How important is wealth?

Replying to my previous post about the Glenrothes by-election, Doctorvee thinks that a nation’s wealth isn’t everything:

Even though you probably won’t catch many people saying it, I am sure there are people who would happily accept a (slight) decrease in Scotland’s GDP as long as Scotland was independent. You might criticise these people, but if, as I have posited, life is not all about the money, it is a perfectly valid position to take.

For instance, I have often heard it said (and not just by nationalists) that Scottish people in general have had more confidence, more of a spring in their step, since Labour were kicked out last year. I don’t know whether that is true or not. I can’t say, personally, that I have noticed much difference in people’s behaviour since the SNP came into power. I am certainly not the sort of person who would become more confident just because the Yellow Party is in government and the Red Party isn’t. But if others do, then that is their prerogative, and who am I to judge that?

Similarly, it is often said that independence would have a host of other benefits besides any economic benefits there might be. For instance, some say that the people Scotland as a whole would become more confident, happier, prouder.

Whether or not you agree with that (and I have to say, I have my doubts), you have to admit that these are desirable goals of themselves, just as much as increased GDP is. As such, I would argue that it is reasonable to accept a trade-off in income if it gives you enough happiness to compensate for it. For this reason alone, I think the argument surrounding independence should hinge less on economic factors.

We all recognise this idea in a way. If everyone just focussed narrowly on money, we would all work 24 hour days and 7 day weeks. And while there are some people who like to work more than others, most of us like to have our leisure time which can boost our happiness. In so doing, we lose money by foregoing the wages that we would otherwise earn. And if we spend money on our leisure activities by going out or even by doing something as simple as using electricity, we lose even more money. But because it makes us happier, we do it. Indeed, if someone concluded that it was worth foregoing all of their leisure activities so that they could earn more money, you would probably think they were a bit of a dunce.

Indeed one of the reasons Western Europe has a lower GDP per head than the USA is that Europeans work shorter hours (GDP per hours worked is roughly the same); another way of expressing this is that Europeans prefered to get their wealth in leisure time rather than in material goods.

But while I would agree that absolute level of GDP per head is not supremely important, I do think growth rate is important, because if a society has low growth its because something is suppressing the entrepreneurial, creative, inventive etc talents of its people. And that’s wrong, not just because it makes people poorer, but because it suppresses people’s talents and drives the best people to leave.

So if Scottish independence would result in an immediate drop in GDP per head (for example if the North Sea oil revenues wouldn’t make up for the drop in funding from the Barnett formula), that would not for me be a killer argument against independence.

This entry was posted in Britain, economics, politics, Scotland, society. Bookmark the permalink.

One Response to How important is wealth?

  1. Pingback: Britblog Roundup #192 « Amused Cynicism

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