For the inner economist in us all: seven ways to think in the 21st century through the Doughnut Economics

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Age of Awareness

22 min readMar 26, 2022

“To see differently is to live differently and living differently is the key to avoiding environmental crisis.” – Leslie Davenport

“Systems thinking is a discipline for seeing wholes. It is a framework for seeing interrelationships rather than things, for seeing ‘patterns of change’ rather than ‘static snapshots.” – Peter Senge

“Let’s face it, the universe is messy. It is nonlinear, turbulent, and chaotic. It is dynamic. It spends its time in transient behavior on its way to somewhere else, not in mathematically neat equilibria. It self-organizes and evolves. It creates diversity, not uniformity. That’s what makes the world interesting, that’s what makes it beautiful, and that’s what makes it work.” – Donella Meadows

Following on from the previous article “Three extraordinary women with three tools necessary for regeneration and wellbeing” where I wrote about Naomi Klein’s books and critical thinking, I carry on with the second post of the series. Here I will write about the economist Kate Raworth and her book and model “Doughnut Economics” (The third article inspired by Ursula K. Le Guin “The paradox of wellbeing: when ill-being helps us along our way” completes the model of responsible thinking: Critical Thinking — Systems Thinking — Paradoxical Thinking).

I met Raworth in a talk she did at Schumacher College in 2013 when she was promoting and making visible the doughnut as a new way of seeing the economy and the environment. Four years later she wrote her outstanding book that will be a classic and I would include it in a selected group of books for sustainability & wellbeing. As every one of us has a long list of books to read, this is one of them that can lead us to a new society.

As I mentioned in the previous article, it is impossible to make the part be the whole, that is, my analysis and reflections would not do justice to the pleasant experience of reading the book completely. As André Maurois said, “The reading of a fine book is an uninterrupted dialogue in which the book speaks and our soul replies.” In this way, when reading the book, it will speak to us and manifest itself differently in each one of us, but what will be the same for all of us is that it will not leave us indifferent to the new compass that it shows us in comparison with the present compass (mostly an infinite growth economy in a finite planet).

**Source: Raworth, K.** **(2017), Doughnut Economics: seven ways to think like a 21st century economist.** **London: Penguin Random House**

How can we look back again after having contemplated this splendid landscape?

Therefore, my suggestion is to read it completely so as not to miss those nuances, that narrative, and those metaphors of life that the author so skilfully communicates to us. However, as I did with Klein’s earlier article, I will propose a framework through which you can savour little bites of that doughnut economy. Systems Thinking will be the framework I’ll use through this post because, in addition to being an economist, Raworth is an excellent systems thinker. Making this frame explicit, I propose to add didactically one more mental tool so that we can experience and interpret the world more consciously. As Linda Elder and Richard Paul told us:

“Yet the quality of our life and that of what we produce, make, or build depends precisely on the quality of our thought. Shoddy thinking is costly, both in money and in quality of life.”

This new awareness of observing the world in a different way, in systems, and as the psychologist Leslie Davenport and the systems scientist Peter Senge propose, will allow us to see the world differently. Therefore, we could start to be able to live differently in the face of this mental dependence that drags from old cultural worldviews that are creating big personal, social, and environmental problems.

In the world of systems thinking, different models coexist, some easier to explain than others, but perhaps the common point that these different perspectives share is the definition of a system, in Raworth’s words:

“So what is a system? Simply a set of things that are interconnected in ways that produce distinct patterns of behaviour — be they cells in an organism, protestors in a crowd, birds in a flock, members of a family, or banks in a financial network. And it is the relationships between the individual parts — shaped by their stocks and flows, feedbacks, and delay — that give rise to their emergent behaviour.”

System concepts such as feedback loops, delays, stocks, and flows, leverage points… are very well detailed and explained with examples throughout the book. Therefore, I have chosen to frame this article in a more simplified cognitive model that has emerged recently and that given its simplicity it begins to be taught in a few schools at a very early age (In fact because my daughter’s school don’t teach them, I was introducing this method to my child when she was six years old in our way to school). This is the DSRP method, an acronym for Distinctions, Systems, Relationships, and Perspectives. According to the authors, Derek and Laura Cabrera in the history of systems thinking has been 3 waves and they propose that a possible fourth wave is emerging where DSRP Theory belongs to. Derek Cabrera, a systems theorist, and cognitive scientist, already observed that his son, when he was a baby, developed the four blocks that make up this methodology. If all of us, more or less, applies its methodology implicitly, let us make this cognitive method explicit and visual to give more light to those systems in which we are involved. This way we could be able to didactically separate the instinct-feeling-cognition triad that surrounds all our experiences, interpretations, and decisions in this life for a better understanding.

