Posted on March 20th, 2017
by Rab Bruce’s Spider
Economies are complex things, which is why making accurate economic forecasts is virtually impossible, even for the genuine experts. For example, take a look at the Office for Budget Responsibility. While some might quibble over this organisation being classed as expert, the Chancellor of the exchequer relies heavily on OBR forecasts when making Budget plans. Yet, since being established in 2010, the OBR has produced a startling consistency in the inaccuracy of its forecasts, even when making predictions only six months ahead in relatively stable political and economic periods. It is wrong every time.
Other expert economists are equally incapable of predicting what is going to happen with any degree of certainty on specific issues. In this regard, we really ought to view economists more like dentists; they can give general advice and predict likely eventual outcomes but there is no way they can specifically say when one particular bad (or good) thing is going to happen. They can be much more helpful when something does happen, in that they can help fix it, but predicting specifics is difficult; much more difficult for economists than for dentists.
Which is why all the predictions we are being bombarded with about the calamity facing an independent Scotland should be taken with a very large pinch of salt. Equally, specific predictions on , say, how many jobs will be lost as a result of Brexit must be viewed with some scepticism. All expert economists can do is give us a broad picture of what might happen and, even then, there are so many unpredictable variables that such forecasts will be, at best, broadly accurate and, at worst, wildly off the mark.
Last time round, the economy of an independent Scotland came under intense media scrutiny and this time will be no different, although there is huge hypocrisy among Unionist pundits since most of them are completely silent on the total lack of an economic plan for a post-Brexit UK. Still, that’s the way the UK media works, so we won’t escape the barrage of doom-mongering.
There is no doubt that the economic future of an independent Scotland is uncertain. There will inevitably be challenges and difficulties to overcome, especially establishing the economic infrastructure of a Central Bank, reserves of foreign exchange and, in all likelihood, a new currency. Having said that, we must bear in mind that plenty of other countries have overcome these obstacles without apparent disaster, so the only reason to believe Scotland could not do the same is if you suffer from a particularly strong strain of The Cringe.
What can be said with a fair degree of certainty is that the choice we face in the next Referendum will be a much starker one than the first. If you had to place a bet on which country would come out of things in better economic shape, you must ask yourself whether it will be a small nation with membership of the EU, having a wealth of natural resources, a currency backed by oil revenues (and a new tax regime along the lines of Norway’s system would guarantee future revenue from this source), with a welcoming attitude towards citizens of other nations, and with the drive and ingenuity that has seen Scotland contribute a host of industrial and scientific advances in the past, or a xenophobic, isolated tax haven with low wages, trade restrictions and a passion for Austerity economics. Quite frankly, it’s a bit of a no-brainer.
The media will always find some people who have lost out whatever happens, because there are winners and losers in all walks of life and with all political and economic decisions, but the chances must be in favour of an independent Scotland soon establishing itself as a wealthy nation. Don’t forget that the Ratings Agency, Standard & Poors, said they would give Scotland their highest rating (i.e. AAA, higher than the UK’s current rating of AA), even excluding the financial benefits of North Sea Oil. Cynics amongst you might point out that the Credit Agencies failed to spot the warning signs of the 2008 financial crash, but it cannot be denied they generally know how wealthy a country is.
Looking at the comments of a second Ratings Agency, Fitch said in 2014 that Scotland becoming independent would mean it would take longer for the UK’s rating to return to top grade. This is an odd remark if we are to believe the Subsidy Myth. If Scotland really is subsidised, losing this drain on resources should mean the Ratings Agencies would be happy to see the RUK’s improved financial position, yet Fitch said exactly the opposite. Again, ignoring the media assertions and looking to independent commentary, we are forced to conclude that other people have a lot more confidence in Scotland’s economic outlook than do many Scots.
But all this talk of economics masks another issue. Should we really be so hung up on what might or might not happen in the future? Economics are important, but every country’s economy is affected by political and economic factors outside its own control, and every country must manage whatever comes along to the best of its ability. Perhaps we should take a leaf out of the Brexit book and decide that the economic consequences are not the most important factor in our decision over independence.
What is important is that Scotland should be able to make its own decisions on all areas of policy, including economic matters. Sticking with the UK means we will lose such valuable things as Workers’ Rights, everyone’s Human Rights, the right to freely travel and work throughout the EU, as well as the enormous trading benefits of the single market. The social issues are even more important than the financial ones. Voting No is likely to result in the abolition of the Holyrood Parliament; perhaps not immediately, and perhaps not in one fell swoop, but, with Labour in disarray, the Tories are set to retain power for the foreseeable future and they detest Holyrood with a passion. Without the Scottish Government to protect us, we not only stand to lose the various rights we currently enjoy as part of the EU, we stand to see our NHS privatised, Austerity economics imposed even more harshly, cuts to Social Security and Pensions, as well as the very important issue of foreign nationals being deported in what are often quite inhumane circumstances. All of these things are valuable for a truly compassionate society, and they will all be lost if we vote No again.
So, take economic predictions with that pinch of salt – even if they support the Yes cause, and let’s not lose sight of the enormous damage that will be done to our society if we don’t make the right choice this time. After all, there has never been any other country which, when faced with the chance to gain independence, made its first question, “Can we afford it?" The fact that this dominates Scottish thinking is actually rather sad, and is a symptom of the UK Establishment’s policy of constantly telling Scots they are dependent on the UK for everything. Too many people have believed this in the past. Hopefully, more and more will see that being able to make our own decisions on how we want to live is more important than whether we’ll be richer or poorer by the price of a fish supper.