Paper Tiger - The UK's failing economy

The ‘no’ campaign has a message which it repeats ad nauseam: a stronger Scotland, a United Kingdom.  You may have seen it whilst online or come across it in debates, but does this argument have any validity?  The answer is no, in fact it is ridiculous to the point of being laughable.

"Why would you want to have a fairer society when we can be strong?" No Campaign statement

The first and most obvious point is ‘stronger than what?’  If they mean stronger than previously then why have they waited 300 years to getting around to making us ‘stronger’, and if they mean stronger than other nations then they are deluding themselves.

The UK is no match militarily to the United States, China or Russia, and that won’t change by maintaining political power at Westminster.  Stockpiles of gold and other precious metals, which can be important in times of crisis, are almost non-existent, and even Britain’s much vaunted seat on the UN Security Council won't last forever

Much of the UK’s dwindling power, be it physical, political or economic, comes from Scotland.  We know that Scotland would be a successful independent country, but the ‘no’ campaign is desperate to keep pretending that Westminster is a global player.

The UK has the 7^th largest GDP in the world according to the UN.  This is a massive decline from 1938 when Britain was 1^st (see: http://en.wikipedia.org/wiki/List_of_largest_empires#GDP_size and http://upload.wikimedia.org/wikipedia/commons/f/f4/Gdp29-41.jpg) and this fall from grace shows no sign of reversing.  The reality that we must accept is that the days of empire are long gone, and former colonies, such as Australia, Canada and India, are moving on and gaining ever more influence and power on the world stage. 

The decline is even more apparent when you consider the average wealth of each citizen in a country.  We consistently see small, independent European nations around the top of the list, with bigger nations trailing far behind.

The International Monetary Fund has 5 small European states within its top 10 wealthiest nations.  The World Bank has 6 as does the CIA World Factbook.  The United Nations puts the total at 7.  At best, the UK stumbles in at 23^rd, which is far behind Iceland and Ireland (http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita).

Of course, this doesn’t consider the extreme concentration of wealth that successive UK Governments pursue.  The Independent describes the situation very well:

The (United Nations Human Development) report shows that the poorest 40 per cent of Britons share a lower proportion of the national wealth - 14.6 per cent - than in any other Western country. This is only marginally better than in Russia, the only industrialised nation, east or west, to have a worse record.

In an unpublished paper Michael Bruno, chief economist of the World Bank, says: "Reducing inequality not only benefits the poor immediately but will benefit all through higher growth."

Perhaps the ‘no’ campaign is suggesting that an Independent Scotland would be weaker without Westminster.  Militarily this is nonsense.  In December 2011, a Russian Fleet arrived within a few miles of the Moray Firth without being detected.  The Royal Navy sent its nearest available vessel to intercept, however it took days to arrive having travelled all the way from Portsmouth.  Politically this claim is nonsense too, as Scotland has just 6 MEPs to represent us in the EU compared to 12 from Croatia (which has a population around 1 million lower than ours).  We don’t get to attend every EU meeting and we don’t even have a seat at the UN!

But let’s return to the main point of economics.  The Scottish economy is falsely described as being dependent upon oil however this is a strange accusation.  Oil is a commodity which gains value in times of economic hardship: this means that nations which export (which Scotland excels at) do well when petroleum prices are low, whilst oil producing countries gain extra revenue during periods of uncertainty and economic hardship, exactly when we would want extra revenue.  North Sea oil is a fantastic stabiliser for our economy and one which Mrs Thatcher used to fuel her ambitions.

Compare this to Financial Services industry, which constitutes 9.6% of the UK's entire economy.  Unlike oil, which has 100 years of production remaining, is based in our territory and will be required for the foreseeable future, banks and other financial institutions are much more volatile.  Only constant appeasement prevents them from moving elsewhere.

The simple truth is this: if bigger were automatically stronger and better, then the members of the ‘no’ campaign would be pushing for a European Super State.  Their actions, however, are very much the opposite.  Instead they ironically argue that becoming Independent means that we’ll be merged into a much stronger organisation than Britain and that we’d have no influence ( see here - http://www.nowpublic.com/world/nigel-farage-ukip-scottish-independence-youre-swapping-your-masters-westminster-brussels - we particularly like Mr Farage’s admission that MPs at Westminster consider themsevles to be our ‘masters’).

The UK economy is a paper tiger, and advocates of Westminster are trapped by the Goldilocks Axiom.  They can keep pretending that they’re still important, but we, the people who live in Scotland, don’t need to share their delusions.

Drew

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