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Raworth, Kate

October 3, 2017 by admin

WORK TITLE: Doughnut Economics
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WEBSITE: https://www.kateraworth.com/
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Kate Raworth, Senior Associate

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PERSONAL

Female.

EDUCATION:

Oxford University, B.A., M.Sc.

ADDRESS

Home - Oxford, England, United Kingdom.

CAREER

Writer and economist. Cambridge Institute for Sustainability Leadership, senior associate.

Oxford Environmental Change Institute, senior visiting research associate.

MEMBER:

Global Resource Observatory (advisory board), Oxford Environmental Change Institute (advisory board), Centre for the Understanding of Sustainable Prosperity (advisory board), Stockholm Global Challenges programme (advisory board), Club of Rome.

WRITINGS

(Co-author, with Anna Coryndon) Trading Away Our Rights: Women Working in Global Supply Chains, Oxfam International (Oxford, England), 2004
Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, Chelsea Green Publishing (White River Junction, VT), 2017

Contributor to Wired.com, The Guardian, Newsweek.com, and New Statesman.

SIDELIGHTS

Kate Raworth has built an extensive career as an economist, her major contributions lying in academia and journalism. Prior to launching her career, Raworth attended Oxford University, where she earned both her graduate and undergraduate degrees. She is still aligned with Oxford as their senior visiting research associate for their Environmental Change Institute. She is also affiliated with the University of Surrey as a member of its Centre for the Understanding of Sustainable Prosperity, and the Economics’ Global Challenges programme sponsored by the Stockholm School. She has offered commentary on a number of television networks, including CBC, CNN, and ITV. She has also published articles on Wired.com and The Guardian, among several other outlets.

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist comes from a theory Raworth has been fostering for several years. In an interview featured on the Chelsea Green website, Raworth explained that her influences for the book came from her dissatisfaction with current economic ideas and practices, which she felt ignored the realities of our society. She felt especially frustrated by how stagnant economic beliefs have become, and sought to bring about some kind of change to the ideas we continue learning about today. As such, Doughnut Economics works to introduce the new concepts Raworth has devised to explain how economic notions should be adjusted for the 21st century. As the title implies, Raworth splits up her ideas into seven different points. This all culminates into a diagram, which Raworth uses to further explain her ideas. It is shaped like the doughnut referenced in the title; each idea forms a different layer. Likewise, each idea presented receives its own respective chapter. The topics covered in Doughnut Economics include how the government needs to take environmental health in account while planning different means of economic development; changing one’s viewpoint of economics and including it in the “bigger picture” of our world and how we’ve constructed it; how the economy should foster a means for everyone to benefit from it, to protect from discrimination and class imbalances; and a few others. One chapter of the book addresses how we can begin the shift from the modern economic system to a new one. Another chapter deals with remodeling economic concepts so they are the responsibility of a group rather than one person alone. She also warns that we should reframe economics with the goal of building a healthier, greener world, rather than using GDP as a measuring stick of how successful an economy is in the long run. Raworth ultimately aims her books at students of the contemporary age who, as she observed, have also grown tired of the obsolete principles they have learned throughout their education. Raworth also proposes several different ways society can band together to make her ideology a reality, breaking down each of her notions to explain how they can be enacted. A Publishers Weekly reviewer wrote: “Raworth’s energetic, layperson-friendly writing makes her concept accessible as well as intriguing.” On The Guardian website, Richard Toye remarked: “Kate Raworth’s guide to rethinking the discipline is at one level entirely sensible.” Duncan Green, writing on the People, Spaces, Deliberation blog, stated: “[G]reat ideas, and brilliant framing, still make change – and this book is a classic combination of both.” On the self-titled Mark Avery blog, Mark Avery said: “It is a clear guide to why traditional economic thinking helped to get us into this mess and how it is unlikely to help us out of it.” Simon Maxwell contributor Simon Maxwell wrote: “Kate’s framework will help keep researchers and policy-makers honest: it is a template which will hold them to account.”

BIOCRIT

PERIODICALS

Publishers Weekly, March 13, 2017, review of Doughnut Economics: 7 Ways to Think Like a 21st-Century Economist, p. 73.

ONLINE

Chelsea Green, http://www.chelseagreen.com (October 29, 2017), author profile; (October 29, 2017) Chelsea Green, “Q&A with Kate Raworth about her radical new book, DOUGHNUT ECONOMICS.”
Circulate, http://circulatenews.org/ (April 19, 2017), Ken Webster, review of Doughnut Economics.
Conscious Company Media, https://consciouscompanymedia.com/ (July 18, 2017), Lauren Mobertz, “Interview: ‘Renegade’ Economist Kate Raworth on Future-Proofing Business.”
Food (Policy) For Thought, http://foodpolicyforthought.com/ (May 22, 2014), review of Doughnut Economics.
The Guardian, https://www.theguardian.com (June 8, 2017), Richard Toye, review of Doughnut Economics.
Kate Raworth Website, https://www.kateraworth.com/ (October 29, 2017), author profile.
Mark Avery, https://markavery.info/ (June 11, 2017), Mark Avery, “Sunday book review – Doughnut Economics by Kate Raworth,” review of Doughnut Economics.
Moneylife India, http://www.moneylife.in/ (June 23, 2017), Sharika Dhar, “To Grow or To Thrive: That Is the Question,” review of Doughnut Economics.
Next System Project, https://thenextsystem.org/ (August 23, 2017), Adam Simpson, “Episode 2: Kate Raworth on ‘Doughnut Economics,’” author interview.
People, Spaces, Deliberation, https://blogs.worldbank.org/ (April 24, 2017), Duncan Green, “Review of Doughnut Economics – a new book you will need to know about,” review of Doughnut Economics.
Simon Maxwell, http://www.simonmaxwell.eu/ (April 24, 2017), Simon Maxwell, review of Doughnut Economics.
University of Cambridge, https://www.cisl.cam.ac.uk (October 29, 2017), author profile.

Trading Away Our Rights: Women Working in Global Supply Chains Oxfam International (Oxford, England), 2004
Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist Chelsea Green Publishing (White River Junction, VT), 2017

1. Doughnut economics : seven ways to think like a 21st century economist LCCN 2016048267 Type of material Book Personal name Raworth, Kate, [author] Main title Doughnut economics : seven ways to think like a 21st century economist / Kate Raworth. Published/Produced White River Junction, Vermont : Chelsea Green Publishing, [2017] Description 309 pages : illustrations ; 23 cm ISBN 9781603586740 (hardcover) CALL NUMBER HB75 .R38 2017 CABIN BRANCH Copy 1 Request in Jefferson or Adams Building Reading Rooms - STORED OFFSITE 2. Trading away our rights : women working in global supply chains LCCN 2004444636 Type of material Book Personal name Raworth, Kate. Main title Trading away our rights : women working in global supply chains / [written by Kate Raworth ; edited by Anna Coryndon]. Published/Created Oxford : Oxfam International, 2004. Description 101 p. : col. ill. ; 26 cm. ISBN 0855985232 Links Table of contents http://www.loc.gov/catdir/toc/fy051/2004444636.html Publisher description http://www.loc.gov/catdir/enhancements/fy1115/2004444636-d.html CALL NUMBER HD6223 .R39 2004 CABIN BRANCH Copy 1 Request in Jefferson or Adams Building Reading Rooms - STORED OFFSITE

Kate Raworth - https://www.kateraworth.com/about/
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About
Kate Raworth is a renegade economist focused on exploring the economic mindset needed to address the 21st century’s social and ecological challenges, and is the creator of the Doughnut of social and planetary boundaries.

She is a Senior Visiting Research Associate at Oxford University’s Environmental Change Institute, where she teaches on the Masters in Environmental Change and Management. She is also a Senior Associate at the Cambridge Institute for Sustainability Leadership.

Her internationally acclaimed idea of Doughnut Economics has been widely influential amongst sustainable development thinkers, progressive businesses and political activists, and she has presented it to audiences ranging from the UN General Assembly to the Occupy movement. Her book, Doughnut Economics: seven ways to think like a 21st century economist is being published in the UK and US in April 2017 and translated into Italian, German, Spanish, Portuguese, Dutch and Japanese.

Over the past 20 years, Kate’s career has taken her from working with micro-entrepreneurs in the villages of Zanzibar to co-authoring the Human Development Report for UNDP in New York, followed by a decade as Senior Researcher at Oxfam.

She holds a first class BA in Politics, Philosophy and Economics, and an MSc in Economics for Development, both from Oxford University. She is a member of the Club of Rome and serves on several advisory boards, including the Stockholm School of Economics’ Global Challenges programme, the University of Surrey’s Centre for the Understanding of Sustainable Prosperity, and Oxford University’s Environmental Change Institute.

She has written extensively for media including The Guardian, The New Statesman, Newsweek.com, and Wired.com, and has contributed to many radio programmes including for BBC Radio 4, The World Service, ABC and NPR, as well as television including CNN World News, Al-Jazeera, BBC, ITV and CBC. The Guardian has named her as “one of the top ten tweeters on economic transformation”.

She blogs at www.kateraworth.com and tweets @kateraworth.

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Kate Raworth
Kate Raworth is a renegade economist focused on exploring the economic mindset needed to address the 21st century’s social and ecological challenges. She is a senior visiting research associate and advisory board member at Oxford University’s Environmental Change Institute and teaches in its masters program for Environmental Change and Management. She is also senior associate of the Cambridge Institute for Sustainability Leadership and a member of the Club of Rome. Over the past 20 years Raworth has been a senior researcher at Oxfam, a co-author of UNDP’s annual Human Development Reports and a fellow of the Overseas Development Institute, working in the villages of Zanzibar. She is also on the advisory board of the Stockholm School of Economics’ Global Challenges Programme and Anglia Ruskin University’s Global Resource Observatory. Kate lives in Oxford, England.
Chelsea Green - https://www.chelseagreen.com/blogs/qa-kate-raworth-radical-new-book-doughnut-economics/
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Chelsea Green Publishing | Blog > Business & Economy > Q&A with Kate Raworth about her radical new book, DOUGHNUT ECONOMICS
Chelsea Green Blog
Q&A with Kate Raworth about her radical new book, DOUGHNUT ECONOMICS

Q: First things first: Why did you want to write this book?

A: I studied economics at university 25 years ago because I wanted to make a difference in the world and believed that economics – the mother tongue of public policy – would best equip me to do that. Instead, its theories left me disillusioned and frustrated because they brushed over or sidelined all the issues that I thought mattered, from social justice to ecological integrity. A whole quarter century on, the theories taught have barely changed, and if anything, they have narrowed. Today’s students are going to be the policymakers of 2050 but they are still being handed down ideas from the textbooks of 1950, based on the theories of 1850. Given the challenges ahead, that’s a disaster, and it is jeopardizing all of our futures. So I decided it was time to take 20th century economics by the horns, flip in on its back, and replace it with an economics that is fit for our times – and that’s exactly what my book aims to do.

Q: Doughnut Economics turns the way we consider economics on its head. How does the Doughnut Economics model depart from the models proposed by economists Adam Smith and Paul Samuelson, and why is it a vital time for a paradigm shift?

A: Smith and Samuelson were both brilliant thinkers, but their ideas got narrowed down and twisted into theories that I think would appall them if they could see the results. What’s more, if alive today, I think they’d be the first to tell us to start looking forward not back, and to come up with ideas fit for our own times.

Smith became famous for his insight into the role of self-interest for making markets work, but he was equally aware of the importance of our interest in others for making society work. He would hate the way his theory has been pared down to create the narrow character of ‘rational economic man’ at the heart of 20th century economics. I’ve no doubt he’d thoroughly agree with my call for a new portrait of humanity, based on today’s insights from cognitive science, sociology and political science, one which recognizes that we are social, interdependent, fallible, adaptable, and embedded within the living world.

