3 lessons from the Scottish referendum: the insult, the fear and the pork – where to from here?

This post could have also been named “How to campaign: confirmation bias, framework effects and the flypaper effect“. But I’m trying to go for a less academic tone these days, so I thought I should at least give the post a more accessible title…

I know I’m coming to this party so late we might as well admit it is over. No one is writing about this anymore. However, I’ve come to the conclusion that many a lesson can be learned from the Scottish referendum and the successful campaign against independence.

Lessons from the Scottish Referendum

First, you don’t gain votes by telling people something is too difficult, particularly when others can do it. It’s a negative message that mostly conveys a sense of perceived incompetence that offends the confirmation bias of those who’d have the responsibility of carrying out the task. In the case of the Scottish referendum, one of the least successful strategies appears to have been to argue that setting up a new country was too hard a task, with too many complex details. Confirmation bias probably means no one likes to get the impression their interlocutors think of them as inferiors. From this point of view, if we are to believe (the very credible) people of YouGov, the shift in conversation from the negative complexities of monetary arrangements to the benefits of a Scottish NHS went a long way towards helping the Scottish independence camp.

Second, fear works. Instead of focusing on how difficult something might be, focus on conveying the feeling that it will be costly, painful or dangerous. Framingk effects work in such a way that we discount potential benefits more than potential losses so that we fear more than we hope, which I would expect to have been an evolutionary adaptation whose adopters enjoyed a higher survival rate. On average we are chickens, basically. So scaremongering the Scots about being unable to coordinate policy for the Pound Sterling (£) and the danger of having the Euro worked.

Finally, votes are for sale. Fearful of the uncertainty that dominated buildup  to the referendum, the 3 leaders of the main British political parties sold the house and became great big sellers of pork, promising Scotland more political power for little more fiscal responsibility if it chose to remain in the union.

It’s not great leadership, but it worked, helped as it was by an already fairly split electorate.

The appeal of Independence

First and foremost, I was rooting for independence because if I were Scottish, I think I would resent the UK, much as I would resent a Spanish king if Portugal had not regained its independence in the 16th century. While a union might have been entered into voluntarily, it probably benefitted a limited number of Scottish aristocratic families that were able to easily integrate with their English overlords. Again, this is not a vociferous anti-British or anti-Scottish statement. It’s what happened when Portugal became a United Kingdom with Spain. Plenty of Portuguese (e.g.: Miguel de Vasconcelos and Francisco de Melo) received privileges and were favoured by the Phillips of Spain. It’s nothing British, English, Scottish, Portuguese or Spanish. It’s just what happens. Scotland also has a long tradition of nationhood and different preferences from England, with great national heroes like Robert the Bruce, the very famous William Wallace, and more recently with the roles it played during the Jacobite risings. Meanwhile, the Highland Clearances of the 18th and 19th century were not unlike the social abuses that accompanied the much vilified potato famine in Ireland, with similar migratory effects. Sure, the UK now foots the bill, but that only happened after Ireland became independent and the SNP started making political inroads. The specific arrangements of Scottish governance have been on the UK government’s agenda since the second half of the 19th century and this was the third referendum in half a century.

I think I would have liked my own country to be independently responsible for its own fate. Clearly no country is isolated from the rest of the world, so an independent scotland would only be viable as a offshore financial centre or as a member of the EU, but that would be its decision. Clearly there’s also an issue of disparity in preferences. Scotland is more leftwing than England is, probably due to having a poorer population, which I’d blame on the aforementioned history. In a way, British identity is dominated by English preferences so the exercise of power in the UK through policies is more in tune with English preferences than it is with Scottish ones. Because of devolution, this does not create the sort of mismatch in the UK that it would within the very culturally fractionalised but politically centralised African nations that Paul Collier discusses, but even so, it appears almost half the population of Scotland has indeed adopted a narrative of discontent, with norms that may justify secession in their eyes. But more on this line of thought next week.

The View from the Rest of Europe

Lastly, Scottish independence would also been interesting and have potentially fascinating externalities in relation to Catalonia. Although the latest poll shows a rise in support for continued union with Spain, past polls have shown that the pro-independence movement has much more strength in the still-Spanish region, but there seems to be no appetite for devolution or allowing Catalonian independence from Madrid.

From Catalonia a great push might create a trend and we could see local cultures in Brittany, Aquitaine and Corsica flourishing once again, coalescing around political movements and who knows extending throughout the rest of France? – Clearly, this is a domino theory of emerging European localism that is only possible in the context of the EU as a unifying power. I honestly haven’t properly thought this through, so I can’t say for sure that such fractionalization would result in the chaos that resulted from the collapse of Yugoslavia, undermining the quality of life of all citizens and potentially eroding the roots of the EU or whether it would be orderly like day the secession of the Baltic republics from the USSR. But it sure would have been interesting to watch. France did a pretty good job at unifying its regions under a single cultural paradigm, eliminating competing languages and regionalism since the middle ages, and particularly with the large scale national education system that followed the French revolution.

Going forward – This conversation isn’t over

The above notwithstanding, I believe the last drop of ink has not yet been spilt over Scottish independence. Either for the reason mentioned above, that the concessions from the UK will be too generous so as to make independence all but a formality, giving Scotland the level of autonomy granted to old protectorates in the early 20th century or falling short of Scottish demands.
One final alternative is that the fear incentive may be removed. The main concern was that Scotland would be out of the EU and it’s single market, left economically isolated from its peers. However, this British government, has long expressed its interest in bringing about a referendum over the UK’s continued membership of the EU. Such a poll would most likely result in a resounding vote for exit. Which would ironically remove the incentive for Scotland to remain in the UK. So we shall see.

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Coming back: Some changes and the promise of regular posts

Dear reader,

My apologies; I’ve been quiet for too long. If you are a regular reader of this website you are entitled to be rightly ticked off and legitimate in having all but written me and this website off. Here’s to hoping you haven’t, even if this is not the first of these posts I’ve written.

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Economic Growth and Military Expenditure: R&D, Consumption, Capture – What Future for Europe?

Before anything else, I want to start by acknowledging the fact that the focus of this article represents a relatively narrow section of what is an enormously interesting, fertile and relevant field of economics with much to contribute to societal welfare and development. I refer the reader to the section of this website with a list of selected references on economic growth, covering Sollow-growth theory, Ramsey models, overlapping generations, endogenous growth and institutional economic contributions to the field.

Perhaps the topic of this post section can be argued to fit within the endogenous institutional growth theory section. Nevertheless, the role of military-supported R&D in driving technological and by association real economic growth appears to me as being underestimated in the public consciousness and often ignored in supply-side debates of long term economic growth particularly in Europe. It appears to me that this is an unfortunate oversight both for its positive and negative potential. I offer a very short discussion of these issues below by emphasizing the appeal of the implications for economic growth and dangers of government capture and militarism.

In summary, it appears that there are four important factors behind the effect that government military expenditure has on economic growth: Scope, scale and how it is funded. The main strains of literature informing the considerations below stem from Ruttan (2006), Barro and Redlick (2011)Ilzetzki et al (2010) and Acemoglu et al. (2010.b).

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Posted in Economic Concepts, European History, European Integration, Political Concepts, Visions of the Political Future of Europe | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

A note on the Feasibility ECB Quantitative Easing

Recent comments from the ECB about potential attempts to mitigate a decrease in inflation through QE have led to an increased interest in the articles posted on this website about the SMP and the CBPP. However, such interventions were pursued for different purposes and as such may offer only partial insight into what the ECB may do. I take this opportunity to briefly review some of the alternatives available to the ECB. I also offer a belated apology and explanation for the decreased posting over the last six months, for those interested.

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Posted in Current Events, ECB, Euro-zone Update, Inflation, Sovereign debt Crisis | Tagged , , , , , , , , , , , , | 2 Comments

How Income Inequality Leads to and Supports Political Capture

As can be seen in posts pondering the past, present and or future nature of the Chinese, Brazilian or Ancient Roman political economy, capture is inevitably a recurring theme in my analyses. More specifically, I have recently found myself leaning towards reviewing income inequality as an intermediary step between macroeconomic and institutional variables. However I’ve long struggled to explain the logical steps behind this otherwise instinctively true fact. This post hopes to address that shortcoming.

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The Rise and Fall of the Roman Republic – Citizenship, Expansion, Income Inequality and Empire

This post is not supposed to offer a formal and authoritative or complete account, description or thesis of the rise and fall of the Roman Republic. Instead, it rather quickly and incompletely summarises what small and insignificant information I gathered in a relatively informal manner for the simple purpose of explaining it to myself. The degree of complexity is completely arbitrary and set to satisfy my heterogenous and idiosyncratic intellectual criteria. This post does not claim to be a rigorous work of history, geography, economics, politics or any other mix thereof of a standard to be published. However, it does make use of all of them, if only as sources and as a buffer between what strikes me as relevant and that which does not.

The success of the Roman Republic, as I understand it, was the result of a number of features that made that polity more adaptable than many of its neighbours and opponents, be it politically, legally or militarily. Checks and balances created competition for leadership that was not necessarily adversarial. Conquest and a degree of economic flexibility created the necessary income inequality to eliminate collective action problems, the abuses from which were at least partially mitigated by increasing legal equality of opportunity that extended the political franchise. Supported by what strikes me as a fortuitous order of conquest, which allowed it to build momentum at a manageable pace, these facts seem to have been the driving impetus for Rome’s success. However, the burden of conquest eventually became too much to bear and led to the Marian reforms, which although successful at guaranteeing military success undermined the Republic’s checks and balances, exacerbated the agency of the few against the collective action problems of the many, and facilitated its eventual capture and reform into the Roman Empire.

The post is divided into four sections. The first focuses on the Republic’s military adaptability. The second considers some secondary features of the Roman state, beyond military adaptability, that also helped its expansion, what I term loyal competition, adaptability of legal franchise and the location, timing and sequencing of conquest. The third part considers the self-reinforcing effect of military conquest as a fuel of economic inequality, the evidence of this fact, both statistical and some telling testimonies. It argues that this economic inequality funded the military agency introduced by the Marian reforms to facilitate the capture of government by the few in a manner that institutionally crystallized political autocracy as the defining feature of the Roman Empire.

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