Blair McDougall – a lesson in how to mislead.

Blair McDougall – Indy PosterBoy

By Alasdair Galloway

In a blog ( Blair McDougall writes of five things he claims have been learned from the recent SNP conference, and the First Minister’s speech in particular.

This is, of course, the usual negativistic, one-eyed stuff that we would expect from the former head of Better Together. But what is interesting about it is its structure and how this can be used to systematically mislead.

The most relevant parts are part 1 and part 5. Rather illogically we will have to start in part 5, where McDougall, as many in the Unionist camp have done, systematically misrepresents Mark Blyth’s position on independence.

For those unaware of who Blyth is, he is originally from Dundee, having a degree in Economics from Strathclyde, but has spent much of his academic career in the United States, where he teaches at Brown University. His most notable work is probably “Austerity: The History of a Dangerous Idea”, and more recently “Angrynomics” (with Eric Lonergan), though he has published more widely than that. He is also a recent appointee to the First Minister’s group of economic experts.

Most recently he has been notable for a 30 second statement, ripped out of a much longer interview. Over those 30 seconds, Blyth says

“If your argument is that we need to do this because of Brexit, then Scotland separated from England is the biggest Brexit in history….pulling apart 30 years of economic integration with Europe is going to hurt, 300 is going to hurt a lot. That means one of two things. Either you have brass-plate independence — you declare independence, you get a vote, but nothing really changes, you put up some brass plates in Edinburgh, and nothing really changes, you keep the pound and all that stuff. Or you go for regulatory divergence — different currency, different economic policy, etc, which will entail significant short to medium-term costs. There’s no way around that. We know that because it’s [independence] Brexit times ten.”

That last sentence has gained an almost frightening notoriety. However, as I have learned, the thing about what Unionists say is more often notable for what they do not say, and this is no different.

But first let’s take the statement at face value, as there is a lot in it to agree with (or at least I do) that we would do well to contemplate before we take the independence proposition back to the Scottish electorate.

In particular, as Blyth argues, if “pulling apart 30 years of economic integration with Europe is going to hurt, 300 is going to hurt a lot.”

In the first referendum one of my worries was how expectations had been managed. Would people expect too much too soon of being independent? Finding our way out of a 300-year-old Union, setting up a new state, including our own currency (at least more quickly than Wilson suggested) is a BIG ask, and we cannot avoid that or claim that we could. We need to have answers, and people need to be prepared for what will be involved.

Shortly before the 2014 vote I attended a public meeting where the speakers were Jim Sillars and Philippa Whitford. At the end there was a Q&A session. One of the last questions was “what should we do if we vote Yes?”. Philippa Whitford’s response was “Go home and prepare for 10 years of the hardest work you have ever done”. I don’t think that is too far from how things will work out. However, she added, “But it will be worth it”. And I agree with that as well.

Personally, I think Blyth might be a bit pessimistic with his 10 year forecast. I suspect we have more finely grained advantages going for us than, as a macro/intentional economist he thinks. In particular, what about the integrated companies that exist in the UK just now. What I mean by that is that are companies which make components for a final product in different establishments, and then bring them together in a central establishment for final production and onward sale. What if one or more of these component making establishments (and remember they are in common ownership) are in Scotland? Are they just going to be sold off/ closed down willy nilly? I don’t think so. Companies like this will have a powerful motive to set up systems to obviate the difficulties of cross border trade. They have too much to lose.

Then there are companies on both sides of the border who have had trading relations for, I don’t suppose 300 years, but for a long time. Are they just going to throw those away? Or will they find ways to obviate the problems of cross border trade?

Then there are Scottish companies which make products that can only be found in Scotland. Where else would you find whisky, or various foods (Scottish smoked salmon, Stornoway black pudding etc). Does England have readymade substitutes for these?

Lastly it will hurt them less than it will hurt us, but will English companies want to give up their trade with Scotland? Are we supposed to believe Marks and Spencer (for instance) will close down, or that Asda will flee the market and leave to Aldi and Lidl?