Paul Samuelson’s greatest influence on our thinking was to shape what we think ‘the economy’ is, and he did it in the 1940s with a picture, known as the Circular Flow diagram. Since he was teaching engineering students at the time, he made the economy look like a radiator system, with goods and money flowing round and round like water through pipes. The diagram had its uses but it certainly had its blindspots too. His diagram made no mention of the living world on which all human activity depends. No mention of the household where ‘labour’ is made ready for work everyday thanks to the cooking, cleaning, sweeping, and washing done as unpaid work (still mostly done by women). And no mention of the commons, those spaces where people get together (in local neighbourhoods or on the global internet) and self-organise to create things they value with no money changing hands (think of community gardens, or Wikipedia – both greatly valued, both outside of the market: that’s the commons!). These blindspots have come back to bite us, in the form of climate change, the stress of work-life balance, and over-reach of the market into public life.

Economics bases on a narrow character of man and an economy disconnected from society and the planet may have seemed to work well enough in the 20th century. But there will soon be 10 billion of us living together on this one fragile planet, and if we are to thrive together, we need new economic theories that will give us half a chance of doing so. Smith and Samuelson would be the first to agree!

Q: You describe how, over the centuries, the focus of economics has moved from the household to the city-state then to the nation-state. Why do you say it’s time for economics to focus on the planetary household and how does that shape your idea of twenty-first century economics.

A: Eco-nomics, from the Ancient Greek, literally means ‘household management’ and it couldn’t be more relevant today: we urgently need a new generation of economists who are ready to manage our planetary home in the interests of all of its inhabitants. For the last 250 years, partly thanks to Adam Smith’s book The Wealth of Nations, we’ve been stuck considering ourselves as national economies, as if only ever in a race against each other. It’s time to recognize that our collective wellbeing depends upon safeguarding the health of this incredible living planet, and so to have the best chance of thriving this century, we need to think far more innovatively about managing the planetary household that we share.

Q: One of the seven principles of Doughnut Economics is the radical idea that we should stop focusing on GDP growth as a measure of progress. Instead, you argue that the twenty-first century economists ought to focus on creating an economy that’s distributive and regenerative by design. But doesn’t GDP growth signify a healthy economic environment and well-being for global citizens?

A: Gross Domestic Product is simply the total monetary value of all the goods and services sold in a nation’s economy in a year. It was first calculated in the 1930s by the American economist Simon Kuznets, who, ironically, was among the first to warn that it was in no way a measure of a nation’s welfare. But his warning was ignored and GDP growth soon became a goal in itself. In the Depression era, followed by post-WWII recovery, it may have correlated fairly well with improvements in people’s wellbeing, but it is widely recognised to be a poor measure today.

If we are to step up to the 21st century challenge of meeting the needs of all within the means of the planet, we need an economy that distributive and regenerative by design. Distributive in that it shares value created far more widely, and regenerative in that it uses materials again and again so that it is working with – not against – Earth’s cyclical processes of life. Getting there is part of a long-term transformation and it’s hard to know how GDP will need to respond in the process: it could go down then up, or up then down, or it could hover steady. In effect, GDP must come to be seen as an adaptive variable, ever-adjusting in response to redesigning the economy. It’s a radically different mindset from the one that has held sway for the past 80 years, of course, and that’s why it deserves far more attention from innovative economic thinkers.

Q: You ask the radical question: “What if our idea of economics didn’t start with money, but with human well-being?” Reflect on how this question is a cornerstone of the way you approach economics.

A: Over the past 30 years, the understanding of what ‘human wellbeing’ is has evolved a good deal. It’s increasingly recognised that it depends upon two things: ensuring that everyone has the resources to meet their needs and rights, so they can lead lives of dignity and opportunity; and on safeguarding the planet’s life-support systems that sustain us all. Five years ago I turned that new understanding into a picture, and it came out looking like a doughnut. In the hole in the centre, people are falling short on life’s essentials like food, decent housing, healthcare and political voice, so we want to get everyone out of that space. At the same time, beyond the doughnut’s outer crust is a place of overshoot on Earth’s critical systems, from climate change to biodiversity loss. To meet the needs of all within the means of the planet, we have to get into the Doughnut itself, which is humanity’s safe and just space. And once we take that as the goal, a fascinating question emerges: what economic mindset will give us the best chance of getting there? That’s essentially what my book is about, and writing it has given me the economic adventure of a lifetime.

Q: Doughnut Economics is an optimistic vision of the future—despite worsening climate change, increasing xenophobia, global financial instability, conflict, and widening inequalities around the world. Why are you optimist about the world’s economic future, and the future of our planet?

A: I’m optimistic because we haven’t yet given ourselves a decent chance of figuring these challenges out and last century’s economics is a critical part of what’s holding us back. We need a new story of our economic future, something that we can aspire to create. When I present the Doughnut to diverse audiences – from university students to Fortune 500 companies – I find that people get really fired up: they’re inspired by the positive vision and they want to be part of making it happen.

Q: The book offers a convincing radical new lens to view economics, but does not provide specific policy standards or prescriptions. How do we put Doughnut Economics into practice? What is the first step toward the planetary and social economic balance?

A: The book very intentionally does not set out specific policy recommendations. That’s because I want it to be as relevant in Beijing and Bangalore as in Boston and Birmingham, and as relevant in 10 years time as it is today.

So the first step is simply to realize that the ideas in Doughnut Economics are already being put into practice: there are businesses, communities, policymakers, urban planners, and financiers worldwide who are redesigning what they do so that their work helps to bring humanity into the Doughnut’s safe and just space. It’s the beginnings of a new economy and we can all help to make it grow. Each of us can ask ourselves: how does the way that I shop, eat, and travel, or bank, volunteer, and vote affect humanity’s ability to meet the needs of all within the means of the planet? How could my business be part of making that happen – or how could my community?

The economy is a complex, evolving system, and that’s an empowering thought: it means that every one of us can play a part in shaping its evolution. Who knows, we could even turn out to be butterflies who set in motion the winds of change.

See more Doughnut Economics videos here: www.kateraworth.com/animations and order your copy of Doughnut Economics today.

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RAWORTH, KATE

Kate Raworth is an opinion leader and the creator of the Doughnut of social and planetary boundaries which, since being first published by Oxfam in 2012, has gained widespread international recognition, helping to shape the United Nations’ Sustainable Development Goals. She is currently writing Doughnut Economics: seven ways to think like a 21st century economist, to be published by Random House in spring 2017.

Kate is a senior visiting research associate and lecturer at Oxford University’s Environmental Change Institute, and a senior associate of the Cambridge Institute for Sustainability Leadership. She was previously senior researcher at Oxfam, co-author of the UN Human Development Report, and a fellow of the Overseas Development Institute in Zanzibar. She holds a first class BA in Politics, Philosophy and Economics and a MSc in Economics for Development, both from Oxford University.

Kate blogs about Doughnut Economics and tweets @KateRaworth.

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Kate Raworth, Senior Associate
Kate Raworth is an economist whose research focuses on the unique social and ecological challenges of the twenty-first century. She teaches at Oxford University’s Environmental Change Institute, where she is a Senior Visiting Research Associate, and she is a Senior Associate of the Cambridge Institute for Sustainability Leadership.

Biography:

Over the last two decades Kate has worked as Senior Researcher at Oxfam, as a co-author of the UN’s Human Development Report at the United Nations Development Programme, and as a Fellow of the Overseas Development Institute in the villages of Zanzibar.

She has been named by The Guardian as one of the top ten tweeters on economic transformation.

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Kate Raworth
INTERVIEW: ‘RENEGADE’ ECONOMIST KATE RAWORTH ON FUTURE-PROOFING BUSINESS
IN AN EXCLUSIVE INTERVIEW, THE AUTHOR OF "DOUGHNUT ECONOMICS" DESCRIBES HOW BUSINESSES CAN GROW WHILE CONTRIBUTING TO A FUTURE OF PROSPERITY FOR ALL.
LAUREN MOBERTZJULY 18, 2017
How can a 21st-century business contribute to a future of prosperity for all? In her new book, “Doughnut Economics,” self-described “renegade” economist Kate Raworth denounces economics as we know it and calls for a holistic view of the market as it is embedded within earth and society.

In this accessible book, Raworth shares wisdom gathered over 20 years of entrepreneurship and human development work to urge today’s businesses and financiers to stop obsessing over growth and consider how to give back to and sustain our communities and the environment. We spoke with Raworth to learn more about her perspective.

When I talk to conscious business advocates, the topic of “leveling the playing field” often comes up: the idea being that conscious businesses are at a price disadvantage because they refuse to take shortcuts that negatively impact the environment and society. I see many parallels between this idea and the “embedded economy” you discuss in “Doughnut Economics.” Could you elaborate on what you mean by the embedded economy, and talk about how we can encourage more businesses to consider themselves as part of this bigger picture?

Kate Raworth: Twentieth-century economic thinking encouraged us to see the market as a self-contained system. This meant the economy simply drew in the labor and the resources it needed and optimized their use to make a profit. It’s a very narrow conception of what the economy is. I have redrawn this system, and I call it the “embedded economy.”

This recognizes the four means of provisioning: the market, the state, the household, and the commons. If you think about an enterprise, which is traditionally situated within the market, you can see it actually depends upon all of these four means. It depends upon the state to provide the public infrastructure on which its access to others is based, as well as the legal and trust infrastructure that makes it work smoothly. It depends upon the household to get workers ready every day and prepare the next generation of employees. And it depends upon the commons, which contributes almost invisibly so many valuable goods and services to the economy. So already we can see that enterprises are embedded within a much richer context of economic provisioning.

The embedded economy, which ties the financial flows to the society and environment on which it depends. Concept by Kate Raworth. Design by Marcia Mihotich .

Conscious businesses already recognize that they are embedded within this much wider system of provisioning. If you look to the natural world, plants, too, respect and contribute to those around them. Biomimicry expert Janine Benyus says giant redwoods comb huge amounts of water out of the air at night. But they don’t take that water only for themselves: Redwoods actually water all of the plants around them. They are embedded within the forest, and that they wouldn’t survive as single standing trees. There are really great opportunities for conscious companies to think of themselves like that: as a nurturing member of the economy and society in which they’re based.

Taking a narrow cost focus can actually end up boomeranging against you. We’ve seen so many examples of companies that are exposed because of the exploitation of their employees or their extraordinary degradation of the living world. This has narrow cost and brand implications for them.

I’ve also worked with many companies that already realize they need to take a broader stance toward how they relate to the world because their own supply chains are deeply dependent upon the living world for the fundamental resources they use to make their products – whether they buy clothing made from cotton grown across the world or produce beer in Africa or Asia while relying on the local water table. If they neglect that and take a narrow cost focus, they actually make their own supply chains far more vulnerable.

I’ve been impressed by some formerly mainstream companies that are beginning to realize that they need to take a more conscious approach. Companies that begin to take these values into account now and base their business models on multiple value sources will embed themselves in a far smarter way.

Sometimes it can feel like businesses are satisfied with depleting natural resources in their local communities and then simply moving on to the next area in order to keep costs down. It’s refreshing to hear your optimism in this regard.

KR: I think we’re at a moment, particularly with Donald Trump as the American president, where we’re seeing many attempts to undercut environmental protections. If any good can come out of this extraordinary political moment, it’s that ordinary people are shocked. They realize that what gets presented as “regulation” and “red tape” are actually protections for our health and protections for the living world on which we depend. We don’t want to see those protections ripped away simply to allow businesses to be more extractive.

In a way, when extreme political measures are proposed, it helps us see more clearly the extremity of what’s at stake. Yes, it is easy to lose optimism in moments when things seem to be going in the wrong direction. I believe that makes it all the more important to speak from a powerfully clear voice of an optimistic vision of the world we want to create. Otherwise, we end up sliding into a world we don’t want to be in.

