I’m on holiday in Venice at the moment and the posts I lined up before I left have now run out. So posting for the next ten days or so may be rather intermittent.
P.S. Try not to break the country while I’m gone!!!
I wrote last week about my own reasons for doubting the case for Scottish Independence. This week I’ve been sharing some of other people’s writings on that theme. Today it’s Kenan Malik‘s explanation of why it is hard to square using the election of government of which you disapprove to justify separatism with the idea you respect democracy:
Whether an independent Scotland would actually ditch austerity policies or create the health service that Scots need is a moot point. But the nationalist argument is a challenge as much to democracy as it is to Tory policies. If everyone always got the government they desired, democracy would be redundant. We only need democracy because different people hold different views, and we often disagree with government policies. The Scots have, of course, a democratic right to vote for independence. But to suggest that they should do because there is a conservative-led government at Westminster seems fundamentally to misunderstand the nature and demands of democracy. Democracy puts the onus upon us to engage with people and to change their minds. Rather than create a movement that can challenge Tory policies throughout the UK, however, proponents of Scottish independence seek to create a new constituency that they think will be more amenable to their views.
An independent Scotland will not solve the dilemma that democracy often creates governments with which a large proportion, even the majority, of the population disagree. There is no single Scottish view on any issue from abortion to Iraq to independence. Scots, like the rest of the UK, are divided by class, culture, politics, gender, age and much else. And, when it comes to politics and values, rather than a mythicised national identity, Scots often have greater affinities with people in England than with fellow-Scots. As the comedian Billy Connolly has put it, ‘I’ve always remembered that I have a lot more in common with a welder from Liverpool than I do with someone with an agricultural background from the Highlands.’
The very fractiousness of the independence debate shows how divided Scotland is. If Scotland becomes independent, should the Labour-supporting areas of Glasgow, or the Orkney and Shetland Islands that for decades have voted for the Liberal Democrats, insist that they have no desire to be ruled by Edinburgh and seek to self-govern? Or should those who oppose independence seek to form their own mini-state?
More prosaically of course there is a good chance of a change in government at Westminster soon and it might be that the political allegiances of Scots shift. So it would be a mistake to project the current situation forward indefinitely.
What my encounter with the late Ian Paisley taught me about political and religious extremism.
I didn’t know what one was supposed to do while listening to a demagogue but I knew I hadn’t expected to be straining to hear him. Ian Paisley’s image is of course forever set as the man booming: “NEVER, NEVER, NEVER” not as the frail old man I saw at the Oxford Union in 2011.
Paisley had, however, been on quite a journey. When he first spoke at the Union in 1969, he delivered an explosive fire and brimstone sermon which was booed and heckled by the audience.
More than three decades later, he seemed not only to lack the physical strength for a repeat performance but also the inclination. In the interim, he had acquired a degree of political respectability. Having done his best to sabotage attempts at sharing power with Republicans, he embraced them at the 11th hour. This allowed him to become First Minister of Northern Ireland with – rather extraordinarily – former IRA commander Martin McGuiness serving as his deputy.
This political mellowing was reflected in a softer public persona. When I heard Paisley I didn’t hear him preaching hellfire but instead delivering a rather bland and often inaudible lecture on the merits of the Kings James Bible. He responded jovially to audience questions which while always polite – itself a change – were often very pointed. Perhaps most surprisingly he talked warmly of the fact that Martin McGuiness had attended a service at a protestant church. Paisley seemed to take this not as a political gesture that an indication that McGuiness might be on the road to being saved. The notion of Paisley welcoming the prospect of McGuiness one day joining him in heaven is certainly a strange one.
What this does show is the extent to which the religious appeared to be more important to Paisley than political. Strangely for a man who was in parliament for 40 years, he seemed to believe he was addressing us not as a politician but as an evangelist. Much as with his view of McGuiness, this portrayed a certain unworldliness; he was a messenger who would repel rather attract young liberal mainlanders to Christianity.
