Wednesday 15 October 2008

Is small still so beautiful?

For years, opponents of self-determination for Wales and Scotland have pointed to the size of the two countries and argued that we were too small to be independent. The almost inevitable response of both Plaid and the SNP has been to point out how successful a number of small countries have been in recent decades. It was a sensible and logical counter argument – with the added bonus of being entirely true.

Does the collapse of Iceland's banking system, and the near bankruptcy of Iceland change the argument? I don't see that it does, although perhaps Iceland is less likely to feature as a specific comparator for a while!

The problems with Iceland's banks are not in any way the result of the small size of the country. Banks have failed in large countries; banks have failed in small countries – size per se hasn't really been a factor one way or the other. What has been more important in determining whether and to what extent any country has been affected has been the nature and extent of regulation and control of the banking industry.

Would a larger country have been better able to sustain the collapse, or rather the cost of the bailout? It seems to me that the real determinant of how well any country, regardless of size, could cope with the sort of bail-outs which are happening at present is more to do with the size of the banking sector as a proportion of GDP than with the absolute size of the country or its population.

For all the glee with which some seem to have seized on the problems in Iceland, claiming that they have 'proved' that small countries are worse off, I really don't see that anything has been 'proved' beyond the need for all countries to ensure that their banks behave in a prudent fashion. The real danger is that people who concentrate on the size argument fail to learn that simple lesson.


Anonymous said...


+ Wales and Scotland would be part of a larger currency union, Sterling or Euro, so the the Welsh experience would be closer to the Irish experience in the present crisis.

The crisis in the USA and the collapse of the USSR just 'proves' that big countries can't cope by themselves in the world.

Normal Mouth said...


I good argument, which echoes one I made in Golwg in July.

The argument that there is a causal link between size and success strikes me as specious, so in that respect both Plaid and now Gordon Brown are wrong.



Rhetoric Innes said...

size is'nt everything ..think of Rocky Marciano!

Also think of the assertions of jean-jacques Rousseau who believed that Small nations (or city states) are inherently better to manage.

This is why Wales should have more de-centralised powers and maybe its own Bank as ordovicius believes

John Dixon said...


No plagiarism intended; but your Golwg pieces have obviously sunk into the sub-conscious!

In attempting to rebut the argument that 'Wales is too small', Plaid have inevitably tended to concentrate on the successes of the small. With the assistance of Bob Innes in his comment, I could attempt to portray this as drawing on the thought of a major European thinker, but to be honest - as far as I am concerned at least - I think it's more to do with simple over-compensating, particularly in the context of the usual 'one-line' response to a story.

One of the advantages of the blog format, for me, is the ability to expand on analysis and ideas (although some might see it as long-windedness!), rather than simply giving the usual one-liner.

I do seriously believe that there are some advantages to being small, just as there are undeniably some advantages to being large. Each of us makes our own judgement as to the relative weights to allocate to those arguments - which is one of the reasons why some people who care deeply about Wales end up as committed nationalists and others, who care equally as deeply, don't.

But I think that you and I at least agree on one thing - making a direct causal link between size and economic success is over-simplistic; there are too many other factors to take account of. At certain times and in certain contexts, there may well be a degree of correlation (and I'm sure that Plaid will continue to draw attention to that); but correlation and cause are not the same.