In case you hadn't noticed, Scotland is having a vote on Thursday. The results of this vote could be dramatic: Scotland could break ties with the United Kingdom and become an independent state. The world would see the creation of a new sovereign state and the end of one of the most important political unions in modern history.

Until very recently, polls had suggested that the "no" vote — a vote against independence — would win. However, the unionist lead has dramatically dropped over the past six months, and some polls in the last fortnight gave the "yes" camp a narrow lead.

It's easy to talk about Scotland's independence in terms of nationalism, but the practical implications of the vote can't be ignored: This is a major shake-up with potentially far-reaching consequences. And Scotland's independence movement isn't based on vague ideals of "Scottishness" — it's a bet that an independent Scotland could find a place for itself as a stable and wealthy social democracy.

Here's what you need to know about Scotland's referendum on independence.

(Laris Karlis / The Washington Post) (Laris Karlis/The Washington Post)

So what's happening on Thursday?

Some 4 million eligible voters in Scotland are expected to participate in a referendum on one simple question: "Should Scotland be an independent country?" They have only two choices: "Yes" and "No." If a majority choose the latter, it may put to rest the question of independence for some time, but it won't stay calls for further devolution of power from London. If a majority choose "Yes," Scotland would sever its union with Britain.

Polls will open at 7 a.m. local time Thursday and will close at 10 p.m. Results will start coming in Thursday night, and there will be a definitive answer by Friday morning.

Wait, why is Scotland part of this union, anyway?

Scotland emerged through the medieval ages as a kingdom separate from England to the south. As WorldViews detailed here, the two nations had a long history of enmity, marked by war and geopolitical skulduggery. But after the death of Queen Elizabeth I, her cousin's son, Scotland's King James VI (and subsequently England's James I) assumed the throne for both countries in 1603. A century — and a lot of turbulent history — passed before Scotland and England united their parliaments in 1707 through Acts of Union. The imperative to unite was one born out of pragmatic necessity: Scotland's economy needed help; the English still considered a semi-independent Scotland a security threat. It was only after Scotland's emergence as an engine of British industry and empire that a sense of genuine "Britishness" emerged.

What brought us to this point?


British Prime Minister Margaret Thatcher and her husband, Denis, wave to the audience after her speech at the Scottish Conservatives' conference in Perth, Scotland on May 16, 1987. (John Redman/Associated Press)

The history of Scotland's independence movement is long and complicated. A simple narrative, though, could begin with the tenure of British Prime Minister Margaret Thatcher, who came to power in 1979. The privatization measures enacted by the conservative premier, as WorldViews discussed here, hollowed out Scotland's industrial base, eroded its labor unions and unraveled its social contract. Scotland was treated as something of a petri dish for Thatcherist policies; the implementation of a controversial new British taxation system in Scotland in 1989 as an experiment was the "most egregious decision," suggests the Guardian.

In the years since, Scotland became a political wasteland for British conservatism. In the vacuum, the Scottish National Party found new life, led by the controversial populist Alex Salmond. As we've explained before, Salmond positioned the SNP in the 1990s as a social democratic, European-friendly party that happened to also favor freedom from Britain. In 1999, it won greater devolution from London, which allowed the formation of a Scottish parliament. From there, Salmond's SNP steadily gained in political clout, winning the support of many Scots who had become disillusioned with the neo-liberalism of the Labor government of Prime Minister Tony Blair. By 2011, the SNP had an outright majority in the Scottish parliament, and, the following year, it won agreement from the coalition government of conservative British Prime Minister David Cameron to stage the upcoming referendum on independence.

What would an independent Scotland look like?

This is a matter of great debate. The critics of the "Yes" camp fear a debt-ridden economic basket case (explored in further detail below). Its supporters, though, envision something far more ideal: a departure from the austerity and inequities of Tory-run Britain and a shift toward a more Scandinavian-style social democracy.

This shouldn't sound jarring. Scotland has a long history of Nordic settlement and has demographics similar to many Scandinavian countries. With a modest population and considerable oil wealth, an independent Scotland, say "Yes" campaigners, would still remain in the European Union and NATO, while boasting a top-notch public health-care system, free higher education and robust social services.

An independent Scotland would also not trade on a narrow, ethnically driven sense of identity. Immigrants, a key swing vote, may play a vital role in the outcome of the referendum.

Won't that require a lot of money?

Yes. The type of welfare state that Scotland would like to sustain (and perhaps grow) would be expensive, and those who campaign against secession have argued that an independent Scotland wouldn't be able to afford it. "The experts at the impartial Institute for Fiscal Studies have been very clear that a separate Scotland would need to make around £6 billion ($9.8 billion) of cuts to things like benefits, pensions and our NHS in the first few years after separation," a Better Together spokesperson told the Guardian this year.

Another report from the British Treasury found that each Scottish citizen would be £1,400 ($2,200) better off every year if Scotland stayed within the United Kingdom.

But supporters of Scottish independence dispute these figures and point out that Scotland is actually in pretty good financial shape. The SNP has cited recent data from the Organization for Economic Cooperation and Development (OECD) that Scotland's gross domestic product (GDP) per head was a healthy £23,300 ($38,069). That's higher than France, Italy, Japan and, yes, the rest of the United Kingdom.

