The Bottom Line aims to invigorate the debate on the economics of Scottish independence.
The number of independent countries in the world has increased four-fold since the second world war, to almost 200. During that period there are no examples of countries deciding to give up their independence and re-establishing their dependence on another country.
Scotland will be the wealthiest country ever to achieve political independence and so there is no doubt that Scotland can afford to be independent and can prosper economically. Even those who led the campaign to remain in the UK in 2014 agreed that Scotland was capable of being a successful independent country.
The debate on the economics of independence prior in 2014 tended to focus on transition issues, the practicalities of what would need to be done to establish the economic institutions that an independent country requires and competing predictions on what changes might mean for businesses, employees, pensioners, taxpayers and users of public services.
Whilst much has been said about the speculated costs of independence, there has been insufficient attention paid to the very real costs of a lack of independence. Put another way, there is a price, we argue a heavy price, to be paid by Scotland for its dependence on the UK state and resultant lack of agency.
What has become increasingly apparent since 2014 is that the UK economy is in a decades-long economic decline. There is evidence that the decline is accelerating and the negative economic impacts of Brexit will increase the risks of economic dependence on the UK. Scotland is not fulfilling its economic potential as part of the declining UK.
In contrast, the success of many small economies shows what can be emulated by an independent Scotland. There are many examples that show what is possible. The success stories of Ireland, Norway, Finland, Denmark, New Zealand, Croatia and Estonia each tell a different story, but there is a common thread, which is that strategic decisions made in the national interest have led to economic benefits.
The Bottom Line aims to invigorate and elevate the debate on the economics of Scottish independence by setting out:
– how and why independence will deliver economic benefits
– the costs to Scotland associated with economic dependence on the UK
This includes a quantitative analysis that gathers and reviews the evidence of how the UK economy is performing. This considers the traditional economic measure of Gross Domestic Product (GDP) and also wider measures such as sustainability and wellbeing.
The Bottom Line also sets out to explain how and why the UK, and Scotland as part of it, is performing poorly – and why political independence for Scotland can be expected to deliver an economic renaissance.
The common perspective of the forthcoming papers by the Bottom Line, is that when a community takes control of its own affairs, the outcomes include measurable improvements in the wellbeing of that community, as well as improvements in its output and wealth. These propositions are supported with an abundance of statistical evidence.
Our purpose is to show how and in what ways agency, by a community or individual has beneficial consequences in several dimensions.
We begin with a discussion of agency itself. Just as individuals are more likely to flourish if they are in control of their lives than if they feel helpless and dependent on others, so nations that have the power to make decisions to shape the future can build thriving economies.
We then move on to a quantitative analysis, using international comparisons to illustrate our arguments. For example, the data show that Finland tops the world table for life satisfaction, comfortably ahead of the UK, as well as delivering an enviably high material standard of living.
That evidence shows that small, advanced economies easily outperform the UK in measures of equity and happiness as well as in productivity. The UK is a state in long term decline, as respected commentators like The Economist and Financial Times now accept.
One factor contributing to the relative decline of the UK is the prevalence of corruption in its political system. Or perhaps, to be more precise, it is an unwillingness to acknowledge that the problem exists. We bring together the evidence, and show its impact on Scotland.
For the last half century, the Scottish economy has become increasingly integrated into the UK economy so that it has become no more than a branch economy. Within the last two decades, many of the remaining large indigenous companies have declined and/or moved their corporate headquarters out of Scotland.
On a positive note, one of our biggest industries, the water industry, has flourished in comparison to its counterparts south of the border. The reasons for this, which are connected to questions of agency and political culture, are explored in one of our papers.
As our analysis shows, small independent states have been able to use their agency to outperform the UK. The chances of the UK matching the economic and social performance of advanced small states in the future are very small. As our papers will clearly show, the gap in performance of the UK in comparison with other advanced economies has been steadily widening for many years, with the UK increasingly left behind. By being dependent upon a failing UK, Scotland is hugely disadvantaged, lacking the agency that would become available with independence.