Scotland Forever! - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 21 February 2014
Scotland Forever! A  A  A

Baltimore, Maryland

Up. Down. Up. Down. The Dow posted a gain yesterday almost exactly equal to the amount it lost the day before. In other words, it went nowhere. Gold slipped a little, not much.

Are you out of the stock market, dear reader? We hope so. We see nothing but misery coming from stocks in the years ahead. Yesterday, for example, we saw one analysis that put the likely return on the S&P over the next 10 years at almost minus 10% per year!

So, let's turn our attention to something else...

Scotland seems ready to break with Britain and go its own way. It is by no means the first breakaway country in history. But most of the last 5 centuries have been spent putting nation states together, with relatively few successful defections.

It took many generations for the Frankish kings to bring modern France into being...conglomerating the Picards and the Poitivins...the Limousins and the Corsicans...those who spoke the langue d'oc with those whose mother tongue was langue d'oie. Only under Napoleon, with national newspapers, national roads, and public schools was the job finally accomplished.

Meanwhile, Germany, wasn't unified until 1871. Before that it was a hodge-podge of kingdoms, duchies and principalities.

America, too, was assembled from smaller pieces. The native tribes had to be exterminated or relocated. Some parts were purchased honestly. But the Mexicans had to be defeated - twice - to make them more agreeable. Texas came voluntarily into the United States, then regretted it. Finally, the rebellion of the Southern states was crushed...and the union held together.

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Great Britain was assembled over a much longer time. Scotland was incorporated by the Acts of Union in 1707. But this followed a series of bloody battles...and preceded even more. Wales was brought to heel in 1282. Ireland was effectively conquered when Hugh O'Neill surrendered in 1603.

And now, if the Scots go their own way, it is a new trend...and probably a better one.

The true measure of an economy's strength is how much nonsense it can support. The Soviet Union put up with 70 years of Bolshevism...and was wrecked by it. Argentina has already survived about the same amount of time with Peronism and still suffers from it. And the US carries its own burdens - typically expressed in underhanded euphonisms such as The War Against Terror...or the Patriot Act... or the Independence Card...or in capital letters, such as the TSA, SSA, BLS, SEC, IRS and so forth.

But the evidence suggests that a small, rich country has a big advantage. It tends to put up with less nonsense than a big one.

Where do taxpayers get the best deal from their government? Our guess is Switzerland. The trains run on time. The airports are clean, modern and efficient. Towns are idyllic. The public health system works. Government workers - including those who check your passport at the border - are polite and businesslike.

Switzerland is not only small. It is not a nation state. It is a confederation of independent states - like the US before it was consolidated.

Small states do a better job of controlling their government...their military forces...and their debt. Not because they are smarter or more peaceful. But simply because there is less distance between the governed and their governors. Citizens can see what their leaders are up to. If they don't approve...the politician can be beaten in the next election, or in the street.

Independence for Scotland? Yes, it's probably a good idea.

And so is independence for Maryland.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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1 Responses to "Scotland Forever!"


Feb 21, 2014

It is a good analysis. I think smaller states would make a lot of sense however the politics has to become clean wherein people should be in a position to decide various alternatives carefully. Besides this the enforcement of the laws has to done to the hilt orvelse their would be anarchy. Various archaic laws need to be changed for better economic growth.

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