The price of independence: Scotland and Britain according to the Economist

The magazine 'The Economist' has declared its position on Scottish independence. Their warning to the Scots: 'it'll cost you'. Their stand-point typifies a market fundamentalist view of Britain that denies the vast potential of a Scotland free of the Union.

Gerry Hassan
13 April 2012

It is a sign of the times, and of its importance as an issue, that the global player which is ‘The Economist’ has Scottish independence as its cover and main feature this week, declaring, ‘It’ll cost you: The price of Scottish independence’. 

Their cover, leader, main UK article and a secondary piece, tell something about ‘The Economist’s’ view of Scottish independence, the UK and the world, each of which I will examine.

‘The Economist’ takes a dim view of Scottish independence; it flies in the face of its view of the UK and the world in breaking up this union which has given so much to mankind and to free market values.

Its editorial declares Scots should decide on independence ‘in the knowledge their country could end up as one of Europe’s vulnerable, marginal economies’ and just to underline this picture, sums up an independent Scotland as ‘a small, vulnerable barque’ (1). So that’s a ‘no’ from ‘The Economist’ to the whole idea!

They do concede that Scotland is no ‘subsidy junkie’ and could be viable as an independent nation, even going on to acknowledge:

In fact it performs better than all regions outside the south-east of England, and has done particularly well in the past decade. (2)

Yet they identify four of what they regard as near-insurmountable problems with Scottish independence: the dominance and vagaries of oil (which would make up, they calculate, 18% of an independent Scotland’s GDP), doubts over the prospects of renewable energy, financial services, and the issue of the currency of an independent Scotland.

Some of the above points are based on very shaky foundations. Here is ‘The Economist’ on the EU and currency issues:

Though Mr. Salmond claims Scotland would enjoy automatic EU membership, European Commission lawyers are doubtful. A candidate Scotland would have to negotiate entry terms—and commit to join the euro one day. (3)

This is plain mischievous; and is based on the contentious Constitution Unit research of a decade ago which argued that an independent Scotland allowed the UK to continue sailing on serenely into the future (4). This is a very dubious reading of the UK and constitutional law. Scotland and England created the union that was the UK thus Scottish independence leaves not one new state, but two new states: Scotland and the rest of the UK. They either both get automatic entry into the EU or both have to reapply!

Then ‘The Economist’ claims that Scotland gets more public spending per head than the rest of the UK, which is inarguable, but goes on to claim that this is ‘in part a tacit acknowledgement that it contributes handsomely to oil revenues’ (5). This is plain 100% wrong; Goschen, the institutionalisation of territorial public spending, dates back to 1888 and from exactly a century before Barnett.

‘Edinburgh’s fortunes as a banking centre would be hard to revive [post-independence]’, asserts ‘The Economist’ (6). Yet, at the same time, Edinburgh as a city is booming and recovered well from the shock of the banking crash. This week’s ‘Spectator’ has calculated that Edinburgh is the most prosperous part of the UK outside of London with a Gross Value Added wealth per head of £34,950 (7).

And then there are renewables, which ‘The Economist’ questions. Scotland is the largest offshore renewable energy market in the EU: with 25% of offshore wind, 25% of tidal and 10% of wave power. As ‘The Scotsman’ put it recently, ‘Scotland leads the way not only within the UK but also globally’ (8).

The United Kingdom as ‘The Global Kingdom’

The unstated motivation in this, is ‘The Economist’ vision of the UK (and beyond that, the world). Their idea of the UK is as a shining free market Camelot on the hill, a ‘global kingdom’ of deregulation, marketisation, outsourcing, hucksterisation and bloviating: believing in this toxic cocktail is the new zeitgeist of the 21st century.

‘The Economist’ version of the UK is based on an outsourced, privately run NHS, a privately financed education system, universities in the hands of global winners and elites, privatised law enforcement, the Royal Mail sold off, the world’s oligarchs using London as their playground and the leading tax havens of the global economy centred around the Crown Dependencies (which while linked to the UK are constitutionally not part of it). This is a dystopia of Orwellian proportions, of the illusion of the autonomous, self-governing, sovereign individual – and a reality of anxiety, doubt, constant unpredictability and unsurprisingly a renaissance in organised crime and the shadow economy.

This is an economy and culture where the importance of the English football Premiership league tells us a lot. A majority of its clubs are foreign owned and have offshore financial arrangements, while a majority of all European football club debt is within the twenty clubs of the Premiership. It is not just a metaphor but a direct example of the grotesque distortions of ‘Fantasy Island Britain’.

The UK is the fourth most unequal country in the developed world and according to Danny Dorling, on existing trends, will shortly surpass Singapore, Portugal and the US, to become the most unequal country in the rich world (9). Something for ‘The Economist’ to boast about perhaps on a future front cover?

