15 September 2014

Keep the UK together


Most of the discussion about the Scottish referendum on independence, , scheduled for September 18, 2014, has focused on the fact that as of late the pro-union forces have maintained a narrow lead, most recently at about 47 to 41 percent.  What has gone less remarked as to why any reference to the 50 percent vote reveals a serious defect in the entire electoral process.  Why should the issue of Scottish independence be decided, as is the case, by a simple majority vote?

There is little doubt that in democratic societies decision by majority vote is often  appropriate for routine legislative matters.  Yet even here that approach can be slowed down by, for example, the requirement of a majority in two Houses, as in the norm in the United States and Canada.  Indeed, it surely the case that majority rule is never the correct standard to apply in elections that contemplate major structural and governance changes, which will shape, irreversibly, the future course of national history and identity.  By way of analogy, most voluntary arrangements, whether they serve business, social, religious or charitable ends, only execute major structural changes, like mergers and separations, by supermajority vote.

The same pattern holds politically,  For example, under Article I of the American Constitution, a Congressional override of the presidential veto (itself a major deviation from simple majority rule) requires a vote of two-thirds of the members of each house of Congress.  The background norm is self-conscious endorsement of the view that all new legislative interventions should be examined under a presumption of error, even in a democratic system.   The same sentiment is evident in the Amendment Process of Article V of the US Constitution, which creates an elaborate set of obstacles to amending the American Constitution, born of a worry that temporary political pressures could produce a permanent change in the government structures that even its proponents could come to regret.

Nothing in the theory of democratic politics requires all matters of public import be decided by simple majority rule.  These same  basic institutional concerns apply in the UK, especially on independence, wholly independent of the strong cultural and social arguments that, as Zac Tate has argued, point to the retention of the current system.  Any referendum that results in changes to the political structure should require a supermajority vote, probably in the range of three-fifths to two-thirds vote.  Under that standard the proponents of Scottish independence would have no chance, which in the absence of any major local grievance is just as it should be.

It might be asked whether any arguments from political theory might cut in the opposite direction.  The most persuasive argument in that direction rests on some version of the EU principle of “subsidiarity” principle, which says that key decisions should be made by the smallest unit that has the capacity to govern the particular issues at hand.  In this connection, without question Scottish politics are further to the left of those of England on domestic issues, given the Scottish preferences for higher taxes and transfer payments, stronger labour market protections, and more extensive economic regulation of the economy as a whole. Membership in the U.K. subordinates what would otherwise be a local majority decision to the collective preferences of the far larger English  population, which at 52.6 million people is about 10 times the population of Scotland. It is just this theme on which Scottish National Party leader Alex Salmond has pitched his case for independence: Edinburgh should exert complete control over taxation and economic regulation inside Scotland.

Yet this simple calculation misses the real complexities of the succession question.  The decisions that any, indeed every, government has to make are by no means all local.  The interconnections in operations between England, Scotland, and Wales have grown far tighter because of centuries of cooperation among them.  Thus while some issues could be decided locally, for many issues local solutions are manifestly inappropriate.  It is to just these functions that David Cameron and other pro-unionists appeal in making their pleas to doubtful voters, urging them to stick with the union.

Indeed, as this theory suggests, the unionists are on solid practical grounds. It is quite clear that Scottish independence will transform the landscape in foreign affairs.  The new nation will have to apply from scratch, if it so chooses, for membership in NATO, the European Union, and the UN for starters, as well as countless other mid level organizations that deal with everything from trade barriers, crime cooperation. to global warming.  In addition to the large number of multilateral treaties, the new Scottish government will have to establish bilateral treaties with virtually every major nation on tax and other business matters.  A quick search of UK Treaties Online shows that there are many hundreds, probably thousands, of current arrangements in place that will have to be sorted out in a very short period of time.  Yet there is nothing that indicates that other nations will sign on quickly to an extension of old relationships to the new government, without some unavoidable rethinking of the basic terms.

The same kind of complexity is sure to occur in connection with internal UK operations, which do not take place entirely within Scotland or England.  For starters, it is sufficient to think about the operation of air, boat, road, and train traffic as between the two countries for disputes over the control of military bases now used by U.K. forces that will (or is it might be?) transferred to English control. There is also the nasty question of whether Scotland can start up a new stable currency, given that it is surely unwise for England to allow an independent Scotland to piggy-back the pound, precisely because England will retain no economic levers over Scottish economic, tax and fiscal policy, which are likely to result in lower economic growth.  Much of the major problems in the EU today stem from the stress that major transfer payments and pro-union labor policies in the PIGS (Portugal, Italy, Greece and Spain) have placed incredible stress on the Euro which could been mitigated if national currencies were permitted to float freely from one another.

Wholly apart from these legal ramifications, an independent Scotland will be able do nothing to stem the loss of existing and fresh foreign capital and withdrawal to England of local businesses, including such iconic firms as the Royal Bank of Scotland Group and Lloyds Banking Group.  That major business shuffle coming on top of the legal transformation would be accentuated by the strong left-wing policies that are likely to gain traction in the wake of Scottish independence.

The pity of this all is that it is all so unnecessary.  Scotland has no major grievance or bitter unhappiness with current institutional arrangements.  Indeed, of the great advantages of the current federation model is that within an acceptable margin of error it allows both Scotland and England to get the best of both worlds.  The national government can take the lead in foreign and military affairs, and can control those network industries that span both, while allowing for some greater degree of autonomy on local issues.  The American constitutional model was initially designed on just that assumption and, ironically, it worked far better before the rise of the New Deal, in an earlier age when it was largely understood that local functions should not subject to the control of the national government, which was unfortunately toppled by the New Deal Constitutional Revolution of 1937.  Yet Scottish independence smashes these present cooperative arrangements, and necessarily blocks an incremental changes in the current system.

It is not possible now to reset the voting rules so that Scottish independence could only achievable by a supermajority vote.  But the case for that system justifies making this stern warning to the large number of Scottish voters who remain on the fence.  The presumption should always be set against major structural changes by simple majority vote. That same presumption should influence fence-sitting Scottish voters to vote “no” this coming Thursday.  There could always be another referendum down the road if Scottish conditions were to become intolerable.  But once the UK is broken up, it should be painfully evident that the Scottish voters, acting alone, cannot by simple majority vote force the creation of a new union with England.   In these uncertain waters, an emphatic no is the only responsible vote on Scottish independence.

Richard Epstein is the Laurence A. Tisch Professor of Law at the New York University School of Law