The End of Reagan-Thatcherism in Economics, Culture and Politics?

owedtojoy

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“Ideas shape the course of history.” said the great economist J.M.Keynes, whose own ideas get mentioned below. Are we now seeing the death of a nexus of ideas that has dominated economics, politics and culture for the past decades. I am talking about the complex set of concepts and policies I am calling "Reagan-Thatcherism", for want of something better. Other names are neo-liberalism (a word first used in 1938 to describe opposition to Keynes' economic ideas), or the Conservative Movement in the US (sometimes "the Movement"), the New Right, neo-conservatism (neo-con or neocon for short) and Globalism.

Obviously this is fairly broad and sweeping, but gaps can be filled in during the discussion (I hope).


First, a brief look at the 1970s. The Vietnam War was over, and the US was in a crisis of confidence. It was felt to be in decline, and the successive shocks of Oil Crises (embargoes imposed by Arab oil suppliers because of western support for Israel) roiled the western economies. The major crux of the day seemed to reside in economics - western governments ran deficit budgets which were supposed to allow them balance inflation and unemployment, according to the theories of Keynes. But the era showed examples of both high inflation and high unemployment. Trade unions were blamed for skewing the labour market, while politicians abused Keynes' economics by supporting inefficient and loss-making public services in supplying water or transport infrastructure. Politicians fell in behind new (or rather older) economic theories.

Economics: What replaced Keynes' economics was a combination of ideas from economic thinkers like Friedrich Hayek and Milton Friedman. Small government, divestiture of public companies (or public monopolies, like Telephone, Transport or Water Supplies) to be run by private enterprise, lower taxes and balanced budgets (or small deficits) were the new prescriptions. The watchword was "a Free Market" for the capitalist and entrepreneur to innovate and compete.

With the collapse of Communism, neo-liberalism and neo-conservatism came into their own. They seemed "the only game in town". Now the Free Market took on a global dimension, and a globalised Free Market was conceived and implemented, with money free to roam across borders finding the highest returns. The world economy expanded, and companies took advantage of Free Trade Agreements by creating flexible global supply chains in the cheapest locations. Innovation in Communications and Information Technology created a multifaceted & massive new industry in Software and Services, like Call Centres, Software Development and Network Management .


There were winners in developing economies which could now compete with the west for the first time, but a new class of losers was created in the west in areas which lost industries. The enormous increase in global wealth lifted millions, and possibly billions, out of poverty. On the back of the liberalisation of trade, China arose in a short time to become the second largest economy in the world, and an apparent burgeoning Superpower to rival the USA itself.

OTOH, the massive expansion in global industry was bad for the natural world. It is estimated that only 25% of the wild animal population alive on the planet in 1975 still exist. Increases in electricity generation and transportation led to massive expansion of greenhouse gases in the atmosphere, driving a global temperature rise and a climate crisis. Environmental degradation and wars drove waves of desperate refugees across borders to see safety elsewhere.

The biggest winner of all was the Global Financial Industry - banks, brokerage houses, and insurance companies, who grew in power to rival and even dwarf only the largest nation-states. They revelled in handling, not only the wealth of Nations, but of Dictators, Oligarchs and Drug Kings. Pay of CEOs and Board members skyrocketed, while middle class wages and salaries rose only slowly or stagnated.

But the new "Reaganomics" failed to stave off the worst Recession for 80 years, while banks crashed in 2008. Many financial houses were left exposed by their poorly planned loan and dodgy financial instruments, while deregulation meant insufficient collateral was held. Many were bailed out by the taxpayers of the nation-states they had displaced as economic powerhouses. Nor was the world economy that emerged from the Recession any more resilient, as another economic crash has followed, accompanied by a worldwide pandemic, in 2020. As Legislatures seek to pass trillion-$$ economic stimulus plans, Reagan's bon mot "Government is not the solution, Government is the problem" seems rather vacuous. In the UK, Thatcher's Tory successor Boris Johnson explicitly cited FDR's New Deal as an exemplar, and effusively praised the National Health Service, founded by FDR's UK equivalent, Labour PM Clement Attlee.

