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Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
Economics is broken. It has failed to predict, let alone prevent, financial crises that have shaken the foundations of our societies. Its outdated theories have permitted a world in which extreme poverty persists while the wealth of the super-rich grows year on year. And its blind spots have led to policies that are degrading the living world on a scale that threatens all of our futures.
Can it be fixed? In Doughnut Economics, Oxford academic Kate Raworth identifies seven critical ways in which mainstream economics has led us astray, and sets out a roadmap for bringing humanity into a sweet spot that meets the needs of all within the means of the planet. En route, she deconstructs the character of ‘rational economic man’ and explains what really makes us tick. She reveals how an obsession with equilibrium has left economists helpless when facing the boom and bust of the real-world economy. She highlights the dangers of ignoring the role of energy and nature’s resources – and the far-reaching implications for economic growth when we take them into account. And in the process, she creates a new, cutting-edge economic model that is fit for the 21st century – one in which a doughnut-shaped compass points the way to human progress.
Ambitious, radical and rigorously argued, Doughnut Economics promises to reframe and redraw the future of economics for a new generation.
Can it be fixed? In Doughnut Economics, Oxford academic Kate Raworth identifies seven critical ways in which mainstream economics has led us astray, and sets out a roadmap for bringing humanity into a sweet spot that meets the needs of all within the means of the planet. En route, she deconstructs the character of ‘rational economic man’ and explains what really makes us tick. She reveals how an obsession with equilibrium has left economists helpless when facing the boom and bust of the real-world economy. She highlights the dangers of ignoring the role of energy and nature’s resources – and the far-reaching implications for economic growth when we take them into account. And in the process, she creates a new, cutting-edge economic model that is fit for the 21st century – one in which a doughnut-shaped compass points the way to human progress.
Ambitious, radical and rigorously argued, Doughnut Economics promises to reframe and redraw the future of economics for a new generation.
384 pages, Paperback
First published April 6, 2017
About the author
Kate Raworth
11 books431 followersKate Raworth is a renegade economist focused on exploring the economic mindset needed to address the 21st century’s social and ecological challenges, and is the creator of the Doughnut of social and planetary boundaries.
Her internationally acclaimed idea of Doughnut Economics has been widely influential amongst sustainable development thinkers, progressive businesses and political activists, and she has presented it to audiences ranging from the UN General Assembly to the Occupy movement. Her book, Doughnut Economics: seven ways to think like a 21st century economist is being published in the UK and US in April 2017 and translated into Italian, German, Spanish, Portuguese, Dutch and Japanese.
Over the past 20 years, Kate’s career has taken her from working with micro-entrepreneurs in the villages of Zanzibar to co-authoring the Human Development Report for UNDP in New York, followed by a decade as Senior Researcher at Oxfam.
Her internationally acclaimed idea of Doughnut Economics has been widely influential amongst sustainable development thinkers, progressive businesses and political activists, and she has presented it to audiences ranging from the UN General Assembly to the Occupy movement. Her book, Doughnut Economics: seven ways to think like a 21st century economist is being published in the UK and US in April 2017 and translated into Italian, German, Spanish, Portuguese, Dutch and Japanese.
Over the past 20 years, Kate’s career has taken her from working with micro-entrepreneurs in the villages of Zanzibar to co-authoring the Human Development Report for UNDP in New York, followed by a decade as Senior Researcher at Oxfam.
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March 13, 2018
This is something that you need to move up your list of books to read - and do so fairly urgently. I liked this book for so many reasons, but not least because she uses some of the same examples I've been using recently to explain ideas that have been troubling me for quite a while now.
One of the things that has obsessed me lately is the idea of the power of images and the odd fact that we don't really hear very much about this power in life more generally. You might think we would say to each other something like, "Oh, here's that ad again, the one with the sexy girl and the ear-wax cleaner - what's the bet I start thinking I need to buy some of those next time I'm in the supermarket…" I mean, we all 'sort of' know that images impact on how we understand the world, that advertising, for instance, relies very heavily on images and so on, and yet, we 'sort of' act as if we didn't know any of this at all. Images present us with visions of the world as we would like it to be and we project ourselves into the world these images create for us - and while this is particularly true of, say, the Marlboro Man or Coke adding life, her point is also that the images that have been created to define how the economy works also constrains how we think about the economy and about society more generally. She says that she realised the power of images when she came up with the doughnut as a way to explain how the economy ought to work.
Her doughnut idea is really quite simple - if we, as a society, do not take enough of the basics from the world around us then we will stop functioning as a society and people will start dying. If, on the other hand, we take too much then the world will start to die and that will have much the same impact on the rest of us too. So, there is a doughnut of healthy interaction with the world in between these two extremes - and that is pretty much where economics ought to be trying to direct us, inside the doughnut of sustainable economic engagement with the world. It is quite a lovely idea in a lot of ways and you can see why this image has become so appealing - she says she runs into it all of the time now, it basically having become a meme and run off with a life of its own.
This is, of course, the opposite of the standard image we have of economics. In that other image life can only get better if things first get worse. We need to grow economies to a certain level before we can look after the planet - but once we have grown beyond that point, well, things start getting much better in all senses. Think of London when Sherlock Holmes was running about solving crimes (I know, he never really existed, but stay with me). The smog was so thick it was called a 'pea-souper' and in one of the Holmes stories (set in the day time) the fog was so bad he had to light a match to be able to read something. Today London is clean and mostly smog free. Ah, the joys of late-Capitalist development. Except, as she points out, this story is mostly nonsense. London is certainly much cleaner and a much healthier place to live now than it was a century ago - but this has more to do with the de-industrialisation of the first world, that is, the shifting of the filth of production away to poor nations, than it has to do with capitalism as a whole becoming more ecologically friendly. We are witnessing one of the planet's great extinction events - capitalism isn't fixing this, it is rushing it to its conclusion. To pretend that production can be constantly shifted away from humans as they reach the right level of development misses the point. The reason Chinese cities now have worse than Holmes's London level of air quality is because they are the production centres of the world now. Just because London is better off, doesn't mean the world is.
And this becomes a central theme here - our problem is that our economy only makes sense if it provides endless growth. But endless growth on a finite planet is clearly unsustainable. Eventually something has to give - and we seem to be rushing towards that point right now. The problem is that those who have swallowed the kool-aid provided by the images presented by the reassuring models telling us how the economy works are incapable of thinking outside of those images. And so, they need to believe that things will very soon get better. Pinker, it seems, discusses how everything is about to become sunny and lovely and how it is those nasty and irrational environmentalists that are the crazy fanatics not prepared to see just how wonderful the world is about to become. And that he presents this rubbish in a book supposedly praising enlightenment thinking…
This book does a lot to give me hope that things just might change - even against my more natural pessimism that people really would swap all of the necessities of life for just one more of the luxuries. She makes many compelling arguments that we need to rethink how economics works and that we need to do that now. That we need to take economics in hand so that we can have some hope of a future on this planet. I really can't recommend this book too highly. Compulsory reading.
One of the things that has obsessed me lately is the idea of the power of images and the odd fact that we don't really hear very much about this power in life more generally. You might think we would say to each other something like, "Oh, here's that ad again, the one with the sexy girl and the ear-wax cleaner - what's the bet I start thinking I need to buy some of those next time I'm in the supermarket…" I mean, we all 'sort of' know that images impact on how we understand the world, that advertising, for instance, relies very heavily on images and so on, and yet, we 'sort of' act as if we didn't know any of this at all. Images present us with visions of the world as we would like it to be and we project ourselves into the world these images create for us - and while this is particularly true of, say, the Marlboro Man or Coke adding life, her point is also that the images that have been created to define how the economy works also constrains how we think about the economy and about society more generally. She says that she realised the power of images when she came up with the doughnut as a way to explain how the economy ought to work.
Her doughnut idea is really quite simple - if we, as a society, do not take enough of the basics from the world around us then we will stop functioning as a society and people will start dying. If, on the other hand, we take too much then the world will start to die and that will have much the same impact on the rest of us too. So, there is a doughnut of healthy interaction with the world in between these two extremes - and that is pretty much where economics ought to be trying to direct us, inside the doughnut of sustainable economic engagement with the world. It is quite a lovely idea in a lot of ways and you can see why this image has become so appealing - she says she runs into it all of the time now, it basically having become a meme and run off with a life of its own.
This is, of course, the opposite of the standard image we have of economics. In that other image life can only get better if things first get worse. We need to grow economies to a certain level before we can look after the planet - but once we have grown beyond that point, well, things start getting much better in all senses. Think of London when Sherlock Holmes was running about solving crimes (I know, he never really existed, but stay with me). The smog was so thick it was called a 'pea-souper' and in one of the Holmes stories (set in the day time) the fog was so bad he had to light a match to be able to read something. Today London is clean and mostly smog free. Ah, the joys of late-Capitalist development. Except, as she points out, this story is mostly nonsense. London is certainly much cleaner and a much healthier place to live now than it was a century ago - but this has more to do with the de-industrialisation of the first world, that is, the shifting of the filth of production away to poor nations, than it has to do with capitalism as a whole becoming more ecologically friendly. We are witnessing one of the planet's great extinction events - capitalism isn't fixing this, it is rushing it to its conclusion. To pretend that production can be constantly shifted away from humans as they reach the right level of development misses the point. The reason Chinese cities now have worse than Holmes's London level of air quality is because they are the production centres of the world now. Just because London is better off, doesn't mean the world is.
And this becomes a central theme here - our problem is that our economy only makes sense if it provides endless growth. But endless growth on a finite planet is clearly unsustainable. Eventually something has to give - and we seem to be rushing towards that point right now. The problem is that those who have swallowed the kool-aid provided by the images presented by the reassuring models telling us how the economy works are incapable of thinking outside of those images. And so, they need to believe that things will very soon get better. Pinker, it seems, discusses how everything is about to become sunny and lovely and how it is those nasty and irrational environmentalists that are the crazy fanatics not prepared to see just how wonderful the world is about to become. And that he presents this rubbish in a book supposedly praising enlightenment thinking…
This book does a lot to give me hope that things just might change - even against my more natural pessimism that people really would swap all of the necessities of life for just one more of the luxuries. She makes many compelling arguments that we need to rethink how economics works and that we need to do that now. That we need to take economics in hand so that we can have some hope of a future on this planet. I really can't recommend this book too highly. Compulsory reading.
January 6, 2021
Economics runs on images. The language of economics is built upon the iconic imagery of supply and demand curves, circular flow models, GDP growth curves and IS-LM models. Raworth seeks to change the language of economics. How? By changing the fundamental images that define economic models.
So what ails Modern Economics? Raworth is not exactly correct in saying that modern economics still runs on the rational-actor model and hence is limited by it. Not when we have Nobel laureates sitting pretty with bestselling books and superstar ideas about behavioural economics that tears down the old models. The problem in fact is not that the models are flawed or that economists are unaware of their own limiting assumptions built into the models. The real problem is that the aims, the end goals, of modern economics are still perhaps out of sync with reality. The neo-liberal idea that everything can be left to the market is only a pipe-dream - no serious policymaker depends on it today. Much of economic progress, just like much of political and societal progress have been made, as Pinker says, by the gradual pushing of the left-right boundary further and further towards the left. What was once marxist is now neo-liberal. The good fight goes on, but trusting the market is not the real problem of the day. That is not the reform needed in economics.
The next big reform has to focus on the overriding goal of all economics - GROWTH! Economic Growth is the assumed solution to all ills. Raworth takes this to be a case of an almost religious belief in a 'Kuznet's Curve of Everything' (in fact a good marker to test if any argument is in part belief-based is to see if there is an assumed Kuznet's curve present in the argument). Almost every argument and every policy seems to assure us that it will get worse now, but it will get better tomorrow as long as Growth continues. Growth must go on.
This is the core paradigm that Raworth really wants to shift. Raworth asks: “What if we started economics not with its long-established theories, but with humanity’s long-term goals, and then sought out the economic thinking that would enable us to achieve them?” How spectacular is that question? Instead of chasing growth and assuming it will give us the things we value, can economics chase the things we value directly?
To be honest, there is nothing particularly new in Raworth's attempt. This is exactly what has been the attempt since the radical 'Limits to Growth' intellectual movement took root. What Raworth is doing differently though is that here the revolution is waged, not using speeches and big ideas, but using images. And in economics nothing is as powerful as images!
Enter the Doughnut: a sort of miracle diagram that is apparently going to change the world. The inner ring represents the “social foundation”, the situation in which everyone on the planet has sufficient food and social security. The outer ring represents the “ecological ceiling”, beyond which excess consumption degrades the environment beyond repair. The aim is to get humanity into the area between the rings, where everyone has enough but not too much – or, as Raworth calls it, “the doughnut’s safe and just space”.
Thus the Doughnut is the image Raworth uses to represent the limits to growth, and to rub in the fact that we cannot rely on the processes of growth to redress inequality and solve the problem of pollution. Now, the doughnut is a powerful image and Raworth is a great ambassador for it, but it might not be enough, especially because Raworth clearly pitches her camp on the left as far as economic arguments are concerned - and as we know by now, that is often enough for whole ideas to be rejected unilaterally by the rest of the political and economic community... Reading the book, one feels that she seems a bit overoptimistic about the possibility of changing the predominant neoliberal/conservative mindset, essentially through persuasion, as if she is not fully aware of how deep the fault-lines lie in these things. The doughnut may not be powerful enough an image to pull this off...
But, the main point of the book is not just about the Doughnut, it is that there is a fresh new path towards changing the economic orthodoxy that is built into all political debates - most of the simplistic economics debates are possible because the right has access to some basic ideas and concepts that can be visualised easily - 'Economics 101', as they keep repeating.
Raworth's attempt at providing a powerful counter, and hence a possibility of rebuilding the imagery of economics textbooks is commendable, and could eventually be a game changer - not because of the idea of the doughnut, but because of the approach it represents. A truly significant modern economics book, for a change.
So what ails Modern Economics? Raworth is not exactly correct in saying that modern economics still runs on the rational-actor model and hence is limited by it. Not when we have Nobel laureates sitting pretty with bestselling books and superstar ideas about behavioural economics that tears down the old models. The problem in fact is not that the models are flawed or that economists are unaware of their own limiting assumptions built into the models. The real problem is that the aims, the end goals, of modern economics are still perhaps out of sync with reality. The neo-liberal idea that everything can be left to the market is only a pipe-dream - no serious policymaker depends on it today. Much of economic progress, just like much of political and societal progress have been made, as Pinker says, by the gradual pushing of the left-right boundary further and further towards the left. What was once marxist is now neo-liberal. The good fight goes on, but trusting the market is not the real problem of the day. That is not the reform needed in economics.
The next big reform has to focus on the overriding goal of all economics - GROWTH! Economic Growth is the assumed solution to all ills. Raworth takes this to be a case of an almost religious belief in a 'Kuznet's Curve of Everything' (in fact a good marker to test if any argument is in part belief-based is to see if there is an assumed Kuznet's curve present in the argument). Almost every argument and every policy seems to assure us that it will get worse now, but it will get better tomorrow as long as Growth continues. Growth must go on.
