Those of you who have read chapter 7 of my book, or heard my talk at the recent Planet Centred Forum seminar, will know that I believe that a market economy is one of the factors making climate change worse. I also talk about the obsession with economic growth – growth, growth and more growth – which is being adhered to by politicians in an increasingly panicky way. It is clear from many experts that the current economic system is based not only on shaky mathematics but is also damaging the planet.
Now, Kate Raworth of Oxford University’s Environmental Change Institute, has come up with an alternative. It is expounded in her book, Doughnut Economics: Seven Ways to think like a 21st-Century Economist (published by Penguin Random House).
Two recent Guardian articles explain the context of her theories, one by Kate herself (The Guardian 6th April 2017) and one by George Monbiot (The Guardian 12th April 2017), who reviews her book. Raworth redraws the economy, embedding it in the Earth’s systems and in society. It includes a doughnut-shaped diagram, which explains the concept, which follows the laws of nature, rather than the laws of motion, or physics. Instead of growth at all costs, her economic model allows us to thrive whilst saving the planet.
Kate expounds this theory in more detail, with video clips and diagrams on the following website:
It starts as follows:
“No one can deny it: economics matters. Its theories are the mother tongue of public policy, the rationale for multi-billion-dollar investments, and the tools used to tackle global poverty and manage our planetary home. Pity then that its fundamental ideas are centuries out of date yet still dominate decision-making for the future.
Today’s economics students will be among the influential citizens and policymakers shaping human societies in 2050. But the economic mindset that they are being taught is rooted in the textbooks of 1950 which, in turn, are grounded in the theories of 1850. Given the challenges of the 21st century—from climate change and extreme inequalities to recurring financial crises—this is shaping up to be a disaster. We stand little chance of writing a new economic story that is fit for our times if we keep falling back on last-century’s economic storybooks.
When I studied economics at university 25 years ago I believed it would empower me to help tackle humanity’s social and environmental challenges. But like many of today’s disillusioned students its disconnect from relevance and reality left me deeply frustrated. So I walked away from its theories and immersed myself in real-world economic challenges, from the villages of Zanzibar to the headquarters of the United Nations, and on to the campaign frontlines of Oxfam.
In the process I realized the obvious: that you can’t walk away from economics because it frames the world we inhabit, so I decided to walk back towards it and flip it on its head. What if we started economics with humanity’s goals for the 21st century, and then asked what economic mindset would give us half a chance of achieving them?
Spurred on by this question, I pushed aside my old economics textbooks and sought out the best emerging ideas that I could find, drawing on diverse schools of thought including complexity, ecological, feminist, behavioural and institutional economics, and set out to discover what happens when they all dance on the same page. The insights that I drew out imply that the economic future will be fascinating, but wildly unlike the past, so long as we equip ourselves with the mindset needed to take it on. So here are seven ways in which I believe we can all start to think like 21st century economists.
Go to her website to see the seven fully-illustrated steps for how this can be achieved. She also explains on the following you tube clip:
And this TEDx talk to economists: