are effective at an emotional level, but systematically overlook the big picture: the complex, multilateral web of relationships that mark world trade and the general equilibrium implications that ripple throughout the entire apparatus when bilateral tariffs are used. Virtually, trade disputes are cast as heroic tales, some foreign country (most likely the home country) being unfairly taken advantage of, and the leader-hero stepping in to advance the nation's interests. In fairy stories, the logic is still more primitive: “Country X trades more than it imports, so tariffs will balance the playing field.” These fables describe bilateral relations as self-contained, static, and obviously moral ones. But world trade is not a series of individual duels—indeed, it is a highly integrated equilibrium system, in which movements in one relationship ripple outward and shape dozens of others indirectly.
For example, if the U.S. taxes Chinese or European goods, the seeming immediate effect may register as a bilateral correction. But in general equilibrium, firms switch suppliers, modify output, and shift capital. Non-direct nations may lose or gain trade flows. Consumers pay more or have fewer choices, and world value chains become distorted. German automobile tariffs may hurt suppliers in Slovakia or Korean electronics producers. Similarly, U.S. tariffs on Chinese inputs may hurt U.S. firms that use them to export, impacting America's competitiveness indirectly.
Fables and myths obliterate such linkages, making policy recommendations which neglect or actively seek to subvert the interconnected logic of trade in the contemporary age. They eschew agency in favor of structure, casting the leadership of the world as forceful actors in wars over bilateral deficits, while the leadership is simply playing its card in a multilateral, interdependent world which resists linear cause-and-effect thinking. Moreover, such myths belittle the realization that multilateral organizations like the WTO are framed to manage trade within the parameters of general equilibrium models. If nations cave in to mythological grievances or fairy-tale remedies, their unilateral conduct bypasses the coordinated process and destroys the very systems that are equipped to handle interdependence. Briefly, framing trade in binary, emotive terms, myths and fairy tales offer a myopically perilous vision. They are unable to imagine that tariffs are not simply weapons of national defense, but levers that alter the very balance of the world. Without a description of the larger system, its feedback, spillovers, and adaptivity, these tales produce policies that may win domestic plaudits, but wreak havoc far beyond the bilateral setting.
At the time when more and more areas are governed by emotive myths and economic fairy tales, the need for rationality and multilateral, coordinated bargaining may never have been greater. The world trade regime is not a field of Manichaean oppositions but an interlinked web wherein decisions taken in one corner have rippling effects on others. If policy is guided by symbolic myths, and not an analytical understanding, the result is neither national vitality but global turbulence. To address trade imbalances, supply chain resilience, or regulatory divergence, none of the national protagonists can single-handedly address it. Unilateral reactions, based on errant perceptions or short-term politics, risk crippling the very systems that underpin global prosperity. Instead, governments must re-enter multilateral, evidence-based discussion, recognizing shared interests, mutual frailties, and the complicated feedback loops of a highly integrated economy. Rational bargaining, grounded in value-added and general equilibrium thinking and institutional trustworthiness, is something more than an ideal of the technocrat, but something that serves as a viable route to long-term solutions. Breaking out of myths and fairy tales is anything but the rejection of storytelling, it is shifting it to cooperation, complexity, and common purpose. This alone will permit us to reconstruct an order of commerce capable of rising to the challenge of this age.