This is the core paradigm that Raworth really wants to shift. Raworth asks: “What if we started economics not with its long-established theories, but with humanity’s long-term goals, and then sought out the economic thinking that would enable us to achieve them?” How spectacular is that question? Instead of chasing growth and assuming it will give us the things we value, can economics chase the things we value directly?
To be honest, there is nothing particularly new in Raworth's attempt. This is exactly what has been the attempt since the radical 'Limits to Growth' intellectual movement took root. What Raworth is doing differently though is that here the revolution is waged, not using speeches and big ideas, but using images. And in economics nothing is as powerful as images!
Enter the Doughnut: a sort of miracle diagram that is apparently going to change the world. The inner ring represents the “social foundation”, the situation in which everyone on the planet has sufficient food and social security. The outer ring represents the “ecological ceiling”, beyond which excess consumption degrades the environment beyond repair. The aim is to get humanity into the area between the rings, where everyone has enough but not too much – or, as Raworth calls it, “the doughnut’s safe and just space”.
Thus the Doughnut is the image Raworth uses to represent the limits to growth, and to rub in the fact that we cannot rely on the processes of growth to redress inequality and solve the problem of pollution. Now, the doughnut is a powerful image and Raworth is a great ambassador for it, but it might not be enough, especially because Raworth clearly pitches her camp on the left as far as economic arguments are concerned - and as we know by now, that is often enough for whole ideas to be rejected unilaterally by the rest of the political and economic community... Reading the book, one feels that she seems a bit overoptimistic about the possibility of changing the predominant neoliberal/conservative mindset, essentially through persuasion, as if she is not fully aware of how deep the fault-lines lie in these things. The doughnut may not be powerful enough an image to pull this off...
But, the main point of the book is not just about the Doughnut, it is that there is a fresh new path towards changing the economic orthodoxy that is built into all political debates - most of the simplistic economics debates are possible because the right has access to some basic ideas and concepts that can be visualised easily - 'Economics 101', as they keep repeating.
Raworth's attempt at providing a powerful counter, and hence a possibility of rebuilding the imagery of economics textbooks is commendable, and could eventually be a game changer - not because of the idea of the doughnut, but because of the approach it represents. A truly significant modern economics book, for a change.
December 2, 2024
Confronting 21st century crises with revolutionary reforms…
Highlights:
--I have high standards for this topic (21st century economics); this accessible overview may one day reach my “bedtime stories” status (not joking):
-Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails
-Another Now: Dispatches from an Alternative Present
-Less is More: How Degrowth Will Save the World
-Debt: The First 5,000 Years
1) Structural crises:
--The first 2 concepts I look for here:
a) Logic of capitalism: production is driven by profits (endless private accumulation of money-power) rather than social needs (social needs without money go unaddressed; this neglect spreads to the entire economy during recessions as confidence in profits evaporate). The logic of the market commodifies social relations: market exchange-value (between strangers maximizing gains) are fetishized, obscuring use-value and social relations (labour in production/reproduction, ecological, commons, etc.)
b) Property rights of capitalism: market commodification expand beyond exchange of common goods (pre-capitalist "societies with markets") into peculiar markets of land/labour/money (capitalism: "market society"). These feature fictitious commodities since humans/nature/purchasing power are not produced for market exchange.
--Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails introduces this elegantly. Once such structural logic is uprooted from liberalism’s naturalization (“human nature”, as if history and social/class distinctions do not exist) and placed on a global historical scale, the connections to crises are clear: Financial casinos fetishizing market prices to oblivion… industrial overproduction amidst global maldistribution churning through global labour and ecologies… social relations/imagination reduced to consumerism/addiction…
“Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth - the soil and the labourer.” -Marx, Capital: A Critique of Political Economy, Volume 1
--Raworth’s writing is whole-heartedly accessible (attention to public communication, including visuals and figures-of-speech); a more academic delivery is Keen’s The New Economics: A Manifesto. The bits connecting theory to history are fun: John Stuart Mill shifting from classical political economy’s social goals to abstract “natural laws”; “economic man” and “equilibrium” as the foundations of mainstream (Neoclassical) economics, erasing class/gender/political struggle/economic volatility etc.; Kuznets' GNP originating in measuring war production to later being adopted as a measure of national “economic health”; Kuznets Curve’s supposed rising-then-falling inequality in industrialized countries then being adopted for post-WWII economic growth developmentalism (note: especially against communist decolonization), etc.
…However, we need to be careful of taking too idealist a position (i.e. assuming ideas drive history, without carefully considering the materialist context/structural logic/interactions). Otherwise, the framing becomes too focused on bad ideas (ex. The Shock Doctrine: The Rise of Disaster Capitalism’s focus on twerp-turned-war-criminal Milton Friedman’s free market fundamentalism) rather than on structural crises that were managed with convenientlybad useful ideas: US’s post-WWII global plan (dollar-gold convertibility) falling apart due to US’s genocidal war spending (annihilating Korea/Vietnam) draining US gold reserves, thus pivoting to “Neoliberalism”: unleash Wall Street to retain economic hegemony while breaking the domestic welfare class-compromise and derailing Third World industrialization:
-The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
-Super Imperialism: The Origin and Fundamentals of U.S. World Dominance
-Capital and Imperialism: Theory, History, and the Present
-The Darker Nations: A People's History of the Third World
2) Revolutionary reforms:
--Revolutions are not simply an event; they are a process to build social trust, imagination and capabilities. “Reformist” reforms obstruct this process through short-term symptomatic relief, divide-and-rule, etc. “Revolutionary” reforms facilitate this process. Thankfully, Raworth is much clearer on this than fellow progressive Mariana Mazzucato’s Mission Economy: A Moonshot Guide to Changing Capitalism.
--Inspired by the complex systems science of Donella H. Meadows (Thinking in Systems: A Primer), Raworth distinguishes the lower (weaker) leverage points (for system behavior change) involved in reformist reforms (internalizing externalities within market prices, tax redistribution, tiered pricing, quotas) vs. the higher leverage points of:
a) Changing system goals: replacing “Economic Growth” (convenient for capitalist endless accumulation as distribution can be ignored) with “Doughnut Economics”, which combines the social needs rhetoric of the UN Social Development Goals as the baseline with the planetary boundaries of Earth Systems science (see diagram: https://images.gr-assets.com/photos/1... ) ...Now, be warned of the liberal imperialist biases of Western technocrats like the “Limits to Growth” pioneers of Earth Systems Science and their fallacy of “overpopulation” (critiqued in Too Many People?: Population, Immigration, and the Environmental Crisis). And once again, to avoid vulgar idealism, changing system goals requires changing the aforementioned structural system logic/property rights.
b) Changing reinforcing feedback loops (think exponential growth) into balancing feedback loops: we return to capitalist structural logic/property rights. Wealth accumulation of the following capitalist property rights is hidden by the mainstream focus on income via wage labour:
i) Land via landlordism/vast inheritance vs. land value tax (to capture windfall gains of social/Commons value-creation).
ii) Money via private bank debt-money creation/speculation vs. various ways to make money into a public utility (Can We Avoid Another Financial Crisis?, The Bubble and Beyond). Finance is such an efficient Ponzi scheme that it is the pinnacle of runaway reinforcing feedback loops.
iii) Enterprise via shareholding (external ownership) speculation vs. stakeholder fixed-return bonds/workers self-directed enterprises (Democracy at Work: A Cure for Capitalism).
iv) Technology/information via winner-take-all Big Tech privatizing social information, socializing costs while privatizing rewards vs. intellectual Commons/social dividend on technology/royalties & State equity for State-funded R&D, etc.
The Missing:
--Like clockwork, yet another progressive not spelling out the economics of imperialism (despite a clear opportunity during the critique of liberal economic-growth developmentalism), thus missing the nuances of decolonization in the real world which (using systems thinking) does indeed affect Global North activism (both to understand how our elites will act and to broaden our own social imagination for change/solidarity).
--Indeed, I have yet to find an accessible overview that synthesizes all of the above with imperialism. Luckily, I have you covered with supplements:
1) Intro to imperialism: The Divide: A Brief Guide to Global Inequality and its Solutions
2) ...with a bit more economic theory: The Agrarian Question in the Neoliberal Era: Primitive Accumulation and the Peasantry
3) …with more environmentalism: Less is More: How Degrowth Will Save the World and A People’s Green New Deal
4) …dive into economic theory: Capital and Imperialism: Theory, History, and the Present
Highlights:
--I have high standards for this topic (21st century economics); this accessible overview may one day reach my “bedtime stories” status (not joking):
-Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails
-Another Now: Dispatches from an Alternative Present
-Less is More: How Degrowth Will Save the World
-Debt: The First 5,000 Years
1) Structural crises:
--The first 2 concepts I look for here:
a) Logic of capitalism: production is driven by profits (endless private accumulation of money-power) rather than social needs (social needs without money go unaddressed; this neglect spreads to the entire economy during recessions as confidence in profits evaporate). The logic of the market commodifies social relations: market exchange-value (between strangers maximizing gains) are fetishized, obscuring use-value and social relations (labour in production/reproduction, ecological, commons, etc.)
b) Property rights of capitalism: market commodification expand beyond exchange of common goods (pre-capitalist "societies with markets") into peculiar markets of land/labour/money (capitalism: "market society"). These feature fictitious commodities since humans/nature/purchasing power are not produced for market exchange.
--Talking to My Daughter About the Economy: or, How Capitalism Works—and How It Fails introduces this elegantly. Once such structural logic is uprooted from liberalism’s naturalization (“human nature”, as if history and social/class distinctions do not exist) and placed on a global historical scale, the connections to crises are clear: Financial casinos fetishizing market prices to oblivion… industrial overproduction amidst global maldistribution churning through global labour and ecologies… social relations/imagination reduced to consumerism/addiction…
“Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth - the soil and the labourer.” -Marx, Capital: A Critique of Political Economy, Volume 1
--Raworth’s writing is whole-heartedly accessible (attention to public communication, including visuals and figures-of-speech); a more academic delivery is Keen’s The New Economics: A Manifesto. The bits connecting theory to history are fun: John Stuart Mill shifting from classical political economy’s social goals to abstract “natural laws”; “economic man” and “equilibrium” as the foundations of mainstream (Neoclassical) economics, erasing class/gender/political struggle/economic volatility etc.; Kuznets' GNP originating in measuring war production to later being adopted as a measure of national “economic health”; Kuznets Curve’s supposed rising-then-falling inequality in industrialized countries then being adopted for post-WWII economic growth developmentalism (note: especially against communist decolonization), etc.
…However, we need to be careful of taking too idealist a position (i.e. assuming ideas drive history, without carefully considering the materialist context/structural logic/interactions). Otherwise, the framing becomes too focused on bad ideas (ex. The Shock Doctrine: The Rise of Disaster Capitalism’s focus on twerp-turned-war-criminal Milton Friedman’s free market fundamentalism) rather than on structural crises that were managed with conveniently
-The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy
-Super Imperialism: The Origin and Fundamentals of U.S. World Dominance
-Capital and Imperialism: Theory, History, and the Present
-The Darker Nations: A People's History of the Third World
2) Revolutionary reforms:
--Revolutions are not simply an event; they are a process to build social trust, imagination and capabilities. “Reformist” reforms obstruct this process through short-term symptomatic relief, divide-and-rule, etc. “Revolutionary” reforms facilitate this process. Thankfully, Raworth is much clearer on this than fellow progressive Mariana Mazzucato’s Mission Economy: A Moonshot Guide to Changing Capitalism.
--Inspired by the complex systems science of Donella H. Meadows (Thinking in Systems: A Primer), Raworth distinguishes the lower (weaker) leverage points (for system behavior change) involved in reformist reforms (internalizing externalities within market prices, tax redistribution, tiered pricing, quotas) vs. the higher leverage points of:
a) Changing system goals: replacing “Economic Growth” (convenient for capitalist endless accumulation as distribution can be ignored) with “Doughnut Economics”, which combines the social needs rhetoric of the UN Social Development Goals as the baseline with the planetary boundaries of Earth Systems science (see diagram: https://images.gr-assets.com/photos/1... ) ...Now, be warned of the liberal imperialist biases of Western technocrats like the “Limits to Growth” pioneers of Earth Systems Science and their fallacy of “overpopulation” (critiqued in Too Many People?: Population, Immigration, and the Environmental Crisis). And once again, to avoid vulgar idealism, changing system goals requires changing the aforementioned structural system logic/property rights.
b) Changing reinforcing feedback loops (think exponential growth) into balancing feedback loops: we return to capitalist structural logic/property rights. Wealth accumulation of the following capitalist property rights is hidden by the mainstream focus on income via wage labour:
i) Land via landlordism/vast inheritance vs. land value tax (to capture windfall gains of social/Commons value-creation).
ii) Money via private bank debt-money creation/speculation vs. various ways to make money into a public utility (Can We Avoid Another Financial Crisis?, The Bubble and Beyond). Finance is such an efficient Ponzi scheme that it is the pinnacle of runaway reinforcing feedback loops.
iii) Enterprise via shareholding (external ownership) speculation vs. stakeholder fixed-return bonds/workers self-directed enterprises (Democracy at Work: A Cure for Capitalism).
iv) Technology/information via winner-take-all Big Tech privatizing social information, socializing costs while privatizing rewards vs. intellectual Commons/social dividend on technology/royalties & State equity for State-funded R&D, etc.
The Missing:
--Like clockwork, yet another progressive not spelling out the economics of imperialism (despite a clear opportunity during the critique of liberal economic-growth developmentalism), thus missing the nuances of decolonization in the real world which (using systems thinking) does indeed affect Global North activism (both to understand how our elites will act and to broaden our own social imagination for change/solidarity).
--Indeed, I have yet to find an accessible overview that synthesizes all of the above with imperialism. Luckily, I have you covered with supplements:
1) Intro to imperialism: The Divide: A Brief Guide to Global Inequality and its Solutions
2) ...with a bit more economic theory: The Agrarian Question in the Neoliberal Era: Primitive Accumulation and the Peasantry
3) …with more environmentalism: Less is More: How Degrowth Will Save the World and A People’s Green New Deal
4) …dive into economic theory: Capital and Imperialism: Theory, History, and the Present
January 16, 2018
I am not an economist but have been in business for 25 years and regularly enjoy reading business and economic texts. I started reading this book with interest, looking forward to discovering some new, thought provoking ideas. However, I found the book annoying and one sided in its analysis. The key tenet is that economic development has to be sustainable, a point that has been well rehearsed and widely accepted. The book starts by stating how important the visual representation of economic theories is and that all key metrics and graphs in conventional use are basically wrong. It then describes the optimal economic development as “a social foundation of well-being that no one should fall below and an ecological ceiling of planetary pressure that we should not go beyond”. This is visually represented by a doughnut! There is little logic to that other that the author seems to believe it is very impactful and memorable. If we are talking about a floor and a ceiling to economic development, how is that best described by two circular rings? The references to the doughnut follow on nearly every page and it is clear that the author sees this as a great invention.
