Scottish Independence, no 1
Andrew Ferguson writes (30 December) in "Scotland On Sunday” (The Scotsman): HERE
“Adam Smith would have backed Scots pound
I was interested to read the article by Brian Quinn in Scotland on Sunday (Another Voice, 15 December) in which he questions the proposal outlined in Scotland’s Future that an independent Scotland would use the UK pound.
In my book, Scots Who Enlightened The World, which explores the Scottish Enlightenment through the lives of its key figures, I focused on some of the issues which need to be addressed to enable informed voting in next year’s referendum on independence, attempting to approach these from an Enlightened perspective. Foremost among these are membership of the European Union and the choice of currency.
Adam Smith, were he alive today, would, I suggested, be troubled by the inherent dangers of becoming a part of a currency zone, be it the pound sterling or the euro, with different economic characteristics. This was starkly demonstrated in recent years by the runaway boom in Irish property prices fanned by the low interest rates imposed on the Eurozone by Germany’s domestic policies when the Irish economy needed to dampen excessive exuberance by a sharp rise in interest rates. With his belief in the operation of markets, he would, I postulated, have favoured the flexibility given by a Scottish pound, albeit if initially informally linked to the pound sterling, as this would give a Scottish Government the freedom to adopt the policies best suited to Scotland’s needs, sharing the views expressed by Brian Quinn.”
Andrew Ferguson, www.scotswho.com, via email
This is becoming one of the many “hot” topics in the 2014 Referendum Debate in Scotland. While happy to join in that debate here in Scotland I am not sure that readers of Lost Legacy are as interested in the issues in the debate as we are in Scotland.
However, I think it worth pointing out that drawing on an imaginary Adam Smith to give a view on the many issues involved is likely to prove unhelpful. This view does not detract at all from Andrew Ferguson’s well thought-out analysis of the currency issue.
What Adam Smith might say today is entirely hypothetical, and subject to many caveats, most of them unknown to anyone who lived over two centuries ago and, not least, missed the history of events during that interval all of which, or course, was unknown to Smith. He was a pragmatist not a visionary.
Moreover, whatever the politics of the 1707 vote in the then Scottish Parliament on its highly restricted franchise that led to the Union known as the United Kingdom, today’s case for Scottish independence does not depend on them (nor does the sad history of the Jacobites and their dynastic quarrel within the UK monarchy).
The UK is now a busted flush: Empire (which Smith warned against) has gone; it will never come back. World domination is now a lingering memory that the ruling political elites, with their proclivities for “police style” interventions, will have to accept eventually. Scotland does not need to remain wedded to the last days of the UK.
Into this mix, the question of the currency is an important element. If the £ benefits Scotland and the rest of the UK then it will happen, but nothing can be negotiated this side of a “Yes” vote.
Meanwhile, we can put forward that which is best for Scotland. If a currency union (with its side effects) is considered best, then so be it ; if it cannot be agreed with the former UK recalcitrant elite, then Scotland will live with one of the alternative options, none of them constituting the end of civilization as we know it.
[Disclosure: I favour a “Yes” vote in the 2014 Referendum.]