British Inequality and The Nordic Alternative
On the first anniversary of his death, Bella Caledonia is publishing the Donaldson Lecture Stephen Maxwell delivered at the 2007 SNP conference. It addresses the gulf between Scotland’s economic potential and the reality of its poor social record. Maxwell identifies the Nordic welfare democracies as the most attractive model for a future independent Scotland and contrasts their success at reducing poverty with the increasing material inequality of neo-liberal Britain and the United States.
Issues of political culture, the changing components of Scottish identity, the struggle for an autonomous Scottish culture, the limits of independence in a globalising world – grand topics of this sort have usually been the substance of these Donaldson Lectures.
As someone whose academic background is in philosophy and theories of international society, I have appreciated those contributions as much as anyone. But today I want to take a more practical policy focus. Specifically, I want to look at the relationship between the economic case for independence and the social challenges Scotland faces.
The most striking feature of Scotland’s situation today is the size of the gap between the reality of life for many Scots and Scotland’s potential. I can think of no other democracy of a comparable size and stage of economic development which suffers a similarly sized gap between its potential and the reality of life as experienced by a substantial portion of its population. I can think of another country of far greater size and wealth which also suffers from a conspicuous gap between reality and potential: the United States of America. Its social problems are if anything greater than Scotland’s. The USA is a case to which I will return.
In the SNP we are accustomed to illustrating the independence ‘deficit’ by comparing Scotland’s economic performance within the United Kingdom with the performance of small, neighbouring independent countries. It is a telling comparison which is at last beginning to win an audience beyond the ranks of committed Nationalists. It shows that in recent decades Scotland has endured a rate of economic growth very roughly half that of its most obvious comparators – the small democracies of Western Europe. And that comparison is all the more telling when we add in the unrealised potential for growth represented by Scotland’s North Sea oil. That potential is usually expressed in terms of the value of the public revenues Scottish oil has pumped into the London Treasury over the last thirty years – approximately £220bn.
But, of course, the lost potential cannot adequately be expressed in revenue terms. Even more important is the accumulated loss of economic development opportunities which Scotland has suffered because of its lack of control over North Sea resources – including the loss of three decades of investment in the development of the alternative energy technologies so critical to the 21st century.
But if Scotland’s economic performance has been at best mediocre over the last several decades, what can we say of Scotland’s social record? Mediocre doesn’t begin to describe it. Disappointing, downright poor, disastrous, catastrophic – the appropriate term certainly lies at the latter end of this spectrum. The facts have been well enough publicised and many of them well be familiar to you. Here is a selection:
- On life expectancy Scotland ranks in the lowest quartile of 22 countries for both men and women, along with Poland, Turkey and Mexico
- On infant mortality Scotland is at the bottom of the third quartile of 26 countries
- Among the European Union’s 15, Scotland has the poorest performance on premature death, low birth weight, infant mortality, underage pregnancies and drug misuse, while achieving the average on long term illness and dental health
- Compared to England on the same indicators, Scotland’s rate of premature death is 30% higher, of long-term illness 20% higher, of dental ill health 80% higher, and drug misuse 40% higher
- Scotland has a suicide rate higher than most of its developed country peers and nearly twice as high as the UK average
- The proportion of Scots self-reporting as being dissatisfied with life is higher than for the British population overall
- Our levels of alcohol misuse continue to increase from levels which already exceeded UK levels. The proportion of Scots smoking excessively (more than 20 cigarettes a day) is also above the British level though that was before the ban on smoking in public venues
- Scotland’s reputation for having one of the highest levels of drug addiction among Western European countries is supported by a death rate from drug dependence and abuse 25% above the British average
The cheerful statistics keep coming – who doesn’t know by now that Scotland has the second highest proportion of obese children after the United States? Many of you will have read a recent UNICEF report which found that, with the exception of the US, among the world’s richest countries the UK offered the poorest prospects for children.
Facts like these challenge everyone who lives in Scotland or professes concern for Scotland. But they are a particular challenge to those of us who champion the cause of Scottish independence.
Independence can be argued on many different grounds: as a fundamental right, as a duty of self-responsibility, as the key to more representative and more effective governance, as a way to maximise the contribution we could make on the great global issues of climate change or international peace. When we make the case for independence we all probably use a changing mixture of these arguments depending on the audience and the context. Individually or severally, they can constitute a rational and convincing case for independence.
But to my mind the truly compelling case for independence will include an explanation of how it will help to improve the prospects of the more than one in five Scots represented by all those gloomy statistics on poverty and chronic ill health. There is a principle at stake here which is at least as important as the principled grounds on which we usually argue the case for independence. It might be called the principle of maximising advantage for the least advantaged members of the community.
Some of you may detect a distorted echo here of the American political philosopher John Rawls’ ‘Difference Principle’, which asserts that economic and social inequalities can be justified only in so far as they improve the lot of the least advantaged. My crude variation of Rawls’ principle is that in developed countries in which a majority of the population enjoys a good standard of living, the case for radical constitutional change – with its inevitable uncertainties and risks – needs to demonstrate how it will improve the conditions of the most disadvantaged groups of the population. Of course, the principle of maximum advantage for the least advantaged does not trump all other considerations – how could it when climate change and nuclear proliferation threaten global survival? And the comfortable majority have their own claims for a better life. But an argument for independence which does not have this question at its core seems to me be morally compromised.
Traditionally, public debate around independence has focused on the economics of independence, and with good reason. Historically, the greatest obstacle to winning public support for independence was a widespread fear among the public that independence would lead to economic meltdown, with cuts in public services and lower living standards all round. That fear still lurks in the shadows but, with the help first of North Sea oil and then of a relative improvement in Scotland’s economic performance from the low points of the 1960 and ‘80s, the debate has moved on.
Opponents have now downgraded their argument from claims of economic collapse to the claim that there would be no clear economic gain for Scotland – that is if they make an economic case at all. Our chief opponent (who is of course Gordon Brown not Wendy Alexander) now gives more time to a different argument altogether: a politico-cultural case for subsuming Scottish identity within a Greater British identity. So far he’s not finding many subscribers, even among his main target constituency of middle England.
The fundamentals of the economic case for independence are now well established. It may be impossible in strict terms to prove that independence will increase Scotland’s rate of economic growth. But the links between independence and an improved economic performance are well supported by the record of other small Western European countries – not just by the bare facts of their sustained higher growth but also by the historical detail of how, over decades, they have used their political independence to maximise their economic welfare. And this appeal to the international record is supported by the many specific examples of London government failing to maximise Scotland’s economic benefit – failures over North Sea oil, the electronics industry, fishing, alternative energy, transport, fiscal regimes and, most recently, agriculture. Put these two fields of evidence together and they create a strong probability that independence would bring major economic benefit to Scotland.
But if we can be confident in arguing that independence will improve Scotland’s economic performance, can we have the same confidence that independence will secure any major improvement in Scotland’s social condition?
The relationship between economic success and social well-being has never been straightforward. We know that economic change always produces losers as well as winners. We know that national economic growth does not translate automatically into reduced poverty. We know that, above a certain threshold of national wealth, further increases produce diminishing returns in social progress and well-being. Other factors come into play too. Professor Richard Wilkinson in his 2005 book ‘The Impact ofInequality: how to make sick societieshealthier’ identified a clear correlation between the degree of economic inequality in society and the incidence of its social problems, irrespective of an absolute level of wealth. The US was his prime exhibit and the UK not very far behind. This summer a team from Dundee University reported a strong relationship between the level of income inequality and infant mortality in the 24 richest OECD countries, with the US and the UK – followed by Australia, New Zealand and Ireland – again as the leading illustrations.