However the real killer point is made here – can England survive without us? One of the many fascinating stats in this article is this – The rest of the UK sold £62.7bn in goods and services to Scotland’. Are they really going to walk away from this. The same article produces statistics to show that the biggest export market for rUK would be ….. Scotland!

The fact is that both sides will be under pressure to make the new reality work.

That said, unpicking a 300-year Union is not going to be a walk in the park, but the key to Blyth’s thinking – all of it and not just the part useful to such as McDougall – is this (interview with the National in August last year):

“There are real fiscal challenges getting there [independence] that cannot be wished away. But the long-term costs of staying tied to the UK’s rapidly imploding growth model are just as bad.”

Gourlay (“Can England Survive”) is even more pessimistic for rUK, asserting that they have never adjusted to the reality of loss of Empire. “It’s archaic institutions and way of thinking guarantees it’s unwillingness to change and therefore the decline can be expected to continue”.

In effect what Blyth is saying is that there will be short-term costs to independence if Scotland is to reorganise its regulatory, currency and taxation position in order to escape what he terms is the “imploding growth model” currently pursued by the Tory government at Westminster.

What does he mean by “imploding growth model”? For Blyth, Brexit is an incalculable economic harm, and he notes that the “supposed benefits have so far at least proven illusory”. However, outside of the EU, the “debt-financed, monopolised UK economy outside of the EU” will mean a “resulting decline in investment and productivity” that forces down real wages.” (you can find this at more length here

So, McDougall’s use of Blyth’s comments is quite illegitimate – I suppose his only defence would be “it wisnae just me”. But Blyth is quite clear – independence will be difficult but worth it.

But let’s go back to Part 1, which is entitled “They’ve chosen conspiracy theories over credible plans”, which dwells on the difficulties of the first 10 years.

McDougall’s ‘argument’ (I am using that word loosely to give the man a break) is that the independence movement is making a “serious attempt to flip the entire frame of the independence debate”. The problems there would be with the border on independence – a “hard border”, it goes without saying – are, according to the independence movement, “only because UK Governments have allowed Scotland to be dependent on trade with the rest of the UK”; that “losing the money redistributed around the UK would mean hard choices, but only because UK Governments have overseen economic growth in the South East rather than Scotland”; “pensions would be less affordable on our own, but only because UK Governments have overseen a situation where more and younger migrants haven’t chosen to make Scotland their home”.

Thus, what supporters of independence are doing, he maintains, is to claim that it’s all Westminster’s fault. This is most clear in the last two of these three assertions.

He claims we are arguing that “losing the money redistributed around the UK would mean hard choices, but only because UK Governments have overseen economic growth in the Southeast rather than Scotland”. The problem with this is that if you look at almost any measure of economic performance, it is actually true. There are two regions in the UK so far ahead of everyone else that it is not unusual that they are the only two regions above the UK average. Those are London and the Southeast.

Let’s spell out the arithmetic of that. There are 13 regions in the UK. If 11 of them are below the average, then arithmetically the two above the average must be 11 points ahead between them – and in practice, it’s worse than that. Much worse.

We don’t need to imply some sort of Westminster conspiracy. This is just how the UK works. It’s why Vince Cable spoke of London as a “giant suction machine”, sucking in resources, talent etc to itself. It’s why Professor Tony Travers of LSE called it “The Dark Star” because like a black hole it draws in everything around it. Look at where company HQs are concentrated. Where profits are declared. Where the country is run from. Where many national centres (eg Art, Sport etc) are located. We don’t need a conspiracy. In fact Westminster has tried to decentralise – see the BBC for instance. But in many cases, this is often more apparent than real. If you want a laugh, watch a programme clearly made in England for an English audience (Bargain Hunt is a good example as well as the Hit List) which appears to be a BBC Scotland production, but only in the sense that London sent Glasgow the money to pay for the programme to be made. Even when they come up here to make the programme there are reports of London crews being brought up for the work rather than use locals.

The last claim is no more defensible and can be criticised on exactly the same way. Young people leaving Scotland – particularly the most talented ones – is how the UK works.

