Report - Section 1

The Economics of Nationalism Re-examined

It is commonplace that the discovery of North Sea oil and entry to the EEC are factors of major economic significance for Scotland. Already both issues, especially the former, feature widely in the SNP's election material. The purpose of this paper is to reassess the economic arguments for an independent Scotland in the light of these developments, especially the discovery of oil. It will be shown that the whole framework within which the economic implications of nationalism were argued has indeed been altered. The importance of this is probably greater than is recognised at present by the majority of the public and it may well be, therefore, that the discovery of North Sea oil will come to be seen as something of a watershed in Scotland's economic and political life.

The case for Scottish nationalism is, of course, very much more than an economic issue. This paper makes no attempt to examine the wider questions. Suffice it to say that Scottish nationalism has been much more concerned with economic prosperity than nationalist movements in other countries. Unlike Wales there is no great cultural movement attaching to the preservation of a language. The main cause of discontent is the country's unsatisfactory economic performance over the last half century, especially the persistent unemployment and net emigration above all in the West of Scotland. Poor social and environmental conditions, especially in and around the city of Glasgow, accompany this outdated economic framework and are as much a source of discontent. Despite regional policy and the efforts of planners, these problems have not been overcome, nor do they look as if they will be in the foreseeable future. The SNP have therefore based their campaign on the assertion that Scotland would be economically better off independent; and it is for this reason that budgetary estimates have always featured so large in the controversy. Yet in spite of Scotland's undoubtedly poor economic performance the SNP case until recently lacked credibility. Most people regarded both their statistics and arguments as suspect, and they continued to believe that Scotland derived more economic advantage than disadvantage from the Union. The importance of North Sea oil is that it raises just this issue in a more acute form than at any other time since the Act of Union was passed.