There are key issues we must fix for a post-independence economy

I studied the manufacture of the pin, as Mr Smith wrote, and what it tells about “division of labour”. In economics lectures, the professor told us that products are often manufactured in an area that specialises in that product.

He told us that wine is best from warm climates, he said grapes were not easily produced in Scotland. He did not like my suggestion that wine could be made from fruits other than grapes, and told me not to be facetious. He said generally things get made close to the source of the raw materials.

I went to those lectures many years ago and Adam Smith (below) lived many years before that.

In the world of today, global shipping is a big and clever business. We see clever minds of brilliant people coalescing in particular spots, so products may not be produced where raw materials are but where clever minds get together.

Two examples in Scotland would be Dundee for computer games and Prestwick for satellites.

Division of labour really means one person makes one part of something while another person makes another bit of it and then someone else joins the parts together. See Henry Ford, Model T Ford 1908.

Financing may be seen in a similar light. There are banks, credit unions, mortgage brokers, building societies, bonds, gilts, venture capital etc, etc.

The City of London was once a leader in this field of endeavour but has seen Brexit-panicked Jeremy Hunt loosening regulations because the City has lost its grip on the mountain of the global financial story.

The situation back in 2021 was that 440 financial service firms had left London, taking £900 billion pounds of assets with them. The situation is hardly likely to be any better now.

One of the disasters of the UK economy is that much of it is run through companies financed by shareholders. Many high streets are now run down, full of betting shops, Turkish barbers and kebab takeaways.

Before opening a shop, one would ask many questions about stock, parking, buses, trains, accessibility, insurance, theft, business rates, attracting enough customers, attracting staff, product returns, rent on the shop space, will someone trip over my doormat and sue? The responsibilities are enormous, the risks vast.

The thing with having great small businesses on the high street is that they provide competition for the major stores, this is where competition plays a great role in the economy. It also provides customers with choices of where and what to buy.

When small independent retailers make their shops attractive, they lift the spirit of anyone who passes. High streets need lots of different offers and should attract people for adventures of discovering things they may never have thought of.

A good high street should lift the spirit of the people who visit.

Our new Scotland needs privately owned businesses which are not only run for profit but for pride of being the best as well.

Meanwhile, in a perfect housing market as demand rises, suppliers come to market and profitably increase the supply, currently there is much to distort the market so it fails. Many people who own houses often use them as a bank.

In many countries, a house is where a home is made and a family is raised. In such places capital gains taxes on houses are so huge there is little to be gained from property price increases unless you have lived in a building for 20 years or more.

Such societies, it has been argued have more stability and the people who live in them are more content.

There is a slogan used by charities for homeless people – “Housing First”. If we sort out the housing market we will probably resolve the homelessness situation at the same time.

Cher Bonfis

via email