How Scotland dodged a bullet by saying 'no' to independence

Scottish voters have averted major disruption by rejecting secession. The United Kingdom will retain its name and the substance of that name.

Britain’s nuclear-armed submarines will continue to operate from their Scottish bases, Britain will lose none of its global power and its chances of staying within the European Union actually go up, with pro-European, anti-Tory Scots guaranteed to vote against Britain leaving the EU as and when that referendum happens.

The Royal Bank of Scotland and a host of other large companies will not relocate to London and jack up real estate prices there. Scotch whisky will continue to flow as readily as it does now.

There is a lesson here for the place of local identities in a globalising world. Globalisation, by creating fairly standardised, uniform rules that almost all countries either follow or aspire to follow, has made national units less significant than they used to be in the fragmented world of the past.

Then, only strong national governments could enforce pro-business laws and rules across a large enough territory to make the pursuit of prosperity viable in the region.

Now, local identities can assert themselves without loss of the conditions that make business and commerce viable. Why do small regions then still stay put as part of larger entities, against which they have several grouses?

Globalisation creates new economies of scale in things like banking and finance, in migration, in the generation and utilisation of knowledge. Small units will find it well-nigh impossible to achieve these economies of scale in themselves.

The transaction cost of making arrangements that would make these activities viable in small units would outweigh tolerating the nuisance of putting up with larger units. At least, the Scots think so.