Bill Mitchell has published a two part analysis of the Scottish Growth Commission report. I strongly recommend reading both. There is not a Rizzla paper of difference in opinion between us. My main commentary was here. Bill's is longer and more technical and on this occassion that is of real value.
What Bill concludes is this:
The Growth Commission recommendations are consistent with the mainstream neoliberal consensus of these issues. They are not conducive to the creation of a vibrant, progressive nation.
Scotland would be exposed to British government decisions yet have no political stake in those decisions.
If the Scottish people determined that they wanted to retain the use of the pound as the national currency, then Scotland would be better off staying within Britain and exerting internal political pressure to improve its situation.
That is an inferior outcome to establishing an independent nation with its own currency.
However, it would be much better than declaring independence but then continuing to use the pound and accept whatever monetary and fiscal policies the British government decided.
Yes, in that situation, the Scottish government (as now) could have some fiscal initiatives. But, ultimately, when the crunch came, it would face a shortage of pounds and austerity would be required.
Overall, an independent nation has to have its own currency and monetary policy. Otherwise, the independence is a sham.
He is right.
The Scottish Growth Commission' recommendations set Scotland up to fail. That is true whether appraised economically, politically or as a potential nation state.
I sincerely hope the message gets through to the SNP this summer.
In the meantime I suggest reading what Bill has to say.
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[…] Richard Murphy summed up Mitchell’s articles (original here): […]
“There is not a Rizzla paper of difference in opinion between us. ”
NB Other brands of cigarette papers are also available 🙂
Are they?
Oh ! Good heavens yes. I haven’t used Rizzla for years.
I haven’t ever….
You are completely correct as of course is Prof. Mitchell.
But is anybody in the SNP listening? Let it not become SNP policy, or for that matter any other party before or after independence.
I hope the up-coming SNP conference has some opposition to it.
I hope so too
Brian Stobie says:
“I hope the up-coming SNP conference has some opposition to it.”
The work needs to be done before then. It needs killing before it gets chance to be tabled at conference. Conference is for talking about sensible stuff not arguing about pish.
Get lobbying. Not just your MSP, but everybody you talk to. Become seriously boring about it.
I am less anxious about this. There are critics like Common Weal and Craig Dalzell (‘The Silver Chain’) rebutting the Growth Commission case. Social media websites in Scotland are discussing the issues, and commentators are writing to MPs and MSPs.
The Growth Commission puts the Neoliberal argument on currency in transparent terms; this provides the platform for critics to deconstruct the argument; and convey the case to the general public – who still largely think Government is an overblown household. This is a real opportunity for MMT ideas to engage with a broader public, through the Growth Commission Report (which is close enough to the governing party in Scotland that such a debate cannot be missed). I would ask anyone with the influence to ask MMT economists like Steve Keen or Randall Wray (et.al) to engage directly with the Growth Commission Report findings and write on it; because what they write will be read in Scotland, and circulate where it matters. This is a real opportunity for MMT. Please take it.
Also use my White Paper on tax – Common Weal are
It is explicit in saying a new currency is essential
And you, Richard; but you are well known in Scotland, and people (political parties, politicians and journalist-hacks) take ‘sides’ in a debate for purely political purposes – as you know. Some input from MMT economists seen to have no dog in this particular political fight (or that cannot, even glibly, be presented in this way by hacks) is also needed.
I have offered….
“I have offered….”
You’ve done rather more than that, Richard.
But it’s good to be getting some stuff to circulate that backs up what you’ve been saying for a long time and which is targeted at the Scottish proposition specifically.
And it was through the piece you recorded for Wings and Phantom Films that I came in. I hadn’t even heard of MMT before then.
Rally?
Wow….
I’m just back from holiday and have missed a lot of this issue. I’ve got a lot of catching up to do, so apologies if I’m reiterating what others have already said.
In the ongoing debate it’s worth stressing that the economic mess which most people in Scotland and the UK are suffering is a direct result of neoliberal economic policies. Brexit hasn’t happened yet, so it’s a minor contributory factor, but neoliberal economics is why we’re in this mess. What’s needed is fresh thinking and an independent currency, just as it should have been in 2014.
I’m kind of frightened to ask but is there anything else that the SNP is completely clueless about?
Their ignorance on this topic is not a good indicator and it does not instill confidence in the idea that they would handle other issues well.
Marco is worried about SNP competence in government
You are assuming that this report actually is approved of by the SNP.
I’m not sure of that, although the lack of rebuttal is a little concerning.
It may be a ploy to have the public demand the currency that the SNP seems happy to deny them. OK. Fanciful wishful thinking….
I’ve no idea what happens behind the scenes. But I’m pretty sure there’s a lot we don’t know much about because of the way the the media lashes into anything.
“As they say “one should never show an idiot a half finished job”.