So we cannot simply assume that the improved rate of economic growth which independence can be expected to produce will translate into a steady decrease in the number of Scots living below the conventional poverty line – 60% of the median household income. Ireland stands as a warning here. As the Celtic Tiger, Ireland has famously enjoyed a rate of economic growth in recent decades twice or in some periods three times that achieved by Scotland yet, along with Scotland, the rest of the United Kingdom and the United States, it has one of the highest rates of relative poverty – for both children and adults – among developed countries.
We should not be surprised at this disjunction between economic prosperity and social progress. Economic growth has never guaranteed a fair distribution of its fruits. Today globalisation adds a further distortion by intensifying external competition to which the weakest members of society are most vulnerable. There is a global trend not just for the highest incomes but also average incomes to grow more quickly than the incomes of the lowest earners.
But globalisation is only one of the causes of the increasing economic inequality which many societies are now experiencing. Another more powerful cause is found in the advance of neo-liberalism since the 1970s and the greater autonomy which that doctrine awards to economic markets. Again the US pulled the UK and a foot dragging Scotland along in its wake.
But there is an alternative to the Anglo-American model of free-market capitalism available to us. The record of the Nordic welfare democracies – Norway, Sweden, Finland, Iceland and Denmark – in combining consistent economic growth with high levels of welfare and low levels of inequality and poverty is simply unmatched in the world. And they are now adding enlightened environmental policies to their premium mix of policies.
Independence will allow Scotland to share in some of the structural strengths of the Nordic countries: their advantages of scale; short lines of political communication and feedback; flexibility in building a national consensus about how to respond to external change even within an interdependent world (and in the face of the centralising tendencies of the European Union). Like the Nordic countries, independent Scotland will be able to make the best of its natural assets and of the opportunities which come its way in a shifting world.
We can also look forward to sharing in some of the intellectual and moral advantages they enjoy as small independent countries: their awareness that they have no alibis for failure; their knowledge that in confronting their problems and exploiting their opportunities independence insists they look first and last to their own resources of intelligence and imagination and courage; their knowledge that no one will subsidise their failures except at the cost of their freedom; their confidence that, because of independence, the experience and achievements of each generation will accrue through a fully developed range of national institutions to the benefit of succeeding generations.
Nations are sui generis. Scotland will enter on independence with a very different social legacy from the Nordic states. Historians stress how distinctive Scotland’s social experience has been. In the modern age, Scotland has experienced the successive traumas of rapid industrialisation and deindustrialisation, of a long, sustained high level of net emigration, of the disproportionate blood sacrifice in British wars – all compounded by three hundred years of displaced government. We cannot underestimate the severity of our social legacy from these passages of our history. Scotland’s social problems are both extensive and intensive – their extension measured by the fact that 1 in 5 Scots still lives in relative poverty, their intensity by the several hundred thousand Scots who experience multiple disadvantages – economic, health, environmental, educational – which produce the terrible eleven or twelve year difference in life expectancy between neighbouring parts of Glasgow. But we need to remember that all countries have their narratives of epic change and challenge, no less the Nordic countries with their modern histories of grinding rural poverty and mass emigration, of military occupation, resistance and civil war, of swiftly changing global markets. Where they differ from Scotland – so far – is that they chose, and continue to insist on, political independence as the indispensable condition of an effective response.
The other condition of the Nordic countries’ social success has been their faith in social democracy. Scotland shares much of the Nordic bias towards social democracy. Of course we will have to work out our own version to suit our peculiar legacy and the particular global circumstances in which independence is finally achieved. But, given the scale and intensity of our social problems, I find it difficult to conceive of an effective response which is not based on thesocial democratic fundamentals of an active state committed to egalitarian outcomes through universal public services and a redistributive tax and welfare system. How we combine those fundamentals with the contemporary expectation of individual autonomy, social and cultural pluralism and civil empowerment is our greatest challenge.
There are models out there to instruct and inspire us, and with independence we will have a resource of far greater value than North Sea oil or renewable energy: the means to apply the full resources of our own intelligence and the will to achieve our own vision of the public good. We will need every ounce of those qualities if we are to make independence work for all the people of Scotland.