Questioning the ‘common sense’: Was Scottish independence really an alternative to UK neoliberalisation?

Introduction

This paper questions whether the Scottish National Party’s (SNP) 2014 campaign for Scottish independence offered an alternative to Westminster’s neoliberalism. Certainly, the SNP has long used the discourse on social justice to both distinguish itself from the parties of Westminster and to garner public support for independence (Scottish Government 2013a: 214). The ‘Nordic Model’ was the SNP’s favoured alternative to Westminster’s neoliberalisation model, and its template for establishing social justice (Scottish Government 2013a: 213, 228, 477). Similarly, the SNP’s red/green coalition, YES Scotland, portrayed independence as a transformation to ‘a greener, fairer and more prosperous society’ (YES Scotland 2014). More explicitly, the Radical Independence Campaign embraced the slogan ‘another Scotland is possible’, emphasising the alternative to neoliberalisation (RIC 2014). But whilst the options of greater democracy, self-determination and social justice convinced 44.7 per cent of the Scottish electorate (in an 84.6 per cent turnout), the British ruling classes were able to convince 55.3 per cent to reject independence. A key strategy for this class, performed by the Better Together campaign (consisting of the Conservative Party, the New Labour Party and Liberal Democrats from north and south of the border), was to successfully frighten workers into believing that independence was detrimental to their job security and standard of living. In the final week of Better Together’s ‘Project Fear’, the British Broadcasting Corporation (BBC) uncritically facilitated the message from the banks, insurance companies, supermarkets and retailers of closures and rising prices if independence was realised. Accounting for this, one Financial Times commentator wrote that markets ‘regard democracy as an unnecessary and unpredictable risk … What the average investor wants is a stable, predictable, market-friendly elite’ (Authers 2014: 28). In contrast, Gregor Gall (2013) argued that the SNP did not threaten the UK’s neoliberalism per se, because it was never committed to radical social and economic transformation. Similarly, Neil Davidson (2012) had warned that independence might only involve a political departure that did not disturb the neoliberal economic base structure of Scotland. A key question, then, is that of whether or not an SNP-governed independent Scotland would have maintained a market-friendly environment for the elite fractions of capital.

Through a historical materialist approach, this paper contributes to this debate by exploring the SNP’s pledge for an independent Scotland that would pursue both the Nordic model and membership of the European Union (EU). The reason for choosing these two policy objectives is that they appear to be in conflict with each other. It is no secret that poverty, deprivation and social exclusion are deeply embedded within contemporary Scottish society, and that populist national identity and nationalism has evolved into ‘a predominantly left wing phenomenon’ (Gall 2005: 182). As such, framing independence around the issue of social justice and the realisation of Nordic social democracy was certain to resonate with sections of the Scottish electorate. Simultaneously, the SNP government also stated that Scotland’s interests would be best served by EU membership because of access to the EU’s internal market and the Europe 2020 strategy (Scottish Government 2013a: 216-219). Yet the EU both legally challenges traditional social-democratic policies, and legally enforces similar economic and social policies to those of Westminster. It is this contradiction that alerts us to whether or not the SNP offered an alternative to the UK’s neoliberalism.

This paper is split into five sections. The first section discusses nationalism from a historical materialist perspective, and how this relates to class politics in Scotland. The next section identifies three competing interpretations of the Nordic model to illustrate that the SNP and YES Scotland campaign each had different visions of social justice for an independent Scotland. In the third section, a socialist explanation of neoliberalisation and competitiveness is used to understand the different collective and neoliberalising Nordic models. The fourth section illustrates how the SNP’s Nordic model was compatible with membership of the EU. It does this by showing how the EU does not defend some ‘European social policy’, but rather, how it has developed a legally binding free-market and austerity agenda (neoliberalisation) to challenge the collective social-democratic policies of its members. Given the SNP’s declaration of the merits of Europe 2020, the subsequent section draws on research demonstrating that the previous Lisbon Strategy (2000) was a driver of neoliberalisation in Europe, including the financialisation that caused the European financial crisis in 2008. Through both identifying the type of Nordic model the SNP were supporting and the economic policies demanded by EU membership, this paper suggests that the SNP may have spoken the language of radical change, but was really only offering a ‘stable, predictable, market-friendly elite’ for neoliberal capitalism in Scotland. However, the SNP’s strategy of declaring the Nordic model and social justice as priorities for an independent Scotland may also have undermined support from the fractions of capital most likely to have benefited from a neoliberal Scotland.

Nationalism: Liberation or limitation of the working-class struggle?

Over the years, a rich debate has emerged amongst Marxists concerning nationalism. It was perhaps Tom Nairn (1977a: 329) who reignited this debate after famously highlighting the incoherence of a Marxist position on the support or condemnation of nationalism. The response in Capital & Class was to argue that support for nationalism depended on whether it was used as a bourgeoisie ideology justifying the centralisation of power and geographic unification for the imposition of state capitalism, or whether nationalism represented ‘agitation in terms of the class struggle’ to further transform state capitalism towards socialism (Nimni 1985: 62). Drawing from the work of Otto Bauer, Ronaldo Munck argued that throughout history ‘progressive nationalism’ had been used as a strategy to unite and secure the state for the violent overthrow of capitalist imperialism; to provide a shield against the market forces of globalization; and to enable the building of federal alliances amongst progressive nationalist states (Munck 1985, 2010). Similarly, outside of Capital & Class it was argued that political context was all-important when discussing nationalism because Marx and Engels were concerned with how authoritarian forms of nationalism could be overcome by democratic, cooperative forms of nationalism (see Benner 1996). Rejecting the idea that ‘progressive nationalism’ is consistent with historical materialism, Barry Ryan and Owen Worth (2010) argue that:

1. Nationalism is an ideology of state capitalism that seeks to create a false consciousness of unity by silencing class conflict;

2. The exclusive nature of nationalism creates antagonistic, xenophobic and racist forces within the state;

3. Nationalism preaches division and conflict between workers with different national identities; and

4. ‘Progressive nationalism’ rests on liberal discourses that hide class relations and inequality, but also legitimise liberal international organizations (i.e. the EU).

