Counting the cost of independence

When people complain about how much the Queen earns, or the expense of the civil list in general, what's almost always behind it is not a belief that the British monarchy could do things more cheaply but rather a disapproval of the idea of having a monarchy at all.  The same is true of the current argument about how much setting up the the infrastructure of an independent Scotland would cost.  'Alex Salmond is under increasing pressure to reveal the likely start-up costs of independence'?  Well, I dare say he is but what good would it do if he did because he doesn't have a clue.  Neither does HM Treasury, nor Professor Dunleavy.  Nobody knows what is going to happen in the event of the unravelling of a three-hundred year-old Union and surely I am not alone in growing more than a little tired of those who believe they do?  I am more likely to believe the higher estimates than the lower simply because that tends to be the pattern with government projects.  The most obviously relevant example here is the construction of the Holyrood parliament building.  It was completed at around 10 times the originally estimated cost - but since I supported devolution, the price of it was not the decisive factor.

The same is true of Scottish independence.  I have absolutely no doubt that the cost of disentangling Scotland from the Union will be more expensive than the Nationalists estimate.  This is not entirely irrelevant given their disingenuous protestations about public spending cuts but fundamentally it is not at the core of the issue.  No, it doesn't matter what it costs; even if it can be done cheaply, setting up the infrastructure of an independent Scotland is for us not worth a red cent because we do not believe it is a very good idea.

I wish people had read to the end of the FT editorial that was quoted by both sides in this particular indy-spat.  [I'll quote from the paper copy rather than providing a direct link to the piece, if you don't mind.]

"These sterile exchanges may fill column inches with accusations and counter accusations.  But they must not decide the outcome.  More is at stake this September than hypothetical arguments about pounds, shillings and pence.  In the heat of the battle, Britain's politicians should not forget the deeper ties of history and shared political experience that link us."

That it is the Financial Times exhorting us to be less narrowly economistic should give more people pause.  As it is, the cost of independence can be measured more easily in the quantum growth in bullshit we've witnessed recently, rather than in pounds sterling.
    

Against the politics of certainty

Whenever I am asked why I'm voting no, I usually say, "Because I don't believe in nationalism".  This is partly because that's what I think, partly because it is surprisingly effective.  It closes down conversations with boring people who just want to recite a load of SNP slogans to you - and those conversations that do continue start from a point that gets to the heart of the issue of what this referendum is about.  It is surprising how many people respond - I'd even say recoil a little - and insist, "Ah, but I'm not a nationalist either but I'm voting for independence".

Allow me to demur.  Political nationalism is the idea that the boundaries of the state should be congruent with the nation, the latter defined in various ways but has conventionally been understood to be a people who share a common culture.  The problem with this as far as I am concerned is that while culture and organisations are human universals, nations and states have not been.  It is a supremely important fact yet nationalists almost always argue as if the marriage between the two is the unquestionable natural order of things and any deviation from this is something that is impossible to justify.  This, I think, explains the utter incomprehension of nationalists when confronted with an alternative view; they don't treat it as a position to argue against but rather as a symptom of mental disorder - hence what is for me easily the most tiresome rhetorical phrases in this neverendum: nationalists endlessly repeating the line, "What are you afraid of?" to anyone who has the temerity to disagree with them.  This incomprehension is also what is behind the notion that any opposition can only be another form of nationalism; that some of us like Britain the way it is partly because it is not a nation-state has not occurred to them - but even if it had, they would not be able to understand it.

The answer, then, to the question, "What are you afraid of?" is exactly this - this politics of certainty, of blind faith, which always and everywhere treats dissent as deviance and heresy.  It is this that is always behind any of the economic arguments that we are told will decide this debate.  That might be true of the undecided but it is not what animates the foot-soldiers that are doorstepping for the Yes campaign.  They might sincerely believe Scotland would flourish after independence but in the way that an abused child would if they were released blinking in the sunlight after some kind of subterranean incarceration.  Might take them some considerable time to function properly but the escape is the overwhelming imperative.  I appreciate some might find this extreme but it is, I think, the base belief among the hardcore of the nationalist movement.  Economic prosperity will follow independence, most of them believe, but even if it didn't, they would still prefer relative poverty to what they see as servitude.

My concern is this is not well-understood.  Certainly not by the waverers who might be persuaded by the frustratingly vague promises of jam tomorrow and also not by the 'non-nationalists' for independence.  Most of these are socialists and greens.  They argue that independence is not a political expression of national identity but rather a means to achieve the sort of policies that are frustrated by membership of the Union.  But at the heart of this is a belief in Scottish exceptionalism: Scots are just so social democratic but will never be able to realise this whilst locked into a Union with these cold-hearted, foreigner-bating southerners.  In other words, this is a national political culture that makes a separate state essential, which brings it full-circle to the original definition.  I'm of a pessimistic disposition so I would argue that the best one could expect is perhaps some mild improvements but without any fundamental shift in Scotland's long-term growth rate.  And I wouldn't expect any Scottish government of whatever party to be that different in their attitude to the power of business and the press.  It certainly wouldn't be with Alex Salmond at the helm.  Whatever happens, it would be accompanied with a heavy dose of disillusion among those on the left, once they realise that the reason we don't have the sort of socialist policies they want to see is because people don't vote for them and not because we're part of the Union.

