Interdependence and Globalisation

Recently I undertook the exercise of writing a brief pamphlet spelling out the need for independence for Scotland in the 21st Century and how we can get there, along with some measures that a Scottish Government must take to improve living standards in our country. I intend publishing selected extracts from that text here on my blog, and this is the first of them. If you would like a copy of the whole pamphlet then please e-mail me at member@neil100.freeserve.co.uk

Two major forces are at work in the world today. One is the greater interdependence between nations and the other is of more nations gaining their independence. These forces are neither contradictory nor mutually exclusive. As economies become more globalised, the need for small nations to exercise their independence increases rather than diminishes. They need to manage indigenous resources in ways they see fit to maximise their ability to carve niche markets within the global economy. Small nations are using their powers over corporate taxes to help them compete for global investment and to help their indigenous businesses prosper; examples of this are the three Baltic states of Estonia, Latvia and Lithuania as well as Finland and Sweden, all of which have populations of less than 10 million people.

As interdependence between nations increases, the way in which that interdependence is managed is also changing. Interdependence no longer requires the creation of super states, like in the 19th century when Germany and Italy were each forged into large states. Today, interdependence between countries is managed through the creation and development of inter-governmental and international institutions. The oil producing countries of the Middle East, large and small, co-operate on oil policy through OPEC. Regional trading blocs in North America, Europe and the Pacific Basin have been established to increase the flow of goods and services between their member states. Inter-dependence and co-operation on climate change is being managed through the Kyoto process.

The European Union now has a membership of 27 independent nation states, ranging from Luxembourg with a population of less than half a million, to Germany, with a population of 82.5 million. The EU is probably the most highly-developed institution in the world today for managing international inter-dependence and the challenges of globalisation.

Its member states participate in a confederal political and economic union in which they agree to transfer and pool their sovereignty in certain areas of policy where it is in their interests to do so. Thus, for example, the EU handles many aspects of trade policy on behalf of the 27 member states, acting as one. Similarly, the EU, through its Council of Ministers, Commission and Parliament, has responsibility for a wide range of policy areas including some aspects of taxation, employment law, industrial policy, regional policy, agriculture, fishing, the environment, fair trading rules within the single market and industrial co-operation in key sectors.

Within the EU, a balance is struck between the rights and responsibilities of the member states which retain their national sovereignty voluntarily while transferring responsibility for policy areas where there is mutual benefit. Independence for Scotland would simply mean Scotland participating in this arrangement as one of the nation state members of the EU.