Independent Scotland doesn’t seem like a good idea to me

Yes, Stoat, the pundit you’ve all been waiting for. Well, at least one person asked.

Coming back from hols I misread a headline on my phone (I don’t have data roaming so gloriously missed everything while I was away) that suggested that Scotland had voted for independence. “Good for them” I thought, though I was surprised they’d been that brave. Then I realised I’d misread it. Anyway, the point is that whilst my overall opinion is that the Scots should vote against independence, my view isn’t very strong, and I do at least feel emotionally in favour of independence. But as an exercise I’ll try to write down a coherent view.

Incidentally, there’s a quite separate reason for wanting (or opposing) Scottish independence: that Scots voters would no longer elect politicians whose opinions would directly affect votes in Westminster. Some would be quite happy to see SI just for that reason; others oppose it for that reason. I’m not interested in that aspect for the moment.

On pure economic / financial terms, its hard to see how SI will help. There are three losses: (1) direct financial support from the UK (Barnett formula); (2) frictional costs (managing the shadow pound, import tariffs, defence, whatever) and (3) capital / business flight (many things that might once have been agnostic about setting up in either Scotland or England are more likely to choose England in future). Set against that there is only the fairy stories about majick oil revenues; those fables won’t come true. I don’t really buy the bit about not being allowed into the EU though; that seems like nonsense to me. The idea that an indep Scotland would be richer and more dynamic doesn’t seem plausible; their tendencies, if anything, are more socialist, which isn’t going to lead to a more dynamic economy, quite the reverse. Note, BTW, that Scotland already has the power to vary income taxes but has never been brave enough to use it, for the obvious reasons.

From the press coverage I get the impression that many on the Yes side are either pretending to believe in the fairy stories the SNP are telling about oil; or are just ignoring the economics issues as something that can be set aside for now and solved later. Surfing a wave of joy-of-independence-now, pay-later. In a certain way I can sympathise with this: I’d be quite ready to believe that losing 10% of GDP, say, was worth the joy of independence. But I don’t see quite how that fits in with the promises that people are being given (see, e.g., the SNP on independence; cite). “Fairer” is very nice; but a levelling-down fairer won’t make the proles happy.

Far too much of the debate I hear on the radio isn’t rational. That’s all very well for general elections where you can change your mind a few years later. It might all end badly for SI.

To my mind, Catalonian independence makes more sense than the Caledonian variety. Spain is the Euro, so Catalonia has no currency problem. Spain is in Schengen, so Catalonia would be too. And defence is less interesting, and so on. Quite a few of the frictional problems vanish.

[Update: 2014/09/17:21:50: and just to nail my colours to the mast: I think the result will be No, by a larger majority than the polls are predicting.]

Refs

* It Would Be Impossible For An Independent Scotland To Establish A Sovereign Oil Fund – Timmy (who really ought to update his photo).
* How a nation went mad – Bagehot, the Economist.
* The welcome return of Plumbum
* Luv2suckbigcok says Yes, but Grindr as a whole says no.

27 thoughts on “Independent Scotland doesn’t seem like a good idea to me”

  1. Actually, a leveling-down fairer might indeed make the proles happy. Above a relatively modest income, sufficient to meet basic needs, reduced inequality or elevated position in an unequal pecking order contribute much more to both happiness and physical health than income does. It is more pleasant to live modestly, surrounded by others who live modestly, than to live a middle-class life surrounded by richer people who bid up prices of all the real estate in livable places, create social and legal expectations for types and levels of consumption that represent major burdens for you, and use their greater wealth to purchase political influence that leaves you with little if any voice in the actions of your “democracy.”

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  2. More socialist economies are often more ‘dynamic’. Although that all depends on what exactly you mean by that word. But generally the social-democratic northern European economies have done pretty well for themselves on measures like per-capita GDP, productivity, social mobility, and various other measures which might be covered by ‘dynamic’.

    [But perhaps they’re not as socialist as you think? -W]

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  3. How did that socialism thing work out for you last time?
    http://www.heraldscotland.com/work-as-if-you-live-in-the-early-days-of-a-better-nation-1.827519
    “A Tory and Labour coalition united the country by nationalising every big British business, industry and bank. Profits were frozen, rents and wages fixed, young men were conscripted into coal mines, girls into factories, rationed food ensured none ate luxuriously while others starved. It signed agreements with our trade unions that lasted for two decades after the war ended. All these Socialist acts had been rejected as Socialist by the same government before the war, leading the novelist Joyce Carey to write, the only good government is a bad government in a fright.’ …”

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  4. As to your second paragraph – imagine a Westminster where the likes of Tony Blair and Alastair Campbell were no longer tolerated…

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  5. Scotland already seems fairer. It has the lowest percentage of wealthiest households in GB, but it has one of the highest household disposable incomes per head.

