The official campaign for the September referendum on Scottish independence began last Friday. The NYT celebrated the occasion with a piece that lays out the key reasons why Scotland might not benefit from independence as much as partisans claim. Unionists and separatists are sharply at odds over whether the Scottish economy could survive a break from the UK:
Nationalists envision a fully independent Scotland as a petro-power. But oil revenue has fallen sharply, by 38 percent from 2010 to 2013. Last year, Scotland paid less into Westminster’s coffers than it took out. Total revenue, including its geographic share of North Sea oil, was about $89 billion, against spending of roughly $109 billion. Another recent analysis by the University of Glasgow’s Center for Public Policy for Regions projects that Scotland will be “significantly worse off than the U.K.” for several years to come, with a higher deficit of almost $1,700 a person in the fiscal year ending in 2016.
Then there is the debt. The cost of servicing Scotland’s proportional share of Britain’s debt “would be worth twice as much as North Sea oil,” said John McLaren, a professor at the University of Glasgow.
In the upcoming July/August issue of the American Interest (which will be up on our website later this month), Tom Gallagher walks through the challenges an independent Scotland would face, and places the independence movement in the wider contexts of Scottish and European politics. Gallagher traces the combination of luck, demagoguery, ethnic politics, and flattery that has helped normalize the independence movement despite the economic and political damage it will do to Scotland. In his estimation, the debate has caused such turmoil that the damage may already be done, even if Scotland rejects independence in the end:
Arguably, this form of identity politics encourages a collective narcissism and dumbs down politics at a time when citizens need to be exceptionally alert that the choices they make are for the best. Worse, perhaps, if the liberation journey proves bumpy and ultimately costly for many who find they lack patrons in the new nationalist order, then populist diversions may be rolled out and make things even worse, just as happened in Greece under Andreas Papendreou, a populist who debauched state finances in the 1980s, and as happened in Hugo Chávez’s Venezuela more recently.
Stay tuned for Gallagher’s article, and as for the NYT piece, read the whole thing.