Before we move on to the explicit application of the DSRP tool, let’s taste a small portion of that donut through some of the context and the story behind it. That is, let’s go into the kitchen and see the tools and recipes that the author has used to create this model.

INTRODUCTION TO THE DOUGHNUT ECONOMICS

“The most powerful tool in economics is not money, nor even algebra. It is a pencil. Because with a pencil you can redraw the world.”

The above quote and the frame at the cover of the book are the elements that the author intends to show us, i.e., there are seven key different ways (there may be more), that can transform mentally, how to be an economist in the 21st century. Anyone could ask why does the economy has so many implications? As Raworth says:

“Economics is the mother tongue of public policy, the language of public life, and the mindset that shapes society.”

Much to our regret, we are immersed in it, as fish do in the water. However, fish are not explicitly and rationally involved in creating that “water” that surrounds them. That water is always there. We do participate in the creation of that “water”, the economic paradigm where we swim. Contrary to what Margaret Thatcher said, “There is no alternative” or also Francis Fukuyama’s thesis that history had come to an end, the author goes against those narratives. There are alternatives and history has not come to an end. We can create our alternative paradigm and history has only just begun. All this is illustrated to us throughout the book with dozens of little stories and graphics that reflect life in contrast to money. In this way, she brings us closer to that Doughnut Economics: from the Commons to the Circular Economy, from the Economy of the Common Good to Biomimicry, from Open Source Movements to the Global Alliance for Tax Justice… and thus numerous alternative examples that indicate the story continues and is very much alive.

Kate Raworth and Yuang Yang, an economist student who co-founded the “Rethinking Economics” movement (an international network of students, academics, and professionals building better economics for the classroom), were frustrated when studying their respective degrees. The contents and curriculum taught in Economics did not respond to their most human concerns. At the end of the 20th century and the beginning of the 21st mostly one type of economics is taught in almost all the world’s universities. They all start from the same pattern and similar narrative, so Raworth revisits the history of the economy and reveals to us both the path that was taken and those that were ignored. The pattern that has survived to this day, on the one hand, has created greater progress in human wellbeing by being able to live longer and a little more comfortably. However, that part of the story does not get along with the part of the story that troubles Kate Rawoth and Yuang Yang, the story of the losers. The one that is leading us to greater inequality every year, the one that is creating immigration due to hunger, poverty, and wars and is received with racism, xenophobia, and aporophobia (rejection of the poor). Besides the icing on the cake is the environmental damage. It is not only about climate change that is usually the flag of ecological problems, but also about the loss of biodiversity, the massive extraction of fresh water, the atmospheric and chemical pollution that kills us, the degradation of arable land, acidification of the oceans…

As Naomi Klein said, it is no longer enough to say NO, in addition to going against those shock policies that cause us so much ill-being and whose trends do not indicate that they are going to reverse overnight, we must say YES for that world we want. Here is the role of Raworth (her book is full of natural metaphors) to displace those old ideas that have us trapped and inspire us with a new economic story that describes so accurately with her narrative and with appropriate images and videos.

This model has been “fermented” for a long time and the doughnut economy has also been fortified by numerous voices and perspectives that Raworth has masterfully collected over many years meeting with different groups: UN delegates, businessmen, students, politicians, economists, third-world housewives, etc.

Finally, we have in these times of the beginning of the 21st century, the real doughnut economics with all its transgressions.

If the first image we had above showed the doughnut economics we are looking for, where humanity lives in a safe and just operating space between the two boundaries, on the second image we have the doughnut economics transgressing them, sometimes due to excess and other due to deficiency. Those boundaries are, on the one hand, the environmental ceiling with its nine planetary limits proposed by a group of scientists led by Johan Rockström and Will Steffen and on the other hand, the social foundation were the twelve dimensions derived from internationally agreed minimum social standards, as identified by the world’s governments in the Sustainable Development Goals in 2015.

