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Question - What is the intelligent economist's notion of an independent capitalist Scotland? Answer Sweden with oil.
This none too surprising view emerges from the pages of Scotland 1980, a series of essays by a number of prominent Scottishbased economists under the editorship of Professor Donald MacKay. Published in May amid a ballyhoo of publicity which included five TV programmes, Scotland 1980 is a logical continution of the debate in ruling class academic circles concerning the problems of independence begun in The Red Papers (1975) and The Radical Approach (1976). MacKay's contribution is the poorest to date, and verges on the banal as regards the political economy of independence.
The originality of Scotland 1980 lies in another direction: its advocacy of a particular political option for an independent capitalist Scotland based on a sophisticated rationalisation of Scottish economic problems. For MacKay and his contributors Scottish unemployment and low productivity stem from the attitudes of the Scottish trade unions. "Popular attitudes towards equality of incomes and trade union resistance to technological progress and to occupational mobility, have been among the principal constraints upon economic progress", writes SNP David Simpson. National wage bargaining has led the unions to win wages equal to UK levels with only 95% of the productivity, thus putting over-priced Scottish workers out of a job. Scottish unemployment may be twice as high as in the UK, writes Charles Mulvey, but vacancies are also higher, proving Scots workers are voluntarily unemployed because they will not move out of their council houses to find work.
Though MacKay and his fellow economists plead professional neutrality towards independence, it is clear they view self government as creating "a climate of opinion which is amenable to institutional change" where a capitalist government "may more casily be able to assert the primacy of national over sectional interests." Such institutional changes directed against the "sectional interests" of the unions and the working class include the end of subsidised council housing to promote labour mobility. Also, a Swedish-style National Labour Market Board which would integrate the union leaderships into the state machinery. These moves are coupled with an industrial policy geared to tax incentives for industry, pioneered in Sweden, to promote local capitalism.
How does MacKay see North Sea oil revenues fitting into this scenario? Here lies a problem for a capitalist Scotland in 1980. The SNP have stirred up working , class expectations by promising a bonanza spending spree. But capitalist profits
depend on Scotland's dwindling marufacturing sector. Encouraging consumer spending by cutting income tax and doubling pensions will suck in foreign imports, creating a balance of payments deficit, and drive up the prices of the limited local produce. Domestic inflation means exports cost more. The result is a nightmare loss of competitiveness and profits for local capitalists. MacKay has a simple answer a substantial proportion of oil revenues should initially be invested abroad"
There lies the political message of Scotland 1980: the pro-independence sections of the ruling class have no intention of creating an oil-rich paradise for the workers, nor have they any stomach for state capitalism. Thus oil wealth is an embarassment. All it enables the Scottish capitalist class to do is avoid a balance of payments problem by providing massive reserves. This frees the capitalist government! from domestic constraints on growth and profit. MacKay says in black and white what we all suspected: the workers in oilrich Scotland will fare no better than the average Arab worker.
This catch-22 of North Sea oil is no more than the contradiction of maintaining a capitalist economy, an assumption which the pop economics of Scotland 1980 never challenges. Implicit in MacKay's scenario is therefore an attempt to square the circle by 10
breaking the unions in order to allow the launching of Scottish oil imperialism and domestic profit. Thus the subtle shift in blame for Scotland's economic woes from the failed Scottish capitalists to the trade unions. Here MacKay exposes the myth of "economics" as a neutral "science" rather than what it is, capitalist ideology. Unemployment is not caused by the trade unions, rather they are a weapon against it, given proper leadership. Unemployment in Scotland has been persistently higher than in the UK since the 1930s, long before wages reached parity with UK levels. Unemployment in Scotland has created labour mobility on a vast scale, driving more than 20 million Scots abroad in search of work. Those who stayed were not put on the dole because they were unwilling to leave their place in the queue for a council house both Wales and the North of England have a higher proportion of home owners but equally catastrophic unemployment.
Unemployment will remain in an independent capitalist Scotland as a result of the vagaries of the unplanned world economy. The contrast between Scotland's oil shieks and the unemployed, coupled with the aspirations opened up by independence, could unleash a fresh surge of the class war.
This leaves the intelligent bourgeois with two options. Firstly, to abandon the idea of independence. There are signs that this is happening in some quarters - witness the Scotland is British Campaign. It is significant that the myopic writers of Scotland 1980 forget entirely about the brooding presence of the multi-national companies and what they might have to say about the torces unleashed by independence.
The second option is a gamble: to use the oil money to buy off the class consciousness of the Scottish working class. This is the choice of sections of the ruling class who back the SNP. Their hope is to kill the unions with kindness by integrating them into the machinery for doling out the oil revenues. Then when the economy is ruptured by inflation the semi-state unions will be the policemen for a rapid austerity programme in the interests of national unity. Just like Sweden.
In this context, it is interesting that the tailpiece to Scotland 1980 is an essay by Gavin Kennedy on "defence" Kennedy advocates Scotland joining NATO and spending more per head of population on "defence" than Spain, Yugoslavia or Romania. Mr. Kennedy was once a member of the Trotskyist SLL. He is now a leading "radical" in the SNP. This opportunist transformation has been accompanied by the rationale that nationalism is a more potent ideology than class. Clearly Messrs. Kennedy and MacKay reserve the right to a little insurance just in case the unemployed Scottish workers don't feel the same way, circa 1980.
Scotland 1980: the economics of self government. Q Press. Edinburgh. £5.95 cased, £2.40 paper. Ayailable at all good bookshops or by post from Q Press. 58 Queen Street, Edinburgh, EH2 3NS. 25p extra for post and packaging.