Robin McAlpine: Indy optimism for 2018 requires us to rediscover our stories

CommonSpace columnist and Common Weal director Robin McAlpine says the Yes movement must get the vision for a new life under independence across

PERHAPS it says something about the kind of people I bump into but I can't say I've picked up a lot of optimism about the year ahead – pretty well from anyone.

So let me kick off the year with something that I have become quite excited about again; Scottish independence. I know, I know – when was I not a 'true believer' ... but sometimes you believe in things that don't necessarily make you feel optimistic.

In reality, for much of 2017, many times when I thought about independence my emotion was frustration or anxiety or exhaustion. I don't think I'm alone among independence supporters in the year past in beginning to see independence as a problem to be solved.

I don't think I'm alone among independence supporters in the year past in beginning to see independence as a problem to be solved.

Well, I've been reminded that it is also an exciting opportunity right in front of us too. The stimulus for this 'remembering' was finishing off the first draft of a book just before Christmas.

The book (which should be published in the next month or so) is a summary of all of the work which has been produced as part of Common Weal's White Paper Project. It tries as hard as possible to take a comprehensive and honest look about what things need to be done to create a successful Scottish state.

Throughout the project we've kept ourselves very constrained – while Common Weal generally does the 'big vision' stuff, in the absence of anyone doing serious leg-work on the technical process of independence (the 'how do we set up a new country' stuff), we did what we could.

And that meant that we had to try as best we could to restrict ourselves to a 'policy neutral' stance – this was not about what Scotland could become as an independent country but how to set up the infrastructure which would enable an independent Scotland to be created.

When we were thinking about setting up a currency, or IT systems, or a civil service, or an energy regulator, we constantly pressed ourself to produce proposals which, once implemented, could equally support an incoming Tory government as some kind of incoming socialist one.

Well, I've been reminded that it is also an exciting opportunity right in front of us too. The stimulus for this 'remembering' was finishing off the first draft of a book just before Christmas.

A lot of this proved to be a long, hard, technical slog – if I never again have to wrestle with the interactions between single markets, customs unions and borders with nations who are outside both, I'll be very grateful.

But behind all the slog, it became increasingly hard for me not to be thinking 'and then...'. And then, once we have a central bank, we could...

And then, once we've got a department of social security we could... And then, one we have a new tax system we could...

It reawakened something in me that I hadn't noticed had dozed off – my excitement about what an independent Scotland might actually be like, feel like, look like. How would it be to live there, to have children there, to start a business there, to write a book or film a film or record a song there, to build a home there, to grow old there.

If you look at energy, then almost all the clever people know that the future is to integrate heating, electricity and transport into one smart energy system with localised generation and storage. It's not going to happen in Britain (which needs a centralised system to lure Chinese investment). Scotland could do it – and it looks amazing if we do.

A cursory look over what Richard Murphy did for us on how to reform a Scottish tax system is head-nodder – as in, you'll find yourself nodding your head and saying 'yes, I'd like it if local businesses in my area were not paying three or four times as much tax as the corporations they're trying to compete against'.

The prospect of a proper, generous Citizen's Income in Scotland grows closer all the time. When people come to understand what that would really mean for them, many will see their future differently. Suddenly, that business you'd like to start is a feasible risk to take...

When you ask yourself 'how do we want to be defended?', bombing various Middle Eastern countries is not exactly a persuasive vision. But a proper costal defence system freeing us up to play a serious role in leading global nuclear disarmament?

Personally, I want to know when we're just going to admit that telecoms is a core public utility like energy and the roads network – and we'll nationalise the lot of them. Lots of countries have genuinely superfast broadband as standard. Imagine we had that – imagine what we could do.

For example, I expect it's a matter of time before all phone and television signals will be going through high speed data cables rather than radio frequencies. This is a chance for Scotland to lead.

It reawakened something in me that I hadn't noticed had dozed off – my excitement about what an independent Scotland might actually be like, feel like, look like.

And if we want to be a leader, the opportunities in truly adopting the reality of an electric, driverless future for transport is where we should go. Frankly, we're still tinkering around with vague promises on when we'll ban new petrol vehicles.

In fact, we should be starting to think about how soon we need to prepare for banning human drivers altogether. The new transport network will be as different from what we have now as Spotify is from hanging outside Woolworths waiting for a new LP to be delivered. Why wait?

The list of what we could have – a properly regulated finance market with its new National Investment Bank, an immigration and citizenship system of which we can be proud, a constitution that we build ourselves as citizens, a national public IT infrastructure which is actually fit for purpose.

