SCOTLAND’S CAPITAL CITY is a chameleon whose economic and political fortunes have gyrated wildly over the centuries. Begun as a military encampment high on a fortuitous volcanic plug, Edinburgh came to life in the Middle Ages as a strategic garrison town. The Port of Leith forged Scotland’s golden link in the chain of great Baltic trading centres of the Hanseatic League. A rising urban bourgeoisie, stiffened by intellectual and political ties to revolutionary Protestant Europe, ensured Edinburgh became the pivot for Scotland’s capitalist transformation – ideologically, financially and socially.
The city lost some of its political clout with the Union of 1707, but this loss can be exaggerated. By its nature, the Union settlement bequeathed Scotland’s domestic affairs – legal, religious and educational – into the hands of a smug, conservative and oft-times ruthless Edinburgh petty bourgeoisie. This middle-class elite has dominated the city – and Scotland – ever since. True, 19th century industrialisation and the slave trade saw a temporary shift of wealth and influence towards the dark Satanic mills of Clydeside. By mid-20th century, Edinburgh’s Old Town was an under-populated slum and its immigrant Irish proletariat dispatched to damp new housing estates on the city’s fringes.
In the nick of time, Edinburgh managed to recover its economic and social dynamism. Partly this was aided by Glasgow’s deindustrialisation and urban planning suicide. As a result, Edinburgh’s petty bourgeois elite of lawyers, accountants, bankers and academics finally escaped the hegemony of Glasgow’s fast-eroding industrial class. Edinburgh’s renaissance was also due to the accident of the International Festival and its ever-inventive Fringe, which refurbished the city’s cultural and internationalist credentials – even if the snooty Edinburgh hoi polloi preferred classical concerts to the avant garde Traverse Theatre.
In the decade and a half before the return of a Scottish Parliament in 1997, Edinburgh’s revival took a distinctly social democratic turn, spearheaded by a youthful and radical city administration. This was the first majority Labour council in the capital’s history. Its progressive values – consciously influenced by Ken Livingstone’s maverick GLC – stood in sharp contrast to Scottish Labour’s unsavoury tradition of clientelism and civic inertia. The new council declared itself a nuclear free zone, set up a women’s committee (initiator of the famous ‘zero tolerance’ campaign against domestic violence), and gave out free needles to halt the spread of AIDS.
But, the city administration also pursued a radical interventionist policy in the local economy through its own public-sector development company, Edinburgh Development and Investment. The result was a complete refurbishment of the capital’s infrastructure with a new conference centre, concert hall, business park, technology incubators and central banking district. At one point, Edinburgh’s capital investment programme was bigger than the rest of municipal Scotland put together – the result of artful financing by a civic team that consisted of former Trotskyists (including myself).
Many of these changes were achieved through a curious alliance between the council and key members of the Edinburgh elite, the banks and big assurance companies. The political horizons of Edinburgh’s financial bourgeoisie – buttressed by private schooling and membership of the all-male New Club – were conservative (and Conservative and Unionist). But just occasionally some in this elite had an inkling of something different. Angus Grossart and Iain Noble used the advent of North Sea oil to create ab initio the first Scottish merchant bank. For Noble it was a quick step to imagining an independent Scotland free from the domination of his rivals in the City of London. By century’s end, Edinburgh’s financial class had recovered a certain entrepreneurial spirit and (in a rare burst of civic engagement) actively collaborated with the city council to modernise the capital’s infrastructure.
With the return of the Scottish Parliament in 1997, Edinburgh seemed destined to recover its historic role as a political capital, while eclipsing Glasgow as Scotland’s premier financial and intellectual hub. As Glasgow’s population continued to decline with the flight of the middle-class to the suburbs, Edinburgh enjoyed a demographic boom. The Old Town slums of the 1960s became, in turn, student flats then expat investment vehicles selling for London prices. Some dared anticipate Edinburgh as the capital of an independent Scotland.
However, the next two incendiary decades proved to be a strange lacuna in the capital’s history. One in which the city as a polis failed to stamp its mark on events. Paradoxically so given the momentous tide of change: the destruction of Labour’s smothering political hegemony in Scotland, the rise and fall of Edinburgh-based RBS as the world’s biggest bank, an independence referendum barely lost, followed by a Brexit that threatened to cut the city off from its traditional European hinterland. Blame for the city’s failure to influence events or create a bigger profile lay with a series of soggy coalitions on the local council and an increasingly complacent Edinburgh middle-class more bent on making money than exerting a positive political influence.
Of course, the Edinburgh of the past two decades was an outward success. Population rose continuously from just under 450,000 to circa 513,000 – a 14 per cent jump driven largely by inward migration and reflecting the capital’s economic boom conditions. Add in the exploding Edinburgh dormitories of West, Mid and East Lothian, and the conurbation has the most dynamic demography in Scotland. By the 2030s, Edinburgh’s population will likely have breasted 600,000, an historic climacteric that will put it ahead of Glasgow.
Yet despite this explosive growth, the capital’s development strategy has proven a catastrophic disappointment in key respects. Construction of a new tram line – an unnecessary prestige project – turned into a financial and planning catastrophe, rightly depriving the city’s incompetent Liberal Democratic administration of its majority at the 2012 municipal election. Massive cost over-runs and construction delays resulted in plans for a comprehensive tram network being sharply curtailed. When the truncated service finally limped into operation in 2014 it had become an international by-word for municipal incompetence.
The tram fiasco was far from being Edinburgh’s worst planning failure. With the city’s population exploding, it was an easy call to let developers make a fast buck by churning out endless, identikit estates, eating deep into Edinburgh’s green belt; or throw up anonymous apartment buildings shoehorned into nooks and crannies in the town centre. The new SNP Government at Holyrood added to the debacle by ordering local authorities to deliver arbitrary quotas of land for house building. The intention was to over-ride nimbyism and stimulate construction to boost economic growth after the 2008 recession. But the consequence was a Stalinist centralisation of planning that gave builders the chance to cover prime farmland in concrete.
