Mark Carney is a jet-setter who worked for the global Goldman Sachs. He skipped across the Atlantic, surrendering the reins of his own country's monetary policy, to become Bank of England governor. He has three degrees in the economic science, which analyses human behaviour as a rational response to incentives. He is, in sum, about the last person on Earth likely to be moved by the emotional pull of nationalism. This came through clearly if unintentionally, when he came to Edinburgh to take breakfast with Alex Salmond, before making a speech about the realities that would have to be reckoned with if – as the first minister proposes – Scotland decided to go it alone while clinging on to the pound.
Hailing from Canada – where Quebec has come so close to cutting itself loose – Mr Carney does at least understand that separatist sentiment is a political fact that must be stepped around with delicacy. He chose to do that by giving an erudite but yawnsome lecture on "optimal currency areas". This allowed Mr Salmond to politely dismiss the intervention as "technocratic", a description that suited both men well since it allowed both to pretend it had nothing to do with a referendum campaign, which one recent poll has suggested might be closer than has been assumed. But convenient as it was for both sides to insist otherwise, the speech was political on any definition, concerned as it was with the reach of sovereignty, power relations between states and the art of the possible in negotiations between them.
The governor's remarks were not quite restricted to post-independence monetary arrangements. He also suggested that the existing tax and spending union helps stabilise the Scottish economy, and dropped in a warning that resetting "national borders can influence trade flows". All this underpinned his central – if unstated – argument that it would be a dangerous headache to re-engineer a common currency that already works well. Unlike the unwieldy eurozone, which struggles to keep in sync with itself, the deep integration of English and Scottish business means that sharing a currency makes unambiguous sense. The modern SNP respects that reality – having ditched earlier enthusiasm for the euro – and so a shared pound is not particularly contentious; the live issue concerns the terms.
There is some unionist posturing here. Faced with a yes vote, London would not be in any position to stop Scots trading in pounds – and nor would it want to, since this would not serve England's interest. But messy logistics could still sink a currency union that is in everybody's interest. Ironically, the nationalist negotiating hand is weakened by an existing symbol of nationhood – the distinct sterling notes issued by the Scottish banks. Without these, Scotland could just assert that it would use English money unilaterally, and then defy England to talk. But it would be unthinkable for a newly independent Edinburgh to give up on the Scottish notes, making it necessary to devise new machinery to guarantee the parity of these with those issued by Threadneedle Street. Beyond that, Scotland would haggle for representation on the committees that set interest rates and bank regulations, something which – in the light of the euro crisis – London would be reluctant to give, except in return for sweeping oversight of fiscal policy and financial supervision. This is what Mr Carney had in mind when he concluded that England's price would be some "ceding of national sovereignty", the very sovereignty of course that Scots would just have resolved to seize.
There are the makings of such a mess here that some serious economists stress the need for a plan B, involving an independent currency, albeit one that would in practice be so closely tied to the pound as to be almost indistinct. Mr Salmond hopes that by branding such conversations technical he can persuade his countrymen to close their ears. But if talk turns to a Scottish groat – or whatever it may be – arguments about the effect on "the pound in your pocket" would suddenly come alive.
