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As policy makers at the “top” of the economy and workers at the “bottom” all struggle to find a path out of todays global recession, there is an opportunity to emerge into a society that emphasizes fair trade, corporate responsibiliy and other tenets of equality, say the organizers of a global conference on economics taking place in Italy at the end of the month.

The Festival will take place May 29 - June 1 in Trento, Italy.Click herefor more information.

Attendees at the 2009 Festival of Economics will reflect on the institutions and rules that brought about the global economic crisis, aiming to understand why most economists failed to forecast it, why “many bankers were able to carry on undisturbed, and why politicians reacted so late,”saysthe Festivals scientific coordinator Tito Boeri. “We need to understand what we must do in order to avoid a crisis of this kind happening again and to be able to come out of this one more united than before,” he added, noting that the question of how to manage the planets common resources will be central, but returning to “the small antiquated world of our youth” is not an option.

Identity and the Global Economic Crisis

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“We are experiencing a crisis that comes from outside.”

From: Festival of Economics - Trento

Facing a sudden juncture that no employee in the workplace could have expected, we felt overwhelmed by something foreign, something bigger than us.

This thought has crossed everyones mind on at least one occasion.

In the face of a threat, it is natural and understandable that we erect walls around our own group, target external enemies, and define our own identities on the things closest to us.

But what does “outside” mean? Outside of what borders? Far from which community?

Lets clarify. We live in the era of globalization, one that allows us to drink coffee from Guatemala, invest in China, and buy Swedish kitchen designs. Conscious of it or not, we as consumers and investors can now exert influence on what happens on the other side of the planet.

But does this really help? Or is it perhaps time to replace the “near-far” paradigm of looking at the world with “top-down” or “bottom-up”?

Causes and solutions are believed to be found at a “higher level” — large banking groups, international organizations, government offices.

Nonetheless, when focusing on a crisis, we hardly speak about individual choices.

The two planes are not in opposition to each other, but any comprehensive overview of the economic system must take both into account: the World Bank and the corner market, the blackberry and the bread in a paper bag.

But at lower levels — at the “street” level — there is a working engine fed by small business owners, farmers, households, and craftsmen. And there is a civil society made up of producers and consumers.

During the upcoming Trento Festival of Economics, “Identity and the Global Economic Crisis,” they will analyze the macroeconomic effects of individual behaviors. In addition to these speakers, John Talbott, of the Anderson School of Management, will discuss the financial crisis and bottom-up economics, while Euclides Mance, adviser to the government of Brazil, will highlight the role networks of economic solidarity can play in responding to the financial crisis. Leonardo Becchetti, of Banca Etica, Monica Di Sisto, from Fairwatch, and the PDs Paolo Nerozzi will also explain how we can help change the economy by reshaping our behaviors and patterns of consumption and investment.

This is something the Nobel Prize laureates George Akerlof and James Heckman are well aware of.

There are no world-changing solutions. But we do need to change those fundamental rules that have allowed a small group of people to make easy and immediate gains to the detriment of many others and, above all, we must enforce this new set of rules. Tito Boeri states that we are not arguing about the pattern but we are trying to fine tune it to find its point of equilibrium and sustainability, considering all the relevant rules, assessments, controls, and responsible behaviors.

We are no longer speaking about niche topics, so the actors involved are many more: today we must think of the CEOs in their suits and ties and the bakers in their aprons. And we must think of ourselves — in between them.

The demand for a fair economy is rising, as proven by the number of personnel employed by the major Italian Ethical Bank, which has doubled in a few months.

“Every cloud has a silver lining,” goes the popular saying. Indeed, those at the “lower” end of the crisis have the opportunity to push for a decisive cultural transformation: one that recognizes the key role of those who drive the economy from the bottom. We are speaking about Fair Trade, microfinance, slow food, Solidarity Purchasing Groups, bio-agriculture, and corporate responsibility. These tools are both effective and sustainable, not to mention ethically preferable.

To get out of the crisis, we should not look for short term and temporary solutions either. Nor should we, as indicated above, seek to change the system through autarchy, protectionism, or anti-globalization efforts. On the contrary, a glance around the world is the answer. By weaving small webs they will steadily grow, instead of speculative transactions changing the world with a mouse click.

So why not teach at the University level what ethical finance, sustainable consumption, and fair trade mean, stressing the links between these and economic, social, and environmental development. No longer should we teach students exclusively about GDP, RoE, and Nasdaq. Alongside these, we should use indicators, such as the ISU, that gauge and take into consideration human rights, environmental preservation, employment rates, and education levels, and distinguish between legal and illegal transactions.

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