Tuesday, March 8, 2011

Quote of the day

Michael Keating, The political economy of independence:
The North Atlantic periphery, and Europe more widely, provide a range of very different models of small nations adapting to global markets. There is a neo-liberal model, associated with some of the central and east European states (an extreme example is Estonia) and in some respects Ireland. This involves competing on low taxes, light regulation, flexible wages and labour markets, and inward investment. The corollary is an under-developed welfare state.

There is a section of opinion in Scotland that has recently been pushing this idea, for example through Reform Scotland and some sections of the media. As the Thatcher government found and the current UK government is finding out, however, it is not as easy as it might seem to roll back an existing mature welfare state.

The low-tax strategy is much easier in a country that has not developed its welfare services, where family and other networks bear much of the cost of adjustment, and where citizens and workers are ready to accept fluctuations in the individual and the social wage because they remember how dire things were before. There is no evidence that such a strategy has a political market in Scotland.
Arguing that it is an 'either-or" as opposed to an "and-and".

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