Unintentional Self-Parody: The Failed Banks Warn Scotland Against Independence

By William K. Black

I do not know whether the Scots should vote for independence.  I assume that the odds are they will vote against it.  I do know that the reasons advanced for voting against independence by business interest are false.  Indeed, the opposite of what they claim is far more likely to be true.  What I find a joy to behold, however, is the suggestion by the banksters that the Scots should get their economic advice about independence from a group of failed and often fraudulent parasites and that they should avoid any action that creates “uncertainty” or would cause them to act as a Nation rather than a U.K. province.  There is a serious effort to make independence from the Brits sound like the path of economic madness.

Each of these asserted business bases for cowering from independence is an insult to the people of Scotland.  In an irony that, if the polls are accurate, is increasingly sensed by Scots, the business arguments against independence, unintentionally, have made a compelling case for independence.  The thrust of the Brit’s strategy is to promise that they will try to cripple Scotland economically should it vote to restore its independence and sovereignty.  Thus we see the English, and their EU allies, claiming that they would prevent Scotland from joining the EU or extort it to adopt the euro (a terrible idea) as a condition of entry into the EU, block its ability to continuing to use the pound as its currency, and even major businesses in Scotland threatening to flee the Nation should it vote in favor of independence.  Labor leader Ed Miliband went so far as to threaten to place armed border guards on the border with Scotland should the Scots vote to restore their sovereignty.

What each of these threats has in common is a demonstration of England’s ill will for the people of Scotland should they choose to be independent.  That malice reveals their lack of respect for the people of Scotland, the continuing definition of them as “the other,” and the willingness to threaten harm to Scotland even when doing so would harm the English.  England’s EU allies are threatening Scotland because they are opportunists trying to curry favor with UK opponents to remaining in the EU.  The entire unsavory stew of threats and extortion reveal the hypocrisy of English pleas to the Scots to maintain their “union” with the U.K.  The English have always believed they are “better together” with the colonials only if the English are sovereign and dominant in the “union.”

As nasty and revealing as the English threats are, it is exceptionally unlikely that the English would make good on those threats were the people of Scotland to vote to restore their sovereignty.  The harm that such English reprisals would inflict on the stagnant Eurozone economy would be severe.  It would be a political disaster for the English parties if they maintained a campaign of hostility against an independent Scotland.

I discuss next the panic that large businesses are trying to induce to dissuade voters from choosing independence.  I end with RBS’ management having the nerve to lecture Scots on financial matters given that RBS continues to exist solely because of the massive governmental bailout of its often fraudulent operations.


National independence is the norm, not a strange form of atavism.  It is the norm when it comes to nations choosing to be independent of England.  Consider first the economic results of the major “Western” nations that have chosen independence from England: the U.S., Canada, Australia, New Zealand, and Ireland.  Each of those nations must be considered among the world’s greatest success stories on economic, political, and social grounds.  Uncertainty is a powerful catalyst for productive change.  Staying the same does not prevent uncertainty, for nothing in the world is static.  Continuing the same policy can produce catastrophic harm because other circumstances changed.

Peoples with well-developed economies that yearn for independence, and the accountability inherent in independence, have proven economically successful throughout modern history.  Part of the reason for this success is that such peoples embrace change and uncertainty to forge their own futures.  National independence of advanced nations from English rule has been the key to attaining prosperity.  Canada, Australia, and New Zealand, of course, attained de facto independence prior to de jure independence.  In each case the achievement of de facto independence was a powerful impetus to full development of the nation.

Ireland and the U.S. had to fight for their independence from the English.  Both peoples chose to be Nations and faced vastly greater uncertainty than the Scots face now should they vote to reclaim their sovereignty.  The cry of the “Loyalist” opponents to American independence in 1776 was “uncertainty.”  The Loyalists warned of English hostility and retaliation should we choose independence.  The direst warnings came from many (but far from all) in the business classes against the folly of independence.  Today, there is no one in the U.S. and virtually no one in Eire that regrets the choice of independence and sovereignty.

The risks that the Scots take in voting for independence does not even begin to compare with the risks taken by their Americans and Irish counterparts who cast their votes for independence by taking up arms to bring about the birth and rebirth of their Nations.  The only constant is how many businessmen bleat in fear of independence because of the threatened wrath of the English.  The traditional English response to any movement for independence is to threaten reprisals.

RBS: Our Ratings Could Fall

RBS had entered the independence controversy by claiming that it might fail if Scotland were to vote to restore its independence.  In Scottish Gaelic the term for RBS’ claims is chutzpah.  RBS is the former control fraud that caused such catastrophic losses that it led to a massive public bailout.  The U.K. owns 80% of RBS, which is by far the largest bank based in Scotland.  The world would be better off were RBS to be split up into smaller banks that would be more efficient, no longer “too big to fail,” and no longer create crony capitalism.

5 responses to “Unintentional Self-Parody: The Failed Banks Warn Scotland Against Independence

  1. I am an Englishman with many Scots relatives and my how I envy them! To vote for self rule, to build a progressive, vibrant place in the world…If only I had the chance. I wish them luck with whatever they choose and hope the despicable comments from the “better together” crowd are resigned to the dustbin of history. If they do choose independence then lets hope they choose to run their economy along MMT lines with a fiat, free floating currency and a job guarantee scheme…lets see ’em fly!

  2. The latest poll indicates that it is now more likely than not that Scotland will vote For Independence next week, and living here as I do, I am fascinated by the fact that it is now possible to architect – from a blank sheet of paper-the first of a new generation of networked monetary and fiscal systems.

    In the long term, possibly even the medium term, this means that Public = State risk intermediaries (ie Treasury and Central Bank as its fiscal agent) will be as obsolete as Private = Banks (credit risk) or Clearing Houses (market risk) intermediaries.

    of course, such a destination must be reached by way of the next ‘adjacent possible’, and having attained that – through a fractal approach – onwards to the outcome.

    This article of mine – Credit Scotland -on the subject was recently published by the Pieria economics site.

    The difference between credit, currency and unit of account are not widely understood.

  3. Like most sane people, I share the author’s doubts about the competence of RBS management. It exists today, as you rightly say, because out was massively bailed out by the taxpayer. The UK taxpayer, in fact. Having grown up as part of the economy an international trading nation of 60 million people, the massive Scottish banking sector is way out of scale for the relatively modest size of the Scottish economy. The UK could afford to bail out RBS when it went tits up, but do you think the government of an “independent” Scotland will be able to afford to do so in the event that it ever crashes again? And if it couldn’t, what would happen then?

    I am reluctant to make this (to me) glaringly obvious point because I also agree that fear of “uncertainty” has historically been a poor guide for nation builders. There are so many great arguments for Britain, starting with its highly successful history, the deep ties between all of its people and the highly successful future that it could have if given a chance. It would be lovely if somebody in the debate would finally make those arguments, which I think would strike a deep resonance with most voters. Nonetheless, insofar as part of any such debate is about practicalities, it seems only fair to point out that the “Yes” side seem utterly bereft of answers to the basic economic questions such as what to do about the bloated banking sector.

    • No-one has any answers what to do about the UK’s bloated banking sector…that’s what happens when you allow criminality to prosper. Personally I would give Bill Black the run of the place at the same time as we build a big prison on the Thames to house the new inmates.

    • Tom. I understand the concern about how and independent Scotland might address a future banking crash. However, while we are currently paying around 10% of the debts accrued in this, we only really had around 5% of the liabilities in Scotland. So, we are actually paying more than we would be if the stakeholders were bailed out by their sovereign countries as happens in most cases – see the USA and Barclay’s Bank.