And despite Scotland's free education and generous social services, nationalists may point to data from last year that showed that Scotland sent more tax revenue per person to the British government than the rest of the United Kingdom. “These figures confirm what we have known all along – Scotland more than pays her way in the U.K.," Finance Secretary John Swinney said at the time.

A number of Scotland-based businesses have threatened to leave if the country goes it alone. But there's a big factor at play here: oil.

Wait, how does oil factor in here?

The impact of North Sea oil is an important factor in Scotland's independence and will certainly continue to be if it goes it alone.

An independent Scotland would probably get rights to the majority of the oil and gas off the coast of the United Kingdom: Despite the British government's investment in the area, natural resources like this are generally divided up by geography alone. One study found that as much as 90 percent of oil revenue may go to an independent Scotland.

There's a lot of oil in those waters: Estimates suggest that Scottish oil and gas exports to the rest of the world were worth over £30 billion ($49 billion) in 2012. Scotland's pro-independence campaign has indicated that it'd like to follow the example of Norway and set up a sovereign wealth fund (what it calls a "rainy day fund") to invest the profits from its natural resources.

However, experts disagree over how long this cash cow can last. U.K. oil production peaked in 1999 and has been predicted to decline further in the future. Salmond, a former oil economist, has predicted that an additional 24 billion barrels of oil can still be recovered from the North Sea, a figure that one industry figure described as "45% to 60%" too high.

Will Scotland keep the pound?

An independent Scotland would keep the British pound as its currency, the SNP says. No, they would not, the British government replies.

It's a clear divide between the "yes" and "no" camps. For what it's worth, Salmond has argued that it doesn't really matter what London thinks. "No one can stop us from using" it, he told Sky News this week.

He's not wrong, but there may be complications. The independence movement has suggested that it would seek a currency union with the United Kingdom, but the powers in London would have to agree to that. Should they refuse, Scotland could unofficially use the pound anyway, in the manner that Ecuador uses the U.S. dollar.

Both options present risks. A recent article in the Economist explained how a "sterling zone" created by a currency union might end up looking like the euro zone, "with Scotland in the part of Greece." The New York Times' Paul Krugman wrote last week: "If Scottish voters really believe that it’s safe to become a country without a currency, they have been badly misled."

Scotland could, of course, create its own currency, though the independence campaign hasn't suggested that yet. There's also another complication: If Scotland is required to join the European Union as a new state, it may be compelled to join the euro zone. Scotland doesn't want that, for obvious reasons.

What happens to the rest of the United Kingdom if Scotland leaves?

It's hard to see it as anything other than a blow. The United Kingdom would lose more than 8 percent of its population. It would lose the vast majority of North Sea revenue. The U.K. would probably lose a significant chunk of its military power (the independence campaign is asking for a share of assets based on population).

The problems would be deeper than that, however. After more than 300 years of union, Scotland is etched onto the very core of British identity. Even that word "British" indicates the inclusion of the Scottish, who live on the northern part of the island named Britain. Critics have wondered what, exactly, the remaining part of the United Kingdom could be called if Scotland goes it alone: It will no longer be a kingdom that is united, nor will "Great Britain" encompass all of Britain. "Former United Kingdom" has been suggested, though it's hard to imagine that catching on.

Even the flag might be up for debate. The current flag for Britain is the Union Jack, which incorporates both the English flag (the red cross of Saint George) with the Scottish flag (the white saltire of Saint Andrew). If Scotland were to leave, logic dictates that the white saltire should go, too.

The impact would make itself known in relatively insignificant ways (yet again, no British man would have won the Wimbledon tennis tournament since 1936) to ways that may have a major effect (Britain's left-wing Labor Party may struggle to regain the Scottish MPs it loses).

Why does any of this matter?

Sure, Britain is a slowly diminishing world power, and Scotland, at least in terms of population, is only a small part of it. But a vote for independence has many implications beyond the dramatic sundering of Britain.

The SNP has said that an independent Scotland would be totally free of nuclear weapons currently kept in its territory and waters. That raises real headaches for London, which anchors its "Trident" system, a number of nuclear-armed submarines, in Scotland's Firth of Clyde. Scotland's independence campaigners believe their disavowal of nuclear weapons would be consistent with their future obligations as a NATO state.

Its independence would also buoy secessionist movements elsewhere, particularly in other restive corners of Europe. Campaigners in the northeastern Spanish region of Catalonia have specifically pointed to the success of the SNP and the process that led to this referendum as a model to be replicated. A pro-independence protest in Barcelona last week drew as many as 1.8 million supporters.

Both Scotland and Catalonia's independence movements champion their respective regions' roles in a wider Europe and see their independent states as cosmopolitan and open to immigrants. It's a far cry from the ethnic nationalism that reshaped Europe's map a century ago. At a time when many pundits wring their hands over the future of the world order and the fundamental flaws of our traditional nation-state system, these small struggles offer an interesting insight into where global politics may be heading.