Wednesday, 17 May 2017

Why Brits Would Probably Be Better Off If UK Nations Split & Became Independent

A couple of weeks ago I created a poll asking if readers thought the nations of the UK would be better off if the UK split up or remained together. As expected, an overwhelming majority thought it would be better if the UK stayed together.

I'm not so sure - by which I mean I'm pretty confident that there'd be more positives to a split than negatives. If you went away and wrote a list of all the things you like about the UK and all the things you dislike, here's what I think you'd find. Just about everything you like would still be equally liked and appreciated if England, Scotland, Wales and Northern Ireland had been separate, independent countries all along, whereas some of the things you dislike would have been rectified if the four countries were not part of a United Kingdom.

Roll off some of the things you like about the UK - the literature, the scenery, the tolerance, the fish and chips, the lakes, the coastal attractions, the music, the films, the comedy, the pasties and the history, and you'll probably find they are tied to a concept of a United Kingdom far less than you think.

With Brexit and the very real possibility that Scotland could become independent in the near future, the splitting up of the UK is a distinct possibility. I'm now going to explain why after the initial upheaval this would be the best thing for the people of England, Scotland, Wales and Northern Ireland. To begin to see why, have a look at this:

As you can see from the image above, the United States, the world's largest economy, accounts for approximately 25% of nominal world GDP, and the seven largest economies (if you include the European Union economies as one) account for 75% of the total.

However, there is a difference between GDP and GDP per capita. GDP is the total economic output of a country - that is, the amount of money a country makes. GDP per capita, however, is the total output of a country divided by the number of people in the population, which measures the average amount of money each person makes.

The leading countries in GDP per capita - countries like Qatar, Luxembourg, Macau, Liechtenstein, Singapore, Bermuda, Isle of Man, Ireland, Switzerland, Norway and Hong Kong - have two very interesting commonalities. Number one, they are relatively small countries, and number two, they are all by and large the highest scorers on the Human Freedom Index. That is to say, once you have in place essential things like a stable society with human rights, property rights and a proficient rule of law, the two most important factors in having a high GDP per person is that the country is small and that it has economic freedom to enable market forces to do their work.

There is a very noticeable pattern regarding these small countries that top the league for GDP per capita - they each have a state that interferes minimally in their economies. Even when the politicians exude bossiness and heavy cultural shepherding, they usually interfere in the economic transactions of their citizens very lightly: they don't have minimum wage laws, nor a big public sector, nor do they interfere very much in the freedom of contract between buyers and sellers, and employers and employees.
In the past few decades the median (real) income of these small, laissez faire nations has gone up by 30, 40, sometimes even 50 percent - and conversely, the nations that have adopted the opposite approach have continued to be many of the world's poorest countries.

What does all that have to do with the United Kingdom, you may ask? Well firstly, the main benefits of a smaller nation are benefits that would diminish a lot of the so-called societal problems that make up present day Britain. For example, the smaller the nation the smaller the state, and the more accountable it is to the population it governs. There is more transparency and more competition, the success of laws and regulations are easier to evaluate, and the efficiency relative to neighbouring countries can be more easily observed.

Let us suppose that England, Scotland, Wales and Northern Ireland became completely independent nations with their own elected governments, their own exclusive set of laws and regulations, and their own financial autonomy. A few years down the line, England and Northern Ireland have pursued more liberal economic policies, lower taxes, lighter regulations and more personal freedom, whereas Scotland and Wales have tried to pursue their socialist agendas resulting in failing economies and social unease.
At election time, voters will have a more transparent perspective of how different national preferences yield different results, with the Scottish and Welsh governments being held more accountable for their dismal performances, and the public being able to look over the borders and assess which policies or freedoms are working for the betterment of the English and Northern Irish citizens.

Because competition, remember, is the biggest driver of innovation and progress, and the most efficient expunger of waste and failure in the world. It works in the trading of goods and services, in ideas and innovations, in technological advancements, and it can work at the level of nation states and their comparable policies and systems of governance too.

Split the union, and as long as each nation has its own elected government, its own exclusive set of laws and regulations, and its own financial autonomy, you'll see competition doing its work, and eventually all four nations will rise in quality because of it.