Doughnut Economics: How Sustainability Got Rebranded as a Pastry
Last week, climate twitter had a heyday sharing this remark: “climate change needs to hire coronavirus’s publicist.” That’s because governments around the world are responding to the coronavirus with sweeping aid packages, bail-outs and awareness-spreading messaging. It has all happened quickly, with the sense of urgency that the climate crisis has never received.
I realized that if climate change were to hire a publicist, it might be Kate Raworth, author of Doughnut Economics. Her book has been hailed as one of the most promising arguments in favor of sustainability in recent years.
One of the reasons may be because she talks the language of economics, arguably the language of power. She speaks as a graduate of an outdated economics curriculum that needs an update. Her audience directly targets economics majors, the very community that gets most pummeled with ideology in favor of free market principles.
These principles are very much at odds with sustainability, as they favor global trade (which devalues human capital while requiring long-distance transport), deregulation (which leads to gross amounts of pollution and public health problems) and unfettered growth (a pipe-dream for economists). Essentially, her argument is framed as a critique of that single metric called the GDP.
She writes, “Today we have economies that need to growth, whether or not they make us thrive. What we need are economies that help us thrive, whether or not they grow.”
This call to action hinges on a single diagram that looks a lot like a doughnut (see below). It demonstrates how we need to shift our aim to operate within two limits in order to prevent ecological collapse, while providing for human needs. She calls these limits the social foundation and the ecological ceiling.
The image basically puts the “triple bottom line” of sustainable development — environmental, social and economic needs — into one visually compelling layout. And she names it the “doughnut.”
In fact, nothing apart from the doughnut shape in the center of the graph is all that original. She has combined the planetary boundaries modeled by Johan Rockström, during his tenure as the Stockholm Resilience Centre’s director (in the outer ring) with a set of social targets that closely resemble the UN’s Sustainable Development Goals (on the inner ring).
Anyone familiar with the world of sustainability has seen these diagrams already, but judging from the positive responses on Goodreads and Twitter, not enough people outside of that cloistered world know about them. Doughnut Economics received above four stars on average from readers in Goodreads, suggesting that it struck a chord with the right target audience.
However, most positive reviews in Goodreads or online on Twitter point out that while they like the book, its concepts aren’t new. Various authors claim Raworth takes some of her ideas from the following sources:
- Keynesian economic theory
- Herman Daly, author of “Beyond Growth” (1996)
- Donella Meadows, et al., author of “Limits to Growth” (1972)
Negative reviews draw upon free market ideology talking points. So the book does tend to polarize and devolve into the two camps echoing the mainstream economic clash. As Marxist economist Richard D. Wolff writes, “The whole second half of the 20th century in economics was an endless rehashing of the free market ideology (or “neoclassical” economics) versus Keynesian economics (or the necessity of government intervention ideology).”
While Raworth certainly lends a brief critique of neoliberalism, Naomi Klein’s “The Shock Doctrine” does it much better. So what are we seeing here that’s new, fresh and inspiring?
What about this book really captures our imagination?
Raworth’s branding of sustainability concepts as an economic model called Doughnut Economics still stands as a remarkable achievement of publicity on behalf of sustainability.
When Doughnut Economics was published in 2017, George Monbiot wrote in praise: “We cannot hope to address our predicament without a new worldview. We cannot use the models that caused our crises to solve them. We need to reframe the problem. This is what the most inspiring book published so far this year has done.”
So, beyond its basic arithmetic — Planetary boundaries + SDGs = Doughnut Economics — how did Raworth accomplish her rebranding feat? Here are my opinions on why her book resonates so well.
Doughnut Economics applies branding principles to an economic theory
In short, Raworth’s model says that we need social safety nets and we need environmental limits to growth. But it says it with a visually compelling infographic that’s symbolized by the doughnut shape. She proudly employs iconography as one of her primary tools to disseminate the principles set forth by her colleagues.
The doughnut is instantly recognizable and memorable. It looks more akin to our planet, with its round shape, than the Kuznets Curve graph or the GDP graph of infinite growth that she sets out to compete with.
Doughnut Economics de-mythologizes free market ideology in relatable language
In the remainder of her book, Kate Raworth outlines seven principles that can update today’s economic theories. She points out how flawed the idea of a rational actor who stands above the earth and single-mindedly pursues financial gain.
She claims that this idea is taught with such an air of truth that economists adopt the idea as a result of their training. Yet, she suggests that it is ripe for reconsideration.
She flips the “me” to “we” with an elegant poetic symmetry that can be found throughout her book. Rather than focusing solely on self-interest, she claims that we should be looking out for the well-being of others as well.
In another part of the book, she criticizes the adage “no pain no gain” to suggest that economic abundance does not require inequities across the population.
She also claims that “trickle down” economics fails to redistribute wealth equitably. As alternatives, she proposes the concepts of redistributive and regenerative forms of disseminating value throughout society.
Arguably, her seven principles lack depth, but they point towards potential areas worth developing further. The book intends more to spark ambition than to stand as a total program for revising today’s economies.
Doughnut Economics calls externalities by their true names
Raworth places a strong emphasis on an area of economics that mainstream “orthodoxy” fails to adequately deal with: externalities.
In simple terms, the negative externalities (i.e., environmental pollution and health costs) stop the positive externalities (i.e., natural and human capital) from providing their services. These barriers within the system are getting overshot beyond their sustainable limits.
Raworth refuses to lump them all together in her diagram or obscure them in jargon. She preserves the specifics, so that every single economist who looks at this graph knows exactly what side effects of growth put us all at risk.
Whether it’s too much biodiversity loss paired with not enough gender equality or too much climate change and not enough peace and security, these issues become the starting point for defining the actual band of leeway in which sustainable economics would operate.
These are not abstract terms anymore, they are tangible real world phenomena. The graph keeps externalities visible, so they cannot be explained away in the fine print.
In short, the book unpacks what ecological limits and social floors we need to preserve in society in a simple elegant image. It frames these as the key goals of our economic activity. Economic growth gets bumped down in priority.
If you want to get a taste of the book’s seven principles without reading the whole thing (even though it’s a short book), she’s uploaded brief animations detailing the main points of Doughnut Economics on Youtube.
Originally published at https://www.ericaeller.com on March 22, 2020.
