Too Poor for Prosperity?

Reading Time: 7 minutes
Nick Durie

The Scottish Government’s Growth Commission has raised more questions than it has answered, it has worried and angered many independence supporters, and far from starting a debate about the positive vision of the growing economy of an independent Scotland is has set independence supporters against one another on the basis of those who will support any policy proposal if it supports independence, and those who want out of the UK because of the model of society it represents.

During the independence referendum of 2014 many critics of the prospectus put before them by the Scottish Government was that in their view it was overly optimistic, that its claims were insufficiently supported by hard data, and that in places it was guilty of boosterism or magical thinking. The Growth Commission was created in response to these criticisms. It was tasked with showing how and independent Scotland could grow its economy and create the fairer society the YES campaign had argued for in a hard numbers driven analysis. Andrew Wilson, an ex-RBS economist was chosen to head the commission.

It took a number of years to publish its report and the commission took evidence from a range of contributors. There is much working in the report, which is lengthy and serious, but which nevertheless diverges very far from the 2014 vision of independence to such an extent that it too is guilty of magical thinking.

Andrew Wilson has talked about “inclusion”; the Scotland we seek to build needs to be more equal than the one we are leaving behind. However nowhere in the report’s 354 pages does it mention full employment, family wages, the beneficial effects of trade unions, or the multiplier effect of government spending. Apart from what is not in the report, there are other examples of magical thinking. The report commits to Sterlingisation. Politically this is not possible. It may be economically worth considering, but voters will be incredulous that this is the plan. Moreover buried on page 92 of the report are a series of monetarist principles which effectively advocate a straitjacket on public spending which, apart from being simply wrongheaded, will prove intensely electorally unpopular.

As Ben Wray, the Editor of Commonspace summarised this section today;

“The growth comm’s analysis is that they will inherit a deficit of 5.5% from rUK, and that this will need to be reduced within the transition period to no more than 3%, with no assumptions about growth and using the Pound Sterling this means it will have to be done through tax rises or spending cuts. They argue that on current growth and inflation rates this would mean a “cash terms increase” in public spending, i.e. a real terms fall. The rule they have for the transition period is that the deficit will always be lower than the growth rate – i.e. take more out of the Scottish economy through revenue than you put in through expenditure. The report does contain the proviso that if growth is very lower there may need to be a spending stimulus in the early years, but the general idea is fiscal consolidation.”

The SNP has fought one referendum and a number of elections arguing very precisely against this kind of politics. Austerity is electorally toxic. Moreover the traditional Unionist argument against independence is that it will lead to deepening austerity, as the Unionists believe, or claim to believe, that Scotland is economically poorer than the rest of the UK, and is subsidised by the Union. Unionist commentators, such as Kevin Hague, have observed with glee that the report apparently shares their analysis.

As well as the questions the report raises (such as why are we being asked to embrace monetarism and below growth public spending, and re-introduce Gordon Brown’s public sector borrowing requirement), the report has also been framed as a discussion document. However that has not stopped many in the movement seeing the report as an effective policy statement. This is dangerous for several reasons.

For prominent SNP blogger Peter A Bell, responding to this writer’s framing of the commitments to strong fiscal consolidation contained on page 92, as Sado-Monetarism, this was an unacceptably trenchant criticism,

“How I despise the pseudo-intellectualism of terms such as “sado-monetarism”. It positively reeks of those posturing, self-righteous, self-regarding, elitist Byres Road cappuccino Commies.”

Echoing very similar sentiments, polling blogger and independence supporter James Kelly reckoned,

“Whisper it gently, but the fact that the radical left are unhappy with today’s events may be no bad thing. Byres Road and the road to victory are not necessarily one and the same. #ScotRef”

Strong stuff, but these are indeed sentiments that suggest ‘discussion’ may not be so broad rangning as to enable the questioning of the particular type of economics that Mr Wilson has advocated. It also pays little heed to the fact that Wilson is advocating a major strategic shift to the right. In 2014 the Salmond administration advocated Keynesian economics, social democracy, reindustrialisation, full employment and a cradle to grave welfare state. As one social media commentator put it,

“I know this isn’t a policy declaration, but it is an alarming sign to people who are rightly sceptical of Westminster and the politics that have polluted the country for the past 30 years. It’s a worrying signal.”

The location of such concerns as elitest, and those of the middle class intelligentsia do not chime with my own experience of advocating those Salmond era policies, as an anecdote I recently retold illustrates.