The book then continues to reject all major economic theories claiming they have brought humanity to “the brink of ecological, social and financial collapse”. While there are certainly many economic problems yet to be tackled, I would disagree with such a dramatic statement. There is no mention of the fact that today’s quality of life for the majority of people is way better than at any time in history, that there are fewer people living in poverty, that advances in healthcare and technology brought by free enterprise have extended life expectancy across the globe and that trade between nations has not only brought hundreds of millions of people out of poverty but has also reduced armed conflict to the lowest level in human history. The author regularly mixes economic issues with political and social issues, such as gender equality and political representation and the writing is often repetitive and patronising.
One of the key ideas of this book, not a new one by any means, is greater redistribution. Not just of income but also of wealth - an argument that has been made many times before and the author completely ignores the effects of excessive taxation on enterprise.
Most readers are aware that achieving sustainable development on a global scale means dealing in a coordinated manner with numerous complex issues, requiring complex solutions. Much more complex and nuanced than a doughnut.
The book then continues to reject all major economic theories claiming they have brought humanity to “the brink of ecological, social and financial collapse”. While there are certainly many economic problems yet to be tackled, I would disagree with such a dramatic statement. There is no mention of the fact that today’s quality of life for the majority of people is way better than at any time in history, that there are fewer people living in poverty, that advances in healthcare and technology brought by free enterprise have extended life expectancy across the globe and that trade between nations has not only brought hundreds of millions of people out of poverty but has also reduced armed conflict to the lowest level in human history. The author regularly mixes economic issues with political and social issues, such as gender equality and political representation and the writing is often repetitive and patronising.
One of the key ideas of this book, not a new one by any means, is greater redistribution. Not just of income but also of wealth - an argument that has been made many times before and the author completely ignores the effects of excessive taxation on enterprise.
Most readers are aware that achieving sustainable development on a global scale means dealing in a coordinated manner with numerous complex issues, requiring complex solutions. Much more complex and nuanced than a doughnut.
May 13, 2018
Doughnut Economics is a really cute title. It is unfortunately not the only cringeworthy aspect of this book. Kate Raworth's ambitious fairytale for adults encompasses Life, the Universe and Everything. It warns against ecological and economic overshoot but itself overshoots in its wide-eyed claims and heterodox heresies. As it happens, futurology is one tough doughnut to crack.
The book has a few central problems: 1) It attempts a synthesis that lacks solid foundations and relies on ephemeral, dubious premises. 2) It is too utopian in its claims about the powers of social planners to "steward" social complexity. 3) It misrepresents basic economic facts, historical and theoretical, e.g. the nature of economic growth and the views of neoclassical and "neoliberal" (always a sign of trouble) thinkers. 4) It preaches humanistic pluralism and social cooperation but reeks of totalitarian impulses, what with its call for top-down global governance structures and for the subjugation of almost all private interests and markets to democratically agreed-upon ends. 5) Did I mention how much I hate the title?
Now, that sounds quite harsh, and that is intentional, but the book is not all bad. It explores absolutely crucial avenues, from environmental sustainability to the digital commons, from alternative currencies to basic income schemes, from land value taxation to financial reforms. It provides food for thought for any thinking person and it crystallizes a kind of a new manifesto for progressivism. But it overshoots. It fails to temper its high architectural hopes with engineering modesty. It doesn't get that complexity is an emergent order that cannot be set to serve particular chosen ends without sacrificing its very life force.
"Regenerative and distributive" is a nice catch phrase, but a more accurate one may be "all aboard the happy train, this way lies unwarranted short-lived enthusiasm." If you feel the calling in your heart, go ahead and follow the vision, my brave Soldiers of the Order of the Doughnut. But harken these words: do not be surprised if you encounter many road blocks - unexpected glitches in the Doughnut matrix - on the way to the completion of your sweet utopia.
The book has a few central problems: 1) It attempts a synthesis that lacks solid foundations and relies on ephemeral, dubious premises. 2) It is too utopian in its claims about the powers of social planners to "steward" social complexity. 3) It misrepresents basic economic facts, historical and theoretical, e.g. the nature of economic growth and the views of neoclassical and "neoliberal" (always a sign of trouble) thinkers. 4) It preaches humanistic pluralism and social cooperation but reeks of totalitarian impulses, what with its call for top-down global governance structures and for the subjugation of almost all private interests and markets to democratically agreed-upon ends. 5) Did I mention how much I hate the title?
Now, that sounds quite harsh, and that is intentional, but the book is not all bad. It explores absolutely crucial avenues, from environmental sustainability to the digital commons, from alternative currencies to basic income schemes, from land value taxation to financial reforms. It provides food for thought for any thinking person and it crystallizes a kind of a new manifesto for progressivism. But it overshoots. It fails to temper its high architectural hopes with engineering modesty. It doesn't get that complexity is an emergent order that cannot be set to serve particular chosen ends without sacrificing its very life force.
"Regenerative and distributive" is a nice catch phrase, but a more accurate one may be "all aboard the happy train, this way lies unwarranted short-lived enthusiasm." If you feel the calling in your heart, go ahead and follow the vision, my brave Soldiers of the Order of the Doughnut. But harken these words: do not be surprised if you encounter many road blocks - unexpected glitches in the Doughnut matrix - on the way to the completion of your sweet utopia.
June 4, 2021
Economics today is very disappointing, at least the way it's taught in academic settings certainly is and this bothered Kate Raworth - so much that she walked away from it. Raworth thinks of economics as a way to manage our 'planetary household' and so she set out to reconstruct its language and reimagine its mechanics. This is one of the things she mentions early in the book: that economists have been very inspired by physicists and mathematicians for centuries now and in their pursuit to make a pure science out of it, they have turned it into a field that has become rigid, abstract and nonsensically complex. (Remember the CDOs of the 2008 global financial crash? There was even CDO-squared, and CDS -a derivative product of CDO that apparently policy makers themselves couldn't make much sense of, because understanding these things is equivalent to absorbing millions of pages of information.)
One of the ways that Raworth suggests in order to enable people to rethink economics is through images. She calls images 'graffiti on the mind', since they linger long after the words and equations have faded. Her proposed image is the doughnut. This doughnut is drawn between two sets of boundaries - social boundaries in terms of rights and planetary boundaries drawn based on research by earth system scientists who believe there are nine critical earth-system processes that we need to safeguard. The inner ring of this doughnut is composed of the basics of social foundations like sufficient food, clean water and sanitation, access to energy, clean cooking facilities, a minimum income, education and healthcare.
Furthermore, it calls for achieving these with gender equality, social equity, political voice, and peace and justice. Since 1948, international human rights norms and laws have sought to establish every person’s claim to the vast majority of these basics, no matter how much or how little money or power they have. Setting a target date to achieve all of them for every person alive may seem an extraordinary ambition, but it is now an official one. They are all included in the United Nation’s Sustainable Development Goals – agreed by 193 member countries in 2015 – and the vast majority of these goals are to be achieved by 2030.
Kate Raworth systematically describes and confronts things that are terribly wrong with our current economic policies and interests. To begin with, she questions the one goal that every nation seems to unquestionably pursue: gdp growth. She points out that the expected long term path of gdp growth which most policy makers claim can be indefinite is highly impractical. While gdp has been used as the leading indicator of economic health, it is a very narrow metric.
Neoliberal and neoclassical economics are based on the assumption that human beings are rational (whatever that means!) but Raworth rightly states that even if we were to accept that claim for a moment, we have to consider that over the past forty years mainstream behavioral psychology experiments conducted by academic researchers in North America, Europe, Israel and Australia have used their own universities' undergraduate students as the subjects. So between 2003 and 2007, 96% of the people studied for the purposes of such experiments came from countries that were home to only 12% of the world's population. Furthermore, these countries belong to what Raworth calls WEIRD societies - western, educated, industrialised, rich and democratic. Needless to say, none of these behavioural psychology experimental results based on which several key economic policies are designed, apply to most of the global population.
Raworth also deconstructs the myth of the free market and free trade, showing that it isn't as "free" as it is made to look. The regulations controlling "free" market have become so inherent to it and and so pushed down by all the linguistics of policy rubble as to be rendered invisible. The free market is essentially a narrative - a controlled, exploitative structure deliberately maintained to further sustain existing power relations.
Ironically, despite their intense desire to practice economics as a science, economists have placed blind faith in hypotheses that had no evidentiary backing whatsoever. The tragedy of the commons and Kuznets curve are famous examples. The Kuznets curve proclaimed that inequality was an inevitable initial consequence of progress. Development economics easily took to this hypothesis that inequality gets worse as the economy develops and only growth can make it eventually better. And thus economic policies were designed to encourage poor countries to concentrate their income in the hands of the wealthy so it can 'trickle down' after triggering a gdp growth. The founding theorist of development economics, Arthur Lewis, famously declared that development must be egalitarian. This theory was even adopted by the world bank in making projections on the fall of poverty.
There's a catch, however. (By now you must have recognised that with neoliberal economics there always is a catch.) The economic growth of East-Asian countries like Japan, South Korea, Indonesia and Malaysia that relied on land reforms and public investment in health and education sectors, showed that growth can be achieved while developing equality. And contrary to the predictions of the Kuznets curve, since the 1980s a lot of high income countries have witnessed increasing income distribution inequalities despite achieving the proposed 'growth.'
Raworth is also a scathing critic of current tax policies wherein governments disproportionately tax what they can like human labour and not what they should like land and non-renewable resources.
Here’s the conundrum:
No country has ever ended human deprivation without a growing economy.
And no country has ever ended ecological degradation with one.
She also points out that due to our current policies that focus on exponential gdp growth (please even physicists don't completely understand exponential growth, it's simply baffling. What are you economists trying to achieve?) and consumerism, 'development' in a lot of countries like Japan, Germany and Italy has come at the cost of really worrisome ecological footprints that far exceed earth's capacity.
It would take four planets for everyone in the world to live as they do in Sweden, Canada and the US, and five planets for all to live like an Australian or Kuwaiti. Does this suggest that, while aiming to get into the Doughnut, high-income countries should give up on the pursuit of GDP growth and accept that it might no longer be possible?
Raworth is advocating for the implementation of ethical principles in economics (this has been almost non-existent so far. In fact, several studies show that economics students tend to feel less empathy than their peers from other fields), Keynesian based economic policies that are distributive, regenerative and growth-agnostic.
Oh and thank you, Katia! For the recommendation. As you can see, I really enjoyed reading this book.
One of the ways that Raworth suggests in order to enable people to rethink economics is through images. She calls images 'graffiti on the mind', since they linger long after the words and equations have faded. Her proposed image is the doughnut. This doughnut is drawn between two sets of boundaries - social boundaries in terms of rights and planetary boundaries drawn based on research by earth system scientists who believe there are nine critical earth-system processes that we need to safeguard. The inner ring of this doughnut is composed of the basics of social foundations like sufficient food, clean water and sanitation, access to energy, clean cooking facilities, a minimum income, education and healthcare.
Furthermore, it calls for achieving these with gender equality, social equity, political voice, and peace and justice. Since 1948, international human rights norms and laws have sought to establish every person’s claim to the vast majority of these basics, no matter how much or how little money or power they have. Setting a target date to achieve all of them for every person alive may seem an extraordinary ambition, but it is now an official one. They are all included in the United Nation’s Sustainable Development Goals – agreed by 193 member countries in 2015 – and the vast majority of these goals are to be achieved by 2030.
Kate Raworth systematically describes and confronts things that are terribly wrong with our current economic policies and interests. To begin with, she questions the one goal that every nation seems to unquestionably pursue: gdp growth. She points out that the expected long term path of gdp growth which most policy makers claim can be indefinite is highly impractical. While gdp has been used as the leading indicator of economic health, it is a very narrow metric.
Neoliberal and neoclassical economics are based on the assumption that human beings are rational (whatever that means!) but Raworth rightly states that even if we were to accept that claim for a moment, we have to consider that over the past forty years mainstream behavioral psychology experiments conducted by academic researchers in North America, Europe, Israel and Australia have used their own universities' undergraduate students as the subjects. So between 2003 and 2007, 96% of the people studied for the purposes of such experiments came from countries that were home to only 12% of the world's population. Furthermore, these countries belong to what Raworth calls WEIRD societies - western, educated, industrialised, rich and democratic. Needless to say, none of these behavioural psychology experimental results based on which several key economic policies are designed, apply to most of the global population.
Raworth also deconstructs the myth of the free market and free trade, showing that it isn't as "free" as it is made to look. The regulations controlling "free" market have become so inherent to it and and so pushed down by all the linguistics of policy rubble as to be rendered invisible. The free market is essentially a narrative - a controlled, exploitative structure deliberately maintained to further sustain existing power relations.
Ironically, despite their intense desire to practice economics as a science, economists have placed blind faith in hypotheses that had no evidentiary backing whatsoever. The tragedy of the commons and Kuznets curve are famous examples. The Kuznets curve proclaimed that inequality was an inevitable initial consequence of progress. Development economics easily took to this hypothesis that inequality gets worse as the economy develops and only growth can make it eventually better. And thus economic policies were designed to encourage poor countries to concentrate their income in the hands of the wealthy so it can 'trickle down' after triggering a gdp growth. The founding theorist of development economics, Arthur Lewis, famously declared that development must be egalitarian. This theory was even adopted by the world bank in making projections on the fall of poverty.
There's a catch, however. (By now you must have recognised that with neoliberal economics there always is a catch.) The economic growth of East-Asian countries like Japan, South Korea, Indonesia and Malaysia that relied on land reforms and public investment in health and education sectors, showed that growth can be achieved while developing equality. And contrary to the predictions of the Kuznets curve, since the 1980s a lot of high income countries have witnessed increasing income distribution inequalities despite achieving the proposed 'growth.'
Raworth is also a scathing critic of current tax policies wherein governments disproportionately tax what they can like human labour and not what they should like land and non-renewable resources.
Here’s the conundrum:
No country has ever ended human deprivation without a growing economy.
And no country has ever ended ecological degradation with one.
She also points out that due to our current policies that focus on exponential gdp growth (please even physicists don't completely understand exponential growth, it's simply baffling. What are you economists trying to achieve?) and consumerism, 'development' in a lot of countries like Japan, Germany and Italy has come at the cost of really worrisome ecological footprints that far exceed earth's capacity.
It would take four planets for everyone in the world to live as they do in Sweden, Canada and the US, and five planets for all to live like an Australian or Kuwaiti. Does this suggest that, while aiming to get into the Doughnut, high-income countries should give up on the pursuit of GDP growth and accept that it might no longer be possible?
Raworth is advocating for the implementation of ethical principles in economics (this has been almost non-existent so far. In fact, several studies show that economics students tend to feel less empathy than their peers from other fields), Keynesian based economic policies that are distributive, regenerative and growth-agnostic.
Oh and thank you, Katia! For the recommendation. As you can see, I really enjoyed reading this book.