Even in the FPTP GE 17, the SNP took the overall majority of seats in Scotland, though you could be forgiven for believing it was a Conservative landslide if your only news source was the BBC (crosses himself ostentatiously and spits ) and MSM.
Anyway they couldn’t possibly do a worse job than the present basket cases we have to live with in Westminster.
If you need a refresher have a scan at the ‘Wee Black Book’ and see how much you have you have forgotten about. https://wingsoverscotland.com/the-wee-black-book/
What are you comparing their “cluelessness” against? Almost nothing. The early Scottish governments following the creation of Holyrood were largely inert. For political reasons “managerialism” (conformity within the ‘status quo ante’) was the prime driver of all policies; at best it had the purpose of ensuring the credibility of Holyrood with a basically ‘small-c’ conservative populace. The SNP have simply done this better than the rest. Now more is required of them, and that is much, much more difficult (and potentially contradicts what they believe has succeeded).
I think there is a daunting awareness of this – not least because it is ‘political’; and ‘nothing-at-all’ in politics can be exploited (by well-resourced media) to appear an alarming and damaging prospect, relatively easily. Hence the ‘foghorn politics’ that is the curse of Holyrood.
Scotland is only now waking from a kind of long-term political catatonia; largely because the political institutions that represent Scotland had increasingly become functionally inert throughout the 20th century (and before), and much of Scottish life at the ‘professional’ and institutional level had fallen into the hands of established, professional, powerful interest groups; who managed large swathes of Scottish life (economy, health, academia, law etc., etc.,) without very directly, or effectively being answerable to anyone (pre-Holyrood, subject to little real political oversight, but cosy deals could be cut); while, partly for longstanding historical reasons, Westminster had no interest in potentially upsetting long established interests, norms and conventions (because Scotland was largely ‘inert’), and found it more convenient to leave Scotland to its own devices, in the hands of complacent institutions, and self-serving but influential interest groups that could always ‘deliver’.
I am of course in this comment over-simplifying the case, but much of functioning, organised Scottish institutional life has found this a very covenient way to operate; largely out of sight, mind or agitation in Scotland, semi-detached even from its own community. We have much to do and the Scottish Government is in the middle of it. It is noticeable that when the Scottish Government does try to do something just a little bit ‘new’ or ‘imaginative’; some major Scottish interest group with resources, attitude and influence has no hesitation at all in taking the Scottish government to court (in Scotland or to the Supreme Court) to disempower it. We should not have illusions about this; it is difficult to achieve change in Scotland.
The ‘establishment’ rules
Scotland will need a strong democracy to overcome that
The SGC is trying to deny Scotland that chance
John S Warren.
That’s an interesting take on where Scotland is and how it got to be there.
Two analogies spring to mind. The old chestnut about the child who wasn’t allowed in the pool before she’d learnt to swim.
And the turning point in WW2 which was marked by the battle for Stalingrad.
The SNP has operated an effective brake on the neoliberal austerity emanating from Westminster and beyond, but a rearguard can only survive for so long before it will eventually collapse. The counter attack had to start before the collapse was complete and before the T34s had gun sights fitted. According to Max Hastings (or was it Antony Beevor) the gunners sighted them by squinting down the barrel with the breech open before loading a shell and firing it.
Not an auspicious start, but it got them to Berlin before anybody else and most of the troops went most of the way on foot. What the Russians found on the way and couldn’t understand, was why the Germans had been so dissatisfied with the opulent and fertile homelands they marched through that they had wanted also to take away from the Russians what little they had.
Scots seeking independence have no designs on Berlin, or even London they just want to be able to live in their ‘Stalingrad’ and not see it destroyed by the depredations of others with greedy eyes and grasping hands.
Hey, Richard this melodramatic tendency….it’s catching. 🙂
Andy Crow,
analogies, metaphors, stories, symbols, signs – all part of the tool kit.
T34 and Stalingrad perhaps not a good example of the art here though. I guess peering down the barrel at a Panther or Tiger was a useful aiming tool, if you had survived to get to point blank range. It is stated that Russian crews in the end, crashed their T34s into the German armour at Kursk.
On your metaphor for fun only:
If the heterodox economists are the T34, then its problems were the crew also had no radio (so communication between heterodox schools). You had to dismantle the floor to get at the spare shells (building a theory as you go, in the face of your enemy) The reason it got to Berlin is the Russians could build far more T34’s than the Germans could build Panthers. (Universities build far more NeoLib economists than we build heterodox economists) The multiplier effect: if you hold the battle field you just repair and resupply the T34’s . If you lose it, you have to rebuild from them from again scratch. (So win the debate). Finally, by the time it got too Berlin it was the T34/85, more firepower and practiced crews, now better than the remaining Germans. (Theory refinement and development, spread the ideas far and wide) the T34 was always reliable, liked by its crews, dealt with hostile terrrain, an efficient, rugged, fighting machine. So much like MMT there 🙂
Well, maybe…
Well. I enjoyed your extension of my T34 analogy, Mike W.