One of the most interesting takeaways I found in “Doughnut Economics” was your call for “generous business.” You argue that businesses should not only aim for net-zero impact, but also strive for regenerative design.

Today when we talk about mitigating the effects of global warming and environmental degradation, we mostly talk about neutralizing our environmental impact, but not so much about creating a net positive impact through regenerative design. How do you envision a world driven by regenerative design, and how do you think the dialogue could be moved in this direction?

KR: As the designers William McDonough and Michael Braungart say, being less bad is not being good. It is being bad, just less so. And even if you can achieve “mission zero,” why would you stop at the point of doing no harm when you’re on the threshold of doing something far more transformative?

If you can do no harm, is it not possible that you could actually do good? Is it not possible that you could actually be generous?

You could have a building that not only generates its own electricity, but creates more electricity than it uses. You could create a factory that puts cleaner water back out into the river. You could have a building that sucks out dirty city air, cleans it and puts it back out into the city cleaner than it came in. This is when humanity starts to behave like a giant redwood and actually creates benefits that it then shares amongst the community.

The corporate to-do list. Image by Kate Raworth.
The corporate to-do list. Image by Kate Raworth.

As Janine Benyus put it, “The 20th-century business question is: ‘How much value can we extract from this?’ We need to transform that mindset and ask ourselves: ‘How many benefits can we layer into this so we can give some away?’”

While many designers are already thinking in a 21st-century way of being generous, they so often run into 20th-century economics that still ask, “How much value can I extract from this?” There’s a clash of culture. We need to transform this mindset into one of 21st-century finance that’s in service of the living world, which is:

“How can we finance this regenerative design so that it gives a fair return for our investors and gives away generous value, whether it’s social, natural or cultural?”

That old 20th-century mindset is blocking our potential for far more regenerative cities, companies, product, and communities. I think there will be a showdown at some point between regenerative design and extractive finance, and regenerative design has to win.

Doughnut economics; diagram by Kate Raworth.

I’ve created the doughnut diagram that shows a compass for humanity to meet the needs of all within the means of the planet, and I’ve presented it to many companies, including the Fortune 500s. It poses an important question: What kind of business are you going to be? Are you going to be the kind of business whose core practices undermine people’s rights and degrade the living planet, or are you going to transform into a business whose core practices actually help bring humanity into a space where everyone can meet their needs within the means of the planet? Some of them find it very affirming, because it depicts an optimistic picture of the world in which their business can contribute to a thriving future.

Can you offer an example in which this extractive mindset has improved or changed?

KR: Well, there are certainly new financial institutions that have come through with these values, for example ethical banks that actually borrow people’s money and invest it in regenerative projects. They give you a fair return, but also inform you about the social, environmental, and cultural value that’s being created in this project. Anyone who’s thinking long-term about the world we are creating for our children and grandchildren should be thinking about how their pension or their savings is being invested not only to generate a fair return for themselves, but also to be generous to the future.

We also have the rise of B Corporations, which embed living purpose at the heart of their business mission. They do not aim only to provide maximum financial return to shareholders, but also to provide a fair return to investors along with social, environmental and community value.

Toward the end of “Doughnut Economics,” you talk about the importance of being “agnostic about growth.” Why is growth for growth’s sake unsustainable? What can we do, as citizens and as businesses owners, to align our efforts with sustainability?

KR: Western economies in particular have evolved to be socially, politically and financially addicted to growth. Everything in nature grows, but nothing grows forever. It comes to a maturity, and then it can thrive for a long time. Our feet grow until we are 18, and they can thrive until we are 80, 90, or 100.

But something that attempts to grow forever can destroy itself or the system on which it depends.

Cancer is the obvious example we know from our bodies, where something is attempting to grow forever and through that process destroys the system it relies on, and ultimately destroys itself. So it’s strange that we have this lust for endless economic growth without wondering whether it could ultimately be disruptive of society and the living world. We now need ingenious financial innovation to find ways we can get a fair return from a product that isn’t continually growing but that has become mature and is thriving.

It looks like we’ve come full circle.

KR: Yeah, that does bring us full circle. The 20th-century industry mindset has been a very linear one where we take Earth’s materials, turn them into stuff we want, use them for a while, and then throw them away. What we need to do is become part of the cyclical processes of life.

Whether it’s the cycle of carbon, the cycle of water or the cycle of nutrients, we need to imagine ourselves in those cyclical processes so that we create, for example, circular economy enterprises that don’t use Earth’s materials up: They use them again and again.

Regenerative design is finding ways to be parts of the cycles of life and be part of the living world. What we now need is a business design and a financial design that catch up to the possibility that is waiting for us.

Anything else you’d like to add?

KR: From all the people I meet, those who work for companies driven by living purpose are the ones who smile about what they do. There can be no greater security and resilience for a company than having employees who love their jobs. I think beyond the immediate cost benefits that one sees in a company’s accounts, it’s the spirit of the workforce and those to whom the company contributes that makes a company resilient. It’s an incredibly important value to embed. The young people I teach are all craving to work for this kind of company. I think that’s a very strong attribute of a conscious company, and I hope that the concept of the doughnut helps to empower companies in pursuing it.

This interview was edited for clarity and length.

“Doughnut Economics” was released on April 6, 2017. Check Kate’s website for other speaking engagements.

Lauren Mobertz
Lauren is a researcher, writer, and coffee drinker examining the link between organizational policies and outcomes like employee engagement. You can follow her current project at workcanbehappy.com/hiring and find her past work at stories.workcanbehappy.com.

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A delicious donut with pink frosting is used to depict the basics of Kate Raworth's 'Doughnut Economics' model.
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Episode 2: Kate Raworth on ‘Doughnut Economics’
Adam Simpson
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August 23rd, 2017

ENVIRONMENT & ENERGYHEALTH & WELLBEINGPUBLIC PLANNINGCOMMUNITY & PLACEGENDER & SEXUALITY

This week on The Next System Podcast. Adam talks with Kate Raworth about her Doughnut Economics model. The pair discuss economic justice, unpaid labor, the commons, and much more. You can learn more about Doughnut Economics at Kate’s website or purchase the book wherever books are sold. You can also follow Kate on twitter.

The Next System Podcast is available on iTunes, Soundcloud, Google Play, and Stitcher Radio. You can also subscribe independently to our RSS feed here.

Adam Simpson: I’m joined today by Kate Raworth, author of Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist. Kate is a senior visiting research associate at Oxford University’s Environmental Change Institute and a senior associate at the Cambridge Institute for Sustainability Leadership. Her previous work at Oxfam and the United Nations, centered on confronting human deprivation, a challenge quite literally at the center of her new doughnut economics model.

Kate, thanks for joining me today.

Kate Raworth: Oh, my pleasure.

Simpson: Obviously, we’re talking about your new book, Doughnut Economics but before we get started I did want to get a sense about your own trajectory into writing this book and your experiences and the concepts that led you to becoming an advocate for this doughnut model of economics.

Raworth: I studied economics at university 25 years ago because I wanted to change the world. I was really frustrated and disappointed by what I was taught because it pushed or marginalized most of the things that I cared the most about, like environment integrity and social justice. At the end of three, four years of study, I was too embarrassed to call myself an economist because who would want to be that? So I walked away from academic economics and immersed myself in what I considered to be real world challenges. I spent three years working in the villages of Zanzibar with bare foot entrepreneurs. I spent four years at the UN helping to write the human development reports, so working very much on the global understanding of what is ‘human development.’

You can’t just walk away from economics because it frames the world we live in. It’s the mother tongue of public policy.
Then I spent a decade working with Oxfam on the front line of campaigning, from women workers rights in global supply chains to climate change and adaptation and who should pay. And then I became a mother of twins, and immersed myself in the household economy and really lived the reality of that. Through all of this, I realized that you can’t just walk away from economics because it frames the world we live in. It’s the mother tongue of public policy. And if I wanted to change any of these issues that I fundamentally cared about, I believed that actually, economics needed to change. So I decided to walk back towards economics but to try and flip it on its head and put front and first, the values that I think are the most important in the world, of what we’re trying to achieve as human well-being. Then ask ourselves, what kind of economics would even give us half a chance of achieving that? And that’s the goal at the heart of the book.

Simpson: Great. Well, one of my favorite things about your book is the images you use to simplify these rather complex ideas. However, our podcast listeners don’t have the benefit of some of your great artwork although we’ll have links in the description to your website and other resources. But how would you, in your own words, describe your model, the doughnut economics model?

Raworth: It sounds ridiculous, I know but I sat down and tried to draw a picture of human well-being in the 21st-century. What are the necessary fundamentals of well-being? And it came out looking like a doughnut, the kind that folks eat here in America with the hole in the middle. So in that hole in the middle, is a space of deprivation. It’s a place where people have fallen short on life’s essentials be it food, water, healthcare, education, political voice, income, access to work, electricity, housing, you mean it, these are the essentials of well-being, as agreed in the sustainable development goals, that the world’s governments have agreed in 2015. So every person in the world has a claim on meeting those essential needs so that we all led leaves of dignity, of opportunity and community. So we want to get everybody out of that hole in the middle of the doughnut into the doughnut itself.

But, at the same time, we can’t over shoot its outer crust because beyond there we are putting so much pressure on this living world that we depend upon, that we start to kick its fundamental systems out of balance, causing climate change, massive biodiversity loss, air and chemical pollution, too much land conversion, a hole in the ozone layer. Earth system scientists have put together what they call nine planetary boundaries, which describe what they believe are the fundamental, critical earth system processes that kept earth and its extraordinary benevolent and stable state for the last 11,000 years that we’ve known as the Holocene, now we’re at the tip of actually driving ourselves out of that. So we need to come back within those planetary boundaries, back within inside the doughnut’s outer crust. So we need to meet the needs of all within the means of the plant. Bring everybody over the social foundation but to do so, within the planetary boundaries. To me, that’s the 21st-century definition of human progress and it’s about creating a thriving balance between those two.

Simpson: Right. I think this gets to growth, which is kind of one of the central topics that you investigate in your book, but it also leads to my next question, which is, the subtitle being Seven Ways to Think Like a 21st-Century Economist. What’s so wrong with the 20th-century economist frame of mind?

Raworth: Well, the thing about the 20th-century economist frame of mind is actually, I’d say, coined in the 1950s text books and those text books are actually based on the theories of 1850, so we’re reaching a long way back for the fundamental drawings and concepts of economics. Back to a time when economists of those days, I mean, let’s go back to Adam Smith or John Stuart Mill. They would be laughing at us if they could see us still using their ideas in today’s economy. I think they would say, “Do you not have any ideas of our own? Can you not look at your contemporary world as we looked at ours, look at your contemporary world. Ask yourselves: ‘What are the values that matter, what are the conditions, the pressure that matter today? What kind of economic mindset would be fit for your world?’ Stop drawing back on ours.”

So what’s wrong with it is that it doesn’t reflect the world that we know. Let me give you one example: Paul Samuelson drew a diagram in the 1940s of the whole economy. It’s in fact, today, the biggest picture of the economy that a macro economist can show you and it shows how money flows around the economy, it’s called the Circular Flow Diagram. It shows money flowing between households and business, some of it is siphoned off through banks coming back in as investments, some going through governments, some going through trade. But it only reflects goods and services that have money attached to them.

Absolutely, no mention of the living world from which all materials and energy flow and all waste and pollution comes out. No mention of the unpaid care worker, parents raising children, raising that labor that comes to work fresh and ready at the factory door every day. No mention of the commons, this space where people organize without the market or the state to produce things they care about. These actually are hugely important today. The living world is being run down by the economy because we’ve so blindly ignored it. Unpaid caring work is squeezed because it’s missing from the picture, dismissed as women’s work. And the commons, well they were seen as tragic and so they don’t even get featured, and yet the digital commons today, are one of the most dynamic places of the whole economy. So ignore that, you’re ignoring one of the greatest space of innovation. These silences in the diagram, come back to bite us.

