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I LIVED in Chester until the age of six and when I told my young friends I was moving back to Scotland they actually asked if me if I would be living in a cave. A similar level of naivety about Scotland, its politics and economics was apparent in a recent Economist article entitled "Loch Mess - Scotland's holiday from reality".
Along with the title, the inherent flavour of this article could be accurately gauged by the accompanying mock-up photo of a Highland Coo adorned with a sparkly Unicorn horn. Yes, I read it, so you don't have to. The jauntily titled "Loch Mess" is pockmarked with political gaslighting with regular references to the independence movement being "populist". The unidentified author seems to be either politically naive, or allergic to research.
The Economist: Scotland’s holiday from reality #TomorrowsPapersToday pic.twitter.com/RuJvKfL01l
— George Mann (@sgfmann) June 1, 2023
Politics aside, let's examine the economic assertions of Scotland's apparant "holiday from reality", the first being on economic growth. In fact, in the first quarter of this year Scottish GDP growth was at 0.4%, whereas in the whole of the UK it was 0.1%. This very particular and narrow measure of Scotland's economic success was also favourable over the same quarter in 2022.
So far, so conventional.
The anonymous author suggests that the Scottish electorate should be unconcerned with social outcomes, but surely that is fundamentally what voters should be concerned about. So far, so bizarre.
They also assert that the concept of a wellbeing economy is just a "fuzzy idea", which is the sole preserve of those pesky Greens. In fact, the repudiation of GDP and its use as the one and only measure of a country's success has been challenged for many years, perhaps most famously by President John F Kennedy on March 18th, 1968 in a speech at the University of Kansas.
It is entirely logical and unfuzzy that politicians, policy makers and economists should examine a basket of economic measures when analysing what success actually is in the macroeconomic context of a country. Over the last 50 years, we have seen growth in the whole of the UK, but has it been shared? Absolutely not, so why would the majority of voters crave it? I would suggest that most people understand that we have finate resources and are sceptical about the dogmatic supplication to "growth" as a means of societal success. It is no longer convincing to them, and research by Business for Scotland backs this up.
The myth of Westminster funding
Apparently, another problem for Scotland is that "flow of money from Westminster is becoming less lavish" - this coupled with our aging demographic and we are of course doomed. The flow of currency from the Bank of England via Westminster votes has never been lavish, which has resulted in our aging demographic, along with Brexit. Moreover, the retention of currency within Scotland is challenging when there are so many tax loopholes, for those who can afford the services of an accountant, to offshore.
Two shopping centres in Aberdeen were recently reported to be doing this, which means that rents paid to them through Aberdonian wages will never re-circulate in Aberdeen or Scotland again. Those offshored pounds will never buy a pint, a coffee, a haircut or a home for that matter, impoverishing us all because the jobs that accompany thoses purchases cannot exist.
The private sector is not only only creator of jobs , the public sector creates jobs too of course. Morover, yet more jobs are created in the private sector as police officers, nurses, doctors and council officers go out and buy pints of beer, coffees, haircuts and homes. When you understand that the UK Government is the currency issuer and therefore does not rely on businesses for pounds you can see clearly why in any country it is vital that government infrastructure is spread around because it supplies a steady stream of currency into the area in which it resides. In the UK it is mostly centred in London.
Thus, embassies, charities and yet more businesses cluster around the constant stream of currency eminating out from these government structures. In Scotland this can be readily observed in the demand for housing in Edinburgh and East Renfrewshire, which is close to the new Queen Elizabeth hospital.
The demographic challenge
Government infrastructure can create interesting jobs too, and nowadays many young politics graduates stay in Scotland to work for our MSPs instead of moving to London. With independence we could retain more of our young people when we create the varied and interesting jobs that are required to create the Scottish state.
Fixing the demographic decline that the Economist author alluded to, requires the full set of governmental tools, that it a central bank and a Scottish currency. When we have these "tools" we can respond more accurately to our societal needs, and more importantly, we can plan. Constantly waiting for the currency issuer to make up its mind about its own political and economic way forward restricts and restrains Scotland. We can be much more responsive and nimble to our particular needs as a monetary sovereign.
Giveaways? Get away ...
Lastly, the ugly language of "giveaways" coupled with their fear of tax rises is an indicator of the author's politics. The symbiotic relationship between government and private sector does not seem to be well understood by both commentators, many politicians and many economists. The "country-as-household" mantra has been promulgated for over 50 years, but it is nonsense. Fiat currencies and taxation are policy tools with which countries can benefit all parts of a country, or a union of countries. So when those on the right of the political spectrum talk of "giveaways" they signal their disdain for redistribution, AKA sharing.
In Episode 14 of Scotonomics, Dr David Patrick shone a bright light onto the mainstream media's hostility to Scottish independence and the frequent assertions that Scotland is an economics basket case. We hope that our YouTube shows, podcasts and articles will inform our readers give them the confidence to reject that notion, and to be able to paint a positive economic picture of an independent Scotland.
