Recently Kate Raworth posted a triptych on twitter of herself, Stephanie Kelton and Mariana Mazzucato holding up each others' most recent books, with the comment: 'Doughnut + Mission + MMT = Let's transform economics. Here's to the synergy of ideas.' This trio form a neat little group of subversive women economists who challenge mainstream thinking - and don't we need that challenge right now!
I've yet to read Mazzucato's latest book (coming up soon) but from what I've read so far, all three women push the envelope of economic thinking in an attempt to move it towards a more just and sustainable discipline. Of the three, Raworth's
Doughnut Economics: Seven Ways to Think Like a 21st Century Economist is the most comprehensive, and the most radical.
Raworth is an English economist who has worked for much of her life in the development field. Her gigs include doing fieldwork in Zanzibar, working on the UN Human Development Program, and working as an educator and policy advocate for Oxfam. These days she has roles at both Oxford and Cambridge Universities. She's been promoting the ideas in Doughnut Economics, including the doughnut itself, for many years, and pulled it together in book form for publication in 2017.
It's hard to go past Raworth's own diagrams to explain the ideas - she is such a great communicator! The following two diagrams are taken from this handy introduction. The best way to understand the idea is through the famous doughnut diagram itself, reproduced below, which forms the basis of the book.
The idea behind the doughnut is that the task of economics is to help create 'a safe and just space for humanity'. The doughnut's inner ring represents a basic social foundation within which all people have access to a decent income, food, housing, education, safety, political freedom and so forth. When some people don't have these we have a shortfall. The outer ring of the doughnut represents the ecological ceiling, the limit at which the earth can continue to support its population into the future. If we overshoot this limit we end up reducing the safe and just space because the earth will no longer be as able to sustain life.
You don't need to be an Oxford-trained economist to realise that at the moment we are both falling short of the social foundation, and overshooting the ecological ceiling. Many people are going hungry, are poorly housed, have poor access to health care, are unsafe in their own homes or fleeing them, or are subject to human rights abuses. At the same time we are overshooting many ecological boundaries - the climate is changing, we have dangerous pollution, we are depleting fresh water, species are going extinct. This means that the classic economists' remedy for poverty - more growth - is not available to us, at least not under the existing model of extractive growth.
If we want to solve this conundrum - and we need to if all our lives are not to get seriously worse - we need to start thinking differently about how we manage our economic resources. Raworth outlines seven types of change, summarised in the following diagram and forming the seven chapters of her book.
This represents a bold challenge to the heart of economic policy-making.
- Instead of thinking about the size of our Gross Domestic Product, we should think about how to get ourselves within the doughnut.
- Instead of viewing the economy as a closed system of financial flows, we need to understand it as embedded in our planetary and natural environment.
- Instead of seeing humans as isolated individuals living by calculations of financial advantage, we need to see ourselves as we really are, social beings with a deep need for community and connection.
- Instead of focusing on a mechanical relationship between supply and demand, we need to understand economics through the lens of complexity theory with feedback loops, limiting conditions and interactions between multiple factors.
- Instead of acting as if more growth will make us more equal (which it hasn't so far) we need to focus intentionally on distribution.
- Instead of a production system focused on extracting, making and discarding we need to develop a circular economy in which we constantly work to regenerate the natural world.
- Finally, instead of our unspoken assumption that growth can go on indefinitely we need to accept that it will eventually hit a limit, and plan for that.
Adopting this approach to economics would be a revolution, not just for economists but for politicians and capitalists generally. The very rich people who run our economies and, by default, our societies would become less super-rich. Hence, they will not donate to, or run favourable media stories on, any policy-maker who supports this type of approach. So it definitely won't happen from the top.
I'm pretty sure Kate Raworth knows this - after all, she's a highly intelligent woman and has spent many years working on these issues. Hence a lot of the examples she uses are from below, or from the fringes. She talks about local communities, start-up companies, sustainable finance providers and so on who are doing things differently, starting to take on the insights here to develop an approach to business that is regenerative and redistributive. These ideas can work, people can make decent livings without trashing the planet or grinding the poor into the dust.
What's less developed here, although not totally ignored, is the spiritual and philosophical underpinnings of the issues it deals with. The discipline of economics grew out of the cold rationalism of the Enlightenment, via utilitarianism and physics envy which led economists to seek 'the greatest good for the greatest number' while trying to define a set of ironclad laws which would govern economic activity the way Newton's laws governed the physical universe.
Economics is stuck in a scientific paradigm that actual scientists now realise is inadequate. In physics itself, Albert Einstein's theories of relativity and Neils Bohr's unveiling of quantum mechanics have revealed a universe a lot less mechanistic and a lot more unpredictable than Newton's equations make it seem. Other fields have gone even further, none more so than climate science which has embraced the idea of complexity and the interactions of a wide range of factors in real world situations. These ways of thinking increasingly make conventional economics look simplistic to the point of absurdity.
On the spiritual plain, we need to move backwards. Before the advent of Enlightenment rationalism we at least tried to live by a range of spiritual disciplines which provide a much richer grounding for life than utilitarianism. In my own Christian tradition we are taught to 'love our neighbour as ourselves', that 'if you did it for the least of these, you did it for me', 'the greatest of all must be the servant of all', that a single sparrow doesn't fall to the ground without God noting it. This is a perfect riposte to 'the greatest good for the greatest number' - all, even the least, are important and no-one can be left behind. Other spiritual traditions approach this in other ways - for instance I
recently wrote about how Australia's first peoples understood themselves as embedded in the wider environment, cousins to the creatures around them and responsible for their wellbeing. In both of these traditions, the pursuit of ever-increasing wealth irrespective of the cost is foolish, not to mention immoral.
The thing is, this is not unrealistic. It is, in fact, they way most societies have lived for most of human history. It's never been perfect, people and other creatures have always suffered, but it's only been in the past century that we have accelerated our destruction of the planet to the point of crisis. We urgently need to discover what our humanity can be without this destruction and start to live it.
Comments