8/28/2005

An Open Letter to Nicola Sturgeon MSP

Glasgow

August 28 2005

Dear Nicola,

Last week, I was very heartened to hear you criticise the Scottish Executive’s decision to award the contract for the construction of a new fisheries protection vessel to a shipyard in Poland instead of Ferguson’s in Port Glasgow.

I’ve been a Unionist all my life, yet I’ve recently been asking myself just why; and the unpalatable truth I’ve had to confront is that I can’t really think of any reason at all.

However, the fact that one’s unionism is failing does not automatically make the party you lead in the Scottish Parliament, the Scottish National Party, an attractive suitor for my vote.

Your comments did, however, create the slightest glimmer of hope that I might one day be converted into an SNP voter.

Personally, I have never been able to understand why some people view the study of history as being boring. Nowadays, it’s possible that that mindset is a consequence of living in a world dedicated to the constant production and experience of new products and sensations. However, as the often-overquoted George Santayana once remarked, ‘Those who do not remember the past are condemned to relive it’. At this point in time, we are right in the midst of a phase in human history where the past seems to have been forgotten and where ideology again wreaks havoc on the lives of history’s passers-by.

We are once again living in an imperial age, and if nothing else the history of Scotland should tell its people to shun and disavow all forms of imperialism.

In the not so distant past, when the sun never set on the British Empire, it must have seemed to those within it that that order would continue forever. The Soviet Union must have felt the same way about its imperial possessions in Eastern Europe. Yet consider how quickly they both collapsed.

Over time, all empires destroy themselves, which makes one fear for the future of that most worthy and beloved of nations, the United States of America, as a consequence of the imperial adventure in Iraq that the semi-reformed Trotskyites who call themselves ‘neoconservatives’ have forced upon it.

There is nothing in the rulebook that says that the same possibility of collapse cannot exist within nations, even those whose constituent parts had previously worked together for centuries with a measure of mutual co-operation and respect.

I have come to the conclusion that the era of the United Kingdom is over, if only because the economic model which previously kept it together, and more importantly gave it a rationale, has irretrievably broken down.

It could not have been in the minds of those who framed the Act of Union in 1707 that its outcome would produce a union of equals; even then, England was just too big for it to be anything other than primus inter pares.

One of the first consequences of a close relationship between a large, powerful nation and a small weak one is that the people of the small weak one start draining away, because their ability to earn a reasonable living in the small country is impaired by the economic power of the large. Thus it was after the Act of Union that the phenomenon of the ‘Scottish Diaspora’ started.

If one follows such matters one can see the same thing happening right now, with the illegal immigration of an estimated 4,000 Mexicans into the United States every single day. The celebrated supply-side economist Jude Wanniski has pinpointed the point of collapse of Mexico’s economy to its government’s devaluation of the peso in 1994. Perhaps over time the 1994 devaluation of the peso will come to be spoken of in the same breath as the Darien Scheme, the economic catastrophe borne of imperial ambition that bankrupted us and drove us into our neighbour’s arms.

However, over time a synergy developed between England and Scotland that free trade theorists call ‘comparative advantage’, which exists where the relationship provides an economic benefit to both sides. The presence in Scotland of minerals and manpower imbued with the Presbyterian work ethic, and the natural advantage conferred by having navigable rivers like the Clyde through which materials could be easily shipped in and out, made us a perfect place for the conduct of manufacturing.

We produced finished goods that were consumed in England in return for currency. That was the comparative advantage.

Perhaps I’m just an incurable romantic, or perhaps I’m overly ignorant of my own country’s history; but in many ways the era of large-scale manufacturing was a golden age for Scotland. Obviously, it was not because people lived in poorer quality housing, or that they were prone to illnesses that innovation has done away with; but that was also when they kept more of their earnings, and their earnings were worth something.

The difficulty, of course, is that all golden ages come to an end, and the one element which did more than anything else to kill Scottish manufacturing was the ideological struggle between those on the extreme left who sought to use industrial action to usurp the rule of law and those on the right who prayed at the shrine of the market.

The comparative economic advantage that once existed between Scotland and England is now gone, killed by politicians. In its place is now a relationship of absolute advantage in favour of England. All the statistics point in that direction; and it bodes ill for our people when voices are being raised down south about how much the Scots receive in state subsidy.

If your dream comes true, and Scotland becomes a nation again, we will have to survive on something. The current economic model will not suffice. The oil money will not suffice. If the government of an independent Scotland even tried to sustain the country’s current level of central spending, then within six months either Alex Salmond or yourself would be on a plane to Washington DC to arrange a loan from the IMF.

