Thursday, February 27, 2014

Scottish pound-dependence

It is only right that the debate about Scottish independence should focus on the question of currency, yet it still entirely misses the point: No matter how they vote in the forthcoming referendum, Scots will not be set free. The question so hotly debated at present as to whether a potential independent Scotland should retain the pound and form a monetary union with England is one where, as so often in the so-called democratic process, only false options are presented, the alternative to keeping the pound being to join the Euro. Two sides of the same coin, really, for either way Scotland's future prosperity or lack of it will be decided by financial institutions which are not subject to any form of democratic control.

A country, or more to the point: a people, which does not control its own currency cannot be deemed an independent or free country. Monetary policy is the tool by which the political will of a nation is made to yield to the interests of private owners who create artificial scarcity or abundance to dictate its economic and political climate. By a clever process of officially sanctioned and legalised fraud, almost all of today's nation states are in debt. To whom, one might ask? Who is that illustrious lender whose assets exceed the resources of all the countries in the world? Of course, no real assets were ever involved. Through the process of fractional reserve debt-finance bankers have bought whole countries with fiat money that never actually existed or, rather, was never backed by any real wealth as such. True independence means to take that control back from them and return sovereignty, political and financial, to the people. A vote on Scotland's independence, whilst it would present such an opportunity, will never be allowed to go as far.

I put these matters to Alex Salmond years ago in a public meeting, long before the Scottish parliament had even been instituted, and his answer was telling. He understood very well that government could create its own money rather than mortgaging the wealth of the nation to private interests creating the same money for them - for in either case the money is created backed by nothing except the creditworthiness of the nation -, but he wasn't ever going to see eye-to-eye with me on these matters, "he had been trained as a banker", he said, and therefore held different views. Prior to becoming a politician Salmond had worked for Royal Bank of Scotland (RBS), that very bank which the taxpayer had to bail out to cover their losses and which will be sold back at bargain prices to the private sector once those losses have been absorbed and it becomes profitable again. These kind of bail-outs remove the last justification for charging interest on "money created out of nothing", i.e. on lending in excess of the bank's actual assets, namely, that since the bank takes a commercial risk it should be allowed to charge for it. In reality, the bank creates the money on the back of the nation's ability and willingness to absorb such risk whilst still having the audacity to charge citizens and government bodies for doing so.

Like most politicians, the loyalties of Scotland's "First Minister" are to the banking fraternity which has catapulted him into position, not to the people whom he claims to represent, and if the fragmentation suits them, Scotland will get its political independence. As for financial and monetary independence, it would probably require a revolution instead of a referendum, and today's Scots no longer have the appetite for politics outside the ballot box. So Scotland, whichever way the vote goes, will remain dependent on the pound or the Euro, but either way on the goodwill of its bankers.

3 Comments:

At 4 March 2014 13:27, Blogger John Bennett said...

I'm not too knowledgeable about issues surrounding currency and finance so I have not much to disagree with on that front.

Currency issues are however related to something your alluding to perhaps, that in a world of corporate capitalism whose engines are the financial sectors hiding its inherent flaws, it is difficult for any nation or people to be truly free.

However, within these constraints we could be a whole lot freer. We are yet again, despite devolution and despite only voting in ONE tory MP subject to the economic policies. The hard neoliberal medicine of austerity and privatisation is being forced down our throats. True in England also, of course but here it reveals the very reason we got devolution; the democratic deficit that exists when 5 million Scottish voters rejecting the Tories (as they have in every election since the 1950's) are irrelevant when 20 million people South of the border vote for them.

Thatcherism-Blairism (a continuation of the neoliberal project) have made the working class of Scotland surplus to requirements and this current batch of Tories and their liberal quislings are pressing home an attack on the welfare state which will render us as human waste, fit only for a uniform be it as mere numbers in a prison-industrial complex or in that old role of the footsoldiers and cannon fodder of imperialism. Labour offer no solution. The SNP have their economic right and their u-turn on NATO is very revealing of the fact that they are no solution but there is little ideological glue within that party and they are and will be even more so after independence, very susceptible to pressure from below.

A nuclear weapons free Scotland will be a reality even under the SNP beyond that it's all to fight for but the reality is we have no chance of seeing the kind of society we want to see, a society based on social justice, anti-racism and a strong tradition of internationalism and commitment to global justice seen through our strong role in solidarity movements from the Spanish Republic through the movement in solidarity with the Palestinians.

We want the welfare state, not privatised health care, to maintain free access to higher education and end an end to the disgusting fact that in a country with the biggest oil and gas reserves in Europe, 20,000 of our old die from fuel poverty. Whose face is on a bit of paper called currency is not the question, the question is what kind of society we want to live in and what role do want to play in a world dominated by fanatical greed. We can strike a blow against empire by weakening the power of it's most senior partner in London and join with progressive forces around the world who are pushing back and paying a much higher price than us. Another world IS possible and and another Scotland is possible.

In comradely disagreement.

John, Glasgow.

 
At 4 March 2014 13:55, Blogger Mustaqim said...

Thanks John, no disagreement really. I hope Scots can gain freedom from Westminster, and you are right that even with devolution only, the Scottish people get a better deal by, for example, retaining free access to university. I equally hope though, that after political independence, real independence from the stranglehold bankers have over the people can also follow. It matters not whose face is on the notes, but it matters who issues and charges for the notes and whether they serve to enable people to conduct business or to get banks to profit at the expense of the nation.

 
At 11 March 2014 14:14, Anonymous Anonymous said...

Thanks for a good transparent answer. And yes you are right without the freedom from the banking /financing it is not much of a freedom

what a great shame

 

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