Friday 29 March 2024

What's the big idea Humza?


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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