What the Euro elections showed, ironically, is that Scotland is not that much different from any other European country and what we are experiencing here is part of a wider nationalistic trend in politics.  You do not need to think it will end in catastrophe to worry where this fundamental misdiagnosis of our problems might take our country or the rest of Europe.  It is frankly absurd to believe, as some seem to, that nothing but good can come of all this flag-waving nationalism and if saying so is a tenet of what the more unthinking nationalists like to call 'project fear' then sign me up.  I'm saying no to nationalism.

      

Currencies as symbols

George Osborne's threat that the rUK would be unwilling to enter a currency union with Scotland in the event of a Yes vote in September has "backfired" according to the Nationalists.  Quite why the suggestion that an independent Scotland should have an independent monetary policy counts as a threat is not something the SNP have bothered to explain - although to be fair, I am not sure I can recall any journalist nor politician asking them to do so.  But in as far as the intended aim of ruling out a currency union was to make Scots less likely to vote for independence, it seems that it is indeed right to say that it has not 'worked'.  Voting intentions, in as far as one can tell, have been unaffected by the issue.  If anything, it gave a marginal nudge towards the Yes camp.  The question is why?  The one favoured by the Nationalists is that Scots agree with the SNP when they say HM Government are bluffing.  Their other explanation is that voters resent being bullied.  There is some evidence for the former claim - not a lot, as far as one can tell, for the latter.  But there is a another possibility: the reason why the currency issue has not had the impact that politicians and pundits thought it would is simply because the issue does not resonate with the average voter.  People generally do not have a great deal of interest in, nor understanding of, the economics of currencies and currency union.  This is hardly surprising - it's not as if the political class are likely to engage with them on the matter in any meaningful way.

"Vote No, keep the pound" may yet prove to gain traction with voters in Scotland but I doubt it.  It reminded me too much of  William Hague's unsuccessful tenure of leader of the Conservative Party when he made opposition to the Euro a key plank of the 2001 manifesto.  He was, as it turned out, quite wrong to assume that a Labour government were going to sign Britain up to EMU but he was also wrong to think this was a burning issue for most people, regardless of their political inclinations.  Euro-sceptics saw membership of EMU as an unacceptable capitulation of national sovereignty, whereas Euro-enthusiasts associated it with a rejection of "little-Englanders" and an embrace of all that they perceived to be funky and cosmopolitan about the EU. I'd suggest that most of the British electorate saw the euro currency issue in this symbolic way too but the polling evidence would seem to suggest that, however they saw it, it was not anything like as important to them as it was to politicians and pundits.  It's a bit like the pervasive attitude to religion; people are very suspicious of enthusiasm.

There's a sense that this is being repeated in the independence 'debate'.  What 'keeping the pound' means to people in Scotland is difficult to say.  For the Nationalists, the prospect of remaining in a sterling zone is the flagship of their 'independence by stealth' strategy; they hope that it will give the wavering voter the assurance that Scotland's departure from the Union will be achieved with a minimum of disruption.  For those of us who are implacably opposed to independence, it represents the unwillingness of the Nationalists to make an honest and unambiguous argument for what they claim to believe in.  But there's a danger that both sides are devoting energy to a rather arid conversation that passes most people by.  This is not to say that the currency issue doesn't matter.  I think it matters a great deal but there's little chance of engaging people in any kind of conversation without a willingness to be candid on the matter.  Can I give what is, I hope, a non-partisan example?  A currency union is less likely than some people assume because those responsible for arranging it would assume such an agreement would require a sort of mini-stability pact that set mutual limits on government borrowing and such like.  Even if he was so inclined, what sort of agreement of this type would George Osborne be able to keep to?  None that would have any credibility in the present situation, as far as I can see.  But it is not in the interests of any of the participants in the independence debate to point this out.  Not the Tories, for obvious reasons - and not anyone in Better Together either.  Neither would the Nationalists lest they concede the possibility that rUK might just have reasonable grounds for ruling out a currency union after all.  What we're left with is indeed bluff and bluster, although not necessarily for the reasons that people are suggesting.
    

Salmond vs Independence

Alex Massie was surely right to say that George Osborne's ruling out of a currency union with the rUK would polarise the debate?  Hardcore Nats would become even more inclined to accuse their opponents of treachery than they already are whereas the unionists would be increasingly convinced that Salmond and the SNP are a bunch of dangerous lunatics.  This has certainly been my experience.  On seeing Salmond's address to 'business leaders' in Scotland where he went all Obama, I genuinely wondered if he wasn't losing the plot.    "Yes we can!", he said.  Yes we can what?  As an independent country of around 5 million people impose on 55 million people a currency union, even if they don't believe it to be in their interests? "Man's lost his damn mind", I thought - yet the response, depending on whose interpretation of opinion polls you believe, is a slight boost to the Yessers.

