How to think like a 21st century economist
Reviewed by Jeanette Stanfield
Doughnut Economics — 7 Ways to Think Like a 21st Century Economist by Kate Raworth, Chelsea Green Publishing, Vermont, 2017.
Kate explores real life economics and through many practical and collaborative investigative approaches and many questions comes up with 7 ways to think like a 21st century Economist. She is now testing these 7 ways in organizations and communities around the world. As a person not trained in Economic theory, I appreciate Kate’s earthy examples that give me vivid pictures of the new economic approach she is advocating.
Doughnut Economics for her is about reinventing economics from being a system based almost exclusively on growth to one based on the thriving of humans and the earth. She uses the Doughnut as a new compass for guiding humanity. The inner ring of the doughnut is the social foundation or the 12 basics all humans need. All are included in the UN Sustainable Development Goals. The outer ring is the Ecological Ceiling, which includes 9 critical processes an international group of Earth-system scientists identified in 2009. The challenge is for humans to thrive in the safe and just space between these two boundaries.
In the introduction who wants to be an economist? Kate talks about her journey to becoming an economist. Her courses raised a lot of questions for her about the present economic model in society today. Courses focused on understanding the market and left out the indispensible role of the life giving earth and the importance of the household and society in the life of every person.
In the first three ways of thinking like a 21st century economist Kate questions present images of the exclusive goal of economy as growth, of economy as a self-contained system and humans as rational, self-interested and dominant over nature.
Her 4th way of thinking declares Get Savvy with System. She wonders what if might have meant if Newton watching an apple fall from a tree had also wondered at the essentials like water, air, sun, roots and bees that grew that apple in the first place and not just on the fact that it fell down to the ground. Perhaps we would not be talking about market mechanisms but about market organism. Perhaps economists would see themselves as gardeners who are stewards rather than believing that things will self-regulate.
The last three ways of thinking like a 21st Century economist explore the dynamics of a complex organic economic system. Tomorrow’s economic system must be distributive and regenerative by design.
Kate talks about a system as Distributive by design as one whose dynamics tend to disperse and circulate value as it is created rather than concentrating it in ever fewer hands. This part of the system is essential if the inner rim of the doughnut the social foundation can meet the needs of all. It looks like a network. One example she explores is the Global Knowledge Commons. Open source technologies and digital communication systems potentially give a way for local communities and innovators around the world to create solutions for their communities. As a global platform where access to experts and innovators around the world is added to this mix, powerful bottom-up networks can directly accelerate the distribution of value, solutions and products.
Regenerative by design gives a way for people to become full participants in regenerating Earth’s life giving cycles so that we thrive within planetary boundaries. One essential example of this is the Open Source Circular Economy for industry. Asknature.org makes the secrets of nature’s materials, structures and processes open-source to all
so that people around the world in very local communities and large corporations can let life teach us how to build, feed, travel, power ourselves and manufacture in life-enhancing ways. Whether it is the OS Vehicle designed in such a way that it can be re-assembled into smart cars, golf carts or airport buggies by Silicon Valley or 3D printers made from electronic waste dumped in West Africa, an open source approach shares nature’s genius with all and opens up new functions for many materials.
The final system dynamic is that it be Agnostic about growth. What does it look like to design an economy that promotes human prosperity whether GDP is going up, down, or holding steady? An airplane takes off and flies but eventually it has to land. That is the same way with economies, which reach a certain growth level and have arrived in a safe prosperous place. In this analogy, some economies are still in the take off stage; others are flying higher, others have arrived.
For the last few years, I have been exploring elements of a sustainable equitable economy. I have stickers on a board naming these elements but hadn’t found an image or model that could hold all of these together in a powerful way. Kate’s Doughnut lets me re-imagine what could be a viable economic future for human society. Please share your thinking and actions regarding a new economy we are all building together.
About the author: Kate Raworth is a senior visiting research associate and advisory board member at Oxford University’s Environmental Change Institute and teaches in its masters program for Environmental Change and management. She is also senior associate of the Cambridge Institute for Sustainable Leadership and a member of the Club of Rome. Visit www.kateraworth.com and @KateRaworth.
Review by Jeanette Stanfield Toronto, Canada 2018