I note Richard’s ambivalent response. I reckon he’s doubtful the T34 would be a match for his old Volvo 🙂
And you clearly know more about the T34 and it’s quirks and strenghts than I do 🙂
🙂
I didn’t wish to disappear into a T34, but it is catching! There was another problem for the Russians; they fired while moving. The Germans followed orthodox technique and fired from stationary positions. The analogy can go on forever; but Kursk was the real turning point, rather than Stalingrad; because after Kursk, and a review of the battlefield by the German engineers of the equipment losses (they still held alot of battlefield ground for some time, I think), the command soon found that the Wehrmacht could never again mount a serious Russian offensive.
To be honest I doubt very much whether the SNP membership will take much interest in the monetary system they get they’re too high on the notion that if they get independence everything will be wonderful much like the approach Brexiteers took to the EU Referendum nearly two years. Detail who needs detail? It’s the SNP leadership that needs to be targetted to spell out the dire consequences of adopting the Neoliberal monetary system ideas of the Wealth Commission Report.
Schofield says:
“To be honest I doubt very much whether the SNP membership will take much interest in the monetary system ……It’s the SNP leadership that needs to be targetted …..”
The membership…? In common with the population at large, some ‘get it’, most don’t. In the same way that so many people don’t ‘do’ politics, millions don’t ‘do’ economics. (cf I don’t do/was never any good at maths)
Speaking to a member (hardly a statistically significant sample) the other evening, she was totally unconcerned about economic issues and we agreed that since she has her cogent reasons for an Independent Scotland she is best campaigning on the issues she’s passionate about and understands. She will win-over those she shares a wavelength with, but would probably be ‘destroyed’ in any discussion about economic issues and lose the attention, instantly of those whose eyes glaze over when you talk economics.
Others locally, in my circulation (also not statistically significantly), will perhaps react differently to the case I offered, and certainly I have one who is adamant Scotland should have its own currency, though I don’t know how solid his economic rationale for that position is.
As for the SNP leadership…. they are doing politics. Politics is a complex game of leading, whilst also following, public opinion. I suspect the party leadership is spread across the entire spectrum of opinion in their reasons for wanting independence and some will undoubtedly not give a toss about the economic ‘niceties’ any more than the majority of MPs in Westminster give a toss. (I would guess there are a few who, don’t even ardently support independence, and are content to be in the ruling party despite the limits of power imposed by the devolution settlement – every political party has its pragmatic careerists)
The truth is this is not a matter of membership OR leadership, it does have to be across the board … a pincer movement and a central thrust to go with it. Each will reinforce the
opinion of the others. Independence is for everybody, so everybody needs to want it.
Traditionally Tory voters, in agriculture and fishing aswell as the ‘general’ business community, are getting very concerned about Brexit implications for their livelihood and are thinking rather more deeply about the opportunities that an independent Scotland offers, and significantly that it might offer them their best hope of avoiding Brexit damage, which will inevitably hit hardest furthest from London.
Brexit has been a gift for the Indy movement. All the arguments have been aired about ‘taking back control’ and ‘sovereignty’ and immigration (which Scotland needs, and accepts it needs). The irony is that whereas England had all this anyway within the EU, Scotland does not have any of it tied to the UK.
Increasingly the BBC’s stock propaganda image of the indy supporters as hooligans with painted faces seems to be representative of a small minority of ardent ‘Unionists’. Only the flags and the face paint are different. The balance has shifted. But the establishment propaganda hasn’t, and almost certainly won’t until it has to scrabble to get onto the winning side.
Which it will, with no apparent signs of embarrassment….. pretending it had been there all the time.
I understand why you say this, but consider this: both in 2014 and now the Scottish Government was prepared to go to some lengths to provide lengthy documents that made some sort of rational case (leave aside whether ‘right’ or ‘wrong’) for policy. It became possible to analyse and deconstruct the argument. In principle no bad thing, although easily enought exploited by others for mendacious or self-serving purrposes.
It is striking that in Britain nothing of substance (capable of being criticised or analysed) is produced at all. The whole argument is drowned in ‘spin’, and nothing else. You may say the UK way works better for those pulling the strings, and maybe so. But really? You wish to recommend this in a civilised society with a developed economy?
John S warren asks:
“But really? You wish to recommend this in a civilised society with a developed economy?”
I’m not clear what it is you think I’m recommending that meets your disapproval, and is in some way inimical to a civilised society or a developed economy. (Assuming we ever get there.)
I think you guys have crossed wires
Try again…
“I think you guys have crossed wires”
That’s rather my impression. Hence my query, to John S. It wasn’t intended to sound combative.