Other European capitals had a less parochial vision, sensing (correctly) that a truly successful global city is one that pioneers and takes risks. Instead, Edinburgh retreated into its traditional petty bourgeois risk aversion. Early plans to make the city a laboratory for green and sustainable housing technology – on a par with Stockholm’s Hammarby Sjöstad – quickly disappeared. An innovative proposal by Edinburgh architect Malcolm Fraser to return housing to Princes Street, and reanimate the city centre, remained a paper project. True, there is Richard Murphy’s wonderful homage to Vienna’s classic Werkbund social housing, in the shape of his 2013 Wharton Square development. But Murphy’s effervescent project is marooned deep inside the new Quartermile district, a crowded facsimile of the worst of the over-priced, plate glass high-rise developments that pollute London’s contemporary East End. Murphy’s Wharton Square is a searing indictment of the utter failure of recent Edinburgh councils to take social housing seriously.
The lacklustre, derivative architecture that fronted Edinburgh’s demographic and economic expansion of the past two decades is a metaphor for the city’s conservative, philistine petty bourgeoisie. Even at the height of the banking boom, there were no flamboyant skyscrapers: traditional petty bourgeois understatement remains in vogue. Nor was there (American-style) conspicuous private sponsorship of major new art venues. Apart from a revamp of the city’s main museum complex in 2008, and a modest upgrade of the Scottish National Portrait Gallery in 2011, wealthy Edinburgh has done nothing much to improve its cultural endowment since the 1990s. Culturally, the capital has been in retreat. The once influential newspaper, The Scotsman, has become a pale shadow of its former self, with circulation crashing from a daily 120,000 at the start of the century to barely 10,000 over-the-counter sales in 2018.
The period saw one major new bank development – RBS headquarters at Gogarburn. Symbolically, this is hidden on the outskirts of the city, in a hundred-acre wood near Edinburgh airport. It cost a ludicrous £350 million to build in the campus style beloved of US high tech firms. Opened in 2005, it stands as a monument to the hubris of Fred ‘the Shred’ Goodwin, the bank’s CEO. Goodwin used borrowed cash to fund international acquisitions, temporarily making RBS the biggest bank on the planet. When financial markets froze in 2008, RBS teetered on the verge of bankruptcy and had to be nationalised by the then Chancellor of the Exchequer, Edinburgh MP Alistair Darling. The collapse of the capital’s two main banking houses – RBS and HBOS – should have proved catastrophic to the city’s business reputation. It didn’t. Edinburgh bankers stick together, even if the older generation were scandalised by Fred Goodwin’s brashness. After 2008 they simply vowed to keep a lower profile.
It wasn’t long before Edinburgh began hosting a new wave of financial groups and fintech companies, facilitated by the city council’s liberal (or neoliberal) attitude to speculative office building. Edinburgh benefits from the agglomeration of scale that comes from being the UK’s second biggest financial centre, with circa 50,000 workers employed – 15 per cent of the UK total. The city’s financial bourgeoisie proved adept at cashing in on the global bull market in equities and bonds triggered by central bank quantitative easing. Its fund managers now have anything up to a trillion dollars of foreign assets under local direction. Baillie Gifford, a secretive private partnership located discretely in the lee of Calton Hill, is one of the largest global investors in Amazon and Tesla electric cars.
Baillie Gifford’s success is a metaphor for the Edinburgh of the last two decades. Forget the SNP’s moderate version of interventionist social democracy. The reality of contemporary Edinburgh is its embracing of the neoliberalism paradigm in all its glory: the domination of a global finance capital, a debt-financed and ultimately unsustainable property boom that gives the illusion of prosperity and a consumer economy based increasingly on entertainment – restaurants, pubs, shops, taxis and hotels. Flash rather than substance.
Like some sleazy Latin American metropolis, Edinburgh is a city of social extremes. The city ranks in the top quartile for incomes in Scotland but is in the bottom quartile for indicators of poverty. In the most deprived parts of the city, the proportion of households living below the poverty threshold jumps to a third. The work force is split between a highly educated professional elite and a precariat whose real incomes have been static for over a decade.
Edinburgh’s increasing social divide is nowhere clearer than in the colonisation of the city centre by a burgeoning student population with its ghetto of new-build, undergrad housing complexes. Modern Edinburgh could be rechristened Student City. By 2016, the student population (including further education colleges) had risen to over 80,000. A staggering 55 per cent of Edinburgh employees have a university degree, more than in London (52 per cent), Bristol (48 per cent), or Manchester (43 per cent).
It is this complacent middle-class Edinburgh that voted overwhelmingly against Scottish independence in 2014, by 61 per cent to 39 per cent. A more even vote in the capital would have narrowed the outcome by a considerable margin. Yet this same middle-class city voted 74 per cent for Remain in the 2016 Brexit referendum and felt chagrined by the UK result. A lesson, perhaps, that Edinburgh’s petty bourgeois insularity has consequences.
Where does petty bourgeois Edinburgh go in the next twenty years? Perhaps Brexit will drive the city’s middle-class to one of its rare bursts of political energy, to embrace the path of Scottish independence glimpsed by the late Iain Noble? Perhaps the long-overdue global revolt against neo-liberalism – on the right as well as the left – will finally and fatally undermine the shaky economic foundations of the Edinburgh financial class? Perhaps there will be a progressive political revolution in the municipal City Chambers and Scotland’s capital will become a global laboratory for post-capitalist living? One way or the other, and almost counterintuitively, Edinburgh could be the pivot on which Scotland’s future turns.