A Risk Assessment for future of the UK

banksy_2219565bBy Laura Eaton Lewis‘My heart says yes and my head says no.’That’s how the narrative goes, isn’t it?  That the only reason to vote yes is out of patriotism and that we must try and quell those feelings to think with our brains.

The No option on the ballot is portrayed as the ‘sensible’, the ‘rational’ choice, perhaps even the ‘cowardly’ choice if we’re to believe the mudslingers.

The Yes option on the ballot continues to be portrayed as the option of ‘hope’, of ‘risk’, of ‘passion’, and, to the mudslingers again, the choice for the ‘naive’ among us.

Like most of you, I don’t hold any truck with mud chucking, so let’s try to untangle these assumptions and put some things straight, let’s look at the whole picture, the risks, as well as our hopes and, for some, our histories too.

The UK is a risk. Independent Scotland is a risk. The best debates I’ve had with No voters are the ones where we’ve come to this conclusion. The pattern of these discussions suggests that those who claim to be more risk averse, have more of a desire to stick with the union. Understandably, we all want to think with our ‘heads’.

Dear UK, #wejustdontknow.

No one can predict the future, but armed with some facts and precedents from historical scenarios, we can make a pretty good risk assessment that, compared with the unknown of an independent Scotland, the UK is a very high risk bet indeed, and not the safe choice you might think.

There’s much research that proves that humans are not very rational when we’re making assessments of risk. Markets themselves are not rational, as much as economists might urge us to believe, because people are not rational, they act on things like purpose, inspiration, and yes… fear.

It turns out that it’s human nature to be more risk averse when it comes to our gains than our losses.  Within the field of economics, Prospect Theory by Kahneman and Tversky shows in experiments that we find it easier to accept losses and much harder to bet on gains, even when the odds are exactly the same. We are biased against the probability of success, we are more driven by fear than we are by logic. That shouldn’t be surprising when you think about it, that’s the same motivation that keeps people in abusive relationships, makes us give unprecedented weight to past failures and stop ourselves from reaching a little higher or trying to make things a little better.  It’s harder to dream.  It’s harder to take the failure of a possibility than it is to accept the erosion of our lot and we would rather choose to side with losses day by day by day than to pitch for something that is equally as probable but could bring us benefits.

The case for independence has been plagued with the search for ‘answers’, for guarantees and certainties about the future, for this very reason. My mathematical mind is perturbed that we don’t give the same scrutiny to the risks on the other side, because they are many and they are significant. As other commentators have posited, is this because we assume a No vote is a vote for the status quo? It’s called Cognitive Dissonance, when you know something in your body, but the words people say to you, the words that form the narrative of ‘sense’ pretend that what you know isn’t true.  There is no status quo, there is no possibility that things will remain the same.  Mathematically speaking, it is impossible. There is only change. There are trends, which can help us predict what will be more or less probable, but there are no guarantees of anything with a vote to stay in the UK.

So let’s look at trends, let’s do a risk analysis of the UK:

On economic stability:

The UK is currently rocking a -5.6% current account deficit (including all oil revenues). That is, annual income from exports is 6% less than what the UK buys from foreign sources.  This isn’t an outlier figure, the UK has held a current account deficit for the last 30 years.  From the OBR figures I calculated the mean deficit since 1997, as that’s as far back as I could get with the detail I was looking for: That’s a trend of -2.13% EVERY YEAR for 17 YEARS.
The UK has a debt to the US federal reserve, to China and others, of £1,286 billion.  No amount of austerity is ever going to pay that off.

There is no way that this data can be spun any other way, this is not a lie.  The UK is bankrupt.

The UK has a policy of selling off, at fire sale prices, profitable public services such as East Coast Rail, which last year made £255 million for the government.  This makes no economic sense.  Public services like the NHS are hugely efficient in economic terms because of the massive buying power they have; as near monopolies with no shareholders they can get suppliers very cheaply indeed. Compare this with contracted out NHS services to whom the UK government gift a monopoly; they are free to hike their prices as high as they like to make as much as they can for their shareholders, who comprise our esteemed members of Parliament themselves, their friends and party donors.

