The question over what currency an independent Scotland would use dominated the campaign in the run-up to the 2014 referendum. – The National
And that was the problem. It was the wrong question. It was the British state’s question. It was posed in order to create a particular narrative. A narrative which followed the pattern of grinding negativity which characterised Project Fear. A narrative of doubt. And arguably the greatest mistake made by the Yes campaign was allowing the narrative to be controlled by the British state and its propaganda machine. The so-called ‘currency issue’ exemplifies this failure to seize the agenda perhaps more depressingly well than any other aspect of the first independence referendum campaign.
What currency? The very act of responding to this question validated it. By accepting that it was a pertinent question, the Yes movement gave the British media an opening to foster the notion that there was a risk of independent Scotland being bereft of a functioning currency. The idea is ridiculous, of course. Simply stating explicitly the proposition that a modern Western European democracy with a healthy mixed economy would have no functioning currency reveals just how preposterous the idea is. But that is what is implied by the question. An implication then reinforced by media lies about nobody on the Yes side being able to answer the question.
And, of course, a large part of the Yes movement opted to run with the British Nationalist narrative. Instead of pointing out that it was the wrong question, they embraced the fallacious notion behind it – that there was some serious uncertainty regarding Scotland’s currency affairs post-independence. At any given time, as much as a third of the Yes movement, mainly on the left, was to be found attacking the SNP and the Scottish Government and the white paper (Scotland’s Future) rather than challenging the British Nationalist propaganda. Often, the rhetoric deployed in these attacks was indistinguishable from the language used by the British media.
One of the most sickening sights I’ve ever seen was in the early hours of Friday 19 September when I was at the referendum count in Perth. As the No results came in, I watch representatives of the British Labour, Conservative and Liberal Democrat parties hug and ‘high-five’ and kiss one another in a stomach-churning orgy of triumphalism; metaphorically popping the champagne as they celebrated Scotland’s humbling at the hands of their precious, precious British state. It was a revolting spectacle. I wish No voters could have seen it. Although I not wish on my worst enemy the soul-rending, spirit-crushing guilt this sight would surely have occasioned in any No voter with a shred of conscience.
Almost as repugnant was witnessing people I knew to be both intelligent individuals and genuine independence supporters as they allowed themselves to be manipulated into undermining the very cause they were supposed to be fighting for. Smart, politically aware people behaving like puppets. It was disturbing to watch. And distressing to recognise the opportunity that was being missed.
The No campaign was, arguably, nowhere weaker than on the ‘currency issue’. The declaration that, should Scotland vote Yes, the rUK would unilaterally abolish the currency union was not an act of economic calculation, it was an act of political desperation. It was the empty threat of a bully facing humiliation. It was the abusive partner in a failed relationship threatening mutually destructive retaliation should their spouse leave. Their house would be burned down. Their children would be harmed. They would suffer appalling physical violence. Should they refuse to submit, they would be destroyed.
Bullies tend to resort to such extreme threats when they are at their most vulnerable. George Osborne’s ‘Sermon on the Pound’ signalled weakness disguised as strength. It was bluster made to look like boldness. It was exasperation dressed up as decisiveness.
And the Yes movement failed to exploit this moment of great weakness. Worse! Much of the Yes movement gave impetus to the British propaganda by unthinkingly parroting whatever line was being peddled by the BBC and the Unionist press. Those on the left – the righteous radicals and the ‘Byres Road cappuccino commies’ and the fractious fractions of fractured factions – were more concerned with flaunting their non-SNP credentials than with fighting an effective campaign. Others simply thought attacking their own side lent them an air of sophisticated even-handedness.
I say all this, not in a spirit of angry recrimination (OK! Maybe just a bit!) but in the sadly diminishing hope that lessons might be learned. Many of those who got it so tragically wrong are, I am regretfully aware, far too self-regarding to ever admit that Alex Salmond was right. They will never allow that the Scottish Government’s position on currency was the correct one at the time. They will never acknowledge that they passed-up an opportunity to tear a huge hole in the anti-independence propaganda edifice. They will never recognise that they, not only missed an open goal, but scored a possibly decisive own-goal.
But some might have the strength of character to take responsibility for an unfortunate error. And that may better arm them for the ongoing fight to save Scotland from the onslaught of ‘One Nation’ British Nationalism.
