Feedback from the Credit Crunch Seminar 2

Simon Clark reports back from the Credit Crunch Seminar on March 12.


Take 60 ordinary people, roughly a cross-section of Edinburgh society, and invite them to give their views on the credit crunch and the economic crisis. Or rather, light the blue touch-paper and stand back, well back.

The meeting was permeated by a deep sense of injustice. How can people just walk away from the mess they have created, often with a big pension, when others lose their jobs and pensions though no fault of their own? You may think economics deals with efficiency and hard-headed analysis, and that concerns of equity and justice are the domain of the soft-headed disciplines (usually ending in 'ology'). Wrong for two reasons! Firstly, if people care about fairness then it will affect their behaviour. For example, they may avoid buying from businesses they see as treating their workers and suppliers badly, or not doing their bit for the environment. Or if people at work are treated fairly, they may be more productive. Secondly, think of the raw politics of the situation. You may disagree with knee-jerk reactions to punish greedy bankers, but if a political party can get support for measures to redress injustices, real or perceived, then - purely as a matter of economic forecasting - you need to take that on board in forming your expectations of future policy.