Bristol’s Festival of Economics – what next?

The first Bristol Festival of Economics concluded yesterday with three panel discussions consisting of academic economists, practitioners of economics, and challengers to the subject. Including Friday’s opening session, the 450-capacity hall at At-Bristol was packed to the rafters each time, showing that there is huge disquiet for the current situation. Which was backed up by most of the questions coming from the floor.

While several people noted that the idea of a ‘festival’ of economics sounded like something of an oxymoron, it was refreshing to see language used so effectively to challenge our conceptions about economics. The festival was such a success that Bristol Festival of Ideas, who organised the event, has announced it will become an annual event.

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Panel One: People, Places and Poverty

Chairperson Julia Unwin is the chief executive of the Joseph Rowntree Foundation and the Joseph Rowntree Housing Trust.

“On Monday, the Joseph Rowntree Foundation will publish its annual state of the nation report. But the top line information is that the number of people working and poor now outstrips the number of people not working and poor.”

Geoff Andrews is a lecturer in politics and an author.

“It’s striking how much poverty is still talked about as a matter of individual choice. The history of housing policy in Britain is a history of betrayal. A lot of people have been left behind.

“Food banks will feed 200,000 people over the next year – which is up from 26,000 people four years ago.  Slow food offers us a way out in this time of austerity. It’s an opportunity to examine the way we live in a much broader sense. Poverty is not here with us to stay, but we should think about what it means for us to be part of a community.”

Paul Gregg is a professor of economic and social policy.

“Pensioner poverty is in decline. Older people are further up the income distribution than they were. They’ve been replaced by families with children. For the last decade we have not been seeing rising real wages. Women’s earnings are now central to keeping families afloat – their wages are rising slowly, and more than men’s wages are.”

Lynsey Hanley is an author.

“Food is one of the strongest indicators of how living in poverty affects people at a psychological and medical level. In 2007, the housing crisis was that we weren’t building fast enough, and were only building one and two bedroom flats. There are 50-75,000 houses a year being built, but that’s a drop in the ocean of what’s needed. We’re now facing the consequences of two decades of political indecision.”

Paul Johnson is the director of the Institute for Fiscal Studies.

“In 2010 we saw the biggest fall in average incomes in this country. It was a fall in real living standards. O% is the probability of this government meeting child poverty targets as incomes are not rising. We have become much more of a welfare state over the last 30 years. We are living in unbelievably extraordinary times. £120bn is the deficit from the cuts. 2010 was the year inequality fell by more than any other year in recent history. Working age people are now more in poverty than pensioners.

“The richest 1% of income tax payers are paying 30% of all income tax.”

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Panel Two: What Next for Britain’s Economy?

Chairperson Heather Stewart is economics editor at The Observer.

“How do we rebuild an economy reliant on consumer spending? How do we build something sustainable for the long term?”

Andrew Sentance is a senior economic adviser at Pricewaterhouse Cooper.

“There has been slow growth around 1% but it hasn’t always been clear to people that there is growth. Employment has held up throughout the recession following the financial crisis. Unemployment rate has stuck at 8%, which is obviously higher than we’d like. Inflation was meant to stay at 2% but since 2006 it has been considerably higher.

“The problem with the economy is not just a lack of demand, but with adjusting to a significantly changed economic order. We’re in a new normal of disappointing growth and volatility in economic prices.

“In the long-term I’m optimistic that western economies will get back to a growth phase. But trying to predict what will drive the next wave of growth is very difficult.”

Peter Marsh is manufacturing editor at the Financial Times and an author.

“Bristol has a great manufacturing heritage and a lot of interesting things going on. In Britain there is much more manufacturing happening than people think. We’re now number nine in the world for manufacturing, which is a 2.5% world share.”

Vicky Pryce is a senior managing director at FTI Consulting Inc and an author.

“It is impossible for a small island to keep growing at the rate it has been. Next year is forecast at 0.1% growth, which means more recession. My message is to rethink how you spend the money you raise, and perhaps raise more because the government can borrow cheaply. Spend on infrastructure and housing.”

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Panel Three: Economics in Crisis

Chairperson Richard Marshall is editor of 3am.

“It’s intimidating sitting here with four people with brains the size of planets, three of whom are women.”

Diane Coyle, author and programmer of this festival.

“There are two types of economists, macro and micro. Micro economists are individuals making decisions, making rational decisions about what to do. Macro economists are when you add everything together as a whole. The crisis is worse for macro economists who didn’t see it coming at all.”

Bridget Rosewell is from Volterra Partners.

“Is economics more like history or physics? Does politics affect the kind of history you do? Physics is about explaining, and when you can predict and can have a good explanation. I don’t think we should be too depressed about the state of the economy, even if we’re depressed about economists.”

Carol Propper is a professor in economics.

“I question when is the optimal time to invest in children, because studies into early child investment have shown that this pays off. Healthcare takes about 10% of the GDP. There’s a government economic service, but not a government sociological or psychological service – even though these would be useful.”

Aditya Chakrobortty is economics leader writer at The Guardian.

“If you ask economists why nobody saw it coming, some say they got too carried away with their own models – which were better than reality. I don’t buy that. Their models didn’t recognise the possibility this might happen.

“No academic discipline has shaped British society as much as economics. Economists have cheerleaded the kind of economy you’ve now got. And it will take well into 2020 before the average family in Britain is earning in real terms what they were in 2002. You’re in a crisis and nobody that I can see has the confidence, depth of study or willingness to enter into the fray.”