Scottish independence: Has Scotland ‘de-globalised’?
- 31 March 2014
- From the section Scotland
As Scotland looks to a choice on its future, with the economy a feature of the debate, two academic contributions give us a new take on the past route that got us to where we are now.
They're from Glasgow University economic historians, and together, they put a new slant on the powerful political narratives, first, that Margaret Thatcher's government was to blame for the demise of heavy industry in Scotland, and second, that Scotland is well adapted to the demands of competing in the globalised economy.
Could it be, on the contrary, that the Thatcher government merely accelerated a trend that was not only already clear, but which had previously been seen positively by Scots?
And it may also be that Scots are far less globalised now than we were a century ago, with far more people now working for the state or selling to other Scots, with possible implications for the way voters approach their nation's future.
An academic paper by Jim Phillips argues that the old industries had been in long-term decline long before Margaret Thatcher's government accelerated the effect.
He says there had already been a recognition that the old heavy industries were not delivering growth while sustaining employment, which is why the industrial policies of the 1950s, 1960s and 1970s tried to find new industries to which people could move, offering higher value jobs, and a route to faster economic growth.
They may not have succeeded, but that was the intention.
That's why the emphasis was on consumer goods, for instance attracting the car plant into Linwood in Renfrewshire, and Burroughs the computer manufacturer into Cumbernauld.
The loss of coal-mining employment was seen as acceptable before the Thatcher era because they were negotiated with the workforce, because there were jobs in more modern, productive pits and because new jobs were becoming available, not least to employ women as they entered the workforce.
Through this period, Jim Phillips' academic paper points to the share of industrial employment falling from 42% of Scottish jobs in 1951 to 21% by 1991. It was an even steeper decline for Glasgow, with the figures demonstrating how long-term it had been; 50% industrial jobs in 1951, falling to 39% by 1971, 28% in 1981 as the Thatcher acceleration began to kick in, and 19% by 1991.
Even more marked was the decline in two of the big employing industries. In railways, employment fell from 55,000 in 1951 to 23,000 only 20 years later, and then down to 12,000 by 1991.
In coal, the fall was from 89,000 in 1951, to 34,000 in 1971, 25,000 in 1981, ahead of the miners' strike to stop pit closures, and only 2,400 ten years later.
Jim Phillips' point is that much of this change was intended rather than merely the result of external forces, natural process or accident. The new, more productive industries appeared attractive, at least until they turned out to offer much lower-skilled 'screwdriver' jobs, without negotiating change with workers or unions, and then it turned out the multinational companies moved on when their operating costs looked more attractive elsewhere.
What has this got to do with the way Scotland thinks now? Well, Prof Jim Tomlinson, also an economic historian at the University of Glasgow, was presenting a paper at the annual conference of the Economic History Society at Warwick University this past weekend, which takes on Jim Phillips' argument.
Tomlinson sees a link from the demise of the old industries, the rising insecurity of the new ones, and the rise of nationalism since the 1960s.
His argument is that Scotland in 1913 was probably the most globalised economy in the world. It exported to the empire in vast quantities. And while that empire was administered from London, the trade was not mediated through the UK economy.
Dundonians in the jute mills looked to the monsoon in Bengal more than the London stock exchange. Glaswegians looked to the demand for shipping worldwide, and the world market for capital goods.
It's even been suggested that, a century ago, the US provided a larger market for Scottish goods than England and Wales. Now, the rest of the UK accounts for twice as big a market for Scottish goods and services as the rest of the world put together.
The state, meanwhile, was very much smaller than we're used to now, with direct employment by the various layers of government coming to around 23% in Scotland, and indirect, state-funded employment putting that figure above 30%. A hundred years ago, the state's share was closer to 4%.
By contrast, it is reckoned that only around 10% of Scottish jobs are now in the manufacturing sector. Whisky, for instance, has been a huge exporting success of late, but as I've noted before, it isn't delivering as impressively on the jobs front.
So the argument is that Scots have ceased to look to a global market for the fruits of their labour. While trade has globalised the economy, Scotland has apparently been heading in the opposite direction. We're now more focussed on the national economy, on provision of services for fellow Scots, not least through provision of public services such as health.
With an economy that's been made much less export-oriented, the Tomlinson thesis is that "there is now more of a 'national economy' in Scotland than ever before in its history".
He's implying that fewer people have a personal stake in securing trade routes into export markets. Their focus is much closer to home. And the professor has pointed out that has left Scotland much less vulnerable to shocks from elsewhere, so while it sounds like it may be a retreat from forces playing on the economy around us, it isn't entirely to be regretted.
Does that help explain the rising appeal of nationalism over the past 50 years? Most nationalists, of course, would argue the contrary. As Winnie Ewing put it at her by-election success in 1967, 'stop the world - Scotland wants to get on'.
At least one other consequence may be a tad controversial for some, but here it is anyway. Where a part of the nationalist story is that Scotland had disappointingly low growth at least until the 1990s, that may be because it had slow-growing, old, heavy industries. When they went, growth picked up to the UK levels we've seen more recently.
Yet the demise of these industries, by the 1980s and 1990s, faced a strong consensus of Scottish opposition. The Labour Party, in those decades, was electorally successful at persuading Scots it was protecting them against those forces. The SNP was making similar arguments, though much less successfully at that time. In protecting the British welfare state, it has been much more successful of late.
Here's the question for both parties; had that opposition been more successful in protecting industries, would that growth rate not have been held back for longer?
One final thought from yet another economics paper published this past weekend, this one with a more directly political application.
A study of a referendum campaign on electoral reform in western Canada sought to find out if it is the politician or the message that makes the difference to the campaign, or as these academics from Columbia, the London School of Economics and Ryerson put it; 'content, charisma or cue?'
The outcome of their study was that the personality of the politician doesn't make much difference. Endorsements do, and equally so on the left and right.
The message can also be much more important than the political messenger. "Employing a message-based campaign or an endorsement-based campaign leads to about a 6 percentage point increase in the intention to vote 'yes' in the referendum," the report concludes.
You can interpret that according to taste, but it may have lessons for both sides of Scotland's independence campaign.