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Great Scot!
Goldman Sachs Panics as Scots Warm to Independence

We’re just two weeks away from the referendum over Scottish independence, and its opponents are beginning to panic. For months, the polls had been showing lower levels of support for independence than for continued union, and a slew of celebrities and business leaders came out in favor of staying in. But now polls are swinging in the other direction. A new poll this week has support for independence only six points behind support for union, a huge narrowing of the 22 point lead the unionists enjoyed only last month.

Many attribute this swing in part to SNP leader Alex Salmond’s surprise win at a widely watched recent debate on the issue. But whatever caused it, critics are becoming more vocal in response. The Telegraph reports that Goldman Sachs is now loudly sounding the alarm (h/t Tyler Cowen):

Goldman warned that public services would have to be cut if Scotland goes it alone, and that the country would face much higher borrowing costs.

But the most worrying consequence, the bank predicted, would be that uncertainty over a currency union would cause a run on sterling and a capital flight with echoes of the eurozone crisis.

“The most important specific risk, in our view, is that the uncertainty over whether an independent Scotland would be able to retain sterling as its currency could result in an EMU-style currency crisis occurring within the UK,” wrote Kevin Daly, senior economist at Goldman.

Scary stuff—but not without justification. The late-stage nationalism that lies behind support for independence is a kind of madness, as Tom Gallagher wrote earlier this summer at TAI. We hope that voters think hard about the benefits of union when they finally go to pull the lever.

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  • gabrielsyme

    The late-stage nationalism that lies behind support for independence is a kind of madness

    There is plenty of silliness to go around on both sides, but madness is a good bit too far. To desire independence for your own nation is an eminently sensible and human feeling, one shared by the vast majority of mankind. This very website has defended at length the right of Ukrainians to self-determination, and that is a nation with a far shorter history of independence. If their desire for independence isn’t madness, why is that of the Scots?

    I’ve only a little bit of Scottish blood in me, but I would vote for independence if, by some fortunate turn of fate, I lived there. Scotland was once independent, and it had its independence sold out from under it by its economic and political elites. Scotland’s faces many significant challenges: demographic weakness, poor public health, weak and declining social capital and misgovernance. Good arguments can be made that each issue might be better addressed as an independent country. Even if one takes a pessimistic view of Scotland’s likely future as an independent state, reasonable people may still prefer a less wealthy independence to a financially beneficial union.

    • mc

      “Scotland was once independent, and it had its independence sold out from under it by its economic and political elites.” The same can be said of the provinces of Spain, France, Italy, Germany, etc., some of which lost their independence much later than Scotland. The political elite in all of these countries recognize how difficult establishing national governments was and many of them will not look kindly to Scotland’s setting an example. Small countries can do well for themselves when times are good–and make no mistake, times have been exceptionally good for Western Europe for over fifty years. But they’re all children born and raised in a long summer. Of preparing themselves for hard times they have no idea.

      • gabrielsyme

        “they’re all children born and raised in a long summer. Of preparing themselves for hard times they have no idea.”

        This is, of course, true of large European countries as of small. But the point is well-taken: larger nations are better-equipped to defend themselves militarily (and at times, culturally as well). Perhaps a good way to balance desires for independence with collective defence and a supra-national sense of identity, purpose and historical continuity would be to resurrect the Holy Roman Empire. Alas, we may have to make do with NATO.

  • wigwag

    It’s madness to support independence for Scotland but rational to support independence for Kosovo? It’s madness to support independence for Kurds but rational to support independence for Palestinians?
    Does either madness or rationality really have anything at all to do with whether or not an ethnic, linguistic, religious or national group is entitled to independence?
    As for who should be frantic at the prospect of Scottish independence, no one should be more freaked out than the British Labor Party and its boneheaded leader, Ed Miliband.

    • Angel Martin

      that is correct, if Scotland leaves, the Conservatives will have a narrow majority in the UK House of Commons.

      for those of us who have lived thru two Quebec referendums, the arguments and parties making them are depressingly familiar, as is the last minute surge for the ‘yes’ side.

    • Vadim Pashkov

      It’s madness to support independence for Palestinians. Because there is no such people The invention of a “Palestinians” is only a means for continuing struggle against the state of Israel. In reality today there is no difference between Jordanians, Arabs that settled down Palestine , Syrians and Lebanese. Only for political and tactical reasons Muslims speak about the existence of a “Palestinian people” . Arabs has no rights to the land of Palestine. “Palestinian” people do not exist

    • Josephbleau

      I would take this to it’s limit and demand to be a sovereign government of myself independent of everyone else. Those who watch Braveheart and dream of freedom and relief from ancient crimes may find that it means the return to the crofters hut so well portrayed in that film..

  • Jacksonian_Libertarian

    I think this would be good for the UK, Scotland will serve as a real world example of Socialist stupidity, and the rest of the nation can move more swiftly towards fiscal responsibility and limited government.

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