I’ve spent big parts of the last 15 years working in
Scotland, with probably 2 years in aggregate on the ground in the country. Any
insight that I’ve picked up has usually only extended to tourism, but recently
I’ve been asked to share any insights that I have on today’s Independence vote
in Scotland.
I think that Scotland SHOULD
vote for independence, but I think they probably WON’T vote for independence.
To most Americans, the UK, Great Britain, England, and Scotland are interchangeable. However, the constituent parts of the UK are more different among themselves than the difference between any two US states. (Say, California and New Jersey.)
There has always been a definite sense of nationalism in
Scotland – when polled, the majority of Scots identify as Scottish while the
majority of English and Welsh identify as British.
But for much of modern Europe’s history, regions have
amalgamated into countries such as Britain for purpose of common defense and
better, easier trade. With the advent of the EU and other post-WW2
developments, the security threat incumbent on small nations has greatly
diminished and the barriers to trade have been largely eliminated. As
demonstrated by a number of peer-countries, such as Norway, Denmark, Belgium,
and the Czech Republic, small countries are viable in today’s world.
(I should note here
that many Scots business contacts that I speak with are voting “no” on
independence exactly because they don’t think governance under a Scottish flag will
be anything other than one gigantic mess. The government already dominates the
economy in Scotland, being 30-33% of the economy. The Scots I speak with know
that government is a TERRIBLE allocator of resources, and their belief is that
this would only become worse with independence. )
Until now, the Scots have largely turned over important
questions of governance to London. Should we go to war in Iraq? Should we join
the EU? Should we have nuclear weapons? Should taxes be higher? On each of
these questions, Scotland has a serious difference of opinion with London. As
an independent country Scotland would be able to answer these questions
differently, with answers directly reflecting Scotland. In this respect, I
think government will be “better” with independence.
Small is good. Small makes for a more responsive government
and while many people see efficiency in scale, I’m skeptical – my track record
in business, politics, and life is that economies of scale are elusive at best,
illusory at worst.
And smaller is feasible – just look at other successful
countries of Scotland’s size (5m people).
The choice for independence, though, is not just for small and responsive government but against a distant disconnected
government, in this case in London. As in The
Hunger Games, the capital city is almost on it’s own planet compared to the
rest of the less-economically successful countryside. Despite good intentions,
London is largely out-of-touch with Scotland. (And just about as out-of-touch
with other provinces of the UK.)
I think this London-first orientation is structural. With
all decisions flowing through London, all new ideas and investments become far
more complex than needed, and have a hard time escaping the London “gravity.”
As an example, consider train and airport policy, which is set by the national
government, and not on a commercial basis. It’s taken something like 7
years of political wrangling to set a plan to unify the country with high-speed trains, and even then,
the plan stops short of Scotland. At the same time, the National government is
trying to decide how to expand airport capacity in London. The decision of
where to add a single runway is the subject of a 4-year government study, with
wide-ranging effects.
Out-of-touch leadership in London is nothing new. It is what
launched the USA, but amazingly, the urge to leave London’s orbit has only
accelerated since 1776. The long ark of history has been to escape the
political control from Planet London in favor of more local solutions. In this
respect, Scotland’s vote is just the latest in a long line, including Ireland,
India, Singapore, etc. The amazing part is that neither the UK political structure
nor attitude has changed amidst the long ark of history.
However, I think that the Scot’s won’t vote for independence because lacking a big nucleating event
like a war or some other injustice, it’s really hard to vote against the status
quo. Sure, polls are showing a very close race, but I think that many voters on
the bubble will default to the status quo, especially with the UK leadership
offering to devolve more powers to Scotland. (Most polls show that a plurality
of voters prefer the “Devo-Max” choice over “Yes” or “No,” but this choice
isn’t on the ballot.)
I don’t mean this as an insult when I say that Scots are
fundamentally conservative, and will embrace the status quo when in the voting
booth. I think that they will collectively put a scare into London with the vote, and
have been, and will thoroughly enjoy watching the English squirm as a result.
Bonus thoughts:
-I’m amazed at how much angst there has been over the choice
of a currency for Scotland and how independence equals macro-economic suicide,
for both Scotland and the world. You’d think that Scotland were voting to
reverse the Earth’s polarity and that with the wrong vote, we’ll all fly off
the earth. I think the reality is that the transition and macro-economic
consequences are drastically overblown. At best, Scotland represents .28% of
the world GDP. For perspective, China will add about 4 Scotlands worth of GDP
in 2014. It matters more to the global economy if China can add a 5th
Scotland-worth of economic growth, or if it shrinks to only 3 Scotlands-worth
of economic growth.
And as for the currency issue, the risk of using the GBP is
overblown – sure Scotland wouldn’t have an ability to set monetary policy, or a
lender of last resort but UK banks will still want to lend in Scotland, and
it’s not like UK monetary policy really pays much attention to the economy more
than 100 miles outside of London.
-On that note (pun intended), why
is UK monetary policy set by the Bank of England
and not an entity referred to as the Bank of the UK or somesuch? This is a small semantic issue, but possibly
representative of how the UK attitude is fundamentally parochial and skewed
towards the Capital. In other words, if you were really building a united
nation, why wouldn’t your institutions be united in name as well?
-I’m stunned, though, at how the debate and polls are
missing the larger strategic questions of “What’s
the ideal form of governance for the 3rd Millennium?” and “Why
is there still a monarchy?”
The independence vote is basically “do you want three or four layers of government?“ Though
not advertised this way, a vote for independence will just (effectively) extract
the UK layer of government, leaving local national (Scottish) and EU
governments to dictate things.
But is this even the right debate to be having? Re-arranging
the local political deck chairs with independence won’t change the economy much
(for better or worse). Of much more benefit to Scotland would be a question of
what economic structure does Scotland want rather than a question of political
structure. In this regard, a very wise move would be to structure the political
economy in the form of an “Asian Tiger” such as Singapore, which could triple
the growth of the Scottish economy, held back by the current social democrat
political economy.
But most of all, it seems silly amidst all of the talk of
independence that even with a yes vote, Queen Elizabeth would still be the head
of state of Scotland. Monarchies are really the ultimate in legacy programs,
staying around much longer than needed or wanted. (Since at least 1776 or even
1066.)
You've read this far - you deserve a treat - here's The Simpson's Groundskeeper Willie on the Independence vote. Free tip: don't mention Willie to a Scot.
You've read this far - you deserve a treat - here's The Simpson's Groundskeeper Willie on the Independence vote. Free tip: don't mention Willie to a Scot.
