Historian Kevin Tennent on the Economics of Scottish Nationhood

3 12 2009

Scotland's Flag

The British business and economic historian Kevin Tennent has published some thoughts about whether an independent Scotland would be a viable economic unit. On Monday, Scotland’s first minister announced that the country would soon be holding a referendum on independence. Monday was, of course, St Andrew’s day, the national day of Scotland– and the day of your humble narrator’s patron saint!

Tennent’s blog post draws on his extensive knowledge of Scottish, British, and global economic history. He begins his analysis with a discussion of the Darien scheme of 1690, the abortive attempt by Scotland to establish a colony in Panama. His blog post also pays attention to more recent developments. Dr Tennent writes:

“The collapse of Iceland’s banking system forced it to seek a £6bn emergency loan from the International Monetary Fund; unfortunately much of this will end up being spent recompensing savers abroad. Had Scotland been independent during the present crisis, then with RBS alone loosing around £24bn in 2008 the country would also have been driven to seek aid from the IMF; the whole of Scotland’s GDP was £86bn in 2006 (although this excludes oil and gas revenue). To cover this loss alone Scotland would have been forced to spend a more than a quarter of its GDP.”

This post should interest Canadians for two reasons. First, there is an obvious parallel between the question of Scottish independence and the separatist movement in Quebec. Would Quebec, which lacks North Sea oil, be a viable state? Second, there is the less obvious but even more important parallels between Scotland’s relationship with England and Canada’s relationship with its wealthy and populous southern neighbour. Most English-speaking Canadians would be in favour of Canada remaining independent of the USA. If they had an opinion on Scottish independence, it would probably be that Scotland should stay in the United Kingdom. Canadians are conservative in the deepest sense of the word and generally prefer to keep things as they are.   But we need to ask ourselves why, if independence is a good thing for Canada, would it be a bad thing for Quebec and Scotland?  What’s good for the goose may also be good for the gander.