As an alternative, these authors directed attention to the post-nationalist examples of transnational linkage between classes to resist transnational capital: the anti-globalisation movement, the World Social Forum, the Zapatista movement (also see Worth 2002, 2013). However, the limited transformative success of such transnational labour and social movements has been well documented (see Bieler 2012a; Paterson 2009). It has also lead to the misleading generalisation that all transnational movements merely legitimise the institutions and policies of global capitalism (see Amoore & Langley 2004; Drainville 2005). Surely rather than generalising and dismissing, it is more fruitful to investigate each struggle to identify its own unique configuration of social forces and its possible outcomes. In this way, advocacy of nationalism ought to depend on how it actually influences ‘agitation in terms of the class struggle’. It is this perspective that this paper adopts when considering the nationalist movement in Scotland.

Certainly the story of the creation of Great Britain and Northern Ireland is an example of centralisation and geographic unification for the development of state capitalism by the landlord class and the middle classes (Nairn 1977b: 8). For Neil Davidson, the origins of Scottish nationalism lie in the Act of Union of 1707, in which an emerging Scottish bourgeoisie class performed a ‘passive revolution’ to establish centralisation, geographic and cultural unification for the development of capitalism without consulting the people (Davidson 2010). In this way, Scottish capitalism and nationalism were intertwined: ‘national consciousness took as many centuries to become the dominant form of consciousness as the capitalist mode of production did to become the dominant mode of production’ (Davidson 2000: 28). Scottish national and class identity also had to compete with a British identity forged from both a very ‘British’ Labour Party and a British empire that had provided opportunities to escape deprivation in Scotland via immigration, soldiering and professional occupations in the colonies (Nairn 2007: 122). An important distinction between national consciousness and nationalism was also at play. As Davidson (2000) points out, many Scots may have been aware of the identity constructed for them as members of an imagined community (national consciousness), but this was not married to a desire for that nation to have its own state (nationalism). The rise of Scottish nationalism in the 1970s was deemed to be less to do with the ‘Celtic bloodstream’ than with the discovery of North Sea oil that ‘awakened the Scottish bourgeoisie to new consciousness of its historic separateness, and fostered a frank, restless discontent with the expiring British world’ (Nairn 1977b: 47). The prevalence of the British identity perhaps explains why only 32.9 per cent of the Scottish registered electorate voted for devolution in the 1979 referendum.

In contrast, Gregor Gall argues that the strength of Scottish national identity in the trade union movements was pivotal in creating the perception (rightly or wrongly) that workers in Scotland were ‘more “left wing”, more “radical” and more “militant” than their counterparts in many other parts of Britain’ (Gall 2005: 176). As a consequence, he states that the socialism that evolved in Scotland largely pursued home rule, which in turn caused populist national identity and nationalism to become ‘a predominantly left wing phenomena’ (Gall 2005: 182). This left-wing national identity was further strengthened as a declining Britain turned to the right and elected Margaret Thatcher and then Tony Blair, both of whom governed over neoliberal policies and Westminster scandals at home, and unethical and illegal wars abroad (Nairn 2007: 123). However, with Blair also came a devolved Scottish parliament in 1999, which was thought to be electorally designed to ensure ‘it would “kill nationalism stone dead”’ (Robertson 1995). Yet the combination of all the above social forces (the Scottish bourgeoisie, Scottish socialism, and left-wing populist nationalism) and divisive Westminster policies at home and abroad all contributed the SNP’s win of a small majority of the seats within the Scottish Parliament in 2011. With it came a pledge for a referendum on independence for Scotland.

Varieties of the Nordic model

The SNP had long used the discourse on social justice to rally public support for independence by stating that only a departure from the Westminster governments could ensure its realisation (Scott & Mooney 2009). Indeed, the SNP declared, ‘An independent Scotland, with a commitment to social justice, can be a beacon for progress elsewhere on these Isles’ (Scottish Government 2013a: 214). The form this social justice would take was developed with the celebration of the Nordic model for Scotland. Since at least 2007, SNP economic policy documents had identified the ‘Arc of Prosperity’ (Finland, Iceland, Ireland and Denmark) as possible economic and social models to emulate. With the exception of Ireland, each of these countries was admired for illustrating how small independent economies have been successful at combining ‘economic growth with lower levels of poverty and income inequality’ (Scottish Government 2007: 2, 5, 10-16; 2008: 17). It is for this reason that the Nordic model was explicitly identified as the preferred model in the SNP White Paper on independence (Scottish Government 2013a: 213, 228, 477). Indeed, sections of the SNP leadership also described the Nordic model as a viable alternative to the Westminster model (see for example Salmond 2012; Sturgeon 2013; Swinney, in Scottish Government 2014). It is no coincidence that academics specialising in comparative welfare state policy from these countries were appointed to the SNP Government’s expert group on welfare.

As Magnus Ryner points out, ideal types such as the Nordic model are not neutral concepts but are a reflection of the political perspective of the theorist responsible for their creation. The Nordic model is, then, a ‘social myth’, and can be interpreted in different ways by different social forces. For example, for those on the left the Nordic model is a ‘mobilising image’ or a rallying call for the realisation of the collective principles inherent in the social-democratic policies associated with the Nordic states of the post-1945 era (Ryner 2007a: 64). From this perspective, the Nordic model promotes social justice through a redistributive tax system; widespread unionisation; a comprehensive social security system; a representative democracy that manages the economy; and social solidarity (see Harvey 2014). Those championing such a Nordic model envisage a society that deplores inequality and rejects the liberal market economies that have embraced neoliberalism and individualism. In contrast, during the 1990s, social forces began to promulgate a negative portrayal of the Nordic model, vilifying its collective principles (‘high tax and spend’), even though they continued to produce growth and productivity (Ryner 2007a: 65). Political and academic elites used this negative Nordic model to campaign for liberal market reforms, and Nordic people elected centre-right governments to implement such reform agendas.

