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Rediscovering Adam Smith

I have just returned back to London from a business trip to Edinburgh, now in the full swing of its major arts festival, when thousands of theatrical, comic and music acts strut their stuff. I was up in that fine city on more prosaic financial matters and although the weather was fairly dire for August – it rained all the time – I had an enjoyable trip and learned a lot more about the city.

First off, Edinburgh remains a serious financial centre. Quite a few traditionally London-based investment managers and financiers have happily turned their backs on the costs, noise and hassles of life in London in favour of Edinburgh. From the point of view of ‘quality of life’, the city has a lot to commend it. Commuting to work is much easier than in London, just for starters.

In the course of interviewing a CEO of a large investment firm, however, I was startled to be told that the top employer in the city is the local council. That’s right. The biggest source of jobs in the place is not a big fund manager, bank, IT firm or some other business, but the local municipality.

Therein lies the problem of modern Scotland, as far as I can see. Socialism has alas taken a deep hold of its public political culture at least as far as I can tell. The land of Adam Smith and David Hume seems to have forgotten some of the virtues of small government and red-blooded capitalism, as this article over at the blog Freedom and Whiskey makes clear I truly hope this changes in the future. And if it ever does, then other financial capitals of Europe could be in for some very tough competition indeed. Edinburgh could become a very pleasant and exciting place to work and is certainly becoming much easier to reach, as developments to its airport go forward.

Well, that’s all from me for a while. Off on holiday. See you later.

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8 comments to Rediscovering Adam Smith

  • Guy Herbert

    “[…] I was startled to be told that the top employer in the city is the local council.”

    Startled? How charmingly naif. It would be an interesting exercise to identify all those local government areas in Britain where the largest employer is not the local authority (not counting other governmental organisations). The City of London is the only one I can think of where there might be a chance: it employs a mere 3,500.

  • Johnathan

    Yes Guy, I guess I am being naive (naif, huh?) in thinking that the private sector could ever be bigger in employment terms than a bunch of bureacrats. Silly me!

    Seriously though, Scotland seems to be far more entrenched in the public sector than is the case for much of the UK, so my point stands.

  • 1327

    Hello

    Actually it is suprising as most councils have pulled a fast one and transferred many of their staff either to housing associations (along with the houses) or the staff work for ALMO’s (Arms Length Management Organisations).

    The largest employer in most cities is the NHS.

    1327

  • Andrew Duffin

    Jonathan is right. 53% of the Scottish economy is in the public sector. It’s a big factor in dragging the country down; it isn’t just the numbers, it the pervasive influence of the public sector mentality which is so damaging. That is to say, “the world owes me a living” and “everything is the state’s responsibility”. Sad.

  • It gets even worse than that. The Nanny State is here with a vengeance.

    The Scottish Executive has cornered a significant amount of TV advertising space with adverts reminding me not to smoke or binge drink, the M8 on the way in to Glasgow has signs above the road reminding me to be a courteous driver and a local sports centre has a notice from the council up on the wall reminding me to seek a woman’s permission before I have sex with her (I’m not making that up). That’s just a few anecdotes that spring to mind.

    I don’t remember England’s nanny state being anything like as bad when I was living there.

  • Guy Herbert

    I think you’ll find the English nanny state has put on a spurt of late, Andy…

    But I do accept the general point. Scotland is much worse than England for state dependence; Wales than Scotland. That’s the main reason why as an Englishman I’ve long favoured Scots and Welsh independence. If I lived in Scotland or Wales I’d be a staunch Unionist.

    BTW “Naif” is just me being pedantic, as usual. I’m assuming Jonathan is a man.

  • Yes Guy, I guess I am being naive (naif, huh?) in thinking that the private sector could ever be bigger in employment terms than a bunch of bureacrats. Silly me!

    This doesn’t follow – imagine there are 1000 local council employees, and 50 private companies employing 500 people each. The local council would be the biggest single employer, but it would only account for 2% of workers, which isn’t a big problem.

    Andrew Duffin’s ‘53% of jobs are public sector’ quote is obviously far more worrying, although it’s a huge enough number than I’d be keen to see a source.

  • …imagine there are 1000 local council employees, and 50 private companies employing 500 people each. The local council would be the biggest single employer, but it would only account for 2% of workers…

    Apologies for the pedantry, but it would be 4%, not 2%. Doesn’t affect your conclusion though.

    Andrew Duffin’s ‘53% of jobs are public sector’ quote is obviously far more worrying, although it’s a huge enough number than I’d be keen to see a source.

    He actually said 53% of the Scottish economy, which I guess means GDP. This article (Link), quoting Lloyds TSB’s chief economist, appears to confirm it.

    As for jobs, this article(Link) says that about 25-30% of jobs are in the public sector.