The economic costs of separatism and the strategic costs of contagion

by Ira Straus

Chair, Center for War-Peace Studies

6th January 2020

While there is much discussion in London of the economic and administrative consequences of Brexit, there is little similarly detailed discussion of the possible consequences of Scottish independence. This is surprising. Restricting a land border is a more radical thing than restricting a sea border. The cross-Channel border is with Britain’s bigger trading partner, the EU, but the Anglo-Scottish land border is more intimate and is no less intensively used.

In the abstract, it is a close call as to which loss would cost more. Both come at a high price.

However, it would be misleading to present it as a matter of two entirely separate costs. Scotxit, if it happens, will be part of the price of Brexit.

When Scotxit was standing on its own, it was defeated by a convincing popular margin. Scotxit has become a living issue again only as a consequence of Brexit. It is a knock-on part of Brexit. Scotxit is thus today a subset of Brexit. It is embedded within Brexit like the smaller circle within a larger one in a Venn diagram.

It follows that the cost of a possible Scotxit has to be added onto the cost of Brexit. This means, inter alia, that the costs of Brexit have been seriously underestimated thus far.

The same pertains to the likely renewal of troubles in Northern Ireland and the possible NI-xit. They too are a function of Brexit. Their costs too would have to be added to Brexit.

Taken together, Scotxit and NI-xit would probably double previous estimates of the economic cost of Brexit. It is a curious oversight that the national statistical agencies have neglected to make estimates of this combined cost all along. Market forecasters have cause to start adding these costs into those of Brexit proper (in the normal manner, multiplying the probabilities of occurring by the prospective costs). Investors have reason to take heed.

Scotxit and NI-xit would also more than double the strategic damage from Brexit.

The strategic security damages

An independent Scotland would almost certainly leave NATO. It would probably delay the exit a few years, for the sake of respecting the reassurances that the SNP has given for political reasons on that score, but the longstanding distribution of attitudes in Scotland renders any other long-term outcome improbable.

It would mean a loss of critical naval basing for both England and NATO in Scotland.

It would also step by step bring an end to the assumption, secure for the last 300 years, that Scotland will always be reliably on England’s side in military conflicts.

This is far more damaging than a mere loss of Britain’s strategic influence, which is what Brexit would directly entail. There was a reason why Britain sought insular security. There is a reason why the Union with Scotland proved a great blessing to both nations. It ended centuries of warfare. It brought a long-enduring peace to the British Isles.

In a context of Brexit + Scotxit, an NI-xit and reunification of Ireland takes on a different security coloration. The prospect would be a British Isles divided into two groupings with contrasting orientations: England and (for now) Wales on the one side, out of the EU but still in NATO; Scotland and Ireland on the other, out of NATO but in the EU.

The implications of this would be profound. It could undermine EU-NATO cooperation in a way that the previous European neutrals never did. Conversely, whenever the EU and NATO would be pulling in different foreign policy directions, the two groups in the British Isles would be on opposite sides. Those isles would revert to a kind of balance of power, for the first time in centuries. It would be an asymmetrical balance, to be sure, but in a complex way: a large imbalance on England’s side in its population and economic weight, but an imbalance on the opposite side in geography, and in the presence in Scotland and Ireland of an EU that outweighs England several times over. It would not be a situation conducive to stability.

It would be a long time before it would be likely to degenerate into open conflicts among the several countries, but there would be a secular tendency in that direction. Diplomatic balancing against each other would resume in a fairly early stage of the process. It would grow tit for tat from there.

Some of the possible later stages: English hegemony reverts to an older, more primitive form, akin to its manner in the days when it was not yet mediated by their all being a part of larger Euro-Atlantic institutions for economic and security affairs. This engenders a similarly more primeval sort of resistance on the part of Ireland and Scotland. Patriotic English writers express frustration with the unrealistic resistance from the Scots and Irish. They talk of teaching them a lesson and exercising England’s hegemonic power the old fashioned way. People within the Irish and Scottish militaries start saying it’s their professional responsibility to begin once again contemplating defense against England, making contingency plans and informal alliances for that purpose. England responds symmetrically. Pundits observe that we are back to the Hobbesian “state of war”, which is not a state of constant warfare but a constant state of “spears pointed”: the point at which, in the Deutsch definition, there is no longer peace, just a truce.

I have no idea whether such an outcome would be probable. I am quite sure it is not inevitable. But I am equally sure it is far from impossible. Out of mind does not mean out of danger. The logic of diplomatic power politics is relentless in the absence of Union.

England’s relative supremacy on the isles might deter war, but even here it would be wrong to assume a guarantee. Balance of power politics would kick in, with foreign great powers stepping in to develop relations among the new entities, creating new forms of diplomatic and power balancing within the isles; and the less benign ones, such as Russia and China, deliberately exploiting the divisions.

