Nations of the world… divide!


Up. Down. Up. Down. The Dow posted a gain yesterday almost exactly equal to the amount it lost the day before. In other words, it went nowhere. Gold slipped a little, not much.

Are you out of the stock market, dear reader? We hope so. We see nothing but misery coming from stocks in the years ahead. Yesterday, for example, we saw one analysis that put the likely return on the S&P over the next ten years at almost minus 10% per year! So, let’s turn our attention to something else…

Scotland seems ready to break with Britain and go its own way. It is by no means the first breakaway country in history. But most of the last five centuries have been spent putting nation states together, with relatively few successful defections.

It took many generations for the Frankish kings to bring modern France into being: conglomerating the Picards and the Poitevins, the Limousins and the Corsicans, those who spoke the ‘langue d’oc’ with those whose mother tongue was ‘langue d’oïl’. Only under Napoleon, with national newspapers, national roads, and public schools was the job finally accomplished.

Meanwhile, Germany wasn’t unified until 1871. Before that, it was a hodgepodge of kingdoms, duchies and principalities.

America, too, was assembled from smaller pieces. The native tribes had to be exterminated or relocated. Some parts were purchased honestly. But the Mexicans had to be defeated – twice – to make them more agreeable. Texas came voluntarily into the United States, then regretted it. Finally, the rebellion of the southern states was crushed and the union held together.

FREE daily investment email from MoneyWeek
Receive our thought-provoking investment email Money Morning every weekday morning, plus occasional promotions, & become a smarter investor.

Please enter a valid email address

To sign up, enter your email address:

Great Britain was assembled over a much longer time. Scotland was incorporated by the Acts of Union in 1707. But this followed a series of bloody battles and preceded even more. Wales was brought to heel in 1282. Ireland was effectively conquered when Hugh O’Neill surrendered in 1603.

And now, if the Scots go their own way, it is a new trend and probably a better one.

The true measure of an economy’s strength is how much nonsense it can support. The Soviet Union put up with 70 years of Bolshevism and was wrecked by it. Argentina has already survived about the same amount of time with Peronism and still suffers from it.

And the US carries its own burdens – typically expressed in underhanded euphonisms such as ‘the war against terror’, or the Patriot Act, or the Independence Card, or in capital letters, such as the TSA, SSA, BLS, SEC, IRS and so forth.

But the evidence suggests that a small, rich country has a big advantage. It tends to put up with less nonsense than a big one.

Where do taxpayers get the best deal from their government? Our guess is Switzerland. The trains run on time. The airports are clean, modern and efficient. Towns are idyllic. The public health system works. Government workers – including those who check your passport at the border – are polite and business-like.

Switzerland is not only small. It is not a nation state. It is a confederation of independent states – like the US before it was consolidated.

Small states do a better job of controlling their government, their military forces and their debt. Not because they are smarter or more peaceful. But simply because there is less distance between the governed and their governors. Citizens can see what their leaders are up to. If they don’t approve, the politicians can be beaten in the next election, or in the street.
Independence for Scotland? Yes, it’s probably a good idea.

And so is independence for Maryland.

FREE daily investment email from MoneyWeek
Receive our thought-provoking investment email Money Morning every weekday morning, plus occasional promotions, & become a smarter investor.

Please enter a valid email address

To sign up, enter your email address:

[xyz_lbx_custom_shortcode id=5]

• Stay up to date with MoneyWeek: Follow us on TwitterFacebook and Google+

  • Subsidiser

    The sooner Scotland gets on its bike, pedalled furiously by its Nationalists, the better it will be for England, shot of those impossible whingers.


    Men in skirts…..or some of the most brilliant minds and inventors in history ? If I were a Scotsman, I would vote for more independence but within the existing Union i.e. the best of both worlds !

  • Boris MacDonut

    Italy only celebrated 150 years as a country 2 years ago. Now Ukraine will split too. Good.
    Nationalism has been an insidious evil holding mankind back since the coming of the railways.

  • And

    Don’t forget that Switzerland is probably the best example of direct democracy anywhere in the world. Other forms of democracy are a sham in comparison. Maybe being small makes direct democracy easier in an electronic-gadget-less world, where counting hands is the norm.
    Or maybe being small and having local government allows more experimentation and learning of what works in society, and other Cantons then copy and adapt. You may be interested in this:


    I hope that Scottish independence will indeed benefit England. I am convinced that it will benefit Scotland. There will be brought into being an opportunity to rearrange the existing hegemony of the bankers of the city of London and the vortex of greed and cynicism that is sucking down the economies of both nations in a downward spiral of mounting debt. We cannot go on like this. I hope that we will not fail to grasp this opportunity and make the right decisions for both our nations.

MoneyWeek magazine

Latest issue:

Magazine cover
Prime location

The best property buys in the eurozone

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.

22 May 1980: Pac-Man hits the arcades

It didn't take long for Pac-Man, or Puck Man as it was originally called in Japan, to become a worldwide craze after it was released on this day in 1980.

The Kids' Portfolio: the four best funds to buy for your children

Investing for your children's long-term future is an excellent idea. But what should you buy? The Kids' Portfolio is a simple collection of four funds intended to be tucked away for 20 to 40 years.