Adam Smith would have backed Scots pound

I WAS interested to read the article by Brian Quinn in Scotland on Sunday (Another Voice, 15 December) in which he questions the proposal outlined in Scotland’s Future that an independent Scotland would use the UK pound.

In my book, Scots Who Enlightened The World, which explores the Scottish Enlightenment through the lives of its key figures, I focused on some of the issues which need to be addressed to enable informed voting in next year’s referendum on independence, attempting to approach these from an Enlightened perspective. Foremost among these are membership of the European Union and the choice of currency.

Adam Smith, were he alive today, would, I suggested, be troubled by the inherent dangers of becoming a part of a currency zone, be it the pound sterling or the euro, with different economic characteristics. This was starkly demonstrated in recent years by the runaway boom in Irish property prices fanned by the low interest rates imposed on the Eurozone by Germany’s domestic policies when the Irish economy needed to dampen excessive exuberance by a sharp rise in interest rates. With his belief in the operation of markets, he would, I postulated, have favoured the flexibility given by a Scottish pound, albeit if initially informally linked to the pound sterling, as this would give a Scottish Government the freedom to adopt the policies best suited to Scotland’s needs, sharing the views expressed by Brian Quinn.

Andrew Ferguson, 
www.scotswho.com, via email