A century of changes shaped country

Historian Tom Devine reflects on the influence of social, economic and political upheavals on Scotland

AT THE dawn of the 20th century, Scotland was at the pinnacle of global pre-eminence. This small country of just over four million people played a key part in the greatest territorial empire the world has ever known. Scots merchants, physicians, soldiers, teachers and engineers were to be found in leading positions from the Arctic wastes of Canada to the teeming cities of Asia to the developing colonies of Australia and New Zealand. Our nation was also an economic superpower, producing half of UK marine engines, a third of its railway locomotives and rolling stock and a fifth of the world's tonnage of ships (more than Japan and Germany combined).

Scotland had become a very wealthy country. One illustration is the remarkable outflow of investment to Texas cattle ranches, Canadian railways and Australasian sheep farms and a host of mining ventures, tea and sugar plantations and construction companies worldwide. Scottish foreign investment in 1914 was £500 million – a significantly higher figure per head of population than for the UK as a whole. Another confirmation of the new wealth was the transformation of the cities and towns. High-status housing for the affluent business and professional classes colonised the suburbs, while in the old urban centres there rose the grandiose headquarters of the engines of capitalism: the banks, insurance companies, legal offices and shipping firms. Scotland at this time was a confident, even brash, country, proud of its unprecedented success.

Yet not all was what it appeared to be. With hindsight, it is clear that Scottish manufacturing was exceedingly vulnerable because of its massive commitment to exports, specialisation in simple capital goods easily replaced by emerging foreign competitors and the extensive inter-relationships between the key sectors of shipbuilding, engineering, mining and steelworking.

Moreover, the success story largely depended on the low wages of the workers. In 1914 nearly half the population lived in overcrowded conditions against just over 7 per cent in England and Wales. And almost two million people left Scotland between 1830 and 1911, placing the country close to the top of the European league table of emigration, as Scots voted with their feet and sought better prospects overseas.

The potentially dangerous over-commitment to heavy industry became even more acute during the First World War as Scotland became a vast military arsenal, producing ships, guns, shells, tents, sandbags and every conceivable form of military hardware. By the time peace came in 1918 a vulnerable economic structure had become even more exposed. Worse, despite the Allies gaining the final victory, the First World War was a catastrophe for Scotland. Nearly 100,000 young Scots men are estimated to have died during the conflict, a figure said by some historians to be among the top three heaviest rates of mortality for a country during the conflict. As a nation mourned, memorials to the dead sprung up even in the smallest hamlets. Across the land, national confidence began to seep away, a process intensified by the economic crisis of the late 1920s and early 1930s.

Of course, the inter-War years were not all doom and gloom – this was the era of mass cinema attendance and the public craze for dancing. Those who managed to keep a job did well, but many did not have work. In the nation's industrial heartland of the western Lowlands, a quarter of the entire labour force – nearly 200,000 people – were on the dole in the early 1930s.

Government was impotent, as orthodox thinking still assumed that intervention by the state could only make matters worse. The business classes were equally devoid of much imagination. "Wait and see" – the hope that the good times would return, a policy considered as "Micawberism" – was the general response. Emigration rose to unprecedented levels and in the 1920s, for the first time since records began, the Scottish population actually fell. In 1935, the novelist and poet Edwin Muir wrote: "Scotland is being emptied of its population, its spirit, its wealth, industry, art, intellect and innate character."

In the event, the nation was saved by rearmament from the mid-1930s, the material needs of "total war" and then replacement demand in the immediate aftermath of the conflict through to the 1950s. Equally crucial were the policies of the new Labour government elected in 1945. The nationalisation of coal, iron and steel, railways and electricity was paralleled by the provision of child allowances, universal retirement pensions, unemployment benefit and healthcare for all. Scotland's problems of poverty, low incomes and poor health had always been more acute than the average for the UK and hence those historic reforms were likely to have an especially disproportionate impact on the living standards of the Scottish people.

Indeed, the 1950s and 1960s were decades of recovery and improvement. Harold Macmillan's famous remark in 1957, "Let's be frank about it, most of our people have never had it so good", summed up the mood. For the first time, Scotland's historic housing problem was tackled. Houses were built at a staggering pace – more than 500,000 were constructed in the 20 years after 1945, four out of five of them in the public sector. Unemployment fell to very low levels. Washing machines, vacuum cleaners and electric cookers started to become more widely available. By 1962, more than a million Scottish homes had a television set.