April 10, 2018
Raworth’s book has in recent months met either raving or scathing critiques. A *** review may thus be a little odd, but let me explain with reference to the broader discussions about the book.
Much of the critique revolves around the simplicity of her description of economic practices and theories. She traces the evolution of economic science to the neoclassical worldviews of Friedman and Samuelson and to the classical worldviews of Walras and Marshall. Curiously enough she stops just there, as if economics has not evolved further as a science, which of course it has. Consider, for example, the strides made in environmental economics, complexity and evolutionary economics, welfare studies in the key of ‘beyond GDP’, etc. Similarly, Raworth’s sketch of economic policy-making seems much of a caricature, suggesting that ‘externalities’ are ceteris paribus left out of policy, while in practice such externalities are at the heart of economic policy. I am not an economist by training, but from students I understand that much of academic courses are still very much outdated, with a strong focus on the rightly despised equilibrium. In short: Although justified on economic education, Raworth’s descriptions of economic science and policy are close to caricature and a strawman argument.
There’s no need for that in order to make the point she wants to make, and that’s where the raving reviews come in. Raworth offers a very appealing broad perspective on the goals, values and functions of an economy that considers social and ecological principles and limits. She rightly suggests a shift from thinking in terms of flows (‘economic growth’) to a framework of stocks (‘capital accounts’). She does not elaborate very much on the intricacies of capital accounting, which may be a bit confusing for economists that are trained to consider monetary capital only, rather than also natural, social or cultural capital.
I understand and appreciate the appeal of the argument, but two main issues must be addressed. First, the doughnut itself very much resembles what used to be called ‘sustainability’. This is a general end goal situation, and hence distinguishes from ‘sustainable development’, which evolves along the lines of particular principles. In other words: sustainability as well as Raworth’s doughnut are static end goal situations, rather than principles for policy and action. This is tricky, because it runs the risk of utopianism and, therefore, of authoritarianism. Utopianism tends to discard competing social ideas, rather than integrating them in a broader context. A focus on sustainability principles rather than goals to reach is much more fruitful. Raworth is not blind to this, e.g. when she elaborates on design principles such as circularity. However, the doughnut is not the analytical tool that credibly integrates this wide diversity of ideas.
Second, I recognize the rhetorical power of the dougnut, but I am also aware of its conceptual limits. Raworth builds upon the works of others (Rockstrom et al.) to present a visual that helps to understand physical and social limits to economic development. As such, this is a work of rhetorics disguished as a scientific argument. Much can be said about the limited scientific credits of the ecological limits approach and of the scientific foundations of the social inner bounds of the doughnut. Don’t get me wrong: I can fully subscribe to the normative point she makes, but it should be clear that this is what it is: a normative argument of great rhetoric power. As such, this is a political pamphlet more than a book of scientific rigidity. Moreover, I’m not sure whether the re-frame of sustainability should be cast in terms of limits, but I do think it can be elaborated in terms of principles, institutions and power relations. Hopefully this book will be a trigger for much work in that direction.
To conclude with some praise: I think Raworth does a great job in broadening the argument that economic growth cannot be sustained into eternity and that a rethink of the foundations of our economy will be necessary. Coming from sustainability science there's not much new for me here, but I appreciate her effort and her tireless tour of presentations on the matter. The message is important.
Much of the critique revolves around the simplicity of her description of economic practices and theories. She traces the evolution of economic science to the neoclassical worldviews of Friedman and Samuelson and to the classical worldviews of Walras and Marshall. Curiously enough she stops just there, as if economics has not evolved further as a science, which of course it has. Consider, for example, the strides made in environmental economics, complexity and evolutionary economics, welfare studies in the key of ‘beyond GDP’, etc. Similarly, Raworth’s sketch of economic policy-making seems much of a caricature, suggesting that ‘externalities’ are ceteris paribus left out of policy, while in practice such externalities are at the heart of economic policy. I am not an economist by training, but from students I understand that much of academic courses are still very much outdated, with a strong focus on the rightly despised equilibrium. In short: Although justified on economic education, Raworth’s descriptions of economic science and policy are close to caricature and a strawman argument.
There’s no need for that in order to make the point she wants to make, and that’s where the raving reviews come in. Raworth offers a very appealing broad perspective on the goals, values and functions of an economy that considers social and ecological principles and limits. She rightly suggests a shift from thinking in terms of flows (‘economic growth’) to a framework of stocks (‘capital accounts’). She does not elaborate very much on the intricacies of capital accounting, which may be a bit confusing for economists that are trained to consider monetary capital only, rather than also natural, social or cultural capital.
I understand and appreciate the appeal of the argument, but two main issues must be addressed. First, the doughnut itself very much resembles what used to be called ‘sustainability’. This is a general end goal situation, and hence distinguishes from ‘sustainable development’, which evolves along the lines of particular principles. In other words: sustainability as well as Raworth’s doughnut are static end goal situations, rather than principles for policy and action. This is tricky, because it runs the risk of utopianism and, therefore, of authoritarianism. Utopianism tends to discard competing social ideas, rather than integrating them in a broader context. A focus on sustainability principles rather than goals to reach is much more fruitful. Raworth is not blind to this, e.g. when she elaborates on design principles such as circularity. However, the doughnut is not the analytical tool that credibly integrates this wide diversity of ideas.
Second, I recognize the rhetorical power of the dougnut, but I am also aware of its conceptual limits. Raworth builds upon the works of others (Rockstrom et al.) to present a visual that helps to understand physical and social limits to economic development. As such, this is a work of rhetorics disguished as a scientific argument. Much can be said about the limited scientific credits of the ecological limits approach and of the scientific foundations of the social inner bounds of the doughnut. Don’t get me wrong: I can fully subscribe to the normative point she makes, but it should be clear that this is what it is: a normative argument of great rhetoric power. As such, this is a political pamphlet more than a book of scientific rigidity. Moreover, I’m not sure whether the re-frame of sustainability should be cast in terms of limits, but I do think it can be elaborated in terms of principles, institutions and power relations. Hopefully this book will be a trigger for much work in that direction.
To conclude with some praise: I think Raworth does a great job in broadening the argument that economic growth cannot be sustained into eternity and that a rethink of the foundations of our economy will be necessary. Coming from sustainability science there's not much new for me here, but I appreciate her effort and her tireless tour of presentations on the matter. The message is important.
February 28, 2019
بعضی از کتابها بزرگترین رسالتی که دنبال می کنند، این است که دنبال آگاهی بخشی هایی باشند که حال مخاطب را خوب کنند. یعنی حرفهایی بزنند که مهمترین دستاوردشان ایجاد امید نسبت به آینده، بهمراه راهکارهایی عملی برای دست یابی به آنهاست. این کتاب برای من چنین ویژگی جذابی دارد. ایده کلی اثر هم تشبیه سیستم اقتصادی به یک دونات، همان شیرینی معروف است که در لایه زیرین آن مولفه های مهم اجتماعی و در لایه بالایی آن مرز زیست محیطی قرار گرفته اند و به نظر نویسنده اقتصادی که واقعا کارمی کند وبرای بشریت مفید است، می بایست کارکردش در بین این دو لایه قرار گیرد، مسئله ای که در سیستم اقتصادی فعلی وجود ندارد اما معیار اشتباه ما یعنی توجه به رشد اقتصادی بعنوان معیار اقتصاد موفق موجب شده تا توجهی به لایه های دیگر نداشته باشیم. تمام تلاش نویسنده هم بر این است که در هفت مبحث نشان دهد ضعفهای این رویکرد کجاست و رویکرد دونات محور چگونه می تواند به این کاستی ها پاسخ بدهد، کما اینکه نمونه های زیادی وجود دارند که امکان این تغییرات را نشان میدهند
کتابهای زیادی در نقد اقتصاد نئوکلاسیک نوشته شده است، اما ویژگی خوب این اثر به کارگیری تفکر سیستمی در زمینه اقتصاد مخصوصا اقتصاد محیط زیست و علم پایداری است که به نظرم به خواننده هم مفاهیم مناسبی از تفکر سیستمی می آموزد و هم مفاهیم تازه مطرح شده در اقتصاد محیط زیست، تکاملی و نهادی را به شکلی ساده مطرح می کند. تنها مسئله ای که به نظرم جای بحث بیشتر دارد، یکی طولانی شدن برخی ��حثهاست که کمی به تکرار میماند و دیگری استفاده از مثالهای زیادی است که بعنوان نمونه در بیان شیوه های جدید اقتصادی و در تضاد با رویکردهای فعلی بیان می شوند، اما آشکار است که قابلیت تعمیم بخشی نمونه های آزمایشی و فراگیر شدن آنها اهمیت بیشتری دارد. گاهی این شبهه برایم بوجود می آمد که صرفا ارائه شواهدی از وجود رویکردهای دیگر کافی نیست، تا وقتی که تمام زوایای امکان بخش بودن آنها در دنیای واقعی و سیستمی بزرگتر را هم درنظر بگیریم. در کل، اثری مثبت و مفید بود و خواندن آن به همه توصیه میشود
کتابهای زیادی در نقد اقتصاد نئوکلاسیک نوشته شده است، اما ویژگی خوب این اثر به کارگیری تفکر سیستمی در زمینه اقتصاد مخصوصا اقتصاد محیط زیست و علم پایداری است که به نظرم به خواننده هم مفاهیم مناسبی از تفکر سیستمی می آموزد و هم مفاهیم تازه مطرح شده در اقتصاد محیط زیست، تکاملی و نهادی را به شکلی ساده مطرح می کند. تنها مسئله ای که به نظرم جای بحث بیشتر دارد، یکی طولانی شدن برخی ��حثهاست که کمی به تکرار میماند و دیگری استفاده از مثالهای زیادی است که بعنوان نمونه در بیان شیوه های جدید اقتصادی و در تضاد با رویکردهای فعلی بیان می شوند، اما آشکار است که قابلیت تعمیم بخشی نمونه های آزمایشی و فراگیر شدن آنها اهمیت بیشتری دارد. گاهی این شبهه برایم بوجود می آمد که صرفا ارائه شواهدی از وجود رویکردهای دیگر کافی نیست، تا وقتی که تمام زوایای امکان بخش بودن آنها در دنیای واقعی و سیستمی بزرگتر را هم درنظر بگیریم. در کل، اثری مثبت و مفید بود و خواندن آن به همه توصیه میشود
December 6, 2020
Strongly recommend for open-minded readers.
Conversely, if being told that, in order to make the world a better place and leave a healthy planet to our children and grandchildren requires that we stop being (disingenuously) intellectually lazy and cease our worship of the false gods of economic growth, you might want to skip it.
More broadly, this is one of the most thought-provoking books I've read in a long time, and one of the most powerful question your pre-existing assumption tools I've been exposed to in some time. I hope college kids and grad students are finding and reading it, and I hope that some of the braver (and more self-assured) folks teaching college and graduate school economics are assigning it. OK, I hope they're assigning it in the public policy schools, too, but I digress.
If you've studied or read Economics, this is really good stuff. (Full disclosure: I have no idea how accessible the book would be to readers who are not familiar with basic economic theory, doctrine, teaching, and jargon, but I also don't know how common those readers are. They teach at least some basic economics in high school these days, don't they?) It's a different animal from the mostly entertaining Freakonomics genre, and it's every bit as (if not more) unconventional, than the terrific, anti-establishment behavioral economics stuff that I've been enjoying for some time.
Let's be clear, this isn't Harari's Sapiens - which, to my mind, was more interesting, broader in scope, more eloquently written, and more polished in its presentation. But I only say that to make the point that this isn't necessarily an easy (or entertaining) read. It is most definitely not a page-turner. I read quite a bit, I'm no stranger to non-fiction or to academic tomes, and I was fascinated, literally captivated by the content. But I still felt like I was struggling, plodding through. I don't think I ever consumed more than a chapter in a day (although, to be fair, I had plenty of distractions). And, while I can't put my finger on it, I never really connected with the voice ... I just don't know why. Still, I'm ecstatic that I read it.
A former economics professor recommended it to me after I recently participated in a free-wheeling policy discussion that touched on a number of public policy, economic, and climate-change-related issues (including, among other things, externalities, the value proposition, behavioral economics, etc.). I'm glad he did. I'm already thinking about ways to incorporate this into some research and writing projects and, among other things, revising and repackaging some prior work. First and foremost, I'm jettisoning externalities and embracing the term effects instead. I ordered a copy for my research assistant before I even finished the book.
It's a game changer, and I hope it maintains its popularity and helps people (and economists and policy makers) think differently about confronting the problems that face our nation and the world.
Conversely, if being told that, in order to make the world a better place and leave a healthy planet to our children and grandchildren requires that we stop being (disingenuously) intellectually lazy and cease our worship of the false gods of economic growth, you might want to skip it.
More broadly, this is one of the most thought-provoking books I've read in a long time, and one of the most powerful question your pre-existing assumption tools I've been exposed to in some time. I hope college kids and grad students are finding and reading it, and I hope that some of the braver (and more self-assured) folks teaching college and graduate school economics are assigning it. OK, I hope they're assigning it in the public policy schools, too, but I digress.
If you've studied or read Economics, this is really good stuff. (Full disclosure: I have no idea how accessible the book would be to readers who are not familiar with basic economic theory, doctrine, teaching, and jargon, but I also don't know how common those readers are. They teach at least some basic economics in high school these days, don't they?) It's a different animal from the mostly entertaining Freakonomics genre, and it's every bit as (if not more) unconventional, than the terrific, anti-establishment behavioral economics stuff that I've been enjoying for some time.
Let's be clear, this isn't Harari's Sapiens - which, to my mind, was more interesting, broader in scope, more eloquently written, and more polished in its presentation. But I only say that to make the point that this isn't necessarily an easy (or entertaining) read. It is most definitely not a page-turner. I read quite a bit, I'm no stranger to non-fiction or to academic tomes, and I was fascinated, literally captivated by the content. But I still felt like I was struggling, plodding through. I don't think I ever consumed more than a chapter in a day (although, to be fair, I had plenty of distractions). And, while I can't put my finger on it, I never really connected with the voice ... I just don't know why. Still, I'm ecstatic that I read it.
A former economics professor recommended it to me after I recently participated in a free-wheeling policy discussion that touched on a number of public policy, economic, and climate-change-related issues (including, among other things, externalities, the value proposition, behavioral economics, etc.). I'm glad he did. I'm already thinking about ways to incorporate this into some research and writing projects and, among other things, revising and repackaging some prior work. First and foremost, I'm jettisoning externalities and embracing the term effects instead. I ordered a copy for my research assistant before I even finished the book.
It's a game changer, and I hope it maintains its popularity and helps people (and economists and policy makers) think differently about confronting the problems that face our nation and the world.
March 28, 2021
"In a period of great economic uncertainty," [Kenneth Rogoff] wrote in 2012, "it may seem inappropriate to question the growth imperative. But then again, perhaps a crisis is exactly the occasion to rethink the longer-term goals of global economic policy."
