Back to the ‘80s?

The Scots need to take a critical look at the high cost of staying in the Union argues Donald Adamson

Shortly before his death in 2003 the English political journalist, Hugo Young, wrote an article in his Guardian column about the relationship between Scotland and England. From his vantage point as gentle critic of the high politics of the British state, Young informed his rea ders that, “Scotland is too important to leave to the Scots”. For nationalists in Scotland, Young’s argument is, of course, anathema. But one of the questions to which Young’s reasoning demands an answer is: are there any other countries in the world which are too important to be left to their own people? Writing from a very different tradition to the parochial British perspective of Young, Rosa Luxemburg provided a partial and orthodox Marxist answer to this question. Justifying her belief that, historically, smaller nations would inevitably be integrated into larger ones, in her 1908 article ‘The nationality question and autonomy’ she wrote: “Can one speak seriously of ‘self-determination’ for the Montenegrins, Bulgars, Romanians, Serbs and Greeks, or even to any real extent of the Swiss?”

Actual history will always trump theoretical history. Moreover, to borrow Young’s terminology, if Serbia is not to be left to the Serbs, Greece to the Greeks, Switzerland to the Swiss, or Scotland to the Scots, then to whom should they be left? Marxists have never quite satisfactorily resolved their problems with nationalism, less so with nationalISM – opposition to this latter is, rightly, a badge of honour. In their attempts to explain or, more often than not, elide Marx and Lenin’s own belief that the workers of each nation must take care of their own capitalists first, ‘internationalism’ has proved a useful default position. The distinctly non-Marxist mainstream Labourist left in Scotland has found it expedient to draw on this internationalist rhetoric in its opposition to Scottish independence. One of the many ironies of this in recent decades is that, while adopting this internationalist rhetoric it has, at the same time, argued for Scotland’s continued membership of a British state which, for over 20 years now, has made it illegal for workers in one sector in Glasgow to express meaningful solidarity with workers in another sector in Dundee!

Here we are then, thirty years after Mrs. Thatcher first came to power, anticipating yet another lost decade (or more) of Conservative government in Scotland. There are, of course, important differences between the present and the period since 1979. In previous decades the Labourist left in Scotland could maintain the charade that, if only Scots could exercise enough patience, sooner or later a Labour government would be returned at Westminster to shift the balance of power back towards workers. Today, no one in Scotland can seriously believe that. In England, Old Labour is dead and so, too, is New Labour. What remains is zombie Labour, seemingly destined to stalk England’s political landscape hunting for its lost constituency. But unlike New Labour after 1994, zombie Labour is not going to be rescued by disaffected Tory voters in middle England. As Heraclitus famously said, you can’t step in the same river twice. And if the Scots should make the mistake of remaining in the union after 2010 then the question has to be asked – at least of non-Tory voters in Scotland – what exactly will they be waiting for this time?

It is encouraging to have a Scottish government that is, among other things, opposed to Trident, intent on distancing Scotland from British military adventurism and its nefarious foreign policy, opposed to PFI and council house sales. But these and the SNPs other policies, whilst not exactly background noise, hardly constitute the basis of transformative social democracy. Devolution, though, has locked in the dysfunctional governance of Scotland. Like the Calman Commission’s grudging concessions to limited fiscal powers, devolution itself is based on the time-honoured constitutional traditions of English Burkean conservatism (change in order to conserve). But what both Calman and devolution also demonstrate is that the purpose of Britishness in Scotland today has been hollowed out into the solitary objective – to keep the show on the road.

If the winter of discontent was a gift from the political gods to Mrs. Thatcher in 1979, so the present financial crisis is a gift from the equally beneficent gods to David Cameron’s Tories today. The crisis means that the sterile, and for Scotland largely irrelevant, British political debate continues unabated, the incompetent Tory pot can call the mismanaging Labour kettle black. The crisis also means that the Tories have mercifully been spared the difficult task of justifying the policies that they would have pursued anyway had the crisis not occurred. The assault on ‘big’ government and huge reductions in public spending were only a matter of time. Unless, that is, you are the kind of person who buys into the platitudes of Cameron’s “compassionate Conservatism”. Not quite as euphonic as St Francis of Assisi it’s true but, for Scotland, the net effect will be similar. But Scotland may be about to return to the 1980s in other ways. For example, an under-reported fact about the 1983 and 1987 British general elections, is that even if every eligible voter in Scotland (with a 100% turnout) had voted Labour, it would have made no difference, the Scots would still have been governed by the Conservatives from 1983-92. A Tory landslide in England in 2010 is, at least, a realistic possibility.

With a Tory prime minister at Westminster and a Tory mayor in London, the Conservatives’ priority will be to restore the fortunes of the City of London

If disenfranchisement, dysfunctional governance and the prospect of another lost decade were Scotland’s only concerns after 2010, the need to avert all of these would, by themselves, justify Scottish independence. But there is something more serious, more deeply embedded than any of these to make the case for independence compelling – Scotland’s chronic economic underperformance in the union. There is nothing new in this of course. It was Adam Smith who, in Book One of the Wealth of Nations, stated that: “The wages of labour…are lower in Scotland than in England. The country too is not only much poorer, but the steps by which it advances to a better condition…seem to be much slower and more tardy”. It says much about 300 years of union that Smith’s words should be so wearily familiar to Scots in the twenty-first century.