Cap that trend off with a penchant for keeping the infrastructure in public ownership, so the taxpayer will continue to pay for the maintenance and development of the electricity grid, the railway lines, while private companies basically get free profits for absolutely no investment at all.  Not a penny of their money is invested into the UK, they simply run payroll for services that we ran more cheaply when they were publicly owned, bringing the taxpayer all of the burden, none of the profits and inflated prices to boot.  This is a trend that will continue unless the Westminster elections return a government committed to renationalising our profitable industries.

The economic policy of the UK government is to run a currency at an artificially inflated value which  makes it impossible for home industries to trade competitively, and this trend is increasing so that UK businesses and industry will dwindle until we have no exports left.  Except financial services -ah yes, our basket case financial sector that is leveraged on average 20 times beyond the asset base they actually hold.  The City of London is an international tax haven, a tax-free zone, where the productivity of the rest of the UK is devalued in order to protect the profits of the shareholders of our banks. Banking boom and bust comes in nine-year cycles, so we have approximately three years until the next one. Given that the UK has experienced a six-year recession, and the banks have already lost every single penny of the £46bn with which the taxpayer bailed them out, it is almost certain that the next crash is going to make the 2007 crisis look like a sunny day on a beach.

There’s more, but those are the bullet points.  There is nothing in this risk assessment that says ‘stability’, nothing that suggests ‘security’, the trends all point to catastrophe.  There is no way of softening this blow.  The UK is locked into free fall, and the only thing that *might* bring it out of this decades long dive is to deindustrialise, invest in infrastructure and devalue the pound to increase its trade value.  Given that this would scare the hedge funds off, how likely do you think that course of action is, when our elected members have personal fortunes invested? Knowing what we know about human nature, and going on past performance, a turnaround is highly improbable.

If we are looking for an analogy, the UK is Spain – no substantial exports, overly dependent on financial services and a ridiculously over-inflated property bubble.  If the UK’s creditors cut off the supply, we will be lucky to end up like Spain or Greece, our balance of debt is the second highest in the developed world. How long can the UK limp on like this before the most profound financial and humanitarian crisis hits?

Scared yet?

I am. I’m very, very scared, of how impenetrable the fortress of Westminster City and how pointless my vote in a UK General Election is.  Quite simply, I am powerless to do anything to stop this or reverse the situation.  The entire democratic will of Scotland can’t do anything in the face of this – it was designed this way.

Compare this to a risk assessment of an iScotland:

Economy

Scotland has run a current account surplus for the past 30 years (if you include a share of oil revenues).  The real value of Scotland’s exports could be as much as double what is actually recorded against Scottish income; because the majority of our big industries such as whisky and tweed are shipped from ports in England, they’re counted as English exports.

Scotland’s house prices have remained stable or in negative equity since 2007, so prices are more realistic and less vulnerable to the ‘bubble’ effect. Currently we don’t get to ‘keep’ our income to cover our expenditure, which we would – plus a variable surplus – in an independent Scotland.  Currently spending on public services in Scotland is higher than the rest of the UK, but our tax receipts are higher. Whilst Scotland currently has control over spending in health and education, the amount received by Westminster has already been cut by 6.8% (HM Spending Review 2010) and when the NHS is privatised in England and Wales this will mean that the Scottish share of the budget from Westminster is reduced in line with spending down south.

Despite what the Better Together literature tells you, Scotland’s NHS WILL be eviscerated by what’s happening with budget cuts down south and even more so if the UK signs up to the TTIP as they are set to do.

I’m not making projections of risk on the basis of ‘lots of oil’ or ‘lots and lots of oil’, because the amount of oil in either voting scenario will be the same. Voting No doesn’t get us any more oil, but we do see that there are no plans from the UK to do anything about the oil running out. The SNP and the Greens are fully committed to developing renewable energy in the first few years of independence to plan for the long term future and fluctuations in oil revenues OR, my personal hope, LEAVE THE OIL IN THE GROUND.  Do we want a future? Yes we do. Scotland is more profitable than the UK, it has good exports, there are no additional risks that an iScotland might face that wouldn’t be faced in the other scenario. IScotland is a lower risk than staying in the UK.