Simpson: I understand that a lot of these things are recognized in a kind of, really dismissive way as “externalities,” which makes sense if, given the Samuelson model, they’re not factored in at all. It reminds me that … I’ve been reading about this productivity question, I forget the author’s name now, but he’s discussing why don’t we have this spike in productivity that we projected. One of the answers about a lot of these things are to do with the commons that aren’t factored into GDP or productivity, like Google. I know that I’m more productive because of Google but it’s never factored on any kind of spreadsheet anywhere.

Raworth: Right, because a lot of the value that it’s generating for you and through you, isn’t monetized. But it’s value that’s created, enjoyed, goods and services enjoyed within the community even in the workplace, but it’s not monetized, which shows that the monetary slice of the economy is probably capturing a smaller and smaller fraction of the total value that we generate. It shows that the thinness of using GDP if you really want a measure of the value of goods and services enjoyed. But even on externalities, that framing is very powerful because it defines already what’s apparently internal. What’s apparently internal in the market is things that have a price as if the economy, is the market.

Call something an externality, well, you’ve already told me how important you think it isn’t.
Call something an externality, well, you’ve already told me how important you think it isn’t. It’s already literally at the margins of your concern. Economists would say, “Oh, how can you say we don’t care about the environment? It’s environmental externalities, there’s a whole field of study around that.” I would say, “Yes, but by the time you’ve called it externality, you have already with your words, pushed it to the side.”

Simpson: It goes, I think, to your point about a market needing to be “embedded wisely,” as you put it, juxtaposed with where the market situates currently in our economy. How would you describe what you call a wisely-embedded market?

Raworth: So often you’ll hear people talk about the free market. The importance of the free market, which should send up a little red flag. Where is this free market? I’ve never been somewhere with a free market, I’ve not seen that place. Because all markets are embedded in regulation, in culture, in social norms of how we do and don’t exchange goods and services for money. What can and can’t be exchanged. You can’t buy and sell passports legally, you can’t buy and sell children. Every market is embedded, there’s no such thing as it being utterly free.

I think the work of Karl Polanyi is very useful here. He talks about markets being always and everywhere embedded. We just become so used to it, that we don’t see it anymore. As he would point out, there’s no such thing as deregulating the market, we can just re-regulate it. There’s always going to be regulation shaping what can and can’t be done, you’re just shifting the regulatory space. You ask how are those shifts benefiting, or how are the costs and benefits of that shifting re-regulation falling on other people? So financial deregulation actually just shifts the costs and benefits of financial crisis onto a different group of people.

I find it a very rich way of thinking. It dismisses this idea of freeing the market and then having it encumbered by the red tape of regulation. Flip that on its head, don’t think of red tape of regulation. Think actually, these may actually be protections of workers’ rights, protections of the environment, protections of things that are outside of the monetary price but are the deeply important part of the economy and of social life that we value.

Simpson: I also wanted to ask about the role of the commons. This came up at multiple different times in Doughnut Economics and I’m wondering what you mean explicitly by the commons and what you think its role ought to be, within the doughnut economy?

Raworth: So most economic students will have come across the commons and it’s always paired with another word, which is tragedy, right? The tragedy of the commons is the way we meet the commons. It’s like a character coming on stage and you’re told, this is the tragic character in the play. Because Garrett Hardin wrote a paper in 1968, called The Tragedy of the Commons, in which he said, well, imagine if there was a pasture land that was shared by several people with cows, they would over graze it and then it would be run down, so a commons just can’t be sustained. You need to either have it managed by the state or better still, privatized. He was just imaging this, and the way he described what he saw as a commons, most people would say, actually, that’s open access where anyone can just go take a resource, it may well get run down.

It was the work of Elinor Ostrom, a political scientist, she must have seen his work and said, “Well, this is interesting. I can go around the world, go around looking at the way watersheds are managed in California or water is managed by rice farmers in Nepal and see that actually, they’re managing a common resource but they’re managing it successfully. Often better than the market and better than the state.” So instead of saying, I hypothesized that this will be a tragedy, she started going around looking at real examples and saying, “Interesting, sometimes it’s a triumph,” and then documenting what is it that made this work. And she’s come up with really powerful lists, so powerful she won a Nobel Prize for it. It’s a powerful list about the member of the commons being clear, having clear rules, punishments if you violate them. Meetings, so that we can negotiate them. All sorts of social organization that makes it possible, that shows the commons can be a triumph. I think that her work gave it status again when her work was highly acknowledged, getting this Nobel Economics Prize.

But also, the rise of the digital commons. The rise of Linux software, which is now the world’s best operating system made by people sitting in their bedrooms late at night, all contributing because they get the satisfaction of contributing to something bigger than yourself, and the recognition of what you’ve contributed. Wikipedia, the same or even local commons like a community garden in a neighborhood. People like contributing to the commons and I think the digital commons is giving it a new kudos because it’s actually incredibly dynamic and powerful. So we’re seeing a resurgence of the commons and it’s incredibly important we learn to recognize them because they’re just been dismissed out of our minds for decades.

Simpson: Right. It does strike me that a basic understanding of anthropology would lead you to find the opposite conclusion of… I’m sorry the gentleman’s name?

Raworth: Garrett Hardin.

Simpson: Garrett Hardin. But also you mentioned the digital commons. It seems to me it goes to the question of meaning and work in our lives. Because a lot of people, sad to say, don’t have perhaps the benefit of what you and I have of loving the things we do for a living. And so, having an outlet of the commons allows them to do work, largely uncompensated as you point out in your work, that gives them a sense of meaning, I think.

Raworth: I think that’s a really good point. Why is it that in any country around the world there are millions of people volunteering at any one moment? Volunteering in a local library, volunteering to help teach kids to read. Volunteering in all sorts of different ways. Why? No monetary reward. Rational economic man can’t explain this one. It’s because of that sense of satisfaction of using your skills. Where the needs of the world and your skill meets, therein lies a satisfaction of contributing to something bigger. And yes, people want to be acknowledged, want to be recognized for their contribution but you can do that in many, many other ways than paying people, which shows that work is not just a means of growing income, it’s a place where many people find purpose.

Of course, it can be a privilege to have those two things coincide, but I think it’s a very nice point you make that some people’s paid work may not be the place where they get their purpose and meaning in life. But by being able to participate in the labor market in the paid work at the same time as having an active role in the commons, there’s purpose. That’s why you see so many people running home from work to go to a community meeting, to participate in something else because therein lies their purpose.

Simpson: Right, right. You brought up rational economic man, there’s an entire chapter dedicated to this concept in your book. There’s also, I believe it’s chapter two, a chapter that casts things like the commons as characters in a play.

It seems to be that narrative plays a large role in your work, and that these narratives about human nature, the economy or otherwise, tend to be self-filling, which is kind of frightening. I remember there’s one anecdote you mention about some sort of formula for analyzing a certain stock market that didn’t work when they implemented it and over time it began to work because people were following this formula. I’m wondering about these kinds of self-filling prophecies and what you think they mean for how we understand economics and economic theory?

Raworth: Oh, that’s a wonder and big question. Let’s start with the power of narrative. I started watching videos on YouTube of Milton Friedman in the 1960s and 70s engaging with students. The kind of radical students who would come up to the microphone and question him after his lecture and he just, with a great smile on his face, he managed to bat them back because he had the most powerful narrative, he had it down. He’d say funny things. He’d say things like, “If you put the state in charge of the desert, there’d be a shortage of sand within a few years.” You know, it’s funny. Doesn’t mean it’s true, but he used narrative, he used humor, he used clever catch phrases to control the space of debate. And I would see these students wouldn’t know how to respond because he had such great comeback lines. That’s the power of narrative and he was the master storyteller of neoliberalism.

So harness those tools, be playful, hone your story down just as he, I think, framed the neoliberal narrative around some characters. Key characters being the market, the state was the villain. So let’s turn that narrative around and replace an old narrative with a new one because we respond to stories, they are more compelling than text books, for sure, and they are what drive the way we talk in politics and in public debates. If we want to write a new story, we need to create that new narrative.

As it comes to who we are, that’s a really powerful story because one of the most fascinating things I learned in the process of writing this book is research that shows that who we tell ourselves we are, shapes who we become. The character of rational economic man who stands at the heart of mainstream economics, he’s never actually drawn in the textbooks, but if a little picture of him was drawn, he would be man, he would be standing alone with money in his hand, ego in his heart, a calculator in his head and nature at his feet. The problem with this character is not just how absurdly narrow he is, it’s what looking at him does to us. Because research in the United States and Israel has shown that the more that economic students learn about the rational economic man, the more they become like him. The more they value self-interest, and the less they value traits like compassion and altruism, so I find that fascinating.

The more that economic students learn about the rational economic man, the more they become like him.
The way we describe the climate system doesn’t change the climate change doesn’t change how it works. But how we describe ourselves to ourselves, change who we become. Nobody wants to be the fool, the idiot, so if we tell ourselves that actually, we’re self-interested and competitive it makes us more likely to be self-interested and competitive. There’s a huge responsibility there in economics as in any other discipline, to describe ourselves wisely because we are actually shaping how we will behave in that process.

Simpson: I think this brings us to kind of the next point, which is the role of GDP and growth, which we’ve talked about before. But, I recall that you mentioned that 21st-century economists should be agnostic about growth, why do you think that is?

Raworth: So I think 20th-century economics became absolutely obsessed with growth. In fact, what we’ve done is construct economies and institutions, financial, social and political institutions in the economy that lead us to be addicted to growth. We expect, demand and depend upon unending growth. We’ve all seen what happens in markets and economies when it looks like it isn’t coming, a panic because we don’t know how to have a thriving economy when growth isn’t coming. So I think by having growth as the driving purpose, we’ve sacrificed all sorts of things in the name of pursuing continual growth. Digging up fossil fuels and sucking it out of tar sands being a very good point, whether in the U.S. or in Canada at the moment, right? In the name of continuing growth, of course, we have to use that form of dirty energy. We need to flip that around, and actually, start not with the thing that we’ve actually become addicted too, but what are the driving design factors we want.

I believe we need economies driven by two design features. One, economies should be distributive by design, which means that value created is shared far more equitably with all those how helped to create it. Think of an employee owned company, which that value is shared amongst all the employees who helped do the work instead of siphoned off to distant and fickle shareholders. So we need economies that are distributive by design but also regenerative by design so that instead of using up earth’s materials and resources, we can use them again and again and again and work with the cycles of life, rather than cut against them.

So if we create economies that are distributive and regenerative by design, what does that need will happen to GDP? Well, I just don’t know because I think that GDP becomes a response variable, right? If we’re getting income into the hands of people who need it, so creating an economy that’s more distributive by design, that’s probably going to boost spending because people who didn’t have an income to spend on life’s essentials will spend more, so that might actually increase GDP. That’s not a reason to do it because it increases GDP. Do it because it’s distributive, that’s what we’re trying to do.

To become regenerative, the government China is spending three-hundred and sixty billion dollars by 2020 on installing renewable energy capacity and solar capacity so that will boost GDP. But once it’s in, the marginal cost of generating electricity will be near zero, so it won’t contribute to GDP. That’s a case of the government of China, moving towards a renewable energy model. GDP will initially go up but then it won’t contribute to it. It should become a response variable.

It’s a huge mind flip, I know, to create economies that enable us to thrive whether or not they grow. Complete mind shift because of course, we’re currently addicted to it. It would have been so much easier to write the book without bringing this chapter in. It would be much more palatable for the mainstream, but I thought don’t buck the big questions, take that it on. So I really enjoy thinking what will it look like to create an economy that could be agnostic about growth.

Simpson: Also, there seems to be a growing body of people who may or may not be marginal, that argue that we ought not just be agnostic about growth but think that we should have this concept of de-growth. That actually in order to get within the ecological limits that you spell out, we actually have to shrink our economies. Of course, it occurs to me that this might have implications for the inner ring of the doughnut, the social foundation that we are also are concerned with in your model. I’m wondering how the idea of de-growth strikes you?

