ECONOMICS is "far less important" when considering questions like Scottish independence than politics, a professor of the subject has said.
Stephen Kinsella, an associate professor of economics at Limerick University, said leaving the UK would likely result in a “short shock” but stressed economies adjust to change.
He likened the situation to the 1916 republican revolt in Ireland, joking that no economist would have advised the Easter Rising leaders to attempt to separate from the UK.
Like Brexit, Scottish independence would be a “structural” change, said Kinsella, who was speaking via video link at the Scotonomics Festival of Economics in Dundee on Friday night.
He said: “Where economic models are really bad are where the structure itself changes so things like Brexit, things like Scottish [independence] referenda, things like the unification of northern Ireland and southern Ireland.
“These are massive structural changes, where the economics of the situation are probably far less important than the political will and the ability to restructure the economy.
“So the way I like to think about it is, in 1916 when there was a revolution in Ireland … no economist would have said, ‘This is a brilliant idea, we should totally separate from the largest economy and the most successful economy in the history of the world. You guys should not do this, the economics of it are absolutely terrible.’
“Objectively, no economist would have said that.”
He added: “A way of thinking about it is that the percentage of exports in 1920 from the island of Ireland to the UK - the UK made up 95% of our exports – it’s 12% now.
“So what happened? Over that time, we restructured the economy, we got really, really, really comfortable with low taxes and very, very business-friendly and stuff like that but essentially we restructured the internal workings of our economy and made ourselves far more pro-business …
“The point is, people adjust, so if there was a Scottish independence movement and it worked out, what would happen was you would adjust …
“We had two or three decades of really hard times after we [Ireland] separated from the UK and we had a trade war, there was autarky, we decided to shut down all trade between Ireland and the UK – very poor choice, don’t do that, don’t shut down all trade between Scotland and the rest of the UK …
“It will be a short shock, no doubt about it. But the reality of the situation is that things adjust, they move on and I don’t think that looking at the north of Ireland and looking at the south of Ireland - you could look at it as an economic experiment in the benefits and costs of colonialism over a century – and there’s no doubt which group fared better.”
