If Only
Posted on August 26th, 2024
by Rab Bruce’s Spider
Mastodon: @RabBrucesSpider1@Mastodon.Scot
X / Twitter: @RabBrucesSpider
Recently, I met up with a relative of mine who has spent their entire lives in England. It was great to catch up and our conversation ranged over a whole load of family topics. We did briefly touch on the subject of Scottish independence although neither the time nor the place was conducive to a proper discussion on that subject. What was interesting, though, was that my relative’s first response was, "But how can you afford to be independent?" This response , so popular with Unionists is one that too many Scots fell for in the 2014 IndyRef, and it is still prevalent in the public perception, particularly, it seems, in England. I should say that my relative is very clued up on UK politics and has a left-leaning view. Yet still they were apparently convinced that Scotland cannot afford to be a normal, self-governing country because we are so reliant on the generosity of our English neighbours.
Now, the answer to the question about affordability can, unfortunately, turn into a bit of a lecture, which can be a turn-off. It can also remain largely unheard if your interlocutor interrupts. This is why the message often doesn’t get across in the media because journalists and interviewers are experts in the interruption as a way to prevent a detailed answer being heard.
As for that answer, the first thing a normal country does is create a central bank and its own currency. Then you can run a deficit to pump money into the economy. Of course, that cannot be random and unchecked, but taxation is the method by which a Government can keep inflation under control. Richard J murphy has written extensively about this system of monetary control, and if you haven’t read his stuff yet, then do yourself a favour and look him up.
As for having a deficit, that is nothing to be afraid of. Most countries run a deficit because that is what keeps an economy growing. The UK has a deficit in excess of £2 trillion, and nobody ever asks how the UK can afford to be an independent state. Incidentally, in trying to search for the amount of the UK national debt, it was interesting how few websites quoted a figure in £, most preferring to disguise it by quoting it as a percentage of GDP which is, in itself, a highly questionable way of measuring an economy’s success or otherwise. But it is worth noting that, after World War 2 had consumed so much of the UK’s finances, the UK Government still managed to create the NHS and embark on a massive housebuilding programme. Of course, that was in the days before Right Wing economists had popularised the "How are you going to pay for that?" mantra so beloved of today’s media. The Government knew it could afford it because it controlled the Bank of England who could provide as much money as it required. There was no thought of comparing a state’s finances to a household budget which has so seriously dumbed down the current level of financial discussions.
So Scotland, with its own currency and central bank could create the money it required to spur its economy into growth, but there is also the issue of how valuable that currency is. It is vital to hold reserves of foreign currency, but that can only be done if there is a demand for the home currency. To ensure that, it is a huge help if a nation possesses some product or services which are in demand worldwide. That way, people need to buy your currency to pay for your exports, or give you an equivalent amount of their own currency.
So what does Scotland have that other countries might want? Well, North Sea oil is the obvious one. Putting aside the environmental issues, there is still a strong demand for oil, so that’s a start. But it would help if we had some other resources like, say, a surplus of renewable electricity which other neighbouring countries would be desperate to buy, or perhaps a beverage of some sort with a worldwide reputation such as, oh I don’t know, whisky. Or maybe having more fresh water than our neighbours will become valuable in the very near future as climate change has an increasing effect. Or maybe if we had some fish farms which produced a world-famous dish such as salmon. It would even help if some of our universities regularly featured in the world’s top rankings so that, instead of discouraging foreign students because the UK Government panders to the xenophobes in the electorate, we could welcome them here. And on the topic of welcoming visitors, wouldn’t it be great if Scotland had some sort of attraction for foreign tourists? If only we had historic buildings, magnificent scenery and other visitor attractions.
If only we had those resources! What a wealthy nation we could be if we ran our own affairs.