Review: Doughnut Economics by Kate Raworth
Part of the new Pandemic Reading section of my website
If there is such a thing as a fun-to-read economics book, Kate Raworth has written it. The book opens with the story of one ambitious student who cannot help but notice the gap between the abstract theories she was learning in her economics courses and the chaos unfolding outside the classroom as the 2008 financial crisis wreaked havoc across the world. This student, Yuan Yang, along with many of her peers who shared her feelings about how economics was being taught staged a revolt. They connected over 80 student groups in 30 countries to force a change in the teaching of economics. The story is a powerful entry into Kate’s own revelations about the shortcomings and myriad blind spots in modern economic theory.
This punchy little book goes on to detail Kate’s own awakening surrounding economic theory and the actual state of the world in terms of wealth inequality and the dire threats posed by climate change. The result was the Doughnut. Following years of work at Oxford University studying economics, followed by development work in Zanzibar, then working at the UN writing the Human Development Report, and then on to work at Oxfam before having twins — Kate had laid the foundation for a revelation.
“Through all this, I gradually realized the obvious: that I could not simply walk away from economics because it shapes the world we inhabit and its mindset had certainly shaped me, even if through my rejection of it. So I decided to walk back towards it and flip it on its head.”
This flip was a fundamental change in the goal of economics. Instead of abstract theories, what if the aim of economics was focused on “humanity’s long-term goals?” From this sprang the Doughnut. The inner circle of the Doughnut is a floor. A “social foundation” below which lies “critical human deprivations,” such as food, water, health, etc. The outer ring of the Doughnut is a ceiling. An “ecological-ceiling.” This ceiling bounds
“…critical planetary degradation such as climate change and biodiversity loss. Between those two rings is the Doughnut itself, the space in which we can meet the needs of all within the means of the planet.” In other words, the thick part of the Doughnut will be “the safe and just space for humanity.”
I once heard change described as a person standing on a burning platform 100 meters above the surface of a raging sea. The person will only jump — initiate a change- once the fire has gotten close enough to leave them no other choice but to leap. This is very much the tone many a reviewer has taken when discussing “Doughnut Economics.” A notably smug, “Interesting…but we’re not going to jump” disposition.
I suppose that is to be expected from Economists who, as a group, are famous for their measured stoicism and temperamental resistance to taking chances. If your money supply is based on people’s faith and confidence, then presenting oneself as reasonable, responsible, and serious reassures people. Even when you have to get on TV and tell them that all of their retirement savings have been swallowed up by a black hole of greed created by the people they went to college with.
After reading this book, examining the Doughnut, and taking in Raworth’s suggestions for “thinking like a 21st-century economist” concepts that include: “See the big picture,” and “Nurture human nature,” or “Be agnostic about growth.” It was then quite easy to look at our world, look back at the Doughnut, and think “I’d prefer to live in the Doughnut.” Some reviewers chastized Raworth for not providing a policy roadmap for how to bring the Doughnut economy into existence. I feel their pain here, how to enact this is a big question. Changing the goals and orientation of a global economy that decidedly does not want to change is a herculean task. At the same time, the discovery of the Doughnut is really enough. Nobody saw Einstein’s work and said, “Oh nice job smart ass. What good is this?” People dedicated themselves to understanding it and throughout decades of research and testing, applications and inventions bloomed. Some good…some, well, you know. It’s hard to shake the feeling that if Raworth had written a step-by-step guide to how to change the world economy from its current form into the Doughnut, reviewers would have simply poo-pooed her solutions and dismissed them as utopian and therefore impossible to enact. I’m often amazed at the lengths to which people will go to ensure that the world does not become a better place. The status quo has the power of inertia working for it, and inertia is very difficult to combat. But fight we must, and Raworth has put her money where her Doughnut is by working with small groups, companies, and citizens to provide education and begin to flush out how Doughnut Economics can be made real in the world.
Kate Raworth’s “Doughnut Economics” is an easily accessible suggestion to all of humanity that we build an economy that makes the world a better place for human beings to live in, while also taking care to ensure that the Earth remains habitable. Obviously, no sober economist working today wants this. The change from the global economy we are now living in would be far too painful and expensive. Which is to say, the fire hasn’t gotten close enough for Kate to be seen as a visionary…yet.