A Scottish Currency

MacPoon, Groat or Smackerooney, it will be far more stable that a Pound Sterling 

 A Pound to a Penny

In the two-match Referendum debate televised between combative Alex Salmond and soporific Alistair Darling, prior to Scotland selling its birthright for a second time in its history, readers will recall Salmond refused to rise to Darling’s vexatious question, “What currency will you use?”.

Laying aside any Plan B (he actually said he had three plans), like a general mounted on his war horse meeting his opposite number mid-field before the battle to exchange a riposte and a scowl, Salmond wasn’t going to disclose it to an invader. That, it transpired, was an error of judgment.

Darling had activated a deep seated fear in us, independence would make us poorer. And in tandem, the then Chancellor of the Exchequer, slimy Etonian, George Osborne, refused Scotland use of the Pound Sterling.  The pair of political hit men performed with aplomb.

The hostile move, endorsed by lickspittle, ground scuttling party politicians, remains a perfect example of England’s power and political duplicity. 

A separate currency is natural

Money is that strange token, a faith, a belief that the piece of paper or coin you hand over will secure goods in exchange. Eons ago we got by with shells and beads and the same belief in their agreed worth.

‘Scotland Be Brave’ ran the legend on the Referendum poster, and duly inspired … we collapsed in fear. To accept responsibility assumes boldness in decision making.

We are a wealthy nation. I suggest Scotland should state its intention to decouple from sterling, immediately on independence signed and sealed – and expect about two years to see a smooth transition of all powers from Westminster stranglehold but a month for ATMs to switch over to our Smackeroonies – rather than as proposed now, petitioning for a continuation of our subservient role in an asymmetrical sterling union. (See NOTES.)

Why not use the Euro?

If you stand back, well back from Farage and his racist refugees, English Euro-sceptics do have an argument of sorts against the Eurozone, only for all the wrong reasons. Contrary to the ludicrous straight banana lies of Brexteers, the EU is a place of democratic practice, but some of its decision making ought to be made more public.

The one institution screaming out for radical reform is the EU Central Bank. It is a repository for the most brutal theories of the Chicago School of Economics, almost all discredited since the death of its hallowed messiah, Milton Freidman. While populated by Chicago School luminaries, the EU Central Bank is unable to throw off its ideological straight jacket, its governing maxim, loan to a nation’s banks, never invest in the nation. The nation is expected to accept artificial austerity so that the banks recover, able to pay the EU Central Bank interest at high rates. The money goes from bank to bank, and back again gathering interest, never landing in our account.

The answer is a radical reorganisation of the EU Central Bank and probably following it, the Bundesbank. In them lie the economic diktas of our EU states national policies. The difference between the Bank of England and the EU Central Bank is obvious: the Bank of England must follow Westminster instruction. It may become antagonistic to Scottish libertarian economic reforms Westminster didn’t like. England has always imposed its rule by force. Safer to dump the Pound Sterling and not use the Euro.

English patriots look at it this way. The Euro’s great weakness, according to their view, is there is no single nation-state to back up the Euro in times of trouble (correct), and no European institutions can or should develop to play that role (wrong).

One step at a time

Let’s take this logic a step further. England’s governing isolationists claim no single currency can serve the interests of a multi-national state. But wait! The United Kingdom is a multi-national state. That being so, indisputably so, then Scotland should issue its own currency forthwith, or forever relinquish its pretence of being a bona fide nation.

If England’s Brexiteers are right about the Eurozone, then we have a moral duty to make Scotland independent of London. The only reply a Brexiteer has to that is the one full of cellulite: Scotland needs England. We are better informed now; we know it is the reverse, England needs Scotland.

What are the arguments in favour?

There are formidable economic arguments in favour of a nation having its own currency. First and foremost Scotland already has its own banknotes. Scotland invented and printed the first paper notes, their existence hugely beneficial for an independent state.

Presently, our three Scottish banks issue Scottish pounds under an agreement with the Bank of England which limits the quantity of printed money. I hope they do become ours again free of their bail out.

