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Wings Over Scotland

We are at war with Eastasia

Posted on January 05, 2012 by

I'm often struck by the ability of the Unionist parties to switch their narrative back and forward on the hoof. They showed not the slightest shame or equivocation, for example, in the way they flipped overnight on the 6th of May 2011 from saying that there should never be a referendum on independence, particularly at times of economic crisis, to the emphatic insistence that there must not only be such a referendum, but that it must happen immediately. Labour opposed the Council Tax freeze and supported tuition fees, only to wake up one morning last spring and decide to swap those principles over, instantly campaigning for the new reversed positions as if they were lifelong principles.

But today's reaction to the news that Scotland's economic output almost precisely mirrors that of the UK as a whole, and is in fact the second most-productive region of the country after the South-East of England, provides us with a particularly good example. Having spent most of the last seven months doggedly trotting out the "too wee, too poor, too stupid" line and urging Scots to stick with their benevolent Southern neighbours without whose financial assistance an independent Scotland would be an economic basket case, suddenly the fact that the Scots more than pull their weight is evidence that the Union is working for us.

It's an odd spin on the figures. For one thing, these numbers are merely relative – the fact that Scotland is doing as well as the UK isn't in itself saying much, as the UK is currently one of the world's most indebted nations, requiring brutal surgery to try to balance the books. Secondly, the stats clearly show that Scotland is indeed subsidising most of the UK, rather than the other way round. Given that there are ten times as many people in that area as in Scotland, it doesn't take an arithmetical genius to work out that were all of Scotland's output to stay within her borders, it would make a huge positive impact on the country's economy. If you go out to dinner and you pay for ten other people's starters, that's an awful lot of money you could otherwise have spent on your own pudding and drinks.

(The elephant in the room is of course London, which generates 171% of the national average GDP. But since most of that is accounted for by the machinations of the City – which bring benefit to nobody but themselves – it's a rather false picture, rather like hacking one of your legs off and proudly turning up at Weight Watchers proclaiming that you've shed a stone and a half in a week. We wouldn't be all that surprised if it turned out that the Bank Of England's creation from thin air of hundreds of billions of pounds of imaginary money counted towards London's GDP, for example.)

GDP isn't a very reliable guide to anything*, but in so far as these figures show anything they demonstrate that Scotland has absolutely no economic reason to fear independence. Nevertheless, we keenly await the next set of stats which can be spun to suggest otherwise, so that the FUDs can once more switch seamlessly from proclaiming Scotland's happy equal partnership in the Union to dire fearmongering about how we're underperforming subsidy junkies who mustn't dare try to go it alone. We're sure it'll be along in a matter of days.


* "GDP is in any case a perfectly useless measurement – any kind of economic activity adds to the gross domestic product. At the site of a zinc factory laden with pollutants there is the gain to the economy from all the zinc manufactured and sold, there is the gain from the tens of millions of dollars the government must spend to clean up the site, and there will be a continuing gain from medical treatments for workers and townspeople made chronically ill by living amid all those contaminants. As the economist Herman Daly once put it: 'The current national accounting system treats the Earth as a business in liquidation'.

Or as three other leading economists dryly observed in an article in the Atlantic Monthly last year: 'By the curious standard of the GDP, the nation's economic hero is a terminal cancer patient who is going through a costly divorce.' So why do we persist with this preposterous gauge of economic performance? Because it's the best thing that economists have come up with yet. Now you know why they call it the dismal science."
– Bill Bryson, Notes From A Big Country

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    1 to “We are at war with Eastasia”

    1. Bugger (the Panda) says:

      Yes, that is an intersting one, the QE and where did it go?
      It certainly did not go into the greater economy, as the banks used to help liquidise their capital base. So, did that show up in the City as GDP?
      You also for got that, nothwithstanding the fact the Scottish Oil taxes go straight to the Treasury, would these and the tax on the profits of BP be included in the revenue from London?
      Tax out the oil tax and then profits on the oil companies and wow big drop for London.
      and then the Olympics

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