However, the pace and extent of these reforms has been limited by an extensive democratic process, high union density and the widespread use of tripartite cooperation in each of the Nordic states. Thus it has been argued that the Nordic model has sought to ensure that liberty is not the exclusive property of a wealthy, privileged minority (Brandal, Bratberg & Thorsen 2013: 12). In this respect, the ‘social myth’ of the Nordic model has developed further to mean that it is possible to execute a ‘Third Way’ between collective principles and liberal market economies. In 2007, ‘Third Way’ New Labour’s Ed Miliband also advocated the social democracy of the Nordic model for the UK because it ‘sustained incremental change which knits progressive values deep into the fabric of the country’ (Miliband 2007: 111). In all, we can see that this current portrayal of the Nordic model does not advocate for the collective policies of the first depiction of the Nordic model, but rather celebrates how Nordic states have begun the process of developing liberal market reforms (see below). As pointed out above, the SNP was supportive of such Nordic countries within the ‘Arc of Prosperity’, many of which had vilified the Nordic model during the 1990 and began introducing markets reforms on the grounds that it would create economic growth. It would appear that the SNP were advocating a Nordic model premised on a liberal market economy, but the commitment to an extensive democratic process, high union density and the widespread use of tripartite cooperation was missing (see p. 13, below).

During the independence referendum campaign, the SNP’s use of the social justice discourse and the Nordic model as a mobilising strategy was understandable given that issue of social injustice resonates with large sections of Scottish civil society and the Scottish electorate. For example, a recent YouGov poll showed an overwhelming majority of the British public being in favour of national democratic control over energy, health and the railways, whilst government control over transport in general, rent and food prices were supported by half of all the respondents (YouGov 2013). A 2010 survey of Scots found that 78 per cent thought the gap between those on high incomes and those on low incomes was too large. The same survey found that 59 per cent agreed that ‘ordinary people do not get their fair share of the nation’s wealth’; and 43 per cent believed that government should redistribute income from the wealthy to the less wealthy. A further 40 per cent said that taxes and spending should be increased (Curtice & Ormston 2011). It thus seems clear that the Scottish people support a form of social justice reflected in the collective economic and social principles found in the first social myth of the Nordic model.

This discourse on social justice is also attractive to large section of wider Scottish civil society. A number of Scottish academics, think tanks and trade unions have decried and asserted alternatives to the economic and social policies of the Westminster parties (see STUC 2014; Scottish PCS 2010; Electoral Reform Society Scotland; Nordic Horizons; Foley & Ramand 2014). Often independence was described as the vehicle to social justice, and the collective principles of the (first social myth) Nordic model are evident. The Jimmy Reid Foundation, a left-wing independent ‘think tank’ and advocacy group, has explicitly integrated the values of social justice and the policies of the Nordic model into its ‘Common Weal’ project – meaning ‘it is done in the interests and for the benefit of the majority or the general public’. The Jimmy Reid Foundation, established in 2011 as ‘a home for all people of the left in Scotland’, takes its name from the late great Scottish trade unionist leader, Communist Party and Labour Party candidate (2013). The genesis for the ‘Common Weal’ project emerged from Scottish scholars using the opportunity of independence to deliberate on an alternative economic policy agenda to the UK’s neoliberal model. Robin McAlpine, a director of the Jimmy Reid Foundation and editor of the Scottish Left Review, has been the very visible champion and driver of the Common Weal. Inspired by the Nordic (Finland, Denmark, Sweden, Norway) economic models, he commissioned research describing the issues facing an independent Scotland, and how these might be addressed (Jimmy Reid Foundation 2014). Common to all of these papers is a commitment to the principles of greater democratic control of housing, energy, industry and infrastructure, whilst using fiscal policy for the creation of economic growth, employment and general prosperity. In many ways, this reflects a commitment to a progressive tax system, low income and wealth inequalities, low poverty, greater skilled labour, greater democratic participation and emphasis on the tripartite relationship between the state, employers’ associations and trade unions. Subsequently, it is clear that the issue of social justice and the pursuit of the original collective principles of Nordic model resonate with wider Scottish civil society. Indeed, many of those involved in the YES Scotland campaign advocated similar positions (Scottish Socialist Party and Greens).

Of particular interest for this paper is the 2013 SNP annual conference at which the Scottish government’s first minister Alex Salmond and deputy first minister Nicola Sturgeon explicitly embraced the principles and language of the Common Weal. Indeed, Robin McAlpine stood onstage at the SNP conference to promote the Common Weal. The SNP appeared to be confirming that it was the vehicle for the realisation of an alternative to neoliberalism in an independent Scotland based on the collective principles of the original Nordic model. As pointed out above, such a policy position is attractive to large sections of the Scottish people. However, whilst social justice and the collective Nordic model were up front and onstage, there was a visible debate amongst senior members of the SNP government over the direction of economic policies and the economic model once independence was secured. The SNP finance minister John Swinney appears committed to restructuring the whole Scottish economy: this is detailed in the Scottish Government Economic Strategy (Scottish Government 2011), the Scottish Government Strategic Forum (Scottish Government 2013b) and the Scottish Government Fiscal Commission Working Group (Scottish Government 2013c). This restructuring is justified on the grounds that it would make Scotland attractive to foreign investment, increase exports and make Scottish workers and corporations ‘competitive’ in the global economy (see Paterson 2014: 10-11). This was to be achieved by public-sector efficiency reforms, building a skilled workforce, promoting the knowledge economy (research and development from universities), and further reducing government regulation on the international trade of energy, goods, services, foreign investment and access to foreign corporations (Scottish Government 2011 and 2013b). What is particularly interesting about this latter perspective is that it uses the discourse of competitiveness and the processes of neoliberalisation, which are currently driving the UK’s and EU’s policies (see below).