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  6. I think Krugman raises the essential point that without it’s own currency Scotland is exposing itself economically. Says PK comparing an independent Scotland to Canada:

    …Canada has its own currency, which means that its government can’t run out of money, that it can bail out its own banks if necessary, and more. An independent Scotland wouldn’t. And that makes a huge difference.”

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  7. I believe your point 1 is simply flat-out wrong. Scotland subsidises the UK, not the other way around. Yes, we receive more public spending per head, but we also raise more revenue per head, and have a higher GDP per head. And that’s before we start dealing with tricky accounting issues such as the proportional distribution of reserved spending, or even begin to think about any potential savings a iScot government might choose to make e.g. through reduced defence spending.

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  8. Another issue: Stoat is quite right to deride “fairy stories about majick oil revenues.” The North Sea oil province peaked over a decade ago and is in obvious decline, and an independent government couldn’t change geological facts – though they could strive to make sure as much as possible of the finite remaining oil revenue went to Scots rather than to a distant imperial center. (Quite a few oil-producing nations have started to realize that they have similar interests.) The amazing thing, though, is to see the North Sea’s decline proffered as a reason to oppose independence by such famous stopped clocks as Alan Greenspan, who normally won’t touch oil depletion with a ten-foot pole because it presents a deadly challenge to their belief in eternal growth of consumption. If oil production declines, economies decline – and who believes that the folks in London who run the UK would voluntarily redirect a greater portion of the pie to the hinterlands at the very moment when the pie is shrinking?

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  9. I’m a fan of learning from history. It’s not a great idea, but it sticks in my head. So I look at what history tells us about how Scotland managed as a country pre-Union. Yuck.
    On the other hand, there is a sense that it is a more equitable society in principle and practice, which one supposes is a good thing.
    On the other hand, it often looks like the SNP imagines that Scotland will be the next Norway. This connection is also preceded in history. This is a (oil) pipe dream.
    On the other hand, I quite like ‘small states’ with populations between 5-10 million; they seem to be better-balanced in some ways.
    So, I’m with you, William; not sure it’s a good idea, though intrigued that it might make an interesting experiment.

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  10. By rossdee • 2014-Sep-17 09:57

    If they can’t use the Pound after independence, they should switch to the Kilogram – its worth 2.2 times as much.

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  11. [I vainly hoped that people might think. http://www.growthology.org/growthology/2011/01/is-norway-socialist.html -W]

    Or perhaps people have a very jaundiced view of the Kauffman Foundations rankings. Norway has moved up in part because it improved its ‘freedom from corruption’ score? Hmmm … I don’t remember that being a major point of contention between socialists and capitalists. If anything this should fall in favor of socialism – not capitalism.

    Norway has historically spent more money per capita than any country in the world – and #2 often isn’t that close. In 2010 they spent $40k per capita and Sweden was #2 at $27k.

    What typically happens with the Kauffman Foundation type rankings is they craft their criteria to claim success where ever it exists.

    Government expenditure as a percent of GDP or government employees per capita seem like much simpler and more reliable measures of socialism.

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  12. Dunc@8

    I think Scotland subsidizing the UK is certainly debatable, but even if it is the case – does that mean that portions of nations that are doing well for themselves at the moment should jump ship and leave the others to get by however they can?

    And what of the times when the UK subsidized Scotland? And will Scotland need subsidizing in the future?

    On a different point, how badly is Scotland doing now?

    She has the lowest proportion of children in low-income households.

    She has the second-best healthy life expectancy.

    She has the second cheapest rental costs.

    She has the best employment rate.

    She has the second highest public services expenditure per head.

    And she has the second highest Gross Disposable Household Income.

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  13. The SNP has nothing even remotely resembling a plan for the day after a “yes” vote on their website. This is their key communications facility, their fountainhead of persuasion. Anybody allowing themselves to be swayed into “yes” by empty advertising promises with no blueprint, hard specifications or plan of any kind should be disqualified for voting in this matter.
    I say this even while my inner child still wishes for “yes” if for no other reason than cementing into history the TorCons as the creature that lost Scotland.

