In her 2017 bestselling book, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, economist and co-founder of Doughnut Economics Action Lab Kate Raworth outlined a new economic paradigm that values well-being, redistribution and regeneration over consumption and growth. Given the enduring effects of the 2008 financial crisis, the increasing economic and social inequality around the world, and the rising threat of climate change, it isn’t a surprise that her progressive, bring-down-the-system message is resonating with a large group of people, especially across university campuses.
For Raworth, what’s problematic about mainstream economics is the framing of the market as the center of our economic thinking. To her, it is a deliberately political move, placing price as the metric of concern above others.
“I ask lecture halls full of students the world over, what’s the first diagram you remember learning? It’s always ‘supply and demand.’ It’s like, welcome to economics, the art of household management. Now here’s the market. There’s absolutely no reason to start like that,” says Raworth.
To her, the emphasis on markets and the labeling of everything that falls outside the price contract as externalities is a deliberately political, and more importantly, dangerous move: “It’s how we destroy the living world.” What’s been largely left out of the economic discourse of free market versus the state—something she describes as “an ideological boxing match”—is the commons and the household.
“Are you a free-market capitalist or a state loving socialist? That’s a reductionist way of thinking. Of course, both of those institutions matter, but we are missing half the story. “The household and the commons? That’s where people are coming together as a community,” Raworth argues.
The household, which includes cooking, cleaning, and unpaid care work has not been conventionally considered as part of ‘work’ because “economists have traditionally been men,” says Raworth. In fact, it still does not show up in most academic curricula. Nevertheless, Raworth argues that household work is so fundamental and indispensable to our economies and our lives that, not so coincidentally, she was making supper for her family before our interview. It’s unpaid work, and “it’s a very real part of my life.”
On the commons, Raworth admitted that most economic students encountered it, unfortunately, as part of a depressing and fatalistic phrase: Garrett Hardin’s “the tragedy of the commons.” Hardin describes the commons as a shared patch of land where “if too many people try and graze their sheep on it, it’ll be destroyed,” an idea Raworth vehemently rejects, citing Eleanor Ostrom. “Ostrom [went to] places where [the commons] were succeeding. The rice paddy farmers in Nepal. The lobster fishermen in the US. What you see is when people create a community with shared set of rules, it’s not a free for all, it’s a common pool of resources.”
In the commons, members know who each other are. They meet, negotiate, and share. They collectively agree on punishments for breaking the rules. This matters, as Raworth argues, because it is the solution to some of the most pressing problems of our time, including the destruction of the delicate balance in our ecological systems. “We can collaborate on using 21st century digital tools at almost zero marginal cost in the commons. We can have platform cooperatives. We can have sharing schemes. The reality is some of the most dynamic innovations that are happening in the world like open-source design is in the commons.” This is why Raworth included the ‘embedded economy diagram’ in her book, a model that embeds all four forms of human organization—the market, the state, the household and the commons. According to her, the questions we should be asking are, “when are they most effective? How are they changed by technology? How can we make sure they’re not co-opted or dominated by power?”
Nonetheless, in the face of her economic paradigm is policymakers’ continuing prioritisation of low-tax economic growth, a mindset that Raworth admits is so entrenched that it can be incredibly hard to change. Though, she finds economists are partially to blame for this.
“I remember coming back to Oxford and having a college reunion drink and meeting my economics professor. I said, ‘do you think that endless growth is possible?’ And he said, ‘It must be,’” Raworth recalls with a face of devastating shock and outrage. “What do you mean, it must be? That’s such a weird answer to the question.”
This illustrates how economists have played a very large role in entrenching this mindset, which Raworth credits to the study of economics without an actual normative goal. “What we end up with is the cuckoo goal of endless growth.”
In fact, growth rates have been falling on a cyclical trend since the 1960s. Furthermore, Raworth sees no evidence showing it’s possible to decouple endless growth from environmental degradation, casting doubt on the idea of ‘green growth.’
“The onus is on those who support green growth or who have it in their job titles to prove far more than it has ever been proven because we are in the era of ecological destruction.” Hoping that some kind of technology that will come to make green growth possible is, in the words of the bestselling author, “incredibly dangerous and deeply morally irresponsible.” This is why Raworth bemoans the continuing fixation of both Conservative and Labour Parties on ‘sustainable growth,’ which she refers to as “a loss of vision in British politics.”
With that said, if endless growth is not coming, what should be happening? It seems like other countries might be able to show a way.
Raworth specifically mentioned a group of nations including Wales, Scotland, New Zealand, and Finland that have set wellbeing, and not growth, as their economic goal. On a metropolitan level, the same ideas have been put into practice in Amsterdam, Brussels, Barcelona, Copenhagen, etc. Altogether, there are 40 cities worldwide that are adopting elements of the Doughnut Economics framework so they can thrive within planetary boundaries and achieve greater wellbeing. Raworth is hoping to attend a major conference in May called Beyond Growth, where she plans to spread these conversations more widely across Europe. She is also hoping to propagate these ideas through her lectures, showing students the tools that her team is creating with businesses, community groups, and designers.
In the long run, Raworth wants to transform our economies from ‘divisive to distributive,’ from ‘degenerative to regenerative.’ “Our world is a world of deep deprivation for billions of people. Of deep ecological degradation and social inequality. While we have the richest 1% own half of the world’s wealth, billions of people cannot meet their most basic needs,” Raworth adds.
“That’s why, the dynamics of pursuing distributive design and regenerative design are my key guiding principles. We should start asking ourselves, what kind of enterprises, cities, lifestyles and ownership models would enable a distributive and regenerative future?”
In the end, it’s up to economists of the future to decide exactly how we can all thrive in a post-growth world without dependence on destructive ways of economic thinking in pension schemes, in the employment systems, in international competition between countries. As Raworth says, “all economists should be trained to do this.”
Besides, it’s what employers are increasingly looking for. “Whether it’s architectural firms or social enterprises or large multinational companies, they want to hire graduates who know about the circular economy, who understand new economic thinking because the companies themselves, they are in that space,” concludes Raworth.
This is part two of the author’s interview with Kate Raworth. For part one, please visit here.