Doughnut Economics by Kate Raworth
Book review by Alison Jones.
Kate Raworth describes herself as a ‘renegade economist’, having left the safety of her economics training for a career on the front line of development. Her contention is that economics as it is traditionally taught is not fit for purpose in the 21st century, largely because it is based on outdated, unchallenged core assumptions.
She argues persuasively that the core models and diagrams of economic theory — which have become woven into our common understanding of how the world works even if we’ve never stepped into an economics lecture — fundamentally misrepresent how the world really works. When we see the upward swing of a GDP growth chart we know things are going well. Things are, quite literally, ‘on the up’. But what does a never-ending upwards economic growth forecast really mean? What is NOT included in that measure of national success?
If we’re to understand our world differently, to reimagine how economics could work, Raworth argues that it’s not enough simply to challenge those models, we need to redraw them.
The doughnut model was born when Raworth took a diagram of the planetary boundaries from the earth systems science tradition and doodled over it the constraints she knew so well from her background in development, overlaying the social story onto the planetary. When, a few months later, she shared her scruffy drawing at a high-level meeting, she was taken aback by the reaction. One of the leading planetary scientists observed: ‘That’s the diagram we’ve been missing all along. It’s not a circle, it’s a doughnut.’ The name stuck.
When I spoke to Kate on The Extraordinary Business Book Club podcast, she cheerfully admitted that she had never set out to become ‘the doughnut lady’:
‘I thought, “What have I done to my career? I’ve lost any sense of gravitas now.’
But in fact the very silliness of the name that attached itself to her model proved surprisingly liberating:
‘It was a real release to write about very serious issues much more playfully.’
The doughnut describes a ‘safe and just space’, a habitable, sustainable band bounded on the ‘hole’ side by a social foundation — the point at which a shortfall in wealth harms human welfare — and on the outside by an ecological ceiling above which our quest for economic growth harms the planet. Right now, of course, we’re failing pretty comprehensively in both directions.
Raworth identifies and challenges 7 fundamental economic concepts — GDP as the measure of growth, the idea of a self-contained market, humans as rational economic actors, the equilibrium of supply and demand, the distribution of income, the assumption that economic growth will eventually create a better environment, and the most pernicious of all: growth at all cost.
‘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.’
Powerful, persuasive, but somewhat lacking in specifics, Doughnut Economics is a rallying call for a new way of thinking and behaving. It remains to be seen how this can play out in politics that any electorate would support: I’d like to think that we’d support our leaders in taking decisions that keep us in that ‘safe and just space’, but as long as individual wealth and comfort matters more to most of us than ending global poverty, it’s hard to see it happening. And the current agendas of most world leaders could hardly be further from Raworth’s vision.
It’s tempting to give up and lay down. But if we’re to have a chance at realising this vision of a sustainable, equitable world, it must begin with reimagining what we’re trying to achieve. And that’s why this book matters.
Doughnut Economics is available from Blackwell’s here.
(Doughnut Economics was shortlisted for the FT/McKinsey Business Book of the Year in 2017. You can see more about it from Raworth herself here: https://www.kateraworth.com/doughnut/.)
Alison Jones (@bookstothesky) is a publishing partner for businesses and organizations with something to say. Formerly Director of Innovation Strategy with Palgrave Macmillan, she hosts The Extraordinary Business Book Clubpodcast, regularly speaks and blogs on publishing, business and writing, sits on the board of the IPG, and is the author of This Book Means Business (2018).
