Scotland Referendum: On Economics

Posted: September 18, 2014 in Uncategorized
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Hadrian’s Wall. Photo: Quisnovus (

In 1861, the two halves of the American republic went to war. In the increasingly enlightened northern states, political debate was turning against the practice of slavery. The largely agricultural south, meanwhile, had benefited hugely from the practice and was growing impatient with the perceived radicalism of northern politicians.

So, with the line in the sand drawn, the south declared itself a separate Confederate nation and began seizing government property within its boundaries. The crisis erupted into war with the attempted seizure of Fort Sumter in North Carolina. In the ensuing conflict, 600,000 were killed. The United States, however, survived.

Today, America is the world’s leading superpower and largest economy. But across the Atlantic, that same question is being asked: one country or two?

Whilst no threat of military conflict looms, some of the factors that tempted the Confederacy into secession are also tempting Scotland into independence. I talked about the political split in my last post, here, but I want to take a bit of time over the economic argument.

The Yes campaign is arguing (perhaps honestly, perhaps not) that an independent Scotland would be wealthier. When the Confederacy went its own way, it was to maintain the status quo rather than disrupt it, but no doubt part of the consideration was economic.

Now many have gone over the economic ups and downs of Scotland going it alone. I will not repeat that Yes leaders have failed to ensure a currency union, or even a currency. Others can chart the flight of capital southwards and say how empty scaremongering is having some very real effects on markets. Nor will I delve into how risky it is to base all your projections on the best case scenario.

Rather, let’s say (somewhat indulgently) that everything turns out exactly like the independence movement projects. Picture a world in which the Caledonian Xanadu is a reality, with every Scot wealthier than before. Even if the economics of independence works out – is it the right move?

Put it like this, had America fractured into two separate nations, would the combined strength of those countries (be it economically, militarily or politically) be as mighty as it is now? Even if a split had worked out for one side, does anyone really believe that two bickering, smaller Americas would pack the same punch on the world stage?

Why not look at those countries that have split? India fractured first into India and Pakistan, then Pakistan itself fractured into Pakistan and Bangladesh. As with America, there was no shortage of perceived difference or enmity in either of these splits – the first between Hindus and Muslims, the second between Muslims and Muslims.

What followed these divorces however were not harmonious, homogenous groups. Pakistan and India ended up at war with each other repeatedly and border tensions eventually went nuclear. Bangladesh meanwhile, endured two decades of hardship after the break.

Never mind the menu costs of setting up a new state, were the resources here spent posturing at, competing with and defending against each other anything other than squandered?

Alex Salmond says that if Scotland goes independent, England loses a surly lodger and gains a good neighbour. As a line, it’s about as convincing as ‘we can still be friends.’ Borders rarely resolve our differences, but they often accentuate them.

Already, the referendum has sown seeds of difference between two peoples who have been one for more than 300 years. Nationalist rhetoric has told many Scots that they’ve had three centuries of bum deals from the English, while spurned voices south of the border have started lashing out at northern neighbours as being something like ungrateful millstones.

Nor do the differences stop there. Scots have bitterly fought among themselves. Nationalists claim they were attacked outside a football game while Unionist MP Jim Murphy had to cancel his speaking tour after being called a terrorist, a quisling and a defender of paedophiles.

It goes deeper. As with Pakistan, the threat of further disunion lurks. The Shetlands Islands have their fair share of North Sea oil and by all accounts are largely against being part of an independent Scotland. With their strong historical links to Norway , there has been speculation that the islanders will either jump ship or even claim independence themselves.

If personal gain is a good reason to break up a nation, why shouldn’t they? Their share of the oil could probably make for quite a wealthy little state. At the risk of carrying over a theme from my last piece, why stop there?

Even the ceaselessly optimistic Yes campaign admits on its website that Scotland’s economic product per head is less than that of London. Why shouldn’t London throw up some borders too? We could end up with a return to the city-states of Ancient Greece, each unstable, each bullying the smaller settlements around it and each vulnerable to attack from foreign foes.

My point is that – when used as an argument for independence – economics (as with politics) doesn’t support Scotland’s case exclusively.

This spiel has been finished for a couple of days now, but whilst I’ve been mulling it over the referendum has caught up with me. All that remains to say now is that I hope I wake up tomorrow in a country that’s agreed it’s better in one piece.


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