The Flottila Effect

Small countries would never be able to survive the coming economic storms, right? We need to cling on to great stable financial states like, er the USA and the UK, er, right?

The potential economic benefits of Welsh independence have been set out in a new report produced by Harvard researchers Adam Price and Ben Levinger. Adam Price – a research fellow at Harvard’s Center for International Development and former MP – describes a ‘flotilla’ effect of small nations outperforming the bigger ‘dreadnoughts’ over time. The report is a serious and substantial contribution to the debate about sustainable economic growth in small nations. This is particularly timely and highly relevant to Wales and other similar European countries in this time of global economic turmoil.

3 lessons stand out:

  • Small is richer: being small doesn’t hamper a country’s prosperity – in fact there is a ‘small country bonus’ amongst the EU’s member states, with smaller countries growing at a more rapid pace;
  • Smaller countries are frequently the fastest to recover from recession;
  • Four key factors make small nations economically successful – openness to trade;
    social cohesion; adaptability; the EU’s flotilla-like structure
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  1. vronsky says:

    “there is a ‘small country bonus’ amongst the EU’s member states, with smaller countries growing at a more rapid pace”

    Gosh, how awfully BBC. There’s no bonus in growth, and I’d expect a site like this to be nailing the myth that there is, and on a regular basis – to be fair, you’ve done it sometimes. And MEPs think the EU is a good idea? Gerraway! I’d expect a more considered view from the left.

    On growth:
    http://physics.ucsd.edu/do-the-math/2011/07/galactic-scale-energy/

    On the EU, plenty here:
    http://www.spectrezine.org/

    1. bellacaledonia says:

      I take your point – not everything’s editorial – just pointing out different narratives of scale…

  2. Donald Adamson says:

    I have mixed feelings about this. On the one hand, Vronsky is right, to sanction this type of research seems to be legitimating the imperatives of the capitalist growth agenda that the left is supposed to be challenging. On the other hand, an independence referendum is imminent and evidence-based research like this is precisely the kind of material that the independence movement needs more of. In that referendum, the No campaign is not going to be knocking on doors telling people how shocking the capitalist growth agenda is, if only! So we need more research like this about small nations in the world system, small nations and sovereignty, small nations in the EU, small nations and globalisation as well as small nations’ economic fortunes and trajectories. These are the kinds of demonstration effects that help to win arguments.

    We need this not only to counter unionist arguments but, more importantly, to counter the fears that unionists will disseminate about the future prospects of an independent Scotland. These fears will win the argument unless nationalists can counter them. Losing the argument means, among other things, locking Scotland into British second-wave neo-liberalism dominated by Tory governments for another generation, with all that this implies.

    Unfortunately, the reality is that all the main political parties in Scotland are still operating with the paradigm of a growth agenda, informed as it is, among other things, by a psychology of deferral that many of us, not just our mainstream political parties, are guilty of. Whether it’s deferring responsibility for promoting the arguments of a sustainable future to others in our societies or, even worse, deferring that responsibility as well as the responsibility for the necessary systemic change, to future generations.

    Tackling that psychology of deferral is one of the biggest challenges we face, and it’s clear that it is going to take time. The imminent independence referendum is not going to be fought only or even primarily on the issue of the capitalist growth agenda, if only it were, and if we are to avoid being gallant losers in that referendum then we’re going to need more research like this. That shouldn’t stop the independence-supporting left developing its critique of the capitalist growth agenda, it just means that until this critique is more widely shared in Scotland we’re going to need research like this as a short-term means to achieve longer-term objectives.

    Many of the cherished beliefs of the advocates of the capitalist growth agenda are collapsing, financialisation, after providing a temporary boost to capitalist growth, has been self-destructive; the efficient market hypothesis has been unceremoniously discredited; the post-Washington Consensus (the Washington Consensus with the bells and whistles of poverty reduction tacked on) has not delivered ‘development’ to most poor countries; ‘ecological modernisation’ has been illusory; marketisation has not only weakened our capacity for public goods provision but has embedded deeper inequality and poverty even in ‘rich’ societies. And, of course, amidst all of this and more, environmental degradation and the depletion of finite resources continues unabated. But still our political classes cling on to a belief system that so manifestly fails to deliver for the vast majority of people in the world.

    Independence won’t solve these global problems of course and it won’t deliver the required systemic change, no country can do that on its own. But that doesn’t mean that countries, including small countries, can’t do anything, another reason why research like this is so important. So, like Vronsky, I would wearily mock the language of research like this but I don’t think that Bella should be defensive about publishing it, it has an instrumental value that shouldn’t be underestimated. It’s just unfortunate that one of the most interesting posts Bella has published recently hasn’t elicited a better response.

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