Stretching the elasticity of social democracy via neoliberalisation/competitiveness

Whilst the Nordic model appears attractive to large sections of Scottish society, it is debatable whether the Nordic countries have continued their commitment to the principles of social justice found in accounts of collective social democracy. In a world transformed, it is often argued that the ‘history of European social democracy is the history of constant revision of its means and ends’ (Merkel et al. 2001: 7). It is well recognised in the literature that social democracy has been transformed since it first emerged in the 19^th and early 20^th century. For a class demanding the common ownership of the means of production to deliver economic, judicial, political and social equality, social democrats argued this was achievable through participation in the representative democracy attached to capitalism (Prezeworski 1980). Martin Upchurch, Graham Taylor and Andrew Mathers (2009) identify three key stages of compromise for social democracy during its relationship with liberal democracy. The first stage, in the initial years of the 20^th century, meant accepting private property while maintaining the ultimate goal of incremental reform towards socialism. The second stage, in the post-war period up to the 1990s, involved abandoning the ultimate goal of socialism and accepting the legitimacy of private property and market forces in return for ‘concessions’ based on collective bargaining (state, trade unions and industry), social justice (economic equality), representative democracy, and the welfare state. Keynesianism established a social contract whereby governments guaranteed a commitment to full employment, and welfare provision in return for the consent of the governed. The third and final stage, evident from the 1980s onwards, involved social-democratic parties accepting many policies which expanded the scope of private property and market principles within the state. For some, these developments signalled a ‘crisis of social democracy’, because they eroded the Keynesianism social contract (Ryner 2007b). In contrast, Jonas Hinnfors (2007) argues that regardless of these market reforms, welfare provision still remains high in Sweden and the UK, and so claims that it is mere hyperbole to suggest that neoliberalism (defined solely as free markets) is replacing social democracy. Similarly, Ben Clift (2007) argues that Keynesianism was once the means to ends coloured by social democracy, but that the imperatives of economic efficiency are now providing the means to social-democratic ends.

In contrast to Hinnfors’ very limited definition of neoliberalism and the vague account of economic efficiency of Clift, it is insightful to visit the literature on neoliberalism as class conflict that has sought to define the transformations of capitalism in this period. I would concur with Stuart Shields in his assertion that we have witnessed ‘a set of processes that remain in train (hence neoliberalisation) rather than some distinct teleological endpoint (neoliberalism)’; and that these processes are produced by actors seeking to ensure the dominance of capital over labour through new regulations (Shields 2012: 2). Neil Brenner, Jamie Peck and Nik Theodore (2010) identify three major dimensions to global neoliberalisation that help explain the deconstruction of Keynesianism social democracy in the UK (collective bargaining, social justice, representative democracy and the welfare state). First, they identify how private enterprise has been brought into formerly state-controlled areas (market-disciplinary institutional reform). James Peck (2010) details these reforms: labour market deregulation and flexibility of the workforce, coupled with welfare cutbacks and privatisation (public utilities [electricity, gas and water], public housing, public health institutions and public services). Furthermore, government invests in the private sector, declaring it to be the solution to all economic problems. The ‘disciplinary’ nature of these reforms emphasises both their legal form and attempts to weaken those capable of opposing reforms (trade unions and public bureaucracies). Second, they highlight the diffusion of these reforms through transnational webs of elites; and finally, they discuss how supranational organisations such as the EU took on a legal character and became pivotal in the enforcement of ‘market-disciplinary reform agendas’ amongst their memberships (see Paterson 2014 on the EU, IMF, World Bank and WTO).

Interestingly, the word ‘neoliberalisation’ is never mentioned by political elites, within policy documents or by the media. Rather, we are bombarded with a discourse suffused with the terms ‘competition’ and ‘competitiveness’, which have come to dominate discussion not only on economics but also on key policy areas such as education, health, welfare and work. Paul Cammack’s (2009a, 2009b) insightful research illustrates the way ‘competitiveness’ conceals the market-disciplinary reforms of neoliberalisation. Supranational organisations such as the EU are using legal mechanisms to ensure that members accept neoliberalisation. At the IMF and World Bank, Cammack (2009a) illustrates the policies requiring the privatisation of public utilities and public services, labour market deregulation and flexibility of the workforce, coupled with welfare cutbacks to ensure that the workforce accepts minimum wages and conditions, and the disciplining of trade unions to minimise resistance. In the wake of the financial crisis, the EU has established benchmarking and surveillance for national governments to implement the above policies with the discourse of competitiveness (EC 2014). Similar to the UK, the EU is pursuing a neoliberalisation policy agenda.

When we acknowledge this more detailed account of neoliberalisation and competitiveness, we can account for a significant change in the UK and Scotland. It is not difficult to identify market-disciplinary reforms bringing the dominance of capital over labour: a shift that stretches the definition of social democracy to breaking point. It is beyond the scope of this paper to address each of these points individually; however, it is possible to illustrate trends in inequality, employment, poverty and the disciplining of trade unions. For example, we can see significant inequalities and policies in the UK that are anathema to the collective Nordic model. Setting aside the inequalities identified by Thomas Piketty (2014), in which 1 per cent of the populations owns 70 per cent of the wealth in core European states, a study recently pointed out that the UK’s five richest families now own more wealth than the poorest 20 per cent of the population. It observed, ‘Britain is becoming a deeply divided nation, with a wealthy elite who are seeing their incomes spiral up, while millions of families are struggling to make ends meet’ (Oxfam 2014). Current polices perpetuate this inequality. First, in reference to unemployment in the UK it is worth noting that the average unemployment rate in the years 1946–1973 was 2.01 per cent, and in many years, unemployment was less than 2 per cent (Boyer & Hatton 2002). In April 2014, the Office for National Statistics (ONS) stated that 2.24 million people were unemployed − 6.9 per cent of the adult working population, which included 27.4 per cent of people aged between 16 to 64 (ONS 2014).