Currency, Banks, Trade

We’re all sick of this one, so I’ll be fast. YES, we can keep the pound.  Yes, it’s in the short-to-medium-term interest of the entire British Isles for us to do so. Stabilise the markets, avoid a run on the pound – after all, the pound is backed by oil which won’t belong to rUK anymore, and iScotland won’t have any banks domiciled in Scotland with which to be a credit risk, the risk is entirely the rUK’s. No financial crash is going to come about from Scotland entering a currency union with the UK. Osborne faces a crash if he doesn’t pull his finger out and stop the bully-boy bluffing.

Is a currency union a good idea in the long-term? Not a terrible risk, as we’d not be doing any worse than if we were in the UK, but it isn’t the best option. We could do much better if we created a different economic and industrial policy to rUK (and I sincerely hope we do) to stimulate production and exports, and in this case we are going to need a currency that can be devalued so that we can sell cheaply enough to be attractive to international buyers. This means that we want to diverge from UK economic policy, and thus we’ll want to have our own floating currency (The White Paper’s plan C).  All in good time, we won’t need that straight away, A phased transition is best and it’ll be some time before we’d want to do that.

Banks are all domiciling in the UK but keeping operations here. Bonus. No job losses, no loss of corporation tax, but the removal of bank failure risk from the Scottish balance sheet.  It’s the UK’s problem, so we don’t NEED A LENDER OF LAST RESORT.  Hear that – we don’t need a central bank with a reserve big enough to bail our RBS if the RBS is no longer registered as a Scottish company.  Thank you, RBS, you are ever so welcome to take your toxic liabilities elsewhere, THANK YOU.

Instead of those broken, basket case banks, we can start a state-owned investment bank and run a  German-style local banking system. Robert Peston from the BBC estimates a £15bn share of the UK national reserves, which would provide ample capital to start an investment bank which would invest in infrastructure development in an iScotland and provide a buffer zone for fluctuations in revenue due to oil. Trade in Scotland is currently better than the rest of the UK, but we could be doing so much better. Investing in infrastructure, renationalising and reindustrialising could make the country truly competitive on a world stage – certainly the will is there from SNP and Greens, so it has a reasonable probability of this coming to pass.
There’s been some excellent work on economic policy by the New Economics Foundation and the Common Weal project www.allofusfirst.org which propose a tried-and-tested set of policies which would in all reality be a workable solution to the financial crises facing the entire Europe.  I’m not going to go into them at length here, but these are proposals that can be taken on by any of the political parties in an iScotland.

Debt

Scotland doesn’t have any debt as a ‘successor state’. There is no debt agreement with a legal entity that did not exist when debt contracts were taken out, so it CANNOT DEFAULT ON ITS DEBTS.  Credit ratings, as confirmed by Moodys and Standard and Poors, would be excellent as a new state with a current account surplus, £15bn in the bank and NO DEBT. As previously stated iScotland shouldn’t need to borrow funds from elsewhere, but if in a crisis scenario it did, it has oil as an asset to underwrite any debts and the interest rates would be comparable or, if not, only 1% higher than current UK debt borrowing.

iScotland has the opportunity to do something really unique here, it isn’t beholden to the debt spiral that plagues so many other countries, and we won’t be held to ransom by toxic banks that are entrenched in the global zero sum money game.  This is our only chance to escape the freefall.

Given that the UK borrowing trend is ongoing and increasing relative to GDP year on year, a small amount of time-limited borrowing for an iScotland is really a drop in the ocean in comparison.  If, as part of the negotiations with rUK, iScotland agrees to pay something towards the UK debt (morally we feel this is right, but legally there is no obligation whatsoever), payments towards such debt are already included in Scotland’s current account balance, so this is affordable. If iScotland negotiates to make payments to rUK to cover a share of that debt, it isn’t in the form of a ‘loan’ so it doesn’t need any security against it – it’s simply an agreement for a schedule of payments… I love the suggestion in Robin McAlpine’s blog www.cmonscotland.com that Scotland should choose to make those payments in the form of infrastructure funds for the North of England, NI, Wales, and Cornwall… put the money into generating industry and exports and try to mitigate against the ruin that City of London is spiralling the entire UK towards… It is probable that we are the only hope for the entire UK, by leaving we could genuinely begin to repair the UK economy and influence their political landscape by creating a viable alternative.

I hope you can see from this comparison that staying in the UK is by far and away a much higher risk and the UK has a severe probability of extreme financial collapse having a debt ratio of around 400% of its annual GDP… whereas an iScotland, in a worst case scenario, might find itself accumulating a bit of debt to start with.

