18th Century Scotland offers a lesson to Americans in the 21st century. 

It is a myth that Scotland was co-opted into Great Britain by conquest. While it is romantic to imagine a bloody battlefield, where the Scots where forced to accept English rule along with the fact that they could never hope to permanently defeat their cousins to the South, nothing could be further from the truth. After 15 centuries of struggle Scotland sold itself -its independent soul- for a chest of silver and political accommodations that, while beneficial in some respects, cast aside the existential aspect of this great people—their perpetual struggle to live in freedom and independence. 

This fact is all the more surprising given the legendary spirit the Scottish people had authored by their fierce resistance to foreign rule. Even the Roman system of conquest, tribute, and the seduction of vulnerable leaders with the luxuries of Rome utterly failed to turn the Pictish tribes into political and cultural vassals. Emperor Hadrian felt it more prudent to build a 73 mile stone wall that was 10 feet high and six feet thick rather than continue an effort to subjugate these uncompromising people. 

In 1698 a group of Scottish private investors and Leaders convinced nearly all of the prominent figures and institutions in Scotland to invest heavily in Scotland's first and only colonial adventure.  The plan was a good one.  A colony would be built at the Isthmus of Panama that would be self sufficient through agriculture and provide bountiful profits via a toll road connecting the Atlantic and Pacific; a precursor to the Panama canal. The problem came from poor soil, yellow fever, and opposition from every economic and political quarter possible.  The English withheld all support and protection from the colony and leveled heavy trade restrictions upon Scotland.  Meanwhile, the Spanish, jealous from their own claim on Panama, blockaded the colony and shelled the wood and mud huts while yellow fever swept through the population.  The colony failed and In the end over 2000 Scots had died and 5 ships where lost along with a vast fortune of invested capital. Scotland was placed on the brink of financial ruin and the stage was set for the political consequences of poor financial decisions.

With the Act of Union in 1707, the English succeeded where the Romans had failed in a manner that ought to be chillingly familiar to the reader; a bailout.  England paid off Scotland’s crushing debts and, in return, Scotland dissolved its parliament ending for all time the Scottish dream of independence.

England purchased Scotland's sovereignty at fire sale prices. The bailout was trivial by today's standards - just under 400k Pounds or $85 million in 2009 US dollars.  In addition to the debt relief, England provided for the independence of the Scottish Presbyterian church, gave an invitation for Scottish businesses to trade freely with England and her colonies, and guaranteed that new taxes would not be levied on Scotland 'assuring' greater prosperity for the nation than it might have had on it's own. Besides an expanded empire, England gained three primary benefits;  national unity on the island assuring Scotland could not be used as a terrestrial base for enemies,  a Hanoverian succession to the English throne over the Catholic Stuarts, and a whole new tax base that it could squeeze out many more times than the bailout in perpetuity. The deal could not have been better for England.

The Parliament of the United Kingdom acknowledges that some votes in support of the Act of Union may have been influenced by payments made to Scots MP's (members of Scottish Parliament), but makes the case that such influence was inconsequential to the result.   In making this point, they skate around the issue of the larger corruption that drove these events.

It is now believed that payouts from the fund of £20,000 may have directly influenced the votes of no more than four or five members of the Scottish Parliament. Most of the other payments were for services already provided, rather than purchases of future support.
Most historians today, though not all, agree that many Scottish politicians and MPs saw union of some kind as a necessary solution to Scotland's dire economic predicament. On this basis, wholesale bribery was not needed to secure the Union.

The direct bribery of Scottish MP's is irrelevant as as the whole of the ruling elite in Scotland had invested heavily in Darien and where facing a reversal in their personal fortunes. The indirect bribery of financial rescue for the Scottish economy, which the status qua of Scottish elites depended on, was more than enough for these 'Leaders' of Scotland to impose what was a universally unpopular act with the people they pretended to represent.  Moreover, the Scottish seats in the newly formed Parliament of the United Kingdom where filled from those who supported the Union.