And then you start to think about how to use all of this. Let me give you an example; if you spend 10 minutes looking at the minefield which is an independent Scotland's exporting strategies when stuck onto a post-Brexit rUK, you'll start realising that we should nationalise the port at Rosyth.

We need to build powerful infrastructure that links Scotland to the world, not that links Scotland to England so that England can link to the world. And when we do, our place in the world looks different. We look connected – and we can build better relationships.

Almost everywhere you look, in almost every aspect of our lives, we're seeing demands that 'something change', that the way the world worked before didn't work for enough of us.

Our consular networks, our 'citizen identifier' (a replacement for National Insurance Numbers), a department for trade and industry, the ability to manage our own finances (including restructuring debt and treating monetary theory in a very different way) – these all need to be done.

But they are more than a task – they offer a window into a near future we could talk about. We could talk about this because all of this hits right at the heart of what people are screaming out just now.

Almost everywhere you look, in almost every aspect of our lives, we're seeing demands that 'something change', that the way the world worked before didn't work for enough of us.

It's hardly worth pointing out that almost all of the kinds of things I've mentioned above are simultaneously very popular with the public and yet still (in Britain) denied to them as a realistic political choice.

But they wouldn't be in an independent Scotland. They would be possibilities, options, reasons for hope.

It's hardly worth pointing out that almost all of the kinds of things I've mentioned above are simultaneously very popular with the public and yet still (in Britain) denied to them as a realistic political choice.

How did we get here? How did we get to the point where I need to remind myself that independence isn't simply a cause I believe in and need to fight (endlessly) to achieve, but an act that creates a place where I want to live?

Why is it that, over Christmas, when I told a teenager of my acquaintance that I honestly believed that my generation (working with his) could create a place we'd actually be proud of, I caught myself out with a sudden surge of enthusiasm and optimism?

I know some of you think that those of us who see independence as a route to a different and better future are conflating different issues (or, on your looney fringe, that we're somehow 'usurping' the 'noble cause' of some prototypically true and pure 'grassroots' which just wants 'freedom').

The problem is, you're all voting Yes already. And we've been running round your hamster wheel since 2014, talking over and over about who should lead and what vessel should be carrying us.

But where are we going? Your faith that there are 51 per cent of Scotland who would prefer it if we didn't talk about anything that would happen so much as one day after a Yes vote is misplaced. But there is easily 51 per cent of the population who can be persuaded by a future they want to live in.

But they wouldn't be in an independent Scotland. They would be possibilities, options, reasons for hope.

How did we give up on vision after 2014? How did we end up in a place where, in the last three years, we ran out of stories? Stories about our future, about our hopes, about our strength and ability to be better that we are now?

There are lots of us who have read and thought and got excited about where we could go next. My own little reminder has given me another boost, just about enough enthusiasm to get back in the trenches for the fights to come in 2018.

So, here's my question – are you excited about what we could become? And if so, is there a reason we're not letting the wider Scottish population in on our secret?

Picture courtesy of Documenting Yes

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Comments

MauriceBishop

Thu, 01/11/2018 - 20:12

Your edifice is built on sand, because your analysis of the central question - what will it cost to replace sterling - is all wrong. Your enthusiastic amateurs went looking for the cheapest solution to the problem. When what they should have done is looked at Denmark as the model. Yes, the price tag is enormous - over 55 billion pounds. And no, there is no easy or comfortable way to amass that sum of money. But, Denmark is able to successfully peg it currency to the Euro, which it shares a border with, and which it does the preponderance of its trade with. (Hopefully you will recognise the similarity.)

If it could be done more cheaply, the Danes would do so. Sitting on more reserves than you actually need is folly.

Insisting the can do it on the cheap will result in a Scotland that has no control over the exchange rate with sterling. Movements in EITHER direction will be catastrophic in the early decades.

In your pursuit of an easy answer that you think you can sell to the voters, you've consigned the new state to certain disaster. And yet, your "easy answer" isn't going to survive first contact with the outside world. Yes, the people who have already decided they want independence at any price will defend it. But the people who are actually qualified to opine on it - economists, rating agencies, and bond traders - will savage it.

But then you'll be able to content yourself with a new grievance about how "biased" everyone is...

Centurious

Thu, 01/11/2018 - 21:46

+1 for another MauriceBishop budle of laughs. I think Robin has a stalker!

