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Scotland’s
Place in the Global Economy We
are all becoming familiar with the immense impact of electronic commerce and the
internet world on our businesses, and those of our clients. But
the impact on governments and the political order is going to be just as great.
This is just beginning to dawn on policy-makers and politicians, and there will
be a heavy further feedback into the business environment when the message gets
through. Here
are a few thoughts on how Scotland, as one of Europe’s most dynamic regions,
may be going to fit into the new and rapidly evolving landscape. As
I see it the key features of the new terrain are these: 1.
Driven
by electronic commerce and the internet the world is now accelerating towards
the ultimate global marketplace at an infinitely faster pace than ever before
and embracing wider areas of life, work and society than ever before. 2.
This time no-one and nothing escapes – not corporations, not governments, not
a single area of social and economic activity, not the capital markets
themselves , which are at the centre of the revolution, not even the new
demi-gods of central banking. (Refer to MPC problems.) 3.
No policy concept or political strategy, national or international , is left
unchallenged by what is now taking place. Every doctrine and concept from the
previous period, every organisation and institution with any sort of centralist
or hierarchical flavour is now supremely vulnerable. 4.
Dreams of trade blocs, currency blocs, ever bigger exchanges, more
supra-national government, global economic management, many of them conceived in
the pre-electronic age, are all coming unravelled. Governments and regulators
are being left far behind. Instead, e-commerce and the internet are building
their own network republic, by-passing both national governments and
international agencies and making nonsense of geography and the mega-regional
mentality. 5.
The outcome of all this is the process of mega-mergers and global branding in
which we are all deeply involved . But there is a political downside which could
work forcefully the other way. 6.
It
gives unparalleled power to the individual over the institution, both in
the public and private sectors. So in this sense democracy and people power are
triumphing as never before, thanks to electronic capitalism. 7.
The consumer or client is now empowered to move way
up the supply and production chain and dictate and shape his or her
requirements. 8.
This applies in every field of business, not least in finance , where access
to information is open to all on equal terms and – dare I say it? -the old
superior wisdom of the giant funds and financial institutions is evaporating.
Middle income wealth, and middle sized enterprise are finding countless new ways
of combining and asserting market power. No existing large financial institution
is safe from this trend. 9.
Intermediaries are being by-passed on
every front. Consumers want to connect direct to the producer, and cut out the
old sales chain. Investors in their powerful millions want to connect direct to
capital markets and cut out the costly fund managers and bankers, (the famous
disinter mediation process) . Voters want to connect direct to policy- and
law-making, demanding total transparency and accountability. 10.
Systems
of governance, whether corporate or official, built on hierarchical authority
are collapsing. Network power takes over, leaving national governments
floundering and powerful lobbies and localised interests dominant. 11.
Threatened
commercial interests – and they are everywhere – will try and harness
nationalism and political processes into protection and over-regulation, in
order to stifle e-commerce advance. This will raise political tensions on all
sides. __________________________________________________ The
good news for Scotland ought to be that smaller states and autonomous regions
(whichever Scotland ends up as) will have a big advantage in handling and
reconciling these political and global forces which are pulling in opposite
directions. But that will depend on
two issues : First,
on Scotland’s ability to govern itself on a low regulation, low tax super
flexible and open basis, without the intrusion of anti-business and xenophobic
biases. Second
, on how Scotland positions itself both vis-ŕ-vis the rest of the UK and the
larger EU. The simple notion that the EU provides an alternative context for
Scotland to the UK should be viewed with great caution. The
EU is not going to develop into an all-embracing super-state or federal union.
