The concept of national sovereignty, simply defined as the power that a country has to govern itself or another country or state, as a supreme authority is not so simple to quantify. The evolving nature of the economic inter-relations between nations since the mid-twentieth century has reflected the will of global populations to take back domestic control from colonial authorities with imperial ambitions.
These overlords, predominantly European states, have been reluctant to relinquish control over colonial global resources. It appears that colonist governments have manipulated the spectrum of sovereignty to create an illusion of independence. Through careful management of terms, independence has been granted to (and gladly accepted by) colonial populations through which the extraction of resources and exploitation of the workforce could continue.
Devious independence
An example of this is the case of the CFA zone (14 countries in Central/Western Africa and the Comoros). These former French colonies celebrated the independence granted by France in the 1960s. However, the strings attached to the agreements have bound the hands of the African governments, arresting any attempt to improve the living standards of their populations. This has been a major factor in the fact that these former colonies languish near the bottom of the UN rankings on global deprivation.
Not all tampering with sovereignty is so blatant. Trade deals such as the Transatlantic Trade and Investment Partnership (TTIP) are widely accepted as a good thing, much like independence. However, the devil is in the detail. If the agreement allows foreign corporations to legally overturn the democratic will of a national government – perhaps to halt environmental damage or exploitation of workers – how much true sovereignty does the domestic authority retain?
Good intentions with ugly consequences
In the aftermath of the second world war, the US took the lead in bringing order to the global economic system, rejecting the Keynesian plan. Institutions like the World Bank and International Monetary Fund (IMF) were formed to stabilise and develop global economies. The United Nations (UN) and The World Trade Organisation (WTO) were formed to encourage global trade and reduction in poverty with the overarching pretext that trade brings peace.
The good intentions are evident, yet lurking beneath is another power-play. The US and European colonial actors ensured retention of control by awarding veto powers, quotas or voting rights to the key players, once again diminishing the level of sovereignty available to the rest. Through these institutions, the US has manufactured extensive global sovereignty, through yet another democracy-diminishing concept.
The United States, itself a former colony of Britain, France, and Spain, has developed a form of financial colonialism. This technique is based on lending US currency to developing countries through these institutions, set up on the pretext of economic aid.
These benevolent organisations provide substantial $US (USD) loans to developing nations. These loans come with constraints, of course. The conditions usually dictate that a neoliberal, austerity-based economic policy must be followed. In doing so, domestic wages are suppressed, and the costs of goods and services required by the US and other Western governments remain acceptably competitive to the buyer.
The positive benefit for the US is that to pay back the loans, the nation must provide either USD or productive output to the US. As the borrowing nation cannot create the USD, the national government and the domestic economy are at the mercy of the markets.
Through the inevitable boom and bust cycles of the global economy, interest rate fluctuations eventually overwhelm the borrower’s ability to repay. The result is increasing proportions of a nation’s productive output being earmarked for export to earn dollars to pay off a spiralling debt burden. This productive output is lost to the domestic market and lowers the living standards of the population.
Where does Scotland fit into this spectrum of sovereignty and what are the implications for independence?
The legal sovereignty of Scotland has been studied and disseminated through the fantastic work of Salvo/Liberation. Their findings confirm that the UK is a union of nations in the form of a trade, financial and peace treaty that did not affect the historic sovereignty of the Scottish Crown or the geographic unity that is the Scottish nation.
The level of a different sovereignty of financial autonomy that we as Scots accept on independence is extremely important. Currently, as part of the UK, Scotland has a low degree of sovereignty. The Scottish government is in effect a currency user, reliant completely on funding by the issuer of GBP, the UK Government. However, The Act of Union ensures that Scotland receives proportional allocation of GBP in any budget announcement.
Political manifestos, informed by public demand in Scotland, can only be implemented if enough funding (or in some cases, legal permission) is granted by the UK parliament. The Scottish government cannot guarantee to enact any political decision demanded by a majority of the Scottish population. This level of sovereignty is minimal.
The devil is in the detail
Unfortunately, as with the case of the CFA zone in Africa, independence with an ill-thought-out settlement with the UK could reduce our national sovereignty in a financial sense while actually achieving legal sovereignty. Like the African nations, with a combined population of 167 million citizens, our living standards could fall due to the actions of foreign governments, through ignorance of the consequences of intentionally imposed economic policies.
Sterlingisation, the current Scottish Government policy choice for the early days of independence, leaves Scots with no ability to increase liquidity to match the requirements of the Scottish economy. The Scottish government will build up foreign debt or produce an ever-increasing amount of output to satisfy the needs of the lender countries.
Fortunately, in a resource-rich nation like ours, the essentials of life should always be available to all Scots. Poverty should be eradicated and living standards improved. Our problem will be that as a country our resources will be constantly in demand. This will result in our labour being exploited for the benefit of others, and our landscape bearing the environmental and aesthetic costs to a more intense level than would be necessary if sufficiency for the domestic market was the goal.
Instead of mitigating the negative aspects of using a foreign nation’s currency, why not embrace full sovereignty with a currency created by our nation’s central bank, like any other well-functioning country? Before making decisions, joining trading groups or unions, and signing treaties that tie the governments hands, let us pause and assess all the obvious implications. Any deal should have an easily implementable exit clause.
Future-proofing the economy: legal sovereignty and full autonomy
It is impossible to plan an economy in any meaningful way. There are just too many unpredictable factors in the real world. All that any government can do is provide the institutions and infrastructure to optimise the health of the current population and prioritise improvement of living standards to benefit future generations.
To facilitate this, the government must keep its economic options as wide as possible. The only way to ensure this is through the creation of a national currency and central bank. Combined with legal sovereignty, and domestic energy and food production that meets national demand, Scots can benefit from a heightened level of sovereignty and full autonomy in real terms.
Any international deal should be made in a spirit of reciprocity, with no exploitation on either side. With this outlook, global prosperity for the people of the world can match that power currently controlled by corporations to whom borders are no barrier.
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