However, it would be possible for an independent Scotland to survive; but the program by which it could be done would require a radical rethink by the SNP of its broadly leftist position.

The first thing that an independent nation needs is its own currency, and an independent Scotland’s independent central bank would have to ensure that the currency is backed by gold.

Historically, gold is the one commodity that always retains its value, the ultimate hedge against inflation. Over the past year, the price of all commodities have risen to new levels as a result of China’s continued breakneck expansion, and although the price of crude oil is currently described as being high, unless there is some radical change in the current global economic order then prices at that level will soon be described as being normal; indeed, it may be the case that we will soon long for the days when a barrel of crude oil cost $68.

The current Chancellor of the Exchequer, Gordon Brown, came to office determined to reverse the well-deserved public impression that Labour Chancellors are incompetent economic managers. In order to do this, he needed to keep inflation down.

As an instinctive tax and spend socialist, the wisest step that Brown has actually taken to curb inflation has been to remove himself from any decision on interest rates by granting independence to the Bank of England. Everything else he’s done, from massive increases in public spending to the constant application of stealth taxes, has been an inflation primer.

He has been aided by the good fortune of having first a booming stock market that immediately translated itself into a booming housing market when the bulls turned into bears. He has engaged in sleight of hand, by changing the way in which inflation is measured. He is one of the most powerful men in a government which has taken the radical and destructive step of permitting record levels of immigration, presumably with the intention of ensuring that mass migration would curb inflation by depressing the wages of British citizens, the success of which policy was praised by Mervyn King, the Governor of the Bank of England, earlier this year.

But for all his manipulation, Brown has failed. Last month, the Office of National Statistics reported that inflation’s back in the system.

The Labour Chancellors thus continue their inglorious record.

A currency backed by gold would minimise the risk of inflation, the first task of any Minister of Finance in an independent Scottish government.

The second thing an independent nation needs is a manufacturing sector. Some other readers of this weblog will know what’s coming next.

One of the most violent epiphanies of my intellectual life occurred while reading an article called ‘Death of Manufacturing’ by Patrick J. Buchanan. Historically, Buchanan has had a bad press in this country, mainly out of most British journalists’ wilful ignorance of the American conservative movement’s very noble history. His profound social conservatism, itself a very American trait, also makes him a figure of suspicion.

But just as you are a Scottish nationalist, Buchanan can properly be described as an American nationalist. Reading the piece, I realised that what Buchanan was writing about had just as much relevance to our affairs and to the former steel and iron works of Lanarkshire as to the collapsing steel industry in West Virginia. What Buchanan has to say about the importance of manufacturing is of universal application; and the lesson that the leadership of the SNP must learn from him is that no nation, whether it is Scotland or America, can be described as independent unless it is capable of producing what it consumes.

At the moment, what little economy we have is heavily skewed in favour of the output of services. The mavens who tell us that we should be proud of the Scottish economy because of our world-class financial institutions forget that the presence of a large financial sector shows that we are good at husbanding wealth – but what role does the country’s banking clan actually play in creating it, apart from investment and speculation?

Of course, tourism would have a role in the future of an independent Scotland, but as I’ve said elsewhere, tourism depends for its success on advantages conferred by nature which we have done nothing to earn, like scenery, and on the exploitation of history created by previous generations, as if we’re constantly happy only to look at our past.

It is reactive. It depends on the tourists actually turning up in order to given us their money. However, what the production of items for sale does is generate real revenues. It earns money independently of either natural features or exploited history. It is essential to the life of any small nation as a means of earning money to keep its head above water.

A strong manufacturing sector would also probably do more to help keep Scots in Scotland than any other economic policy, because it would do something that no government has been willing to do for at least 26 years – create meaningful jobs.

Much talk is dedicated to government initiatives to foster ‘innovation’. However, the reality of innovation, as has been pointed out time and time again by Paul Craig Roberts, Ph.D., is that innovation always follows research and development, which in turn always, always physically follows manufacturing around. Where the manufacturing is done, so also that is where the innovation takes place.

As a consequence of some less than shrewd career moves earlier in life I now work in a call-centre. This has taught me two very valuable, if stark, lessons. The first is that one can understand why the United Kingdom worked best when its constituent parts did not have to speak to each other.