Doughnut Economics is Raworth's critique of how the field of economics has fallen short in addressing the major issues of the 21st century. Published in 2017, her book points out that income inequality is extreme, billions live in abject poverty, and ecological destruction is worsening.
- as of 2015, the world's richest 1 percent now own more wealth than all the 99 percent put together
- two billion people (or 29 percent) live on less than $3 a day
- around 40 percent of the world's agricultural land is seriously degraded, and by 2025, two out of three people worldwide will live in water-stressed regions.
About 40 percent of the book delves into the history of economic theory to provide background. Raworth tried to enliven these sections with analogies to reach the lay person, but I believe that having some exposure to economics courses is necessary. The rest is Raworth's proposal for a radical alteration in the prevailing economic framework and modeling and some ideas for how to accomplish the new goals.
Here’s the conundrum: No country has ever ended human deprivation without a growing economy. And no country has ever ended ecological degradation with one.
Raworth's 7 ways to think like a 21st century economist:
1. changing the goal from GDP growth to her doughnut framework (which establishes a minimum of human well-being that is capped by available ecological resources)
2. moving away from the self-contained market to viewing an economy embedded within the larger spheres of society and then earth
3. dropping the assumption of rational economic man to connecting with broader humanistic values
4. evolving from a mechanical equilibrium view of economics to one with dynamic complexity
5. designing a more distributive economy in terms of ownership of labor, resources, and ideas to mitigate income inequality
6. regeneration instead of only consumption of ecological resources
7. reduce the importance of a growing GDP and its underlying belief that it will cure all social ills.
I have taken many economic courses during my academic sojourns, and I have assiduously avoided the class in economic history. My aversion explains why a substantial chunk of this book was a long, slow slog over many days of persistent effort. Sometimes it felt like Raworth had put up a straw man, the Kuznets Curve, as an easy mark to debunk; I don't ever recall being instructed about this. Other times, she made valid criticisms, such as about the faulty assumption of man's rational behavior. Of course, the sub-field of behavioral economics had been forging new ground against this assumption since the 1990s. Certainly, Reagonomics and the "keeping up with the Joneses" marketing haven't led to a reduction in income inequality in the US.
Trickle-down economics may be a chimera but trickle-down behaviourism is very real.
Far from being a necessary phase in every nation's progress, rising inequality is a policy choice.
Raworth is trying to inject a values-based mindset into the discipline of economics, since economics is the mother tongue of public policy, as Raworth declared. During my time in university, the economics department was (and probably still is) aiming for the respectability of the hard sciences by using mathematics as its language, for a field originally classified within the social sciences. Raworth avoided politically-loaded phrases such as socialism and capitalism, but nonetheless, this is a book about political economy.
Markets are not mere mechanisms; they embody certain values. And sometimes, market values crowd out nonmarket norms worth caring about.
The ideas and examples she included were brief and not as numerous as I would have liked. She did include the disclaimer that real change would be decades in the making. A novel-to-me concept was complementary currency. Specifically, in Switzerland and in Belgium, complementary currencies were created in order for people to earn credits by doing something socially or communally beneficial and then exchange them for future similar service or another desired community good.
Overall, Doughnut Economics offers a good idea that is probably more mainstream than not now in 2020. It's food for thought. While the components and implementation of her doughnut framework are far from being junk food, Doughnut Economics certainly is calorically light.
3 ☆
December 15, 2017
Yes. Finally. Everyone read this (and other books like it). (I have written two myself ;)) We need to rethink our economic systems. We cannot rely on GDP growth forever and at all costs. The costs are huge and irreparable. We don't have much left in the way of environmental buffers, we have way too much inequality, and for what? We have to understand that banks are not just neutral players in the system, but that they create money. That businesses have profit maximization as their model, which is fine, but there needs to be a balance. The way we have typically envisioned the economy has not included all the right players--we are not all consumers or producers. We have to account for unpaid work, for non-monetary costs (externalities), and where the energy for the widgets are going to come from? Read this!
Want to read
May 15, 2018One of the best TED talks from this year: https://www.ted.com/talks/kate_rawort...
January 3, 2022
Zacznę nawiązaniem do kina i tak samo skończę.
Ta książka przypomina mi Matrix: Neo, zanim połknął właściwą pigułkę, żył ciągle z taką wątpliwością, że coś tu się nie zgadza, ale nie bardzo wiadomo co.
Podobieństwo polega na tym, że ta książka jest między innymi o produkcie krajowym brutto, czyli PKB, który - jak wiadomo - prawie wszędzie rośnie. Wiele osób zadaje sobie pytanie: czy PKB może sobie tak rosnąć w nieskończoność? I intuicyjnie ludzie zdają sobie sprawę, że coś tu się nie zgadza, ale nie bardzo wiadomo co.
Wg autorki nieskończony wzrost jest niemożliwy z bardzo prostego powodu: Ziemia i jej zasoby nie są nieskończone. Zatem życie wg zasad PKB wcześniej, czy później doprowadzi nas do zagłady.
Tytułowy Obwarzanek to schemat systemu funkcjonowania gospodarki oraz ziemskiej populacji, który uwzględnia to ważne zastrzeżenie a książka precyzyjnie i przystępnie opowiada jak to miałoby działać.
Całym sercem zgadzam się z tezami tej książki nie tylko dlatego, że mam dzieci i nie chciałbym, żeby żyły w MadMaksie albo Wodnym Świecie.
Ta książka przypomina mi Matrix: Neo, zanim połknął właściwą pigułkę, żył ciągle z taką wątpliwością, że coś tu się nie zgadza, ale nie bardzo wiadomo co.
Podobieństwo polega na tym, że ta książka jest między innymi o produkcie krajowym brutto, czyli PKB, który - jak wiadomo - prawie wszędzie rośnie. Wiele osób zadaje sobie pytanie: czy PKB może sobie tak rosnąć w nieskończoność? I intuicyjnie ludzie zdają sobie sprawę, że coś tu się nie zgadza, ale nie bardzo wiadomo co.
Wg autorki nieskończony wzrost jest niemożliwy z bardzo prostego powodu: Ziemia i jej zasoby nie są nieskończone. Zatem życie wg zasad PKB wcześniej, czy później doprowadzi nas do zagłady.
Tytułowy Obwarzanek to schemat systemu funkcjonowania gospodarki oraz ziemskiej populacji, który uwzględnia to ważne zastrzeżenie a książka precyzyjnie i przystępnie opowiada jak to miałoby działać.
Całym sercem zgadzam się z tezami tej książki nie tylko dlatego, że mam dzieci i nie chciałbym, żeby żyły w MadMaksie albo Wodnym Świecie.
December 29, 2017
The key concept is a doughnut to represent the economy. In very simple terms the doughnut has a hole in the middle which shows a shortfall in "social foundations" and the area outside of the doughnut shows our overshooting of the world's "ecological ceiling". Both these two core concepts are self-evident in today's economies. The author holds this doughnut up as a basis for re-structuring our approach to economics. That is as about as deep as the book's theory gets. The problems are vast the solutions are complex and I applaud anyone trying to solve them. That being said we all need to be honest and call out mediocrity when we see it.
The accolades on the cover of this book compare the author to Keynes, in a word this is laughable!
This book offers nothing on how to influence policy, what measures to replace GDP with, or practical ways to reduce inequalities. It mainly, and to my mind quite arrogantly, says that current economics and precious economists are no longer relevant (especially Simon Kuznets). No coherent vision is formed and neither is any strategic framework presented.
The accolades on the cover of this book compare the author to Keynes, in a word this is laughable!
This book offers nothing on how to influence policy, what measures to replace GDP with, or practical ways to reduce inequalities. It mainly, and to my mind quite arrogantly, says that current economics and precious economists are no longer relevant (especially Simon Kuznets). No coherent vision is formed and neither is any strategic framework presented.
April 4, 2018
The dismal science has a propensity to be tedious and uninteresting to anyone outside its narrow sphere. But its influence is wide and pervasive, the neo-liberal agenda has given us a society where there is now a vast chasm between the super-rich elite and the poor underclass and where the single-minded pursuit of profit is degrading the world that we live in and are totally dependent on. This system that favours a small political and financial elite who make decisions based on a narrow range of interests and desires and I think that you could argue that economic theory has remained just a theory. The economists at the London School of Economics were quite embarrassed when the Queen asked how they managed to totally miss the 2008 financial crash. This is a common occurrence, time and time again these events have not been predicted, let alone prevented and they have caused serious harm to economies large and small.
Is there a way of fixing it though?
Kate Raworth thinks that there is. In this radical new economic theory that she sets out in Doughnut Economics, she identifies seven elements where the present systems have failed and her proposals to overhaul the current thinking. Addressing the fundamental issues such as growth, GDP, rational economic man and distribution of wealth her new economic plan takes us away from the folly of equilibrium and the boom and bust that always follows.
The principle of the doughnut above is that the outer ring is the limits of our resources; we, after all, are just on one planet and haven't got another to use when we have ruined and used this one. The inner ring is what we all need to be able to survive as human beings, from the essentials of food, water and shelter to the elements that make us civilised like energy, education and justice. The band between these two lines is the space where we all can live comfortably. It is a simple and elegant model and the places where parts of this have been implemented, the benefits are there for all to see.
When the short-term interests of a small elite diverge from the from the long-term interests of society as a whole, it is as Jared Diamond says, a blueprint for trouble. Raworth has developed an excellent and sustainable model of economics that we really need to start moving towards to, to make the economic systems work once again for the good of humanity and the planet. It is well thought through, with clear reasons as to why the current system is failing for most of the world at the moment and a soundly robust new system. For me though, the only thing it was lacking is the how we are going to change to something like this, that is urgently needed. Budging those vested and deeply ingrained interests is going to involve a lot of pain. Overall a really good book with a positive message and maybe a chance to turn a work that thrives for all.
Is there a way of fixing it though?
Kate Raworth thinks that there is. In this radical new economic theory that she sets out in Doughnut Economics, she identifies seven elements where the present systems have failed and her proposals to overhaul the current thinking. Addressing the fundamental issues such as growth, GDP, rational economic man and distribution of wealth her new economic plan takes us away from the folly of equilibrium and the boom and bust that always follows.
The principle of the doughnut above is that the outer ring is the limits of our resources; we, after all, are just on one planet and haven't got another to use when we have ruined and used this one. The inner ring is what we all need to be able to survive as human beings, from the essentials of food, water and shelter to the elements that make us civilised like energy, education and justice. The band between these two lines is the space where we all can live comfortably. It is a simple and elegant model and the places where parts of this have been implemented, the benefits are there for all to see.
When the short-term interests of a small elite diverge from the from the long-term interests of society as a whole, it is as Jared Diamond says, a blueprint for trouble. Raworth has developed an excellent and sustainable model of economics that we really need to start moving towards to, to make the economic systems work once again for the good of humanity and the planet. It is well thought through, with clear reasons as to why the current system is failing for most of the world at the moment and a soundly robust new system. For me though, the only thing it was lacking is the how we are going to change to something like this, that is urgently needed. Budging those vested and deeply ingrained interests is going to involve a lot of pain. Overall a really good book with a positive message and maybe a chance to turn a work that thrives for all.
June 27, 2021
Our current capitalistic model is linearly regressive.
This is a big ideas book. Its enormous and sweeping hopes are only paralleled by its unachievable aspirations. Don't get me wrong, I really enjoyed this book and Raworth is pretty brilliant and demonstrated impressive knowledge of the disastrous economic model in which we live. She's more of a do-good philosophizer than an economist. This is the exact type of book that conservative right-wing neoliberals snicker at while denouncing snowflake ideology. And that's okay because I'm pretty sure Raworth is completely right about everything said in this book.
The main thrust of Doughnut Economics is that economic theory that started in the mid 1900s came out on the completely wrong foot. It grew into a culture and society that equates GDP growth with social prosperty. Current western capitalism, which has ushered the anthropocene era from unfettered growth, is based on a common-believed cast of characters: the market is ever efficient, business is always innovative, the commons are a necessary tragedy and the state is an incompetent blubbering fool which must be used only to protect property. The Earth and its resources and not even considered in the current model. We believe the economy is a circular model: labor and consumption go round and round and then government and trading siphon off revenue and return some back. It assumes that the economy is a closed system and that growth is the only viable goal.
Doughnut Economics turns all this upside down. The Earth and its resources should be the foundation of the economy with the goal of having an economy that is regenerative and profitable. The commons have creativity which should be unleashed rather than burdened with mindless labor. The market is important but can easily unleash inequality as a design feature. The state is vital to rule keeping. And the household is the main driver of the economy which is completely ignored in tradition economic model. If it weren't for the household and the unpaid work that mostly women do, the current economic model would instantly collapse. Everything we need to know about what really drives the economy can be learned from the fact the Adam Smith wrote the Wealth of the Nations while in his 40s, living with his mother.
Government subsidy and investment actually helps growth as we have seen in tons of government investment in variouss technologies in the later half go the 20th century which allows for tech to take off. The big point is that economics isn an open system within a larger system of chaos which must be flexible. Old economic models are too rigid.
Economic growth and GDP obsession is not a panacea for inequality. Our current model is linearly degenerative which destroys the environment and only concentrates wealth. GDP and economic growth are not exponential but actual on a sinusoidal curve. There is a point where a nation must not be so obsessed with GDP growth because it will force unhealthy behavior like immigrant scapegoating, financialization, hollowing out of the middle class, speculative bubbles and the privatization of public goods to create impotent revenue streams.
This is a great book for dreamers.
This is a big ideas book. Its enormous and sweeping hopes are only paralleled by its unachievable aspirations. Don't get me wrong, I really enjoyed this book and Raworth is pretty brilliant and demonstrated impressive knowledge of the disastrous economic model in which we live. She's more of a do-good philosophizer than an economist. This is the exact type of book that conservative right-wing neoliberals snicker at while denouncing snowflake ideology. And that's okay because I'm pretty sure Raworth is completely right about everything said in this book.
The main thrust of Doughnut Economics is that economic theory that started in the mid 1900s came out on the completely wrong foot. It grew into a culture and society that equates GDP growth with social prosperty. Current western capitalism, which has ushered the anthropocene era from unfettered growth, is based on a common-believed cast of characters: the market is ever efficient, business is always innovative, the commons are a necessary tragedy and the state is an incompetent blubbering fool which must be used only to protect property. The Earth and its resources and not even considered in the current model. We believe the economy is a circular model: labor and consumption go round and round and then government and trading siphon off revenue and return some back. It assumes that the economy is a closed system and that growth is the only viable goal.
Doughnut Economics turns all this upside down. The Earth and its resources should be the foundation of the economy with the goal of having an economy that is regenerative and profitable. The commons have creativity which should be unleashed rather than burdened with mindless labor. The market is important but can easily unleash inequality as a design feature. The state is vital to rule keeping. And the household is the main driver of the economy which is completely ignored in tradition economic model. If it weren't for the household and the unpaid work that mostly women do, the current economic model would instantly collapse. Everything we need to know about what really drives the economy can be learned from the fact the Adam Smith wrote the Wealth of the Nations while in his 40s, living with his mother.