What will replace the Hayek-Friedman ideas at the heart of Reagan-Thatcherism? A return to Keynes' Social Democratic model, or something else, or a synthesis? While there has been a political reaction against Free Trade, it is unclear how it will play out. Perhaps the ideas of Thomas Piketty or Stephanie Kelton will take hold? With the world as its (rather unlucky) laboratory, surely the economics profession can come up with something applicable that will not lead to a further disaster?

Culture: Reagan-Thatcherism had its own cultural fronts, and even in Science. Typical was the philosophical reign of Ayn Rand, who influenced technocrats like Chairman of the Federal Reserve Ben Bernanke, and GOP Speaker of the House Paul Ryan. Rand was a hater of any communal effort, a worshipper of the (male) heroic entrepreneur, a despiser of "losers", a scoffer at altruism and an apostle of selfishness. Rand's Objectivism allied itself to a Libertarianism for which "Taxation is theft". In an symbolic outcomes, Rand's Foundation had to receive a Government taxpayer loan in 2020 as a bailout. In sign of the times, Ayn Rand Institute approved for PPP loan

This piece by Stuart Hall characterises Reagan-Thatcherism's Culture War, fought in conservative publications like National Review, on Rupert Murdoch's Fox News, and (farther to the right) on Breitbart News.:

.. the dominance of the political new right... Reagan-Bush and Thatcher.... They redefined the contours of public thinking with their virulently free-market social philosophy and set in motion a powerful, new, anti-welfare consensus... built... on their mastery of the ideological terrain.... They successfully fashioned a seductive appeal to selfishness, greed and possessive individualism, striking a sort of populist alliance across the lines of traditional class alignments and introducing the gospel that “market forces must prevail” into the very heart of the left’s traditional support. They exploited ordinary people’s basic fears of crime, race, “otherness,” of change itself. They fished in the murky waters of a narrow and reactionary cultural nationalism and rallied around their sexual and cultural agenda a highly vocal and well-organized “silent” Moral Majority. Paradoxically, though PC is its sworn adversary, the New Right shares with PC an understanding that the political game is often won or lost on the terrain of these moral and cultural issues…

Allies in popular culture were "shock-jocks" who claimed to be speaking with a freedom and frankness denied ordinary people. Political programmes against Abortion, Gun Control and Gay Rights were useful adjuncts to the economic war to "liberate" entrepreneurs from the shackles of heavy-handed, "job-killing" regulation. To some on the right, this was a game to draw in the masses who clung to important cultural symbols in the face of rapid change. To others, like Fundamentalist Christians, is was deeply serious and in fact more essentially conservative than anything economic.

The "culture war" had strange manifestations - against renewable energy and climate change action (traceable to the economics concern of the right), and a manly rejection of face masks as a protection in a pandemic. Science was the enemy of the culture war, often in the interests of "better science" (described as commonsense, or intuitive knowledge of the right thing).

This "culture war" has reached a head in the Black Lives Matter movement, which have for the first time since the 1960s, moved racial justice into the Overton Window* of public discourse. America's GOP showed an effective control of the Overton Window, but there are signs in 2020 that it is at its weakest since 1980, or at least since 2008. The outcome is not clear, but (for example) the alliance between Fundamentalist Christians, White Supremacists and Moderate Conservatives (the "Silent Majority") may be fracturing in the Age of Trump.

*The Overton Window is the range of ideas the public is willing to consider and accept — ideas a politician could successfully campaign on.

Conclusion
It seems at this point Reagan-Thatcherism has run its course, but what will take its place is unclear. Some of it will survive - like the globalisation of money. A reactionary uber-Libertarianism, where the wealthy seek to retain their wealth by allying with populist politicians? Or a veering back to some form of Social Democracy?
 


owedtojoy

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An Addendum to the OP ...

