Campbell Airlie – Should we vote “yes” or “no” for more independence?

In Scotland we are rapidly approaching decision day, when we will be asked to decide whether we want to be an independent country or remain in the United Kingdom. But is this a valid question? Is independence a fallacy in the 21st century? Is it an attainable goal?

In the democracies which have developed in Western Europe, and especially in the countries that make up the UK, over the past few hundred years it is often been said that “we  should have control over our own destiny.” On the face of it that seems perfectly reasonable, but what does this emotionally charged statement actually mean? True independence can really only work if we are completely isolated and have a society which is not dependent on any others in any way. The minute we need to interact, trade or collaborate with others then this apparent ideal must end up in compromise.

What does true independence look like and what might be the role of government? Some attributes will certainly include the ability to pass laws as deemed fit for our society; have proper security against any external threats and so to have and control armed forces and security services; full fiscal autonomy and control, including budgets, monetary policy and taxation; create an environment through good governance and by elected officials to ensure that we have the kind of society wanted by the people being governed.

So do we enjoy these attributes in the UK already, and whether or not we do will we have them in an improved manner in an independent Scotland. To answer that properly we need to recognise that for millennia societal structures are fractal, even although we didn’t know what fractals (meaning fractional dimension) were until some 40 years ago. Fractals are infinitely complex patterns that are self-similar across different scales. So a fractal system has the attribute that if you cut out a subset of the system, then the daughter system looks just like the mother. Repeat this and you get the same result ad infinitum. What does that have to do with societies and independence?

Millennia ago when the population was small and dispersed we had small groups of people who were separated from all others. These groups had a truly independent society – whether or not democratic is hard to say of course. They made their own decisions and lived by the consequences, meanwhile neither being affected by others nor affecting others. As they travelled more or expanded then they were forced into the same space as others. This often led to conflict, but once resolved the groups merged one way or another.

This aggregation or unification of societies is called defractionation in the fractal model. This happened again and again over millennia. Sometimes the societies so formed found they could not live in harmony and they fractionated to form smaller societies that are self-similar (in structure) to the larger one. However, fractionation and aggregation are irreversible processes. The fractions do not exist in isolation, they have to co-exist with the remainder, not least of all because they live in the same overall limited space. This sometimes works well but there are many instances where it doesn’t – the Middle East is rife with such cases, as are the ex-USSR countries – the latter being a case of societies that have undergone amalgamation in forming the USSR and then fractionation since the collapse of the Iron Curtain. Current behaviour of Russia towards Crimea and East Ukraine looks like more unification. The fractal society pulses larger and smaller.

What does this have to do with us? Well the European Union is in a classic phase of unification whereby our society is being forever more entangled in terms of laws and fiscal structures. As a result the independence of the UK and all member states no longer exists, at least by the attributes described earlier.  But do all member states have the same level of independence, or might some of the larger, and more powerful, ones have more independence than others. Or for that matter is it the smaller ones that retain more independence?  It’s not obvious, but it would seem to be the case that the UK is more independent than others by dint of the fact that we did not adopt the Euro. But in many other regards we cannot claim to be independent whilst a member of the EU – this isn’t an argument for leaving the EU, just an observation and irrefutable fact.

So if the UK fractionates how will the two parts look? If Scotland were to remain in (if that is possible) or to join the EU, then it seems clear that Scotland will actually have less independence than it currently has as part of the UK. Can that be correct? Let’s go back to the attributes of an independent country and test this.

Firstly, would we have the ability to pass laws as deemed fit for our society? Well yes, but only if they are in agreement with European Law, so we’re not wholly independent on that count.  But not much different from the UK at present, although the UK does have some veto powers that Scotland would not have.

Secondly, would we have proper security against any external threats and so have and control armed forces and security services? This is tricky as we don’t have our own forces, at least not yet. We don’t have our own security services, but we could of course set them up. That would be a Secret Intelligence Service (MI5, MI6, GCHQ). Of course we could agree to share these with the UK, but if we did that we would have less independence than now, as they would be the larger partner and pull the strings, whereas now we’re part of that club.

