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

by Kate Raworth

Eyeing the rise of the Soviet Union, the USA pursued growth for national security through military power, and the two sides became locked in a fierce ideological contest to prove whose economic ideology – the ‘free market’ versus central planning – could ultimately turn out more stuff. Growth appeared to offer an end to unemployment too, according to Arthur Okun, Chairman of President Johnson’s Council of Economic Advisers. His analysis found that an annual 2% growth in US national output corresponded to a 1% fall in unemployment – a correlation which looked so promising that it came to be known as Okun’s Law. Soon growth was portrayed as a panacea for many social, economic and political ailments: as a cure for public debt and trade imbalances, a key to national security, a means to defuse class struggle, and a route to tackling poverty without facing the politically charged issue of redistribution.