Politics: What happened to the Reaganites? Many took strange trajectories - to examples some journalists like Andrew Sullivan, a Brit who moved to the US and became a staunch Reagan-Thatcherite, became disillusioned with the Iraq War, became a fierce defender of Barack Obama, and is now appearing rather marooned between two stools. Other journalists like Laura Ingraham are still strident and even slightly deranged supporters of Donald Trump. See Anne Applebaum Laura Ingraham’s Descent Into Despair

Applebaum herself is a case in point - a paid up Reaganite, whose growing doubts led to a tipping point of Sarah Palin's VP candidacy in 2008. She wrote an article against McCain, a former friendly acquaintance who had launched a book for her, and he never spoke to her again. The article describes to trajectory of other Reaganites, many of whom are now Never-Trumpers supporting Joe Biden's Candidacy. Ironically, Reagan himself started his career as a Roosevelt New Dealer, and never showed any real inclination to demolish the US Welfare system, beyond rhetoric. George W Bush sought to privatise Welfare, and Trump seeks to abridge Medicare. It is not clear if Reagan himself would sit comfortably in the party of Donald Trump. His Foundation, guardians of his legacy, have distanced themselves. Reagan Foundation asks Trump campaign and RNC joint fundraising committee to stop using Reagan's likeness in fundraising pitch - KTVZ


For example, another Reagan stalwart, George Schultz, Reagan's Secretary of State, became an avowed advocate of climate action, along with Moderate Republicans like Arnold Schwatzenegger. California, the incubator of Reaganism (and Nixonism) became a Democratic stronghold.
 

wombat

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Why do people still listen to economists? They remind me of the Roman augers who would gut chickens before a battle and tell the general he would win. Economists are no better than fortune tellers despite their pretence of using mathematics to justify their predictions. The basic problem is the size of the state's involvement in peoples' lives. We would be better off following Lincoln's idea - "Government should do for people what they cannot do better for themselves and nothing more"
 

McTell

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I'm not seeing much about Ireland on this reagan-thatcher thread? As in dot-ie. We came late to the mass-consumer game, so please let us crassly indulge in it for a touch longer.

I start work at 5am most days, this is my "elevenses", and the world hasn't changed much since the 1990s.

Why would a group of yanks or brits who have climbed onto a great heap of wealth want to give it away? That would be unusual, if you're looking for unusual.
 

owedtojoy

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I'm not seeing much about Ireland on this reagan-thatcher thread? As in dot-ie. We came late to the mass-consumer game, so please let us crassly indulge in it for a touch longer.

I start work at 5am most days, this is my "elevenses", and the world hasn't changed much since the 1990s.

Why would a group of yanks or brits who have climbed onto a great heap of wealth want to give it away? That would be unusual, if you're looking for unusual.
So the Iraq War, two Economic Recessions, mass unemployment and a pandemic just passed you by?
 

owedtojoy

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Maybe a reactionary uber-Libertarianism, where the wealthy seek to retain their wealth by allying with woke Leftists.
A very unlikely alliance, since the New Wealth mostly accumulated as a result of the victory of the New Right. The New Right is perfectly capable of re-inventing itself as the "defender of the little guy".

A fitting symbol of this is the American Presidency held by an unashamed plutocrat reaping private profit from his office.
 

Sidewindered

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So the Iraq War, two Economic Recessions, mass unemployment and a pandemic just passed you by?
He's desperately trying to deflect from the fact FF/FG totally bought into neoliberalism in the 90s and 00s, and the likes of McTell would have been enthusiastic supporters of the whole false "Boston or Berlin" narrative of the time. Deregulation, privatisation, public-private partnership scams, and the Bertie Bubble. The steady erosion of workers rights and unions, the ending of pension provisions or free education or....just all the things that define Reagan/Thatcher were implemented in Ireland too, just in a (slightly) less virulent form, and especially by the Bruton and Ahern administrations. Resulting in a fragmented atomised society under increasing strain just to stay afloat and the triumph of naked me fein politics..

Like all Thatcher's Childer ageing Boomers, the McTells of the world now see the world they have bankrupted, exploited and despoiled from their own children and grandchildren. They voted for this, year in year out, for decades.