Relying on the famous saying attributed to Gandhi, “Be the change you want to see in the world.”, Raworth adds that we must also draw the change we want to see in the world if we want to arrive at new thinking in economics. Systems thinking can help us combine the power of verbal frames with powerful visual frames and thus have, at the very least, the opportunity to rewrite and redraw a new story. Next, let’s savour some parts of that doughnut through the DSRP tool and then make way for some videos that she leaves us on her website where we could be inspired to start a new economic story in the 21st century.

DSRP: A COGNITIVE TOOL FOR A GOOD SYSTEMS THINKER

The educational proposal of Derek & Laura Cabrera is that students begin to consider Distinctions, Systems, Relationships, and Perspective (DSRP) as an essential tool in school. They think of systems thinking as synonymous with generalized thinking. Therefore, if we don’t want these students to become consumers of information but builders of knowledge, we need them to develop into good thinkers. These good thinkers could solve our tough problems, create better inventions and solutions and be better citizens in the future. According to these researchers, a thinker (child or adult) is truly well-rounded when he or she has developed these eleven skills.

The key insight for being a good thinker (systems thinker) that connects these skills with the DSRP model is that underlying all the above “Thinking Types” are four simple metacognitive patterns:

- Making distinctions between and among ideas.
- Organizing ideas into systems of parts and wholes.
- Identifying relationships between ideas.
- Taking many perspectives on any idea.

Let’s take a didactical look at this tool with these four blocks in action through the book “Doughnut Economics”.

Distinctions

(Systems thinkers) ”They make DISTINCTIONS (identity-other) between and among things and ideas. How we draw or define the boundaries of an idea or a system of ideas is an essential aspect of understanding. Whenever we draw a boundary to define a thing, that same boundary defines what is not the thing (the “other”). Systems thinkers consciously use distinctions to challenge existing norms, labels, and definitions and to identify biases in the way information is structured.”

After the crisis of 2008 and well into 2011 with the protest movement Occupy against economic inequality and the different critical environmental problems, more inspiring visions were needed. Then political leaders spoke out, or rather I should say, offered us an Orwellian neo-language. The author felt like stepping into a Manhattan deli to buy a simple sandwich and there was a huge choice of different tastes to fill it with. And she leaves us this contrasted wording:

“What kind of growth would you like today? Angela Merkel suggested ‘sustained growth’. David Cameron proposed ‘balanced growth’. Barack Obama favoured ‘long-term, lasting growth’. Europe’s José Manuel Barroso was backing ‘smart, sustainable, inclusive, resilient growth’. The World Bank promised ‘inclusive green growth’. Other flavours on offer? Perhaps you’d like it to be equitable, good, greener, low-carbon, responsible or strong. You choose — just so long as you choose growth.”

Systems

(Systems thinkers) “They organize things and ideas into part-whole SYSTEMS to make meaning. Systems thinkers know that changing the way ideas are organized changes meaning itself. The act of thinking is defined by splitting things up or lumping them together. Systems thinkers constantly consider context by asking “what is this a part of?” in order to see how things fit into larger wholes than is the norm.”

There is a whole chapter devoted to systems, from which we can glean some systemic insights. For example, Newton’s anecdote about the shares of the South Sea Company. They began to rise fast because of false rumours. He already had had shares before, but he had already sold them for a large profit. However, their price continued to rise, and perhaps intoxicated by the enthusiasm and excitement of the people…

“He jumped back in at a much higher price in June — just two months before the bubble finally peaked and burst. Newton lost his life savings as a result. ‘I can calculate the movement of stars, but not the madness of men,’ he famously said in the bubble’s aftermath. The master of mechanics had been confounded by complexity. Like Newton, we all pay a high price when we don’t understand the dynamic systems on which our lives and livelihoods depend.”

Elsewhere, she quotes that great systemic thinker, Donella Meadows, who left us through illness at the age of 59 before we had had a chance to learn a little more of the wisdom she treasured.

“‘The future can’t be predicted,’ wrote Donella Meadows, ‘but it can be envisioned and brought lovingly into being. Systems can’t be controlled, but they can be designed and redesigned … We can listen to what the system tells us, and discover how its properties and our values can work together to bring forth something much better than can ever be produced by our will alone.”

