JUST MENTIONING THE ECONOMY these days brings accusations of negativity and even “talking down Scotland”. The news is bad, everyone knows it, nobody wants to hear it.
To avoid confusion, addressing the facts is not really about how Scotland chooses to manage its relationship to the UK. While Britain as a whole has been incompetent in managing the crisis, our grim numbers are a microcosm of a failing world order. Economic news does not determine the constitution, but it does ask questions about what type of independence might be possible or desirable.
To nobody’s surprise, Christmas was a wipe-out for everyone, but especially for Scottish retailers. Sales fell 16.6 percent compared to December 2019, with non-food sales plunging 33.4 percent. This backs up previous claims that it could be “years” before Scotland’s retail sector returns to stability and growth, with KPMG’s head of retail warning: “2021 will undoubtedly be one of the most challenging years ever for Scotland’s retail sector.”
A new Demos-PwC “Good Growth for Cities” report highlights the uneven impact. Glasgow, a city long dependent on retail, saw its economy contract by an extraordinary 10.4 percent in 2020. But nobody is immune. Edinburgh had among the smallest contractions of any UK city, but the capital’s economy still shrank by over 9 percent, and will see the slowest recovery.
Conversely, the report suggests that Glasgow will exit the crisis quickest. However, time and again predictions of a “V shaped recovery” have been confounded. The virus and its economic impact has proved stealthier and stickier than political leaders expected. This applies most obviously to the blustering libertarians, Trump’s American administration, Johnson’s Westminster and Bolsonaro’s Brazil, but European liberal leaders have looked just as bewildered, at times more so. Chaos reigns, and stagnation beckons.
After 2020, returning to normal may feel like a welcome relief, but we should pause to reflect on what that wish implies. Firstly, there is growing evidence that, even allowing for vaccination, our ruling orders cannot restore normal, even if that was their wish. Key economic sectors will simply never recover. Meanwhile, companies and consumers have learned to adapt and live differently. Old fashioned business trips will be nullified by Zoom. Town centres will be replaced by online delivery hubs.
Secondly, we were just exiting a decade of austerity and stagnation when this latest crisis landed. And that’s before considering climate change. Calls for decarbonising the economy, by dates ranging from 2025 (XR) to 2050, are increasingly common among right-on liberals. But even mild versions imply searching changes that would be the very opposite of a return to the status quo as of 2019. Long before the virus rudely interrupted “normality”, any society halfway committed to modest planetary goals needed a return to “big government” and central planning; the question was how to achieve that with a modicum of popular democratic consent.
The coronavirus should be a reminder that politics is not a story of goodies and baddies. Underneath all political moralising is an economic system that determines people’s wealth and prosperity, who gets rich and who stays poor. Capitalism, our system, is ageing, inept, bilious and barely able to rise from its sickbed. The system no longer rewards our sacrifices with better living standards, and in all probability cannot for the foreseeable future. This is why political chaos is not confined to one society, but rather the law of the last decade, and probably the next.
There are upsides in this gloom. Governments have ripped up the economic dogmas that sustained vast injustices. This opens the door to democratic control of production, consumption and distribution. An imaginative Scottish political response to this crisis could present independence as a new social order addressing the real challenges of the 21st century, namely climate change and decades of built up inequality.
Last year critics could have dismissed this as fanciful rhetoric. But few now deny that the last forty years of economic orthodoxy was founded on fantasies. The evidence is everywhere, in the economic stats, the climate challenges, the political chaos and the total demobilisation of society faced with a virus. After decades of wasteful oligarchy, it’s time to face reality.