Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist

by Kate Raworth

Redistributing Income—and Redistributing Wealth In the latter half of the twentieth century, policies aimed at national redistribution fell into three broad categories: progressive income taxes and transfers; labour market protections such as a minimum wage; and providing public services such as health, education and social housing. Beginning in the 1980s, the authors of the neoliberal script pushed back on each one. Fierce debate rose up over whether higher income taxes discouraged the high-paid from working more, and whether higher welfare payments trapped the low-paid into not working at all. Minimum wages and labour unions were portrayed not as protection for the poorest of workers but as a barrier to their employment. And the state’s role in providing quality education, universal healthcare and affordable housing was depicted as an increasingly prohibitive public expense that simultaneously encouraged dependency. Thanks to international public outrage over widening inequalities, ambition for greater redistribution has returned in the early twenty-first century. Many mainstream economists in high-income countries now advocate raising top marginal income tax rates along with higher taxes on interest, rent and dividends. Social activists worldwide have put companies and governments under pressure to pay living wages; the Asia Wage Floor Alliance, for example, is demanding a living wage for garment workers across Asia.30 Others call for a maximum wage too, set within each...