We have seen labour-market deregulation and flexibilisation of the workforce, such that more than 20 per cent of employees were in low-paid work in the UK, and 7 per cent were on short-term contracts of 3 to 6 months (Labour Market Statistics 2013; OECD 2013). Almost 1.4 million employees are on zero-hours contracts (Office of National Statistics 2014), with half of all zero-hours-contract workers earning less than £15,000 per year, compared with 6 per cent of all employees. A key concern is the ‘lack of employment rights for zero hours workers, financial and job insecurity and a culture where workers are afraid to question the terms and conditions of their employment’ (House of Commons Scottish Affairs Committee 2014). Indeed, the OECD (2013) drew attention to the widening income gap caused by the promotion of part-time, insecure and low-wage jobs in the UK. Secondly, in reference to poverty, a Joseph Rowntree Foundation (2014) report stated, ‘Just over half of the 13 million people in poverty [in the UK] were working families’. Those who are unemployed are subject to both ‘discipline and demonization’ by the UK state, and the real value of state welfare support has fallen such that food banks are becoming the norm. As the Chief Executive of the Joseph Rowntree Foundation (2014), said: ‘We have a labour market that lacks pay and protection, with jobs offering precious little security and paltry wages that are insufficient to make ends meet.’

Similarly, data from 2013 illustrated that the youth unemployment rate (age 16-24) was 20.6 per cent in Scotland. In the same period, 11.9 per cent of 16-19 year olds were not in education, employment or training (Scottish Government 2014). It is estimated that 90,000 workers in Scotland are on zero-hours contracts (House of Commons Scottish Affairs Committee 2014). In all, 870,000 people in Scotland still live in poverty (17 per cent of the population); and around 200,000 are children (20 per cent of all children – Mooney et. al 2014). In the ‘age of austerity’, the UK government has initiated £22 billion cuts to the annual value of UK benefits and tax credit support in 2014/15. The Scottish Government allocation of public expenditure from the UK Treasury to fund welfare provision will be reduced by over £4.5 billion (Mooney et al. 2014). These welfare cuts will adversely impact on those already most disadvantaged in Scotland.

Finally, both the Thatcher and Blair governments actively sought to weaken and vilify trade unions (McIlroy & Daniels 2009). In 1945, trade union membership stood at 10.3 million (44.2 per cent density) but has since declined extensively (26.0 per cent in 2011). In 2011, UK-wide, trade union density was strongest in Wales (34.9 per cent), followed by Northern Ireland (33.6 per cent), then Scotland (29.8 per cent) and England (24.8 per cent – Brownlie 2012). As John McInally (2014), vice-president of the PCS union, has repeatedly argued, the UK is the most hostile to trade unions of all European states. This ‘hostile’ environment minimises the capacity of collective organisations to protect against part-time, insecure and low-wage jobs, poverty and austerity. In relation to the collective principles and policies of the Nordic model, the UK’s social democracy is plagued by inequality, such that inequalities seem to ensure that liberty is the exclusive property of a wealthy, privileged minority.

It appears that neoliberalisation has transformed the social democracy of the UK, but does this mean that social democracy is in crisis in the Nordic states? Nik Brandal, Øivind Bratberg and Dag Einar Thorsen (2013: 6-12) address this question in their overview of Nordic social democracy as Denmark, Finland, Norway and Sweden have elected centre-right governments and embarked on neoliberalisation. They argue that reformers of social democracy ought to remember ‘the distinction between values (which should be maintained) from means (which should always be subject to revision)’. The core value they see in Nordic social democracy is that the liberty of all individuals is enhanced within a society: ‘poverty and deep-seated inequality are thus viewed as prominent threats to personal freedom, perhaps even more so than the excesses of state regulation of the market economy’. Economic inequality and opportunity are managed by the representative democratic process. An extensive democratic process, high union density (Finland, 74 per cent; Sweden, 70 per cent; Denmark 67 per cent; Norway, 52 per cent), and the widespread use of tripartite cooperation (employers, trade unions and the state) have been instrumental in vocalising and protecting the values of social democracy during the rise of centre-right parties and the onset of neoliberalisation (Kananen 2013; Sandberg 2013). In Norway, these social-democratic principles were established before the discovery of oil, and so trade unions have always played a strong role in developing government policies. Andreas Bieler (2012) also points out that there are very few transnational capital relations (investment and trade) in Norway, which he argues is the key reason why the Norwegian economy has not experienced neoliberalisation in the same way as other Nordic countries. In this way, the collective values of social democracy are not completely undermined by the means, as we have seen above with the neoliberalisation embraced by Westminster and the corresponding levels of unemployment, low pay, poverty, inequality and declining union voice in the UK and in Scotland. In addition, emphasis is placed on pursuing social democracy within the national context, and an international cooperation that embodies the values of social democracy. This may highlight why many within the Nordic states are concerned that EU membership further threatens the values of social democracy (Brandal, Bratberg & Thorsen 2013: 120). It must be remembered that the Nordic states joined the EU with strong collective social-democratic principles, but as centre-right parties have been elected and have sought to introduce neoliberalisation, there is a growing convergence with the EU’s policy agenda (though contested by unions).

A Nordic neoliberal Scotland?

In light of the above, the question of what Nordic model the SNP were advocating looms. It has long been argued that the SNP is actually incapable of implementing the radical social and economic change found in the collective Nordic model and as advocated by the Common Weal. Gregor Gall (2013) has argued that the SNP may look like a European left-of-centre social-democratic party, but that this is only because it is situated within a party system in which neoliberal policies and ideas dominate. Whilst the rhetoric of social justice emanates from and surrounds the SNP, at its core is a commitment to accommodating the existing demands of international and transnational capital through neoliberalisation and a competitive agenda. Indeed, the discourse of competitiveness is woven throughout the SNP’s economic policy agenda (Paterson 2014: 10-11). For Gregor Gall (2013), the model of an independent Scotland envisaged by the SNP is the ‘Irish Tiger economy’, promoting low corporate tax, with a currency union that ensures that economy policy is set within neoliberal institutions (London and Brussels) and with no commitment to high union density or tripartite cooperation (for example, Amazon). Similarly, Neil Robertson (2013) had warned that Scots need to be wary of the fact that their vote for independence – as a vehicle for social justice – only departs from the UK institutions politically, but remains economically wedded, ensuring independence arrives at a distinctly neoliberal Scottish destination.

