Scotland, Quebec, and Tupy
By David Henderson
Scotland’s greater statism and, ironically for the birth place of Adam Smith, suspicion of capitalism, is a potent obstacle to reform in England and Wales. It is also a serious danger to economic prosperity north of the border. Sooner or later, Scotland will need to introduce reforms that it would never accept from a Westminster government. The end of the Union maybe [sic] a high price to pay for the end of socialism on the British isles, but the rewards from a more robust, long-term economic growth are not negligible either.
This is from Marian L. Tupy, “Scottish Independence Will Kill Socialism on Both Sides of the Border,” September 17, 2014.
I think Marian’s point is exaggerated but I think he has the direction of change correct. This is similar to a point I made in a piece in the Wall Street Journal when Quebec voters were voting on separation in the mid-1990s. I can’t find the piece on-line but it’s David R. Henderson, “If Quebec Separates, Almost Everybody Wins,” Wall Street Journal, January 19, 1996.
The basic idea of both Marian’s and my pieces is that the smaller entity whose majority votes to secede, if they do so vote, is one that is more statist than the one that they voted to secede from. So statism in the bigger country will fall. One would expect statism in the smaller country to increase because it is no longer constrained by the bigger country. But what people in the smaller country will learn is that they can socialize the costs only within their smaller country, not within the bigger country. So they face a constraint that is tougher than the one they previously faced. Therefore, they become less statist. Is that a sure thing? No, but the odds are good.
One big hedge about Quebec. I have made this argument about Quebec to my Canadian friend Jason Clemens. Jason comes back by pointing out that in Canada there is zero federal intervention in education. “Why do you think that is?”, he asks. “I don’t know,” I answer. “Because Quebec is in the union and they won’t allow it,” he answers, “Let Quebec out and that constraint goes away.” He has a point. So the bottom line is that the consequence for a particular country will depend, more than I said in my WSJ piece, on the specifics.
By the way, Marian L. Tupy wrote “European Union” for The Concise Encyclopedia of Economics.
Postscript: At the risk of making this post too chatty, let me add that I like the post of our guest blogger, Alberto Mingardi, earlier today on this. I do want to challenge, though, not Alberto, but Clive Crook, on one thing. Crook writes:
A Scotland that stays in the union reluctantly will be of little use to itself or anybody else.
This is way too anthropomorphic. If Scotland stays in the union, Scots will have lives, just as if they left. It reminds me of various comments I’ve seen over the years on Canada of the flavor, “Why does it exist?” or “What’s the point of Canada anyway?” I can assure you that when I grew up in Canada, well before I became a libertarian, I didn’t ask those questions. Nor do, typically, adult Canadians. The people who ask those questions tend to be the type (I’m thinking Bill Kristol here) who think that nations have to stand for something rather than being places where people can carry on their lives in peace.