England would necessarily begin to refocus on intra-isles security. The loss to its global strategic position would be enormous. Military spending would need to revert to historic levels prior to the Euro-Atlantic era, a level that was considerably higher than today’s goal of 2% of GDP, but bought less security.

Further secessionist contagion

No one can know how far the contagion effect would go within the British Isles. What we do know is that the contagion effect is real. It has structural not just psychological causes. It is the effect that has already led from Brexit to the renewed push for Scotxit.

We should recall here the specific mechanics of the contagion effect in Yugoslavia. Slovenia’s and Croatia’s secession didn’t merely inspire the others to follow suit. Their departure also created structural pressures for further secessions. Bosnia felt abandoned within Yugoslavia — left all alone with the dominating Serbs, hitherto the largest single minority but now elevated to a majority in the rump Yugoslavia. So too did Macedonia and Kosovo. They all felt forced to secede, one after the other. It was something the wiser Bosnians had long prevented in the knowledge of where it could lead. Bosnian secession in turn led to the local Serbs making their own secession from Bosnia, as they feared being left alone as a minority amidst dominant Bosnian Muslims and Croats. Non-Serbs in the Serb areas of Bosnia in turn fled for their lives; Serbs in turn fled from ethnic cleansing in the non-Serb areas, and in Croatia. Once Bosnia was out, Macedonia came next; leaving to ethnic tensions internal within it, too, as its Christian Slavs and Muslim Albanians were left facing each other alone. Then came Kosovo, leaving as a consequence of a bloody war that it took NATO to stop. Eventually even Montenegro seceded; and Montenegro had been as close to Serbia as Wales to England.

With this in mind, we should glance over the range of potential areas for further contagion within the UK, beyond Scotxit and NI-xit. This starts with Wales and Cornwall and moves on from there.

The balance of the UK’s union was never truly adequate, and would be rendered totally inadequate for the remaining minority areas by the combination of Brexit and a Scotxit or NI-xit. They would be left all alone with the English — an unhindered English majority.

After Wales and Cornwall come Gibraltar, the Falklands, and 15 other British dependencies. They would suffer a different form of contagion: a loss of confidence in the shrinking Britain. They would have to begin a search for new moorings.

It was the UK’s membership in the EU that had finally made it possible to quiet the NI troubles. The EU’s elan, limited though it has always been, is also what enabled the UK to keep its internal Union from fraying in face of the long decades of powerful Soviet anti-(Western) imperialist agitation.

Soviet (and American) pressures and agitation had contributed to the end of Britain’s external empire. This greatly weakened Britain’s once much larger nationalism and more confident pride, an energy that had long been important for holding its inner country together. The EU, alongside NATO, stepped into this gap. It performed a great service to the unity of the UK. By embedding all parts of the isles in a much larger union, it not only offered them a new form for their enlarged common destiny. It also created the closest thing the UK ever had to an unconflicted internal political balance: by adding on a layer of a fully multilateral balance within the EU, where England too was a minority power, the Scots and Irish gained a partial compensation for their unbalanced minority status in the British isles alone. The EU gave the conflicting Irish communities more than an open border that enabled them to calmly fudge their dual identity and end the troubles; it also gave Ireland a veto on diplomatic and security matters, one formally equal to Britain’s. This backdrop reinforced Ireland’s voice in the NI settlement and in its subsequent interpretation and implementation.

The UK’s departure from the EU inevitably reopens all the old sores, and new ones to boot. English nationalism is not the bright, vigorous, modernizing, world-leading force that it was centuries ago, one that brought cumulative growth, something to which many a wise person was attracted in Scotland, one that gave their country’s thinkers the enlarged perspective that enabled them to lead the intellectual world in the Scottish Enlightenment. It is instead a backward looking reverie, a sputtering rationalization for shrinking itself, a doctrine propounded as a basis for dangerously unsound socioeconomic fantasies on both Left and Right, something more prone to repel than attract.

After Brexit, the Russian organs — RT, Sputnik, and intelligence services — will play up all the new secessionist movements, the same way they have already played up both Brexit and the Scottish secessionist reaction to it. RT unashamedly plays all sides for disrupting the West. It does not shy away from encouraging further secessionists from newly seceded states. It has played up even the smallest, most comic opera secessionist movements in substates of individual states of the U.S. After any major secession actually takes place, the secondary subsecessionist movements cease to be such comic opera affairs.

Even England proper can be subject to this contagion. There are areas of England near the Scottish border; areas with Labour demographics that are closer in economic ideology as well as in geography to Scotland than to London. Conversely, areas of Scotland near the English border do not want to be cut off from England, and showed it in their voting strongly against independence in the 2014 referendum.

