Why independence will disappoint the tartan libertarians

Scotland will not be forced to adopt a scorched earth approach to public spending if it leaves the UK.

The publication earlier this month of the first report by the Scottish government’s Fiscal Commission Working Group, into the macro-economics of independence, was met with a surprising degree of approval from an unlikely source. Writing for the conservative website Think Scotland, right-leaning journalist Alex Massie praised the report's apparent endorsement of austerity as the most effective economic strategy for Scotland should it leave the United Kingdom in the next few years: "[These findings] add weight to the notion that Scotland's future lies as a low-tax, flexible, nimble, enterprise…it seems quite probable that cutting public spending - for one reason or another - will be one of the first tasks facing an independent Scotland."

The idea that independence will provoke a shift to the right in Scotland, rather than to the left, as is commonly assumed, has been touted by a number of Scottish commentators for a while without having gained any real traction in mainstream debate. It tends to be composed of three parts. The first is that SNP leader Alex Salmond and his finance secretary John Swinney are closet Thatcherites who, despite their soft-left posturing on welfare and social issues, advance an aggressively neo-liberal economic agenda, as illustrated by their support for lower corporation taxes. The second is that an independent Scotland, carrying an inherited share of UK debt amounting to between 70 to 80 per cent of its GDP, will be under heavy pressure from the international financial markets (credit rating agencies, essentially) to demonstrate a commitment to ‘fiscal credibility’ in order to maintain low borrowing costs. And the third is that SNP plans for a currency union with the rest of the UK will tie Scotland to a fiscal stability pact which imposes severe restrictions on Edinburgh’s capacity to borrow, precipitating a reduction in debt-fuelled Scottish public expenditure.

Under these conditions, nationalist visions of an independent Scotland replicating the social achievements of high-spending Nordic welfare states would have to be abandoned. Instead, as Massie contends, the first independent Scottish government would need to observe strict budgetary constraints and take steps to liberate enterprise in an effort to soak up necessary public sector job losses. In this sense, independence would act as a disciplinary force against the prolifigate Scots, prying them away from their longstanding addiction to big government. (Something, ironically, successive Westminster administrations have failed to do.)

But the assumptions on which this libertarian fantasy rests are grossly exaggerated. To begin with, although there is a strong neo-liberal streak in SNP economic policy (hence the party’s position on corporation tax), Salmond and Swinney are not the Friedmanite ideologues some make them out to be. Indeed, in his repeated calls for increased capital expenditure as a means of growing the Scottish economy out of recession, the First Minister’s response to the financial crisis has followed a clear Keynesian logic. Likewise, Swinney’s decision to levy a charge on large supermarket retailers suggests a willingness to challenge commercial interests not commonly associated with free-market enthusiasts. The SNP’s aim of cutting Scottish defence spending and redirecting the savings towards more socially productive industries provides another indication of the nationalists' underlying loyalty to traditional centre-left principles.

The right’s insistence that, with independence, ‘market realities’ will amplify Scottish austerity is similarly unconvincing. According to the commission's report, between 2006 and 2011, including a geographical share of North Sea oil and gas output, Scotland’s average deficit was 5.1 per cent of its GDP. This compares favourably to the UK’s deficit of 6.4 per cent over the same period (p.158). What’s more, the report points out that by 2017, Scotland's population share of UK public sector net debt will be equivalent to 72 per cent of its GDP, five per cent lower than the UK’s anticipated share (p.170). By the standards of equivalent European countries, this represents a substantial debt burden. But it certainly isn’t unmanageable, nor does it make additional, radical cuts to public expenditure inevitable. At any rate, any future Scottish government, having witnessed the failure of the current coalition government’s deficit reduction strategy, will be acutely conscious of the effects austerity has on economic recovery.

The report also questions right-wing claims about the likely consequences of monetary union. While it concedes that any fiscal stability pact agreed between Edinburgh and London would have to enforce "discipline and sustainability" in the management of Scottish public finances, it simultaneously acknowledges the need to provide space for "national discretion to target instruments of fiscal policy to address key local challenges and take advantage of new opportunities" (p.132). In line with the lower debt and deficit levels Scotland is likely to enjoy outside the UK, this could allow for a limited programme of deficit-financed capital expenditure, with any subsequent increase in borrowing costs covered by the new sources of revenue independence would make available. These might include the aforementioned defence savings, a permanent tax on bankers’ bonuses (something Salmond has indicated he is sympathetic to) or a clamp down on tax evasion and avoidance, among other options.

