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The Scottish Budget and the Myth of Job Creation

Robert Cunninghame Graham, the toff-turned-socialist who became the first president of the SNP, once joked – or perhaps only half-joked  - that he wanted a Scottish parliament because it was better that our taxes “were wasted in Edinburgh  than wasted in London”.

I was reminded of this comment when reading newspaper reports of the new Scottish Budget which the finance secretary described as one for jobs, but one also constrained to a large extent by London.

Well if that is the case, on this occasion at least, thank the Lord for London!

While John Swinney no doubt has the best interests of his country at heart, he seems to share the conceit of most conventional politicians that governments can actually create jobs. 

"This is a Budget focused on delivering investment, protecting household incomes and creating jobs," he told MSPs. Then he threw money like confetti at the usual suspects, including the huge welfare industry.

So how does that create jobs? Well, the fact is that governments cannot create jobs. All they can do is create conditions encouraging the creation of jobs.

If Mr Swinney were to announce a massive bridge and road-building programme then that would clearly lead to several thousand of construction jobs. But by their very nature these jobs would only be temporary; the longer-lasting jobs would come later as a result of the way the private sector used the improved communications to develop trade and increase efficiency. 

Yes, government has a legal and moral responsibility for certain jobs – like police officers, medical staff, school-teachers, military personnel, tax inspectors. But these are necessary jobs, essential to the continuance of a viable society. Beyond that any job ‘created’ by government is spurious. Even the private sector does not ‘create’ jobs – new jobs are the inevitable consequence of the rise in demand for a service or product.

If government-engineered jobs are seen as an end in themselves rather than a means to an end the parallel with communist societies is obvious.

In the good old days of the Soviet Union the tractor factory became a metaphor for socialist economics. Opening yet another factory producing X or Y tractors per month was seen as yet another achievement for communism. The fact that there were already many more tractors than was needed to plough the nation’s fields was immaterial; what mattered was the 1,000 new jobs created by the latest tractor factory.   

Therefore what may concern some about the latest Swinney announcement is the implication that government – and only government – has the key to job creation. Such an attitude can have many negative results, not least of which is that (as in Soviet Russia) the people actually come to believe it, making them ever more dependent on the state. 

Scotland is probably a good example of this: how many of our brightest young graduates – who should be be engaged in commercially funded R&D or in growing and creating businesses – are sucked into some mediocre public sector quango where intuition is exchanged for job security, an index-linked pension and 12 uncertificated ‘sick days’ per annum?

Coincidentally, on the evening of the day the budget details were reported in the newspapers, I settled down to a Kindle read of a set of essays by the commentator and satirist, Dr Theodore Dalrymple (not his real name). 

Dalrymple is a psychiatrist and former prison doctor who for four decades has interacted with society’s low-life. No liberal thinker, Dalrymple does not hide his disdain for his charges with their bullying, violent misogyny, unfeeling towards fellow citizens and, above all, their self-pitying and sense of entitlement.

Dalrymple, nevertheless, considers that to some extent these people are ‘victims’ – but not in the lefty-sociological sense that their plight is the fault of an uncaring, swashbuckling capitalist society where it is every man for himself. 

Rather he sees his charges as victims of Britain’s left-liberal intelligentsia who have been responsible for tearing down traditional personal, family and community values, especially those relating to personal responsibility.

But my main reason for referring to Dalrymple is that in one essay he compared big government in Britain (where there was relatively little corruption) and big government in Italy (where corruption was endemic). 

He suggested that the latter might be preferable to the former on the basis that in being open to bribes, Italian bureaucrats at least oiled the wheels of progress  while in Britain things stood still thanks to the incorruptible obfuscation of big government.

Dalrymple’s conclusion? While one would rather corruption did not exist in any form, small government with a bit of corruption was, on balance, better than leviathan government with no corruption.

Perhaps this is the reason why Europe is in such an economic mess: Brussels/Strasbourg represents not just big government but mega government, along with corruption on a grand scale (auditors have refused to sign off the EU accounts for at least the past dozen years).

Of course, compared to the EU, Holyrood is a paragon of transparency and honesty. Consequently one hopes that ‘the best wee country in the world’ might eventually come to recognise that a government which knows its limitations is the best government of all.


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