But instead of self-reflection and contrition for a life spent fighting and voting for what's wrong, instead we get gibberish misdirection - and doubtless as the thread goes on some Angry Boomer ranting about avocado toast.
 

McTell

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He's desperately trying to deflect from the fact FF/FG totally bought into neoliberalism in the 90s and 00s, and the likes of McTell would have been enthusiastic supporters of the whole false "Boston or Berlin" narrative of the time. //
Yes, because false it may have been, what was the alternative?

We didn't have the accumulated wealth of the likes of sweden or france to pay for a big public sector. We had FDI to sell into the common market /EU, and the IDA have been the heroes of the story in the past 30 years.
 

farnaby

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It seems at this point Reagan-Thatcherism has run its course, but what will take its place is unclear.
There are multiple answers depending on where you focus. Europe (EU) veered towards it with its competitiveness strategies in the 2000s but always with a much stronger focus on market regulation than the Anglo-Saxons - and lately the Franco-German axis has been champing at the bit to go back to the era of "national champions". Not very Reagan-Thatchery. The EU is the only region with some hope of a return to social democracy.

The idea that "government is the problem" obviously didn't make many inroads in China - the question is whether the "Beijing Consensus" of "a more muscular state hand on the levers of capitalism" will spread further, perhaps along the Belt and Road paths.

Possibly the biggest question is whether the post-Trump US will return to championing the old multi-lateral structures that enabled globalisation (WTO, IMF, World Bank) or disinterestedly continue to cede this space to China.
 

McTell

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//

Like all Thatcher's Childer ageing Boomers, the McTells of the world now see the world they have bankrupted, exploited and despoiled from their own children and grandchildren. They voted for this, year in year out, for decades.
//
Not really. I've never been a property/ land guy until the last 10 years, buying a small farm near the family farm (midlands). I buy and sell imported stuff that people mostly want.

Debt is something I've avoided, so I can sleep at night. But, the bad actor here was the state run and manned central bank that failed to supervise lending in 2002-2007. If the state is going to make everyone pay for regulations, then regulate and enforce.

I'm sure a lot of the unlucky after 2008 had made their plans on the understanding that someone in that huge building in dame street was able to count and do sums. But no, it was all a front, and amazingly nobody from the CBI went to jail either.
 

owedtojoy

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There are multiple answers depending on where you focus. Europe (EU) veered towards it with its competitiveness strategies in the 2000s but always with a much stronger focus on market regulation than the Anglo-Saxons - and lately the Franco-German axis has been champing at the bit to go back to the era of "national champions". Not very Reagan-Thatchery. The EU is the only region with some hope of a return to social democracy.

The idea that "government is the problem" obviously didn't make many inroads in China - the question is whether the "Beijing Consensus" of "a more muscular state hand on the levers of capitalism" will spread further, perhaps along the Belt and Road paths.

Possibly the biggest question is whether the post-Trump US will return to championing the old multi-lateral structures that enabled globalisation (WTO, IMF, World Bank) or disinterestedly continue to cede this space to China.
"Post-Trump"? Say with fingers crossed!

We should not be hung up on Trump ... there is a course of history that is to an extent independent of the actors in it. That is what Keynes was getting at when he said " Ideas shape the course of history ". A man or woman can influence history, but the ideas in their heads count for a lot, too.

The fact is that China is a Capitalist economy, with private ownership and markets nominally out of the control of the State, is a tribute to Captialism. The fear is that the Chinese model may be more effective at the accumulation of wealth than the western one. In fact, looking at the west, there is a gathering Oligarchy who must be looking at China with envy.

The rise of China was a by-product of the triumph of Reagan-Thatcherism, with the expectation that China would become more like us. That has failed, and future western leaders, hopefully more effective ones than Trump, will have to come to terms with that.
 

owedtojoy

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He's desperately trying to deflect from the fact FF/FG totally bought into neoliberalism in the 90s and 00s, and the likes of McTell would have been enthusiastic supporters of the whole false "Boston or Berlin" narrative of the time. Deregulation, privatisation, public-private partnership scams, and the Bertie Bubble. The steady erosion of workers rights and unions, the ending of pension provisions or free education or....just all the things that define Reagan/Thatcher were implemented in Ireland too, just in a (slightly) less virulent form, and especially by the Bruton and Ahern administrations. Resulting in a fragmented atomised society under increasing strain just to stay afloat and the triumph of naked me fein politics..

