A go-alone Scottish economy is viable – but would it be any better?
Scots may dream of a Swedish-style state but, lacking concrete plans, Ireland is the likelier model
People generally get this wrong. And it’s reasonably important that they get it right instead.
Both Sweden and Ireland are more free market, more capitalist, than the UK or US. This is why both places work in their different ways. Just look at any of the listings of economic freedom: more free trade, lower corporate and capital taxation, less regulatory intervention into the economy.
The differences between the two aren’t in those basic economic structures. Sweden layers a high tax, high redistribution welfare state over the top of that. As does Denmark, which as Scott Sumner points out is, absent that welfare state, probably the most capitalist and free market economy on the planet, even including Hong Kong.
Ireland doesn’t do that tax and redistribution thing. Which is fine, that’s a political choice.
But that’s also why Scotland just ain’t ever going to follow the Swedish or even Nordic model. Because the polity of the country simply doesn’t believe in that free trade and capitalism bit. They want the high tax, high redistribution: which is fine, as I say, that’s a political choice (even if not one I like nor one I’d want to live under). But they don’t want to have the liberal economic order which makes it possible.
Thus they’d be fucked of course, Venezuela on the Clyde here we come.
That Swedish model relies upon the vigour of the free market and since Scotland doesn’t understand nor want that then they can’t have the Swedish model.