Scotland – Union or Disunion?

by Sydney Williams Tomorrow, the 700th anniversary of the Battle […]

Image by © Dreamstime

Image by © Dreamstime

by Sydney Williams

Tomorrow, the 700th anniversary of the Battle of Bannock Burn that gave Scotland freedom from the English, resident Scots aged 16 and older will go to the polls to determine whether Scotland will remain part of the United Kingdom, or if it will become independent.

(The British and Scottish crowns were reunited in 1603 with the ascension of James I as England’s king. James I was already, as James VI, King of Scotland. However, it would not be for another 100 years, until May 1, 1707, that the Act of Union brought open borders to Scotland.)

The Scots are an independent, loyal and stubborn people. As Niall Ferguson noted in Monday’sNew York Times: “If you said to the average Glaswegian, ‘If you down that beer, you’ll get your head kicked in,’ he would react by draining his glass…and [then] telling the bartender, ‘Do it again.’” But they are also a thoughtful, creative and industrious people, having produced such luminaries as Adam Smith, David Hume, Sir Walter Scott, Robert Burns, Alexander Graham Bell, Andrew Carnegie, John Paul Jones and one of my favorite authors, the late George MacDonald Fraser.

In the campaign for independence, Alex Salmond and his Scottish National Party (SNP) have appealed to the emotions, using ideology and policy grievances as their principal tools.  Mr. Salmond has phrased the “Yes” campaign as a struggle between Scotland and Westminster – the powerful against the weak, a lord (or laird) versus his servants. His arguments have been heavy on the romantic and nationalistic, but light in terms of responding to hard questions: What currency will Scotland use? How would the two countries divide declining revenues from oil production? Will large Scottish banking and insurance institutions, such as the Royal Bank of Scotland and Lloyds, move out of Scotland as they have threatened to do? Where will the UK’s Trident nuclear subs be based if they are forced out of the Royal Naval base in Glasgow? What will be Scotland’s share of UK debt? If Scotland reneges on that debt, as Mr. Salmond has indicated he might, what will be the effect on the country’s credit rating? How will Edinburg finance the welfare state Scots have grown accustomed to, and which they want to continue and expand? How high will taxes have to be raised? What will be the impact on the economy? How will reserves for a central bank be funded?

More distracting than helpful have been the outpourings for “Yes” coming from Scottish expatriates. They ride the nationalist wave, but would be immune from any unpleasant consequences. Sean Connery backs independence because the people of Scotland are “the best guardians of their own future.” But, what does that mean? The actor spoke from his home in the Bahamas, a place that will never feel any nasty repercussions of separation. The author Irvine Welsh, who now lives in Chicago, half-joked: “Staying in the UK is nature’s way of stopping the Scots from ruling the world.” Scotland-born Alan Cumming, who plays a spin doctor on CBS’s “The Good Wife,” exclaimed: “We now have a chance to have our own destiny in our own hands.” Living in Manhattan, Mr. Cumming’s destiny depends on TV and movie appearances.

Forecasts of doom are predicted by those who fear what separation may bring. The headline in the current issue of The Economist: “Painful Consequences of Scottish Independence.” The opposition has raised the questions listed two paragraphs above, and suggested a “Yes” vote will give confidence to Catalans in Spain, Corsicans in Italy and Bavarians in Germany. A hundred years ago, Europe was dominated by empires – Turkish, Austrian, Prussian, British and Russian. World War I ended those empires, sometimes along purely arbitrary lines. A world that welcomed the final dissolution of Britain’s Empire after World War II has now decided that the U. K. is at its optimum size. Like cells that survive by dividing, the people of nations are almost endlessly divisible, but at some point, when divided too small, the consequence is anarchy. An unhealthy focus on ethnicity gives rise to an equally unhealthy spotlight on nationalism.

It must be remembered, countries and their leaders operate in their own self-interest – not in the interest of other nations. That is also true of Britain’s Prime Minister, David Cameron regarding Scotland. Mr. Cameron spoke Monday in Aberdeen, with a take-it or leave-it attitude: “If Scotland votes yes, the U.K will split, and we will go our separate ways for ever.” Listening to English politicians and other world leaders, all of whom predict dire consequences if Scotland goes it alone, one cannot help being reminded of Queen Gertrude’s comment to her son Hamlet, in Shakespeare’s eponymous play: “The lady doth protest too much, me thinks.” One cannot help wondering: Is David Cameron playing Br’er Rabbit to Scotland’s Br’er Fox?

Scotland has produced some of the most renowned men and women in history, far out-stripping what would be expected from a country their size. But, in recent years, they have indulged in socialism, using English taxes to help fund their welfare state. There is a belief, of almost religious intensity, that money’s will be found to fund Mr. Salmond’s utopian dream. “Freed from London,” is the way the New York Times reported his recent speech, “Scotland would be able to pursue distinct and more social-democratic policies…” Of the 60 members of Parliament that come from Scotland, 59 are Labour. Without Scotland, David Cameron’s Conservatives would hold an absolute majority in Parliament. It is the hope of Mr. Salmond and his cohorts that they will be able to build a Scandinavian-style welfare system. Independence, however, would inject a dose of reality, that nothing in life is free. A welfare state depends on taxes, and tax revenues depend on productive uses of labor and capital. Much would depend on how oil revenues are divvied up, but North Sea production has been declining, as have revenues. Scotland will have to become more productive.

Will an independent Scotland be able to survive in the world they may create? No one can answer with any authority, though the odds are against them. If they are successful in independence, it will be because of hard work on the part of its citizens, along with an ability to attract risk capital that will demand high returns. It will depend on reversing an aging demographic and on retaining and attracting existing and new industries. It will depend on restoring the image so many of us had of Scots being thrifty, hardworking and diligent. Scotland’s historical character suggests independence should work, but it will not be easy and it will not allow for the type of state Mr. Salmond envisions – at least not for several years. But that does not mean independence is not an achievable goal.


The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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