Relationships

(Systems thinkers) “They identify RELATIONSHIPS (action-reaction) between and among things and ideas. We cannot understand much about anything, including a system, without understanding how parts and wholes are related. Relationships come in all types: causal, correlation, direct/indirect, etc. Systems thinkers use relationships to show dynamical interactions between things and ideas, including feedback loops to show reciprocal relations.”

At one point in the text, she talks about how dangerous it is sometimes to put prices on things because that implies causes or consequences in the long term. In this case, our moral relationships, which have been solidly built up over many years…

“…twentieth-century theory has led economists to overestimate the effectiveness of price as a lever, and to underestimate the role of values, sense of reciprocity, networks, and heuristics. Crucially, the theory overlooks the fact that some things may be put in jeopardy when they are given a price. That is especially true when it comes to relationships that we have traditionally managed with our morals. Here’s why. Setting a price is like striking a match: it sparks intense interest but that spark ignites both power and danger.”

Perspectives

(Systems thinkers) “They look at ideas from different PERSPECTIVES (point-view) and understand that every time we make a distinction (including identifying relationships and systems), we are always doing so from a particular perspective. Systems thinkers use perspectives to rethink distinctions, relationships, and/or systems. They move beyond human or animal perspectives (i.e., “perspectives with eyes”) by taking conceptual perspectives (i.e., seeing a phenomenon from the perspective of an idea or thing).”

In one part of the text, Kate talks about the differences in naming. The relationships or images that it creates for us are different. For example, calling them “natural capital” or “ecosystem services” can be so double-edged. Here she shows us the interesting point of view of a chief of an Iroquois nation…

“When Chief Oren Lyons of the Iroquois Onondaga Nation was invited to address students at the University of Berkeley’s College of Natural Resources, he highlighted this risk. ‘What you call resources we call our relatives,’ he explained. ‘If you can think in terms of relationships, you are going to treat them better, aren’t you? … Get back to the relationship because that is your foundation for survival.”

At another point, she tells of the frustration of Janine Benyus, one of the biomimicry experts, when she worked with people who were trapped in the mindset and metrics of degenerative economic design…

“While collaborating with a large commercial land developer on designs for renovating the suburb of a major city, she proposed constructing buildings whose biomimetic living walls would sequester carbon dioxide, release oxygen, and filter the surrounding air. The developer’s first response? ‘But why should I provide clean air for the rest of the city?’”

DSRP as a whole

We all use the DSRP methodology and tool, although we do so unconsciously rather than consciously. It is something we are born with. Moreover, we do it by combining more than one of the elements at a time, which gives many variables and combinations. However, using all 4 elements together consciously is what will give its maximum synergy to this mental tool for obtaining a fuller, more accurate, deeper, and clearer picture of reality. Raworth, in this book, makes the (D) distinctions between what an economist has been until today and what an economist can or should be in the 21st century, both of which look at the (S) system that we people and the planet form together. In addition, she considers the (R) causal relationships that lead to behaving in one way or another, bringing us one or another consequence. With great clarity and depth, she shows us that the (P) perspective of the 21st-century economist with the compass that is the doughnut economy is possibly the appropriate point of view with which we must lead us into the future.

A very paradigmatic example due to the consequences that followed is described perfectly in the book. It shows the four DSRP blocks in conjunction with each other. There the author tells us the history of Monopoly. It seems that the creator of the game, Elizabeth Magic, back in 1903 invented a game called “The Landlord’s Game” with two different sets (D) of rules. With the first set of rules called “prosperity”, the first (P) perspective was that the game ended when the player who had started with the least money doubled it. It was a win-win game. On the other hand, the second (P) perspective of rules, the “monopolist” model, consisted of, more or less, today’s rules where the game ended with a single winner and everyone else bankrupt. Raworth quotes:

“The purpose of the dual sets of rules, said Magie, was for players to experience a ‘practical demonstration of the present system of land grabbing with all its usual outcomes and consequences’ and so understand how different approaches to property ownership can lead to vastly different social outcomes. ‘It might well have been called “The Game of Life”,’ remarked Magie, ‘as it contains all the elements of success and failure in the real world.’“

The problem came later when in the 1930s the Parker Brothers game company bought the patent for the game. In the launch of the new game, this time under the name Monopoly, only the rules of the “monopolistic” model in which one won over all the others were retained. As we can see with this example, the (S) system created by Magie was complete, and in it, one could see the (D) different (R) relationships that occurred when taking one or another (P) perspective in the game. Parker Brothers broke the system so there was no longer any distinction, no alternative perspective, other than winning the game by beating the others. Thus, only a single relationship remained, which was a see-saw cause-and-effect relationship, i.e., win or lose. The question remains: what would have happened if the game had continued with the dual rule system?

