Scottish Independence

If large numbers of Scotsmen really did dislike the English, that wouldn't really seem to weaken their case for secession and independence. If anything, it'd be all the stronger a justification for leaving.

Paul Krugman is not impressed by the SNP's money plans.

The Eurozone comparison is ill-informed and overly-simplistic to the point of ignorance.

The Eurozone crisis came about because the Euro expanded too quickly into economies not suitable or secure enough for integration. Dysfunctional and corrupt economies like Greece aren't on a level enough playing field with, say, Germany to make for a viable currency union.

The Scottish and English (and Welsh, Irish, etc.) economies are already fully integrated, with long-standing shared economic infrastructure. Scotland is England's second largest trading partner. An independent Scotland will have less debt, a budget surplus, more resources to invest in the economy and a greater political will to actually invest it.

If Scotland doesn't receive its rightful share of UK assets, it in turn is not obliged to accept a share of UK liabilities. This translates to £130 billion of debt and £4-5.5 billion more in interest payments dropped onto the British taxpayer. How very austere.

Krugman's "argument" could have been lifted straight from the Project Fear handbook; plenty of scary-sounding "what if's" but not a single figure to back any of it up. Lazy "journalism".

An independent Scotland will have less debt, a budget surplus, more resources to invest in the economy and a greater political will to actually invest it.

Hahaha. Sorry I couldn't keep a straight face while reading that.

Edit:

The Eurozone comparison is ill-informed and overly-simplistic to the point of ignorance.

Actually, it seems quite accurate. Greece may have been the proximate cause of the crisis, but the reason it metastasized all over Europe and has dragged on for years is because of the poor design of the euro area, as well as inept handling by politicians.

edited 24th Feb '14 10:52:09 AM by storyyeller

But you're not really talking about an asset. We're not talking about the value of the gold in the vaults or shares in the company, we're talking about the services of a central bank that are the natural function of a government's ability to back up money.

Sorry for jumping in, but I couldn't read TheBatPencil's post and not say something.

Greece was not the cause of the Eurozone crisis, except in as much as it was the match thrown on the waiting powder keg. The euro as originally conceived was fundamentally unstable, lacking any sort of mechanism to conduct fiscal policy in response to asymmetric shocks.

What that means is that if demand undergoes a significant shortfall in a Eurozone country, it will be unable to conduct stimulus to restore employment since it can't increase its borrowing and it can't control its interest rates. The response demanded in exchange for aid will be austerity, which cuts demand (and thus revenue) even further, making the crisis worse.

The problem is exacerbated when one trading partner in a currency union is prospering while another is struggling. The prosperous country has no incentive to support the weaker one fiscally, only to offer it "bail out" loans with terms that demand austerity. There's something interesting about the term "bail out": it omits any mention of fixing the hole that's causing the water to leak in.

Scotland shackled to the pound or to the euro would be unable to conduct fiscal policy without begging to the Bank of England or the ECB, meaning it would have no protection at all against a protracted shortfall in demand.

It would be fiscal suicide. It would be far better for Scotland to adopt its own currency, because then it could conduct both internal fiscal policy, such as stimulus, and monetary policy, such as devaluation and interest rate adjustments.

edited 24th Feb '14 12:24:37 PM by Fighteer

If the Nats are worried about people losing money to exchange rates or fearful of the pain in the arse that setting up a new currency can be, it seems the obvious course of action would be to follow the wisdom of the Irish and set up a "McPound" and peg it to the UK pound.

edited 24th Feb '14 11:46:19 AM by Achaemenid

As long as it can be unpegged if necessary...

The Irish did in '78, when they joined the ERM and the EMS. I think it went alright.

Ireland has been one of the biggest victims of the Eurozone crisis, so I can only assume that things did not go swimmingly for them, although their mistake may have been abandoning their pegged currency in favor of the euro. I am ignorant of the precise details of when and how each country joined.

edited 24th Feb '14 12:01:24 PM by Fighteer

Ireland joined the Eurozone at the launch of the currency on the 01/01/1999.