Government subsidy and investment actually helps growth as we have seen in tons of government investment in variouss technologies in the later half go the 20th century which allows for tech to take off. The big point is that economics isn an open system within a larger system of chaos which must be flexible. Old economic models are too rigid.
Economic growth and GDP obsession is not a panacea for inequality. Our current model is linearly degenerative which destroys the environment and only concentrates wealth. GDP and economic growth are not exponential but actual on a sinusoidal curve. There is a point where a nation must not be so obsessed with GDP growth because it will force unhealthy behavior like immigrant scapegoating, financialization, hollowing out of the middle class, speculative bubbles and the privatization of public goods to create impotent revenue streams.
This is a great book for dreamers.
April 18, 2023
I have a lot of feelings about this book ;/ Sorry for this review being a bit chaotic, but my intention is to share the most important impressions I had while reading this one.
1. it sounds like it's written by an activist, not an economist - there's a lot about sustainability, the tragedy of commons (named in various ways), and being responsible; but not much about incentives, mechanisms, or (at least) behavioral economics - that may that all sounds very naive and a bit ... detached from reality (one good example: a fragment about Newton's apple - I could barely believe my ears)
2. I like the idea of introducing Systems Theory - but this can be done easily in the economics we know now; This is a universal mechanism that can be used to model & simplify reality - in fact, many economists already do apply systems thinking. So what's the fuss about?
3. I couldn't help the feeling that Raworth proposes solutions she does not understand ... I had such an impression when she praised the advantages of Bitcoin or preached for open source models while bringing Linux as an example. These are very bold over-simplifications - obvious for everyone familiar with at least some details.
4. This book is quite fresh, but one could already say it has aged badly - the energy crisis caused by Russian aggression on Ukraine, the rise of energy-consuming Generative AI - beautiful concepts under the umbrella of sustainability got pushed to n-th row nearly immediately. That's what happens when you base your hopes upon declarations of businesses ... I think that activists (especially radical Leftists) could use this as a good lesson about the role of the state (e.g., as a regulator/legislator).
5. I totally disagree with the chapter on the role of growth - it completely ignores everything we've learned (over the centuries) about progress, what motivates people, why Marxism has failed, etc. I'm not saying we should always go crazy about GDP/growth as a Northern Star metric - but progress is an essential part of every civilization and also our nature.
6. It's very irritating when the author makes a good observation (e.g., about why developing countries are not/less interested in adopting responsible practices because they want to focus on "catching up" with the rest of the world) and then completely ignores the need to address it - barely shrugs it off. It happens many times across the whole book.
In the end - I gave 3 stars. Why so much if I have been so critical?
I don't question the author's intentions. She brings valid concerns in. Some solutions have a spark of a good idea somewhere there (e.g., YES - Open Source can in some cases and in some form be a solution - e.g., as a foundation where collaboration can save a lot of money for those who will build platforms on the top of Open Source core - for instance: RISC-V processors). But it's not enough; too shallow, too naive, and too far from pragmatism.
1. it sounds like it's written by an activist, not an economist - there's a lot about sustainability, the tragedy of commons (named in various ways), and being responsible; but not much about incentives, mechanisms, or (at least) behavioral economics - that may that all sounds very naive and a bit ... detached from reality (one good example: a fragment about Newton's apple - I could barely believe my ears)
2. I like the idea of introducing Systems Theory - but this can be done easily in the economics we know now; This is a universal mechanism that can be used to model & simplify reality - in fact, many economists already do apply systems thinking. So what's the fuss about?
3. I couldn't help the feeling that Raworth proposes solutions she does not understand ... I had such an impression when she praised the advantages of Bitcoin or preached for open source models while bringing Linux as an example. These are very bold over-simplifications - obvious for everyone familiar with at least some details.
4. This book is quite fresh, but one could already say it has aged badly - the energy crisis caused by Russian aggression on Ukraine, the rise of energy-consuming Generative AI - beautiful concepts under the umbrella of sustainability got pushed to n-th row nearly immediately. That's what happens when you base your hopes upon declarations of businesses ... I think that activists (especially radical Leftists) could use this as a good lesson about the role of the state (e.g., as a regulator/legislator).
5. I totally disagree with the chapter on the role of growth - it completely ignores everything we've learned (over the centuries) about progress, what motivates people, why Marxism has failed, etc. I'm not saying we should always go crazy about GDP/growth as a Northern Star metric - but progress is an essential part of every civilization and also our nature.
6. It's very irritating when the author makes a good observation (e.g., about why developing countries are not/less interested in adopting responsible practices because they want to focus on "catching up" with the rest of the world) and then completely ignores the need to address it - barely shrugs it off. It happens many times across the whole book.
In the end - I gave 3 stars. Why so much if I have been so critical?
I don't question the author's intentions. She brings valid concerns in. Some solutions have a spark of a good idea somewhere there (e.g., YES - Open Source can in some cases and in some form be a solution - e.g., as a foundation where collaboration can save a lot of money for those who will build platforms on the top of Open Source core - for instance: RISC-V processors). But it's not enough; too shallow, too naive, and too far from pragmatism.
October 23, 2020
The book to me is like preaching to the converted, kicking an already open door, you know what I mean. Maybe that's why I did not really find many new stuff: circular economy, systems thinking, regenerative growth, sustainability, and so on, unfortunately since I work in an NGO I am already in the spaces where these stuff are already flying around.
I expected to have a more practical explanation on how to use the visual to the non-converted. While the book in the first chapter stressed the importance of visuals in economic theories, I was thinking, oh maybe we'll get more in depth know-how on using the doughnut as visual aid. But nope, the book apparently is dedicated more on the values, thinking, philosophical background of the visual itself.
I am also hoping for more Southern/Eastern point of view, instead all I got was quotes from Western/Northern thinkers/theories/economists/whathaveyous. As a person living in a developing country I also feel a bit of a disconnect and felt the book is more targeted towards WEIRD (Western, educated, and from industrialized, rich, and democratic countries) audience. And of course, when the author made several typos about a region in my country - I could not help but feeling a bit miffed.
So....yeah, I am clearly not the target audience. But this book could be useful for a primer if you're it.
I expected to have a more practical explanation on how to use the visual to the non-converted. While the book in the first chapter stressed the importance of visuals in economic theories, I was thinking, oh maybe we'll get more in depth know-how on using the doughnut as visual aid. But nope, the book apparently is dedicated more on the values, thinking, philosophical background of the visual itself.
I am also hoping for more Southern/Eastern point of view, instead all I got was quotes from Western/Northern thinkers/theories/economists/whathaveyous. As a person living in a developing country I also feel a bit of a disconnect and felt the book is more targeted towards WEIRD (Western, educated, and from industrialized, rich, and democratic countries) audience. And of course, when the author made several typos about a region in my country - I could not help but feeling a bit miffed.
So....yeah, I am clearly not the target audience. But this book could be useful for a primer if you're it.
June 17, 2020
This book is an excellent demonstration of the straw man fallacy. It is quite easy to act smart by criticizing economists from 80 years ago and ignoring any advances to the discipline since then. Her book would be much better if it was focused on sustainable development rather than making ridiculous claims about what economists think, and then trying to debunk things that economists have already debunked a half century ago. I am particularly frustrated after reading this because I agree with the author's intent to use economics to tackle climate change, inequality, and race and gender issues, but when I feel this book is such biased propaganda on the topic, that it actually moves us farther away from these goals.
As a bit of background, I am a tenured economics professor, with a very similar background as the author (I also worked in international development for multiple years, care deeply about sustainable development and improving society, and even happen to have twins!), I find her book to be condescending and lacking any particular thoughtful insight into economics. These are the exact type of books that make a layperson feel like they now understand economists, when actually most readers are probably now even more misinformed about economic thought than before reading this book. Instead people would be better off reading Easterly/Sachs/Collier to understand real economic debate on growth and development. Those books are easily accessible to the general public and would make people better informed and better equipped with tools to engage in meaningful debate about how to use economics to improve society.
As a bit of background, I am a tenured economics professor, with a very similar background as the author (I also worked in international development for multiple years, care deeply about sustainable development and improving society, and even happen to have twins!), I find her book to be condescending and lacking any particular thoughtful insight into economics. These are the exact type of books that make a layperson feel like they now understand economists, when actually most readers are probably now even more misinformed about economic thought than before reading this book. Instead people would be better off reading Easterly/Sachs/Collier to understand real economic debate on growth and development. Those books are easily accessible to the general public and would make people better informed and better equipped with tools to engage in meaningful debate about how to use economics to improve society.
February 20, 2020
Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, by Kate Raworth, is a book examining classical economic thought and how it is changing in the 21st Century. Contrary to what this book may state, economics and economic thought is largely changing and moving away from classical and neo-liberal dominated theories. Economics is sometimes viewed by its advocates as a science with set laws. It has been historically compared to and designed around engineering. Flow charts, graphs and equations dominate the subject - even if it is more related to social sciences and human behaviour, both at the micro and macro level. Raworth captures this movement and evolution of economics with her Doughnut diagram, looking at economics in a more holistic or systems thinking way. The doughnut communicates the inter-connectivity of Earth as a biosphere, its human and social factors, and the materials taken to generate economic activity. This holistic view is interesting and I personally have noticed it going through schooling in Governance and Environmental Studies - economics is changing as a discipline, and this is far overdue.
Economics is an antiquated subject that, in modern times, seems to promote the interests of financial elites. Concepts like the Kuznets Curve, Supply and Demand, Price Elasticity, and so on, promote lasseiz-faire attitudes toward systems design, positing that a hands off approach to the market is key to a successful economy. In reality, most political theorists and scholars would strongly disagree; governments and their citizen constituents create and manage the systems that allow the market to thrive. Security, laws and regulations, infrastructure spending, wage laws, environmental regulations and so on are all important factors to ensure markets are safe, accessible and able to function. In a chaotic system, the market would struggle to function, and would be subsumed by actors or agents with the ability to exploit situations or exert power. The State and Market are intertwined completely and may not even really be separate things. Society in the modern world requires both to function properly.
Raworth drives this point home by re-examining many of the classical principles of economics, showing not only that they are inadequate, but that they were always simplified concepts that did not necessarily translate into reality. For economics to move beyond theory and into the realm of science or law, this needs to change. Generalizations such as Homo Economicus - the rationale consumer or citizen - are basic concepts that often miss much of the important factors that explain human interaction with the market and society. Raworth's doughnut is so appealing because it allows the measurement and inclusion of economically driven issues - climate change, pollution, poverty and inequality, etc. that are considered "externalities" in economics and deemed to be outside or aside to the calculable market driven systems of profit, cost and so on.
At the end of the day, this book is simple, effective and authoritative. Raworth has a mastery of classical economics buoyed by a desire to see it become a more effective system for humanity to use in its quest to manage society, the environment, and humans interactions with their surroundings. The doughnut chart, here is telling, and fits neatly with projects like the United Nations Millennium Development Goals, or the drive to create sustainable (environmentally and socially) corporations under corporate governance models. It is also an inspiring read for budding economists, or those wishing to learn more on the subject, as it shows that greed is not the main driver of the economic sphere any longer, and many thinkers, from Smith and Stewart to Hayek and Keynes, up to Raworth and other modern economists, have and continue to recognize and work to improve the gaps in economics and its applicability to the human sphere. A solid read, very enjoyable, and very inspiring.
April 24, 2021
I was really reluctant giving only a 2-star rating, especially because I qualitatively agree with many of the topics presented. For me it was just really painful because it felt quite incoherent, rambly, and drawn out, overburdened with metaphors and anecdotes, as well as not representing opposing ideas fairly.
Maybe concerning the title: it's unclear till the end, why a doughnut is the illustration of choice. Raworth spends almost an entire chapter to explain the power of visualization and I suppose there is something to it: create powerful narratives and images that speak to the citizens instead of opaque equations. But apart from asserting again and again that 'we should get the entire population inside the doughnut' (inside the doughnut? like, this metaphor doesn't even work?! She wants to get us into the hole of the literal doughnut?), there is no real story around it. It's a bar diagram woven around a circle and even being generous with funky pop-sci visualizations, it's not even a good metaphor, in my view. Whenever the doughnut comes up it doesn't feel fitting but more as if we're forcing it on the particular argument she's making.
Many times Raworth painted an extremely oversimplified picture of mainstream economists, neoliberals, and international institutions. Like, again, I get where you are coming from and I have plenty of things to criticize but just dismissing them with (paraphrasing) "mainstream economists don't think that way", "they didn't take that into account", "they don't know what happens at the end of an exp(x) function" is like ... what? Of course they do but their arguments are more subtle than that. To convince people that are not already of your opinion, you have to make a robust case and walk the extra mile to really carefully represent the opposing ideologies.
This leads me to the following: It's not clear for what target audience the book was written. Activism should, in my opinion, always either improve the arguments of the proponents or convince opponents. But I feel unless you've never read anything on environmental economy it's hard to say what is truly new. And on the other hand, as I pointed out above, I would not be convinced if I was a liberal or a techno-optimist.
Lastly, it's just too long. Deleting all the sometimes very extended metaphors would already help, as well as cutting back on the repetition. Wouldn't recommend to read unless skim reading or to some vaguely environmentally aware middle class parents or hippie children.
Maybe concerning the title: it's unclear till the end, why a doughnut is the illustration of choice. Raworth spends almost an entire chapter to explain the power of visualization and I suppose there is something to it: create powerful narratives and images that speak to the citizens instead of opaque equations. But apart from asserting again and again that 'we should get the entire population inside the doughnut' (inside the doughnut? like, this metaphor doesn't even work?! She wants to get us into the hole of the literal doughnut?), there is no real story around it. It's a bar diagram woven around a circle and even being generous with funky pop-sci visualizations, it's not even a good metaphor, in my view. Whenever the doughnut comes up it doesn't feel fitting but more as if we're forcing it on the particular argument she's making.
Many times Raworth painted an extremely oversimplified picture of mainstream economists, neoliberals, and international institutions. Like, again, I get where you are coming from and I have plenty of things to criticize but just dismissing them with (paraphrasing) "mainstream economists don't think that way", "they didn't take that into account", "they don't know what happens at the end of an exp(x) function" is like ... what? Of course they do but their arguments are more subtle than that. To convince people that are not already of your opinion, you have to make a robust case and walk the extra mile to really carefully represent the opposing ideologies.
This leads me to the following: It's not clear for what target audience the book was written. Activism should, in my opinion, always either improve the arguments of the proponents or convince opponents. But I feel unless you've never read anything on environmental economy it's hard to say what is truly new. And on the other hand, as I pointed out above, I would not be convinced if I was a liberal or a techno-optimist.
Lastly, it's just too long. Deleting all the sometimes very extended metaphors would already help, as well as cutting back on the repetition. Wouldn't recommend to read unless skim reading or to some vaguely environmentally aware middle class parents or hippie children.