Northern Irish Unionists would not wish to live in a united Ireland. Many English and Unionists would “return” to England proper from Scotland, NI, and Wales. Many Scots and Welsh and Irish would return “home” from England.

All of these historical time bombs would begin to sizzle and crackle in ways unimagined for centuries. The most that can be said for consolation is that not all of them would explode.

The economic damages

Scotland’s trade with the rest of the UK is more than three times as large as its trade with the rest of the EU — 46 bn pounds, compared to 14 bn. One in four Scottish jobs depends on trade with England.

This is the more remarkable, since, as Nicola Sturgeon is fond of saying, the EU is eight times larger than England. Logically, this makes the point opposite to the one she intends. It shows that drawing a hard border across a land connection is a far more terrible thing than drawing one across a sea border.

An open and direct land connection is something special. Its sundering is specially damaging.

Scotland losing its full economic union with England would be terrible for its economy. So would loss of its EU connection by Brexit. Its rejoining the EU, after Brexit and Scotxit, would however, by requiring a further customs hardening of the border with England, add still more to the damage.

There is no Scottish solution to the economic damage to Scotland of either Brexit or Scotxit. The only solution would be for all of the former UK to rejoin the EU. Which, desirable though it would be, is not to be expected for at least a generation. After which conditions will have changed so much, with consequences piling one atop the other, as to make speculation meaningless.

A much deeper economic socio-interdependence develops across an open land connection than across a sea link. So do human connections — family and friends and visits and commuting and jobs.

These cross-land links are living ones. Sundering them is an awful thing, in both senses of the word. It cuts far into the flesh. The old geographical extensions do not grow back, nor are there prosthetic Scotlands to replace them; what remains is the memory of their sensation, the phantom limb syndrome. The truncated body heals with ugly scabs, mental as well as physical: the sense that Germans held after 1919 of having been stabbed in the back, an existential betrayal at the hands of their elites; the sense Russians have held of bodily dismemberment since 1991. It is not a whole and healthy independence.

The land links are further deepened — their sundering made still more awful — when there is a longstanding merger or intertwining of language, government, and laws across the landline. This long ago developed, not only with Scotland but throughout the British Isles. Irish Republic nationalists might count as fortunate their failure to bring back old Irish; it spared their island a linguistic division that would have deepened its political division.

The converse is also true: a new opening of intercourse across formerly closed borders has to be managed more carefully when it’s a land border not a sea border. Turkey has only a small border with the EU, but the migration with which it has threatened the EU — and has sometimes visited upon the EU — has given Europe tremendous trouble. In fact, it was the migratory pressure from Turkey in two forms — in demanding EU membership, and in encouraging mass border crossings by third-country nationals into the EU — that was, together with the careless welcoming of the latter by Mrs. Merkel and the trend toward Europeanizing them by the EU, the decisive cause that pushed the original vote for Brexit over the 50 per cent mark. When a land border is deliberately opened permanently, as was done within the Schengen area, it has to be done with greater caution than when opening sea borders: lengthier transitions, closer cooperation of the police forces on both sides, strong agreement on how to manage the borders external to the newly shared internal open area, and other shared management arrangements.

The several decades of open commercial sea and Chunnel link between the UK and EU have developed deep interdependencies, on top of the substantial ones that had always existed across the Channel. Its severing alone would be damaging enough. Its likely knock-on effects, among them a likely severing of the centuries of open land border between England and Scotland, will be still more damaging. It is their combined damage that has to be assessed for a proper assessment of Brexit’s economic cost. The official estimates, much castigated for exaggeration, have neglected this. Whatever may be the full truth about overestimation or underestimation on the limited terms that have been used — something that we will find out only after Brexit — they turn out to be a gross underestimation in the larger sense, which requires taking account of the knock-on political effects that are likely to ensure from Brexit within the British Isles.


We may conclude with a word from the founding U.S. Secretary of State, John Jay. He knew that America’s prospects at home and its role in the world at large depended entirely on its Union. It was a nascent Union, a historic innovation as much as the EU, and one that was similarly destined to keep growing wider and deeper for many a decade. In the fateful year when the Constitution was up for ratification, a Constitution that deepened the Union in just the ways that were most feared by the Antifederalists then and the Euroskeptics today, he wrote this to his vacillating countrymen:

“the day the Union breaks, we will say, in the words of the poet, ‘gone, gone, is all my glory’.”

The Federalist No. 2, 1788

He meant it as a warning, not a prophecy, for America. It is with dread that I watch today as it is turning into a prophecy for Britain.