When it comes to cities, London is the most unequal in the rich world with a chasm of difference between the top 10% income-wise and lowest 10% income-wise of 273 to 1 (the difference in England overall being 96 to 1). As Neil O’Brien, head of the centre-right think tank Policy Exchange, has written in this week’s ‘Spectator’, ‘London is like a Potemkin village for visitors; its population does not represent the UK at all’ (10).

‘The Economist’ as the Dave Spart of the Counter-Revolution

Finally, there is ‘The Economist’s’ take on the future of the world: what can only be described as a utopian globalisation dressed up in the rhetoric and values of a liberation theology of the market. It is actually deep down a linear optimism, a belief that the best tomorrow humanity can hope for is a bigger version of today and thus one profoundly pessimistic and depowering.

The journal’s vision for the future is handily laid out for all to see in its just published, ‘Megachange: The World in 2050’. In a chapter, ‘The great levelling’, it predicts a future where ‘the gap between the world’s rich and poor will be far narrower’ (11). Strangely though, for a book with a multitude of graphs confidently predicting the linear optimism of the future, not one fact is provided which supports this contention.

This tells us that ‘The Economist’ world, for all its pretentions of evidence-based policy, is actually founded on blind faith, dogma and a narrow, inflexible economic determinism. It is the Dave Spart of the counter-revolution: over-earnest, humourless and constantly predictable in its one dimensional, very masculine take on the world.

Scottish independence won’t change the world. It will, as ‘The Economist’ admits in one its quieter moments, be something which can work if Scots want it to.

Scotland is the third richest nation or ‘region’ of the UK, with only London and the South East richer. If you take into account a proportionate share of oil and gas, Scotland is the richest part of the UK apart from London. Even ‘The Economist’ acknowledges the first part of this, but it doesn’t take the next step and concede the huge economic disparities which make up the UK. The entire UK economy is disfigured by the uneven development around London and the South East, with the capital virtually becoming, as ‘The Spectator’ addresses, not just a ‘world city’, but its own empire city, the centre of the empire state building that is the UK.

As the economist John Kay argued last year, Scotland gains and loses by becoming independent and gains and loses by remaining in the union; there are risks associated with both, but for many of us in Scotland, the risks of the union grow higher by the day. Kay wrote that ‘the gain in sovereignty would be limited by the realities of globalisation’ (12), a language of nuance miles removed from some of the Armageddon nightmares presented by some pro-union opinion.

The union that is Scotland and England in the UK has been, as ‘The Economist’ notes, ‘a marriage’. It gave much to both countries through the ages; Scotland contributed disproportionately to the civil servants, buccaneers and soldiers of Empire. It now seems that this marriage has become one of convenience, after the love has gone, and that both parties, while still rubbing along in many ways, barely know how to speak to the other one.

What Scotland is looking for is a renegotiation of the terms of the relationship; not necessarily a full or traditional divorce or separation, but a new relationship of equals in which both historic nations find their place in the world again.

A thoroughly modern relationship where we find mutual respect and affection for each other, remember common interests, traditions and shared history. That would be something fitting to the past we have shared on these isles, and a future shaped by hope and humility.

It would be a future very different from the rather arrogant, patronising, hectoring world of ‘The Economist’ – a world which increasingly works for only a tiny, unrepresentative elite and which is widely seen to have failed after three decades of revolution. ‘The Economist’ may be content to be the ‘Pravda’ of its age, but some of us want to aspire to a different kind of world.



1. ‘It’ll cost you: Scottish independence would come at a high price’, The Economist Leader, April 14th 2012,

2. ‘The economics of home rule: The Scottish play’, The Economist, April 14th 2012,

3. It’ll cost you’, The Economist Leader.

4. Jo Eric Murkens with Peter Jones and Michael Keating, Scottish Independence: A Practical Guide, Edinburgh University Press 2002.

5. ‘The economics of home rule’, The Economist.

6. Ibid.

7. Jonathan Jones, ‘Planet London’, Spectator Coffee House, April 12th 2012,

8. The Scotsman, March 19th 2012.

9. Danny Dorling, Fair Play: A Daniel Dorling Reader on Social Justice, Policy Press 2011.

10. Neil O’Brien, ‘Another Country’, The Spectator, April 14th 2012.

11. Zanny Minton Beddoes, ‘The Great Levelling’, in Daniel Franklin and John Andrews (eds.), Megachange: The World in 2050, Profile Books 2012, p. 181.

12. Gerry Hassan, ‘Anatomy of a Scottish Revolution: The Potential of a Post-nationalist Scotland and the Future of the United Kingdom’, Political Quarterly, Vol. 82 No. 3, p. 376.

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