Nelson

Fri, 01/12/2018 - 11:04

When every sentence is given it's own paragraph, it's a speech, not an article. It looks overbearingly dictatorial. As for the speech - the first question really should be: can't you try to do that stuff now, without a never-never land comfort blanket? Unfortunately, that could pass as a radical idea in the Scottish broken-record echo chamber.

Ally Lay

Fri, 01/12/2018 - 11:37

It is hard to think of a government in recent memory which has been more economically profligate than Theresa May’s.

As long as Scotland remains a part of the U.K. we will be nothing more than an afterthought. The Conservative parties relentless pursuit of a hard Brexit (and Labour’s acquiescence in all things Brexit) are proof enough of that.

I’ll take my chances.

I want to live in the Scotland that Robin describes.

Though I do enjoy Maurice’s sophistry, and how often he comes here to practice it.

MauriceBishop

Fri, 01/12/2018 - 13:03

Sophistry, eh? OK. Use the space below to explain why it will be OK for independent Scotland to have a currency that free-floats vs sterling. Because that is what we will have if we follow the Common Weal "do it on the cheap" model.

Sceptical Scot

Fri, 01/12/2018 - 13:40

You are trying so hard to be positive Robin, but this piece has a somewhat forlorn timbre. The prospect of a 2nd independence referendum appear to be thinning with each passing month, and it is left to you and a few weary diehards to try to keep the whole thing going.

Here is an alternative. The snp will likely lose the parliamentary majority to justify a mandate for another referendum, and they will for the first time have to seriously consider an electoral deal with the labour party, such has been the vehemence of their anti tory rhetoric recently they cannot rely upon the tories the way they did in their first term.

The viceral hatred between these two is axiomatic, but outwith the activists this situation is something of a bore, the mainsteam of progressive opinion would rather they put the material conditions of the people before their own partisan concerns. Who knows what could grow from such parliamentary arrangements,? I fear the snp would need to rethink what they mean by independence, and consider a federal solution that would actually deliver progressive benefits. The stand off between 'unionists' and 'nationalists' is now corrosive politically, socially and economically, to move on requires statecraft on both sides.

I can't help thinking that the debacle in Catalonia has seriously taken the wind out of the Scottish independence movement....watch carefully how a minority nationalist movement misjudged their strategic objectives, and dug trenches.........who really wants to endure a generation of such nonsense....or should we be talking about another generation!

Thy-Robocop

Sun, 01/14/2018 - 12:32

@MauriceBishop: I believe I have explained to you before that you can’t accumulate foreign currency reserves if you don’t have your own currency to give to those states who’s foreign currency you want to acquire. Only a Scottish Central Bank handling the Scottish currency can make the decision on how much money needs to be in circulation in order to accumulate the right amount of foreign currency reserves, and only the Central Bank can create new Scottish currency. If the Central Bank doesn’t exist, the Scottish currency can’t be created, and so foreign reserves cannot be accumulated by an independent Scotland.

In short, obtaining foreign currency is NOT an up-front cost of setting up a new currency and central bank. The up-front costs consist only of the staff, buildings and IT equipment needed to run the central bank, plus the money needed to print out coins and banknotes, and based on how other central banks are run, it would cost about £200 million for a nation the size of Scotland to run its own central bank (or roughly 0.6% of how much Scotland gets according to the latest Scottish Budget). Once it is up, the staff of the central bank will handle the rest, creating as much Scottish money as needed to invest in the new infrastructure Scotland needs once it becomes independend, handle all the benefits payments, and accumulate foreign reserves, amongst whatever else it needs to do, and subject to a proper tax regime to prevent rampant inflation as per the Weimar Republic, which need not be austerity, as currently practiced by the Tories (for one thing, the investment in the new structures needed for Scottish independence alone will provide a significant boost to the local economy, thereby increasing the tax revenue collected in Scotland).

Unless, @MauriceBishop, you can prove to us that Denmark needed 55 billion of foreign currency reserves when its central bank was created in 1818, and when its currency, the Krone, was created around 1870?

Actually, that may be hard to prove, given how far back you need to look for suitable data. But there have been new nations founded more recently, before the turn of the millenium, as part of the fall of Yugoslavia. Each of those nations had to set up their own central banks and create their own currency upon independence. It should be easier for you to prove your point by finding out how much it cost those nations to fund their central banks, and whether it is equal, or greater, than the amount of foreign currency reserves they accumulated that year...

MauriceBishop

Sun, 01/14/2018 - 17:05

It is the markets, not Nicola Sturgeon or the amateur economists of CommonWeal, who will decide if independent Scotland has the right amount of reserves to make the currency credible.