Whenever anyone points out the obvious problems with King Eck and his back of a fag-packet plans, nationalists frequently say that the Yes Scotland campaign is not about Alex Salmond.  This is technically true in that not all nationalists are SNP.  But the question remains: why then are so many of them prepared to defend his strange contortions over the issue of currency?  We should be clear that a currency union would not mean full independence.  The SNP's ideas lacked credibility anyway, as if you can pull a few fiscal and monetary levers and - hey presto! - you have a Scandinavian social democracy.  Salmondites have too much faith in government for my liking but the point is that under 'plan A' Scotland wouldn't even have control of these 'levers'.

This story in the Scotsman today is, I suppose, a logical extension of Salmond's weird notion that the government of the putative rUK would in some way obliged to agree with the opinions of his 'Fiscal Commission'*.

"In the event of Scottish independence, people in England, Wales and Northern Ireland should not be given a formal say on whether Scotland enters a currency union with them, according to First Minister Alex Salmond."

Here's something else we should be clear about: a currency union would require both parties to cede some of their sovereignty, as the governor of the Bank of England said. You might ask why English, Welsh or Northern Irish voters would agree to surrendering this to a country that has just rejected them but Salmond is clear that it is not necessary to ask them.  It also might be worth pointing out that any set of rules for a sterling zone that limited government borrowing and so on would be something that George Osborne would not be able to operate within at the moment.  No matter, according to the Nats - he doesn't get a say in this.

There is an honest case to be made for Scottish Independence but it is certainly not being made by the Yes campaign.  As it is, the 'debate' is becoming an increasingly futile and angry one because it is being conducted, not between nationalists and unionists, but between those who know what 'independence' means and those who do not.  The twist Salmond has introduced is that there is also a distinction to be made between people who are entitled to it.

*Bunch of economists employed by the Scottish Government who agree with the Scottish Government, although not as much as Salmond would like.
 

The Madness of King Alex

In the event of a Yes vote in September, I've favoured a currency union with the rest of the UK for three reasons, two of them (or all three, depending on your point of view) for entirely selfish reasons:

a) Saying a currency union 'would work' is not the same as saying that it carries no risks nor that it would work better than the system we presently have.  The answer to these points is that it would and it wouldn't respectively, Rather it would be the least bad option because while it carries risks, these would be borne disproportionately by the rest of the UK and not Scotland.  This is congenial to me because I live in Scotland.

b) If Scotland launched its own currency, it would undoubtedly see an increase in the cost of borrowing - to a degree that is unpredictable if  the (admittedly extremely unlikely) event that King Eck carried out his lunatic threat to walk away on Scotland's share of the national debt.  I don't like this idea because I have a mortgage and credit cards.

c) Currency union is the option post-Yes vote that looks the least like actual independence and I don't believe in independence.  I'd put it more bluntly: if Scotland and the rest of the UK agreed a currency union, Scotland wouldn't really be independent.

This is me.  Why others should favour it is more of a mystery.  Two groups within the British Isles spring to mind:

1) Scottish Nationalists.  At this moment in time their behaviour is tending to reinforce the impression I've always had; there's a fair chunk of the SNP high command that don't really believe in independence.  How else can we explain their behaviour in the last few days?  We should be clear about this: the 'threat' by George Osborne can only be considered a 'scare-tactic' to the extent that, not 'the peepul', but the nationalists are scared of what independence means.  Currency union was the flagship of the 'independence by stealth' campaign.  Vote independence and you'll hardly notice the difference.  This has been holed below the water-line, hence the rage and the pathetic accusations of 'bullying'.

2) The rest of the UK.  It has repeated endlessly, apparently to no avail, that a currency union requires the agreement of both parties involved.  The truism that nationalists care about no country other than their own is illustrated in this case.  Is it not significant that at no point have the nationalist even given the faintest clue that they realise the rest of the UK needs to be persuaded to join this arrangement?  The madness of Salmond and the SNP lies not in their economic analysis but in the assumption that everyone else is under some kind of obligation to agree with it.  Even if they were so inclined, I'm not sure they could persuade anyone.  It's not just the fact that the rest of the UK would be obliged to bail out Scotland but Scotland would never be able to reciprocate - there's also the political dimension.  Mark Carney clearly said that a monetary union would require both parties to surrender some of their sovereignty.  It was all text-book 'optimal currency area' stuff but the nationalists missed the both parties bit.  One wonders if any nationalist could tell me how a democratically elected English or Welsh politician would be able to sell the idea that the rest of the UK should surrender a part of their sovereignty to a country that has just rejected them?  Because in the unlikely event that they were so disposed, the most recent evidence would suggest that they would receive a hostile reception.