“During the referendum I remember standing at a stall on the edge of the scheme being approached by a skagged out one legged man in early middle age, clearly slowly dying of leg abscesses from arterial injections. Anecdotally many heroin addicts die this way. This man adopted a socratic tone with me, speirin questions of the benefits of a YES vote. As I outlined the mission with our core messages (secure reindustrialisation, win full employment, restore family wages, and end benefit sanctions) he started to hirple away on his crutches. “Guid!” He said. “That’s how A votit that wey in the post. Just wantit tae check.” Alex Salmond’s SNP government and the YES campaign had engaged *this* man, a man slowly dying from his own miseries for the generalised want of those four things. It’s a far cry from banning pizzas to tackle “social exclusion.””

My own experience of making the argument for independence thousands of times on doorsteps has been that the promise of full employment is in fact the single most passionate and moving thing I can say about the prospect. Abandoning this policy in order to pursue monetarism and fiscal consolidation is unlikely to be anywhere near as popular.

This takes us to the social history of the independence debate and the YES movement’s composition itself. Independence actually has to be voted for, and the support for it is very demographically biased towards younger people, and working class people, who together form a majority of the population.

That is not to say that everyone in those demographics is convinced of independence but they are certainly more likely to endorse it than other cohorts of people. For the majority of those people their support is conditional, and stems from the history of our campaigns for this objective, and their relationship to our campaign messages, or as I prefer to look at it, our war aims.

Scotland is a very unequal society and the majority of people are not doing well out of the British system. As many who have spoken in defence of Mr Wilson’s proposed change of tack have claimed, there are sections of society which believe that a more equal society where everyone has a job and a decent home is unrealistic to achieve. Those people would be attacted towards a more conservative assessment of the benefits of having a new country, they claim. The trouble with this thinking is that there is no guarantee that shifting towards a radical right wing prospectus will go unnoticed by those who currently support independence because they believe it will be something hopeful in their lives and future chances. Those who espouse firm commitments to Thatcherite/monetarist principles in Scotland – while numerous in middle class encloves, ironically, like the foresaid Byres Road (I know this because I have canvassed that street many times with a Keynesian full employment message) – are far far less numerous than those without a ha’penny to rub together.

In light of this tension there is always the rejoinder – much in evidence this week – that after independence the people can choose whichever government they like. That’s true of course, but the problem with this assumption is that many people, perhaps a majority of voters, will not be voting on the idea that they can choose the government of an independent Scotland many years down the line, but on the prospectus put to them before the vote, for how an independent Scotland will look like. Pursuing policies in such a prospectus (which is essentially what Andrew Wilson has created: a policy document) which then go on to be unpopular, or unpopular with a number of previously supportive groups of people, could prove very destructive towards our chances of building an independence electoral majority.

To conclude then, in my view the basic analysis of the 79 group – that Scotland’s middle class will never embrace radical constitutional change as a bloc, and drive that change, and that they are a conservative demographic minority, and that the only way to overcome their check on social progress is by engaging the working class majority of Scotland – is both essentially true, obvious, and that therefore our task is to communicate the advantage to the working class of independence, to achieve sufficient working class and wider progressive turnout, to swamp the votes of conservative Scotland.

What Andrew Wilson proposes is a stark change of message for our movement, towards a more mainstream British vision of a monetarist, fiscally conservative Scotland. He devotes 354 pages to spelling out how this would work, but for all that he has talked of inclusion, he has ignored previous highly successful messages of support for full employment and reindustrialisation, which electrified working class Scotland in 2014, but which our campaign had insufficient discipline to get to turn out and defeat the organised phalanx of conservative Scotland, which already has the right wing Scotland it wants.

It is unclear what possible benefit there may be behind turning the independence movement against itself on whether to embrace the right wing changes he advocates or not, but it seems fairly clear it plays into the hands of those who say that Scotland is too poor to achieve prosperity for all. Simply surrendering to this miserable doctrine in lengthy technicolour seems both very unlikely to convince them to embrace change but very certain to upset a lot of good people, while creating an atmosphere of hostility within the movement between those horrified at the economic volt face, and those more horrified at what they perceive as a breach of discipline.

One thought on “Too Poor for Prosperity?

  1. An Indy Scotland needs sovereign, democratically controlled money creation and supply – and investment in the real economy – not bailouts to speculators and the City of London spivs in the Capitalist Casino.

    http://www.positivemoney.org

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