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The Economic Crisis and the Independence Debate

I LIKE THIS ARTICLE SO I PUT IT HERE , HOPE ISOBEL DOES NOT MIND:

The Blog - Isobel Lindsay http://tinyurl.com/amwsdr

After the financial sector disasters, promoting the economic case for independence will be more difficult unless that case is presented as an opportunity for new thinking. That means drawing a clear line between the neo-liberal consensus of the past two decades and aspirations for Scotland’s economy and society. People’s response to an economic crisis can go in two directions – hunker down and cling to the status-quo or seek out new solutions. Independence has to be seen as the chance of a fresh start.

The banking crisis arose not just from some sub-prime mortgages in the U.S. but from the fundamental flaws in the neo-liberal ideology that promoted unrestrained markets driven by personal and institutional greed. Corporate power was assumed to know best and to have the right to drive public policy.

Fortunately Scotland kept a substantial public sector although it was criticised for doing so (remember how we were told that ‘bad’ public investment was ‘crowding out’ good private investment). We did not go down the route of creeping privatisation in education, health and care services to the extent that the Labour Government has done in England. But too many went along with the view that corporate power and, in particular, large financial institutions would be the base on which an independent Scotland would thrive.

We can make a strong case that the full economic powers of independence are necessary to act effectively on employment, infrastructure and social justice but it will only be seen as a strong case if the public can see a vision of the Scottish economy that is different. We need to go back to Scotland’s substantial strengths and put the emphasis on building a good and sustainable economy. But this has to start with some honest “We got it wrong” confessions. Labour, SNP, Tory and Lib Dem, all got it wrong in relation to what was happening in financial institutions in Scotland. They were too close to the bankers and too complacent about an economy driven by massive debt. To be fair to the SNP on one issue, they have resisted (and have taken a lot of opposition and media flack for doing so) the expensive, speculative vehicles of PFI schemes.

“We got it wrong” can be the start of a new ‘national conversation’ on what we want the Scottish economy to deliver. A debate on the quality of life people want and on sustainable development in the context of a review of Scotland’s natural and human resources would focus on the future and would lead inevitably to the necessity of having core fiscal, monetary and welfare powers here. In this context, the questions will not be about whether an independent Scotland could have poured billions into the banks but about how we create an economy where we have an effectively controlled financial sector that doesn’t need to be bailed out, a sustainable energy policy, good education and social care, more investment in recreation and culture rather than in retail ‘palaces’, greater focus on local manufacturing and food production. We also need a Council of Economic Advisers which includes some strong Left and Green voices given the unimpressive list of recommendations to date from existing members.