I have to confess that I haven't read the SNP's blueprint for an independent Scotland released today, but I have followed its press coverage (which puts me in the same position of most of the media, who haven't read it either but who have read what their colleagues have had to say about it).
There are two things which are immediately striking. The first is that the attractive, solvent and fair country which Alex Salmond promises is not his to grant. Which is to say, an independent Scotland will presumably have elections with changes of government from time to time, and the Labour party north of the border will have an agenda different from his.
The second is that Salmond is no nearer fixing the currency problem than he was five years ago. Reading the Torygraph's online discussion boards (neither more nor less barking than the Graun's, which alas no longer allows me to post), I was astonished to find that almost none of the Nationalist posters understood the difficulties adoption of sterling posed for Scotland. These are, in no particular order, that Scotland would have no central bank and no lender of last resort, that the Scottish economy would not be taken to account by the Bank of England in setting rates, and that its ability to borrow on the money markets (like rUK Scotland will not be breaking even any time soon) would be constrained, possibly by Westminster (which might make borrowing controls contingent on using sterling).
The question I could not get any Nationalist to answer this morning was, "Why would Scotland be better off swapping a system in which it has a modicum of influence over monetary decisions in favour of one in which it has none whatsoever?"
Here's another one: Why has Alex Salmond abandoned the Euro as currency of choice, presumably on the basis that a currency union without political integration eats its weaker members alive (see Spain, Ireland and Portugal for details), in favour of another currency union without politcal integration?
The situation would actually be worse for Scotland than it is for the PIIGS - at least the ECB is supposed to take into account what it is happening in the peripheral Eurozone countries, which is more than the BoE would be doing post-Independence. You can see how this would play out immediately - a recovering rUK would probably need a higher base rate than Scotland, and if so Scotland would immediately have interest rates that were too high, and which had the effect of strangling its economy.
The only Yes-voting poster I could find who understood these problems favoured a short period of sterling usage followed by the setting up of Scotland's own currency. There are obvious difficulties with this, but at least it has the merit of allowing monetary decisions to be made in Scotland rather than in Threadneedle Street in the City of London.
That most posters didn't understand the problem is rather depressing, and raises the unattractive prospect that the Yes vote could win without its supporters really understanding what they were getting into.
Electorate has no grasp of economics. Who knew?