And for all the changes to his politics, religion clearly remained an area in which he had not evolved. When asked if he might reciprocate McGuiness’ gesture and attend a Catholic service, he was adamant that that was not possible as it would be collaborating with an evil force. Challenged by one audience member to repeat his claim that the Pope was the antichrist, he did so albeit rather indirectly – he is still a politician after all. He also made it clear not only were Catholics and non-Christians beyond the pale but so were Protestants who did not share the fundamentalist positions of his Free Presbyterian Church. And he also stood by his opposition to homosexuality.
I note that Paisley remained staunch in his intolerant religious beliefs while coming to accept nationalist politicians playing a part in government because I feel it has contemporary relevance. Many people including David Cameron have suggested that tackling Islamism requires tackling not just those who advocate jihad but also ‘non-violent extremists’ who advocate intolerant positions but not violence. I would suggest that Paisley indicates this is not necessarily the case. He was moved from being a fanatical opponent of the peace process(es) to one of its cornerstones while still being a bigoted fundamentalist. Political extremism is a political problem which needs a political solution and seeking a spiritual one may well be an ineffective distraction.
On Saturday, I quoted at length from Oxford economics professor Simon Wren-Lewis’ fisking of the Yes campaign’s fiscal policy. However, it’s its monetary policy which is most reckless.
Paul Krugman is an even more eminent economist than Wren-Lewis. He has been a professor at Princeton for more than a decade, won the Noble Prize for economics in 2008 and is one of America’s most important political pundits. He’s also no fan of the ‘effing Tories’ but nonetheless he warns Scots that:
…the combination of political independence with a shared currency is a recipe for disaster. Which is where the cautionary tale of Spain comes in.
If Spain and the other countries that gave up their own currencies to adopt the euro were part of a true federal system, with shared institutions of government, the recent economic history of Spain would have looked a lotlike that of Florida. Both economies experienced a huge housing boom between 2000 and 2007. Both saw that boom turn into a spectacular bust. Both suffered a sharp downturn as a result of that bust. In both places the slump meant a plunge in tax receipts and a surge in spending on unemployment benefits and other forms of aid.
Then, however, the paths diverged. In Florida’s case, most of the fiscal burden of the slump fell not on the local government but on Washington, which continued to pay for the state’s Social Security and Medicare benefits, as well as for much of the increased aid to the unemployed. There were large losses on housing loans, and many Florida banks failed, but many of the losses fell on federal lending agencies, while bank depositors were protected by federal insurance. You get the picture. In effect, Florida received large-scale aid in its time of distress.
Spain, by contrast, bore all the costs of the housing bust on its own. The result was a fiscal crisis, made much worse by fears of a banking crisis that the Spanish government would be unable to manage, because it might literally run out of cash. Spanish borrowing costs soared, and the government was forced into brutal austerity measures. The result was a horrific depression — including youth unemployment above 50 percent — from which Spain has barely begun to recover.
And it wasn’t just Spain, it was all of southern Europe and more. Even euro-area countries with sound finances, like Finland and the Netherlands, have suffered deep and prolonged slumps.
In short, everything that has happened in Europe since 2009 or so has demonstrated that sharing a currency without sharing a government is very dangerous. In economics jargon, fiscal and banking integration are essential elements of an optimum currency area. And an independent Scotland using Britain’s pound would be in even worse shape than euro countries, which at least have some say in how the European Central Bank is run.
I find it mind-boggling that Scotland would consider going down this path after all that has happened in the last few years. If Scottish voters really believe that it’s safe to become a country without a currency, they have been badly misled.
In a scathing post on his Mainly Macro blog, Oxford Uni economics professor Simon Wren-Lewis dissects the claims made about the fiscal position of an independent Scotland. He observes that the’ independent and impartial’ IFS has indicated that an independent Scotland would be reliant for revenue on diminishing supplies of North Sea oil and tackling an ageing population. In addition, Wren-Lewis believes that being part of a currency union would mean Scotland having to pay more interest on its borrowing. The net effect of this would be to leave an independent Scotland looking at a much larger gap between the government’s revenues and its spending than would the UK as a whole.