Raworth: So, I’ve been engaged in debates with folks in the de-growth movement, many of whom are close allies because I share many of their goals. I believe if I say a regenerative and distributive economy, they would say absolutely, this is in other words, in your words, this is similar to what we’re talking about. I don’t use the word de-growth because I don’t think it helps us. I’m really inspired by the work of George Lakoff who talks about framing and he would say, never frame your argument in your opponent’s language. When we use the words de-growth, we’re just talking about the negative of what we don’t want, but we haven’t yet said what we’re for, right? I don’t just want to frame my vision around something that I’m against. And it’s still focusing, by being for de-growth, we’re still focusing on the metric of what happens to GDP. I’m saying that I don’t think that’s the point of what we should be focusing on.

I believe in being agnostic about growth because… I can imagine, I can’t prove either way whether GDP must necessarily go down or go up. I don’t want it to grind to a halt, I definitely don’t want it to grind to a halt because the economies we have today, are deeply divisive and degenerative. Deeply divisive in the vast share of increasing GDP goes to the 1% and degenerative in that we’re generating income by running down the living world. We need to transform our economies and that process of transformation could well lead to an increase in GDP, as it will with China increasing three-hundred and sixty billion dollars in solar energy capacity. Fantastic. The point is to let GDP become a response to the economy we want to create, not be driven, be fixated on whether or not it goes up or down.

Simpson: We don’t want to overshoot our ecological ceiling and we definitely don’t want to have a shortfall that we fail to meet our social needs. In your mind, is there any kind of choice involved here in terms of can we actually meet everyone’s base needs without exceeding the ecological limits? As I understand it right now, the way we consume, the way we waste, we’re living like we have several earths is often the metaphor that is explained to us. I’m wondering, is it an issue? How are we going to have 10 billion people on earth by 2050, is there a way that we can all meet these base values without exceeding the ecological limits?

Raworth: Right, big question. So right now, we are not at all living within this doughnut, obviously. Many millions of people in the world are falling into that hole in the middle because they don’t have enough food, water, healthcare, education, income, political voice, and so they’re falling short on life’s essentials. Indeed, in countries rich and poor are in that space. At the same time, we have already overshot, at least for the planetary boundaries on climate change, biodiversity loss, land conversion and excessive fertilizer use, maybe also on air and chemical pollution. So we need to come back within planetary boundaries while getting everybody out of that space of deprivation in the middle. It’s never been done before, it’s never been done. That’s why we need a really new way of looking at things and we can’t use last centuries’ economic textbooks to give us the mindset to take on this very 21st-century challenge.

Does that space exist? I don’t think anybody could prove it, but I profoundly believe that at least, so seven billion people today, likely to be ten billion. I have a strong glass half full possibility about it and I’ll tell you why. There’s extraordinary inequality in the world that means we are currently below the foundation and over the ceiling. Let me say about food, 11% of the people in the world don’t have enough food to eat every day. How much food would it take to meet their actual needs? Around 3% of the current global food supply. Could that be found? Well, around 30 to 50%, 10 times that amount of today’s global food supply is not actually eaten, it’s lost post-harvest, wasted in the supply chain or scraped off plates into the kitchen bin. So what we’re looking for to enable everybody in the world to have enough to eat, is just 10% of what’s not even being eaten.

That’s just one way of reflecting the extreme inequalities in global access to resources today. That gives me hope and confidence that in a very different setting, this could be achieved. Not to make it sound easy, right? It’s not a question of shipping the food around, of course not. But at the level of provisioning on the planet, it’s possible. This could also be true in other areas as well. Does it have to be a trade off? I don’t believe it does. I think instead of running down earth’s resources I order to meet our needs, which is what 20th-century degenerative industry has done, we need to flip into regenerative design where we work with the living cycles of the world.

I would rather be an optimist than a pessimist, because if I was a pessimist, well, I would just go home and watch telly.
Very different industry, very different ways of building buildings, moving around, transporting ourselves, producing food. We need agriculture that sequesters carbon rather than releases it. We need buildings that sequester carbon rather than produce green house gas emissions. Industry design innovation, a revolution in how we create spaces and an economy that enables it, I think, will put us on track for doing that. I can’t prove it, but I would rather be an optimist than a pessimist, because if I was a pessimist, well, I would just go home and watch telly.

Simpson: You mentioned several times the role of design and designing to distribute and to be regenerative. I’m wondering you could flesh out for me a little bit more about what such systems might look like. What those circular flows might look like?

Raworth: In terms of a regenerative design, you would have, some people call it a circular economy or a cradle-to-cradle economy. Instead of the degenerative liner system that we have today where we take earth’s materials, we make them into stuff we want, use it for a while and then throw it away. We’ve got this take, make, use, lose culture that cuts against the living cycles of life and we need to flip those arrows around so that we start to regenerate. So, on the one hand, you need to allow earth’s natural biological materials to regenerate themselves. It’s why we need to have a food waste bin in the kitchen. All the food waste, all the biological material that we’ve been using, goes into that, can be taken back and either in your own back garden or in a municipal organic recycling center, turn back into living material in the world.

But at the same time, we also need to turn all the materials that we create, be it from computers to tables, to buildings, to carpeting, all these synthetic fibers that we’ve created in the world, we need to reuse and restore those. There’s an example of a carpet company, very famous carpet company called Interface run by a man called Ray Anderson. He saw a video online about this cradle-to-cradle design and he had an epiphany. He said, “I want my carpet company to be living in this regenerative economy.” Instead of just ripping out old carpets and whoever had the building rip out the carpets, shove it in a skip and it gets land filled. Interface would say, “Well, actually, we will continue to own the carpets and when you’ve finished with them, we know where they are because they’re in your building, we’ll come and get them. We’ll take those carpet tiles away, we’ll take all the fiber off and 100% we’ll use that again. Then the glue that was stuck together, we can turn that into something for using roads and we can use the mesh again.” Using every part again. Having the factories, 100% based on solar energy. So bringing the economy completely into regenerative design.

Of course, we were talking earlier about work and purpose, this man just lived with a light in his eyes. You could see it because he was so inspired by what he was doing and creating a regenerative company. The question is how do you get the finance, how to you get the business model that allows you to unleash this? Because I think 21st-century regenerative designers, they’re driven by a question that says, “How many benefits can we layer into what we’re doing so that we can give some away?” 20th-century finance says, “How much value can we extract from this?” That is a clash of transformative agenda meeting 20th-century capitalism. We need to transform finance and business models to unleash transformative design, rather than hold it back.

Simpson: You argue that economists should stop thinking about themselves and their role as a mechanic that acts on the economy with a wrench but rather as a gardener that acts on the economy with a pair of sheers. I was hoping you might explain what you meant by that here on the podcast?

Raworth: Yeah. The language we talk about the market is embedded, this idea of the economy as a machine. We talk about the market mechanism, market forces and this is harking back to the 1870s, when William Stanley Jevons and Leon Walras wanted to make economics a science as reputable as physics. And the physics of the day was Newtonian physics, so they wanted to make it an analogy. Newton showed that gravity pulled the bull to rest and so they said, well prices pull the market into an equilibrium, so they made this very mechanical language for the market mechanism.

I think it also leaves economists in search of economic laws as if there were levers to pull on in this economic machine to pull it back into equilibrium. It’s just a very poor analogy and it leads us down the garden path, as it were, towards a garden because it’s a much smarter way to understand the economy through systems thinking. Starting not with the supply and demand curves of economics that are so constrained that they try and argue that prices will pull the economy into equilibrium, but rather start, with systems thinking. The fundamentals of that, which are balancing feedbacks and reinforcing feedback loops. Once you look at the world through the lens of feedback loops, things that spiral up, up, up, or down, down, down, and those are reinforcing feedbacks or balancing feedbacks, something that will bring it back to sort of level. Then you can start to understand so many things in the world, from your family relationships to the rise and fall of the stock market to the rise of the 1% to the crash of ecosystems. It makes more sense to look at it through a systems thinking lens.

So I think economists need to be more like gardeners, realizing that the economy and economic interactions are ever evolving, have their own life, their own organic movement, but we want to design them towards the values that we hold. So it’s a matter of giving up, like you say, pulling on the wrench as if this market mechanism, it’s actually far better thought of as a market organism.

Simpson: It seems to me that your framing naturally leads one to more long-term concerns. When you pull a wrench or a lever, you get a reaction. When you plant a seed it’s going to take some time, an investment of effort in order to get a result.

Raworth: I think that’s a really nice point. And also, it comes with far less control, right? The person pulling a wrench on a machine believes they are stopping or starting or correcting something and controlling that machine. Whereas, when you intervene in the garden it takes a long time, you haven’t got control over it. And again, I think, this brings a certain humility to economics that it’s a complex, very complex adaptive system we don’t fully understand. It’s almost sort of gardening sometimes with blindfolds on, we don’t fully understand it. And that’s why people who are into evolutionary economics say that policy should be more like an evolutionary exploration.

So you want to figure out how to improve girls school enrollment in districts of India. Rather than deciding what policy you think will work and implementing it, try different versions, try to experiment with different kinds of interventions in different places. So diversify, then seeing which one’s work, select and then those that work well, amplify. Again, always recognizing that there’s going to be contextual differences. But that idea of diversify, select, amplify, that’s exactly what plant breeders do, selecting the things that work because we don’t understand the system fully in advance, learn from it by engaging with it. And that’s what Donella Meadows and the system thinkers would say absolutely makes sense of how to dance well with a system.

Simpson: For my last question, I want to start with a quote from your concluding chapter about evolutionary economics. “If economies change by evolving, then every experiment—be it a new enterprise model, complementary currency or open source collaboration—helps to diversify, select and amplify a new economic future.” Now, I quote that because I wanted to give you a chance to talk about the ways that Doughnut Economics is being picked up around the world and how certain urban planners are trying to take your model and use it as they plan for the future.

Raworth: So sometimes you meet people who say, “Oh, I’m involved in a local cooperative and we’re developing open source software,” or “we’re setting up a complementary currency in our neighbor.” It can all sound a bit small and marginal and kind of niche activity. I often think it gets dismissed as that, hooky stuff around the edges of the economy. What I wanted to do with that quote is say, actually, this is the creation space of a new future. Just as the butterfly effect, the wings of a butterfly beating can set off the winds of change elsewhere, perhaps, these initiatives shouldn’t be regarded as odd, hooky things at the margins of the economy but rather, the place where new models are beginning. Because if a complementary currency or an employee owned business model or co-op works in once place, it inspires others who will then quickly take it and make it happen in other parts of the world.

One thing that’s excited me is seeing the response of people to using the doughnut. The doughnut is an open source idea. It’s out there in the commons, anybody can use it and one of the beauties of that is people pick it up, use it and they make their own. So I was contacted by urban developers in Sweden and Stockholm who said, “We are creating a new suburb of Stockholm and we love this doughnut because it’s precisely the blueprint we’re looking for. We want to meet the needs of all of the inhabitants of this new district for healthcare, education and transport and energy and food within the means of the planet. Respecting the local ecosystem into which we’re embedding this new neighborhood. How do we do that?” They love the challenge. They’re calling it a doughnut district in Stockholm, one of the most livable city districts in the world. They say they want to start here, but we want to make them elsewhere. Again, modeling it there, trialing it, seeing what works and then take the ideas, the core principles of that design, to other places in the world.

