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.