“We are bought and sold for English gold. Such a parcel of rogues in a nation.” – Robert Burns
Over the last couple of weeks, debates over currency and regional integration concerning the Scottish National Party’s (SNP) bid for an independent Scotland have revealed a distinct reality concerning such a plea: i.e. that the independence movement in its current form is fundamentally about politics and not economics. This has been a dangerous reality for the nationalists to admit to. Scottish First Minister Alex Salmond and British Chancellor of the Exchequer George Osborne have been exchanging fire over an independent Scotland’s proposed use of sterling, and the media has been cutting deep into the arguments.
There are several issues to address here. On a local and material level, why does the SNP wish to continue using sterling? The benefits are obvious: entrenched financial security, maintenance of economic and financial status quo etc. On a theoretical level, what would the use of sterling, which ties the Scottish public economy into the policy of the Bank of England, mean for Scottish independence? This article argues that if Salmond wishes for Scotland to tie itself to the rest of the UK financially, then the independence movement is fundamentally flawed and does, in fact, not matter to international politics. The only movement that would matter would have to be both political and economic in nature. At this moment in time, it seems that Salmond lacks bravery, if he and his government are sincere about Scottish independence. Either that or the movement is flawed as a whole.
Independent Scottish Sovereignty
In order to discern why a politically, but not economically, independent Scotland could be rendered a white elephant, it is useful to look at the theoretical dynamics of sovereignty in the international system. Such a system is fundamentally about power, stemming primarily from resources, but also the political influence bought with resources – for example, the political power of Saudi Arabia in world affairs through control of oil supplies. Therefore pure arbitrary state power is not necessarily a mark of effective sovereignty. There are plenty of examples of nation-states that do not exert particularly effective power in the international system, except through input into institutions such as the United Nations (UN) or regional unions such as the Association of Southeast Asian Nations (ASEAN).
Likewise, there are plenty of examples of private entities that exert more political power than some states do. The corporations that make up the oil supermajors have a huge economic, and therefore political, impact upon global affairs; as do banks, as witnessed in the recent financial crisis. It is not enough for the SNP to consider that political independence alone will bring Scotland the power it desires; granted, this is just a theoretical argument. The point is that the nationalist movement needs to proclaim exactly what it is wishing to achieve on an international level before it begins to segregate itself, politically or economically, from the rest of the UK. Before it does so, what importance does the movement actually hold?
Anglo-Scottish Economic Union
By openly admitting that Scotland will not seek economic independence from the UK, the SNP has compromised any notion of Scottish sovereignty post-independence. The proposal, rejected by the three dominant Westminster parties, is for Scotland to retain the pound sterling, which would make the Scottish public economy reliant on Bank of England policy, and subject to financial currency fluctuation. On the other side, the UK would effectively underwrite Scottish debt (which, as Scotland is part of the union, it already does). Blair Jenkins, CEO at Yes Scotland, claims that “the pound belong as much to Scotland as it does to the rest of the UK”. However, this is an empty argument, as in material reality, it matters not from where a currency emerged, but simply what/whom has the greatest influence to determine its prosperity. In the case of sterling, the City of London is that greatest influence, and so unfortunately, Scotland’s claim of half-ownership is weak.
Brian Quinn, former executive director of the Bank of England, notes that “by choosing to announce its preference to retain sterling…the current Scottish government has effectively surrendered its freedom”. Quinn has a distinct point, linking back to the discussion on sovereignty. What is Salmond hoping to achieve by demanding political and not economic independence? It can be argued, as mentioned above, that political independence is but nominal in the contemporary world economy, whereas economic independence is a firm measure of prosperity and international influence. Therefore, it seems that to demand political independence whilst remaining economically dependent is a bit of an oxymoron. One could argue that recognition as a nation within the Union is the greatest political independence Scotland can have without economic independence, something the nationalists are perhaps not willing to accept.
The Westminster government has counteracted the SNP’s proposal for a currency agreement, arguing that Scotland effectively already has one – and it is called the Union. If the UK does not see much of a difference between Scotland as a member of the Union and as an independent state, then what does Salmond hope to achieve by fighting for political independence, other than cultural nationalistic vigour? Does this render the Scottish independence movement, as it is, vis-à-vis both the rest of the UK and the world economy to be unimportant? Salmond should either be more sincere, and take a fully independent Scotland forward, or stop his rhetoric of agreements and lower-case unions and push Scotland’s agenda within the political and economic structures of the United Kingdom and the upper-case Union.