FRIEND ACCESS
.Home > Deepen / Ako atu anō > Publications > Book Reviews > Doughnut Economics reviewed by David James

Doughnut Economics reviewed by David James

Doughnut Economics

Kate Raworth, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist Random House, London, 2017

Reviewed by David James

 

This is the most exciting and thought provoking book I have read in a long time, and well-written too. It is a fundamental rethinking of economics which is also perfectly in tune with Quaker social testimonies and could be influential in saving humanity from itself and the planet from humanity. I hope it will find a place in every Meeting library and will be read and discussed by Friends who are puzzled as to how to realise our testimonies in present global circumstances.

Kate Raworth lectures at Oxford, where she first studied economics before working alongside barefoot entrepreneurs in Zanzibar, then spent four years in the team which wrote the UN annual Human Development Report. After that she was a researcher for Oxfam for over a decade, took time out as a mother of twins, and finally returned to Oxford. The result is that she can reference not only past and present economic thinkers but also a multitude of examples of evaluated practice throughout the world.

She is doing three main things in the book. The first, distributed throughout its pages, is to provide new diagrams to explain economics and replace the old ones. “Images… go directly into long-term memory where they are indelibly etched… At the heart of mainstream economic thinking is a handful of diagrams that have wordlessly but powerfully framed the way we are taught to understand the economic world—and they are all out of date, blinkered, or downright wrong.”

Her central diagram is a ring doughnut, a pair of concentric rings. “Below the inner ring—the social foundation—lie critical human deprivations such as hunger and illiteracy. Beyond the outer ring—the ecological ceiling—lies critical planetary degradation such as climate change and biodiversity loss. Between those two rings is the Doughnut itself, the space in which we can meet the needs of all within the means of the planet.”

The needs which must be satisfied to bring everyone out of the inner space of multiple deprivation are all included in the UN Sustainable Development Goals agreed in 2015. The outer ring, the boundaries beyond which we cannot safely move, are the nine critical processes identified in 2009 by earth scientists led by Rockstrom and Steffen.

The Doughnut diagram, first drawn by Kate Raworth in 2011, was on the table at the UN while the final text of the Sustainable Development goals was being drafted. It has been steadily gaining acceptance, and some nations have had Doughnut assessments of their economies. The second matter explored in the book is what is wrong or inadequate in the conventional accounts of economics, leading up to the neoliberal dogmas we have lived under for the past thirty-four years. Kate Raworth offers clear alternative accounts and models, each with its illuminating diagram.

She invites us to be sceptical about Gross Domestic Product growth as a satisfactory measure of the economy. She then puts the sacred cow of markets in perspective as just one realm within the economy alongside households, the state and the commons, with a need for all four to work effectively together.

It seems that the older models ignored the role of finance as a central and active part of the economy, an omission which was shown to be dangerously short-sighted in the global financial crash of 2008, so the book explores finance and ways it can help us reach the Doughnut. Kate Raworth then debunks the “rational economic man” of traditional economics, drawing on research in other disciplines to provide a fuller and more hopeful portrait of humanity. Lastly in offering new models, she introduces a way of thinking about systems, and the elements of systems which all interact to produce dynamic complexity. She does so briefly and clearly, with yet another telling diagram. Having prepared the ground, she then, as her third theme, directly addresses the changes that could be made to bring us all into the Doughnut. This where she offers much more than other authors who have critiqued neoliberal economics but without credible alternatives either theoretical or practical. Her argument is that we need an economy consciously designed to redistribute wealth and to regenerate aspects of the planet which have been put at risk.

Her wide experience shows at every turn. When she makes a radical proposal, and the reader queries whether it could possibly work, she can produce examples of it in action in some part of the world. Admittedly they may be very small candles in a vast dark, but they exist.

One of the reasons conventional economics has gone wrong, as she describes it, is that economists have tried to treat their field as a science with its own set of laws, and to separate it from other fields such as psychology, sociology, history, politics and philosophy; whereas the laws are illusory in a time of uncertainty, and the task of the economist is to work with other disciplines to design ways to bring society and the planet into the space of justice and sustainability. This book therefore covers much more than economics alone, and I believe will speak cogently to the general socially-aware reader.

Kate Raworth revels in the dynamic complexity of the world. She quotes with approval Donna Meadows on this, in words a century beyond classical economic texts: “Let’s face it, the universe is messy. It is nonlinear, turbulent and chaotic. It spends its time in transient behaviour on its way to somewhere else… It self-organises and evolves. It creates diversity, not uniformity. That’s what makes the world interesting, that’s what makes it beautiful, and that’s what makes it work.”

The commons, as she describes them, are the shareable resources from nature or society which people use or control without relying on the state or the market. They include some natural resources, some cultural resources, and now some kinds of digital resources such as open-source software. Historically and currently the commons are always under threat from the encroachments of the market, or in some cases the state.

Doughnut Economics REVIEWED By David James Friends Newsletter Volume 99 No.5–November 2017 p13