NICE to see ourselves as others see us. The Scottish Parliament has just received a visit from the Association of European Journalists. One of them, an old pal of mine now living in London, has sent me an email: “It was so good to get away from the errors of Brexit as seen through the prism of Westminster and the South-East. Another world – and I suspect, one day perhaps quite soon, another country. The next time we meet, I’ll probably have to have my passport with me.”

True, in this era of political insanity, a semblance of normal life survives in Scotland. It is still only a partial political life: no foreign policy to speak of, no defence policy, barely half of an economic policy – and so on down the line. The last lack is an especially grievous one because sound financial administration is one of the best means for any government to influence its society and at the same time one of the clearest measures of its success. If it makes its country richer, this will be reflected in higher tax revenue, which can be used for better schools and hospitals or whatever else the people want. If on the other hand, as the Scottish Government hints, it is indifferent to wealth creation, especially through the operations of the capitalist system, all these benefits will remain beyond our reach.

The present Scottish alternative is to have the Government intervene much more directly in the allocation and distribution of resources, to an extent seldom seen in other countries. One example came to light last week with the confirmation from Derek Mackay, Cabinet Secretary for Finance, of plans for a Scottish National Investment Bank (SNIB) boasting a budget of £2 billion. Its prime aim is to foster strategic projects with “patient” long-term funding, in contrast to the demand in the world of casino capitalism for double-quick returns.

The First Minister, Nicola Sturgeon, had previously said: “The time for debating whether or not this is a good idea has passed. It is now time to get on with making it happen. We are determined now to move at pace.”

READ MORE: Plans for Scottish National Investment Bank backed by MSPs

None too soon. Scotland has today lost nearly all its big companies, leaving an economy of small and medium enterprises often ill-served by the inherited financing structures. Much of the economy used to be reliant on the Scottish banks which, as they hurtled down towards their own self-destruction, conceived the perverse plan of driving entrepreneurs out of business so their assets could be seized.

That phase of our banking history is happily passed, but still SMEs are often imperilled from their outset because they cannot generate enough revenue to cover the initial heavy cost of starting up. Too many go bust in their first year of operation, and nearly half do so by their fifth year. It is a glaring structural weakness of Scotland’s economy, not so far addressed by the private sector. Can the public sector do better?

SNIB will help us to find the answer. A skeleton structure is appearing now, and banking operations should be in full swing by next year. We would, of course, be foolish to expect dramatic results over such a short span of time. The weaknesses of the Scottish economy are too deep-seated. Just during 2019 we have seen three examples of projects in which SNIB might have taken part if it had already been up and running. Instead it was the Scottish Government itself, rather than an independent agency, that did the business, with close involvement right at the top from senior ministers.

The first project was the nationalisation of Prestwick Airport, which has done nothing to make it viable. The second example was the North Sea fabricator at Burntisland, again rescued but not saved. The third example is Ferguson Marine at Port Glasgow, a continuing saga of official subsidy failing to make a company capable of fulfilling its contract amid adverse circumstances.

READ MORE: Ferguson Marine shipyard set for public ownership

It has left the investor and the Government not in exemplary co-operation, a beacon of hope for the future, but at daggers drawn. What is more, this sorry tale has also frightened away original alternative investors who might have put their own money into the shipyard but who now shy away. Everybody loses.

Of course this has all happened in advance of SNIB getting going, so no direct inferences can be drawn. But what does it tell us about the political and economic background of these commercial operations against which to apply our future tests while we look for investments more able to succeed? There is little certainty about this.

By way of comparison, US investors will get no help from federal or state government, and will sink or swim with their markets. In Germany they will be taken under the tender loving care of the official bureaucracy, in partnership with management and unions. In England, as my correspondent noted, spendthrift chaos reigns. Scotland can and should seek its own path.

But I would say Scots have got a bit too used to expecting the state to do everything for them, or try to. The SNP Government is not at all unhappy with this state of affairs, and willing to overlook any collateral damage.

On the contrary it believes that, even short of political independence, it should regard itself as in principle omnipotent. For now it may be constrained by the defects of devolution, by London’s limits to its budget and by the car-crash of Brexit. Even so it thinks it can and should micromanage as much as possible of the whole range of Scottish life, public or private, from SMEs to smacking, always bearing in mind that the real deal is still to come.

The National:

As for SNIB, under proposals drawn up for the Scottish Government by Benny Higgins, chief executive of Tesco Bank – a retail not an investment banker – the first job is to fill a gap in the market for loans of £1 million to £10m to SMEs with high growth potential.

I have already said that we have a genuine problem here, and SNIB could solve it. But there are other measures that might work better, such as tax cuts, personal for the entrepreneurial class and later, once we have the powers, corporate.

In fact a cut in corporation tax was SNP policy under Alex Salmond till, ahem, Nicola Sturgeon came out against it, such is her appreciation of the importance of profit to capitalism.

It would still be possible for SNIB to fund, possibly through direct investment, innovative responses to the “great challenges”, such as developing artificial intelligence or cutting carbon emissions. Capital would be there with the “scope and scale to be transformational to the Scottish economy”, says Higgins.

Here I think its big test will come. In Scotland we already make liberal resort to the pork barrel with investment decisions swung by the political influence brought to bear behind them.

SNIB must be governed by autonomous stakeholders with the weight and competence to resist such pressure. If it possesses these qualities, it could well exceed the most exacting expectations. If not, we will see more of Prestwick, Burntisland, Port Glasgow – in other words, failure. These abortive projects got through the pre-SNIB system. They should not get through the SNIB of the future.

In the Scotland to come, if the allocated budget is to be spent on ministerial grandstanding, it cannot be spent on national development.