This is not an overly optimistic assessment of the risks, this is as real as I can get from the source data I’ve uncovered over the past two years.

The political risks of the UK are massive, for all the reasons you already know – increasingly right-wing, increasingly committed to the madness of austerity, increasingly corrupt and with vested financial interests. The first past the post voting system means that there is no real choice at election time and subsequently party policies have narrowed to the extent that the opposition is basically the same policies dressed up in different coloured ties.

We don’t know what Scottish government we’ll get in an independent Scotland, but three things are for sure:

1) it’ll be the government we voted for
2) there will be a spectrum of parties representing the proportional percentage of votes cast, and
3) there’s real choice in policy from a robust Green party with new momentum in its sails, an SNP that would have to redefine itself without its home-rule agenda, many independents from the grassroots movements, and newly invigorated and refocused Labour, Tory and LD parties. You choose the policies, but guaranteed, it’ll be a renaissance of politics and a true choice of vision.

It shouldn’t need to be said anymore, but this decision and this risk assessment is not about (the many) nationalism(s), and it’s not about identity, it’s about democracy.

The Westminster-run campaign has underestimated us. It belittled our individual capacity for leadership when it failed to inspire us with its lack of a positive vision for the UK, and it belittled our intelligence when it failed to engage with our questions and failed to provide a compelling economic case. It’s underestimated the extent to which it can convincingly ‘spin’ data, when it is now faced with a population armed with tiny devices capable of finding the source of every piece of raw data, and the ability to film and capture the reality on the ground and distribute this very quickly. Sousveillance. We are Watching Them.

We’ve all become generalists.

They bring out the ‘specialists’, get the ‘Good Will Hunting’ guy to do the sums that tell us that we’re better together or that the world will fall into a deep recession. But the one thing we all know is that those nerdy types don’t really know much about how things work beyond their narrow field of study.  They’re don’t have an overview of the big picture – they are not generalists.

It is not just about affinity.  The Yes campaign is not naively optimistic. It’s pragmatically optimistic because the only way you can create something different is to use your imagination. Imagination is the most powerful tool we have. Imagination is serious stuff – it is the human capacity of ‘play’ that allows us to learn and evolve complex strategies. It is play and imagination that have ensured our survival and the thriving of humanity. Art is an inherently political act, it’s the space of creation.  So the fact that the the Yes campaign has focused on a collective imagining of a new future is not a failure of intellect. Instead, I would argue, it makes it the most important project of our times.

We simply cannot go on as things are.  We risk the ruin of the entire future for our entire nation. All scientists are now equivocally agreed that we shuttling towards climate change. If you look at the UK balance statement you will see that for at least 30 years we have been shuttling towards economic ruin and the UK has no plan to avert economic disaster. I’m not making this up.  You can read it here in the Economic Review from Office of National Statistics 2014.

I stayed up all night writing this, because it feels like this is the last important thing I might be able to do to help others understand the real risks of the choice we’re facing.

I have no vested interests.  I have no investments.  I have a mortgage that is with English bank (they’ll all be English banks) and since I already have a contract to pay in pounds sterling tracking the BoE base rate, my mortgage payments will remain the same as anyone else in the UK. If I had a pension, it would also stay in line with everyone else in the UK.

I’m don’t have a narrow vision. I am a generalist, so I see the big picture and am not speaking as someone who needs to protect my own over-leveraged bank, or defend my own futures-trading fund and it’s narrow mathematical calculations. Like many of you that spend your time researching online to understand this world a bit better, I know a lot about economics. My motivation is not to make money, I want to make a future for my children possible.

This is why artists have had a lot to contribute to these discussions.  The ecology of art-making is much like a scale model of society.  I work between ‘big picture’ scenarios, and the nuts and bolts of ‘making things happen’, I work with all kinds of people here and overseas, and I have seen the real effects of systems work and the real impact of policies on people’s lives and behaviour.  That Scotland’s creative minds have contributed much to this debate, this movement, is not due to a deficit of specialists or intellectual talent that would otherwise be leading the way – creatives are leading the way because that is the unique role we play at these times of great flux and change. I wrote earlier about the human tendency to underestimate risks in ‘holding your position’ and overestimate the risks of pitching for something better… we need our visioneers to help us see what better world might be possible, help us prioritise and realise our mutual purpose, help us sift through all the information to see that actually, it is possible to make a change for the better.

