A Matter of Trust - A Social Credit Crunch

Every time we turn on the news at the moment we see the impact of the psychology of communities at work in the economy. The collapse of confidence in a company results in a massive crash in share prices. A lack of faith in a national economy sees a run on its currency.

There is currently no difference between what happens in a disadvantaged community and in the City of London. Both have an expectation of failure, which is self-fulfilling. There is a loss of trust, which is a key lubricant in the engines of successful markets. Without trust banks do not lend to each other and investors do not invest, without trust a disadvantaged community members do not help each other.

For two years I talked at the RTPI Successful Regeneration Conference on this very subject. See the pdf of my talk Often I would see some blank faces in the audience - younger planners who had had no experience of a recession. Now my comments are all the more true and people understand them better.

Of course trust is a key form of social capital. In the past there has been a tendancy to talk about social capital as something separate from economic capital, but it is very obvious that this is not the case. Economic capital needs social capital, now more than ever.