Posts Tagged ‘united kingdom’
This weekend, the main theme of my posts has been the risks, challenges, and possible benefits of one ethnonationalist political separatism or another. As a Canadian, I’m familiar with Québec, but other examples exist around the world.
What of you? Is there a separatist movement afoot in your country? Does it affect you?
The discussion at Crooked Timber was the first I’d heard of the uproar in the British Isles over the statement, by British Chancellor of the Exchequer George Osborne among others, that the United Kingdom would not enter into a currency union with an independent Scotland. In that a key plant of the Scottish separatists’ argument had been that there would be such a monetary union, this categorical exclusion of a possibility that the SNP had count on is politically quite controversial.
As Scotland lurches toward independence or not from the United Kingdom, I was reminded of the experience of Québec and its separatists. Specifically, as I noted in discussion at Noel Maurer’s blog, I was reminded of the arguments I found in my 1980 hardcover edition of Jane Jacobs‘s book The Question of Separatism. Descended from her 1979 CBC Massey Lectures, Canadian Cities and Sovereignty Association, Jacobs was writing in the era immediately after the separatist defeat in the 1980 referendum, at a time when sovereignty-association still seemed a plausible future development. Jacobs, for her part, thought that the independence of Québec might well be a good idea, as a way for Québec to break with incipient peripherality and develop in promising new directions. (Jacobs particularly liked the example of Norway.) She did not think that Canada and independent Québec should develop too close an association, though, and was particularly concerned about the idea of the monetary union proposed by separatists like Réné Lévesque. For instance:
Lévesque wants Quebec to have full sovereignty over taxation, social policies, and at least some military expenditures, over investment policies, borrowing policies and some policies concerned with use of private savings and accumulations of capital, over funds spent on public bureaucracies and subsidies, and many other matters that affect the value of a given currency relative to others. Thee are powers now largely, though not entirely, held by Ottawa. Indeed, Lévesque complains of exactly that when he says that Quebec does “not control the real economic levels which remain in the federal domain.”
What Lévesque fails to confront is that the powers he wants for Quebec are powers that happen to influence the strength or weakness of a currency relative to others, and that also influence the value of a currency domestically. Suppose Canada and Quebec sometimes do become associated sovereignties, and suppose each really did then exercise independently the kinds of powers I have mentioned. Nowadays, when our currency falls on bad times, we blame Ottawa. Under double sovereignty with a hared currency, Ottawa and Quebec would be blaming each other. Unless everything went along marvelously, they would likely be furious with each other.
The answer to that [. . .] is that the two governments could cooperative on managing the shared currency and act jointly on matters that affect it. Yes, so they could. But there goes independence.(100-101)
On the one hand, [Lévesque] expresses fears that direction of Quebec’s affairs might revert back to Ottawa. And–in a remark apropos the European Economic Community–he expresses his fears that associated sovereignties face the anger of falling into what he calls “merely a multinational, multicultural federalism.”
On the other hand, when he attempts to depict Canadian-Quebec cooperation on customs union and currency, he conjures up exactly the sort of centralized bureaucracy and power structure that would make his fear come true. He has proposed joint bodies at what he calls the technocratic level, centralized ministerial structures, possibly also “a delegated parliament to which both sides would delegate members who are already elected to their parliaments, and which would meet once or twice a year . . .” (119-120).
[T]wo of Lévesque’s aspirations for Quebec–independence, and a shared currency with Canada–are not reconcilable. Here we see the contradiction again. The proposed supergovernment would be necessary for joint control of matters affecting a shared currency. But it is at odds with the kind of political structures appropriate to the sovereignty Lévesque has wanted for Quebec–or indeed to sovereignty for the rest of Canada. It is compatible, instead, with “merely a multinational, multicultural federalism,” to use Lévesque’s own description of what should be avoided. And it would saddle us all with additional, complex and expensive layers of bureaucracy and a new layer of centralized control beyond anything we have now. This would be too high a price to pay for what I can only understand as Quebec’s timidity concerning a currency of its own. (120-121)
All this has created a desire among Scots for an answer. What would an independent Scotland do?