I was also contacted by a municipality and urban planners in Kokstad, which is the fastest growing town in KwaZulu-Natal in South Africa. They said, “We picked up this doughnut model. We loved it because we could turn it into our own. Working with the youth of the town we decided we had to add into the social foundation, fun because it should be fun transforming your economy and we’re using this doughnut diagram to revision the future of Kokstad. What town do we want to become? Don’t just grow spontaneously, sprawling without thinking about how we’re designing our town, but rather how do we make it a place that allows us to thieve? That distributes value to all of the participants and inhabitants of Kokstad. That values and thrives within the environment, the ecosystems that we’re part of.” So I love it when I see urban designers, or indeed, companies or communities or schools, pick up the doughnut and say, “We’re using this as a tool for ourselves.” That gives me hope because I think actually, a lot of the best ideas come bottom up when people take an idea, make it specific to their place, to their community, and turn it into their own.

Simpson: Great. Well with that, Kate I think we’re out of time today but I want to think you again for joining me. Once again, this was Kate Raworth talking about her new book, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist.

Thanks very much, Kate.

Raworth: Thank you very much. Lovely to be here.

Adam Simpson
Adam Simpson

Program Associate at The Democracy Collaborative more
Kate Raworth
Kate Raworth

Renegade economist. more
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Doughnut Economics: 7 Ways to Think Like
a 21st-Century Economist
Publishers Weekly.
264.11 (Mar. 13, 2017): p73.
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Full Text:
Doughnut Economics: 7 Ways to Think Like a 21st-Century Economist
Kate Raworth. Chelsea Green, $28 (320p) ISBN 978-1-60358-674-0
This sharp, insightful call for a shift in thinking from economist Raworth posits that a long-overdue
intellectual revolution has finally begun. According to her, the established model of economic thought no
longer satisfies economics students, who are calling out for change; the education they're receiving is out of
pace with current economic realities. To formulate a better model, Raworth reversed the way she'd
previously looked at economics. Rather than relying on established truisms, she laid out long-term goals for
humankind and worked to figure out how economic thinking would allow us to achieve them. The result is a
diagram consisting of a series of rings around a hollow center--the titular doughnut. Raworth places a "safe
and just space for humanity" in a ring between a social foundation and an ecological ceiling, leaving human
deprivation and planetary degradation, respectively, in the doughnut "hole" and outside the doughnut. The
plan to move forward consists of seven ideas, such as shifting the goal of economists from addressing
financial to humanitarian concerns, recognizing ecology as a significant factor in economic growth,
responsibly redistributing wealth, and so on. This is a highly optimistic look at the global economy, and
Raworth's energetic, layperson-friendly writing makes her concept accessible as well as intriguing. (May)
Source Citation (MLA 8th
Edition)
"Doughnut Economics: 7 Ways to Think Like a 21st-Century Economist." Publishers Weekly, 13 Mar. 2017,
p. 73. General OneFile, go.galegroup.com/ps/i.do?
p=ITOF&sw=w&u=schlager&v=2.1&id=GALE%7CA485971677&it=r&asid=538be3cd039949fdf683904b5023ab3a.
Accessed 21 Oct. 2017.
Gale Document Number: GALE|A485971677

"Doughnut Economics: 7 Ways to Think Like a 21st-Century Economist." Publishers Weekly, 13 Mar. 2017, p. 73. General OneFile, go.galegroup.com/ps/i.do? p=ITOF&sw=w&u=schlager&v=2.1&id=GALE%7CA485971677&it=r. Accessed 21 Oct. 2017.

The Guardian
https://www.theguardian.com/books/2017/jun/08/doughnut-economics-by-kate-raworth-review
Word count: 939
Doughnut Economics by Kate Raworth review – forget growth, think survival
Raworth seeks to change the language of economics, which is biased towards neoliberalism. Is her eco-model the answer?
Richard Toye
Thursday 8 June 2017 04.30 EDT Last modified on Wednesday 20 September 2017 05.33 EDT
Survivors of a shipwreck find themselves on a desert island with a large quantity of tinned food – but no means to access the contents. Among them is an economist, who declares he has a solution: “First, let us assume that we have a can opener ... ”

The joke is an old one, long used to mock the unrealistic nature of many economic models. But we will introduce a new character into the story, who jumps up to explain the economist’s error. “Economics has failed,” this person declares. “What we need is a new paradigm!”

The hungry mariners might be forgiven for feeling a little dissatisfied. Although conventional economics has many well-known limitations, the unorthodox or radical alternatives are not without their drawbacks either. So Kate Raworth’s guide to rethinking the discipline is at one level entirely sensible. She is right that not everything can or should be left to the market, that the “rational actor” model of economic conduct is problematic and that we cannot rely on the processes of growth to redress inequality and solve the problem of pollution. On the other hand, she seems overoptimistic about the possibility of changing the predominant neoliberal mindset, essentially through persuasion.

We may be far from rational in our individual economic behaviours, yet – she appears to say – if only the problem is framed in the right way, the population can potentially be induced to support the sustainable and fulfilling human goals from which mainstream economics has led us so cruelly astray.

How is this to be done? Enter the doughnut – a sort of miracle diagram that is apparently going to change the world. The inner ring represents the “social foundation”, the situation in which everyone on the planet has sufficient food and social security. The outer ring represents the “ecological ceiling”, beyond which excess consumption degrades the environment beyond repair. The aim is to get humanity into the area between the rings, where everyone has enough but not too much – or, as Raworth calls it, “the doughnut’s safe and just space”.

If you are familiar with the ideas of Hyman Minsky, Daniel Kahneman, Joseph Stiglitz and Ha-Joon Chang, you will not be in for too many surprises, but if not, this book serves as a compact synthesis of modern heterodoxy. Raworth’s distinct contribution is in her emphasis on environmental themes. Too many writers, even radical ones, tend to treat “the economy” and “the environment” as separate issues, even though they admit that the one has an impact on the other. Yet, as she rightly stresses, the conventional notion of “externalities”, or economic side effects, serves to imply that problems such as pollution are not ones that economists need to make central to their concerns.

As long ago as 1972, the Limits to Growth report showed that GDP may not be able to increase forever in a world of finite resources. Raworth calls on us to “become agnostic about growth”, noting that the option of halting it and the option of trying to make it continue indefinitely both seem, in their different ways, intolerable. She highlights the dilemma without proposing a clear solution, but this is no criticism.

What if we started economics not with established theories, but with humanity’s long-term goals and how to achieve them?

Raworth asks: “What if we started economics not with its long-established theories, but with humanity’s long-term goals, and then sought out the economic thinking that would enable us to achieve them?” But surely, we first need to work out if they are achievable. What if humankind can only survive in the long-term at subsistence levels of consumption that would seem unendurable to most of us? What if, as recent work suggests, greater equality is most likely to come about through massive destruction of capital induced by war and social breakdown, rather than through the peaceable processes of social democratic redistribution?

Ignoring the large parts of the Earth that continue under authoritarian rule, and the rise of kleptocracy elsewhere, Raworth dismisses the political problem of bringing about change with a wave of the doughnut. Yes, she admits, proposals for a fairer global tax regime look impossible now, “but so many once-unfeasible ideas – abolishing slavery, gaining the vote for women, ending apartheid, securing gay rights – turn out to be inevitable”. This seems close to assuming that a can opener will inevitably wash up on the beach.

To the extent that Raworth has a political programme it is about changing the language in which we discuss economics. Of course she is right to protest about the narrow ways in which the discipline is framed; of course it is true that the media predominantly casts the issues in ways that play to a neoliberal agenda; and of course rightwing politicians often skew arguments by labelling tax cuts as “tax reform”. But although language is important, there is a risk that overstating its power might lead us to neglect certain fundamental economic interests and desires. “Change one word and you can subtly but deeply change attitudes and behaviour,” Raworth tells us. Perhaps, but is that new word “doughnut”? There just might be a hole in the argument.

© 2017 Guardian News and Media Limited or its affiliated companies. All rights reserved.
People, Spaces, Deliberation
https://blogs.worldbank.org/publicsphere/review-doughnut-economics-new-book-you-will-need-know-about
Word count: 1202
Review of Doughnut Economics – a new book you will need to know about
SUBMITTED BY DUNCAN GREEN ON MON, 04/24/2017

My Exfam colleague Kate Raworth’s book Doughnut Economics is launched today, and I think it’s going to be big. Not sure just how big, or whether I agree with George Monbiot’s superbly OTT plug comparing it to Keynes’s General Theory. It’s really hard to tell, as a non-economist, just how paradigm-changing it will be, but I loved it, and I want everyone to read it.

Down to business – what does it say? The subtitle, ‘Seven Ways to Think Like a 21st Century Economist’, sets out the intention: the book identifies 7 major flaws in traditional economic thinking, and a chapter on each on how to fix them. The starting point is drawings – working with Kate was fun, because whereas I think almost entirely in words, she has a highly visual imagination – she was always messing around with mind maps and doodles. And she’s onto something, because it’s the diagrams that act as visual frames, shaping the way we understand the world and absorb/reject new ideas and fresh evidence. Think of the way every economist you know starts drawing supply and demand curves at the slightest encouragement.Her main target is GDP (the standard measure of national economic output), and its assumptions – an open systems approach to economics that ignores planetary boundaries as it promotes economic growth. Her breakthrough moment while at Oxfam was coming up with ‘the doughnut’ – two concentric rings representing the planetary ceiling and minimum standards for all human beings. The ‘safe and just space’ between the two rings is where our species needs to be if it wants to make poverty history without destroying the planet.

When Kate came up with the doughnut in a highly influential 2012 paper for Oxfam, my non-visual mind failed to grasp its full value. After all, wasn’t this just a restatement of the idea of sustainable development? But it went viral, especially at the UN, because it allowed activists and policy makers to visualize both the threats and how they were trying to overcome them.

The other 6 main chapters cover:

‘See the big picture’: seeing the economy as ‘embedded’ in wider social and environmental systems
A critique of individualist ‘rational economic man’ that redraws the object of economics as social, adaptable humans
Moving from equilibrium economics to complex adaptive systems
Forget Kuznets: growth won’t lead to falling inequality – the economy must be ‘distributive by design’
Forget Kuznets II: growth won’t clean up the environmental damage it helps cause – the economy needs to be ‘regenerative by design’

Where does growth fit? Need to move from the current financial, political and social addiction to growth, to allowing GDP to adjust up, down, or oscillate, as the economy transforms
These bald summaries do no justice to the writing (Kate writes beautifully – leaving Oxfam seems to have liberated her), or the content (see last week’s posted extracts for a taste). There’s erudition, in the summary and critique of the main economic ideas, accompanied by smart biographical asides. Here’s a lovely example on the ‘care economy’:

‘in extolling the power of the market, Adam Smith forgot to mention the benevolence of his mother, Margaret Douglas, who raised her boy alone from birth. Smith never married and at the age of 43, as he began to write The Wealth of Nations, he moved back in with his cherished old mum, from whom he could expect his dinner every day. But her role never got a mention in his economic theory.’

That comes along with a comprehensive introduction to new economics theory and practice – a compendium of hundreds and thousands of innovators, activists and thinkers trying to incubate new thinking on money, financial systems, tax. Pretty much everything is ripe for redesign, with an urgency created by the tick tock of climate change. ‘Ours is the first generation to properly understand the damage we have been doing to our planetary household, and probably the last generation with the chance to do something about it’.

The chapter I must enjoyed was when she comes back to growth and discusses the bicycle problem (although she never calls it that). What if growth is like a bicycle – if you stop moving forward, you fall off? If politics, society and the structure of capitalism depends on growth (for example by requiring a return on investment, or through the nature of market competition), how can they wean themselves off it and survive? She wrestles with the arguments, coming up with this memorable summary of the two camps:

‘The keep-on-flying passengers: economic growth is necessary – and so it must be possible

The prepare-for-landing passengers: economic growth is no longer possible – and so it cannot be necessary’.

Although she claims to be agnostic, her sympathies clearly lie with the second camp, and the chapter sets out some fascinating ideas – rethinking the nature of money, reforming finance, changing the nature of taxation, new metrics – for how society needs to ‘prepare for landing’. That seems like a thoroughly original and brilliant way to get past the insane optimism of the exponentionalists, and the sloppy oppositionalism of the degrowthers.