So whilst some have argued that Scotland has always rejected neoliberalism, and have sought to secure ‘Scottish social democracy’ (McCrone 1992: 144; Paterson 2007: 116), this overlooks the conflicting classes and differing interests in Scotland. A more detailed account illustrates that the ‘Scottish ruling class are integrated into transnational networks of power and governance’ (Miller 2012: 93). This is because from Thatcherism to New Labour (1997), and from Scottish New Labour in the devolved parliament (1999) to the present SNP government, the Scottish economy has been open for sale and mergers in the global capitalist economy. Identifying and tracing developments in corporate ownership, such as finance and energy, Millar illustrates that this Scottish capitalist class is part of UK, European and transnational class networks. The interests of this transnational capitalist class are also integrated into the Scottish Parliament and the Scottish Government via the pro-business assumptions of both policy-makers and politicians; but also by the sponsoring of political activity by business, and its influence in the mass media (Millar 2012: 120). Indeed, Millar’s work provides more evidence as to the reasons why the SNP cannot be relied upon to pursue transformative economic and social policies similar to the collective Nordic model envisaged by the Common Weal.

The European Union: Scotland’s natural home?

Evidence of the SNP’s support for the neoliberalising Nordic model is perhaps reinforced by the claim by the SNP Government that EU membership would serve Scotland’s interests via access to EU’s internal market and participation in the Europe 2020 strategy (Scottish Government 2013: 216-219). I concur that the economic and social policies dominant in the EU at the moment are the consequence of a struggle between specific state and non-state actors/classes (supranational, national, and regional) seeking divergent objectives in the 1980s and 1990s (van Apeldoorn & Hager 2010: 215). It is beyond the scope of this paper to give a detailed account of the different perspectives asserting the agents responsible for driving EU integration; but I would nevertheless suggest that a configuration of fractions of the capitalist class supportive of the interests of transnational capital prevails in the EU (see Van Apeldoorn, Overbeek & Ryner 2003). From this historical materialist position, I acknowledge that the economic, the legal, the political and the social are not separate spheres, but are ‘organic constituents of a productive system’ (Bieler & Morton 2008: 116). As Cammack argues above, the EU promotes a productive system based on neoliberalisation because of the dominance of the transnational capitalist class. In the following section, I want to illustrate that the free-market model of economic integration promoted by the EU demands a specific approach to social policy, one which undoubtedly limits the ability of its member states to pursue traditional collective social-democratic policies.

In many ways, the defining feature of the European integration project has been the creation of a liberal market order. As illustrated above, European states were focused on correcting market failure through social-democratic policies in the post-Second World War order ‘in a compromise between big business and big labour’ (Ryder 2007b: 12). Thus initially, European integration left its members a great deal of policy autonomy in the domestic realm (liberal embeddedness). Indeed, in the 1960s and 1970s, regional organisations such as the European Economic Community (EEC) were perceived as a defensive strategy, building trade blocs that pursued protectionist policies in the face of strong international competition (Hertz 2013). By the late 1990s, academics argued that a ‘new regionalism’ was occurring, as protectionism gave way to exposing corporations and workforces to competition in the global economy (Hette & Soderbaum 1998). This leads to the question, ‘Is the EU’s primary purpose to insulate member states from global pressure while protecting and advancing a distinctive European model of society and political economy? Alternatively, does it function as a kind of cipher through which European societies are globalized?’ (Rosamond 2013: 251). In the former proposition, the EU can be viewed as defending European members from the impact of global forces: that is, global finance and trade competition. The ‘European social model’ and a stable currency (the euro) are often deemed to be protected from the assimilating tendencies of deregulated US capitalism (see Breslin et al. 2002: 1-7). The power arising from demands to access the EU single market is used as leverage to fashion global regulations that reflect these European social values and the interests of dominant social forces (in the World Trade Organization, but also bilateral trade agreements). In the latter perspective, the purpose of the EU is to establish a series of well-defined steps for the neoliberalisation of members’ national economic and social policies, so that EU corporations and worker forces are integrated and compete in global financial, trade and services markets. Here the EU’s market power does not promote or protect European social values; rather, it is used to establish global regulations promoting neoliberalisation as the only policy option for states. Thus the EU creates opportunities for EU corporations to exploit domestic and foreign markets via the legitimising discourse of ‘competitiveness’ (see Ryner 2007; Cammack 2009a).

EU membership shaping a neoliberal Nordic Scotland

In favouring the latter answer to this question, the point made in this section is that European social policy is disciplined at the EU. Whilst the EU has ensured the development of liberal markets amongst members, neoliberal disciplining has been most evident during the financial crisis, when EU members (Greece, Ireland, Portugal and Spain) have negotiated the terms of financial assistance (bailouts). At such times, EU assistance has been conditional on the restructuring of both social-security legislation and labour legislation that reflects collective social-democratic principles (see Pochet & Degryse 2013; Clauwaert & Schömann 2012). The Treaty of Maastricht (1992) was integral in establishing the legal powers requiring EU members to comply. As Rosamond (2013) points out, the construction of a functioning single market in the EU requires significant supranational governance. Subsequently, European political elites have given the EU legal powers (‘exclusive competence’ Article 3 TFEU) over customs union, competition law, administration of fisheries, commercial policy, the conclusion of international agreements and monetary union, and to share competence with member states on aspects of establishing the internal market. If collective Nordic social democracy involved an extensive democratic process and the widespread use of tripartite cooperation to direct the economy towards national objectives, McGowen (2001) identifies three policy areas in which EU law takes precedence over domestic laws and impacts on national governments pursuing social-democratic policies: (1) competition policy; (2) the Single Market; and (3) EMU.

Taking these in reverse order, the EMU imposes restraints on a member’s macroeconomic policies, such as the ability to borrow and run large fiscal deficits. Yet social-democratic governments have used fiscal autonomy to borrow capital in order to invest in industry, corporation and workers in the pursuit of national goals. Secondly, the completion of the Single Market also requires the liberalisation of government procurement. Previously, social-democratic governments had used preferential purchasing as a policy to promote domestic industry, production and employment. Preferential purchasing was also used as a redistributive policy. Finally, on the grounds that it enhances ‘consumer welfare’, EU competition policy is applied to prevent anti-competitive conduct amongst corporations and members for fairness in market access. ‘Consumer welfare’ has never been defined (Andriychuk 2012: 839-842). However, in sculpting this ‘competitive’ environment for corporations, many smaller corporations have been forced to close because they are ‘uncompetitive’, and significant unemployment has occurred throughout Europe.