Thirdly, would we have full fiscal autonomy and control, including budgets, monetary policy and taxation? Now it’s getting more complicated, and this largely depends on what we do for a currency. The currency options are (a) keep the pound in a monetary union with the UK, (b) keep the pound but with no monetary union, (c) adopt the Euro. The latter may of course be a requirement of membership of the EU, and so in fact may be out of our hands.

Option (a) has been ruled out by the three main Westminster parties, and it may not be unreasonable to assume that the majority of English people would be against it if we decided to unilaterally leave the club which is the UK. But of course if we become independent then, time being a healer, perhaps we will form some sort of currency union. Scotland has around 10% of the UK GDP and so the bank of last resort will, whether we like it or not, be the Bank of England. (Remember it was started by a Scot, so we have some claim over it!). Scotland does not have a Central Bank.  One of the things that will almost certainly be part of the fallout is the ability of Scottish banks to print money. It is almost certain that the pound we will have will be the English pound. That won’t be a shock to those who travel, as we all know we need to take the Queen’s head with us when we travel abroad, and sometimes even to England. (Despite the humorous protestations, Scottish notes are not legal currency in England). Because we have the English pound as currency, then Scotland will not have control over fiscal budget, monetary policy nor taxation. This is not really in doubt, we just have to look at the Eurozone or the USA where in each case the individual states have limited fiscal autonomy.

Option (b) is of course feasible as argued rightly by Alec Salmond when he says “the pound is as much Scotland’s as England’s.”  Which pound is he referring to though? Is he laying claim to the English pound? If we are to use the pound as currency it will be the English pound and he knows that, but this would be a disastrous comment to make whilst arguing for independence, and he is much too savvy for that.  There is nothing to prevent Scotland using the English pound as its currency, the same way that Panama uses the USD, as other countries effectively do, including  Argentina in the past. But if we do that we have no say whatsoever. Furthermore, if our economy was in any way out of phase with UK then that would manifest itself in volatile inflation, beyond our control. So we have less control and autonomy, and so (b) is  worse than option (a).

Of course “keeping the pound” may mean we keep our Scottish pounds. Firstly we would need to have one and only one. So is that BoS or RBS or even Clydesdale? (These all only work because of a quaint agreement in the 1760s known as the “note exchange” where Scottish banks agreed to accept the others’ notes – the Bank of England wasn’t party to that). The latter is Australian and the other two are owned by the UK government, and of course by dint of our part in the UK owned some 10% by the people of Scotland. So we better have a new pound anyway. That then needs to be accepted throughout the world and that is non-trivial as we don’t have a track record. The Scottish pound would not immediately be a hard currency and would be prone to abuse by speculators. This then is a worse option than using the English pound.

What about the Euro, option (c)? It’s hard to think that is a good option given the turmoil in the Eurozone in the last few years. That shows with clarity the problems of the same currency in countries that are very different in culture (eg aversion to tax in the Mediterranean countries), different in makeup of the economy and GDP per capita. Unless we had no option it would probably be the worst free choice to adopt the Euro. If it was thrust upon us that would be the worst outcome.

Whatever choice of currency we end up with, we will be worse off and less independent than we are currently.

Lastly, independence means that the duly elected government has the role to create an environment through good governance to ensure that we have the kind of society wanted by the people being governed. This ought to be easier to achieve in an independent Scotland. However, even here there is a warning, and it comes back to fractals. Once independent, the logical next step is for more fractionation eg the North East (they have a lot of the oil), Shetland and Orkney (they have the rest of the oil) and maybe even the Glasgow-Edinburgh corridor. Stranger alliances have been made in the past – the Wars of the Three Kingdoms in the 17th century being a good example, and more recently UK and US support for Saddam Hussein in the Iraq-Iran war.

So there is potentially an incredible irony over seeking independence.  Scotland may end up being less independent by any definition of the term than we are now. And we may be starting a fractionation phase of Scotland itself, and not just of the UK.

None of this says we can’t vote “yes” and the country won’t go down the toilet. Some things will be more difficult, but others may be better. The one thing that we will not have is more independence; in the 21st century, and especially in Europe, independence is a fallacy. Ironically, voting “yes” will mean we will have less control over our own destiny. And that would be a bummer.

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