Should Scotland Declare Its Independence?

I’m not Scottish. But my eighth-generation ancestor, Thomas Boaz, was born in Scotland in 1721. Seeking religious freedom, he migrated first to Ireland and then shortly to the colony of Virginia. So I have a romantic attachment to my distant Scottish heritage.

In 1997 I climbed the Wallace Monument, all 246 steps, on the 700th anniversary of the Battle of Stirling Bridge, at which Andrew Murray and William Wallace defeated the English forces, as seen in the movie Braveheart.

Now, in the 700th anniversary year of the Battle of Bannockburn when an army commanded by England’s King Edward II was defeated by a smaller force led by Robert the Bruce, Scotland is holding a referendum on independence. Advocates want to take Scotland out of the United Kingdom and assume their place in the world as an independent nation.

There are good arguments on both sides of the issue. Scotland has prospered in union with England, Wales, and Northern Ireland. Some scholars argue that the Act of Union in 1707 made the Scots part of a larger and more advanced nation and opened the way to the Scottish Enlightenment of David Hume and Adam Smith. And perhaps those modern ideas and the connection with England made possible the achievements of the inventor James Watt, the architect Robert Adam, the road builder John McAdam, the bridge builder Thomas Telford and later Scots such as Alexander Graham Bell and Andrew Carnegie.

There’s plenty of reason to believe the small nation would be a success.

But whatever the benefits of union might have been in 1707, surely they have been realized by now. And independence for any country ought to appeal to Americans. So herewith a few arguments for independence.

1) Scotland is a nation. That’s simple enough. The Oxford dictionary defines a nation as “a large body of people united by common descent, history, culture, or language, inhabiting a particular state or territory.” That would be Scotland.

As it happens, England is a nation, too. Even today the English people often forget to call themselves “British.” The popular anthem “Jerusalem,” sung at the wedding of Prince William and Catherine Middleton in Westminster Abbey, concludes:

Till we have built Jerusalem,
In England’s green & pleasant Land.

England and Scotland are both nations with history and culture. They need not be combined in one state.

2) There’s some evidence that small countries enjoy more freedom and prosperity than larger countries. The Nobel laureate Gary Becker wrote in 2005,

My conclusion is that developments in the global economy during the past 50 years have greatly reduced the economic disadvantages of small nations enumerated for his time by Hamilton. In fact, being small now may even have efficiency advantages….[As trade barriers have come down over the past half-century,] small countries can now gain the advantages of large markets through trading with other nations.

Recent reports by Credit Suisse and by the Welsh politician and entrepreneur Adam Price lend some detailed support to that thesis. In any case, Scotland is hardly a uniquely small country. It has a similar population to Sweden, Norway, Denmark, or Switzerland.

Alex Salmond, the leader of the Scottish National Party and the likely first prime minister of an independent Scotland, may be a socialist, but he’s not an idiot. He knows that a tax hike in Scotland wouldn’t work. Asked in a televised debate, he responded, “We don’t have proposals for changing taxation. We certainly are not going to put ourselves at a tax disadvantage with the rest of the UK.”

As Alex Massie put it in the Spectator, “It’s not quite read my lips, no new taxes but it’s not far from it….When it comes to tax no other British politician in recent years has cited Arthur Laffer more frequently than Alex Salmond.” With a top British tax rate of 45 percent, and 41 percent in Ireland, Salmond doesn’t want to raise the Scottish rate to 50 percent and push out top earners.

3) Critics of independence often say that Scotland is subsidized by wealthier England. The analysis is controversial, but it does appear that the United Kingdom spends about £1,500 ($2,500) more per person in Scotland than it does nationally. If it is true, as many British conservatives say, that Scots are whiny subsidy-suckers, then take them off the dole. It’s easy for a country with 52 members in the British parliament to demand more money from the British central government. An independent Scotland would have to create its own prosperity, and surely the people who produced the Enlightenment are smart enough to discover the failures of socialism pretty quickly if they become free, independent, and responsible for their own future.

4) Finally, surely the good people of England wouldn’t be churlish if Scotland decided to “dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them,” as our Declaration of Independence put it. Some British opponents of independence insist that an independent Scotland couldn’t use the British pound, and that the UK would oppose Scotland’s admission to the European Union.

As it happens, Scotland had a successful independent monetary system from 1716 to 1845, as discussed by Lawrence H. White in his book Free Banking in Britain and in a new Harvard Ph.D. dissertation by Tyler Goodspeed. So maybe it doesn’t need the pound sterling.

But in any case, it’s not clear that the UK could stop Scots from using the pound. Several countries use the U.S. dollar as their currency. Economist Steve H. Hanke of Johns Hopkins University, a leading analyst of dollarization and currency boards, says Scotland could set up a currency board and essentially peg the new Scottish pound to the British pound one-for-one. Scots could do business with either Scottish or British notes.

As for the EU, it’s clearly important for small countries to be able to trade freely over a wide area. That’s the basic value of the EU. But many Britons now chafe under the rules and regulations of the EU bureaucracy. Maybe Scotland would do better to join the European Economic Area, a broader common market of European countries that aims to “enable goods, services, capital, and persons to move freely about the EEA in an open and competitive environment, a concept referred to as the four freedoms.” Free trade, no supranational regulations, what’s not to like?

England and the UK would only hurt their own citizens if they sought to prevent free trade and joint currency with Scotland. Governments have been known to hurt their own citizens in pursuit of power, but the British people would have good reason to insist that they be free to trade with their neighbors across the River Tweed.

In any case, the economic arguments will go on till the vote on September 18. Scotland certainly has the elements necessary to be a successful European country. The real question is whether the Scots themselves desire, to borrow an Irish anthem, “that Scotland long a province be/A nation once again.” As a descendant of Scots who helped America secure its independence, I hope so.

David Boaz is executive vice president of the Cato Institute and author of The Libertarian Mind, coming in February.