It would be interesting to see graphs of Ireland's currency valuation, employment, and interest rates before and after both its 1978 unpegging and joining the Eurozone. That's a bit off-topic, but it would be illustrative for Scotland's case.

Yes and no. The Euro isn't the root cause of Ireland's misery, though it certainly exacerbated it; Ireland's problem was a horribly distorted economy that relied on a financial sector and housing bubble they couldn't afford to rescue if everything went tits up. Which it did. Spectacularly. Essentially a microcosm of America, really.

As for the post-1978 currency, I think it served them well enough until '99.

edited 24th Feb '14 12:05:47 PM by Achaemenid

The Eurozone crisis was triggered by the collapse of a housing bubble that was driven by cheap borrowing, with money flowing in from the wealthier euro nations who were eager to get in on the growth of their poorer cousins. This caused substantial wage inflation, which made those nations suffer competitively against their peers. When the money dried up, their exports were too expensive to allow that segment to make up for the collapse of their internal markets.

A country with its own currency could have conducted external devaluation to resolve the crisis, in effect stiffing foreign creditors to restore their trade balance. As the Eurozone countries lacked the capability to do that, they were forced to cut internal spending instead, forcing a crushing depression.

All this could have been averted if the ECB were empowered to lend directly to those countries and assume responsibility for their debts, as is the case in the United States with the Federal Reserve and the various states. Florida doesn't have to worry about paying its citizens their Social Security benefits or insuring their bank accounts because those are guaranteed by the federal government. (The United States has its own problems with austerity, but that's a separate topic.)

If an independent Scotland chooses to adopt a Eurozone model, shackling itself to another country's (or bloc's) currency, then it will be following exactly the wrong example and setting itself up for a terrible future crisis.

Please note that I have no horse in the race as far as Scotland's independence goes. I think that we should be going for more, not less, political unification on a global basis, but that's not strictly relevant to this particular topic.

edited 25th Feb '14 7:16:02 AM by Fighteer

Irish Guy Here: 'Twas the builders and the banks that fucked us. The government helped, so we got a new one, which then fucked us harder.

So, in the political scheme of things, we've got the parties that got us into this mess, the parties that made it worse, the parties that are too small to win a majority, and the guys who supported the IRA.

Anyway, back on topic, if Scotland does get a "Yes" vote, what's the chances of Wales splitting? (Northern Ireland apparently pays more in Public Sector wages than it gets in taxes, so it would sink like a stone if it went independent.)

edited 24th Feb '14 12:17:40 PM by GeekCodeRed

"Northern Ireland apparently pays more in Public Sector wages than it gets in taxes, so it would sink like a stone if it went independent."

Again, only if it decided to stick to a common currency instead of using its own; if it were to choose the latter it could set monetary policy in such a way as to rebalance those books, so long as it still has something to offer in terms of foreign trade. If it lacks an independently functioning economy, though, then any separation would doom it as surely as were Montana to secede from the United States.

Possibly higher, although Wales has less of a history of independence and greater cultural ties to England. Plaid Cymru aren't the force there that the SNP are in Scotland.

,

Nobody wants Northern Irish independence - they either want to part of the UK or part of the Irish Republic. If it did change hands, that Republic would have to pay for it - and deal with all the shit that having Northern Ireland as part of your country entails. And whilst realizing De Valera's dream of a United Ireland would be a nice political victory, dealing with all of that - the inevitable Unionist outrage, the sectarianism, the quite possible restart of The Troubles - would be a monumental inconvenience for the Republic.

Frankly, the only scenario where NI would become independent would be if neither the UK nor the Irish Republic wanted it...which might be more likely than you'd think.

edited 24th Feb '14 12:27:23 PM by Achaemenid

... tries to resist getting drawn into the political discussion.... fails...

