The health of the economy has a profound effect on our lives. Too often, however, the economy is experienced as something that happens to us, rather than something we are part of. Everyday conversations in supermarket queues, offices and pubs focus on economic and financial issues.  But however pervasive credit crunch conversations are, the truth is that many people—perhaps most people—are ‘economically illiterate’. Few speak the language of the ‘dismal science’, and this impacts negatively on our democratic public life. In the evolving financial climate, some people do not possess the tools to fully comprehend or participate in the global and domestic currents shaping our economy - and our own lives.

Demos’ Economic Literacy project will probe this ‘democratic deficit’ in economic life.  Running from July to November 2009, the project will explore the necessary conditions for and for the deeper public understanding of economics which will enable a richer and more confident sense of economic citizenship. Greater knowledge of economics will enable citizens to navigate an uncertain economic landscape more effectively, and will equip citizens with the skills to assess and participate in the political decisions on economic affairs. Economic Literacy aims to make the ‘invisible hand’ of market forces a visible one.

The project will address the following key questions:

• How much do people understand about economic processes – what is the current level of economic literacy?
• What is the distribution of economic literacy in the population?
• How far do people understand their own role in economic processes?
• Do people lack a sense of agency in their economic lives?
• What steps could be taken to enhance economic citizenship?
• Can economic literacy increase ‘rational’ economic behaviour?
• What are the likely economic impacts of an increase in economic literacy?

Through workshops, focus groups and public surveys, Demos will seek to assess the current levels of economic knowledge in the UK, and will identify ways in which economic literacy could be improved. The project will culminate in a report to be published in winter 2009, which will detail our findings and recommendations for boosting citizens’ economic understanding and removing barriers to economic citizenship. 

The project is generously supported by Provident Financial.