You’ll easily be able to identify those who have learned from past mistakes. They’re the ones who are now responding to the ‘what currency?’ question with the only sensible answer there ever was – it doesn’t matter! It is of little or no consequence what the currency is called or whose picture is on it or what colour it is… well.. OK! the colour matters. But the rest doesn’t. It never did. What matters is how a nation’s currency affairs are managed.
Is Scotland capable of managing its own currency affairs?
That is the only pertinent and important question. That is the meaningful question. That is the question the British political elite didn’t want asked. Because that is the awkward question. The kind of awkward question the Yes movement should have been asking when, instead, it was berating and hectoring and harassing Alex Salmond on behalf of Project Fear and at the behest of the British media.
Is Scotland capable of managing its own currency affairs?
The British political elite didn’t want this question asked for the simple and glaringly obvious reason that they cannot answer it without undermining their own propaganda. If they say Scotland is capable of managing its own currency, that undermines the effort to portray Scotland as utterly dependent on the beneficent and paternalistic British state. If the say Scotland isn’t capable of managing its own currency, they face immediate angry demands to explain this slight.
Is Scotland capable of managing its own currency affairs?
If you weren’t asking that question of Unionists during the first independence referendum campaign then you were missing a perfect opportunity to turn the tables on Project Fear.
That’s not the only question that should have been asked of the British state on its threat to unilaterally abolish the currency union. (I’m not listing them again here. Think of them for yourself.) That position was so vulnerable it would have disintegrated under even mild scrutiny. It was never going to be subjected to that scrutiny by the British media. It was up to the Yes movement to do that. And we failed! Yes, ‘we’! Because there is only one Yes movement and I am part of that movement as surely as I am part of the human species. We failed abysmally!
Some maintain that this failure to properly address the British state’s threat to end the currency union was the single biggest factor in the outcome of the 2014 referendum. What is certain is that it is representative of the failings which rendered the Yes movement less effective than it might have been. We need to do better next time. As I’ve said elsewhere, we need to approach the coming referendum campaign with a totally new mindset. We need a change of attitude within the Yes movement.
We need to ensure that we never again allow our Yes movement to be manipulated and divided by British propaganda. We must not allow the British media to control the agenda.
We must rid ourselves of the idea that it is our aspiration which must be justified and recognise that it is the denial of that aspiration which has to be vindicated.
We must reject absolutely the notion that ‘British’ is the standard by which everything must be judged.
We must stop explaining and start demanding explanations.
We must stop searching for better answers to the wrong question and start asking the awkward questions.
We need to know that power is not given. Power is taken.
If you find these articles interesting please consider a small donation to help support this site and my other activities on behalf of Scotland’s independence campaign.
Peter A Bell 
Reblogged this on Scotto Voce and commented:
We need a change of attitude within the Yes movement.
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I guess I have always maintained the view that Scotland already has its own currency. The fact that it called a pound (£) and aligned to the Bank of England is only by default having been printed by said bank. We have three Scottish banks all producing paper money with individual Scottish bank designs where the only reference to the GBP is the word ‘Stirling’. This can easily be changed.
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“the only reference to the GBP is the word ‘Stirling’. This can easily be changed.”
Indeed, it can be changed easily to “Sterling”….
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It’s time we did talk about currency. During the 2014 indyref I gave up explaining to people some basic currency facts. Things never mentioned publicly by the Yes movement, SNP et al.
For every Scottish pound printed a pound sterling must be deposited in a BoE account, with 5 billion pounds of notes in circulation, NIC. Splitting the pound and giving up Scotland’s share back to a Scottish Bank would mean handing our own money back. We backed our own currency. Plus a share in BoE assets. Those Titans and Giants would return to Scotland.
Since the gold standard was dropped by Blair our British pound is just fiat currency, bits of paper with someone’s face on it.
I find it incredible that we are even debating currency, Scottish currency in an independent Scotland will be CURRENCY, bits of paper with someone’s face on it. We could even use we round bits of metal for coinage.
Does anyone have a better idea?
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You have to ask, then, why The National is making issues like this the touchstones of any new referendum – in common with the unionist MSM.
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The National isn’t making currency an issue. Business for Scotland is acknowledging that circumstances have changed since the first referendum campaign. In my article, I’m looking backwards for lessons about going forwards. I’m pointing out that currency was never an ‘issue’ in the way British Nationalists portrayed it. hat is not to say it isn’t an issue at all. Obviously, it’s something that has to be considered. But it’s no more than that.
