Apparently after a year in office Humza Yousaf lacks a
big idea. What could the big idea be? My guess is that it will be some variant
on a theme that Scottish independence is wonderful and will solve all of Scotland’s
problems instantly and turn us into Denmark? Is that the big idea?
In fact, Scotland only has three ideas, socialism, authoritarianism and nationalism, and everyone believes at least two of them. The big idea would be to believe something else.
Almost everyone in Scotland is either a hard nationalist (believer in independence) or a soft nationalist (believer that Scotland should be treated differently within the UK because we are a country that ought to have its own parliament). Hard nationalists inflexibly believe even contrary to the evidence that the solution to all problems is independence. But soft nationalists will never accept that devolution is a failure that fuels hard nationalism, because this would require them to give up their soft nationalism.
Almost everyone including the Scottish Conservative
Party believes in socialism/social democracy. The solution to every problem is
higher taxes, more state spending and free things paid for from other people’s
taxes or absurdly your own.
Almost everyone believes in authoritarianism. Both the
Lib Dems and Labour voted for Humza Yousaf’s hate crime bill. It is accepted by
everyone that government has the right to set prices to discourage behaviour it
doesn’t like such as smoking, drinking and eating unhealthy foods. Government
can force me to drive a certain type of car and charge me more to do so in
certain places.
These three ideas explain most if not all of the
Scottish government’s mistakes. Public ownership, nationalisation plus nationalism
is behind the decision to waste public money on a shipyard incapable of
building ships. Something isn’t better because it is made in Scotland despite all
the little flags on bags of carrots. If someone can build a ship elsewhere
quicker and cheaper buy it and sell them something else. This is usually called
trade.
People who invest in property in order to rent it to other
people are like everyone else just trying to make a profit from investing.
Making a profit is not bad. You make a profit by going to work each day which
profits you by giving you wages.
Investing is tricky, you can invest in shares or bonds,
property or by leaving your money in a savings account. But if the interest
rate is less than inflation you lose money, so you have to take a risk. You mitigate
this risk by spreading your investments across various asset classes. But even then,
some years your investments may go down. If you have rent controls, you make it
harder, perhaps impossible for investors to make a profit. If you so increase
the rights of tenants that landlords cannot ask them to leave and forbid rent
to increase, then the asset class of property becomes not worth investing in. It
means it is harder to spread risk.
Why go to the trouble of buying a flat, doing it up
and going through the hassle of renting it if you can just buy shares, gold or
bitcoin (don’t buy bitcoin by the way, you are just buying tulips).
Socialism fails because of human nature. People are
ingenious. We live in the UK. It is easy to move to another part. If taxes are
massively higher in Scotland people who pay very high taxes will move. If you
charge me more to buy wine and beer in Scotland, I will buy it on Amazon or
travel to Berwick and put it in my boot.
The big idea for Humza Yousaf and whoever succeeds him
is to ditch nationalism, socialism and authoritarianism. The peculiar thing
about Scottish independence is that if it were achieved it would almost
certainly be at the price of contradicting what everyone in Scotland believes.
I am never especially convinced by economic arguments
against Scottish independence. You can argue all you want for the advantages of
staying in the UK and disadvantages of leaving. But the truth is that if Scotland
did leave it would have to manage.
The way that Scotland would manage would by introducing
free markets and capitalism. It wouldn’t have any choice. The bond markets
would be your ruler rather than the Scottish parliament. The size of the Scottish state would have to
shrink compared to what it is now. Public spending would be massively lowered.
There would be nothing free and benefits and rights would have to be cut and
curtailed.
Scotland would not join the EU and would not join
EFTA, because it’s key priority would be maintaining an open border with the
former UK and access to the former UK’s market. The best and possibly the only
option would be to treat Scotland like Gibraltar, the Isle of Man and the Falkland
Islands or to create a relationship such as the Faroe Islands have with
Denmark.
If the former UK agreed (and it might not, last time
it said No) this would enable Scotland to continue using the former UK’s currency
and maintain free trade and open borders. The price would be the former UK’s nuclear
deterrent remaining in Scotland.
An honest SNP leader would argue that independence is
decades away and can only be achieved by growing the Scottish economy and by
cutting spending and taxation. No wasteful baby boxes, no money for Gaza. What’s
more an honest SNP leader would say Scottish independence can only be achieved
by decades of cooperation with the British government rather than continual
hostility.
If you hate Westminster, can’t stand being British and
boo God save the King then you are hurting your chances of independence,
because you require the British government not to hate you back.
Of course, Scotland could go down the EU route with
full separation from the former UK but that would just make the task harder and
in my view impossible. It would be a worse shock than Greece leaving the Euro
or 2008.
With a semi-detached relationship to the former UK,
Scotland could within the limits of cooperation try to make itself a more
pleasant place to live than England with lower taxes, more freedom, less authoritarianism,
cheaper prices and better services. The result might be to attract people from
England and elsewhere.
If I were SNP leader this is what I would offer as my
big idea. But it requires an understanding of economics that the SNP clearly
lacks. It requires honestly about where Scotland is and what would be necessary
to obtain independence. But above all it would require Scottish nationalists to
ditch their nationalism. The end result would be that Scottish citizens would
still be Scottish and British.
But this is the problem for the SNP leader’s big idea.
In Scotland there are only three ideas, socialism, nationalism and authoritarianism.
The big idea is to ditch all three.
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