“There is a certain irony of having this in an RBS tent”- Joseph Stiglitz

Nobel prize-winning economist Joseph Stiglitz began his talk with an “homage” to Adam Smith, the founder of economics and one of Edinburgh’s most famous residents. Nevertheless, he devoted much of his talk to why Smith, who put forward the idea that markets are efficient and self-regulating, was wrong. 

Stigliz was briefly interrupted by four climate camp protestors, who ran into the tent, objecting to RBS’s sponsorship of the event. After the audience booed them, and Stiglitz retook the microphone, he agreed: “There is a certain irony of having this in an RBS tent.”

One of the few economists who foresaw the banking crisis, he argued that the financial sector was to blame for it, pointing the finger at “perverse incentives” for the bankers’ short-term goals and reckless risk-taking. But he said that governments are also implicated for not preventing the financial system from acting irresponsibly.  If Smith’s works had been read in their entirety, Stiglitz argued, it would have become evident that the Edinburgh academic had added many caveats and concerns to his belief in free markets.

To put the bailout figures in context, he said that President Bush had vetoed a bill which would have provided healthcare to poor children, saying that the economy could not afford the few billion per year it would have cost. But the bailout of AIG alone cost £180bn. “To those of you who don’t know a lot about economics, that’s a lot of money,” he said, to laughter from the audience. 

Stiglitz then turned his attention to the policies which are currently being used to move countries out of recession. He was damning of the “Hooverite” policy, adopted by many European countries, of cutting the deficit quickly. “So your message is: ‘Don’t do it, George?” said Ruth Wishart, the chair. “That’s right,” said Stiglitz, smiling. 

In response to a question by candidate for Labour leader, Diane Abbott, about the role of government in the economic downturn, Stiglitz observed that the comparison of a country’s economy to that of a household’s economy is misleading. He said that a household living beyond its means would be wise to cut its expenditure, but if a country were to reduce its expenditure, unemployement would rise, reducing its income in tax revenue. 

A Beginner’s Guide to Acting English is the first book by successful standup comedian Shappi Khorsandi. It details her family’s move from Iran to Britain, where her father, a famous journalist and satirist, was in danger. “I’ve wanted to write this since I was a kid,” she said.

Khorsandi described the problems that her family had adjusting to London life in the seventies and eighties - the disgusting tomato soup, the punks on the Tube who told her mother to “go home” - and the death threats her father received from supporters of Ayatollah Khomeini’s regime. The family were forced into hiding, and the young Khorsandi wrote a heartfelt letter to Khomeini, begging him to spare her father. The family were forced to watch, helpless, as Tehran was bombed in the Iraq-Iran war, at times unable to contact their extended family. 

Despite these hardships, they still managed to enjoy themselves, taking their police guard on picnics and teaching them Iranian dances. “Laughing at yourself and the situation you’re in is a very Iranian trait,” Khorsandi said. It certainly seems that a good sense of humour runs in Khorsandi’s genes. She described her paternal grandmother as “the funniest woman ever”, and her father performs standup comedy in Farsi. 

But Khorsandi seems to be enjoying her crossover from standup to writing. “Can I say how pleased I am to be at a book festival,” she said. “After the seedy cesspit of the comedy circuit, you all look so clean.” She described standup as “like a calling”, but did not discount the idea of more books to come.

Labour politician, journalist and author Roy Hattersley spoke to his audience about the problems raised by political biographies. The author of several political biographies himself, the timing of this speech seemed particularly apt with Book Festival attendee Peter Mandelson’s biography The Third Man released only weeks ago, and the launch of Tony Blair’s biography A Journey expected in September.

Hattersley described the recording of private conversations between politicians for future publication as “despicable”. He claimed that, not only is this a betrayal of friendship, but it makes effective government impossible. He also warned the audience not to believe that “verbatim accounts” are a true represenation of what actually happened. “Don’t believe [the author’s claim] they are doing it as a contribution to history; rather, it is a contribution to their bank balance,” he said. 

One of the crucial ingredients for a biographer is timing. Hattersley laughingly congratulated himself for choosing to write a biography of Lloyd George, the leader of a Conservative-Liberal coalition, at the present moment. Looking back to that coalition, he predicted: “It’ll all end in tears.”