March 8, 2019
This is the book that every economics graduate must be made to read. It was such a personally vindicative book for me to read, especially whenever she takes a direct hit at Greg Mankiw who I've seen in my own experience has convinced an entire class of aspiring economists within halfway through first semester that Markets are destiny, all government intervention is bad, companies have the sole aim of profit maximization and consumers make perfectly rational decisions to maximize personal utility. It is on these narrow assumptions lacking any historical context, that the entire course is later structured upon.
Our generation is probably the last genration that can act on climate change. In this scenario, a large upheaval of current thinking of the economy is needed. While this sorta widely acknowledged, this is the book that provides a meaningful blueprint for the thinking required to suit 21st century challenges. There are some excellent points about tax reforms too which should enter more into public discourse. Enjoyed reading this a lot, A ray of hope in the era of defeatism.
Our generation is probably the last genration that can act on climate change. In this scenario, a large upheaval of current thinking of the economy is needed. While this sorta widely acknowledged, this is the book that provides a meaningful blueprint for the thinking required to suit 21st century challenges. There are some excellent points about tax reforms too which should enter more into public discourse. Enjoyed reading this a lot, A ray of hope in the era of defeatism.
January 10, 2018
This book is very ambitious, but with a very valid and honourable course. Through her own experience and interactions with the modern students, Kate Haworth realised the economic theory that is taught to the undergraduates is at least 50 years old, based on more or less single paradigm, too technical. Respectively, the policies based upon the theory could be outdated, and sometimes have got a wrong set of goals. Why it matters? For two main reasons: current students are future policy makers and advisers. So they should have much more modern, broad view. I can add that economy is something which affect us all. We are all within this system (so to speak). And. on the one hand, we all think we know a lot to form an opinion; but in reality the mainstream theory is hard to understand without special knowledge. So it creates a vacuum between “qualified” advisers to the policy makers, academia and the general public plus the politicians who are often even more clueless.
Kate decided to redefine the goals of the discipline and the approach she proposes to educate the future economists and the general public. She is “lucky” with the timing as she is writing a decade after the financial crisis, when the mainstream economists totally discredited themselves by “not seeing it coming”. So currently there is more opportunity to challenge the dogma which existed around so-called “neo-classical” model of economics.
In preparation of the book, she seemed to plough through a substantial amount of literature representing a variety of current alternative economic paradigms. The ideas per se are not absolutely new, but they have new relevance and she puts them all together. The result is lively and coherent text which represents these ideas in the form understandable to anyone. I can see the big influence of the so-called sustainability economics theory (Herman Daily, Donatello Meadows) on her writing, which is a good thing (IMHO). Also she tends to use the pictures and diagrams to introduce her concepts claming that “one picture is better than thousands words or equations”. (I like the equations very much, but it is just me).
The book in its current form is unlikely replace the infamous Econ-01 (Introductory Economics course for the undergrads), but it is a fantastic starting point for this discussion. Personally, I also benefited from updating my knowledge of the modern economic thinking through her Bibliography and found a lot of interesting areas to investigate.
The book lacks academic vigour. Some areas are weaker than the others. For example, the areas about theory of money, trade, unemployment are barely touched; the suggested policies for redistribution are vague. I hope she would expand on this or someone else will produce a similar quality book updating the thinking in these areas. Also the Austrians (evolutionary approach) are not mentioned apart from Hayek. And he is mentioned only in the role of devious neoliberal. It is a pity as they would fit her general paradigm. Some people might consider her views as a left-wing leaning.
However, her approach is certainly more heterodox and broad than the traditional textbook. Amazingly enough, I found out from different sources the current economic students are not taught the history of economic thought. So they are not exposed to a wide range of ideas (sometimes contradictory) within the historic context. Therefore, this book is the move in the right direction for educating the future economists and stimulating the new debate. It is also a refreshing, well presented and interesting read.
Appendix:
The best place to receive a quick intro into her ideas is at her website. There are very short animations:
www.kateraworth.com/animations/
But I will quickly summarise the main point here as well. She calls them “Seven ways to think as 21 century economist:
1) Change the Goal - she claims the goal of the current economics is maximising GDP. She says is too narrow (even might be wrong) and she is proposing something which she calls “Doughnut” - finding the balance between sustainable environment and thriving for all the humans (social justice). Strictly speaking, we are talking here more about the goal of economic policies, not the economics as a science in the normative sense of the world - the objective study of the reality. But here we come to the debate whether economics is a science indeed and can it be objective of the abstract human values. Fortunately for us, this is beyond the consideration of her book.
2) Tell a New Story - broadly criticising neoliberal script about the dominance of free market and expending it to “embed” the economics in the context of society and nature. She considers the commons, household and the government as important in the economy as the market. She also considers the solar energy as a key production factor which feeds all economic activities.
3) Nurture the Human Nature - This chapter addresses what traditionally would be called “Microeconomics”. It starts with criticising the idea of “Homoeconomicus” - the model of an individual, rationally maximising his utility in economic decision making. She introduces some behaviourist and heuristic ideas about the individuals within the context of economics. Also she demonstrates that in some situations money is not the best way for motivating people within the economy. Though her argumentation is not always clear and one can disagree with some of her statements, this chapter is really a good starting point to find out about the alternative views on the microeconomics assumptions.
4) Get Savvy with Systems - Broadly addresses the subject of what traditionally called Macroeconomic theory. The orthodox approach is the static model when the economy eventually would achieve an equilibrium of aggregate supply and the demand. She shows why it is the unrealistic model. Her recommendation is to change the approach and move to modelling the dynamic systems; also to look for an analogue of this system in the nature. Again, this approach is shimmering within the environmental economics theory. Also applying the physics theory of thermodynamics has becoming popular between the economists and in finance. I found this chapter the one of the most interesting and plan to read more on this approach.
The three last chapters are devoted to the economic policies more than the theory. Also they cover the basics of the theoretical foundations as well. However, I found them a bit more hazy in terms of their practicalities. She admits that it is just a starting point though, and there are a lot of new ideas as well as the traditional ones.
5) Design to Distribute - She argues the economy should be redesigned in a such a way that there would be embedded mechanisms of the income and wealth redistribution. She criticises the traditional theory that inequality would grow at the initial stage of the economy growth and then would subside by itself in the later stage of the development. (Kuztnets curve). It is not confirmed by the empirical data. She opines: “Far from being a necessary phase, rising inequality is a policy choice.” She also underscores the inequality’s impact on the decline of democracy. Her conclusions are referenced to the modern research and thinking which is included in the bibliography (including Piketty - the french economist who wrote the bestseller “Das Capital in 21th century”. ). Apart from the traditional role of the government, she hopes that the modern growth of creative commons economy through the networks would translate into something bigger like zero marginal cost production and distributed R&D, for example. There are many other ideas and examples of diversifying the economic system.
6) Create to Regenerate - She discuses the challenges and progress made to redesign the economy from being degenerative (in relation to the Planet) into the regenerative one.
7) Be Agnostic about Growth - probably the most controversial chapter in the book. She argues that the rich countries might think about limiting economic growth to achieve the world’s sustainability. She contrasts the “green growth” vs no growth for the the rich developed economies (while the rest of the world is still targeting economic growth). By “post growth” economy she does not mean that no value is created. Rather, she talks about value creation which is not necessary measured in monetary terms and/or are not created in terms of financial profit (which is basically what GDP is). “We will still generate product and services that people enjoy, but far less of that total value will flow through market transactions.”
She appreciates though that our society does not yet know how to live without economic growth. And, in my opinion, she does not have a developed theory (or proposal) on this front as well. She appeals for “many sectoral transformations, including a strong contraction of industries such as mining, oil and gas, industrial livestock, demolition and landfill, speculative finance to be offset by a rapid and lasting expansion of long-term investment in renewable energy, public transport, commons-based circular manufacturing and retrofit buildings.” - That sounds good, but a bit too naive. Nevertheless, it is a certainly relevant area to think about for 21th century economist.
Kate decided to redefine the goals of the discipline and the approach she proposes to educate the future economists and the general public. She is “lucky” with the timing as she is writing a decade after the financial crisis, when the mainstream economists totally discredited themselves by “not seeing it coming”. So currently there is more opportunity to challenge the dogma which existed around so-called “neo-classical” model of economics.
In preparation of the book, she seemed to plough through a substantial amount of literature representing a variety of current alternative economic paradigms. The ideas per se are not absolutely new, but they have new relevance and she puts them all together. The result is lively and coherent text which represents these ideas in the form understandable to anyone. I can see the big influence of the so-called sustainability economics theory (Herman Daily, Donatello Meadows) on her writing, which is a good thing (IMHO). Also she tends to use the pictures and diagrams to introduce her concepts claming that “one picture is better than thousands words or equations”. (I like the equations very much, but it is just me).
The book in its current form is unlikely replace the infamous Econ-01 (Introductory Economics course for the undergrads), but it is a fantastic starting point for this discussion. Personally, I also benefited from updating my knowledge of the modern economic thinking through her Bibliography and found a lot of interesting areas to investigate.
The book lacks academic vigour. Some areas are weaker than the others. For example, the areas about theory of money, trade, unemployment are barely touched; the suggested policies for redistribution are vague. I hope she would expand on this or someone else will produce a similar quality book updating the thinking in these areas. Also the Austrians (evolutionary approach) are not mentioned apart from Hayek. And he is mentioned only in the role of devious neoliberal. It is a pity as they would fit her general paradigm. Some people might consider her views as a left-wing leaning.
However, her approach is certainly more heterodox and broad than the traditional textbook. Amazingly enough, I found out from different sources the current economic students are not taught the history of economic thought. So they are not exposed to a wide range of ideas (sometimes contradictory) within the historic context. Therefore, this book is the move in the right direction for educating the future economists and stimulating the new debate. It is also a refreshing, well presented and interesting read.
Appendix:
The best place to receive a quick intro into her ideas is at her website. There are very short animations:
www.kateraworth.com/animations/
But I will quickly summarise the main point here as well. She calls them “Seven ways to think as 21 century economist:
1) Change the Goal - she claims the goal of the current economics is maximising GDP. She says is too narrow (even might be wrong) and she is proposing something which she calls “Doughnut” - finding the balance between sustainable environment and thriving for all the humans (social justice). Strictly speaking, we are talking here more about the goal of economic policies, not the economics as a science in the normative sense of the world - the objective study of the reality. But here we come to the debate whether economics is a science indeed and can it be objective of the abstract human values. Fortunately for us, this is beyond the consideration of her book.
2) Tell a New Story - broadly criticising neoliberal script about the dominance of free market and expending it to “embed” the economics in the context of society and nature. She considers the commons, household and the government as important in the economy as the market. She also considers the solar energy as a key production factor which feeds all economic activities.
3) Nurture the Human Nature - This chapter addresses what traditionally would be called “Microeconomics”. It starts with criticising the idea of “Homoeconomicus” - the model of an individual, rationally maximising his utility in economic decision making. She introduces some behaviourist and heuristic ideas about the individuals within the context of economics. Also she demonstrates that in some situations money is not the best way for motivating people within the economy. Though her argumentation is not always clear and one can disagree with some of her statements, this chapter is really a good starting point to find out about the alternative views on the microeconomics assumptions.
4) Get Savvy with Systems - Broadly addresses the subject of what traditionally called Macroeconomic theory. The orthodox approach is the static model when the economy eventually would achieve an equilibrium of aggregate supply and the demand. She shows why it is the unrealistic model. Her recommendation is to change the approach and move to modelling the dynamic systems; also to look for an analogue of this system in the nature. Again, this approach is shimmering within the environmental economics theory. Also applying the physics theory of thermodynamics has becoming popular between the economists and in finance. I found this chapter the one of the most interesting and plan to read more on this approach.
The three last chapters are devoted to the economic policies more than the theory. Also they cover the basics of the theoretical foundations as well. However, I found them a bit more hazy in terms of their practicalities. She admits that it is just a starting point though, and there are a lot of new ideas as well as the traditional ones.
5) Design to Distribute - She argues the economy should be redesigned in a such a way that there would be embedded mechanisms of the income and wealth redistribution. She criticises the traditional theory that inequality would grow at the initial stage of the economy growth and then would subside by itself in the later stage of the development. (Kuztnets curve). It is not confirmed by the empirical data. She opines: “Far from being a necessary phase, rising inequality is a policy choice.” She also underscores the inequality’s impact on the decline of democracy. Her conclusions are referenced to the modern research and thinking which is included in the bibliography (including Piketty - the french economist who wrote the bestseller “Das Capital in 21th century”. ). Apart from the traditional role of the government, she hopes that the modern growth of creative commons economy through the networks would translate into something bigger like zero marginal cost production and distributed R&D, for example. There are many other ideas and examples of diversifying the economic system.
6) Create to Regenerate - She discuses the challenges and progress made to redesign the economy from being degenerative (in relation to the Planet) into the regenerative one.
7) Be Agnostic about Growth - probably the most controversial chapter in the book. She argues that the rich countries might think about limiting economic growth to achieve the world’s sustainability. She contrasts the “green growth” vs no growth for the the rich developed economies (while the rest of the world is still targeting economic growth). By “post growth” economy she does not mean that no value is created. Rather, she talks about value creation which is not necessary measured in monetary terms and/or are not created in terms of financial profit (which is basically what GDP is). “We will still generate product and services that people enjoy, but far less of that total value will flow through market transactions.”
She appreciates though that our society does not yet know how to live without economic growth. And, in my opinion, she does not have a developed theory (or proposal) on this front as well. She appeals for “many sectoral transformations, including a strong contraction of industries such as mining, oil and gas, industrial livestock, demolition and landfill, speculative finance to be offset by a rapid and lasting expansion of long-term investment in renewable energy, public transport, commons-based circular manufacturing and retrofit buildings.” - That sounds good, but a bit too naive. Nevertheless, it is a certainly relevant area to think about for 21th century economist.
October 30, 2020
This is both a critique of how economics is taught today (according to the author) and how it should be taught (mainly to include questions like environmental damage or unpaid household work). I read is as a part of monthly reading for October 2020 at Non Fiction Book Club group.
As a critique of the current study of economics it is quite weak and I think unfair, mainly because the questions raised, like an assumption of rationality or problems of environmental externalities, are actually well-discussed within the field for decades. It is not a case of physics envy (also discussed in the book), but if we compare with study of physics: in school with start with Newtonian theory and only later pupils move to questions the classical physics has problems with and introduce quantum mechanics or general relativity. I see the basic economics teaching just like Newtonian physics – it is wrong but useful and it is fine enough for use in most of ordinary tasks. Blaming neo-liberal economics in failures of today strongly reminds me of a similar critique from the right of e.g. cultural Marxism, mainly a straw man fallacy.
In what the book really shines is in describing alternative economic and near-economic though, it is a great reference source for people wanting to know more and be able to comfortably debate some economic issues from universal income to pollution quotas. The book contains references to research, a lot of which started in the 1970s (so misleadingly labelled ‘new’), even if in details it omits problems of that research. Say it noted the importance of 1972 The Limits to Growth, but decides not to add that most of its initial ‘forecasts’ were from the start biased to promote policies (and highly inaccurate).
