October 25, 2014
This is about sovereignty, not short-term economics
Bloomberg News (*)
Should Scotland remain part of the United Kingdom? Should Britain stay in the European Union? Does Texas, for that matter, belong in the United States?
The last question isn’t as urgent as the first two, but similar issues are involved. It’s obvious (to most people) that Texas belongs in the United States, but not so obvious that Scotland and Britain are better off where they are. Why is that?
Don’t look for enlightenment to the debates about Scottish independence and a British exit from the EU. Up to now, they’ve dwelt on inessentials. Bill Emmott makes this point in a good column in the Financial Times: the discussions are bogged down in arguments about economic prospects. See last week’s televised debate on independence between Alex Salmond (leader of the Scottish independence movement) and Alastair Darling (a Scot who’s a former British chancellor of the exchequer), for example.
It’s impossible to say whether, in the fullness of time, independence would help or hurt Scotland’s economy, or whether “Brexit” would help or hurt Britain. It all depends — on policies, not constitutional arrangements.
Of course, Scottish independence and Brexit might trigger policy changes — just as any election might. But they wouldn’t dictate them, much less fix them in place. So Scotland’s economy might do well after independence, or it might do badly. In the same way, the British economy could thrive or fail outside the EU — as a useful new report for Boris Johnson, mayor of London and possible future Tory leader, explains.
Granted, if I were a Scot, I’d be tempted to vote against independence to deny the majority Scottish National Party (too left-wing for my taste) control of Scotland’s economic policy. But that would be a short-sighted calculation. The same goes for disputes over the terms of separation — including how public debts and assets (such as the government’s claim on oil revenues) should be divided. Those questions matter, but in the end they shouldn’t be decisive. As Emmott says:
“Voters must ponder how an independent Scotland might feel not with the policies promoted by Mr Salmond and his Scottish National party but with whatever alternation of governments might occur in coming decades. The same applies to Britain outside the EU.”
If short-term economics isn’t the main thing, what is? The discussion really shouldn’t be about policy. It should be about sovereignty — about what it means and where it best resides.
The case for Scottish independence is that (a) the Scots are a nation and (b) Scotland is a viable state. Earlier devolution of political power to Edinburgh was intended to satisfy the Scots’ appetite for self-government, but it's had the opposite effect. It’s increased the sense of a separate cultural identity — the sense that Scotland is a nation.
Also, this idea of nationhood is aligned with distinctive and apparently durable political preferences. As Salmond said in his debate with Darling, there are more pandas in Scotland than Tory members of parliament. This doesn’t change from one election to the next. So you have a separate and distinctive political and cultural community living inside a state — Britain — that persistently overrides its views.
One answer to that might be a bit more Scottish devolution. Sovereignty is divisible, after all. With polls predicting defeat for the independence campaign in next month’s referendum, more devolution is the likeliest short-term outcome: the campaigners will demand, and in fact have been promised, a consolation prize. But more devolution will only add to the desire for full independence, just as before. And if Scotland were given more devolved powers, it would begin to be a state in all but name anyway. Why not recognize this and celebrate it with full independence?
I see four main arguments against. First, the smaller the state, the less valuable sovereignty becomes. (Little countries are apt to get bossed around.) Second, the smaller the state, the smaller the scope for risk-pooling (for instance, through cross-regional fiscal transfers). Third, the smaller the state, the smaller the zone of complete and guaranteed economic integration. (As the great Scottish philosopher Adam Smith pointed out, the bigger the market, the better. Membership of the EU would mitigate this danger for Scotland, but wouldn’t eliminate it.) Fourth, and relatedly, the smaller the state, the smaller the pool of talent for leaders (no disrespect to Salmond).
Weighty objections. Nonetheless, I’d say it's a close call. If I were a Scot, I’d be leaning toward independence: the desire for self-government trumps the rest.