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Editorial comment

As I prepared to write this comment, there was a chance that I would be doing so in a very different country to the one I had grown up in: a not-so-United Kingdom, dismembered by a referendum on Scottish independence that had, in the run up, been too close to call. In the event, the Scots chose to remain in the union by a decisive but not overwhelming 55% to 45%. Even so, Scotland’s relationship with the rest of the UK is likely to change fundamentally.

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In the last few weeks running up to the vote, the leaders of the main unionist parties – the governing coalition of Conservatives and Liberal Democrats and the opposition Labour Party – promised increased devolution of power from the British Parliament in Westminster to the Scottish Parliament in Edinburgh. And quickly: the UK is due a general election in May 2015; David Cameron, the British prime minister, has promised draft legislation by January – an almost absurdly optimistic timetable.

Further devolution will give Scotland autonomy akin to those enjoyed by states in federal systems of government – such as Australia, the US or Germany. Accommodating this within the UK’s unitary political system will be cause for some significant political turbulence in the coming months and years – less so than independence negotiations, but still fundamentally changing the landscape of British politics. There is now no return to the status quo ante.

The Scottish referendum is the latest in a line of important votes this year that has taken us to India, Indonesia and South Africa for general elections and will culminate in the US Midterm Elections in November. Here, control of the Senate lies in the balance with the very real possibility that the Republicans will take control and thus enjoy majorities in both houses of Congress – majorities they will use to attack the pillars of President Obama’s administration: the Affordable Care Act (Obamacare) and environmental regulation.

Not that anything is likely to change: the president’s veto pen will ensure that any legislative attempts to curtail the Environmental Protection Agency’s radical regulatory agenda or repeal Obamacare will fail. Two years of continued gridlock thus lie ahead in the run up to the 2016 presidential election – a fate that India and Indonesia will hope to avoid under their new reformist leaders. Both countries need reform to boost economic growth – particularly in their coal industries where the two countries face contrasting problems. India cannot produce enough coal; Indonesia is arguably producing too much, helping to keep thermal coal prices in the doldrums.

In many ways, politics always boils down to economics: “it’s the economy, stupid” may have become a cliché – but that doesn’t stop it being true. In the Scottish referendum, it was economic arguments that swayed voters: for many, it came down to whether they believed they would be better or worse off in an independent Scotland. Narendra Modi and Joko Widodo rose to power promising economic reform. The fierce ideological battles in the US largely boil down to what you believe the state’s role in the economy should be.

Unfortunately, this intersection between politics and economics is all too often a breeding ground for bad ideas and growth-damaging uncertainty. It needn’t be so. Adam Smith, the father of modern economics, author of The Wealth of Nations and (fittingly) a Scot, once wrote that little else is required to bring a country from poverty to prosperity than “peace, easy taxes and a tolerable administration of justice”. Politicians would do well to remember that; the world would be a more prosperous place if they did.