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

by Kate Raworth

never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.’

‘Students must learn how to discard old ideas, how and when to replace them … how to learn, unlearn, and relearn,’

vision. Worldview. Paradigm. Frame. These are cousin concepts. What matters more than the one you choose to use is to realise that you have one in the first place, because then you have the power to question and change it.

it is absolutely essential to have a compelling alternative frame if the old one is ever to be debunked. Simply rebutting the dominant frame will, ironically, only serve to reinforce it. And without an alternative to offer, there is little chance of entering, let alone winning, the battle of ideas.

First, change the goal. For over 70 years economics has been fixated on GDP, or national output, as its primary measure of progress. That fixation has been used to justify extreme inequalities of income and wealth coupled with unprecedented destruction of the living world. For the twenty-first century a far bigger goal is needed: meeting the human rights of every person within the means of our life-giving planet.

secure a certain fund of subsistence for all the inhabitants, to obviate every circumstance which may render it precarious; to provide every thing necessary for supplying the wants of the society, and to employ the inhabitants

to supply a plentiful revenue or subsistence for the people, or, more properly, to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services’.4

traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth’.

the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.’

‘Economics is the study of how society manages its scarce resources,’

economics had become a value-free zone, shaking off any normative claims of what ought to be and emerging at last as a ‘positive’ science focused on describing simply what is.

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.

‘even if more material goods are not themselves most important, nevertheless, a society is happier when it is moving forward.’

we should always ask: ‘growth of what, and why, and for whom, and who pays the cost, and how long can it last, and what’s the cost to the planet, and how much is enough?’

goals for “more” growth should specify more growth of what and for what.’

What kind of growth would you like today?

This Great Acceleration in human activity has clearly put our planet under pressure. But just how much pressure can it take before the very life-giving systems that sustain us start to break down?

Anthropocene: the first geological epoch to have been shaped by human activity.

the social foundation of human rights and the ecological ceiling of planetary boundaries create the inner and outer boundaries of the Doughnut.

their interconnectedness demands that they each be understood as part of a complex socio-ecological system and hence be addressed within a greater whole.

human thriving depends upon planetary thriving.

Billions of people still fall far short of their most basic needs, but we have already crossed into global ecological danger zones that profoundly risk undermining Earth’s benevolent stability.

The Doughnut provides us with a twenty-first-century compass but what determines whether or not we can actually move into its safe and just space? Five factors certainly play key roles: population, distribution, aspiration, technology and governance.

we are ‘persuaded to spend money we don’t have on things we don’t need to make impressions that won’t last on people we don’t care about’.

achieve human prosperity in a flourishing web of life

‘The most important assumptions of a model are not in the equations, but what’s not in them; not in the documentation, but unstated; not in the variables on the computer screen, but in the blank spaces around them.’

Earth itself, however, is a closed system because almost no matter leaves or arrives on this planet: energy from the sun may flow through it, but materials can only cycle within

Redrawing the economy as an open subsystem of the closed Earth system is the major conceptual shift

the role of energy deserves a far more prominent place in economic theories that hope to explain what drives economic activity.

how big can the global economy’s throughflow of matter and energy be in relation to the biosphere before it disrupts the very planetary life-support systems on which our well-being depends?

‘Significant changes occur when social movements reach a critical point of power capable of moving cautious politicians beyond their tendency to keep things as they are,’

‘A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them.’

providing public goods

supporting the core caring role of the household,

unleashing the dynamism of the commons,

harnessing the power of the market by embedding it in institutions and regulations that promote the common good

today’s high-income countries are ‘kicking away the ladder’ that they once climbed, recommending that low- and middle-income countries open their borders to follow a trade strategy that they strategically avoided themselves.

trace the finance backing any major political campaign and you’ll see what drives its policies.

Having been cloistered for seventy years within the confines of Samuelson’s insular Circular Flow diagram and the Mont Pelerin Society’s narrow neoliberal script, we can now start writing a new story simply by picking up a pencil and first drawing the Embedded Economy.

First, rather than narrowly self-interested we are social and reciprocating. Second, in place of fixed preferences, we have fluid values. Third, instead of isolated we are interdependent. Fourth, rather than calculate, we usually approximate. And fifth, far from having dominion over nature, we are deeply embedded in the web of life.

basic personal values that are recognised across cultures: self-direction, stimulation, hedonism, achievement, power, security, conformity, tradition, benevolence and universalism.

First, all ten basic values are present in us all,

Second, each of the values can be ‘engaged’ in us if it is triggered:

Third, and most interestingly, the relative strength of these different values changes in us not just over the course of a lifetime, but in fact many times in a day,

we are more aware than ever before of the opinions, decisions, choices and behaviours of other people.

availability bias – making decisions on the basis of more recent and more accessible information;

loss aversion – the strong preference to avoid a loss rather than to make an equivalent gain;

selective cognition – taking on board facts and arguments that fit wit...

risk bias – underestimating the likelihood of extreme events, while overestimating our ...

what first appears to be a failure of rationality might be better thought of as a triumph of evolution.