He argues that the results would not be pretty:
Could Scotland just borrow more? I am all for borrowing to cover temporary reductions in income, due to recessions for example, which is why I have been so critical of current austerity. However, as the IFS show, North Sea oil income is falling long term, so this is not a temporary problem. Now it could be that the gap will be covered in the longer term by the kind of increases in productivity and labour supply that the Scottish government assume. Governments that try to borrow today in the hope of a more optimistic future are not behaving very responsibly. However it seems unlikely that Scotland would be able to behave irresponsibly, whatever the currency regime. They would either be stopped by fiscal rules imposed by the remaining UK, or markets that did not share the SNP’s optimism about longer term growth. So this means, over the next five or ten years, either additional spending cuts (to those already planned by the UK government), or (I hope more realistically) tax increases.Is this a knock down argument in favour of voting No. Of course not: there is nothing wrong in making a short term economic sacrifice for the hope of longer term benefits or for political goals. But that is not the SNP’s case, and it is not what they are telling the Scottish people. Is this deception deliberate? I suspect it is more the delusions of people who want something so much they cast aside all doubts and problems.This is certainly the impression I get from reading a lot of literature as I researched this post. The arguments in the Wee Blue Book are exactly that: no sustained economic argument, but just a collection of random quotes and debating points to make a problem go away. When the future fiscal position is raised, we are so often told about the past. I too think past North Sea oil was squandered, but grievance does not put money into a future Scottish government’s coffers. I read that forecasting the future is too uncertain, from people who I am sure think about their future income when planning their personal spending. I read about how economists are always disagreeing, when in this case they are pretty united. (Of course you can always find a few who think otherwise, just as you can find one or two who think austerity is expansionary.)
Jaws earned sharks a place in the popular imagination as the ultimate predators of the sea. By contrast, Orcas most famous depiction on screen – at least until Blackfish came along – was as the loveable creature that needs liberating in Free Willy. This is ironic because Orcas can eat even the deadliest sharks for breakfast – literally!
The video below shows a pack of the Whales hunting down and killing a Tiger Shark.
Even the most formidable shark of them all. the Great White, isn’t safe from Orcas. There is a recorded incident of a Great White being held upside down in an Orcas mouth to prevent it using its gills properly until it suffocated, at which point the Orca ate its liver. They also been recorded hunting the largest species of fish in existence: the Whale Shark.
That they and not Great Whites are the sea’s top predator should not surprise us. So starters they are much bigger, with a top weight of 6 tonnes as against the Great White‘s 3.5. They are also more intelligent and most alarmingly for their prey they hunt in packs.
So let us be thankful that – assuming we’re not stupid enough to stick them in tiny tanks and try to get them to perform tricks – Killers Whales don’t seem to go after humans.
The experience of the last country to leave the UK contradicts many of the optimistic claims the Yes Campaign is making about the prospects of an independent Scotland.
When Michael Collins signed an agreement with the British government in 1921 to create the Irish Free State, a quarter of the world was ruled from London. Since then that massive empire has almost wholly disintegrated: India, Nigeria, Malaya etc. have all become independent. Yet none of them are quite the same as Ireland. It was not just part of the British Empire but Britain itself. Dublin is closer to London than Newcastle. Ireland even sent MPs to sit in the Westminster Parliament. It is, therefore, in many ways the only historical event comparable to the prospect of Scottish independence. It is not one that is flattering for Yes Scotland.
Here are some lessons Scottish voters would do well to bear in mind:
1. This is not a freedom struggle
Firstly, a point of contrast. When it looked like Ireland would leave the Union, the British government sent in soldiers. Traumatised WWI veterans committed atrocities and paramilitary death squads roamed Dublin’s streets.
Today there is no question that if Scotland votes for independence, London will deliver it – though not necessarily on the terms that Alex Salmond suggests.
The people of Ireland were shackled to a state and society that was institutionally racist against them. By contrast, Scots have the same civil liberties and democratic freedoms as the citizens of the rest of the UK. Whatever else it is, Independence is not a battle for Scot’s freedom.
2. Independence does not mean leaving the UK’s shadow
Just about the only time I’ve come across Ireland being mentioned in the Independence debate is to note the fact that until 1978 the Irish Pound were backed by Sterling. This is a point in favour of the Yes argument that Scotland could continue to use the Pound after independence but also illustrates a broader point they would be less happy with: even after having notionally obtained independence the Irish economy was so closely intertwined with that of the rest of the UK that it opted to continue using its currency.