The power of the imagination has always been potent. The birth of theatre in ancient Greece was as a political space for the examination, discussion and realisation of the political issues of the day.  Politicians were playwrights and playwrights politicians.  It is no accident that as the centuries progressed and governing power in Europe leaned further towards dictatorship, that under Roman rule ‘entertainment’ diverged fully from art, and the bread and circuses were used to keep the people mesmerised.  These days the harnessing of the power of imagination has diverged further, into advertising and persuasion. From Sigmund Freud to his nephew, Edward Bernays, the architect of the American consumerist dream and founder of the real life Mad Men.  We have seen the power of political campaigns run by Charles Saatchi in the UK.  Images, signs and performance in advertising are the same materiality as art but used in a different way, not to open up possibilities, but to close down and form identities promoting particular ideologies.

Unlike advertisers or career politicians, the purpose of the artist is not to persuade. You don’t choose to be an artist to command great power – art chooses you because you are driven to ignite the imagination of civic society. Art’s currency is not that of the carrot or the stick, it is that of the gift. And the paradox is that choosing to be an artist in our hyper capitalist economy is choosing to be powerless, financially destitute, to have no vested interest except to make people’s lives better.

Art is an experience that happens to you and the effect and the affect of powerful symbols at play brings to light our cognitive dissonances and creates a fertile space for re-sowing new concepts and understanding.  That is an immensely powerful process that even the disempowered, the disenfranchised and the politically disengaged can enter into. It’s the stuff that can change the future. It activates the capacity for social invention, and it is this ‘inventiveness’ and the capacity to leap into the unknown, (despite our biases to measure that risk disproportionately high) that makes humans more evolved and adaptable than other animals.

Artists are ideal politicians in many ways because we work with power, and yet we don’t want it for ourselves.  We can take much about creating a new society from art and artists – the processes of art-making provides alternative models for success, models that are not beholden to a top-down hierarchy.  Artists are highly adept at working collaboratively, consensually, engaging with very stuff of conflict whilst simultaneously working to create the world anew. We work within diplomatic contexts, within tight budgets and we work practically, with pragmatism, within societies.  For artists, the process of building real life utopias isn’t a pipe dream, is the reality of what we do every day.  For arts producers, ‘making the impossible happen’ is our job.  We are the visioneers and the producers of future worlds.

So for those who think it’s impossible to imagine our world working differently, I tell you I know it’s possible, I’ve seen it done. On my scaled down model, I’ve done it. Imagine if the new world on my ‘human scale’ was to combine with the new world of yours, and yours, and yours and on and on and on till we realise… it’s not difficult any more.  It’s possible.

Politics is too important to be left to the politicians.  If you can imagining the world differently it gives you power.  The power to choose whether to let change happen to you, or the power to be that change.  Either way, change is always coming, the choice is whether you’re going to hold your power in your hands or let someone else wield it over you.

Look at the risks. If we don’t do something to change our society, we risk losing it all for the sake of being afraid of a short period of disruption.  Use your heart, use your head, and then use your imagination.  On Thursday the 18th September, for the first time you truly have the power in your hands, and you can choose to keep it or give it away again.  Imagine what we could do, it’s too much of a risk not to.



Categories: Austerity Britain

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33 replies

  1. Absolutely first class sumation of the of our current condition

    • Nearly 30 years later, Kahneman himself debunks this article.

      “In reality, people often act irrationally. They may focus too much on the near term; or they may be overconfident, thinking they know what they don’t know, or putting too much stock in their own beliefs”.

      “When you think in terms of states of wealth, you are thinking long term. So to the extent it is more rational and reasonable to think long term, then that’s the calculation that people should make. This is part of the reason that Bernoulli’s error was never corrected within economics: This is a reasonable way to perform. What was not noticed was how psychologically unrealistic it is…. Financial advisers–not out of deep theory–try to get you to think in terms of your portfolio as a whole, your income post-retirement. And *in general, the more global you can be, the closer you will be both to rationality and to risk neutrality*. ”

      And another gem that relates to the current debate:

      “*People assign much higher probability to the truth of their opinions than is warranted. It’s one of the reasons people trade so much in the market, generally with bad results*. [Another example is people] exaggerate their confidence in their plans–something we call the planning fallacy…. The existence of the plan tends to induce overconfidence.”

