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The common weal

August 21, 2013

Today I went to an event at the Edinburgh Fringe festival on the common weal, an initiative launched by the Jimmy Reid Foundation, a left-leaning think tank which among other things campaigns for a more equal and fair independent Scotland.

Director Robin McAlpine defined the idea of the common weal. The phrase comes from the old Scots term which means both ‘shared wealth’ and ‘our wellbeing is common to us all’. In essence it means that if we share more we will grow the sum of wealth and wellbeing available to everyone. Put differently, both society and individuals will benefit if we emphasise mutuality and equity rather than conflict and inequality.

James Meadway from the New Economics  Foundation spoke passionately about the inequalities at the heart of the UK economy and why Scottish independence is essential for geographic income redistribution — and as a beacon of hope for England.

Lesley Riddoch, the third presenter, has written a new book, Blossom, suggesting that Scotland can learn from Scandinavian local democracy.

According to Riddoch Scottish councils are too big. The average Norwegian municipality has 12,500 people – the average Scottish council serves 162,500. Councils have been robbed of their power, and as a result most of us feel powerless. Apathy is a result of institutional failure rather than an inbuilt problem with national consciousness.

In response to McAlpine’s proposal for a national investment bank Riddoch said that Scotland should have fewer national entities; we need small, co-operative organisations which answer to local demands. Councils cover such large areas they’ve become out-of-touch.

I agree but I think it’s naïve to imagine that local councils can have anything close to enough power necessary to counteract the demands of international companies. If the British state struggles to generate enough tax revenues from footloose multinationals that hide their cash in international tax havens, then local councils will certainly find the task a lot harder.

The annual council budget of East Lothian, where I grew up, is £220 million. That’s chickenfeed to big corporations. The British financial sector alone spent almost half this sum lobbying the government in 2011. US lobbyists spend many multiples more. How could a small council withstand such sheer financial muscle?

Some government functions can only be delivered on a large scale. The well-known problems of the global economy — low wages, a race to the bottom on tax, environmental degradation, financial instability – are partly a result of the lack of international cooperation and a breakdown in national state regulation.

These failures affect local communities. The apathy felt by many Scots isn’t just due to the erosion of local democracy; it’s the result of the anarchy of the global economy. That the admirable local opposition to Donald Trump’s Aberdeen golf course hasn’t translated into widespread rage is partly due to the feeling that our actions amount to little against the clout of transatlantic millionaires.

The Tobin tax is a good example of the need for powerful large-scale governance. If a single country decides to tax international capital flows, even by the tiny amount proposed under the Robin Hood tax campaign, financial institutions will have an incentive to move elsewhere to a region or country without such a tax. Any similar threat by national or local governments risks failure if it isn’t conducted in unison with other powerful states or regions with the teeth to make their rules stick.

The radical environmental regulation needed to preserve our planet will never be put in place without better international governance – which in turn requires strong national control. For instance countries or localities that tax air transport more will simply lose out to airports with smaller levies. Carbon emissions are everybody’s problem, so they need the input and coordination of all.

Public goods and natural monopolies can’t be delivered without a strong state. The failings of privatised utilities are due to a purposeful erosion of the power of the national state rather than its inherent failings. Rail, the post, electricity, power and water need to be brought back under local and national control.

Scandinavian countries are in fact exemplars of the strong state — they tax and spend, and they consciously retain the levers of economic control so that they can allow their citizens to exert democratic influence. For instance Denmark and Sweden stayed out of  the eurozone because they knew it would clip their fiscal and monetary wings. Norway isn’t even in the European Union.

I’m not opposed to Riddoch’s view that local governance needs to improve. Doubtless we need to regain control of our communities, and in so doing we will no doubt feel more empowered. But local democracy isn’t inimical to large-scale governance. Certain things need to be done by national states: at least financial regulation, the collection of certain taxes, environmental legislation and the provision of public goods an natural monopolies. Some other things need to be run locally: taxes, environmental services, local transport, possibly health and education.

Maybe there’s no conflict between the local and the national. The real question is whether the institutions of governance and democracy serve to hand more influence back to us, the people, rather than surrender it to the faceless forces of international power. Maybe we need more democracy at both the local and the national levels.

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