The legal nature of European competition policy for the single market is very clear in the case of state aid (subsidies). This illustrates an EU commitment to the deconstruction of collective social and economic policies, because its aim is to outlaw government assistance/subsidies to domestic workforce/sectors/companies. Since the 1980s, the European Commission (EC) has been assertive in seeking to clarify, legalise and enforce the conditions under which EU members can use state aid for the above purposes. For example, the Lisbon Treaty places significant legal restrictions on the use of state subsidies by member states. Members are obliged under the Treaty to show that state aid is not distorting the single market (Lisbon Treaty 2007: Article 107 [1]). Members use the ambiguity of the Treaty’s language on state aid to frame subsidies as promoting competitiveness (Clift 2013). Whilst the EC European Competitiveness Report (2012) asserted the need to identify and remove government subsidies and protection via benchmarking and the monitoring of member states’ economic policies, the EC has declared an 2014 objective to address any ambiguity (EC 2014). The objectives of European economic integration clearly impact significantly on the capacity of its member states’ governments to promote domestic growth, redistribute wealth and address poverty through collective social-democratic principles. As a member of the EU, an independent Scotland would have been subject to the neoliberalisation of these types of collective policies within its Nordic model.

The Lisbon Strategy and Europe 2020 for a neoliberal Nordic Scotland

Finally, a number of historical materialist writers have argued that throughout the 1990s, the EC Commission was responsible for forging and promoting the neoliberalisation of European integration (Cammack 2009; van Apeldoorn 2010; Macartney 2011; Birch & Mykhnenko 2014). Indeed, each of these authors draws attention to the way that Delors’ White Paper of 1993 laid the framework for neoliberalisation by advocating the promotion of economic competitiveness and export-orientated growth to address unemployment. In doing so, the EU Commission and the ‘modernisers’ in the Council of Ministers (in the UK, Blair; in France, Chirac; and in Germany, Schroder), both rejected a policy of European protectionism to shelter members from international competition (a mediating layer of governance), and agreed instead to pursue a policy that emphasised wage restraint, the cutting of unemployment benefits, labour-market flexibility, cutting government spending and developing positive public opinion around competitiveness. In this way, neoliberalisation was seen as determining the form of European economic and social policy throughout the 1990s.

In this section, it will be illustrated that whilst the European economic model has been enshrined in law, the European social model has only been greatly discussed. Hailed as a set of policy initiatives to address low productivity, unemployment and economic stagnation throughout the EU, the Lisbon Strategy emerged in 2000. It declared that by 2010, Europe would be ‘the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion’ (European Parliament 2000). However, by 2004, a review of the programme reported that most of the goals would not be achieved. In 2005, the EC and the European Parliament reasserted the fact that ‘well-designed social and environmental policies are themselves key elements in strengthening Europe’s economic performance’ (European Parliament 2005). By 2009, the EU accepted that the Lisbon Strategy was a failure and amidst a pressing economic crisis, and the EU Commission announced Europe 2020 as a 10-year strategy aimed at ‘smart, sustainable, inclusive growth’, with greater coordination of national and European policy (European Commission 2010). At each of these stages, we see a European economic policy with a corresponding social policy presented together as if each had equal weight in the strategy.

In reality, European social policy has become the blether justifying the European economic policy. For example, Jean-Claude Barbier asserts that the Lisbon Strategy emerged from President Jacques Delors’ (then EU Commissioner) 1993 White Paper, which articulated a European social policy embodying the principles of social democracy (Barbier 2012: 385). However, this project was greatly hindered by the 1997 elected liberal-market ‘modernizers’ (Blair, Chirac and Schroder). They arrived in Europe and made social policy subordinate to the implementation of market principles in EU integration. Debate on EU social policy was paralysed, and was not revitalised until 2009, with the adoption of the ‘Europe 2020’ economic strategy. Whilst Europe 2020 celebrated the principles of ‘flexicurity’ (worker flexibility in the labour market, with a commitment to keeping unemployment short-term) and ‘active inclusion’ (to bring more people into employment), Barbier argues that both of these principles were combined with ‘stricter eligibility criteria for benefit’, forcing workers to accept these terms and conditions. He also contends that as economic policy was enacted as EU ‘hard law’, lip service was paid to a similar commitment to European social policy. Thus for Barbier, EU social policy is the ‘waffle’ around the hard law of an EU market economic policy.

Indeed, the legal primacy of the EU economic model over the EU social model is explicitly stated in the Lisbon Treaty (2007): ‘the principle of an open marketing economy with free competition’, with a corresponding EU legal competence to enforce (Article 119. 1) contrasts starkly with a mere commitment to the values of the EU social model (Article 3. 3). The EU has very limited legal competence for the realisation of this social model (provision of very limited general social services; some health protection; equality of worker and employer representation – see Schiek 2012). Moreover, in recent years the social policies of different member states have actually been overruled where they conflict with the Lisbon Treaty, such as in collective bargaining and pension schemes (see Neergaard et al. 2013). Indeed, a defining characteristic of the EU has been the pressure it has exerted on member states to conform – restricting the capacity of those states to maintain distinctive national collective social-democratic policies.

