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A Scots Pound shows the folly of abandoning Scotland’s historical scepticism

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ANYONE who has been on Twitter will recognise the strong resistance to logical discourse among the “cluckeratti”; there is a vast cohort of Twitter users who stick close to consensual prejudices like a brood of hens in a barn; far removed from lone calls of free -flying birds seeking new food in new places.

If you say something counter to a prevailing consensus, the clucking surges in storms of raucous spitting spite; such is the inbuilt need for humans to have their own beliefs confirmed.  It is much easier to be supported within a shared consensus than remain forever objective and inquiring, retesting truths against evidence – the way of the Scottish Enlightenment.

In our state of Neverendum, this “conversation” appears to reach a level of concentrated bunkum when talk turns to an “independent currency for Scotland”.  Even worse, I fear there is a confluence of influences here that could do untold damage.

What is this confluence?  Essentially it joins some poor economics with aspirational goals expressed in a seemingly acceptable way.  The backstory is that the UK’s refusal to countenance sharing the pound in 2014 chopped the secessionist argument off at the knees. Since then, the Growth Commission proposal of a pegged currency option has been seen to be unworkable; those proselytising for independence have now re-grouped and are building a new consensus based on an independent Scottish pound.

The new confluence works like this:

First, it is claimed that setting up a new central National Bank of Scotland would be easy. Qualified staff with networking ‘links’to the banking eco-system would be easy to find, it is said.  Those purported links are, however, in themselves a problem; I have trawled the commentaries and I can find no-one willing to declare this new Central Bank should be independent.

So, second, what then are the policy influences that the ‘links’ above might suggest? Well, a negative to start with; an antagonised investment services sector.

There is no way fund managers can take currency risks with their investors’ money presently valued in UK pounds. At best, they would demur from taking part, at worst they would move funds away from a Scotland’s government jurisdiction. So, to avoid these outcomes that would hobble or damage the Scottish economy any practical links would, in my view, have to be with those at least some way in favour of the SNP’s aspirations and world-view. That means adopting the stance that using central government policy to increase growth is good, and almost certainly believing that monetary policy has a place in the policy mix for this.

In the wider leftist constituency, there are organisations such as Common Weal who want an independent Bank’s board to include non-bankers. They also want to use the Bank for various purposes that would transform Scotland’s economic structure. The SNP would inevitably have to offer some policy crumbs to this tendency.

To achieve this, they have to develop a narrative that allows them to push the Growth Commission’s many years of austerity aside; in this they would be influenced by the party membership and their voter base – all heavily skewed to those living off the public sector, plus the wilder elements of the “yes” cause who are essentially seeking socialism, plus the nativist element for whom all ideas have to conform to a prejudicial nationalism that trumps all reason.

Now, third, the confluence where influences are conjoined and bolstered; enter Modern Monetary Theory, or MMT. A political gift from heaven, MMT purports to allow a Central Bank to create money for public spending at zero economic cost, to achieve the goals of social justice, equality and even growth performance through socialised public investment – that with sufficient spin can thrill their voters.  I have noticed more and more reference to MMT in the background of nationalist thinking.

Within the context of our human tendency to confirmation bias, Modern Monetary Theory provides the answer to the story that the SNP needs to tell – irrespective of its connection with monetary reality.

MMT supports the view that public spending can create good and provides a tool in the form of Central Bank action to achieve it that is flawless and largely costless.  What a weapon! Using “real” Scottish money to create “real” Scottish progress, with its very own set of brakes in case it goes wrong in the form of higher taxation of Scotland’s ‘well-off’.

Fourthly, adding to this tale of conflatory success, bring forward a job vacancy (especially suited for Nicola Sturgeon) to communicate emotional intelligence. In these bad times, we know she “understands how we feel” when things go agley, she says it is “the last thing I want to do” when tough measures are taken; this is public policy delivered not on evidence or merit, but as a poisonous pill. Forced onto us by Chief Mammy with some regret, it will be said to not really taste much different from a sugared placebo and is defined by its own truth that it “is the right thing to do” through its promise of an independent Scotland’s success.

Just imagine what Sturgeon could do with the promise of MMT as a policy to feed her constituency of interest.

Oh dear. The fatal loop of self-serving logic without evidence is ignored. For a nation of the Enlightenment that adopted scepticism as a tool of analysis, demanded objectivity above superstition, and promoted an attitude of humility to our understanding of common facts, such hot-air conviction should not sit well with us.  But the cluckeratti feast on it, it sounds right, it tastes right, and to hell if it kills them – and us too – when it is swallowed whole.

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