Throughout the post-war period, Old Labour, New Labour as well as the ‘official’ Conservative British governments have mismanaged Scotland’s economy. Many on the left are turning to Keynes – curious how, for so many on the left, Keynes’s contemporary, Michal Kalecki, never merits even a passing reference. It was Keynes’s biographer, Robert Skidelsky, writing of the malfunctioning post-war British economy, who made the astute observation that, “fiscal fine-tuning and the stop-go cycle were England’s unique contribution to Keynesianism”. Plus ca change! England has never quite got the hang of coordinating fiscal and monetary policy, although sterling’s (flattering) role as Bretton Woods’s second reserve currency up to 1972 did exonerate some of the mismanagement that occurred up to this period. In reality (that is, from the perspective of the US Treasury), in Bretton Woods, sterling was the dollar’s first line of defence. But Skidelsky’s point is right up there with the prescient observation of General de Gaulle in 1963 that “England is America’s Trojan horse in Europe”. De Gaulle was referring to defence and foreign policy, but today we can add to these the toxic effect in Europe of the diffusion of Anglo-American neo-liberalism since the 1980s – the unfortunate offspring of what Joan Robinson called the “bastard Keynesians” – underlining further the perverse temerity of England’s ‘Euroscepticism’.

With a Tory prime minister at Westminster and a Tory mayor in London, the Conservatives’ priority will be to restore the fortunes of the City of London, the engine of growth of England’s economy. In truth, in the highly unlikely event of a Labour victory in 2010 this would be its priority too – early on in his tenure as chancellor, Gordon Brown understood that he needed the City more than the City needed him. And should Scotland remain in the union after 2010, the roller coaster ride that the pernicious Treasury-City-Bank of England nexus has taken Scotland’s helpless economy in the last thirty years will continue. If after 2010 the Scots want a return to business as usual the union will deliver.

One of the assumptions that inform projections about Scotland’s economy after independence is that they are based on static comparative advantage. They assume that Scotland’s economy after independence would be subject to the same constraints that limit Scotland in the union. If, more plausibly, projections were based on dynamic comparative advantage, there is a great deal to be optimistic about. An independent Scotland would not need to embark on a dash for growth, though it would need to improve on its dismal economic performance in the union. Independence is a necessary but not sufficient condition for this. If we take nothing else from Keynes it should be his insistence on the critical importance of investment, to this we can add research and development. Indeed, should the electorate of Scotland have a Damascene conversion to an environmentally sustainable independent Scottish workers’ republic, investment, research and development would still be the key to Scotland’s future. Short of that, an independent Scotland will need to stimulate (and attract) investment, research and development funds. Realistically, that means that Scotland will need to re-connect with Europe. It is remarkable that, after 35 years EU membership, Scotland is less well connected to Europe than countries which have only joined the EU in the last four years. As for England, Europe has long taken the Lyndon Johnson approach – better to have England inside the EU tent pissing out than outside the EU tent pissing in. But England will never commit itself to Europe, the psychology of red-lineism is in its cultural genes.

With independence, a Scottish National Investment Bank could be established to coordinate investment, research and development across the Scottish regions with the capacity to raise funds in open markets. Equally important, independence would shift the debate on twenty-first century governance in Scotland away from the tired British debate on devolution for Scotland to a more dynamic debate on devolution within Scotland, with the objective of enabling the different regions of Scotland to develop and flourish. If transformative social democracy is to mean anything it must mean that an independent Scotland makes the twenty-first century the century of equality. Thatcher’s anti-trade union legislation should have no place in an independent Scotland. Similarly, collective bargaining could beneficially be re-constituted, collective bargaining tends to function more effectively in smaller countries but its most significant advantage is that it reduces wage dispersion. The rotting edifice of New Labour’s tax credit system should also be abandoned after independence and replaced with a basic income scheme, guaranteeing all Scottish citizens a minimum income and dignity whether in or out of employment.

Since the 1970s the Scots have allowed the benefits of North Sea oil to be squandered. It would be unforgiveable if the present generation of Scots allowed the same thing to happen to energy renewables which could, realistically, be the engine of growth in an independent Scotland. If combined with other enlightened policies, for example, nationalisation of the railways, a liveable minimum wage, a radical recalibration of the rewards for ‘success’, investment in affordable housing and the reversal of the distortionary impact of house price inflation with a package of property and inheritance taxes, Scotland could not only anticipate a sustainable future but trigger the momentum for an enduring and transformative social democracy. Alternatively, in 2010 Scots can jump back on the British roller coaster, part of a British state about to lurch even further to the right where the ugly face of British nationalISM will never be far from the surface.

A sea-change has occurred in Scotland since the 1970s. For over three decades, unionist parties have successfully nurtured fear in Scotland about the consequences of independence. What is clear today is that, all along, what the Scots should have been most fearful of were the consequences of remaining in the union. If we have learned nothing else in the last 40 years we have surely learned that.