Everybody want to make their pet issue the “touchstone” of a new referendum. It’s all about this! It’s all about that! It’s all about whatever it is that I’m currently obsessing about! In fact,there’s only one thing that the new referendum is ‘all about’, and that is our right of self-determination. Before we can restore Scotland’s rightful constitutional status we must first assert our democratic right of self-determination. And the best way to assert a right is to exercise it. Everything else flows from that. If we don’t take the power to decide, the question of ‘what currency’ becomes irrelevant. Because we won’t be making the decision. We won’t have a choice. The decision will be made for us. The choice will be imposed on us.
And what goes for currency,goes for everything else as well.
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The Yes movement has to play the project fear game too. Westminster is trashing Scotland’s democracy and Scotland’s economy. Reducing the block grant steadily. They plan to assault Scottish culture.
A pro-indy project fear will not be dishonest. It is simply telling it like it is. This notion that we have to play the game for our country’s freedom in some gentlemanly English public school cricket match kind of a way has to go.
The notion that if we pretend there’s no genuine political emergency situation and that we’re not really playing for high stakes then the public will slowly come round to the Yes camp in enough numbers is silliness of the worst kind. There’s no point in studiously avoiding boat rocking when your enemies are going to tip the boat over anyway.
We have a second indyref now and even if we lose we’re still fighting. Retreat and Westminster will succeed in reducing Scotland to a Lincolnshire.
And you’re right on the money about currency Peter. Let’s be a bit arrogant. If people ask us what Scotland will do about a currency after independence, just say that we’ll have a currency, same as any country in the world has one. Then talk about Westminster’s plans for Scotland if we don’t get independence.
Scotland’s choice is a seat at the United Nations between Saudi Arabia and Senegal on the one hand and a future as the new Lincolnshire on the other.
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“Scotland’s choice is a seat at the United Nations between Saudi Arabia and Senegal on the one hand and a future as the new Lincolnshire on the other.”
Great point!
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I can see you’re taking an historical approach on the premise that “those who cannot remember the past are condemned to repeat it.” However, the question will undoubtedly come up again and I feel we need to say unequivocally that we will have our own currency and our own Central Bank.
Prof Richard Murphy said in an article in the National last year and repeated on his blog: “Scotland can truly be independent, and make its own choices on its economy, tax and much else, but I stress that’s only true if it has its own currency and central bank. If it has neither if those things then the situation is very different. If it uses the euro look to Greece for the way Scotland could be beholden to the European Central Bank and the International Monetary Fund for permission as to what it may do in its own country: that’s no route to independence. And if it uses sterling the Scottish government would continue, as it is now, to be a glorified local council working within constraints effectively laid down by the Bank of England, with whom it would have to bank, and in whose currency it would have to pay its debts at interest rates effectively set in London. If anything, this is an option worse than that which Scotland faces now.” (http://www.taxresearch.org.uk/Blog/2017/08/03/get-the-currency-and-the-tax-system-right-and-an-independent-scotland-could-flourish/)
We also need to explain why it is imperative to have our own currency, and how recent thinking (MMT) which is gradually being accepted by most enlightened economists, means (among other things) that a country with its own currency can never go bust, and point out that even Westminster’s bank has used MMT through Quantitive Easing, creating money where none existed before. (unfortunately the way they have used it benefited only a small sector of already rich people and bolstered the banks who caused all the trouble in the first place) For example, Murphy argues that a “People’s QE” or a “Green New Deal” would have been a more effective use of the B of E’s money creating facility.
There are a lot of myths and misunderstandings surrounding a sovereign currency, as many of the comments in today’s National confirms. We have to address this rather than just saying “It’ll be alright on the day – trust us” as people won’t believe us.
Richard Murphy’s blog is an excellent primer on currency, taxation and other issues too.
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I’m very well aware that times have changed. Unfortunately, even if the Scottish Government’s earlier plan was still ‘on balance’ the best option – which it might be – it would be all but impossible to sell it to the people of Scotland. This probably has much worse implications for rUK than for Scotland. But what can you do, eh?
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I usually enjoy your arguments, but I’m having difficulty understanding this one. While I can see that saying we will use Sterling might assuage the fearful, I think it was economically illiterate, for the reasons given by Richard Murphy above. I hope some lessons have been learned.
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It’s not all about economics. There’s also the political aspect. The problem with ‘experts’ is that they tend, perhaps naturally enough, to analyse everything in isolation and in terms of their own expertise. You may respond that this goes for politicians as well. But the expertise in politics comes from being able to balance a range of expert analyses and take account of myriad connected issues. And that’s what Alex Salmond did with the currency issue.