You can't accumulate foreign currency reserves by printing notes that no one will accept.

The only option open to independent Scotland is to run primary budget surpluses. If you want to know what that looks like for the average man in the street, look at Greece.

"The up-front costs consist only of the staff, buildings and IT equipment needed to run the central bank, plus the money needed to print out coins and banknotes, and based on how other central banks are run, it would cost about £200 million for a nation the size of Scotland to run its own central bank (or roughly 0.6% of how much Scotland gets according to the latest Scottish Budget)."
- and yet, Alex Salmond wouldn't touch it with a bargepole, and Nicola Sturgeon is terrified of discussing it in public, and has hired a PR firm to give her words to say. That tells you all you need to know.

You need a policy that works in 2018, not 1818.

Thy-Robocop

Sun, 01/14/2018 - 23:22

@MauriceBishop: The markets will have to accept the new currency once an independent Scotland passes laws so that all taxes due to the Scottish Government are to be paid in the new currency, otherwise they can’t do business with Scotland.

How else do you think any of the new currencies made in the last few decades and still in use have been accepted by the markets? Would the markets have accepted the Euro if they Eurozone members were still allowing for taxes to be paid in their original currencies? Would they have accepted the Croatian dinar, or the Bosnian dinar, if they weren’t paying for taxes in the newly independent Croatia, or Bosnia and Herzegovina? This is actually quite similar to Scotland’s situation, since the Yugoslav dinar was still around at the time even though Yugoslavia itself was breaking apart. By your recogning, the markets would not have accepted those new currencies, and would have forced the new nations to run budget surpluses or stick with the Yugoslav dinar of their ‘parent’ nation. Yet somehow they still exist to this day, even though Croatia has been running budget decificts for most of the time it has existed. Indeed, the Wikipedia article on its economy seems to say that it has actually improved over the years, despite their deficits. How do you explain that?

I mean, goodness, there are shops that accept Bitcoin. Bitcoin is not backed up by any state laws or taxes to a Bitcoin Central Bank, yet they still found a value for it, and now it is worth thousands of dollars. And there are a few cities in the UK that are printing their own currencies as well, such as the Bristol Pound, which was made in 2012, and still exists to this day. How do you explain the fact that it is still going, when Bristol still accepts Pound Sterling in its shops and to pay taxes?

https://en.m.wikipedia.org/wiki/Bristol_Pound

On another note, I am a bit disappointed that Salmond and Sturgeon don’t discuss the currency issue, but I think it’s mainly because there’s no active independence campaign running, rather than because they are terrified of the challenges of a new currency. If there was anything to be terrified about it, Common Weal would have found it by now. A lot of their reports are essentially big literature reviews on what others have done before, not brand new policy created from scratch (and where they do create policy from scratch, they hire experts to write those sections, such as Richard Murphy for their paper on taxation), so if there were any bad examples, they would have compared them with the good ones and worked out why things didn’t work out, in order for an independent Scotland to avoid repeating those mistakes.

MauriceBishop

Mon, 01/15/2018 - 13:04

"The markets will have to accept the new currency once an independent Scotland passes laws so that all taxes due to the Scottish Government are to be paid in the new currency, otherwise they can’t do business with Scotland."

Then that is what will happen. Remember in 2014 when John Swinney said that the reason to vote Yes was that then he could borrow billions to "undue austerity". That won't be possible if the currency is risky, because the markets will just say no, the risk/reward scenario is out of whack.

"How else do you think any of the new currencies made in the last few decades and still in use have been accepted by the markets? Would the markets have accepted the Euro if they Eurozone members were still allowing for taxes to be paid in their original currencies?"

All of the national currencies ceased to exist when the Euro was brought in, so no bank, corporation or person in the Eurozone had any option; and it was backed by reserves - those of the former national central bank. And because of its sheer size and the disappearance of the D. Mark, it instantly became a reserve currency. So I hope that you can see how the Euro has absolutely no bearing on a currency for Scotland.

As for "any of the new currencies made in the last few decades" - name which countries you are thinking of that are a close match to the size and state of development of Scotland.

Nobody attempts to borrow on the international markets using the Bristol Pound.

"If there was anything to be terrified about it, Common Weal would have found it by now." Well, now. Common Weal is ideologically committed to independence. So when the currency issue pops up as an obstacle, it is treated as something that has be explained away. The amateur economists who wrote the "White Paper" on currency started from the preconceived assumption that they could make the case for an independent currency affordable. They then went looking for data that would support their conclusion. Their work was riddled with errors - both of fact and logic - and they've not responded to any of the critiques it received.