Seven Ways to Think Like a 21st Century Economist

These are the seven ways to think about the economy in a transformative way that Kate Raworth leaves us with these animated videos (Subtitles in more than 30 languages)

1) Change the Goal

From GDP to Doughnut.

2) See the big picture

From self-contained market to embedded economy. (It tells a new story. From the neoliberal narrative to a story fit for our times).

3) Nurture human nature

From rational economic man to social adaptable humans.

4) Get savvy with Systems

From mechanical equilibrium to dynamic complexity.

5) Design to distribute

From ‘growth will even it up again’ to distributive by design.

6) Create to regenerate

From ‘growth will clean it up again’ to regenerative by design.

7) Be agnostic about growth

From growth addicted to growth agnostic.

ETHICS AND EDUCATION FOR REGENERATION AND WELLBEING

In this article we have talked about change, so necessary to reverse all those social and environmental transgressions that we are all creating together. By observing these insights (to be seen in the 3rd article of the series through paradoxical thinking) some creativity emerges to respond to these challenges. Indeed, this has begun to be inspired by that relatively new discipline, biomimicry. This is based on the understanding that we don’t necessarily have to reinvent the wheel, but that we can look at best practices and models that nature has used over centuries to help us gain new insights into how to solve human problems.

In the same way, and with some humility, why not look at the wisdom of some indigenous peoples through the lessons they pass on to us? On the one hand, their cultures place great emphasis on life values, universal and intrinsic values. On the other hand, they already knew and wisely practiced systems thinking, although they may not have had a word for it because it was already embedded in their culture, myths, and legends.

If we want to remember legends, there is one with possible origins in India, which has been passed down through the ages by various peoples until reaching the present day and which should be an educational reference in all schools. It is the parable of the blind men and the elephant, widely mentioned in the article I wrote in Spanish a few years ago “How elephants can give us an educational lesson in good living” (I’ve recently written a post in English about education and elephants that can also be insightful). In this legend, several people who are blind (or in the dark) begin to touch the body of an elephant to understand what it looks like. Each one of them touches a different part, but only one part, such as the leg, the trunk, the ear, the tail… Then they begin to compare their observations and realise that they don’t agree on anything. According to some versions of the story, the problem is solved, but with a lot of conflict and some violence due to the egos of these blind people to make their opinion prevail. In others, sometimes it is not. Perhaps the use of the DSRP methodology would have been a good tool to resolve this conflict. First, the D for Distinction would indicate that there is always another one or others. P for Perspective would make us put ourselves in their shoes to understand their position. The S for System would make us see each other as a whole and finally, the R for Relationship would bring together those points that were so distant at the beginning but were connected.

Kate Raworth with her book Doughnut Economy, in my opinion, has implicitly used these three elephant metaphors I mentioned in that article:

- The Blind Men and the Elephant
- Don’t think of an elephant
- We have an elephant in the room

Firstly, the construction of her doughnut economy is based on taking the perspective of the different economies, voices, opinions that he has collected over the years. However, she is still not finished, she is still gathering new perspectives to relate them to the whole system because this elephant of the “doughnut economy” needs more details to see it in its fullness. This link leads to DEAL (Doughnut Economic Action Lab) where this community and movement are focusing on turning ideas into action, and on learning with and from others through experiments in co-creating a new economy. As in the elephant and the blind men, all voices are useful to continue building and maintaining that vision.

Secondly, Kate is, like me, an enthusiast for the ideas of linguist George Lakoff with his metaphors of life, frames, etc. The idea of Lakoff’s book, “Don’t think of an elephant (Know your values and frame the debate)” has been aptly used by Kate in this book. Who in their right mind seeing such a beautiful image of a planet where humanity lives in a just and safe space can forget it?