Looked at from a purely economic perspective, the Scottish Government’s position may have appeared economically illiterate – although I think that’s being a bit harsh. Viewed from a political perspective which takes into account, among other things, the need to “assuage the fearful”, the position looks at least ‘politically literate’. Especially when the connections are taken into consideration.
Remember that maintaining the currency union was not the whole of it. The Scottish Government’s position was every bit as much concerned with the issue of debt and concern to protect the economy of rUK. It is in Scotland’s interests that the r\uk economy is healthy. We do a lot of business with them.
There’s nothing wrong with abstracting a political position, in whole or part, for the purpose of examining it using the tools of a particular trade. But we must never lose sight of the fact that it has been abstracted. And that, after it has been dismantled and inspected, it has to be put back together and returned to its place in the big machine. A N Whitehead called it the fallacy of misplaced concreteness.
When all is said and done, we come back to the same point. If people are saying that Alex Salmond got it wrong on the currency issue because this position was vulnerable to attack, then the onus is on them to demonstrate that there was another option which would not have been vulnerable. Or would at least have been less vulnerable. There was no such option. There was no ‘right’ answer. Only answers which were wrong to a greater or lesser extent. An answer may look right in a very particular light. But look quite wrong when illuminated by pure white light.
What made Salmond’s answer wrong was, not economics, but the failure of the Yes movement to support it. Right or wrong was not a matter of absolute objective fact. It was a matter of judgement. The position was up for a vote. And about a third of the Yes movement chose to vote with the No campaign.
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A wee reminder needed here I think Peter et al.
Page 378 of “Scotland’s Future”, Crown copyright 2013 – Currency – 8. What currency will an independent Scotland use? We propose that the pound Sterling will continue to be the currency of an independent Scotland. – 9. Will Scotland join the Euro? No. The current Scottish Government is clear that Sterling should continue to be the currency of an independent Scotland.
So, Peter, we set the argument, that some anonymous Welsh Labour type countermanded and waslater copied by Lord Waggiefinger with his request for a Plan B. We put ourselves on the back foot.
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You’re making the same mistake made by a great many people. Disregard the merits of the policy position itself for a moment. Think only in terms of political choices. For a political choice to be wrong, in any sense, there must be an alternative that is less wrong.
Now, go back to considering and comparing the merits of all the options available to Alex Salmond. You will not find one that is less wrong as a political choice. What you will find are options which are better in terms of your personal preferences. But that is not the basis on which Alex Salmond was making his political choice. It was not, and could not be, a subjective judgement. It was a matter of political judgement.
On that point, is it not curious that people who will readily allow that Salmond is one of the most astute political operators around are simultaneously prepared to believe that he is prone to making massively stupid blunders? And why do they believe that? Two reasons spring to mind. They choice made does not accord with their personal preferences. Or because they’re responding to the media. In most cases, it is likely to be a bit of both. People who judge it the wrong choice on the basis of their subjective assessment will find affirmation of that judgement in the media’s critical commentary. And who doesn’t like to have their subjective judgements affirmed by a ‘higher authority’?
Alex Salmond knew that his currency position would be attacked regardless of what it was. He also knew that the volume and relentlessness of the attack would make it appear that he was “on the back foot”. He therefore chose the option which was most defensible on purely rational grounds. Which would, as a corollary, tend to make the best option in economic terms. He may have appeared, at least to the casual observer, to be “on the back foot”, but he didn’t fall. Why? Because he had chosen solid ground on which to make his stand. You will doubtless recall the shrill frustration of his enemies when they failed make Salmond so much as waver despite throwing pretty much the entire weight of the British state’s propaganda machine at him.
What Alex Salmond may not have reckoned on was the extent to which individuals and groups on the Yes side added their weight to that mustered by the British political elite. The mistake was not Salmond’s. The mistake was declining to set aside their personal preferences and policy agendas to get behind the sound political choice. It was an appalling display of political naivety such as not even Salmond’s nous and experience could have prepared him.
It wasn’t a betrayal of Salmond personally. Although it could easily be seen that way. It wasn’t a betrayal of the SNP. Although there were party members among those who so stupidly and needlessly turned on Salmond. It may not even have been a betrayal of the independence movement. Although that one is more difficult to argue. Worse, perhaps than all of these, the Yes movement joining forces with the British Nationalists was a betrayal of plain good sense. It was thoughtless. It was mindless.