Of course, the fact that Scotland’s overall fiscal position may improve slightly with independence doesn't mean an independent Scotland would escape ongoing economic difficulties. A heavy reliance on diminishing natural resources, massive inequalities of wealth and income and a burgeoning demographic crisis ensure Scotland, like the rest of the UK and most of the developed world, will be subject to severe financial pressures in the years ahead. There is, however, little to suggest those pressures are best alleviated by a scorched earth approach to public spending, and less still to back up the assertion that such an approach is necessary or unavoidable. The chances of independence transforming Scotland into some sort of socialist nirvana are slim; the chances of it turning Scotland into a libertarian paradise slimmer yet.

Scotland's First Minister Alex Salmond holds up the signed agreement for a referendum on Scottish independence during a press conference in St Andrews House in Edinburgh. Photograph: Getty Images.

James Maxwell is a Scottish political journalist. He is based between Scotland and London.

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Let's talk about Daniel Hannan, Donald Trump and Adolf Hitler

The downside of Godwin's Law.

One of the enduring mysteries about Daniel Hannan is why he deletes so many of his tweets. The other is why, when he deletes so many, he leaves so many other absolutely clunkingly braindead observations on the internet for all to see. It's like he isn't ashamed of them. It's like he doesn't even know.

Anyway – one advantage of these lapses in Hannan's online hygiene is that it allows me to find out about particular highlights weeks after the event. So it was that Twitter user @eurosluggard tipped me off to this absolute gem from 31 January.

It's worth actually expanding every individual image there, just so we can really revel in the fact that Hannan chose to tweet so many lovely memes showing senior politicians as Nazis. (I'd embed the tweet, but I’m frightened the bugger would delete it.)

And, my personal favourite:

This is quite ludicrous enough in itself. That both the left, and online debate in general, are a bit quick to call people Nazis is not in dispute (Godwin coined his Law for a reason). That Daniel Hannan chose to highlight this by tweeting a picture showing the man who led his party for 11 years dressed as a Nazi is, nonetheless, objectively hilarious, and not in the way he presumably intended.

However – to really understand the full insanity of this tweet you have to scroll back a bit. Here's the tweet that kicked the whole thing off:

Which is some rather spectacular point-missing in action. Nobody, best I can tell, is talking about banning President Trump from the UK altogether (in stark contrast to his administration's policies, which genuinely would ban certain countries' citizens from the US). The argument was actually about whether he should get a full state visit with all the bells and whistles and posh dinners and the Queen.

Declining to lay out the red carpet for someone is not the same as preventing their visit altogether. This is the same sleight of hand that happens when the Brendan O’Neills of this world conflate "no platform-ing" with "the erosion of free speech". Nobody has so far offered me a $250,000 book deal, but sadly, I don't think this is because I am being deliberately censored.

Whether Hannan is being consciously duplicitous, or is merely a bit thick, is, as ever, an open question. At any rate, other Twitter users decided to point out that he was being a little bit cheeky.

 

And that's where we came in:

There's another sleight of hand here – another elision between two related, but distinct, concepts. Can you see it?

It's this: he's leapt from gerenic accusations of fascism to the specific one that Donald Trump is like Hitler. But Hitler wasn't the entirety of Nazism, which was in turn only one form of fascism. Something can be fascistic without necessarily looking anything like Naziism.

Donald Trump is not Adolf Hitler. But some of his policies, and much of his rhetoric – the rallies, the demonisation of outsiders, the attacks on the media, the swing to protectionism, "Make America Great Again" – contain enough echoes of fascism to, at the very least, make "Is Donald Trump a facist?" a question worth discussing.

Consequently it’s being discussed, rather a lot, by the American media. Hannan’s tweet implies that it is only silly hysterical lefties that could possibly be concerned with such matters.

There's another elision at work in Hannan's tweet. Comparisons between Barack Obama and Adolf Hitler are quite obviously ridiculous. So are those involving Mitt Romney, and John McCain, and David Cameron: none of them was a fascist, or anything like.

Donald Trump, though, might be. By placing him in that company, Daniel Hannan is implying that he is just another centre-right politician, being unfairly demonised by the left. He isn't.

I don't believe for a moment he's done this deliberately: Daniel Hannan is many things, but a fascist he is not. But in his heartfelt belief that everything must be the fault of the left, he's ended up implying that all liberal criticism of Donald Trump as an extremist is illegitimate.

There is a real downside to the tendency for online political debate to leap to words like fascist, as expressed in Godwin's Law: it deprives us of the language to describe the rise to power of something that genuinely looks like right-wing extremism. But just because we often cry wolf, that doesn't mean there's never a wolf at the door.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.