Sr. Fintech Consultant, BTC, Blockchain, Cybersecurity, Artificial Intelligence
Oxford based, Kate Raworth, a member of the University’s Environmental Change Institute, has blazed a trail with her book, “Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist” and reminded us that “economic growth was not, at first, intended to signify wellbeing.” Yet, that is what governments tell us.
Guardian journalist George Monbiot, a writer who is never afraid of taking on The Establishment, whether a government or a business like Monsanto, in his review of Raworth’s approach to economics pointed out that as billionaires capture governments, political leaders have become voiceless. The most they can offer citizens is the allure of economic growth, “the fairy dust supposed to make all the bad stuff disappear,” as he says. And we are supposed to turn a blind eye to the fact that this promised growth causes environmental destruction and does nothing to alleviate unemployment or inequality. He quotes a leaked memo from the UK’s Foreign Office: “Trade and growth are now priorities for all posts … work like climate change and illegal wildlife trade will be scaled down.” Nobody seems to mind what we destroy, as long as we have wealth.
Raworth is a much-needed voice in this scenario. She has voiced the ‘inconvenient truth’ that the economic philosophy of the last century, has “lost the desire to articulate its goals,” and has promoted a version of humanity that is deeply flawed. As she says, the dominant model of the “rational economic man” is one that is based on self-interest, isolation and calculation, which you might say paints a picture of the manipulative narcissist. She also says that what we have ended up with is a Holy Grail of endless growth.
The doughnut economy
Instead, Raworth says, economic activity should be aimed towards “meeting the needs of all within the means of the planet.” Her vision of a strong economy is one that “makes us thrive” whether or not the economy grows. And that means changing the picture of what an economy is and how it functions. Which is where the doughnut comes in.
She has restructured the concept of an economy by firmly placing it within the Earth’s systems and in society. Her diagram shows the flow of materials and energy, and also reminds each one of us that we are more than “workers, consumers and owners of capital.”
The doughnut has two rings: The inner ring of the doughnut represents a sufficiency of the resources we need to lead a good life: food, clean water, housing, sanitation, energy, education, healthcare and democracy. Anyone living in the hole in the middle of the doughnut, lives in a state of deprivation. The outer ring of the doughnut consists of the Earth’s environmental limits, and when we go beyond this we inflict dangerous levels of climate change, other forms of environmental pollution, loss of species and a variety of other assaults on the living world.
How can we create a doughnut economy?
An economic model that follows Raworth’s vision will primarily seek to reduce inequalities in wealth and income. Furthermore, the wealth we get from the natural world should be widely shared; this includes everything from agriculture to mining. The financial industry should be structured to conserve and regenerate resources, instead of squandering them, and state-owned banks should be investing in projects that radically change our relationship with the environment, such as zero-carbon public transport and community energy schemes. She also suggests that we must measure prosperity in a new way.
We have heard some of these ideas before, but what Raworth has done, is integrate them into a coherent programme, the results of which can be measured when implemented. Governments need to urgently turn Raworth’s ideas into policy.
If there is one resolution you make for 2019, I’d suggest it is this: read her book and discover that we could have human prosperity and a thriving living world. We owe it to our children and all future generations to change or economic model now.