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The SNP Growth Commission document has provoked a lot of debate this month. It has many flaws, but the most glaringly obvious is that it has woven into its fabric a belief that global capitalism with its free markets and neoliberal policies is the only possible economic structure for a future Scotland.
It seems to forget that this is the very system that Scotland has been operating under and that it can account for most of its economic woes.
Some SNP supporters may have believed that once it was free of the iron grip of the UK Treasury it would take a different course, but Nicola Sturgeon’s endorsement of the Growth Commission’s report has stated loud and clear that this is not the case.
We should have known that to be the case because since devolution the Scottish government of whatever political complexion has not challenged or even questioned the basic system that shaped its economy. Sturgeon claims that the report explicitly rejects austerity.
And so it does. But those words are merely inserted within a document that has, running through every page, an approach that will almost certainly require it to use austerity measures to meet its fiscal targets.
The commission fails to analyse some basic weaknesses in the Scottish economy. It would have done well to consider the work of John Foster for the Red Paper Collective since 2005.
In March 2018 http://redpaper.net/wp-content/uploads/2018/03/2018-red-paper.pdf Foster describes how the ownership of the Scottish economy has changed in the past 30 years.
He details the steady erosion of the number of major companies owned and controlled from within Scotland. He shows how the past 10 years has seen an acceleration in this process in both the manufacturing and finance sectors. Many well-known “Scottish” companies are owned by international investment companies. Today only four significant financial institutions remain under broadly Scottish control. All the Scottish registered banks are owned and controlled from outside Scotland.
This process of externalisation has resulted in a loss of manufacturing jobs and a huge increase in low-paid, low-skilled precarious work.
As Foster states, “The main thrust of the SNP developmental strategy has been with the neoliberal grain of EU policy — that of offering financial incentives to footloose capital, such as Amazon and Hewlett Packard, or, in terms of a post-independence future, cutting corporation tax on the Irish model to draw in firms from outside.” The commission totally endorses this approach.
The main thrust of the document is that Scotland can emulate other small countries that appear to have more successful economies. The flaws in that approach are numerous, including differences in history, culture, geography, politics, level of exposure to international capital etc.
But the lesson main author Alan Wilson draws is that countries that run tight, prudent economies are doing better than Scotland.
“Overall, small economies tend to be a more prudent in their approach to fiscal policy. A sustainable (desirable) level of public debt is lower in small economies than in large ones. The immediate implication for Scotland is that it should aim to be more prudent than the UK and that it has the opportunity to do this.”
The main role model is New Zealand. It spends several pages regurgitating a 10-year-old New Zealand government paper, presenting it as if it was written for the Growth Commission. It merges an unimaginative prudent capitalist approach with a cut-throat approach to business failure.
They probably had not noticed but the New Zealand prime minister who introduced many of those policies has now denounced them. He says: “They have failed to bring economic growth and what growth there has been has gone to a few at the top.” http://www.radionz.co.nz/programmes/the-9th-floor/story/201840999/the-ne...
It further looks to Denmark with its policy of “flexicurity” which has now been adopted by the EU as an acceptable model to be rolled out within the member states.
Way back in 2012 Dalibor Rohac of the neoliberal Legatum Institute wrote: “Nordic countries demonstrate that in order to make the welfare state work we need a large dose of free market economics. The left is right — the UK should indeed aspire to be more like Scandinavia in liberalising its markets and bringing public spending under control.” This appears to be the lesson the Growth Commission has taken from its research.
Not surprisingly, the STUC is unhappy about the contents of this report. But mostly it is unhappy that it was excluded from the work of the commission while welcoming “the recognition of the need for government, businesses and trade unions to work together.”
It should, rather, be grateful that its name does not appear on it and that it doesn’t have to defend it. Much as STUC general secretary Grahame Smith may think he could have influenced its findings, it is hard to believe that he could have persuaded them to include greater diversity of economic ownership, public ownership and an increase in collective bargaining.
The publication of this document may well signal the end of the broad Yes alliance that allowed disparate groups from revolutionary socialists to conservative business people to project onto an independent Scotland the kind of future their perspective demanded.
The very exclusion of the trade unions from the process of creating the document, while simultaneously calling for partnership with them as a necessary condition for economic success, exposes the contradictions at the heart of the nationalist project, a contradiction centred on class.
As James Connolly put it, “Whoop it up for liberty! After Ireland is free, says the patriot who won’t touch socialism, we will protect all classes, and if you won’t pay your rent you will be evicted same as now.
“But the evicting party, under command of the sheriff, will wear green uniforms and the Harp without the Crown, and the warrant turning you out on the roadside will be stamped with the arms of the Irish Republic. Now, isn’t that worth fighting for?”
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