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What would Adam Smith say about Scottish independence?

- September 13, 2014

(Michelle Schwarze; Special Collections Library, University of Glasgow)
Scotland is poised to vote on the merits of its union with England, but not for the first time. During the intellectually vibrant Scottish Enlightenment of the 1700s, Adam Smith — the famed Scottish philosopher and economist who sought to explain what made nations prosperous — grappled with similar questions about the advantages and disadvantages of the Acts of Union of 1707. Smith expressed sympathy with those who had opposed the Union immediately following its passage, because the “infinite good” that Scotland experienced post-independence was a “very remote and very uncertain” prospect to Scots in 1708. Scottish voters currently face a converse question: Have conditions changed sufficiently to suggest that Scotland would be more prosperous post-union?
Some evidence suggests that Scots might think so. A slew of recent polls show that First Minister Alex Salmond and the “Yes Scotland” camp could win Thursday’s referendum, although a number of commentators (such as Paul Krugman) have voiced their concern over the economic consequences likely to follow from a “yes” vote. Much of the public debate over independence has focused on the potential economic difficulties an independent Scotland would face, including the costs of a rapidly aging Scottish population, the decline of North Sea oil revenue and the increased cost of Scottish government debt vs. Scotland’s share of British government debt (see here).
According to Salmond and others, rising economic inequality in Scotland, and the Scottish government’s perceived inability to address this inequality (even under devolution), is at the heart of their call for independence. As Salmond put it in a speech to the Scottish National Party conference last October, “this level of inequality offends the very basis of a good society.” And “Yes Scotland” sees itself primarily as an advocate for a “fair and caring Scotland for all.” Those in favor of Scottish independence have thus framed their cause as fundamentally egalitarian, and sympathetic to the interests of the least well-off.
But would an independent Scotland be a more equal one? And would it be more caring toward all its members? In contrast to current proponents of independence, Smith strongly supported union for economic reasons. Fewer restrictions on trade with England meant Scottish goods would sell for a better price, which Smith saw in part as the spark for the rapid economic development Scotland experienced in the 18th century (what Scottish historian Nicholas Phillipson has called a “profound revolution”). In his famous “Wealth of Nations,” for example, Smith explained how the dramatic increase in the price of Highland beef led to the cultivation of land that brought dramatic improvements in Scottish living conditions.
More importantly — and in contrast to the caricature that much research has consistently debunked — Smith believed that the economic benefits of Union were so valuable because they benefited the least well-off. Union with England, and freer trade, brought about a “civilized and thriving” society in which “all are often abundantly supplied … even of the lowest and poorest order,” even “though a great number of people do not labour at all.”
Beyond economic reasons to support the Union, Adam Smith saw a moral one. If care for all, especially the poor, is a central social concern, then a unified Great Britain is also preferable to an independent Scotland because what Smith called sympathy — our innate desire to imagine ourselves in others’ situations that often leads us to aid them — is stronger for those within our society. In his “Theory of Moral Sentiments,” he explains that increased social interaction with those with whom we share an identity (such as a nationality) increases our sympathetic understanding with them — something social psychologist Mark Levine and his collaborators have demonstrated.
These moral improvements were important to Smith because they forced even the most successful individuals not to “look down with insolence” upon those in worse conditions. And while Smith was far from complacent about the real harms economic inequality wrought on individuals, much of his work was devoted to highlighting how critical the sympathy of others can be to those who are suffering.
Of course, Smith had the benefit of hindsight when he evaluated the effects of union. The precise consequences of the upcoming vote on independence, whether economic or social, will likely take decades to emerge. But Smith’s concern with how both economic and psychological conditions can be shaped by politics — and, in turn, how they can shape prosperity — suggests that both considerations might be relevant for Scottish voters heading to the polls next week.
Michelle Schwarze is a postdoctoral fellow at the University of Wisconsin at Madison.