The loss of sovereignty is just that.   In less than 4 years the UK Parliament walked back on many of it's promises in the Act of Union by increasing taxes on the Scots and interfering Scottish church and law. The real cost to Scotland was the loss of potential and opportunity--of what they might have been as an independent nation.

Darien and the loss of Scottish independence is a lesson for America because it illustrates the apparatus in which rights are lost and power exchanges hands in modern times.   However, we do not need to go back 300 years and to another country to see this phenomenon in action.   Our Federal government has exacted a heavy toll on the self determination of the banking and auto industry as they have been beneficiaries to public largess meant to save them from the ruin they themselves had crafted.   The Obama administration has; fired and appointed new CEO's, dictated how companies will operate, picked winners and losers in franchise retention, pushed car companies to produce undesirable models, and otherwise interfered with the long term free market viability of these industries.  

If the growing interference in private industries and the march toward a command economy was not enough to worry us, the condition of State budgets and the resulting opportunity for a power grab ought to be terrifying. 

The Center on Budget and Policy Priorities, a non-profit and non-partisan research group, has projected that state budgets through the next three years and the picture is sobering.  State budgets where in the red to the tune of $110 Billion for fiscal year 2009 which ended on July 1.   State budgets for fiscal year 2010, which started on July 1st, will be $165 Billion in deficit, rising up to $180 billion for fiscal year 2011. 

Our state governments are on a path to complete insolvency wherein the only alternative to the complete collapse of local government will be the infusion of federal money.  While the federal government might evaporate with no one missing it for a few days, our society comes to a screeching halt without the basic services that State governments provide.  Letting a state collapse would have far greater consequences than the crisis that led us to bail out many banks and the auto industry.   Loss of these services can't be and won't be allowed to happen.    Sadly, the federal government has long taxed and then placed conditions on the redistribution of its citizens wealth in a manner that expands federal size and power to ever increasing levels.   A collapse in the solvency of state governments opens the door to the most extreme federalist inventions.  We can only speculate what statist fantasies will be put into action in failed States as the price for their continued existence. 

In such a cauldron of change little would be off the table including the uniquely American practice of keeping as much power as possible local to those it is meant to serve.  I have no doubt a compelling financial case can be made for the merger of state and federal services, but in the passion and panic of a real crisis, will we consider, or even care about the long term costs of centralized power?

Let's take this one step further.  It is clear that our government is oblivious to the ruin sown by federal overspending including the series of ill-advised bailouts that have been, and are likely to be funded.  On our current course, we will soon be required to default on our debt, deflate our currency, and turn to global powers and organizations for relief from our own excess and foolishness.  What would China want from us that we could not refuse to give?  What freedoms would the G8 ask us to surrender to gain their patronage, the 2nd amendment, jurisdiction of the World Court?  How will the EU see us change to suit their support and investment.  Will we be asked to align with global notions on the criminality of 'offensive speech' casting aside the 1st amendment?  The United States is about the only place in the world where such speech is not illegal.  Whatever the final price tag on relief from our own financial indiscretion, it will include the loss of real sovereignty and we will perhaps pay for it forever.

In the early 18th century, as Scotland surrendered its own rights as an independent people, the seeds of a new nation were taking root in North America.  Given the spirit of the Scottish people, and the disenfranchisement that the Act of Union caused, it is not surprising that the people of Scottish origin have played a central role in the history of the United States.  Many Scots left the country of their birth seeking the freedom, independence, and opportunity they could not find in the United Kingdom.  The field of Yorktown was well soaked with the blood of the Scots-Irish of the American South.   The miracle of the United States is that it gave a place for the freedom loving people of the world to go.  If the United States joins every other country in the world down a path of centralized power and command economies, where will those stalwart individualist go?  What continent will honor the independent spirit as America once did, or at very least, leave it be?