2007 - 2020

500 Days

6a00d8341c5b0b53ef017d3e6159d8970c-320wi500 Days before Independence Day and a group of economists and academics have published a major new vision for Scotland, called ‘the Common Weal’ based on a Nordic model of social justice, equality and participation.

The Jimmy Reid Foundation has said: “The current debate about Scotland’s future has opened up a window to economic and social models outside the UK. There is much that we can learn from them. Many aspects of the Nordic countries, many aspects of economies such as those of Germanic countries, aspects of the large-scale cooperative model in many parts of Europe and other lessons from abroad are now informing Scottish debate. What we see in all these cases is that economic performance and social outcomes greatly outstrip the UK.”

The Sunday Herald has this report on this major development in the independence debate:

A group of economists and academics has stepped into the independence debate with their own vision of how Holyrood could transform Scottish society after a Yes vote in the referendum.

They argue Scotland can become a new Nordic-style country by cherry-picking the best bits from Denmark, Norway, Sweden, Finland and Germany and implementing them under independence.

Instead of continuing the UK’s decline into a low-wage, low-skill economy in which markets rule, public services dwindle and the gulf between rich and poor widens, they say Scotland can choose a new direction of travel.

It wouldn’t be utopia, but it would, in theory, include expanded cradle-to-grave public services, better jobs, better wages, a more diverse economy with more shared ownership of industry, more local democracy, less social division and more gender equality. Instead of state intervention being seen as a humiliating act of last resort, it would be embraced as contributing to the common good.

The sting would be higher taxation – but not necessarily higher taxes for all – and the impact would be offset by those higher wages.

Its proponents call it the “Common Weal” model, after a favourite concept of the late Clydeside trades union leader Jimmy Reid, based around collective endeavour.

The blueprint runs counter to 30 years of free-market neo-liberalism in the UK, and many will dismiss it as the usual failed lefty pipedreams.

But its advocates point out the ideas are already part of the furniture in the Nordic countries – they’re just not being tried here, and perhaps our economy and society wouldn’t be in such a mess if they had been.

While the UK is one of the most indebted countries in the world, the Nordic countries are among the most solvent. Independence, they argue, offers the chance to swap our old, broken, brutal economic model for a more enlightened one and change our fundamental outlook as a society.

The intervention is more than academic fancy. In recent weeks, a private discussion paper about the Common Weal has been circulated by the left-wing Jimmy Reid Foundation within the highest echelons of the SNP, the Yes movement, trades unions and business people.

The reception from non-politicians appears to have been a mix of gratitude and relief there is finally some joined-up thinking on offer.

Officially, the Yes Scotland campaign says it’s “an interesting contribution to the debate”, but privately its key players are far more positive and keen to push the concept. MSPs are interested too.

The paper is doubled-edged. On one level, it’s an indictment: its very existence implies that the SNP have failed to make a vivid, engaging, day-to-day case for independence.

But it is also aimed at catapulting the debate forward, away from the straight Yes/No arguments on separation and the distractions lobbed around by Better Together, to discussing various models of independence.

It puts forward a “spine” of six interlocking strands aimed at a “fundamentally new approach to the economy and public governance.”

The changes are:

  • Tax reforms designed to reduce inequality;
  • A better welfare state;
  • Reform of the finance sector;
  • More diverse ownership of industry;
  • More variety in business types;
  • Greater democracy at work and in communities.

Intended to attract cross-party support, the paper is not prescriptive, but suggests how an independent Scotland could become more like her Nordic neighbours.

According to Mike Danson, professor of enterprise policy at Heriot-Watt University, one of the paper’s authors, Nordic countries have higher standards of living because their economies are based on “smart specialisation”.

He said: “These are the most innovative and competitive nations in the EU, with a much better balance between manufacturing and financial services. Their highly productive enterprises pay some of the highest wages in the world by making much more effective use of workers’ skills and giving them the autonomy to participate in developing their companies.

“Sustainable and fair economic growth can be pursued in an industrial policy based on a virtuous cycle of investment in people, enterprises and research actively co-ordinated and promoted by the government.”