Its future will be much more as a dense network of states,
meeting some of Scotland’s needs but not others. The whole European Union is
about to go into ‘constitutional reform’ mode for the next year or so, at
the end of which this will become much clearer. Conclusion:
Scotland and Scottish enterprise seems ideally placed to prosper in the new
global environment, so long as it retains a balanced and wise local political
leadership which does not tangle excessive nationalist prejudices with wider
business needs, and which understands both the benefits and the limitations of
being part of the EU network. ________________ IT
IS TIME TO RE-MERGE PHILOSOPHY WITH ECONOMICS. ECONOMISTS
HAVE DRAINED ECONOMIC ANALYSIS OUT OF PHILOSOPHY AND OUT OF REAL LIFE AND
PRODUCED AN ABSTRACT MONSTROSITY, A WORLD OF MODELS AND ASSUMPTIONS INCREASINGLY
DISCONNECTED FROM EVERYDAY LIVING AND FROM PATTERNS OF HUMAN BEHAVIOR, WHETHER
AT THE INDIVIDUAL OR THE INSTITUTIONAL LEVEL. AS
A RESULT, THEY HAVE NOT ONLY FAILED TO EXPLAIN OR PREDICT MOST OF THE ILLS WHICH
BESET THE WORLD ECONOMY, BUT THEY HAVE ACTIVELY ENCOURAGED A DEFORMITY OF
PERCEPTION AMONGST POLICY MAKERS AND COMMUNICATORS, WHICH HAS LEAD IN TURN TO
DEEP PUBLIC BEWILDERMENT AND DISTRUST OF GOVERNMENT AUTHORITIES. THE
MISLEADING ‘BLACK BOX’ VIEW OF THE WORLD PURVEYED BY THE ECONOMICS
PROFESSION, AT ALL LEVELS FROM THE MOST INTIMATE MICRO WORKINGS OF MARKETS TO
THE MACRO LEVEL OF NATION STATES AND THEIR JURISDICTIONS, HAS BEEN VASTLY
REINFORCED BY STATISTICIANS WHO HAVE BROUGHT A SPURIOUS PRECISION AND
QUANTIFICATION TO ENTITIES AND CONCEPTS WHICH MAY NOT IN FACT EXIST OUTSIDE
ECONOMIC THEORY. CANDID
AND HONEST LEADERS OF THOUGHT AND OPINION IN ALL SOCIETIES SHOULD NOW TAKE IT
UPON THEMSELVES TO SET BEFORE THE GENERAL PUBLIC THE TRUE LIMITATIONS OF THEIR
POWERS OF INFLUENCE ON THE CYCLE OF ECONOMIC EVENTS AND ON SHORT TERM CHANGES IN
THE LEVELS OF BUSINESS ACTIVITY . THEY SHOULD EXPLAIN QUITE OPENLY THAT NATIONAL
PROSPERITY AND SECURITY DEPEND NOT ON TRADITIONAL ECONOMIC POLICY MANIPULATION
BUT ON THE UPHOLDING OF INSTITUTIONS, AND THE LAYING DOWN AND JUST
ADMINISTRATION OF LAWS WHICH ARE FRIENDLY TO CAPITALIST EVOLUTION AND WHICH
ENCOURAGE THE RISKS,THE INNOVATION AND, ABOVE ALL, THE COMPETITION WHICH ALONE
MAKE FOR ENDURING ECONOMIC SUCCESS INSIDE ANY SOCIETY AND FOR A DEGREE OF
PROTECTION AGAINST THE NOW INEVITABLE GLOBAL HURRICANES. THEY
SHOULD ADMIT THAT THE GLOBALISED NATURE OF CAPITAL MOVEMENTS AND INVESTMENT
PERCEPTIONS REMOVES OLD POWERS FROM NATION STATE GOVERNMENTS BUT ALSO IMPOSES
NEW DUTIES AND NEW ROLES, (OR THE RESURRECTION OF OLD ROLES ) AT BOTH THE
NATIONAL LEVEL AND THE LEVEL OF INTERNATIONAL COOPERATION. AND THEY SHOULD DULY
EXPLAIN HOW THEY, AS ASPIRING LEADERS OF GOVERNMENTS AND DEMOCRACIES, INTEND TO
DISCHARGE THESE NEW DUTIES, BOTH DOMESTICALLY AND THROUGH THE INTERNATIONAL
NETWORK, WHILE AT THE SAME TIME DISCARDING REDUNDANT AMBITIONS AND PROMISES
WHICH CAN NO LONGER BE DELIVERED. DH.
20.10.98 |
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