Like all Thatcher's Childer ageing Boomers, the McTells of the world now see the world they have bankrupted, exploited and despoiled from their own children and grandchildren. They voted for this, year in year out, for decades.

But instead of self-reflection and contrition for a life spent fighting and voting for what's wrong, instead we get gibberish misdirection - and doubtless as the thread goes on some Angry Boomer ranting about avocado toast.
"Boston or Berlin?" Now, there's one from the history books!

And we were crazy enough at the time to say "Boston".

No need to ask again - we unequivocally chose Berlin when we said No! to the Brexit-Trump axis.
 

Cnoc a Leassa

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“Ideas shape the course of history.” said the great economist J.M.Keynes, whose own ideas get mentioned below. Are we now seeing the death of a nexus of ideas that has dominated economics, politics and culture for the past decades. I am talking about the complex set of concepts and policies I am calling "Reagan-Thatcherism", for want of something better. Other names are neo-liberalism (a word first used in 1938 to describe opposition to Keynes' economic ideas), or the Conservative Movement in the US (sometimes "the Movement"), the New Right, neo-conservatism (neo-con or neocon for short) and Globalism.

Obviously this is fairly broad and sweeping, but gaps can be filled in during the discussion (I hope).


............
Conclusion
It seems at this point Reagan-Thatcherism has run its course, but what will take its place is unclear. Some of it will survive - like the globalisation of money. A reactionary uber-Libertarianism, where the wealthy seek to retain their wealth by allying with populist politicians? Or a veering back to some form of Social Democracy?
Great and provocative opening question - are we now seeing the death of a nexus of ideas that has dominated economics, politics and culture for the past decades i.e. loosely titled Reagan-Thatcherism, neo-liberalism? What will take the place of Reagan-Thatcherism is unclear. The wealthy will certainly seek to retain their wealth by allying with whatever political movement can best achieve their aims. Those who have done best economically from liberal policies will certainly mount an all-out defence for their policy priorities.

The Western political combination of representative democracy, liberalism and capitalism has delivered decades of prosperity and stability. It has an unrivalled record of economic and social progress.

On the international scene, liberal economic policies on globalization, financial deregulation, free trade, etc. led a markets revolution. These developments, coupled with policies of creative destruction, led to the loss of jobs, to the transfer of other jobs offshore and the downgrading of the quality of the jobs and employment terms and conditions for many workers. For those who lost their jobs, long term welfare-state paternalism and a life of dependence has proven to be no alternative to a good quality full-time job, with its meaning and purpose for life and all the normal connections in a well-functioning society.

Another and more significant consequence of liberal economic policies has been the massive growth in income and wealth inequality. In the new market environment, an increasing share of economic activity and wealth has gone to a tiny proportion of society, while those on middle and low income have become relatively poorer and more insecure. The trend whereby liberal economic policies redistribute wealth upward and thereby increase wealth disparity is socially unacceptable and economically counter-productive. The concentration of wealth and power, passed on from generation to generation in a class-based social order, runs directly counter to equality of opportunity. The concentration of wealth in a small group in society transfers the wealth to safe inactivity or new investment opportunities. Economic philosophies and policies that genuinely promote prosperity across the full spectrum of society leads to a middle class expenditure and circulation of wealth that is better for overall economic progress and growth.

On a social level, globalisation and open trading has led to more open borders and economic migration. Into that more open environment, civil unrest and war has injected an upsurge in displaced people leading to growing anxiety about uncontrolled mass immigration.

