September 17, 2014

#England vs. #Scotland — a 9-point overview and more

Tomorrow, the vast majority of eligible voters in Scotland head to the polls to vote on whether to become independent from the rest of the United Kingdom or not.

So, what's all at stake? Besides North Sea oil and gas reserves?

Pride. Resentments. Related psychological issues The Tories, the Conservative Party. Actual, and perceived, economic issues with London.

And, North Sea oil and gas reserves.

Those are the biggies. Any lesser issues connect with one or another of the big ones.

First, the funny version, from John Oliver, who is great with this.

That said, the serious version.

First, the economics.

I don't know how much Scotland feels "stiffed" by England. The per capita GDP? Scotland at $44,378 vs England at $50,566. Actually, if income differentials are a cause for secession, Wales, at $30,546, has more right to want to leave the UK. (That said, per the Beeb, how North Sea oil and gas revenue is divided could affect the Scotland/England difference.)

At the same time, while England may not be as liberal as, say, Sweden, it's more liberal than the US. I presume that that includes being more liberal overall in progressive taxation. That income differential may hurt.

Ditto on language. Welsh is spoken by about 20 percent of Wales, and 15 percent read and write it with proficiency. In Scotland? Only 1 percent speak Scottish Gaelic; yes, 20 percent speak Scots, but, it's been affected enough by standard British English that one could halfway argue Scots is an English dialect and not a separate language.

That addresses non-economic pride and resentment issues to some degree. Scotland may not be so united if resentment against London (primarily against Conservatives, but somewhat against Labour) is discounted.

Natural resources distribution, per what I said above? A chart on Oliver's video tells the truth. By 2040, North Sea oil production will be about one-quarter of what it is today. Indeed, in less than a decade, production is likely to be less than a quarter of the 1999 peak.

More economics. Per this good 9-point overview from the Washington Post, I don't see how an independent Scotland can continue to keep the pound as its currency; certainly not as its official currency:
An independent Scotland would keep the British pound as its currency, the SNP says. No, they would not, the British government replies. 
It's a clear divide between the "yes" and "no" camps. For what it's worth, Salmond has argued that it doesn't really matter what London thinks. "No one can stop us from using" it, he told Sky News this week. 
He's not wrong, but there may be complications. The independence movement has suggested that it would seek a currency union with the United Kingdom, but the powers in London would have to agree to that. Should they refuse, Scotland could unofficially use the pound anyway, in the manner that Ecuador uses the U.S. dollar. 
Both options present risks. A recent article in the Economist explained how a "sterling zone" created by a currency union might end up looking like the euro zone, "with Scotland in the part of Greece." The New York Times' Paul Krugman wrote last week: "If Scottish voters really believe that it’s safe to become a country without a currency, they have been badly misled." 
Scotland could, of course, create its own currency, though the independence campaign hasn't suggested that yet. There's also another complication: If Scotland is required to join the European Union as a new state, it may be compelled to join the euro zone. Scotland doesn't want that, for obvious reasons.

I've seen people favoring independence bash Krugman. Well, any idiot knows he's right about the eurozone. Sorry, folks.

And, the yes folks are showing naivete or hubris on other issues related to this First Minister Alex Salmond et al claim that Scotland could join the European Union via renegotiation of treaties. The EU, per a CNN overview, has already said no. 

In that case, it appears Scottish adoption of the euro would be part of the price of membership. 

The Wall Street Journal further discusses pros and cons of five different monetary options.

That said, if there's a yes vote, for oil and gas reasons alone (even if they are already in decline), this would be a blow indeed to the remnant UK.

So, why? I think the Telegraph has it right. Starting with the Thatcherite mistreatment, while the economy is an issue, it's ultimately psychological.  That said, the Telegraph's also right that, setting aside Thatcherite-related resentment, the West continues to generally move, for now, toward a post-industrial world. What can Scotland offer to that world besides oil?

As for the outside world?

If North Sea oil and gas weren't involved, the international business world probably wouldn't pay half as much attention.

Per John Oliver, if not for Mel Gibson in "Braveheart," and a love-hate relationship with haggis and bagpipes, the average American probably wouldn't pay one-quarter as much attention. Just wait and see the yawns and ignorance that greet any Catalan independence movement.

So, if you do like bagpipes, crank up "Scotland the Brave."

And, if you're really interested, it may take 3-5 years after a yes vote to find out if, or if not, "Scotland the Brave" was also "Scotland the Dumb."

To Americanize this, it would be like if Austin wanted to secede from the rest of Texas.

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