Is this just about people not liking the politics of their fellows across the map? It seems like an awfully petty reason to break up what has been, historically speaking, a very successful political union.

I mean, I'm well aware of The Troubles and the effects they had across the world, but Great Britain was an economic, military, and cultural powerhouse for a long, long time and is still very influential on the world stage. Seems a shame to give that up.

Edit: If this topic has been done to death, feel free to tell me so and ignore it.

edited 24th Feb '14 12:40:11 PM by Fighteer

Are you talking about the Northern Irish or the Scots?

For Northern Ireland, what you have is tension between a pro-British implanted population of mainly Scottish Protestant settlers who came over during and after Oliver Cromwell's borderline-genocidal conquest of Ireland and told the Catholic natives to piss off (sound familiar?). This same population, throughout the British rule of Ireland, occupied a privileged position in Irish society - the exact degree fluctuated, as Irish nationalism fluctuated in popularity, but in general Northern Irish Protestant's position is somewhat akin to that of whites in the Deep South in the Jim Crow and segregation era. When the Irish fought their war of independence, the British decided that they would split off the majority-Protestant areas in the North of the country, ostensibly so as to protect them from Catholic retaliation - and so began the Irish Civil War, between those in the Republic who would accept this and those who wouldn't.

So Northern Ireland became a semi-autonomous province with a Protestant majority who loathed the Catholic minority. This led to systematic discrimination and repression - Catholics were banned or seriously impeded from participating in the economic, social, and cultural life of the province. As tends to happen, they got fed up, shit went down, and The Troubles began.

There's no pro-British sentiment in that minority because they were treated as colonial subjects by the British administration of Ireland and as second-class citizens by the Northern Irish assembly.

Scotland doesn't have anything like the same history of oppression Ireland does, and a lot of the great nationalist Scottish myths - Wallace, "Bonnie" Prince Charlie, that moronic film - are just that; the truth was often that these conflicts were "Scot vs Scot" as much as they were "Scot vs English". And we were certainly enthusiastic participants in Empire; to the point that some have even called the British Empire "Scotland's Empire". There's a reason we're all over Canada. Certainly, Scotland punched well above it's weight both nationally and internationally during the Imperial era.

But at the same time, the 1707 Act of Union was in a large part initiated by the emergent Scottish capitalist elite in order to recover their losses from the Darien scheme, an ill-advised attempt to start a colonial empire in Panama using 1/4 of all Scotland's money (this peerlessly stupid project naturally went horribly, horribly, wrong). Support for an independent Scotland thus remained fairly stable through the Union era, at around 25-30% of the population, and that has become more pronounced since the Witch of Grantham Margaret Thatcher's premiership and as Scotland and England drift politically apart. England, for obvious reasons of population, dominates the UK's political scene, and there is a sense that egalitarian, cosmopolitan Scotland is becoming shackled to a nation that is increasingly conservative and parochial.

edited 24th Feb '14 12:52:27 PM by Achaemenid

Seems like it would be more prudent to work at addressing the causes of London becoming more conservative than to say "the hell with it" and go your separate ways.

It's not just Scotland and England that are drifting apart Politically — it's also Northern and Southern England^note  The North leans more to the left. I wouldn't call them progressive, though. Quite the reverse. , for largely the same reasons.

edited 24th Feb '14 12:59:57 PM by Greenmantle

The United States would seem to have the opposite problem: big cities being havens of liberalism (the American version) and the country being conservative socially and economically.

It's not town vs. country (although that exists), it's more where in the country that town or village actually is. Someone in a small village in say, County Durham or Lanarkshire, compared to that in Kent will have rather different political views.

Well, of course. That goes without saying, but seceding over it would seem a bit much. There are always noises about secession in various predominantly rural U.S. states, but nothing ever comes of it because even the marginally intelligent folks realize that it would be economic suicide.

edited 24th Feb '14 1:17:01 PM by Fighteer

Standard & Poors believe Scotland could get an AAA credit rating, even discounting the North Sea oil.