Zombies. Can Scotland escape the economy of the living dead.

Like me, you probably don't pay too much attention to the monthly unemployment figures, since they don't seem to be going anywhere in particular. In fact, something quite extraordinary is happening, which is transforming the world of work, making a nonsense of government policies, like the much criticised Work Programme and turning a once prosperous and relatively secure society into one driven by insecurity and debt. It also poses a very serious question about Scotland's future.

You see, unemployment - 2.5million - is a lot lower than it should be. Indeed, the numbers out of work have been falling even as the country heads into triple dip recession. Unemployment rose to 8% in November 2011 and has been falling more or less ever since. Yet in the recession of the 1980s, which was mild compared to this one, unemployment rose to 12% and stayed there.

Stranger still, unemployment in Scotland has been running at a lower rate than in the UK. This month, 7.7% of Scots were out of work, against 7.8% for the UK. In the 1980s, unemployment in Scotland soared to 15% - almost double what it is today and far ahead of the rest of the UK. Indeed it was nearer 18% in the West as Scotland's industrial heartlands were ripped out and thrown on the scrap heap. So, although this recession has lasted twice as long as the 1980s and is far deeper, unemployment is falling when it should be rising.

This is all exceeding strange, because I defy anyone to look around Scotland today and regard it as a country in economic recovery - despite the claims made by the Scottish government, who can't seem to decide whether Scotland is being dragged down by the UK Chancellor, George Osborne's austerity or being held aloft by Alex Salmond's Plan Mc B.

What has happened is something we haven't seen in Britain since the 19th Century: a productivity recession, in which the economy is going back in time. The reason unemployment hasn't increased is largely because people are accepting lower wages. Pay (except of course for bankers) has been falling by 1% a year, in real terms, which may not sound like much, but equates to around £1500 in reduced income for average households so far, and earnings will continue to fall until 2018 at least. This is unprecedented.    Firms are are using cheap labour instead of new machines - which is why productivity is falling in Britain. We're getting poorer by making ourselves less efficient. This is why those high street shops have all been closing and why Britain isn't recovering through exports, despite the fall in the value of the pound.

This only sounds counter-intuitive because our political culture is still essentially neo-liberal and assumes that if you hold down wages the economy must do better. In fact, quite the reverse is the case. Low wages breed economic stagnation because worker/consumers lack money to buy goods and firms have no incentive to apply new techniques and machinery because labour is so cheap. That's why this depression is unlike any this century. You have to go back to the 1870s to find a recession as long and as deep - though even then industrial output continued to grow through the application of new technologies. Coalition policies today are taking us back to the days when people wore top hats and the government was run by ex public schoolboys. Oh - I forgot, it already is.

The St Andrews Day Cringe.

The world is dancing to a Scottish jig today, or so we're told. From the 12th Annual St Andrew's Ball in Baku; the Kirkin' o' the Tartan's Scottish gathering in Sydney; and on to Java where "a Scottish Ceilidh Band will stir all to their feet with the finest ceilidh music to be heard east of Krakatoa", according to Scotland.org.   Rock on. Oh – and there'll be a few events in Scotland as well.  Like synchronised smearing from cyber nats  like Mark McLachlan and his Unversality  of Cheese graters.

I always feel uncomfortable about St Andrews Day.  There always seems to be something slightly bogus about it. In Norway, Iceland Ireland they have no problem with celebrating their national day with a sense of collecive pride. But here it always seems to be polluted by politics – which I suppose given the constitutional DEBATE is inevitable. The SNP see it as a recruiting pageant and Labourites see it as nationalist propaganda exercise.

The Scottish National Party have  colonised St Andrews Day and used it this year not only as a climax to the “Year of Homecoming” but as the moment to pop the question on independence – or rather to publish their white paper for a referendum on separation to take place – inevitably – on St Andrews Day 2010. This has been roundly condemned by the Labour opposition as a waste of time and money and a needless distraction from the urgent task of hauling Scotland out of recession. Commentators think the SNP is on a loser because support for independence seems to be waning, in recent opinion polls, and that today will be a St Andrews Day damp squib which will confirm that the SNP's honeymoon is well and truly over.

The bill will certainly not get through the Scottish parliament as it stands because it is opposed by the a majority of MSPs. But that doesn't mean Alex Salmond is daft tabling it. I don't think anyone in the party seriously believes that the Labour leader, Iain Gray, will be so moved by Alex Salmond's oratory that he will tearfully assent to the ballot taking place on the SNP timetable, but the bill represents the honouring of an election pledge and sends a message, not least to the SNP rank and file that the SNP leadership has not forgotten about its historic mission. Then we can forget about it until after the next election.

But is the independence project still viable? Is it still on a roll? Well, it depends how you look at it,Yesterday’s Mori/Ipsos poll suggested that only 25% of Scots want to leave the UK. – but historically formal independence has rarely had the support of more than a third of the Scottish voters. That hasn't stopped the SNP being extraordinarily successful under Alex Salmond and moving Scotland in the direction of ever greater autonomy.

In a way, the Calman Commission report, and Labour's white paper last week, is a measure of the success of the SNP. For the first time in Scottish history, the three opposition parties – Labour, Liberal Democrats and the Scottish Tories have united behind a proposal to give the Scottish parliament extensive tax powers. That would never have happened had the SNP not won power in Holyrood in 2007 and forced the unionist parties to come up with a better offering than independence.

Now, I know that many people believe that Calman isn't worth the paper it's printed on, and that it's a unionist trap. The estimable Nicola McEwen of Edinburgh University has described it as “not so much devoluion max as devolution and a little bit”. The tax powers are incoherent and piecemeal, the borrowing powers are unworkable and it doesn't address qurestions like Scotland's right to a share of oil revenues. True. But I think we are missing the constitutional wood for the presentational trees.

Clearly, Calman is not a proposal for full fiscal autonomy, nor is it a fully worked out federal model, since it doesn't propose constitutional changes at the federal, ie Westminster, level. But just look what it does do: Calman establishes, for the first time, the principle of fiscal accountability, transparency – that the Scottish parliament should raise the money it spends. Calman not only proposes the partial repatriation of income tax, it also proposes that Scotland should have new taxes like stamp duty. It is quite remarkable that the unionist parties put their names to this report – especially the Tories.

Of course, George Osborne has distanced himself from last week’s Labour white paper, but importantly he has accepted the principle that the parliament should raise the money it spends. If the Tories are elected next May, I believe they will try to impose some system of fiscal accountability to Scotland, partly to address the complaints from Tory backbenchers and the London press about Scotland getting too much public money, and partly because they need to force through radical cuts in spending across the board. With a nationalist government in Holyrood, the surest way to achieve this would be through fiscal autonomy because as we all know, the amount raised by taxation in Scotland is considerably less than what is spent here.

If Labour win, then they will try to implement Calman. But they will have to do it with the active cooperation of the Scottish parliament. It couldn't just be handed down from on high because that would have zero legitimacy. This suggests to me that the Scottish government would be able to argue strongly for a better arrangement, if not right away, then in a few years time.

I believe this is why Alex Salmond has been willing to accept that 'third question' on the referendum ballot paper – the 'devo max' option, based on Calman. It may be a unionist proposal, but so was the Scottish parliament. People said that devolution was a trap, a half way house that would never work, a means of undermining independence. It was – but it was also a democratically elected legislature which has steadily drawn power to itself. Calman would be an important new stage in the evolution of Scottish democracy.

So, while the SNP may not be doing so well right now, the momentum is still towards Scottish autonomy. The truth is that independence is paradoxically, a goal that will never be reached because full separation is no longer possible. It isn't the destination that matters, but the journey.