The survey found 64.8% of those questioned wanted the Scottish Government to produce a “Plan B” before September’s referendum.
The research, for the Daily Mail newspaper, was carried out after Chancellor George Osborne last week ruled out doing a deal to allow a separate Scotland to share the pound with the rest of UK.
Labour shadow chancellor Ed Balls and Liberal Democrat Chief Secretary to the Treasury followed suit by rejecting a currency union.
In the wake of that, polling company Survation questioned 1,005 people aged 16 and over on the issue on Monday and Tuesday of this week.
A fifth of those questioned (20.1%) did not believe the Scottish Government required to draw up an alternative to its plans for a currency union, while 15.1% said they did not know.
The same poll also put the gap between support for independence and support for the Union at just nine points.
A total of 46.6% of those questioned wanted Scotland to remain in the UK, while 37.7% were backing independence, with 15.7% undecided.
Certainly many Scottish separatists are quite clear about their desire to adopt a new currency. Adam Ramsay and Peter McColl’s recent Open Democracy article “Scotland should relish the chance to run its own currency” comes up with three reasons for a Scottish pound.
The first is that it would allow for a more significant departure from Westminster policies. If you’re a sort of soft social democrat like Salmond, then the need to have a vague fiscal alignment with Whitehall is not a huge issue. The sorts of changes the First Minister wants to make to Scotland’s tax and spend policies are, in general, moves in the right direction, but nothing particularly radical. Yes, he wants to make Scotland fairer, but he wants to do it within the spectrum of conventional policy. Westminster is unlikely to have much issue sharing a currency with a country with those sorts of plans. If you want to see a more significant change in the way the country is run (as we do), changes that the Treasury would loathe, then any link with Westminster is more of an issue.
The second reason to ditch the pound was summed up by the FT last week: it would “mean Scotland could use monetary policy and the exchange rate to soften the impact of any future crisis”. In other words, having control of a Scottish currency would be good all of the time, but even more important in a crisis (as an aside, the FT piece this comes from seems to imply they think that it’s more likely than not that an independent Scotland would move towards its own currency. Given the scorn poured by Better Together types about this proposal only months ago, that’s quite a turn around in public debate).
The final reason we should ditch the pound is that it’s helped destroy Scottish exports and, particularly, our manufacturing. The main argument you hear in favour of a currency union is that the majority of the stuff that Scotland exports is to the rest of the UK. But really, that should be the main reason to be against a currency union. The pound is a hugely expensive currency. That means it’s expensive for people in other countries to buy the stuff we sell. No wonder 70% of Scottish exports go to the rest of the UK. No one else can afford to buy what we make.
Scotland has advantages in this regard that Québec never had, in that local Scottish banks produce Scottish coinage to this day. Jacobs, when imagining the birth of the Québec currency, imagined that the trajectory of the Irish pound, established in 1928 at parity with the British pound and remaining there for fifty-one years. At that point, the British and Irish currencies both joined the European Exchange Rate Mechanism and began floating against each other. (Forbes‘ Eamonn Fingleton also brings the Irish parallel to light.) A slow controlled decoupling of Scotland’s money from the United Kingdom’s, not a sustained monetary union that would effectively leave the United Kingdom in the position of supporting the British and Scottish economies with only its own resources to fall back on, would be ideal.
Scottish separatism seems to be driven as much by economic concerns as cultural concerns, probably more so than its Québec counterpart. That’s why it doesn’t make sense to me that prominent Scottish separatists like First Minister Alex Salmond insists on a monetary union that would limit an independent Scotland’s freedoms in the areas that are dearest to the separatists. Does Salmond really believe a monetary union with the rump United Kingdom would work? Does he not have the courage of his own convictions? I don’t know.