      So for logic’s sake, vote NO to independence 🙂

    • The article says “If you look at the UK balance statement you will see that for at least 30 years we have been shuttling towards economic ruin and the UK has no plan to avert economic disaster. I’m not making this up. You can read it here in the Economic Review from Office of National Statistics 2014.”

      I have just read this document (link: http://www.ons.gov.uk/ons/dcp171766_365818.pdf ) and i cannot find ANYTHING that correlates with your statement. Yes, we are generalists and we will check facts!

  2. I use a simplistic model when discussing this.

    Two young couples starting life make different choices.

    One couple buy an impressive car and a large house. They take several holidays a year and return with plenty of photographic evidence.
    The impression is that of a very successful couple.

    The second couple buy a modest semi and a used (pre-owned now:D ) car and start saving for the future of the children the hope to have one day.

    The first couple are very vulnerable to changes in the economy such as interest rates. The second couple have left a buffer to handle such fluctuations.

    The UK is the first couple – Trident replacement / Global influence / Force projection via high military budget. A mindset that the few generate the Wealth and the remainder are a burden.

    The second couple is Scotland – Modest defence spend for regional issues (fishing/oil) / Free education as an investment in the future / Oil fund to handle market fluctuations / citizens lifestyle critical (no foodbaks)

    It is not ONLY a financial choice it is a MORAL choice. In reality I would continue to have a very good lifestyle post a NO vote. However this debate has opened my eyes to the other World ignored and forgotten by Westminster. Those who live on the edge of survival every day. Westminster engineered the situation over decades to demoralise those people from voting, to make them feel it was pointless and that their opinion didn’t matter.

    Those who will vote YES are doing it for others, for society, to change from the dominant self interest model of ALL the Westminster Parties to move in the direction of the Common Weal.

    Don’t judge the current Labour Party / LibDems / Tories by what they say. Judge them by what they have done to protect your society.

    Look around – do you see the wealth of Scotland reflected in your area?

  3. Wow! This is by far the best overall analysis of the economic arguments that I have read throughout the whole campaign. Everyone should see this. Thanks, Laura.

  4. Jeremy Warner in today’s Telegraph

    “Westminster must immediately abandon all this nonsense about not allowing Scotland to use the pound. On the right terms, monetary union between Scotland and the rest of the UK is perfectly feasible. Wider monetary union in Europe has manifestly failed but few would challenge its efficacy between, say, Germany and Austria. Scotland and the rest of the UK are similarly integrated, economically and contractually. Yet there has to be a price. Scotland must surrender sovereignty to keep the pound, as Europe has in keeping the euro.”

  5. An absolutely superb piece. Thank you, thank, you, thank you! Of course, anyone who has had the wit and taken the trouble to get their information from reliable sources i.e. the independent media will already be aware of the unrecoverable bankruptcy of the US and UK (covered up only because both their ‘national’ – in fact private – banks are allowed to print money, and not least because of the income from the heroin trade – a major reason for the war crime invasion of Afghanistan).

    In fact, given that this kind of information has been available for a long time, I’m puzzled as to why it hasn’t been used from the start by the SNP/’official’ Yes campaign to demolish the BT arguments. Too devastating? It’s not just information that is important for the Yes campaign – it’s information that everyone in the whole of Britain ought to be aware of, for their own sakes and for the chance of beginning the re-democratisation of Britain. When the inevitable crash comes there will be violent recriminations as people realise just how consistently they have been conned and lied to for years. But honesty would also compel them to accept their own portion of blame – for having bought into ‘popular capitalism’, profiteering from the housing boom, rampant consumerism etc. – all those elements of living as if there were no tomorrow. The chickens are coming home to roost.

    It’s deeply moving to see how quickly the bushfire of enthusiasm and creativity and positivity has burst into flame and spread in Scotland – as it will no doubt in other parts of the UK as people join the centrifugal forces and turn their backs on the recklessness and selfishness of a failed model of capitalism tied to the economic imperialism of the narrow vested interests of the so-called political, corporate and other ‘elites’ across the globe.