In a sense, however, this new material prosperity was a fool's paradise. The fundamental economic problems remained. There had been precious little effective diversification, and, even more ominously, Scotland seemed to be losing its competitive edge in such crucial areas as shipbuilding. Governments both Conservative and Labour responded by pouring prodigious sums into the new Ravenscraig steelworks, opened in 1957, and later into prestige projects in car and truck manufacture. Yet this could not disguise the fact that whole areas of the nation's economy survived on a virtual life-support system of state subsidy and government intervention.

By the late 1960s public expenditure in Scotland was running at around 20 per cent above the British average. But even this largesse could not contain relative decline and rising unemployment, especially as the UK became afflicted by balance of payment crises, industrial relations problems and increasing inflation. This was the background to Winnie Ewing's sensational by-election win for the SNP in 1967 in the safe Labour seat of Hamilton. This was no flash in the pan: the SNP won almost a third of the vote in the second general election of 1974. Opinion poll evidence suggested that this success was based on a protest vote, but Scotland was once again firmly on the agenda of the UK Labour government. Even the threat of secession from the British state when North Sea oil seemed the only hope of sustaining national economic recovery was enough to concentrate minds in London.

The response was to promote a policy of devolution to Scotland in order to take the sting out of nationalism. It was a strategy based on expediency, rather than belief in devolution for its own sake, because Labour's wafer-thin majority relied on Scottish seats. The Scottish Assembly also had few of the powers which might have galvanised the electorate, and was therefore probably doomed from the outset. The referendum of 1979 showed a small majority in favour, but the turnout was low and the regions were divided. Instead of devolution, Scotland entered the 1980s with a Conservative government bent on a radical attack on the perceived economic and social ills of the UK.

That decade and the 1990s saw the greatest economic and social transformation in Scotland since the Industrial Revolution. The old industrial order which had sustained the nation since early Victorian times disintegrated in the space of a few years, triggered by a steep rise in oil prices and Thatcherite monetary policy which moved the priorities of the state from guaranteeing full employment to control of inflation. The principal weapon to achieve this was a huge hike in interest rates – whole sectors of the Scottish economy suffered and around 20 per cent of jobs were lost. The great staples of the traditional system crumbled with alarming speed, as did many of the "new" industries established under the regional policies of the 1960s and 1970s.

This pain, together with the implementation of policies including the community charge or poll tax, triggered massive opposition to the Tory government and rejuvenated the movement for Scottish devolution. The creation of a Scottish Parliament came to be seen as a way of avoiding such Westminster interference. It was this collective opinion, following Labour's landslide victory in 1997, which led to the opening of the new Scottish Parliament in July 1999.

A new Scotland emerged from the 1980s. The nation reinvented itself as a post-industrial economy based on financial services, oil, public services, tourism, light engineering and science-based industry. Family structure is transformed: most women are in employment and account for the majority of workers in education and health and the classical family pattern of married parents and dependent children is the exception rather than the rule.

Church-going has slumped to historically low levels. Demand for professional and skilled labour in the new economy, together with the enormous expansion of higher educational provision, have resulted in upward social mobility on an unprecedented scale. The nation is more prosperous today than at any time in its history, though major problems and challenges remain in health, social disadvantage and the scourge of the drug culture. There can be no denying, however, the sheer scale of the changes of the last 20 or 30 years. The Scotland of 2008 is a different place from that of 1980.

SCOTLAND: A CHANGING NATION

ON FRIDAY, the National Museum of Scotland will open a new permanent gallery chronicling the story of modern Scotland.

Tracing the Scottish experience from 1900 to the establishment of the Scottish Parliament as the century drew to a close, Scotland: A Changing Nation, will show how war, politics, economics and social change have shaped Scotland.

To celebrate, The Scotsman will spend this week celebrating modern Scotland and its contribution to the world. We begin today with an essay by historian Tom Devine, on Scotland in the 20th century.

Tomorrow, our Life & Arts section will explore how Scottish ingenuity has shaped the modern world. Vote for your favourite from our 15 innovations and you could win dinner for two with a bottle of wine at the award-winning Tower Restaurant, as well as a family membership of National Museums Scotland.

A special edition of our Recommends supplement on Wednesday will contain a selection of incredible things to see and do across all of Scotland's national museums. On Thursday, we hear from some voices of modern Scotland, some well known, some not, but all compelling.

And on Friday, we close with a fiendish quiz to test our readers on what they have learned this week.