The second is that I have lost count of the number of science and engineering graduates I have worked with who cannot get jobs in their own fields in their own country, and no politician seems to understand why that is the case. We will bemoan the economic inequalities bestowed on us by the Union until the cows come home, yet it would require real will and yes, real courage for the SNP to effect the resurrection of this vital part of our nation’s history. A strong manufacturing sector would get those graduates out of the call-centres and back into the labs and factories, using their brains to drive the country forward. The question that you need to answer is whether your party actually possesses that will and courage.

The third thing an independent Scotland would need to do probably flies in the face of some of your dearest principles, but for the survival of the nation it would nonetheless be necessary. An independent Scotland should eschew any form of international involvement unless it is conducted on our own terms.

Over recent years, the SNP has become known as an antiwar party, with Alex Salmond opposing every single conflict that the UK has entered into. Although one suspects that his opposition to war is motivated more by leftist principles than the libertarianism of Randolph Bourne, it is nevertheless true that wars, all wars, are usually begun as a result of interference by one nation in the affairs of another, a practice inimical to independence.

Yet the SNP has also previously declared its attachment to membership of the European Union. It makes no sense to gain independence from a central authority in London only to immediately surrender it to another one in Brussels. It could be argued that the loss of Scottish fishing rights in Scottish waters that the EU has wrought is an economic catastrophe for affected areas as least as profound as the de-industrialisation of the Central Belt was for that region. What has Brussels ever done for us? For our countrymen, all the shepherds of the oceans from Troon to Peterhead who farmed and cared for our waters and its creatures, with whom they lived in harmony for centuries?

Similarly, if we are to be a nation, should our law not be supreme within it? Having gained the status of nation, it makes no sense that any other law or body, such as the World Court, should have primacy over us. Why should the immediate response of every nation to nationhood be to seek membership of the United Nations, an institution which served its purpose in its day but which is now alleged to be riven with appalling corruption which drew resources away from those most in need of its assistance, those whose only sustenance derived from the Iraqi Oil for Food program?

Do we really want to be associated with such a body?

Do we want to be part of a World Trade Organisation that would direct with whom and on what terms we can do business? A Scotland outside the EU, UN and WTO could be a true moral leader amongst nations.

Obviously, the reasons why so many people in Africa and Asia are mired in poverty are many and complex; however, one of the principal factors is the unfair terms on which they require to trade. Would it not be better for Scotland to reject the current biased international trade system, so that if we decide that the import of one particular commodity from Malawi should be without tariff we could proceed without the consent of the EU or WTO, and thus give Africans access to our markets on better terms than any they currently receive and help them generate real revenue, the surest route out of poverty?

The fourth thing that Scotland would need in order to be independent would require a leap of will and imagination of which I am not sure any politician is capable – the absolute rejection of taxes.

The taxation of earnings has always been an explosive issue in our country – however, nobody now asks why they pay income tax.

There is an assumption of necessity in every debate about taxation that I can ever remember hearing. I can’t think why, because the legal forfeiture of earnings serves no purpose other than to create a bureaucratic snake which lives only to eat its own tail, eventually needing more and more to feed itself in order to achieve less and less efficient returns.

For example, Tony Blair and Gordon Brown talk about Britain’s ‘world-class public services’, as if the reduction of a waiting list by fair means or foul is an achievement worthy of recognition. Similarly, there is an assumption that all children learn equally well under equal conditions, an assumption which has been disproven so often that it should no longer have any credibility in the public square. Neither policy works. But still we pay in order to try and disprove that they don’t work.

But the hunger of the snake doesn’t stop at your pay-packet. The state taxes you after you’re dead. The state didn’t do anything to earn or husband those resources - so why is it entitled to a slice? If you invest in any form of property whose value is likely to appreciate, you’re charged capital gains tax upon realisation. Why? What did the state do to protect that investment? The state also charges corporation tax, or secondary income tax, as it should be called, a tax which corporations are able to effortlessly pass on to their consumers in the form of increased prices on the shelves.

Why? For what purpose? To provide more public housing that’s unfit for human habitation? To continue with the fantasy that the solution to every problem is a new law?

A political party that aspires to lead a nation to independence must be nationalist. It cannot be anything else, which means that it cannot be socialist. In Scotland, socialism has been tested to destruction, and amongst its failures includes the desperate statistic that the difference in life expectancy for a man in the west of Scotland is a full 11 years lower than that for a man on the South Coast of England. There is a reality to life in the United Kingdom now that no politician even mentions, the appalling gap between rich and poor. Nothing would do more to narrow this gap and revive the dying but absolutely critical necessity of social mobility than the abandonment of our current system of taxation and the rollback of the state, which would give the country a booming economy almost at a stroke.