Wonderful, but what influence will the book have? Because in some ways Doughnut Economics is an example (albeit a particularly brilliant one) of what I call IIRTW (‘If I Ruled the World’) thinking. There’s a cursory nod to the nature of power, but the implicit theory of change seems to be to invoke a sort of progressive/environmentalist version of Silicon Valley – a movement of smart, dedicated people building a New Jerusalem. Their brilliance will identify the win-win solutions, while some ill defined political upsurge will overcome the blockers. Together they will save the world.

What’s missing is a decent power analysis and discussion of how the ideas interact with politics (beyond broad social movement activism): not just the power of bad guys, but the workings of democracy. When I discussed this issue with Tim Jackson, another environmental economist guru, he ended up accepting that autocratic systems were probably the most likely to implement his ideas.

But great ideas, and brilliant framing, still make change – and this book is a classic combination of both. If only 10% of the ideas get implemented, the world will be a much better place. And I’m always happy to help if Kate wants to write a follow up – Doughnut Politics anyone?

Here’s Kate summarizing her message on Open Democracy. And in keeping with her commitment to visuals, check out these brilliant animations of the book’s main ideas. Here’s the first, setting out her stall on GDP

1. Change the Goal - 1\7 Doughnut Economics
Plus a 90 second trailer for the book

Doughnut Economics by Kate Raworth: book trailer

This post first appeared on From Poverty to Power.

Photo Credit: Mark Faviell via Flickr
Circulate
http://circulatenews.org/2017/04/book-review-doughnut-economics/
Word count: 716
BOOK REVIEW: DOUGHNUT ECONOMICS
KEN WEBSTER · APRIL 19, 2017

I admit to having not really liked Kate Raworth’s doughnut image when I first saw it. After all, a doughnut is a deadly mix of white flour, sugar and fat. Then again, that’s sort of apt if you think of life in high income countries today: attractive but easy to overdo and in the end not that satisfying. However, Kate’s choice of image had impact. In development circles it became a very useful illustration of that sweet spot between alleviating poverty and eroding the ecological support system.

Kate Raworth’s Doughnut Economics, published by Random House April 6th 2017
Her latest work is the result of three years’ research and writing. It attempts to bring economics – and how it is discussed – within reach of everyone with even half an ambition to understand the nature of that subject today and how it might evolve in future. This represents her return to economics, which she studied at university before embarking on a long career in practical development work in Africa, at the UN headquarters in New York, and a decade at Oxfam. Coming full circle, she found that the discipline is essential to understanding our choices, but is increasingly disconnected from our own experiences and is widely misunderstood.

Bringing economics within our grasp is no simple task, and to have achieved it – as with the doughnut itself – with simple diagrams and elegant prose to encapsulate an idea or set of relationships in a way that is resonant, memorable and very useful deserves a great deal of praise. It is easy to make things complicated, to pursue the detail, to look properly ‘academic’ and knowledgeable. It is a mark of profound understanding to be able to relate the essential, to use the appropriate metaphor and a carefully crafted sentence – enough but not too much. It’s a kind of doughnut approach itself: positioning economic understanding within a safe and just space (yes, economics is steeped in values and morality). One of Raworth’s messages is that we need to contextualise our economic thinking. Context brings meaning, after all. The economy is not like a machine that operates on the world, but is something embedded within it, more like the heart and its circulatory system. In this respect, she makes good use of the insights from contemporary science – the science of systems. In one sense she is helping our understanding of economics ‘get with the programme’ (it is strange that economics seems so often stuck with mechanistic assumptions of equilibrium, of ‘X’ marks the spot supply and demand, of individuals as independent decision makers). The danger, perhaps, is that Raworth’s prose is so direct that some will mistake it for mediocrity, arguing that the economy deserves to be more opaque, more of a mystery than it really is. Like priests, economists sometimes act as though they were essential intermediaries between the laity and God.

‘Is Raworth a serious economist?’ I have heard that question a few times already. She is certainly serious about the work: there are fifty-nine pages of notes, references and bibliography to get stuck into. It’s better to ask, ‘Does she make sense?’ In interview she is clearly on top of her subject. As a self-confessed generalist she will be treated with suspicion in some quarters, but an interdisciplinary approach is very much to the good if it is a systemic understanding we are looking for. And we are.

Although the book is a working through of seven ways to think like a 21st century economist, it’s good to ask where the circular economy fits in. Unsurprisingly, it’s one of the seven, and the notions of ‘dynamic complexity’ and an ‘embedded economy’ – two of its crucial elements – are also on the list. Kate uses a clear and simple version of the ‘butterfly’ diagram which, in passing, has done much for the Ellen MacArthur Foundation in its efforts to advance understanding of a circular economy. The logo of the Foundation is a version of her embedded economy, drawn to suggest a dynamic relationship. Doughnut Economics goes much further than this however, although some strands are visible in A Wealth of Flows.
Mark Avery
https://markavery.info/2017/06/11/sunday-book-review-doughnut-economics-kate-raworth/
Word count: 334
Sunday book review – Doughnut Economics by Kate Raworth
MARK ♦ JUNE 11, 2017 ♦ 2 COMMENTS

Scientists tend to be pretty sniffy about economists: economics seems like the pseudo-science which explains anything after it happens and yet predicts nothing about to happen. So why would anyone want to think like an economist? And yet economics is about values and about what sort of world we want to live in – something on which science is rather poorly equipped to comment.

I enjoyed this book very much. It’s a very accessible but intellectually satisfying read. Much good use is made of diagrams such as the one of a ring doughnut on the book’s cover. We need to live in the ring doughnut: the smaller circle representing a floor of economic activity which ensures that human needs are met, and the outer circle representing the limits to economic activity set by maintaining the environment. The doughnut is a safe and just place for us to live.

Of course it’s a bit more complicated that that in reality but the doughnut is the stepping off point for the book and a destination for human life. It’s a a good start and a good destination in this good book.

We aren’t living in the doughnut at the moment as our species as a whole is living beyond the outer ring of the doughnut and yet too many people are simultaneously living below that inner ring. Draw that!

This book is just what environmental campaigners need to feel confident to shout ‘That’s nonsense!’ at the next economist they hear talking on the radio. It is a clear guide to why traditional economic thinking helped to get us into this mess and how it is unlikely to help us out of it. And it is quite fun too.

Doughnut economics: seven ways to think like a 21st-century economist by Kate Raworth is published by Penguin.
Simon Maxwell
http://www.simonmaxwell.eu/blog/doughnut-economics-seven-ways-to-think-like-a-twenty-first-century-economist-by-kate-raworth.html
Word count: 1384
Monday, 24 April 2017
Doughnut Economics: Seven Ways to Think like a twenty-First Century Economist
Kate Raworth

Kate Raworth’s book on doughnut economics has received ecstatic reviews – George Monbiot in the Guardian even describes her as the J.M. Keynes of the twenty-first century. She doesn’t need a further encomium from me. For the record, though, I have been a fan of the doughnut since Kate first launched the idea in an Oxfam Discussion Paper in 2012; and also a fan of her writing and communication skills. High quality analysis and communication are both in evidence in this book.

The new book is more than a simple presentation of the doughnut - of the socially just and environmentally safe space between, on the one hand, planetary boundaries, and, on the other, social and economic minima (Figure 1). Kate’s target is no less than the hegemony of economics: the narrowness of its goals, the limitations of its theory, the poverty of its method, and its failure to reach out to other ways of thinking. The scars of her early, and apparently unsatisfying education in economics are deep. In a revealing tweet on 15 April, Kate replied to an(other) admirer: ‘I set out to write the book I that I wish I could have read as an undergraduate’.

So what should undergraduates be taught? And what ways of thinking are needed more generally by ‘twenty first century economists’? There are seven of these, each of which is the subject of a chapter in the book:

Change the goal: away from GDP to sustainability and well-being.
See the big picture: not just a self-contained ‘market’, but rather an ‘embedded economy’ which takes account of households, common property resources, the natural environment, and power.
Nurture human nature: and not just ‘homo economicus’, recognising that people are interdependent social beings, enmeshed in the web of life.
Get savvy with systems: recognising complexity, challenging equilibrium economics, and learning to work with the grain, as gardeners not engineers.
Design to distribute: tackling inequalities in wealth, land, and money.
Create to regenerate: building a circular economy, reshaping the state, and raising the standard of business responsibility. And
Be agnostic about growth: not just decoupling growth from environmental resource use, but learning how to live without growth.
A summary of the seven changes required in ways of thinking is given diagrammatically, as below (and apologies for the poor quality image):

This is all presented as a challenge to orthodox thinking, but also as a manifesto. There are specific proposals throughout, from alternative ways of measuring progress, through careful use of behavioural nudges, to open-source intellectual properly, better city design, and reform of global finance and taxation. In the last chapter, Kate announces that ‘we are all economists now’, and calls for activism to deliver a doughnut-compliant world.

The book ranges widely. Kate has mined her undergraduate economics notes (Ricardo, Smith, Keynes, Hayek, Samuelson, Solow), added some contemporary thinkers to her library (Joseph Stiglitz, Ha Joon Chang . . .), and collected lots of nice examples and quotations. It was fascinating to learn, for example, that the board game Monopoly was originally designed by its creator, Elizabeth Magie, with two sets of rules, one to illustrate the evils of predatory capitalism, the other to illustrate the benefits of social solidarity and cooperation. How interesting that only the former survived. Also interesting to read about financial nudges undermining social responsibility: when parents at nursery schools in Israel were fined for picking their children up late, they regarded the fine as a payment which legitimised their action, stopped worrying, and became not more punctual, but less.

The seven ways of thinking are intuitively and intellectually attractive. But does the book range widely enough, and is the list complete?

On the first question, it was surprising to find, given Kate’s history at UNDP, with the Human Development Report, and at Oxfam, how little there was in the book of development economics. One can search in vain: for the work of Dudley Seers on the limitations of the special case of high income economies, or on alternatives to GDP; for ILOInternational Labour Organisation on redistribution; for dissenting economists, like Hans Singer, on the problems of neoliberalism and the Washington Consensus; for Frances Stewart, Richard Jolly and Andrea Cornia on alternatives to structural adjustment; for Jeff Sachs, or Bill Easterly, or Paul Collier or Dani Rodrick. Even Amartya Sen only gets one mention. There is only one Human Development Report mentioned in the bibliography, and only one World Development Report: yet both championed environment, redistribution and other themes in the 1990s.

The omissions are so numerous and so startling that they really stand out. Could it be that the sub-discipline of development economics does not conform to the narrative about the discipline of economics being malevolent? Or, to put the point another way, the seven ways of thinking correspond pretty well to the agenda of development concerns. Perhaps undergraduates should just be advised to study development economics?

There is an important clue to how Kate thinks about development in a passage on inequality, which downgrades inter-country inequality and instead poses the modern-day challenge as one of dealing with intra-country inequality. Citing Andy Sumner, she says that ‘for the first time, ending human deprivation is becoming as much a question of tackling national distribution as of international redistribution . . . the new geography of deprivation puts tackling national inequalities high on the agenda of ending poverty for all’. In fact, Sumner makes the point even more clearly. Kate quotes him as follows: ‘a fundamental reframing of global poverty is approaching, and the core variable to explain global poverty is increasingly national distribution and thus national political economy’.

No-one can quarrel with the argument that the number of low income countries is falling. However, to draw the conclusion that national distribution is the only remaining issue must surely amount to charging off down the wrong path. There is no discussion of global public goods: Inge Kaul is another economist not mentioned. The role of trade in lifting hundreds of millions out of poverty is not acknowledged, apart from a brief plea for fair trade. Tax avoidance is discussed, but conflict, migration, the arms trade, drugs – the global public bads which shape outcomes in many developing countries, and the stuff of much debate in the fields of development economics and development studies - none of these really feature. With global forces so powerful, protectionism and isolationism on the rise, and global institutions so fragile, any manifesto must surely include proposals to nurture and rebuild multilateralism. Is that an eighth way of thinking?

