Spotlight on Geopolitics

In the wake of the sovereign debt crisis, we are used to thinking that neoliberalism has a negative effect only on Europe’s weaker economies. In fact, in many richer parts of the continent people have become obsessed with their regions’ per capita income, to the point of considering to split up for good with their less fortunate co-nationals. Thus the well-off Flemish wish to secede from Belgium in order to avoid subsidising the less competitive Walloons; the Catalans loathe to help out some of Spain’s poorer regions and would likewise prefer to live in a separate state; even Bavarians have second thoughts when it comes to paying their taxes to Berlin, thus calling into question the long term viability of Bismarck’s German reich.

In many respects, however, Scotland is an exception to this rule. The Scots’ plans to dissolve the 300 year-old union with England is based on a desire to preserve and enhance Scotland’s egalitarian way of life. The latter puts them on a collision course with its much larger partner, which is still bent on privatising everything down to police stations, and on charging an arm and a leg for the chance to acquire a good education.

The 2014 independence referendum in Scotland, if successful, might result in the creation of a second ‘Norway’, inside the European Union. Like Norway, Scotland has around 5 million inhabitants confronted with a harsh climate, both countries’ economies relying mainly on oil production and fishing, although the Scots earn a few billion euros more from selling their whisky brands worldwide.

The independence referendum also brings into focus an alternative economic model which has come to be known as state capitalism. Indeed, in a global social environment dominated by neoliberalism-inspired inequality, economic stagnation and recurrent crises, the Norwegian brand of state capitalism stands out as a viable alternative. In Norway, state ownership extends to major companies, major banks, energy companies and even the stock market. While most of Europe is mired in negative growth, Norway has been experiencing annual growth rates of between 4 and 5 percent. As one local politician puts it, the country had pioneered state capitalism long before the Chinese, immediately after world war II. Norwegians enjoy high standards of living and although they pay high levels of taxes, they get excellent, free medical care, as well as free education for the young, in return. Their experience shows that having the state as a stakeholder in strategic industries improves both the stability and the performance of any given economy. This, to be sure, is what The Economist should be promoting as the Scandinavian model worth emulating.

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  1. Florian Pantazi

    I gave your blog a bit of thought and it left me wondering if you have ever been to Norway or Scotland? I suspect you have not or it may have coloured your views slightly differently.
    The first thing that needs to be dealt with are the facts which we base our assumptions on.

    1. Opinion polls in Scotland are running around the 30-34% mark in favour of independence with about 55% against. There are about 18 months to go with the Scottish government failing to answer many of the big questions being asked by the electorate. So it is anybody’s guess where we will end up. As we stand at the moment it is a non starter which rather makes you blog redundant.
    2. If you had visited both countries, you would know that none of the Scottish mainstream political parties are likely to follow the Norwegian model of ‘State Capitalism’ You would also realise that the countries are so different. Wages are higher in Norway but the cost of living is horrendous with very high tax rates to boot. Norway are to be congratulated as they have built up a huge savings fund from their oil fields which is being held over for a rainy day. Unlike the UK/Scotland they never had an industrial revolution and therefore don’t have the social costs that the UK/Scotland have built up due to heavy industry moving to countries with cheaper labour costs (Steel, Shipbuilding etc.).

    You say that “Norwegians enjoy high standards of living and although they pay high levels of taxes, they get excellent, free medical care, as well as free education for the young, in return.”
    Florian, I would argue that the UK has a good standard of living and all education is free for 5-18 year old children and the National Health Service is there for everyone. University Students have to pay depending on where they attend Uni (Scottish students pay less than others to attend Scottish University.

    You say “Their experience shows that having the state as a stakeholder in strategic industries improves both the stability and the performance of any given economy. This, to be sure, is what The Economist should be promoting as the Scandinavian model worth emulating. “

    I don’t think that one will fly Florian as old style socialism is no longer in vogue even in Scotland.

    George Mc

  2. Thanks for the link to your article,Marc, I have now read it. I do not think that Scotland can be kept outside of the EU, despite the noises made by one person to this effect…

  3. If Scotland wants to defend its social model it should fight for independence from Washington and Wall Street, not the other British nations who are by and large struggling with the same problematics. More than a GDP claim, not speaking a different language is the main difference that sets Scotland apart from other European regions claiming independence like Catalonia, Flanders, the Basque country etc).

    Among independent countries in Europe without languages of their own (as Belgium, Switzerland and Austria) Scotland would not only be having its media and cultural environment influenced by just a neighbouring European language sphere (with similar history and values) but more importantly by a cultural and economic superpower on another continent.

    Culturally I guess Norway kept a lot more integrity, as a country, than Scotland has ever been able to manage through centuries of centralisation from London, as well as during the last-60-year domination of America over English-speaking cultures. Although most Norwegians can also speak English (enough to perfectly understand Hollywood movies too) keeping their own language has enabled them to preserve their identity, even in the past when they belonged to Sweden.

    With or without an independent state, Scotland will always remain (along with England, Ireland, Australia, New Zealand and Canada), an American cultural zone, in no way comparable to any continental region or country in terms of identity, perception of oneself and feeling of community, because of the language.

    In the British isles, compared to the rest of Europe, the impregnation of neo-liberal dogma shaping political debate (and always happening incidentally to profit Wall Street: through the City, the Sun, the one way “special” relationship, a tax-haven business-model in the case of Ireland …) will always represent a clear difference of general approach and common values, compared to non-English-speaking Europeans.

    Among the latter, Scandinavians including Norway have cherished their social-democratic traditions and long managed to resolve the sterile and artificial opposition between the state and capitalism. This, as this article shows, is contrary to England, Ireland or Scotland where people still dive into Cold war debates going back to Thatcher and Reagan and more generally into every controversy beneficial to the USA’s cultural hegemony. Just look at the difference of excitement and suspense in the European media for the American presidential elections compared to the thrill in the UK (including Scotland) depicting a new era for the nation to come.

    Were Scotland to become independent it would probably fight anyway in American wars or UN resolutions (just like Scottish soldiers and diplomats do now), have a small “City” in Edinburgh in order to provide Wall-Mart, General-Motors and Coca-Cola with financial service facilities for their European markets and probably go on lobbying in Brussels to favour these corporations’ interests. At the end of the day Scottish kids will go on imitating American accents to look like their favourite pop-stars, so what’s the urgency for Scotland to leave the UK?

    It must be funny for Englishmen to see how Scottish nationalists claim to be more European (as opposed to the UK). Even independent, I doubt Scotland would manage to avoid becoming a neo-liberal English-speaking dominion that Washington has at disposal in the world. Maybe if they spoke a different language it would be easier for them to start formulating a different model for the future of their own country than the ones dictated by Wall street, the Pentagon and Hollywood, in the political agenda of the “Anglo-sphere”.

    Culturally, a language is very useful to identify a common interest, build a social contract accordingly and make economic choices corresponding to your country’s collective benefit and shared values (as the Norwegians, like most non-english speaking countries in Europe enjoy within their own langage sphere).

    If Scotland wants to regain its social model it would be better off fighting for it against Washington than London.

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