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In defence of small nation states

18 October 2016

10:54 AM

18 October 2016

10:54 AM

Scotland may have a second referendum within three years, as many Remainers correctly predicted. If the British government makes a mess of Brexit, the Scots may be inclined to leave the sinking ship and rejoin the EU. If Britain succeeds in going it alone outside a larger federation and doesn’t suffer a huge economic setback then perhaps the Scots might think they can do so too.

I’m rather inclined to believe that neither the UK or the EU will necessarily be around as this century matures, and it won’t be the economic or emotional catastrophe people imagine. Sad though it would be to see ane end of ane auld sang, Scotland would do fine as an independent nation. They gave the world Adam Smith, after all.

It’s not just Scotland; Catalonia is next in line and Flanders may also break away. In Nigeria, Biafran secessionism has returned and one of the likely results of ejecting Isis from Mosul will be Kurdish independence finally coming together. There are dozens, if not hundreds, of groups who would like independence – and the world would probably be a better place if they succeeded.

In 1992 Freddy Heineken, of beer fame, wrote a book in which he proposed a united Europe of smaller countries of around 5 to 10 million people. He went a bit far – I’m not sure there is an appetite for an independent Wessex or Mercia anymore – but his idea made some sense.


Spend any time on the continent and you can easily see why the EU is popular there and nation states are not so important; Provence, for example, has more in common with Catalonia or Lombardy than it does with Normandy or Île-de-France. Ditto for the Catalans and northern Italians. The same is not true with Kent and Picardy. The EU is logical because it recognises the gradation of culture and identity found in Europe, and the fact that borders are historically arbitrary. (They are within Britain to some extent, as Northumbrians have far more in common with Lothian than London, and indeed were once part of the same medieval kingdom). That one part of Europe ended up in France and another in Italy has much to do with historical quirk or accident.

Baron Heineken was a great believer in the EU, but many of the benefits that the Union has undoubtedly brought our continent are now settled at a global level, where tariffs and other barriers have dropped sharply since the 1970s. It’s why in the long term I think post-Brexit Britain will be fine, because the developed world will continue to drop barriers to trade. (The short and medium term, I’m not so confident.)

But the same goes for Scotland, Catalonia, Provence, or even the Shetlands for that matter. Because while Brexit is often presented as a revolt against globalisation, which it certainly is, the existence of global bodies setting rules on trade (and other matters) also makes it easier for nation states, and in particular smaller nation states, to thrive.

For centuries, modernisation meant the reduction in the number of states in the world, because being part of larger entities brought economic and political benefits; in Napoleon’s time there were 300 sovereign states in Germany alone, while by the end of that century there were only 50 in the whole world.

Today there are four times that many and most of the richest ones are also the smallest, among them Singapore, Hong Kong, Norway and Switzerland, as well as a number of micro-states. When England and Scotland united, it created a free-trade zone that was enormous by the standards of the time, but with barriers falling across the world the benefits of pooling sovereignty might be limited. Small is beautiful, which is partly why the Netherlands, Baron Heineken’s home country, was so effective from the 16th century onwards, being the perfect size for good government. The same goes for England, which had the added advantage of a moat; for all that English people congratulate themselves on their genius for government, it was the country’s relatively small size that made it so easy to govern.

Just as with trade crossing borders, so with people. Contrary to the argument that large-scale movements across borders are inevitable, technology makes controlling migration easier than ever. It also makes it easier to facilitate free movement between rich countries. As I argued as a co-author of a recent paper for the Adam Smith Institute, there’s no reason why a frequent American visitor can’t swipe into Britain like he can swipe into the Tube. I’d go further and say there’s no reason why an American can’t freely live and work here. The social costs of free movement between rich countries are very minimal, and in future there will probably be increased competition to attract the small pool of very talented people. It is feasible we could have open borders not just with western Europe but also Japan, the US, Australia, Canada, Singapore, South Korea, New Zealand and, if and when its median income reaches a certain point, China. So there’s no reason why a world of 500 or even 1000 states would slow down the necessary free movement of skilled labour.

Free societies also seem to be diverging along values lines, and the divides between liberals and conservatives are often larger than those between nationalities. The United States has partisanship levels so extreme, you wonder if they wouldn’t just be happy splitting up the country and going their separate ways. That’s up to Americans decided, not me, but it might also be the best solution for Britain’s cultural divide.

The best thing about a world of 1000 nation states is that it would give people more choice. They could live somewhere that reflects their values, which is often the problem at the heart of so much 21st-century political rage. Let everyone find a state that suits their needs, and see which works best.


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