Personally, I hate the expression ‘inward investment’ – in English, it means that everything’s cheap because most of the people are poor and the politicians will do and say anything to get the unemployment statistics down. But a system of taxation based on no taxation would create growth without parallel in the modern history of any country, China included. And unlike China, we are energy sufficient in both oil and coal, so there would be little prospect of inflation in the works. The only thing that could mess this growth up would be political interference.

At this point, some will ask how the state will fund itself. They might care to heed the words of Abraham Lincoln.

Lincoln was once reported to have said, ‘Give me a tariff and I will give you the greatest country in the world’. If we are to be independent, is there no advice that the SNP could take from the man who freed the slaves? As one commentator has put it, why should goods that we are perfectly capable of producing here be admitted into the country free of charge and the citizens taxed at 40%, when the citizens could live without taxation and the goods be charged at 40%? I think I can hear your answer.

In the ‘global economy’, we need to be ‘competitive’. My answer would be to say, against whom? After independence, presumably the English and Welsh would still be using the old model – no competition there. On the global scale, China has one huge advantage over us, its reserve of manpower. However, the efficacy of that manpower surplus as a tool for keeping prices down is dependent on a centrally administered world trade system that permits their goods to compete on equal terms with ours in our own country. If we’re going to be an independent nation, isn’t allowing that system just daft?

There would be some minor consequences to a tariff, such as a rise in the price of goods in the shops. After 26 years, the most pernicious psychological effect of Thatcherite anarchocapitalism has been the fostering of the idea that what is cheapest is always best, a notion which has enabled the supermarket chains to put half of the UK’s dairy farmers out of business. Any price rises would be more than offset by the increased fiscal power that would be passed to citizens through the abolition of taxes. Literally, we would all be better off.

A tariff would serve the dual purpose of encouraging domestic production and providing revenue for a small, focussed government.

Of course, some politicians who lack vision might be afraid of putting forward the idea of the rollback of the state into the public square, as it would involve the serious business of making at least 90% of Scotland’s public sector unemployed.

It would also require wholesale reduction of the welfare state and its chief appurtenance, the National Health Service. No British politician seems to possess the will required to conduct these most necessary tasks. However, the absence of personal taxation would surely be the most powerful incentive for seeking and keeping work – and despite the difficulty with ‘inward investment’ that I mentioned above, it’s hard to believe that a nation without taxes would not attract a massive amount of capital willing to invest in it.

But sacking people is always an ugly and traumatic business. The simple fact of being born is one of the most traumatic events a human being ever goes through. There is no reason why any in the new Scotland should receive a free pass from the birth pangs of their nation, simply because, like their fathers, they’re in the T & G.

The final thing that Scotland would need to be independent is the correct form of government. At times, the SNP has toyed with the idea of keeping the monarchy, yet most sentiment now seems to be republican.

Well, I’m a republican as well, in the strictest sense of the word. As far as democracy is concerned, you can keep it.

The most successful experiment in nation building ever undertaken has been the foundation of the American republic. Having gone through the War of Independence in order to overthrow a perceived tyranny, the framers of the Constitution, in love not with ‘freedom’ but ‘liberty’, took great care to ensure that tyranny could never return. As a result, the Great Republic’s federal structure was designed to ensure that most power stayed at a local level, and they deliberately intended the power of central government to be small.

That the office of President of the United states is now so powerful is only because of a series of historical aberrations or deliberate deviations from the Constitution by presidents (Harry Truman’s seizure of the power to declare war was a particularly egregious case in point), Congress and the Supreme Court (which has been deviating from the Constitution from ‘Marbury-v-Madison’ in 1803 all the way up to ‘Kelo-v-New London’ in 2005).

The problem with democracy is that it is fundamentally incompatible with liberty. In a democracy, the minority lives at the sufferance of the majority and citizenship has no real value. Urban areas always hold a greater influence than rural, for no reason other than sheer strength of numbers.

Instead of such a system, would it not be better to let the people of Caithness decide to enact a death penalty or to restrict abortion if they wish, instead of having laws imposed on them by Edinburgh? And if the people of Dumfries and Galloway wish abortion on demand up to birth, although such a law would be personally repellent to me, who would I be in Glasgow to stop them? And why should both regions not return two Senators to Edinburgh to protect the interests of their areas with precisely the same powers as the two Senators from Glasgow?

The framers of the Constitution of the United States were on fire with the ideas of the Scottish Enlightenment. If Scotland is ever to be independent, we should not try to re-invent the wheel and experiment with constitutional structures which would lead to our having Fourth and Fifth Republics within a century. Instead, we could do no worse than walk in the footsteps of Alexander Hamilton and his brethren, learn from their mistakes and, yes, bring the Enlightenment home.