  6. Thanks for staying up all night to write this, it was worth it! The most pragmatic yet inspiring essay on independence I have read so far, and I’ve read few in my time I can tell you.

  7. I can’t comment on the piece as a whole, since I only got this far:

    “There is no way that this data can be spun any other way, this is not a lie. The UK is bankrupt.”

    It may not be a lie – that depends on whether or not you know the statement is false – but it is false. That debt is denominated in sterling; both the debt and the currency – the unit of account – in which it is denominated are issued by the same entity. The UK government. It is impossible to be bankrupt in your own unit of account, that which you and only you can create.

    If you start out with such a fundamental error you’re likely to end up with very bad conclusions. This doesn’t mean Scotland can’t or shouldn’t be independent, it just means – amongst other things – that the conditions for successful independence are different.

    • I know – this article is so full of blatant propaganda – spun and dressed as “facts” and “statistics” its hilarious. Clearly written by someone who doesn’t have a full grasp of the economics of the situation and doesn’t really care – as long as they can distort the data to present a positive argument for their POV. Its just incredible people are so desperate to believe this stuff they can’t see the glaring bias of this article.

    • You’re quite right, but I hope it’s obvious that I mean bankrupt as it’s used in common parlance.. as in, you’ve got debts all over town and you can’t pay them. That’s the reality, and the term ‘bankrupt’ has particular resonance for the most vulnerable in society who are the ones who will be the ones who will pay dearest when the big crash comes.

      • Even the common parlance meaning – which isn’t so different from the technical meaning really – is incorrect though. The UK *can* pay those debts it has all over town, at maturity or any time prior to maturity. Doing so all at once would undoubtedly cause ‘distortions’, but with debt of various maturities there’s no good reason to pay it off at once.

        In a sense some UK debt was ‘paid off’ at once by the QE process, in that private sector bond holdings were swapped by the BoE for cash and reserves. That did cause distortions; driving ‘hot money’ into assets other than government bonds since yields on those bonds dropped.

        There was no issue of ability to pay though, and there will be no such issue as long as the debt and its denominating currency continue to be issued by the same entity.

        Yes, more crashes will come, it’s just that they will be driven by the continuing fraud and greed of the financial sector, aided and abetted by governments which do not act in the interests of all their citizens. So yes, the most vulnerable will suffer, again. Not because of sovereign debt though.

        I should say that in general I agree with you, based on other pieces you’re written. With your underlying intent at least. I’ll probably agree with that intent here as well – I promise to read the rest later. But if we buy into neoliberal fantasies about money, currency and so on we – whoever ‘we’ are – will be setting out on the wrong path.

  8. Wonderful article. Should be mandatory reading for everyone.

  9. Thank you so much for this excellent article, Laura, your hard work is greatly appreciated.

  10. Excellent article which lays out the real issue with the UK, I hope it is widely read,quickly.

    Sorry O/T Wings appears to be down.

  11. Brilliant. Powerful.

  12. Sorry O/T but VERY VERY important. Many voters have not received their polling cards and probably won’t in time for the referendum. Many are saying people in places where Yes support is strong are wost hit by this scam. Please spread the word that YOU DO NOT NEED A POLLING CARD TO VOTE.

    • Good point! You DONT. I called the Lothian Joint Val Board because I haven’t received mine either and they assured me to just turn up and that I would definitely be on the register. No card needed. Spread the word!

  13. Wow awesome very factual, true and to the point in every sense and really done your homework. Independence means YOU keep your monies and decide for yourselves what to give away or keep, rather than Westminster giving it away to countries that don’t need/want it whilst having people cueing up for food parcels. Vote your own government in, instead of following the rest of UK which will end up TORY as Government allowing immigrants in who will vote for them.

  14. Excellent article, but this sort of thing should have been front and centre a long time ago. Further, I believe the dominance of the SNP positions have greatly undermined clarity and bravery for most Scots considering this momentous, albeit also fundamentally simple, decision. Frankly, I believe independence is a no-brainer and remain astonished that so many Scots seem against it. However, I think that Salmond’s repetition ad nauseam about currency union is a huge mistake. If you want independence, you want to be independent from the City of London/BIS/bankster system. Without separating from the City of London, political independence from Westminster is nothing more than a slogan.

