After the 2008 crash and its political fallout, the central role of finance in modern capitalism should require no emphasis. Accounts of financialization invariably stress the importance of the City of London, from its historical status as a world creditor under the British Empire to its position today as the preeminent global financial center. Yet it’s only in recent years that the City has seen off a rival center in its own national economy. For anyone who wants to understand the way global capitalism works, the history of Scottish finance forms a neglected but essential part of the picture.

Scottish banking not only had a distinctive identity within British finance, but it even had its own legal basis and its own banknotes. For much of its history, the Scottish financial sector largely operated without encroachment from the City’s leading banks, both in Scotland itself and on the international stage. Indeed, many of the key innovations in British capitalism were first pioneered in Scotland, as Edinburgh’s financial elite sought creative ways to accelerate growth. One example was the joint stock company, which enabled rapid expansion as capitalists did not have to risk all their personal fortunes in an investment.

Such pathbreaking financial tools helped Scotland progress from being one of the most backward feudal-agrarian economies in Europe to become an important center of industrialization and empire. The credit which fueled that transformation by and large originated in Scotland — usually channeled through its two big Edinburgh institutions, the Royal Bank of Scotland (RBS) and the Bank of Scotland (BoS). It’s only possible for us to talk about a distinct Scottish capitalism, as opposed to British capitalism in Scotland, because finance largely retained its independence following the 1707 Act of Union.