And this interconnection applies to politics as well as economics. To this day the schism between Ireland’s two main political parties can be traced back to their differing attitudes to the Anglo-Irish Treaty. And of course, the conflict in the British controlled North was to reverberate South of the border.
We could expect that even after a Yes vote, Scotland would continue having to debate its relationship with the UK as it would have to continue to decide whether to pool its currency, armed forces and national broadcaster. And if it does the decisions about those institutions will continue to be made in London but by a government which Scottish voters would have no role in electing.
3. Don’t believe guff about nations having an inherently collectivist ethos
What we assume to be the fixed elements of national characters are generally just lazy and fickle stereotypes. For example, in the early nineteenth century, it would have been generally thought that the French were ruthlessly efficient (witness Napolean’s armies), while Germans were unwordly romantics who sat around listening to Beethoven. For this reason we should be very sceptical about the notion that Scots are more caring than the English. As I’ve already blogged about this week the empirical basis for this notion is weak. And the experience of Ireland should make us more dubious still.
The Irish have as a good a claim as any nation to be inherently collectivist as any. The central role of the Catholic Church and its social teaching should have provided the institutional and ideological basis for a society that looked after its members. It was even written into Ireland’s constitution that “justice and charity” must “inform all the institutions of the national life” and that the “state must protect the vulnerable, such as orphans and the aged.”
However, none of this stopped Ireland from becoming the site for a radical experiment in free market economics which turned the country into a corporate tax haven and created a massive property bubble. When the Credit Crunch burst it wrecked first Ireland’s banking system and then its public finances. That plunged the country into a deep recession and austerity.
4. Currency unions are horrible
Pretty much all Ireland’s warning for Scotland can be brought together in a single incident. In November 2011, the Irish government had to be bailed out not just by the IMF and its Eurozone partners but also by the UK.
As well as arising from a distinct lack of collectivist feeling on the part of the Irish and illustrating how tied to the UK it remains, it also showed the problems with currency unions.
That the UK was in a position to be bailing out Ireland rather than being bailed out itself was rather remarkable. It too had suffered a banking crisis and its government’s debt and deficit were almost as bad as Ireland’s.
What saved it was having its own currency. When the crisis hit the Bank of England slashed interest rates and began printing money to drive down borrowing costs. The value of the Pound also dropped making British exports cheaper and reducing the value of debts.
Ireland did not have this advantage. The Euro was also the currency of larger and more robust economies like France and Germany. Therefore, its value did not fall as far and the European Central Bank felt unable to take the kind of aggressive action the Bank of England did lest that stoke up inflation in the rest of the Eurozone. That left both its economy in worse shape and there being less money for the government to borrow.
However, what’s really damning for the Yes camp is not that a currency union didn’t work for Ireland after the crash but also failed it during the boom that went before. Ireland’s financial deregulation and corporation tax cuts initially worked. It drew in large amounts of foreign investment and grew at an impressive pace. That and high levels of inflation should have been a cue for a central bank to raise interest rates in order to prevent the Irish economy overheating. But the ECB had responsibility for the whole Eurozone and it was not growing anywhere near as fast as Ireland. Therefore, interest rates stayed low and there was nothing to stop Ireland going on a borrowing binge.
The cruel reality of currency unions is that they turn even success into a problem. If Yes Scotland delivered on its aspiration to “unleash Scotland’s great economic potential” then presumably Scotland’s economy would grow faster than the rest of the UK and it would likely find interest rates set too low. So even if independence does lead to a boom, a Scotland without an independent central bank would be liable to an Irish style bubble.
That a currency union with all its inherent flaws is Salmond’s “Plan A” – even with the Eurozone crisis still ongoing – does rather illustrate the bleakness of the options available to an independent Scotland.
Ireland’s history can seem like a litany of sectarian violence and economic misery but it is actually a prosperous and peaceful country. And Scotland starts with advantages Ireland didn’t. It would not be born in a civil war nor would it have to contend with an overmighty Catholic Church. So we should not expect Ireland’s history to track Ireland’s. But it does illustrate many of the structural problems that Scotland would face in the wake of a Yes vote.