Overall an interesting read, but it can lean readers in a wrong way if they are unaware of its biased nature.
As a critique of the current study of economics it is quite weak and I think unfair, mainly because the questions raised, like an assumption of rationality or problems of environmental externalities, are actually well-discussed within the field for decades. It is not a case of physics envy (also discussed in the book), but if we compare with study of physics: in school with start with Newtonian theory and only later pupils move to questions the classical physics has problems with and introduce quantum mechanics or general relativity. I see the basic economics teaching just like Newtonian physics – it is wrong but useful and it is fine enough for use in most of ordinary tasks. Blaming neo-liberal economics in failures of today strongly reminds me of a similar critique from the right of e.g. cultural Marxism, mainly a straw man fallacy.
In what the book really shines is in describing alternative economic and near-economic though, it is a great reference source for people wanting to know more and be able to comfortably debate some economic issues from universal income to pollution quotas. The book contains references to research, a lot of which started in the 1970s (so misleadingly labelled ‘new’), even if in details it omits problems of that research. Say it noted the importance of 1972 The Limits to Growth, but decides not to add that most of its initial ‘forecasts’ were from the start biased to promote policies (and highly inaccurate).
Overall an interesting read, but it can lean readers in a wrong way if they are unaware of its biased nature.
December 1, 2020
While I say that as well as fiction I read non-fiction, really I typically only read popular science, ancient history and some travel. One area that I never expected to be reading is the wannabe science of economics - but, as with politics, you might not take an interest in economics but it will take an interest in you.
There have been a slew of popular progressive economics books in recent years - from examinations of our broken system like John Lanchester’s Whoops!: Why Everyone Owes Everyone And No One Can Pay and Grace Blakeley’s Stolen: How to Save the World from Financialisation, to those that are more focused on looking at how we build better systems (The Spirit Level: Why More Equal Societies Almost Always Do Better and Utopia for Realists: How We Can Build the Ideal World), to the more hardcore ecomic theory (I swear I’ll get round to reading Thomas Piketty and Yanis Varoufakis!), and Kate Raworth’s book may be the best I’ve read at both outlining the problems and offering potential solutions in clear, straight-forward language.
It is an idea she has been presenting and working on for almost a decade. While her degree is in economics she was disenchanted by the blinkered, systematised thinking that shackles the discipline (as she points out early on, and again at the end of the book, while other social sciences seek out an encourage different ways of thinking, economists are taught that certain core principles are not to be questioned - no, more than that; they are indoctrinated into the mindset that there are no other ways of thinking.)
The idea of the doughnut is simply this: the hole in the middle is the lack of human dignity - insufficient food, water, shelter, healthcare, education. Those basics that we should allow to all people as a right.
The outer circle is the limit to which we can live with the finite resources of minerals, energy, food production, clean air, clean water.
The doughnut, therefore, is the space between those, where we as a species, as a culture, can provide a decent standard of living for every individual for the long term, without threatening the environment that we rely on for our survival.
It seems like almost too simple an idea - and an even simpler diagram, however she begins by pointing out how important visual signifiers are to us - the iconic map of the London Underground, Copernicus’ illustration of the heliocentric universe - the rising curve of progress and Paul Samualson’s simplistic Circular Flow diagram, picturing the economy as a closed loop that is taught in Econ 101 to this day. Raworth references sharing the ‘doughnut’ diagram with activists who respond effusively stating “YES! That is EXACTLY what I’ve been trying to say!”
And if that was all this book was, it would be no more than an interesting idea. I am sure there are many who are happy to scoff exactly so without engaging, but Raworth both delves into the history of and problems with economic theory, and outlines ideas - both conceptual and real-world ideas actually being implemented - for how we can, and must, do things differently.
She points out how so many of the great economic theorists of the past are selectively understood - Samuelson knew his diagram was a simplification ad absurdum, of use as only the most broad idea for non-specialists; when Simon Kuznets came up with GDP as a measure of productivity, he specifically warned that it was necessarily a narrow measure that should not be used as a benchmark to gauge progress; back to John Stuart Mill and Adam Smith (I always find it remarkable that most people who quote Smith appear completely ignorant of the half of his work in which he talks about social responsibility and warns against the dangers of subverting everything to the acquisition of wealth).
She thoroughly dismantles the consensus idea of economics that growth is the Ultimate Good (quoting a respected economist whom she doesn’t name, when asked why perpetual growth is possible simply responds “Because it has to be!”) to a more thorough debunking of some of the assumptions and models that underpin a pseudoscience that has come to dominate both public policy and public consciousness to a degree that neither the public nor policy makers feel they can question it.
On top of this, the author outlines the generalities of what we need from a new economics and gives examples that work in the real world, along with concepts that should be used in general.
But this is not a utopian exercise; Raworth makes sure to state that change will be far from easy, and requires some extremely difficult choices. Nonetheless, the tenor of the book is ultimately hopeful, pointing out possible routes out of consumption-driven catastrophe to a future that is not only survivable and sustainable but equitable and regenerative, where we are not merely ameliorating the damage we do to our life support system but actively improving it.
I mostly consumed this via the audiobook, while dipping into the ebook - hence the sparsity of notes. I feel I need to go back for a closer read, to fully embed the ideas. I should do the same for some other books - the ones mentioned at the start of the review. For all the economics is a pseudoscience, it may be the most important factor in how we cope with the coming decades, impacting on everything from our jobs to the welfare state to climate change and alleviating mass extinctions, to production of food and energy and technology.
A must read, and must act on.
There have been a slew of popular progressive economics books in recent years - from examinations of our broken system like John Lanchester’s Whoops!: Why Everyone Owes Everyone And No One Can Pay and Grace Blakeley’s Stolen: How to Save the World from Financialisation, to those that are more focused on looking at how we build better systems (The Spirit Level: Why More Equal Societies Almost Always Do Better and Utopia for Realists: How We Can Build the Ideal World), to the more hardcore ecomic theory (I swear I’ll get round to reading Thomas Piketty and Yanis Varoufakis!), and Kate Raworth’s book may be the best I’ve read at both outlining the problems and offering potential solutions in clear, straight-forward language.
It is an idea she has been presenting and working on for almost a decade. While her degree is in economics she was disenchanted by the blinkered, systematised thinking that shackles the discipline (as she points out early on, and again at the end of the book, while other social sciences seek out an encourage different ways of thinking, economists are taught that certain core principles are not to be questioned - no, more than that; they are indoctrinated into the mindset that there are no other ways of thinking.)
The idea of the doughnut is simply this: the hole in the middle is the lack of human dignity - insufficient food, water, shelter, healthcare, education. Those basics that we should allow to all people as a right.
The outer circle is the limit to which we can live with the finite resources of minerals, energy, food production, clean air, clean water.
The doughnut, therefore, is the space between those, where we as a species, as a culture, can provide a decent standard of living for every individual for the long term, without threatening the environment that we rely on for our survival.
It seems like almost too simple an idea - and an even simpler diagram, however she begins by pointing out how important visual signifiers are to us - the iconic map of the London Underground, Copernicus’ illustration of the heliocentric universe - the rising curve of progress and Paul Samualson’s simplistic Circular Flow diagram, picturing the economy as a closed loop that is taught in Econ 101 to this day. Raworth references sharing the ‘doughnut’ diagram with activists who respond effusively stating “YES! That is EXACTLY what I’ve been trying to say!”
And if that was all this book was, it would be no more than an interesting idea. I am sure there are many who are happy to scoff exactly so without engaging, but Raworth both delves into the history of and problems with economic theory, and outlines ideas - both conceptual and real-world ideas actually being implemented - for how we can, and must, do things differently.
She points out how so many of the great economic theorists of the past are selectively understood - Samuelson knew his diagram was a simplification ad absurdum, of use as only the most broad idea for non-specialists; when Simon Kuznets came up with GDP as a measure of productivity, he specifically warned that it was necessarily a narrow measure that should not be used as a benchmark to gauge progress; back to John Stuart Mill and Adam Smith (I always find it remarkable that most people who quote Smith appear completely ignorant of the half of his work in which he talks about social responsibility and warns against the dangers of subverting everything to the acquisition of wealth).
She thoroughly dismantles the consensus idea of economics that growth is the Ultimate Good (quoting a respected economist whom she doesn’t name, when asked why perpetual growth is possible simply responds “Because it has to be!”) to a more thorough debunking of some of the assumptions and models that underpin a pseudoscience that has come to dominate both public policy and public consciousness to a degree that neither the public nor policy makers feel they can question it.
On top of this, the author outlines the generalities of what we need from a new economics and gives examples that work in the real world, along with concepts that should be used in general.
But this is not a utopian exercise; Raworth makes sure to state that change will be far from easy, and requires some extremely difficult choices. Nonetheless, the tenor of the book is ultimately hopeful, pointing out possible routes out of consumption-driven catastrophe to a future that is not only survivable and sustainable but equitable and regenerative, where we are not merely ameliorating the damage we do to our life support system but actively improving it.
I mostly consumed this via the audiobook, while dipping into the ebook - hence the sparsity of notes. I feel I need to go back for a closer read, to fully embed the ideas. I should do the same for some other books - the ones mentioned at the start of the review. For all the economics is a pseudoscience, it may be the most important factor in how we cope with the coming decades, impacting on everything from our jobs to the welfare state to climate change and alleviating mass extinctions, to production of food and energy and technology.
A must read, and must act on.
June 13, 2017
This could be sold as a 1-page pamphlet with the torus ring, and you could infer the rest that is written in this book. If you haven't studied psychology or neuroscience to at least an A-grade or 1st year undergraduate level, or have not read much popular science books, then this might contain new information that interests you. For me, I was aware of the majority of studies mentioned, and I often found the information provided obvious or needlessly waffling. Rather than explain the point succinctly, the author got lost in trying to tie all studies and connections into the torus diagram, when really the connections were already obvious.
April 8, 2017
Everyone should read this book!
June 20, 2022
Economics is known as the "dismal science" for a reason. So there's nothing new in exposing it as a form of political philosophy. The plus-value here then would be from the "doughnut diagram" which supposedly makes clear to people what they can't understand otherwise about ideas like how the Earth has limited resources, or that poverty is sort of a problem unfixed by laissez-faire regimes. I find this premise questionable. The author does not provide evidence to back it up.
Other books to consider:
The Worldly Philosophers
23 Things They Don't Tell You about Capitalism
Affluenza: The All-Consuming Epidemic
Confessions of an Economic Hit Man
Factfulness: Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think
Other books to consider:
The Worldly Philosophers
23 Things They Don't Tell You about Capitalism
Affluenza: The All-Consuming Epidemic
Confessions of an Economic Hit Man
Factfulness: Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think
June 1, 2019
"Today's economy is divisive and degenerative by default. Tomorrow's economy must be distributive and regenerative by design." Raworth calls herself a "renegade economist," but what you'll find here isn't economics, but rather marketese pronouncements on how "21st Century Economists" ought to think. Cast off old thinking! And embrace a more "holistic" point of view!
"It is clearly time for economists to leave behind the foolhardy search for economic laws of motion. Instead, step up to the design table and take a seat alongside those innovative architects, industrial ecologists and product designers who are spearheading the regenerative design revolution."
It's useful to read Raworth's progressive critique of economics alongside something fact-based — Rosling's Factfulness, Easterbrook's Better than it Looks. Both highlight rhetorical techniques she uses regularly here: pointing out economic disparity and some absolute numbers of poverty, without looking at the remarkable trend of poverty alleviation under market economics. Pointing out ecological mess, without looking at the improving trend over generations.
The worst canard arrives early in the book, and perhaps flavored my reading for the rest of it: Raworth points out (as if this were something new) that the rational economic actor, homo economicus, is unrealistic and a poor model for behavior: therefore, chuck all economics and their (one almost hears 'math driven') models. When, in fact, this is amongst the most interesting areas of economics today, and well popularized via Hidden Brain, Freakonomics, etc.
Not recommended.
"It is clearly time for economists to leave behind the foolhardy search for economic laws of motion. Instead, step up to the design table and take a seat alongside those innovative architects, industrial ecologists and product designers who are spearheading the regenerative design revolution."
It's useful to read Raworth's progressive critique of economics alongside something fact-based — Rosling's Factfulness, Easterbrook's Better than it Looks. Both highlight rhetorical techniques she uses regularly here: pointing out economic disparity and some absolute numbers of poverty, without looking at the remarkable trend of poverty alleviation under market economics. Pointing out ecological mess, without looking at the improving trend over generations.
The worst canard arrives early in the book, and perhaps flavored my reading for the rest of it: Raworth points out (as if this were something new) that the rational economic actor, homo economicus, is unrealistic and a poor model for behavior: therefore, chuck all economics and their (one almost hears 'math driven') models. When, in fact, this is amongst the most interesting areas of economics today, and well popularized via Hidden Brain, Freakonomics, etc.
Not recommended.
June 21, 2022
Marzy mi się, żeby ta książka była lekturą obowiązkową dla wszystkich polityków. Na każdym poziomie administracyjnym.
To nie tylko pozycja, w której pokazuje się błędy i wypaczenia obecnego systemu ekonomicznego, narzeka na to jak strasznie jest i dlaczego tak.
Tutaj autorka pokazuje, jak można te błędy naprawić.
Obwarzanek (po angielsku donut) to obrazowo pokazany zakres, w którym można zaspokoić potrzeby wszystkich ludzi na miarę możliwości naszej planety.
⭕okrąg wewnętrzny to próg, poniżej którego znajdują się bieda, analfabetyzm.
⭕ Okrąg zewnętrzny to poziom krytycznej degradacji naszej planety.
Pomiędzy tymi granicami jest miejsce na rozsądne i zrównoważone gospodarki. Trzeba się tylko wyzbyć chciwości, myślenia wyłącznie o krótkotrwałym zysku.
Bardzo Wam polecam!!!
P.S. Nie obawiajcie się trudnego języka - to nie jest podręcznik do ekonomii! Doskonale jest napisana!
To nie tylko pozycja, w której pokazuje się błędy i wypaczenia obecnego systemu ekonomicznego, narzeka na to jak strasznie jest i dlaczego tak.
Tutaj autorka pokazuje, jak można te błędy naprawić.
Obwarzanek (po angielsku donut) to obrazowo pokazany zakres, w którym można zaspokoić potrzeby wszystkich ludzi na miarę możliwości naszej planety.
⭕okrąg wewnętrzny to próg, poniżej którego znajdują się bieda, analfabetyzm.
⭕ Okrąg zewnętrzny to poziom krytycznej degradacji naszej planety.
Pomiędzy tymi granicami jest miejsce na rozsądne i zrównoważone gospodarki. Trzeba się tylko wyzbyć chciwości, myślenia wyłącznie o krótkotrwałym zysku.
Bardzo Wam polecam!!!
P.S. Nie obawiajcie się trudnego języka - to nie jest podręcznik do ekonomii! Doskonale jest napisana!
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