Another feature of a Nordic Scotland would be an expanded welfare state funded through a higher overall tax take, some of it derived from more publicly owned industry. Instead of dwindling benefits being used as a political football, as in the strivers versus shirkers debate, the Nordic Folkhemmet or People’s Home concept would be imported, which characterises welfare as mutual support delivered via the state not merely handouts.

“A Scottish welfare system should be framed around notions of security, justice and equality,” said Ailsa McKay, professor of economics at Glasgow Caledonian University.

The finance sector would also be overhauled, with a move away from the profit-mania of the RBS days, and a shift to lending by state banks to Scottish companies to foster local small and medium-sized enterprises (SMEs) focused on exports and research. Germany’s SME base, the Mittelstand, accounts for 70% of the workforce and 50% of GDP.

The ownership of industry would change under the Common Weal as well as its form, with greater public and community involvement.

One of the things Norway did that the UK didn’t during the North Sea oil boom was to keep a publicly owned oil company, Statoil, which now earns a fortune for the country.

Andy Cumbers, professor in geographical political economy at Glasgow University, said an independent Scotland shouldn’t repeat the UK’s mistake with wind energy, and should have a direct stake in renewable companies. “Denmark’s emergence as a global leader in wind energy has been built around co-operative and localised forms of public ownership that have stimulated broader participation and spread the benefits across the nation,” he said.

The report comes as a volley of reports from the Unionist camp about defence, the currency and international affairs, as well as a very awkward paper on pension problems from Scotland’s top accountants, have led to navel-gazing in the Yes camp.

David Cameron’s intervention on defence, when he thumbed his nose at Alex Salmond by swaggering along the deck of a Trident submarine, led to a debate about the SNP’s position of wanting to shelter under the Nato nuclear umbrella while ousting nuclear weapons from Scotland. It is not a stance backed by the SNP’s Green or Scottish Socialist allies in Yes Scotland.

Likewise, George Osborne’s recent visit to Glasgow to warn Salmond’s goal of an independent Scotland keeping the pound in a currency union with sterling was “unlikely” to work, has generated internal bickering. Not because the Yes camp think Osborne is right – they’re sure he’s bluffing. But because the Chancellor inflamed the nationalist old guard, who came out and demanded a separate Scotland have its own currency.

Dennis Canavan, Yes Scotland chair, took to the airwaves to advocate a Scottish currency, joining former SNP leader Gordon Wilson, ex-SNP deputy Jim Fairlie and Scottish Socialist co-convener Colin Fox in rejecting Salmond’s approach.

More worrying for the Yes side, the split over the pound exposed deeper fears that Salmond’s cautious ‘don’t spook the voters’ pitch on independence, with its emphasis on continuity, is holding back the cause by failing to make an inspiring case for change.

The gripe has been made before: Green MSP Patrick Harvie has warned against offering voters a slightly more Scottish version of the status quo. But, in recent weeks, the feeling has been growing stronger and louder in the Yes camp. “It’s like the floodgates are about to open,” says one exasperated campaigner.

The new blueprint – and its mentions of nationalised industries, government running banks by design not in bailouts, a bigger welfare state, higher taxes, workers’ rights – may sound alien to voters after years of Thatcher, Blair, Brown and Cameron. But the point and potential attraction of the Common Weal lies precisely in being different. If its supporters can persuade people theirs is a vision for the future, not just an idealised past, the independence debate might start to get interesting.

The following are described as the benefits of the Nordic model:

• Income and wealth inequality are low and social cohesion is high
• Pay is higher, poverty is very low and a much lower proportion of jobs are in unskilled, routine sectors
• Total tax take is higher and this enables significant redistribution and strong public services but without endemic debt and deficit
• The welfare state is strong and public services are extensive, well funded and generally universally available
• Finance is seen as a means of sustaining industry and providing financial security for individuals, not as a speculative means of profit maximisation
• Economies are diverse with a much more balanced portfolio of industry sectors, much more emphasis on product innovation, a much larger medium sized industry sector exists, there is a much more diverse ownership profile (including more extensive public and community ownership and cooperatives), and a much more mutual and coordinated approach to economic development is taken
• Society is generally more inclusive with better gender and other equality in politics, on boards of governance, in leadership positions etc.
• There is an assumption that active democracy is beneficial for all, whether that is a very highly democratic structure of local government or industrial

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  1. Peter A Bell says:

    People might like to download the paper in order to study it. – http://bit.ly/169nlUT

    1. bellacaledonia says:

      Thanks

  2. Paul Cairney says:

    My impression is that the ‘Nordic model’ is underpinned by some kind of cultural/ long term support for relatively high taxes, reinforced by the tangible benefits in terms of welfare state. Seems difficult to replicate in Scotland before the vote, since few will want to associate a Yes vote with an economic cost.

