SB: But I want to step back a bit. If you stop somebody in this street, which is supposedly dedicated to free markets, and ask them what economists do, they will say, "They forecast, and they forecast badly." Most of the great economists never made a macro-economic forecast in their lives, and Hayek said that all economists can teach us are principles. Now most people are too impatient for that. They sneer at economic forecasts and yet they want a magic crystal ball, and they can't have it. But the great majority of economists are not pronouncing or failing to pronounce on the good life. A useful economist would be one who could do a better job of the [London] congestion charge than the former mayor Ken Livingstone did. Keynes said that one day economists should be humble, useful people like dentists. Now no one fitted this description less than Keynes himself, but, if you look at what useful economists do, they are things like that. Economists can't tell us about the good life but they ought to be able to tell us about means and ends. Where we might differ is that I would take a utilitarian view of the good life, and by that I don't mean that you can calculate bits of happiness. In the end, I think it is human welfare that matters. The early utilitarians thought that you might eventually be able to measure human welfare in terms of a cat. If a cat is purring then it is happy, and I think that Jeremy Bentham approached social policy in that way.

DJ: What do we think is the most important moral question, or moral insight, that has emerged from our present crisis? Many people, like the Archbishop of Canterbury, have jumped to the conclusion that the whole system is rotten and should be replaced, or at the very least requires radical surgery, because there's something terribly wrong with it. But is that the right sort of moral conclusion to draw? Or if not, what is?

SB: I don't think the Archbishop, who is a great scholar in some ways, has the faintest idea of what should replace the market system.

EH: Hear, hear!

SB: But what is more, if he became the economic adviser to the next government, we really would have a depression. And all the authoritarian conservative instincts will say, "behave", "discipline", "spend less", "tighten your belt", and if they're reinforced by some awful Archbishop, we really would get a depression, and no amount of sermonising would get us out of it.