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  14. The polls I’ve seen show a strong late surge for the yes side with the no side in the lead. What if it comes down to 1 or 2% of the vote?

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  15. (I have no horse in this race), but it is sufficiently rare for countries to split that independence would offer interesting data.

    How would citizenship work? Presumably that’s documented somewhere.
    For example, would VIscount Monckton be Brit or Scot?

    [I can’t recall citizenship coming up much in the debate. It seems to have been a non-issue. Perhaps we all get to choose. Not that we are citizens of course, we’re subjects of Liz and Phil the Greek. And indeed, how would the Lords work? http://www.timworstall.com/2014/09/08/so-heres-a-question-about-scottish-independence/ -W]

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  16. Eamon – that’s not actually my reason for my position on Scottish independence. I was merely pointing out what I believe to be a factual inaccuracy in the OP. I support Scottish independence because of the constitutional arguments, not the economic ones, so I’ve no interest on trying to defend it on economic grounds.

    John Mashey / William: the citizenship question hasn’t come up much because it was settled very early on. All current British citizens may retain that citizenship. The proposed rules for Scottish citizenship are detailed here: https://www.scotreferendum.com/questions/what-different-routes-to-citizenship-will-exist-under-the-scottish-governments-proposals-and-who-will-qualify-for-these/. The default outcome for anyone born or normally residing in Scotland will be dual citizenship.

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  17. Fair enough Dunc, sorry for getting the boot on the wrong foot.

    On the citizen front, current British Citizens will retain their citizenship, but what about those born after independence, if that happens?

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  18. As I understand it, under current rules, first-generation children of British citizens born abroad inherit British citizenship, but their children would not.

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  19. Short term.
    Yes I tend to agree that the NO’s with a bigger margin than forecast, but thats only a wild guess.

    Most of the media are against SI and most of them are also promoting the idea that the results are ‘too close to call’.
    This may have been justifiable ; we shall see soon enough.
    In the old days it was often suggested that you could improve your chances by talking up your own opinion poll results. The true effect may be the opposite.

    Reversibility? David Cameron and others warn that there will be ‘no turning back’. Why so sure?

    If the Scots opt for YES and do not like the outcome what would stop them negotiating for a loose form of federation such as the Scandinavians adopted for a while? (EFTA)?
    Who can rule out such developments in the Balkans?
    The various versions of DEVOMAX (offered to the NOs) might similarly converge to a stable state consisting of a of a federation of British Parliaments.

    East Germany had drifted a long way, but was able to reunite to form a tighter federation than EFTA. And there was Hong Kong. What about the two Koreas? Anything is possible.

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  20. It’s all fascinating (no horse in race). For some entertainment on the subject, try this:

    He articulates well my feeling that British politicians, led by Cameron, are idiots, and their minders should not have let them out. If independence wins, it will be partly because these guys don’t know how bad they look and can’t be bothered to notice that Scots react to being pushed by doing the opposite.

    It’s a nice distraction from our own government, which does things like this which are dangerous and nauseating:

    http://www.slate.com/blogs/weigel/2014/09/17/house_science_committee_hearing_on_clean_power_plan_and_climate_action_plan.html

    If it weren’t for the confusion and consequences that might ensue, I’d love to see the Scots give Whitehall what for. As to the practicalities, the comments above are useful, my opinion on the matter is not. This is just piffle.

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  21. [But perhaps they’re not as socialist as you think? -W]

    Check out what’s happening in Sweden. Neoliberalism’s about to take a complete hammering. Everyone’s fed up of the Austrian School’s BS.

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  22. About 10.35 PM Thursday.

    Peter Kellner predicted (99% probability) that NO’s have won with a significant lead (see Newsnight). He has followed a sub-sample and observed how some of them shifted towarsd the NO camp in the last day or so.

    I can’t see how he can an ‘interest’ ,( i.e. a corrupting bias) because what he says now won’t affect anything, and he knows his stats. So it is very probably settled.

    +The instability which I mentioned above, associated with DEVOMAX, will soon commence.

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  23. Hank, look at UNICEF reports on children, like this:

    Click to access iwp_2013_1.pdf

    The UK ranks (and I’d bet Scotland alone as well) anywhere from better than to much better than the USA. We yanks shouldn’t worry about the Scottish kids. They will at least make sure they all have health care and education.

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