Because of that thoughtlessness and mindlessness – perhaps spiced with more than a pinch of personal and/or partisan malice – the Yes movement missed an opportunity to turn the tables on Better Together, the British parties and the British establishment in a way that would have done considerable damage to their nefarious campaign. It might even have been a decisive blow. It sickens me to think that the 2014 referendum may have been lost due to the folly of a large part of the Yes movement.
I suspect this may have irked Alex Salmond as much as it irked me. Given his history, it’s easy enough to believe that he had danced the British Nationalists into a trap. But the trap was never sprung on the them because the Yes movement was too intent on pushing Salmond into it.
I could explain at more length the nature of that trap and how it could have been used effectively, but this reply is already rather lengthy. I’m going to stop here also because I still get quite angry when I think about that missed opportunity. I’ll finish by saying that it would be gratifying to think lessons had been learned in the Yes movement. Regrettably, I have cause to regard that as a forlorn hope.
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Good gawd, this is stupid stupid stuff. You guys really haven’t got a scooby doo, have you?
There will be no currency union, WM & BoE have made this clear… there is no upside for rUK but a huge downside for them in doing this…. why would they? That is a rhetoric question ‘cos nobody on here, least of all Mr Bell has the brains to answer it.
Sterlingisation? Yep, you could do that…upside? We get to use sterling. Downside?
We could not print our own money.
There would be no Lender Of Last Resort for financial institutions in Scotland. They would leave and go somewhere else. England? Dublin? Paris? Who knows, but they wouldn’t stay in Scotland. Too great a risk.
In order to maintain a steady flow of a foreign currency in our country, we would have to try and achieve an equitable flow of currency twixt Scotland and rUK . Never ever going to happen. with our imports from England being so high.
A foreign country would be making decisions on our bank interest rates, which may not be in the best interests of our country all the time.
No fiscal transfer. £10billion smackeroonies, guys.
“This probably has much worse implications for rUK than for Scotland.” Utter shite.
Finally, a belter from Mr Bell: “British state on its threat to unilaterally abolish the currency union. (I’m not listing them again here. Think of them for yourself.”
If Scotland goes independent, then it is Scotland that is walking out of the currency union, not the “British state”, and the reason that Mr Bell is “not listing them again here.” is because he does not know.
He hasn’t got a bloody clue.
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Top trolling, Geacher, I’m sure you’ll win over lots of people with your patronising ‘nobody here has the brains to answer it’. Mervyn King admitted (after the referendum, of course) that a currency union or sterlingisation were perfectly feasible options. The question you have to answer is ‘what would be the effect on rUK if their national debt per head jumped 10% (because Scotland no longer paid a share) and their balance of trade was no longer supported by dollar denominated oil exports?’
As for your ‘Fiscal transfer, £10billion smackeroonies’, that’s ‘utter shite’. A fiscal transfer from Westminster to Scotland is meaningless without looking at the fiscal transfer of nearly all Scotland’s tax and oil revenue to Westminster first.
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SandyW… you make my case right there fella. Nowhere in the interview does Mervyn King say the words that you attribute to him, tho’ he does say that there would be “an issue about public finances”. I suggest you go ans watch it again and tell me I’m wrong.
” A fiscal transfer from Westminster to Scotland is meaningless without looking at the fiscal transfer of nearly all Scotland’s tax and oil revenue to Westminster first.”
That is gobbledegook. We as a country raised £58b in taxes last year, and spent £71b. We received over £1,700 per person more in public service funding than the UK average, and more than we could have spent on our own if we were independent. On the first day of independence, we would lose that source of income. Where would we make that up, that £10b?
As for Scotland no longer paying a share of the UK’s debt? Well if you consider that last year we paid 8.4% OF the debt, but contributed almost 21
% TO the debt, then you will see that rUK would be better of. tell me, how could a small independent country cope with a deficit of £13B? Over £2,000 for every person in Scotland?
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“As the No results came in, I watch representatives of the British Labour, Conservative and Liberal Democrat parties hug and ‘high-five’ and kiss one another in a stomach-churning orgy of triumphalism; metaphorically popping the champagne as they celebrated Scotland’s humbling at the hands of their precious, precious British state. It was a revolting spectacle. I wish No voters could have seen it. Although I not wish on my worst enemy the soul-rending, spirit-crushing guilt this sight would surely have occasioned in any No voter with a shred of conscience.”
This is hilariously overwrought. I hope for your sake it’s some sort of deliberate rhetorical device.
If you actually wake up this angry about the referendum every morning, I think it’s time to speak to a qualified psychiatrist, or get a job.
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