Whilst Kean Birch and Vlad Mykhnenko (2014) list the failures of the Lisbon Strategy to meet its own objectives (growth, employment, and dominant knowledge-based economy), they also highlight the fact that the ‘Lisbonization of the European economy’ was pivotal in shaping the conditions that caused the European financial crisis (2008). The commitment to creating a knowledge-based economy required not only the promotion of education and investment in research and development, but also innovation and the liberalisation of financial markets and security markets (Birch & Mykhnenko 2014: 111). This is also known as ‘financialisation’, and has been defined as ‘a pattern of accumulation in which profits accrue primarily through financial channels rather than through trade and commodity production’ (Krippner 2005: 174). It was this financial restructuring of the European economy to stimulate investment in high-technology sectors that contributed to the conditions for the EU’s financial crisis. The pivotal role private transnational financial institutions played in establishing financialisation as EU policy, and the manner in which they profited, have also been traced by Huw Macartney (2011). In their assessment of Europe 2020, the authors point out that whilst it advocates ‘smart economics’, Europe 2020 echoes the Lisbon Strategy in its use of the language of social policy to surround an underlying legal commitment and drive towards further free-market reforms (Birch & Mykhnenko 2014). The failure of Europe 2020 is also reflected in debates over the ‘incoherent’ and ‘ineffective’ concept of ‘social investment’ for reforming welfare provision in the EU (Nolan 2013: 459), and its poverty and social exclusion targets (Copeland & Daly 2012: 273). Indeed the EC acknowledges that ‘EU countries are far from reaching the 2020 target and the worsening social situation caused by the economic crisis is undermining the sustainability of social protection systems’ (EU Commission 2014). It would appear that the deconstruction of national welfare states, another key component of social democracy, is part of the EU’s market-disciplinary reforms agenda.

It is important to pause here to acknowledge again the SNP government’s discourse on the need for independence to address social justice via adopting the Nordic model, and its assertion that EU membership is desirable because participation in the EU 2020 Strategy will create employment and growth. Earlier in this paper, it was highlighted that the Nordic model could be interpreted in three different ways: as a rallying cry for the rejection of market economies in favour of collective policies; as the demonisation of these collective policies; and, finally, the celebration of social-democratic states that had begun the process of neoliberalisation. It was argued that to defend the collective principle in government legislation required a democratic process that accommodated widespread unionisation, and the extensive use of tripartite cooperation. The role of trade unions is deemed paramount for ensuring that government policies reflect the collective values of the Nordic model. It is then interesting to reflect on the success of this Europe 2020 strategy in relation to employment, poverty and the disciplining of trade unions. First, in terms of employment in March 2014, the EU28 unemployment rate was 10.5 per cent, and the youth unemployment rate (under 25) was 22.8 per cent (Eurostat 2014). Using data from 2011, the European Commission asserted that 24 per cent of all the EU28 population (over 120 million people), is at risk of poverty or social exclusion – this includes 27 per cent of all children in Europe, 20.5 per cent of those over 65, and 9 per cent of those with a job (EU Commission 2014) This leads the EU Commission to acknowledge that ‘EU countries are far from reaching the 2020 target and the worsening social situation caused by the economic crisis is undermining the sustainability of social protection systems’.

However, the EU asserted in 2013 that 24.8 per cent of the EU28 populations were now living in poverty. Finally, in terms of union density, the average level of union membership across the whole of the European Union for 2012 is 23 per cent. There is great variety of levels of union density, ranging from Nordic states (Finland, 74 per cent; Sweden, 70 per cent; Denmark 67 per cent; Norway, 52 per cent) to lower union density in the UK at 25 per cent; Estonia and Lithuania at 10 per cent; and France at 8 per cent (worker-participation.eu 2014). These figures draw attention to the fact that EU membership and participation in Europe 2020 does not appear to be able to address inequality and deliver the social justice sought by Scottish civil society groups and the YES Scotland movement. Rather, it could be argued that this picture of the EU fits well with the SNP’s vision of the Nordic model in Scotland: similar to the ‘Irish Tiger economy’, promoting low corporate tax, with a currency union that ensures that economic policy is set within neoliberal institutions (London and Brussels), and with no commitment to high union density or tripartite cooperation.

Conclusion

This paper began by asking whether or not an independent Scotland governed by a SNP government would have established a market-friendly elite and environment for capital. To address this question, the paper explored the SNP’s pledge for an independent Scotland to pursue both the Nordic model and membership of the EU. Through a historical materialist approach that sought to evaluate each nationalist movement’s ability to ‘agitation in terms of the class struggle’, this paper argued that the SNP did not offer an alternative to Westminster’s neoliberalism. After identifying three competing interpretations of the Nordic model, the paper illustrated that the SNP aspired to a liberal market reformed Nordic model. The SNP did not promote higher corporate taxation, high union density and tripartite government decision-making, which currently countered the liberal market reforms taking place in Nordic states. By outlining a socialist explanation of neoliberalisation and competitiveness, this paper has illustrated how these liberal market reforms challenge the social-democratic principles relating to the collective Nordic model. In stark contrast, sections of the Scottish population, civil society, think tanks, trade unions and the YES Scotland campaign appeared to support the social justice of the collective Nordic model. This argument was supported by a discussion of the Reid Foundation and the Common Weal. Thus the SNP’s appropriation of social justice and the Nordic model was one tied to neoliberalisation, and a commitment to the discourse of competitiveness for the dismantling of social-democratic collective principle and policies.

It was clear that the SNP’s Nordic model was compatible with membership of the EU. The key point here is that whilst a great deal of time and effort is spent discussing the possibility of a ‘Social Europe’, it has remained subservient to an economic policy based on neoliberalisation with the accompanying discourse of competitiveness. Thus paper has sought to highlight the fact that both the Lisbon Strategy and the Europe 2020 strategy reinforce a legally defined EU economic policy that trumps European social policy. In the first place, when EU economic policies have conflicted with national social policies EU courts have decided in favour of EU economic integration. And secondly, the European economic crises (in Greece, Ireland, Portugal and Spain) have seen the EU benchmark and enforce neoliberalisation over national social policies. This pattern is likely to continue as the main states within the EU react to the financial crisis with a competitive discourse and national policy position based on austerity. This all sounds strangely similar to the current Westminster economic and social policies from which the SNP government argues it will depart. Subsequently, the SNP may have rhetorically embraced the language of radical change, but was in fact only offering a Scottish, ‘stable, predictable, market-friendly elite’ fit for neoliberal capitalism. However, whilst this may have convinced sections of the Scottish population that social and economic transformation would emerge from SNP independence, it also frightened the dominant fractions of capital into a strategy that prevented independence from occurring.