Scotland sees its economic revival as a model for Clinton's America

November 23, 1992|By San Francisco Chronicle

GLASGOW, Scotland -- For an advance glimpse of Bill Clinton's America, the politically curious will find a remarkable crystal ball in Scotland -- the nation that defied Margaret Thatcher for a dozen years and is now one of the few economic bright spots in an otherwise deeply gloomy Great Britain.

What the Scottish experience suggests is that the Clinton program of government-led recovery just might work, but only if it is implemented with stubborn pragmatism.

More than a decade before Mr. Clinton launched his assault on the conservative legacy of Ronald Reagan -- the closest ideological ally to former Prime Minister Thatcher -- the Scots were defining the terms of battle. The result is the world's most detailed blueprint for the proposed Clinton revolution.

This is a place where "partnership" between the public and private sectors is practiced with the fervor of a religion, where the government spends more than 50 percent of its budget on the physical and social "infrastructure" -- transportation, education, housing -- and where a fine-tuned government "industrial policy" has generated tens of thousands of jobs through the cultivation of foreign investment.

It is also a land that so decisively rejected the unfettered free-market policies of Thatcher that her Conservative Party has been reduced to a minor player locally. Of 72 Scots in the British Parliament, just 11 are Conservatives.

The bottom line, Scots contend, speaks for itself.

Fifteen years ago, Scotland was the sick man of Europe, with almost a quarter of the work force in Glasgow, its key manufacturing center, unemployed. Today, at a time when the Thatcherite bastions of the English south are languishing in a near-depression, Scotland has one of the rosiest economic outlooks on this side of the Atlantic.

"You look at Bristol -- that's really Maggie Thatcher country -- and the unemployment rate has doubled in the last two years. Across England, it's gone up by 50 percent," noted Steven Ince, chief economic development officer for the city of Glasgow. "We started out in much worse shape than the rest of Britain, but our numbers have been going down for a decade, and our performance in unemployment has barely changed with the current recession."

In the last business quarter, bankruptcies rose 21 percent in England -- and fell 7 percent in Scotland. Scottish unemployment, which had reached nearly 14 percent in the early 1980s, had fallen to 6 percent by the beginning of this decade.

Like Mr. Clinton's centrist Democrats, Laborite Scots say, they have succeeded through a policy compromise between their party's socialist traditions and the interests of the business establishment.

"We're a Labor government in a Conservative Britain," said Bill Miller, a Labor Party leader who chairs the Glasgow Regional Council's economic and industrial development committee, "but our attitude is that everything that's public isn't necessarily good, and everything that's private is not necessarily bad."

The policy mixture is clear at every turn in Glasgow, Scotland's larg

est city with 2.5 million of the 5 million Scots in its metropolitan area.

On the one hand, the city remains deeply committed to subsidized housing and public transportation, which were nearly abandoned in England during the Thatcher years.

"Scotland in general is profoundly socialist" on such issues, says city government spokesman Alan Redfern. The Glasgow government and other state offices, he points out, hold deed to 68 percent of the city's 312,500 homes and apartments. "We're the biggest municipal landowner in all of Western Europe."

The government here also maintains one of Europe's most comprehensive mass transit systems, with fares less than half as expensive as those in London.

Yet on the other hand, the Glasgow government has gone far beyond the limits most cities dare approach in its adoption of a bold, entrepreneurial approach to urban management.

Public property offers the most startling example: Western Europe's biggest municipal landowner is also one of Western Europe's most aggressive real estate dealers.

The institution responsible for that role is the Glasgow Development Agency, a publicly funded mediator between the city government and the business establishment.

In the 1970s, this longtime industrial capital on the banks of the River Clyde was the urban nightmare made real -- the Detroit of Britain.

Unemployment stood at 22 percent in 1978. Where 70 shipyards had once made "Clyde-built" a synonym for the best vessels afloat, a single commercial shipbuilder survived into the 1980s. Where enormous steel and railroad engine plants had once given Glasgow the proud nickname "workshop of the world," empty warehouses and factories stood.

In 1979, Mrs. Thatcher was elected prime minister, ushering in an era in which the distressed city could not expect extensive financial assistance from London.

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