Thirdly, Kate showed us the elephant in the room, the one in the picture with all the transgressions we are doing to society and the Planet. It is necessary to regenerate the system and she didactically showed us that YES, there is indeed an elephant in the room in case we hadn’t seen it, or, to those who knew it was there and tried to deny it, she dismantled all their artifices.

Taking this last point, I echoed with this Twitter thread that all countries have an elephant in the room, i.e. a self-evident truth that is ignored or overlooked.

The one in the UK and the one in the USA were great. We were killing fleas with a sledgehammer. Specifically, in the United Kingdom, we exceeded 5 biophysical limits out of the 7 which are measured (some multiplied by more than 8, which would correspond fairly). On the other hand, we obtained 7 good social indicators, one draw, and 3 failures out of the 11 indicators that the University of Leeds was checking. If you are curious to see the indicators for your country or any other country, here is the link to the project: “A Good Life for all within Planetary Boundaries”.

We have indicated in these two articles the importance of critical thinking and systems thinking in both formal and informal education. Regarding the latter, apart from any methodology on systems thinking that may begin to be given in schools, it is also important to emphasise the characteristics that make a person a better systems thinker to develop them in schools.

As for those possible individual traits that make a person more likely to develop such thinking, researchers Heidi Davidz, Deborah Nightingale, and Donna Rhodes in this research give us some clues and key enablers.

Thus, higher-level systems issues have complexity, ambiguity, complications, and dizzying amounts of information that require tolerance for ambiguity, the ability to ask the right questions, the ability to navigate complexity, and analytical ability.

Trying to gather more information and understand the system requires strong communication skills and strong interpersonal skills that enable access into dialogue with more people.

Finally, being curious and open-minded motivates us to learn more about the system context. And this is where I would put that systems lever in education. Children are born curious and both parents and teachers should try to leave as much openness as possible, because sooner rather than later, with it we gain access to the other skills that develop us into better systems thinkers.

Curiosity, one of the 24 strengths of positive psychology, is that spark that allows us to appreciate what is interesting and beautiful in this world through its non-linear, turbulent, and chaotic dynamics that Donnella Meadows showed us in one of the quotes at the beginning. The filmmaker Tiffany Shlain in one of the best uplifting videos I’ve ever seen shows us that curiosity is one of the five skills, strengths, or qualities for thriving in this 21st century. It is even quite probable that curiosity is the beginning of the other four: creativity, initiative, multi-disciplinary thinking, and empathy.

I find it easy to connect the first skill, curiosity, with the second, creativity, through the Spanish podcaster Nuria Perez. She finishes all her outstanding podcasts (“Gabinete de Curiosidades” / Cabinet of curiosities — In my opinion, the best good-feeling podcast in Spanish) with the motto “Because, if we lose curiosity, what are we left with? I can’t imagine how could she founded the “Creativity Hospital” (Teaching creative thinking) without curiosity. Just a few miles where I’m writing this post, the Schumacher College appears as an outstanding ethical and educational centre that implicitly teaches those five skills and especially the third one, the initiative to change the world through the curiosity and creativity that emerge in its courses. I round off with Schumacher College (in honour of a 21st-century economist who lived in the 20th century) and the circular chalk of the doughnut economy that Kate is proposing to us in 2017 through her book. Back in October 2013 at the Schumacher College, Kate Raworth in her first visit gave us a lecture to show us this doughnut and ask us for new ingredients to make it even healthier (Soon in a post I’m writing, my answer with a recipe for a stronger “Doughnut” Economics) I was also coming inside the Schumacher College for the first time, although I had seen it from the outside. I was coming as a curious listener or, rather, as an anthropologist of this new paradigm of wellbeing that needs more bold, empathic, and multi-disciplinary thinkers who can transform the present economy so that we can truly thrive in this 21st century. In this new paradigm, Doughnut Economics fits like a glove (in Spanish, like a ring to one’s finger).

The next post will be the 3rd and last of this series which inspired me to create the responsible thinking framework. Critical Thinking and Systems Thinking are possibly answering Why? And What? so there is a third question that emerges How? And this could be answered by Paradoxical Thinking.