    An independent Scotland should have its own currency and banking system with its own credit-generating mechanisms INDEPENDENT of the BIS, IMF, EU and City of London, an independent state for all practical purposes outside the jurisdiction of the U.K. (as is the BIS HQ in Switzerland, and the Vatican in Italy). The bad guys know how valuable such independence is. So should the Scots.

    So the vote on Thursday is simple: should we be an independent country? The answer is simple: Yes! Later on, the Scots can work out exactly how to do it. Indeed, after a Yes vote the country can then decide that Union, or a more devolved Parliament within the Union which they will FINALLY be in a strong position to negotiate, is the best option. But the first position is to acknowledge that Scotland is and should be an independent country. That is the only issue. Exactly how to do it and what shape it will take is to be determined later.

    It’s not about hope. And it’s not about fear. It’s about what is right, proper, self-evident and natural.

    I am very inspired by the level of interest and participation amongst the grass-roots (aka working classes) in this referendum, but also very discouraged by the degree to which so many Scots cleave to an Empire which has never served their interests well.

    All you need to know: 40,000 young Scots emigrate every year from one of the most beautiful landscapes and vibrant cultures in the world. If the Union has resulted in that, the Union is not good for Scotland. It’s very simple.

    I live in Canada on Cape Breton Island. It’s a great country in many ways but, like England and U.K., dominated by a rapacious business and government class which stifles local community culture and economy to the benefit of multinational corporations. The waste in terms of spiritual, familial, community and cultural life, both individual and collective, is incalculable. Here it is hardly ever perceived, let alone discussed. However if Scotland votes Yes, it will send a message throughout the British Empire diaspora (which includes the US) and could instigate a wave of greater cultural and political awareness and creativity which has been sorely needed for decades, if not more than a century.

    Scotland, you are at the geographical (and, historically, the philosophical) apex of the Western world. You created the Enlightenment. Take your place. On Thursday until 10 p.m. you are a free people for the first time in centuries, if not always (the Lairds are gone!). Take pride. Be fearless. Do the right thing.

  15. I don’t get the “head over heart” argument about pensions. Clearly, the only guarantee of pensions is the enthusiasm, energy and commitment of young people. And equally clearly, they are fired up by the yes vote! For your pensions, go with the young!!!!!

  16. You may all think this is a wonderful piece because it says exactly what you want to think. Maybe if you all left your little utopia you might realise that this article is not at all based on facts and there are HUGE and completely unknown risks if you enter an independent scotland that the government has no plans to tackle it! ALSO do you seriously want a government in charge that were also in charge of the edinburgh tram disaster?!

    • Of course we don’t want a government in charge that was also in charge of the Edinburgh tram disaster. That would be the Scottish Labour administration, who, along with Edinburgh City Council allowed themselves to be tied in to a contract that made it impossible for the incoming SNP administration to have the whole thing cancelled, although they did try, without incurring even more expense in penalties than the cost of completing the project.

      • So a farce directed by Scottish Labour and SNP, with no direction whatsoever from Westminister, and at a cost of nearly £1000,000,000 to Scottish tax payers.

        That is no excuse. Politicians are corrupt and incompetent in Westminister, but they are also corrupt and incompetent in Edinburgh. I don’t see how we would be any better off on that front post-independence.

    • Labour Council in charge in Edinburgh, having said that are the a disaster?
      How many passengers have there been? Are they in profit? Would it have
      been better if there were no trams?

      Although I will never vote Labour the leader of the Council appeared on tv
      and gave one of the most honest appraisals of what had occurred.

      One of the few times I have seen.

  17. Reblogged this on Wake Up Before It's Too Late and commented:
    A very good read before tomorrow…well worth it – great article!

  18. Reblogged this on amnesiaclinic and commented:
    Excellent article – imagination and the power of bringing the impossible into being. Now why is play and the nurturing of the imagination and the arts being driven out of education?

  19. Thank you for this insightful article. I live in Devon, despair of the UK government, and truly hope for Scotland the “Yes” votes wins. If only the West Country could join you….

  20. Reblogged this on Mind Over Mutter and commented:
    Also worth a read for some helpful facts and thoughts

  21. Yes! Finally something about general.

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