There are real negative economic and social consequences to aspects of liberal economic policy. Politics must address these consequences. The loss of electoral support by centre ground parties is a clear sign that economic liberalism has failed some of its traditional supporters. The political ferment after the 2008 crash has manifested itself in a fragmentation of some traditional large political parties but not yet in the emergence of any coherent new big idea i.e. your reference to Piketty, return to Keynes' Social Democratic model, or something else. The Covid pandemic and the consequent economic dislocation give this question a sharper urgency.

Reshaping middle ground progressive liberalism will be a difficult challenge. The first hurdle will be to recalibrate economic liberalism in order to roll back income and wealth inequality and to improve the standard of living of the ordinary people, particularly for the working poor and the unemployed. This will require finding a new balance point that best represents the economic interest of both ordinary citizens and individualism.

Your reframing of the big idea debate in the context a cultural analysis; “Rand as a hater of any communal effort”, and “a seductive appeal to selfishness, greed and possessive individualism” gets to the heart of the debate imo i.e. “the political game is often won or lost on the terrain of moral and cultural issues.

Trying to maintain a coherent position on liberalism as the excess of economic liberalism and its focus on individualism are recalibrate will be challenge for social liberalism. Seems to me that the left wing parties became so wrapped up in the individualism agenda of social values that they lost interest in the relative decline of the working class and middle income people. To mis-quote parentheses comment at No. 3 “the wealthy attained their wealth by allying with the distracted Leftists.

The connections between economic liberalism and social liberalism are real and substantial. They are two aspects of the one political philosophy. For those whose economic interest is best represented by the liberalism of the individualist, it can be expected that they will put social liberalism front and centre to their defence of their privileged economic position. An expectation that economic and social liberalism can pursue contradictory paths, with one being recalibrated and the other proceeding as if nothing has changed seems misplaced.

In the past the interests of the wealthy have helped drive the philosophy of individualism with focus on the social individualism agenda, to quote your piece “a game to draw in the masses who clung to important cultural symbols in the face of rapid change” while simultaneously keeping their income inequality and wealth accumulation policies running at max power.

In a perceptive article titled Where Are the Liberals? David Brooks Jan. 9, 2012
(link Opinion | Where Are the Liberals?), the author addresses the challenges then facing liberalism. Quote “Liberalism has not expanded because it has not had a Martin Luther, a leader committed to stripping away the corruptions, complexities and indulgences that have grown up over the years. ….believes in government but sees how much it needs to be cleansed and purified.”

The Brooks question remains to be answered.
 

owedtojoy

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China has achieved economic progress without democracy and without liberalism.
Exactly. Some western would-be Oligarchs and Authoritarians are envious.

The point is that no Oligarchic or Authoritarian system has achieved the long-term stability achieved by the western democracies on the principle of the people consenting to be governed, and potentially replacing the government by a new one, peacefully, every few years.
 

AhNowStop

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Why do people still listen to economists? They remind me of the Roman augers who would gut chickens before a battle and tell the general he would win. Economists are no better than fortune tellers despite their pretence of using mathematics to justify their predictions. The basic problem is the size of the state's involvement in peoples' lives. We would be better off following Lincoln's idea - "Government should do for people what they cannot do better for themselves and nothing more"
Ah come on now at least half of them are sometimes right :unsure: :oops: :confused:


No I actually agree with you and I have a degree in the feckin useless aul sh1te
 

joe sod

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Possibly the biggest question is whether the post-Trump US will return to championing the old multi-lateral structures that enabled globalisation (WTO, IMF, World Bank) or disinterestedly continue to cede this space to China.
The anti China policy will outlast Trump , Biden has been making alot of noise in that direction too. The spread of the corona virus throughout the world has fundamentally changed the relationship with China for many countries. We are back to a Bi polar world again,and countries will have to choose sides, Europe and the West will go with the US, much of Asia will probably go with China depending on the importance of China to its economy.
Probably more inflation as less cheap imports from China and import tarriffs.
The global institutions wont be global anymore there will be US dominated institutions and Chinese dominated and there wont be that much interaction between them like the old Soviet Union days
 

ringobrodgar

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I appreciate my input is getting very tiresome for many on these boards but without Thatcher's nasty English nationalism there would be no Scottish devolution and parliament.
 


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