Read this if you want to know what a real currency expert with no ideological commitment to independence says about currency: http://www.gla.ac.uk/media/media_358421_en.pdf

Key passage:

"The ball-park cost of setting up a separate currency, purely in terms of the foreign exchange reserves required, is a minimum £40bn. This is the sum of money similar sized Nordic countries - such as Denmark, Norway and Sweden - need to run a variety of different independent currency regimes, from a float to a fixed rate, and a managed float."

He wrote that in 2013 when the forecast for iScotland's finances looked much better than they do now.

Continuing:
"to have a separate currency an independent Scotland would need to run a fiscal austerity programme in terms of having a budget surplus of 5% of GDP just to balance the external books. To gather in the sums of money needed to run and independent currency regime would require an even larger fiscal surplus, perhaps up to 10% of GDP."

That is why Salmond didn't and Sturgeon won't discuss the issue. They know the voters would never vote for it if they understood what it really meant for their futures.

That is also why Sturgeon has hired a PR firm to work on the question for her.

Thy-Robocop

Mon, 01/15/2018 - 23:27

@MauriceBishop: You seem to be missing the point I was trying to make here. How can markets reject a currency, if it is the only thing that can pay for taxes imposed by the government over the territory of the nation it governs?

Your next paragraphs does suggest the answer to that question. The Euro needed legislation and agreements in order to have the other currencies cease to exist, including legislating that taxes could only be paid via Euros, otherwise people would still be paying them using the physical currencies of their home nations, which were still in circulation up to 2002, despite the Euro replacing all Eurozone currencies virtually in 1999. The same methods would have been used by nations emerging from the former Yugoslavia to back their new currencies, else they would have had to defer to the Yugoslav dinar still in use by Serbia. And the same method is also being used by Bristol City Council to ensure that the Bristol Pound is being put to use, despite the fact that it still uses the regular pound sterling.

An independent Scotland would be able to legislate over all matters, including those areas currently reserved to the UK government. There's no reason why it couldn't impose laws to force the use of the new currency, and once those laws are in place, the markets will be forced to follow, regardless of whether the currency is 'risky' or not. The range of examples I've provided shows that it works just as well for a community currency for small city as it does for a large currency union between multiple nations.

Of course, the markets will demand high interest rates on borrowing if they perceive the currency is risky... but then again, a nation that owns its own currency doesn't have to borrow from elsewhere, when it can print as much currency as it needs to run its economy, as Modern Monetary Theory would suggest.

On that note, I suggest you read up on Modern Monetary Theory, as it underpins a lot of Common Weal's work on how an independent Scotland can manage its economy, and it will help you understand why Robin is so optimistic despite the 'issues' you keep pointing out to him. The following blog post explains how it could be used by showing how the UK government could fully fund the NHS without extra austerity elsewhere, and indeed how it could use those same principles to end austerity.

http://www.taxresearch.org.uk/Blog/2017/10/16/can-we-afford-the-nhs/

MMT would also provide an alternative to the crippling austerity suggested by the paper you linked to build foreign currency reserves, and those principles have already been applied by Common Weal in their papers, so you'll find that they've probably have addressed the issues raised in the paper you linked already.

And I'm starting to think that if we are ever going to settle the currency issue, or end austerity in the UK, the Yes movement will need to start educating everyone on Modern Monetary Theory, and make sure the SNP get the memo, so that they can make a better case than they are doing now.

MauriceBishop

Tue, 01/16/2018 - 16:32

I'm not missing anything. The ability of the Scottish Government to force use of its currency stops at its borders. The international lenders who have the billions that the SNP say they are so desperate to borrow will just say "No." And the foreign firms who sell the goods that Scotland's private enterprises, and councils, and the hospitals, need to buy will also just say "No."

Well, what they will actually say is "No, not at the exchange rate that you want".

But hopefully now you get the drift.

Why does nobody say "No" to receiving Danish Krone? Because the Danish government is fully committed to maintaining parity with the Euro, and has the resources it needs to maintain that peg, and has, in the past, demonstrated that it will use them as and when needed. So no one runs a substantial risk of the Krone falling in the value in the time it takes for them to sell it on for a different currency.

Imagine you are a lender who sent the independent Scottish government 1.0 billion pounds sterling, in return for a piece of paper that says in one year the Scottish government will pay back 1.05 billion pounds Scots. Now, imagine that over the course of the year the pound Scot loses 20% of its value vs the pound sterling.

What is your piece of paper worth now?

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