An independent Scotland would come into the world with a measure of goodwill from the world that few other nations would ever be fortunate enough to experience. All over the world the St. Andrew’s Societies and the Caledonian Clubs would ensure that our sometimes strange, sometimes silly but always beloved wee nation would never be short of friends.

But if Scotland is to be independent, then you and your party must be nationalists - as I’ve said you cannot be socialists and you certainly cannot be internationalists. You may just have been playing cheap politics with other peoples’ jobs last week, in which case you’re worthy of condemnation.

But what you said certainly sounded good to these ears – and if we hear more of the same, you might just be persuading me, inch by inch, to vote for you….

Yours sincerely,

Martin Kelly

2 Comments:

Blogger The Three Gates said...

Mr K,
You're having a busy weekend.
The content of this blog is surprising; I wonder if it's really the lure of independence or the SNP, or if it isn't more related to disgust with the current wilderness which is the political right, which prompts it.
My own memory of pre-union history seems to flag up that England demanded union, rather than any Scottish clambering for it (remember the Alien Act?).
I have reluctantly voted SNP for the last 10 years or so. Reluctantly, because I don't think the SNP have the quality of manpower to rule effectively. However, I believe their aim is true in that Scotland needs independence urgently, before we become a service nation to our more powerful southern neighbours. Might be too late on that one. I think the SNP could at least double their vote overnight if their first election pledge after independence was an immediate general election, so people could vote politically rather than 'nation'ally. I also think people underestimate the potential for a rise in confidence after independence. I don't see this as some kind of idealistic flag waving catharsis, more as a shift in the troughs that the political, scientific and cultural elite would head for.
One thing which would worry me is an Edinburghcentricism in the same way that we have a Londoncentrism at the moment. Regarding the EU, its regional funding has been VERY, VERY good for the Highlands & Islands in my own experience.
We're in catch-22 at the moment. The best (politically and economically) tend to leave Scotland for fairly obvious reasons. Without these people, it is difficult to make a plausible case for independence. The second raters who remain have only an interest in the status quo. A vaccuous gridlock.
I've often considered starting up my own party, but too many skeletons in the cupboard, too many hours blogging, a desire for a quiet life, and looking for a meaningful job have scuppered my efforts.
Wha's like us?

10:06 PM  
Blogger The g-Gnome said...

D,

The Scottish Conservative Party and myself are over. Either two or three weeks ago, Iain MacWhirter wrote a column in the 'Sunday Herald' comparing a Tory MP with a member of the BNP. When the Scottish Conservatives cannot summon the outrage to actually answer an allegation like that, and leave it to mugs like me instead, they don't deserve my support.

You're probably more accurate in saying the piece has been motivated by disaffection towards the right. The SNP may be many things but it's certainly not alluring, particularly after the appalling treatment meted out to Margo MacDonald by the gossips and whisperers.

We already are a service nation - the problem, we can't service anything. You might call that 'Scottish cringe', another phenomenon which probably appeared for the first time shortly after union. The difficulty the SNP would have is one I've tried to address here. The Unionist model doesn't work anymore, so it needs to change - but change never occcurs in a vacuum, it must be rooted in something. Yes a General Election immediately after independence would be a good thing - what I'm interested in trying to do is set out how we could get to that stage in the first place.

Your fear of Edinburghcentrism is well founded, and the best defence against that would be a republican federal structure. Too many people in Scotland assume that having a republic would involve ditching the Queen for Winnie Ewing and we could then all go along as before. No, we could not continue as we have done, a fact which is the SNP's 800-lb gorilla in the room. One thing we do well in Scotland is reformations - we are the world experts at it. Why, then, if we were so bold in the past, can't we be bold again?

Of course EU regional funding has been very good for H & I. The difficulty is that if we aspire to be independent, how then can we justify immediately swapping the sovereignty of London for that of Brussels, which would be necessary in order to keep the development money coming in? And all these things need to be weighed in the balance. Do the economic gains made by parts of the country which have received EU funding outweigh the damage that EU membership has done in other areas? Or to put it another way, isn't it absurd of Brussels to say, 'You, Jock, you can only fish x,y and z for so many days of the month', thereby depressing Jock's economy and making him a more likely recipient of EU development aid further down the line?

Better instead to pursue policies which would improve the lot of all Scots, and the best way I think that could be done is with the outlined program.

12:58 PM  

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