Doughnut Economics - Kate Raworth - Part 1 of 8

2020 Reading Challenge - Day 209

July 29, 2020

Book 58 - Doughnut Economics
Kate Raworth
  Introduction - pages 1-26

Reading Time - 60 minutes

I've been wanting to read this book for a while and finally got it from the library. It's amazing and well worth a read! One might expect a book about economics to be boring and/or dense... but it's not. And it makes so much sense. I admit to falling behind in the blogging department with this book, so am going to catch up by doing a chapter at a time, rather than 50 pages at a time.

Introduction

I had not idea but... apparently a lot of economics students are rebelling against the narrow and biased ideological perspectives of traditional economics... perspectives that are out of touch with reality. It's pretty clear to these students that the earth, and humanity, is headed for a day of reckoning and they want to reprogram the doomsday machine that is capitalism.

Buckminister Fuller once said that one can never change things be fighting the existing reality. To change something, build a new model that makes the existing model obsolete. And that's what this book is about. Rather than capitalism's existing model of endless growth (which is ridiculous on a finite earth)... Raworth suggests a new economic model... the doughnut model. The book offers seven mind-shifting ways to think like a 21st century economist... rather than a 19th or 20th century economist. Part of the drive to a new model is what is happening on the earth and within society:

• gross, and growing, inequality - 1% of the population owns more wealth than the other 99% of the population
• deepening degradation of the planet
• rising population and a growing middle-class (globally) that wants the same things other middle-class groups have had

Economics will play a defining role in addressing these issues as everything has now been assigned a monetary value - from parks and rivers to fisheries and forests. But... traditional economics, that is running the world today, is rooted in textbooks from the 1950s which are themselves rooted in theories from 1850. These theories are based in flawed assumptions and have common blind spots which, if left to continue unchecked, will spell disaster for the 21st century.

The author studied economics and began to wonder... what would happen if it was flipped on its head... what if we started with what humanity's long-term goals are and then seek out the economic thinking to make that happen?

What if the lower boundary is the social foundation... above which there is a safe and just space for humanity and below which there is human deprivation.

And what if the upper boundary is the ecological/environmental ceiling beyond which planetary degradation takes us into disaster territory, but below which, we can live within the boundaries of earth's bounteous generosity. Voila... the doughnut model...

Within those two boundaries, there is a safe and just space for all of humanity to enjoy life. The question then becomes... if this is our goal... how do we get there. What ideas and theories would help to achieve this ultimate goal. Raworth decided that images hold a lot of power and many of the traditional economics diagrams are based on deep assumptions. So, Raworth came up with a bunch of diagrams that can reframe how we understand the economic world... moving from diagrams that are out of date, blinkered or just plane wrong... to diagrams that offer us hope for a different world.

She comes up with seven areas in which we can think like a 21st century economist:

1. Change the Goal from GDP to Doughnut model - shift from a model that fosters inequalities and destruction of the planet to one in which we can thrive in balance
2. See the Big Picture - move from the circular flow diagram (economics is just consumers spending money to business which pay money to consumers for labour) to a model in which economics is embedded within society and within the natural world
3. Nurture Human Nature - move from the image of the "rational economic man" to social, adaptable humans
4. Get Savvy with Systems - move from a simplistic supply and demand model which is based on mechanical equilibrium to systems thinking which is dynamic and fluid
5. Design to Distribute - move from inequality (the rich get richer and the poor get poorer) to one in which there is a network of flows designed to distribute wealth (not just income) equitably.
6. Create to Generate - move from pollution to regenerative by design - a circular economy
7. Be Agnostic about Growth - move from the idea of endless growth (impossible) to economies that may not grow but allow us to thrive

Let's go...