    1. Also wondering: where is the vital context of ecology/environment (of climate change and environmental degradation)? – and the imperative for a rapid transition to renewables alongside a massive cut in energy use – the evolution of sustainability and resilience(to those changes already locked in place, and those that will inevitably flow from the further crossing of ‘tipping points’)

  3. The case for Nordic-influenced social democracy
    NB: Not transformation and the replacement of capitalism
    However, if re-positioned as non-reformist reforms oriented in that direction?…..?

    NB: Also lacks a challenge to the role of the state in our corporate-state/state-corporate world?

    Further – worth noting the (increasingly neoliberal) directions of these nations – not to mention their previous ‘successes’ as based, in part, on systems/institutions/relations that have led to oppressions/repressions/exploitations across much of the rest of the planet? Indeed, one based on competitive nationalism – and the nation state as ‘container’ (impact of policies are only judged within the container – the inevitable ‘losers’ in such competition outwith the container are invisible-ised?)

    A really interesting contribution, to the much needed critical debates around the independence questions – and certainly one that moves beyond much of the continuity neoliberalism of present discussions to oppose TINA and suggest there are alternatives?

  4. Also wondering: where is the vital context of ecology/environment (of climate change and environmental degradation)? – and the imperative for a rapid transition to renewables alongside a massive cut in energy use – the evolution of sustainability and resilience(to those changes already locked in place, and those that will inevitably flow from the further crossing of ‘tipping points’)

    1. bellacaledonia says:

      Really good question. My understanding is this is framework not an end point Gordon. The issues you mention are essential.

    2. Ray Bell says:

      I think the Nordic countries have a good record on renewables.

  5. Ray Bell says:

    I think the Nordic countries have a good record on renewables.

  6. Richard says:

    The Nordics do a lot right of that there is no doubt. But this reads a little like an idealised version of the so-called Nordic model. They all do things quite different so I am not sure that there is such a thing as the Nordic model. The Norway and Sweden part of the Nordics are both more indebted than the UK.
    http://www.edmundconway.com/wp-content/uploads/2013/02/leastindebted.jpg

    Would Scotland be happy with a private company providing the fire and ambulance service? That is what happens in Denmark.
    http://en.wikipedia.org/wiki/Falck_%28Denmark%29

    Market income inequality is almost the same in Sweden as the UK. Their lower level of inequality is not through wages but almost entirely with taxes and transfers.
    http://www.peterfrase.com/2011/08/redistribution-under-neoliberalism/comment-page-1/

    1. Peter A Bell says:

      An ideal is not a bad starting point in politics.

      1. bellacaledonia says:

        Well said Peter and we’re so used to the race to the bottom of everyday politics that this is a refreshing chance. Let’s have some bloody aspiration! Let’s raise the bar – isn’t that what independence is about?

  7. George Gunn says:

    As far as renewables are concerned they – wind, tidal etc. – are all directly linked to the ownership of land and seabed. The wind farm policy in Scotland is a dogs dinner with landowners and utility companies mutually exploiting the lack of social and fiscal legislation to make money and a mess of the visual environment. The Pentland Firth development is stymied by the dead hand of the Crown Estate. Until we tackle ownership so that no one person can own, for example the island Tanera Mor which is on the market this morning for a cool £2 million – then Scotland’s energy policy and the environmental benefits which it could bring will not progress. It’s all very well for the Scottish government to say that they want to meet a certain target in green energy but their lack of conviction on land ownership and related taxation is a typical liberal failing. The current half baked approach means the economy of the Highlands will not develop, our population will not increase – which is what we need – and Scotland as a nation will lose out. I welcome the Common Weal document but it is only a beginning. Thatcher’s cabal wasted decades of North Sea resources. Let’s not make the same mistake in Scotland.

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