IT may be a little presumptuous to use this column to promote a new eBook I have out this week, excepting two things. The first is that it’s free, so I can’t be accused of profiting as a result. The second is that although it does not focus specifically on Scottish issues the themes that it addresses are highly relevant to debate on the future of Scotland.
The book is about economics. And if that does not appeal I hope that the title, which is "Money for nothing and my Tweets for free" provides some indication that this is not a standard treatment of the subject.
The reality is that economics and the work of economists impacts almost all aspects of our lives. Despite that few people, most politicians included, seem to have little idea what economics really says, and as importantly, why so much of that is wrong. So, I set out to address this issue. The aim was not to write a book. It was, instead, to write some Twitter threads (some up to 80 tweets long) explaining some important economic ideas. That worked. One has reached 1.755 million people, and got over 130,000 interactions, which was a bit surprising. So I decided to pull them together in an eBook, which is available free to download here. That explains half the title then.
The other half refers to the fact that much of the book is about money. It’s a topic we all think is familiar to us because we all use money everyday. But when it comes to knowing who creates money, how the Government manages this process, and whether and even how and why the government borrows there is massive confusion in society, and politics.
This matters right now to Scotland. The independence debate is unavoidable at this moment. What I show in this book is that without its own currency Scotland will never be independent. In practical terms, that’s because without its own currency Scotland will not be able to manage its own economy. It would instead be working to keep its bank manager happy, and that bank manager would be in the Bank of England, in the City of London.
It’s a simple fact that once the use of force became an unacceptable method for oppressing empires, money became the preferred weapon of choice for countries like the USA, the UK and France who have wanted to keep up their control of overseas territories. They’ve done it by requiring the use of their currencies in places that could just as easily use their own money. And they have also done it by charging heavily for this dubious privilege of using another country’s money. It is not by chance that the so-called developing world has remained poor. The "developed" nations have used their power over money to keep them that way, which has suited them very well.
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The same logic applies in the current debate in Scotland. The rest of the UK could continue to exploit Scotland if Scotland chose to still use sterling as its currency after independence. It’s on such terms that I expect Westminster to one day agree that Scotland might have independence, which it will seek to ensure is nothing of the sort by keeping Scotland shackled to the pound.
As I argue in my book, this would be disastrous. Only a country with its own currency can run the deficits required to tackle crises like that created by Covid without ending up horribly in debt, which the UK has not because its done quantitative easing. I explain QE in-depth in the ebook.
That’s why Scotland must have the ability to use QE after independence, or another crisis could be devastating. Scotland must also be in control of its own interest rates and taxes after independence, which it could not be without its own currency.
READ MORE: Nicola Sturgeon told to 'bite the bullet' and create a new Scottish currency
Most of all Scotland must be able to float its own currency on foreign exchange markets after independence, so that is freed from the need for austerity to generate foreign currency reserves in the bizarre fashion that the Wilson Growth Commission thought appropriate, but which is wholly unnecessary.
I am not saying that I have all the answers for an independent Scotland, but I definitely have one. It will need its own currency as early as possible if it is to make its own and proper way in the world. Nothing else will do.
You can download a PDF of Richard Murphy's new book from this link.
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