Home / Opinion / The right direction for Scotland

If 200,000 voters, or 5% of the electorate had switched their mind and voted “Yes" rather than no, the UK would have been no more after the Scottish referendum on 18 September. The long dismantling of the British Empire would be at an end, a process that began with Indian Independence in 1947. To add irony, Scots often played pivotal roles in the establishment and running of that Empire on which, for a while, the sun never set. Not just the residents of Kolkata will know of Duff College and the Roxburgh Building.

Those of us who grew up in former colonies might have had some sympathy for a proud people with a strong identity demanding self-determination and independence from London. The sympathy would have grown with the imperiousness of the no campaign. Its essential message was that the Scots would not be able to run their own affairs and needed the English. Despite that, the Scots made the right decision and one that has resonance for separatist causes in countries such as Spain, Italy, Canada and India.

According to the no campaign, the reason for Britain to stick together was because not to do so would be very risky for Scotland’s currency, pension, banking and trade arrangements. It was not an entirely emotionless, negative, appeal. When the race had tightened, Prime Minister David Cameron told us in his best plummy, southern accent—despite possessing a Scottish surname—that he would be heart-broken if Scotland left the UK. That may possibly not have had the desired effect. But the no campaign won, even if it was for all the wrong reasons.

There are over 80 countries in the world with a population of Scotland’s or less and many of them are very successful. Denmark is reportedly one of the happiest countries in the world. Many, such as Singapore and Luxembourg are some of the wealthiest. It is true many of the most successful such as Norway, Qatar and Kuwait are oil-rich, but then so is Scotland. Most of them use another country’s currency as Scotland proposed to do, or have an irrevocable fix with one. Many can boast better funded pension funds than most large countries and more solid banks and they have prospered by being competitive and globally integrated. Economic success is not the preserve of the large. Lee Kuan Yew was able to turn Singapore, which on secession from Malaysia in 1965 was one of the poorest countries in the world to one of the richest was because small countries can also be more nimble and easier to transform. The no campaign was based on invoking fears that were not supported by evidence around the world.

One of the reasons why the no campaign took this route is that the real reasons not to secede are more complicated and subtle. The starting point of course is that unlike British rule a 100 years ago, the Scots are not oppressed subjects, discriminated against, exploited and denied equal opportunities. Public expenditure per capita in Scotland shows signs of the opposite. Scots excel in all British activities from architects and economists to scientists and writers and are not under-represented in national honours. Since 1900, there have been three times as many Scottish prime ministers of Britain than their share of the population would warrant, including Ramsay Macdonald, Bonar Law, Arthur Balfour and Gordon Brown. One of the most famous British prime ministers, Sir William Gladstone was a Scot. Assuming no discrimination, being part of a larger stage grants you more opportunities for greater influence. More diversity also fertilizes artistic and scientific discovery. On the other hand, reducing people to a single identity often breeds violence. Racism, sectarianism and religious fanaticism are driven by ignorance and insularity that is less easily found in diverse countries.

Huffington Post recently published a review by my brother, an eminent British psychiatrist, on some fascinating research on the negative economic effects of the kind of solitarist pride that separatists play upon. The research by Pelle Ahlerup and Gustav Hansson, published in the Journal of Comparative Economics found a U-shaped relationship between local nationalism and government effectiveness. Nationalism is a positive force for government effectiveness at low levels. The researchers postulate that this is because it supports cooperation and cohesion amongst citizens. But nationalism transforms into a malign influence at higher levels. Excessive nationalism leads to resistance to new ideas from abroad, increased protectionism and insufficient scrutiny of state agencies. It is interesting that the countries in which local populations are least jingoistic are the economic and exporting powerhouses of Germany, Taiwan, Japan and the Netherlands. Countries with the greatest jingoism today are Egypt, Venezuela, Morocco and Iran where economic troubles are mounting.

The parcelling up of people into solitarist identities is a force for ignorance and intolerance. In its mildest form, it leads to economic inefficiency. In its strongest form, as we see too often in the Middle East, it is a violent force. There is value in defeating separatism, especially if it is done by working hard to support the equality of opportunity for all citizens, irrespective of their geography, region, religion, caste, class, colour, gender or any other dividing force.

Avinash Persaud is non-resident senior fellow at the Peterson Institute for International Economics, non-executive chairman of Elara Capital and formerly a senior executive at JPMorgan and UBS.

Comments are welcome at theirview@livemint.com

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