During my career in a Business School, I don’t know how many students I helped toward securing a degree, but it would be “a lot”. I know some of them remained in Scotland, but I also know many of them were off as soon as the ink was dry on their degree parchment. A former colleague once said to me that the problem for Scotland was that “the legs were up here, but the brains were down south”. Where, for instance, are the most senior civil servants located? London is giant talent magnate (or “suction machine” to repeat Cable’s point).

However, we need to look at the other side of this situation to fully understand the consequences for Scotland. If we treat the pool of talent as a zero-sum game – what they gain we lose – then the more talent goes to London, the less talent there is for Scotland (and the other regions) to be able to prosper. The consequences for the Scottish economy are obvious – if your best talent is leaving for the south, it cannot be good for the performance of the economy.

One thing we cannot do though – even as an independent state – is to command our young people to stay in Scotland. Instead, we must create the opportunities that will make them want to stay. Give them sufficiently attractive choices that they will chose to remain in Scotland. Stop allowing our new small enterprises to be bought up and decision-making moved down south, but instead to protect them from takeover, or at least impose conditions on their purchase that will keep the same decision-making powers in Scotland.

McDougall asserts that independence supporters have flipped one of the Union’s main arguments, that we have been “Shifting the blame for the pain of leaving the UK onto those who oppose leaving the UK”. The reality as we have tried to show here is quite different – that it is simply a matter of pointing out how the UK works. We don’t in fact need to blame anyone, but even on McDougall’s own account being in the UK is not in our interests – that economic growth is focused on two UK regions, that talented people are sucked in by the Dark Star that is London.

What Mark Blyth does is to supercharge this, because while he recognises that leaving the Union will be difficult, will pose challenges many of them severe, remaining in the UK that has left the EU presages an even worse future from its “imploding growth model”. Or put another way, while leaving the Union will be difficult, remaining in the Union will do nothing to make things better -if Blyth is correct, then probably the reverse.

Perhaps this is the best conclusion to all of the above. Enjoy –  


5 thoughts on “Blair McDougall – a lesson in how to mislead.

  1. FFS why are we agonising over this and looking for problems? Let’s look for solutions instead.

    I think that a total of 62 countries have now [gained] independence from the UK, some of them third world countries and few (if any) of them in a better position to do so.

    None of them have asked to rejoin. Is someone suggesting that Scotland is in a position that is any worse than that of these 62?

    Liked by 1 person

  2. Can’t disagree with any of this Alasdair, and good to see a mention that senior SNP MPs are clear eyed about the challenges. One of the many things that bugs me is the poor quality of debate allowed on any issues concerning Scotland

    If NS discusses 17 new policies, initiatives or aspirations plus mentions independence the latter is the one that will grab headlines and influence questions from reporters or opposition M(S)Ps

    Often analysis of the current situation is “simply a matter of pointing out how the UK works” but the subsequent debate is skewed to a defensive position “how dare we criticise” “you just want to tear the UK apart” “well Scotland’s no better” followed by a rush to big up Scotland/SNP bad headlines

    When you write “He claims we are arguing that “losing the money redistributed around the UK would mean hard choices, but only because UK Governments have overseen economic growth in the Southeast rather than Scotland”. The problem with this is that if you look at almost any measure of economic performance, it is actually true” I wondered how on earth we are allowing the opposition parties & media to twist this and make it out as if we’re in the wrong?

    Liked by 1 person

  3. The UK was once known as “Treasure Island” because of big business acting in concert to ramp up prices for beyond what a functioning market would have allowed. This included government infrastructure contracts (fixed bids) as well as consumer goods.
    It became obvious that the same model of cars, for example, were available within the EU for far less than within the UK. Importing these cars forced the price down to proper levels.
    Brexit has and will, allow big business to go back to the profiteering days of “Treasure Island” and you can bet the house that Tory MPs will benefit as well as the Tory party, so intervention wont happen.
    I would guess that is happening right now with gas.

    Liked by 1 person

    1. You know Gavin, since this began I have wondered not just why its happening – it’s the wrong time of year (or God help us at the beginning of next year when it will still be cold) but why is no one asking why? If this was Putin, I think it’s odds on we would know, so why is it happening and who is profiting?


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