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An E4A student’s reaction to Doughnut Economics: 7 Ways to think like a 21st Century Economist (by Jen Gobby)

I am a PhD student in the Economics for the Anthropocene partnership and have spent much of the last 3 years in research seeking out and grappling with ways to bring the social and ecological crises we face into one lens. We are living with the legacy of decades of academics and activists addressing environmental problems as separate from social problems. Climate-exacerbated refugee crises and rampant continuation of extractivist fossil fuel projects violating the rights of indigenous peoples (amongst other alarming trends) are demanding a new way of thinking about ‘environmental’ issues. We need to develop better ways to understand how environmental destruction and social injustice are linked and to develop solutions that address both simultaneously.

Kate Raworth’s new book helps do just that. She uncovers the roots of social inequity and environmental destruction in the logics of outdated economic thinking and offers a framework for mapping out a pathway towards a more socially-just and ecologically-sane world.

Published this year, the book lays out the economic dimensions of the crises in plain language, miraculously making the topics of crises and economic thinking a page turner! Not only does this book offer a profound and integrated understanding of the crises we face and their root causes, but also captures a comprehensive and inspiring collection of the solutions and alternatives that are out there, being both imagined and practiced.

The focal point of the book is the Doughnut, Raworth’s graphic that lays out, in the space between the two concentric circles, a safe and just space for humanity. The book explains how economic theory took some very wrong turns and drove us to where we are: far exceeding the planetary boundaries and falling way short of meeting all people’s basic human needs. That’s the bad news.

But this book is mostly good news. The good news is that 1) economic theory is a changing, mutable thing (not some natural law) and that therefore we can re-make it; and 2) she offers up a road map for getting humanity back into that safe and just operating space by envisioning an economic system that is both ecologically regenerative and socially distributive by design. Though you’d think such idealist visioning is pie in the sky thinking, the pages of this book offer example after example of existing real-world initiatives and innovations showing that, not only is it possible, but it’s happening. She leaves readers with a palatable sense that it actually is possible. This counters the pervasive feeling that massive social inequality and ecological destruction brought on by the neoliberal capitalist agenda is inevitable and that it’s too far gone to change. By showing how flawed economic thinking got us into this mess, she shows how clever and innovative economic thinking can get us out.

Her roadmap is laid out in what she calls “Seven ways to think like a 21st century economist”, each of the seven ways of thinking is a chapter in the book. These ways of thinking point the way back into the Doughnut.

1) Change the Goal – from GDP to the Doughnut.  In this chapter, she identifies the misguided goal that has been driving economic policy and has been our only measure of progress: GDP. She writes “this fixation has been used to justify extreme inequities of income and wealth coupled with unprecedented destruction of the living world. For the 21st century, a far bigger goal is needed: meeting the human rights of each person within the means of our life-giving planet”.

2) See the Big Picture – from self-contained market to embedded economy. Chapter two tells the history of how a mainstream economics came to hold the “circular flow diagram” as a center piece of economic theory. She writes that “its limitations have been used to reinforce a neo-liberal narrative about the efficiency of the market, the incompetence of the state…” and she argues for the need for a new model, a new way of understanding and drawing the economic system that is embedded “within society and within nature and powered by the sun”.

3) Nurture Human Nature – from rational economic man to social adaptable humans. This chapter contests the old portrait of ‘rational economic man’ by presenting the readers with vast amounts of research findings uncovering a different story of human motivation and decision-making. She paints a new picture of who we are, what we care about and what we’re capable of. From self-interested to social, from calculating to approximating, from dominant over nature to dependant upon the living world, from fixed in tastes to fluid in values, she opens up space to “nurture human nature in ways that give us a far greater chance of getting into the Doughnut’s safe and just space”.

4) Get Savvy with Systems – from mechanical equilibrium to dynamic complexity. Here Raworth points to Systems Thinking with its understanding of the dynamics of feedback loops, as a much better way to understand and steward our economies as ‘ever-evolving complex systems’ rather than relying on the “misplaced nineteenth-century metaphors of mechanical equilibrium”.

5) Design to Distribute – from ‘growth will even it up again’ to distributive by design. Myth busting the Kuznets Curve- the old idea that inequality “has to get worse before it gets better, and that growth with (eventually) even it up”, this chapter calls for designing economies to be much more distributive. To Raworth this means “going beyond redistributing income to exploring ways of redistributing wealth, particularly the wealth that lies in controlling land, enterprise, technology, knowledge and the power to create money”.

6) Create to Regenerate – from ‘growth will clean it up again’ to regenerative by design. She then takes on the Environmental Kuznets curve – which claims that “pollution has to get worse before it can get better and that growth will (eventually) clean it up”. She convincingly argues that there is no such economic ‘law’ and that “ecological degradation is simply the result of degenerative industrial design”. Here she calls for economic thinking that “unleashes regenerative design in order to create a circular- not linear – economy and to restore humans as full participants in Earth’s cyclical process of life”.

7) Be Agnostic about Growth – from growth addicted to growth agnostic. Mainstream economists view endless economic growth as the unquestioned goal, ecological economists argue that endless economic growth is not possible given planet limits, and development economists argue continued growth is necessary to bring much of humanity out of poverty. In this chapter Raworth flips the terms of debate. She doesn’t adopt a clear stance for or against growth in all cases, but rather questions our economies’ addiction to it. She points out that today “we have economies that need to grow, whether or not they make us thrive; what we need are economies that make us thrive whether or not they grow”.

In these seven chapters, the seven key ways of thinking, Raworth points the way out of this mess and into the Doughnut’s safe and just space for humanity. In the closing chapter, she calls on us all to be 21st century economists that do the hard work of charting the path towards the goal that she has so clearly laid out. As a student of the Economics for Anthropocene partnership I heed this call and I am doing my part; but not through economic theory. Instead I am an activist-scholar studying theories of change and  strategies and tactics for systems transformation.

A key question remains unanswered in this book: how can we get to that safe and just operating space when the people and institutions with all the political power and wealth needed to make change are deeply invested in the status quo of continuing to violate ecological limits and human rights? Perhaps the outdated neo-liberal economic theory that undergirds the crises we face, is still holding sway not because decision-makers still believe the theories, but rather because the theories serve their vested interests. As such, they are not likely to take up the theories and practices offered by Raworth in this book, regardless of how much they make sense. Nor are they likely to relinquish power voluntarily. Given this, better economic theory alone cannot be the answer. So yes, we must heed Raworth’s call to think like 21st century economists, but we must also learn to think, and act, like 21st century revolutionaries!

 

Jen Gobby is an E4A PhD Candidate at McGill University. Her research investigates ecological economics, climate justice and indigenous resistance to resource exploitation. Meanwhile, she spends summers on a little island building, growing food, chopping wood and living in community.

 

 

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