A Nation Right On The Money

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KEEPING ideological preferences to a minimum will likely be the key to any successful Welsh Independence drive.

People from right across the political spectrum need to be able to support the core concept of Independence itself, without insisting on any partisan direction for the nation in advance.

But, perhaps an important exception to this general rule could be made in one essential area: the currency that an Independent Wales would use.

Scotland’s Independence Referendum in 2014 was hobbled by uncertainty about the currency Scotland would use as part of the SNP’s plan for a Currency Union with the UK.

Indeed, subsequent research showed that thousands of people were persuaded to vote NO, as they fell for the British state’s propaganda that they would not be allowed to use the pound sterling in an Independent Scotland.

Wales needs to learn that particular lesson and learn it well, ahead of its own date with destiny whenever that occurs.

Gwlad’s Policy Director, Stephen Morris, said he was hopeful a consensus could be reached on currency ahead of that point, as it would be such an existential question for Wales’s success as an independent nation.

He said there was nothing to stop a sovereign and independent nation from using another nation’s currency, and there were dozens of small nations which indeed did use another nation’s currency.

And if an Independent Wales decided to carry on using Pound Sterling, there was nothing the rump UK could do about it.

But, he pointed out that there were many disadvantages to using another nation’s currency – which were particularly relevant for Wales.

‘It means that the value of the currency is set at a rate which suits that nation, and not your own,’ he said.

‘For example, the Euro is controlled in practice by Germany at a rate which suits them, and has led to depressed growth in other European nations, especially in Italy which has had zero economic growth since abandoning the Lira for the Euro’.

‘Here in Wales, we have an export-oriented economy, but the currency is controlled by England, an import-oriented economy, and thus managed to suit the interests of England first and foremost.’

‘Wales is therefore at an immediate disadvantage using Sterling, which leads to under-investment in our industrial base, fewer jobs and lower pay’.

He added that one important point about introducing a new Welsh currency would be that the nation would be compelled to spend its resources wisely.

‘Nations which over-spend see the value of their currencies decline, which is an important signal not to be ignored.’

‘For example, had the socialist government of Venezuela paid more attention to the declining value of their currency, their subsequent economic disaster could have been avoided.’

He said he hoped that a discussion would now ensue within the Independence movement, so that Wales would be well prepared for the eventual nation-wide debate about the practical implications of Independence.

‘Even though an Independent Wales using Sterling would be entirely viable, as a party we believe that Wales could only fully enjoy the economic benefits of Independence, if it had its own currency as well.’

What exactly happens with Independence will be entirely dependent on which political parties win favour in the eyes of the electorate in that first post UK election in Wales.

In the meantime, the independence movement of all shades can coalesce around the idea of a new Welsh currency.

 

2 thoughts on “A Nation Right On The Money

  1. It is essential that Wales, as an independent sovereign nation, establishes its own central bank issuing its own currency. Only then will it have autonomy to issue money (which is nothing but a psychological tool to organise and coordinate human economic activity and social obligations and expectations) to utilise all available labour and all available resources, both natural and manufactured, to address the normal, innate physical, emotional and intellectual needs of its population.

    Wales, Scotland and Northern Ireland have all missed the core of the problem – that the UK (essentially the English establishment) has always been the currency issuer holding the others subservient and beholden to it and dependent upon it as currency users. By pretending that money is in limited supply they have kept all of the people of the UK impoverished.

    To assure the Welsh people that independence is: possible, socially and personally beneficial, and progressive they should be informed about the insights of Modern Monetary Theory regarding the true nature of government spending and taxation and the misleading myths of ’taxpayers’ money’, the ‘deficit’, ‘government borrowing’ and the ‘national debt’ and especially the potential for full employment and environmental protection via a national Job Guarantee Scheme and a Green New Deal.

  2. We’re a bit wary about MMT because flooding the economy with too much money has bad long-term consequences, and it’s always better to leave the final decision on how much money should be circulating to “the wisdom of crowds” rather than to the government. For the same reason we’re sceptical of so-called ‘sovereign’ or ‘positive’ money, such as the Bradbury Pounds or US civil-war-era Greenbacks were. There’s much more discussion about all of this in Part 3 of the currency series we put on our blog last year:

    https://gwlad.org/en/english-a-currency-for-an-independent-wales-part-3/

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