Upon independence, and to keep everybody happy we can avoid major financial upheavals, the Scottish government can commit to maintaining (say, for two years) the same rules of quantity supply. (See NOTE below.)

However, “control of the three banks’ note issues should be transferred to a Scottish Central Bank which commits to maintaining a currency board that allows for a seamless transition to a free-floating Scottish pound within a couple of years.” (SNP policy is to found a People’s Bank. Call it, our Central Bank.) 

I place that last paragraph in italics because that is the view of at least three eminent economists who have studied Scotland’s situation: Richard Murphy, Yanis Varoufakis, and David McWilliams, an Englishman, an Irishman and a Greek!

So, outpourings of imminent catastrophe, people throwing themselves off the top of buildings, or castle ramparts it being Scotland, we won’t have bank closures as the Scottish notes are already in circulation, no ATM disruption, no re-writing of short and medium term contracts and no fear of bank runs.

Don’t take my word, economists are agreed, and when experts are agreed, the opposite point of view cannot be held to be true.

Public Debt

Turning to the issue of public debt and we win top prize. Scotland does not have a public debt. The UK has debt, and it alone must shoulder it in the event of independence. To be precise, it might take a little if we use it as a negotiating hand. Then again, we could rent Rosyth Docks for (say) £5 billion a year for five years tops, (as Greenland has done with its US air force base), then it’s bye bye Trident.

By suggesting we keep the Pound Sterling, albeit for a limited time, we are dealing the best hand to London as a bargaining chip for securing the continuation of a lopsided currency union. Our own currency minimises the amount of UK debt we care to accept.

The Bank of England always favours England

Any thought of the bank of England as Scotland’s bank of last resort, a kind of legal guardian, is dangerous. The current governor made plain sharing sterling can happen, but if you have a tyrannical Westminster – an historical fact for over 400 years! – it matters not a jot what the governor thinks.

A shared Bank of England will always favour tuned to the needs of southern England and the City of London; it operates as a perpetual drag on Scottish growth; it poses a permanent threat to the solvency of the Scottish government.

Scotland can never secure sovereignty within the sterling zone because a shared central bank will always force Edinburgh to dance to the tunes of the City and of England’s agenda. Let us dump the hideous Barnett Formula in which mafia thugs take most of our earnings and leave us just enough to keep the shop open so we pay up again next month. 

Staying in the EU does not mean forced to use the Euro, ergo, using our own currency is the solution. Best of all, the EU does not control interest rates. As Mrs Thatcher said: “Those who control interest rates control the political!” We must control our own rates.

Be brave, be bold

Scotland is not a basket case. It never was, and it never need be. It has no humanitarian crisis. By exiting the sterling zone, Scotland stands to gain nationhood without suffering any of the catastrophic economic costs.

We can reject malicious unionist prejudices with confidence. We can do it because we have never been subsumed into England fully, neither culturally, economically, geographically or spiritually, though England has tried its damnest to have us become North England. Ties to an annual English ‘allowance’ we cannot reform the Bank of England, nor can we eradicate colonial manipulation while in an unequal union, but we can reform Scotland.

Epilogue

I shall end quoting Yanis Varoufakis as we look to a healthier union with Europe: “An independent Scotland, with its own currency guaranteeing autonomy from Euro-sceptic England, can help an emerging alliance of peripheral European countries establish a new Eurozone architecture; perhaps even one that Edinburgh may want to join….” to which I add, first we must dump England and its bank, and without the EU we can forget reinstating independence.

Using our own currency is as natural as using your own toothbrush, only a lot healthier.

 

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NOTES

Taking their future in their hands, grassroots activists attending SNP Conference on 27th of April, 2019, rejected the softly-softly, over-cautious timetable proposed by the SNP leadership and instead voted to install Scotland’s own currency at the first opportunity after independence.

The Bank of England issues £1 million notes (Giants) and £100 million notes (Titans) which are held somewhere on its Threadneedle Street premises permanently. The three Scottish pound issuers are, simultaneously, authorised to print Scottish pounds of the same face value.

The economists’ view of Scotland’s wealth: https://wp.me/p4fd9j-niV

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