An eighth way of thinking is certainly needed in climate action. In addition to the seven core ways of thinking, development economists who work on climate policy focus on topics such as: international regime and negotiating frameworks, as in the UNFCCC; the scope for international carbon taxes and/or carbon tariffs; and international technology transfer. They also emphasise that climate action will require a new industrial revolution on a global scale, one which will disrupt and dislocate current ways of working , creating winners as well as losers: social protection and action to support transition in disadvantaged and forgotten communities also plays an important part. This is about much more than redistributive justice, land taxes and the like, as discussed in the chapter on inequality: it is about sectoral and regional balance, gender, age, and the structure of the real economy. A recent paper provides an overview of the issues. Perhaps ‘leave no one behind’ amounts to a ninth way of thinking?

Do these gaps and additions invalidate the value of the doughnut as a heuristic, or the search for grand narrative. No, this is a book to be celebrated. Ways of thinking 1-7 certainly help focus on the right policies, for example in assessing the contribution of the private sector or dealing with growth. In this respect, Kate’s framework will help keep researchers and policy-makers honest: it is a template which will hold them to account.

But there is fertile territory for a second edition.
Moneylife India
http://www.moneylife.in/article/to-grow-or-to-thrive-that-is-the-question/50841.html
Word count: 790
To Grow or To Thrive: That Is the Question
Sharika Dhar
23 June 2017

Kate Raworth’s Doughnut Economics aims at transforming the current economic mindset which is obsessed with only one aspect of the subject: the GDP, to be more precise, growth.

GDP or gross domestic product is defined as the production of goods and services, within the boundaries of a country, in a year. It is a measure of economic growth and an indicator of the ‘economic health’ of a country.

“GDP is a cuckoo in the economic nest. Rather than raising their own offspring, they surreptitiously lay their eggs in unguarded nests of other birds. The unsuspecting foster parents dutifully incubate the interloper's egg along with their own. But the cuckoo chick hatches early and kicks the other eggs and young out of the nest... It’s a powerful warning to other birds: leave your nest unattended and it may as well get hijacked. It’s a warning to economics too: lose sight of your goals and something else may well slip into their place. And that’s exactly what has happened. In the 20th century, economics lost the desire to articulate its goals: in their absence, the economics nest got hijacked by the cuckoo goal of GDP growth. It is high time for that cuckoo to fly the nest so that economics can reconnect with the purpose that it should be serving.”

She argues that “instead of prioritising metrics like GDP, the aim should be to enlarge people’s capabilities so that they can choose to be and do things in life that they value... This calls for a profound shift; a shift in the image of economic progress from endless GDP growth to thriving in the ‘Doughnut’.”

The doughnut is the 21st century diagrammatic representation of the circular flow of the economy. For years, the circular flow has represented the working of the economy, the key players and interactions between these players to show how the economic engine runs. The doughnut is more of an updated version of it, where the key players are the ‘social foundation of well-being’ and the ‘ecological ceiling on the planetary pressure’.

It is shaped exactly like the sweet pastry it is named after. The essence of the diagram is that the factor of social foundation of well-being, which is the inner ring in the diagram, is the point that one must not fall below, as that would indicate the shortfalls in the society. The second factor, the ecological ceiling on the planetary pressure, which is the outer ring of the diagram, is the point that one must not go beyond, as that would represent an overshoot of the utilisation of the natural resources in the ecology.

The doughnut presents the challenge of staying between the two rings; unfortunately, in this present time, we are failing miserably at it. Even with the rapid level of progress we have achieved, we are far beyond the doughnut's boundaries on both sides. So, how do we thrive in such a situation?

Raworth says, “Five factors which will significantly shape humanity’s prospects for getting into the Doughnut’s safe space, which are population, distribution, aspiration, technology and governance,” as these are the core players in policy formations. She adds, “But they cannot bring about the scale of transformation required unless we also transform the economic thinking.”

Raworth believes that the current economic institutions need to be revolutionised as the subject matter being taught is outdated. “It’s like the citizens of 2050 are being taught an economic mindset that is rooted in the textbooks of 1950, which in turn are rooted in the theories of 1850.”

For this transformation to happen, she presents seven ways to think like a 21st century economist. More than an immediate answer to the economy’s problems, they aim to radicalise the mindset of the current generation of economists and non-economists. These ‘principles and patterns’ would equip economic thinkers to create a more networked, sustainable and inclusive economy.

Raworth believes that the economists of the 21st century might be the first ones to understand the impending problem but are the last to actually make a change. “The task is clear: to create economies that promote human prosperity in a flourishing web of life, so that we can thrive in balance within the Doughnut’s safe and just space.”

She quotes Keynes, “The master-economist must possess a rare combination of gifts. He must be a mathematician, historian, statesman, philosopher... he must study the present in the light of the past for the purposes of the future.
Food (Policy) For Thought
http://foodpolicyforthought.com/2014/05/22/review-kate-raworths-doughnut-economics/
Word count: 1511
Review: Kate Raworth's 'Doughnut Economics'

Man, sometimes you just have to catch yourself in moments of pure luck. Like today, after a morning spent in glorious summer weather hammering out the last formatting issues of my thesis, when I was able to attend a lunch seminar (who said there was no free lunch in economics?) with the inspiring Kate Raworth and have a 2-hour chat afterward with her as well as some senior researchers in ecology, animal genetics, food systems and the like from SLU. What did we talk about? Basically, how to change the world. And economics education. But most of all, Raworth’s suggestion for a new framing of the global challenges and goals as we move from the Millennium Development Goals to the Sustainable Development Goals as of next year: the so-called “doughnut” of the safe and just operating space for humanity.

As Raworth explained, she was inspired by and built on the concept of Planetary Boundaries developed by Rockström et al., which we already talked about in a previous blogpost (more than a year ago! How time flies!). Basically, this is a theory by earth scientists on how human action affects different realms of our ecosystem – the outer 9 wedges of the circle – which all have ‘tipping points’ over which we should not venture because they could lead to unforeseeable damage to our entire habitable planet.

Well, great, Raworth thought – but clearly we can’t live in the very inside of the circle either where we don’t have any human impact on the planet? Because that would mean deprivation, human suffering, and a clear disregard for human rights – and from an anthropocentric perspective, we are trying to keep within the boundaries to enable human life to continue in a way worth living for generations to come. So what we need to aim for is to live within the band – or, if you will, the doughnut – that enables us to fulfill the needs of all without overloading the planet with impacts it cannot absorb.

But enough with fluffy concepts – we need to operationalize them too. We already know how the outer limits were defined – by Rockström and his team of scientists -, but how did Raworth come up with the inner minimum standards? She read through all government submissions for the Rio+20 conference on their development foci in the coming decades and found a common denominator in those categories that at least 50% of all governments mentioned. They are the wedges on the inside of the circle – health, resilience, and food for instance.

When, in turn, you try to quantify these goals – using indicators assembled by the UN, such as the amount of food insecure households for the food category or the wage gap for gender equality – you realize that on a global scale, we are still falling short on all these goals. On the other hand, if you consider that we would only need 3% of the current agricultural production would be needed to end global hunger (around 1/10 of the estimated food wasted between farm and fork!), that only 1% of current greenhouse gas emissions would be spent to achieve global electrification, and that 50% of the world’s carbon emissions are produced by the 11% richest people – then you understand that the two goals of sustainability and development are not necessarily mutually exclusive (which is the purported reason why the climate negotiations keep stalling).

Rather, what is needed according to Raworth is for the least developed countries to keep developing, but to avoid resource lock-ins; for the emerging countries, to pursue the relative de-coupling of GDP growth and resource throughput; and for the richest countries to pursue absolute de-coupling – to reduce our per-capita footprint on an absolute scale.

This is, however, where things get a little more complicated (and the summary ends and my personal opinion starts, just to make it clear). For here is where the hard questions of how to actually live within the doughnut start to emerge, questions to which the framework does not really provide answers. For some, the answer is voluntary simplicity and de-growth. For others, a swift turn towards a dematerialized sharing economy characterized by product-service-systems and virtual goods. And for some, the doughnut is actually just an alternative depiction of the ‘green growth’ idea. Here lies my beef (figuratively ;)) with these types of very inclusive, teleological (goal-driven) frameworks – we could talk for hours about how we agree that development needs to be balanced with greater sustainability, and I think the doughnut idea is a great visualization tool for that purpose (more on that in a second). But I don’t necessarily see it being different from the climate negotiations in the past where (Western) governments have argued for the need for global emission reductions while (developing) governments have argued for their right to develop – and where every side respectfully acknowledges the other’s points without engaging on the inherent contradiction between them out of diplomatic politeness. I fear that showing officials this diagram would achieve the same purpose – Raworth told an anecdote about Latin American leaders and European ones both finding their own policy goals reflected in the diagram and gossiping about the other side’s suspected disapproval of the framework – from a positive viewpoint, this could mean that we actually stand much closer on the issue than we realize. From a rather pessimistic perspective, maybe it just means that we see whatever we want to see in these types of frameworks without acknowledging the underlying complexities any further.

But – BUT – having countries agree to binding goals is at least currently one of the best ways to move forward, and I do think that calling this type of framing into the minds of policy-makers again and again will have a lasting impact when short-term high growth rates beckon (let’s hope so). And in view of current policy decisions, be it the Australian budget cuts that led to the International Symposium on Sustainable Development Goals 2015 to be called off, or the current TTIP negotiations that might sacrifice long-term public health and safety considerations for short-term trade goals, reminding policy-makers of this basic fact [“your decisions all occur in the framework of one functioning ecosystem”] might be more necessary than ever.

Furthermore, Raworth talked about ‘visual intelligence’, which I found fascinating – the fact that making these types of facts and connections visual leads us to understand and internalize them better. You guys know I love infographics and data visualization, but this presentation just made me even more aware about how important the (visual) framing of concepts and ideas really is. In a different context, I was reading an article today that talked about the importance of making up new words (I think the example was ‘mansplaining’) because without the words, we cannot start to have a debate on things. Without thinking about the economy as having a clear upper bound symbolized by the planetary limits, we have a hard time understanding the problems behind unlimited exponential growth. Add to that the fact that our brains are generally better at visual pattern recognition than at computational tasks, such as processing dense scientific papers into take-home messages to remember, and the doughnut is outright genius. I’ll have more to say on maps in a bit of time (still doing my agricultural history class!), but yeah. Fascinating stuff.

Finally, in the discussion we talked a lot about the new educational and research frontiers in this field – it’s such a shame that current economics students don’t get schooled in this type of analyzing! Hopefully, we can move into a more innovative interpretation of the discipline in the future, especially as it is still the language that is being used in these types of debates.

For more information, this is where you can go:

The original Oxfam report detailing the doughnut model.

Kate Raworth’s blog, which has a plethora of great insights. She is currently also collecting a useful assembly of videos on economics, ecological perspectives and more, so great for nerdy awesome video nights!

She is also incredibly well-read and mentioned a number of great books and researchers on the topic, including:

Tim Jackson: Prosperity without Growth: Economics for a Finite Planet

Peter Victor: Managing without Growth: Slower by Design, not Disaster

Victor Galaz’ work (and blog) at the Stockholm Resilience Center

Dr. Thomas Hahn’s work, equally at the Stockholm Resilience Center

John Fullerton, founder and leader of the Capital Institute, which tries to re-invent finance in a more socially just and sustainable way.

Aaanyway. This seminar. It was such a breath of fresh air, just an affirmation that there are indeed people working on the issues that are important, that are moving the discipline and policy-making forward, and that care. And not just for the sugary kind of doughnut.