“Doughnut Economics” by Kate Raworth is a groundbreaking book that challenges traditional economic models and presents a new vision for a sustainable and equitable future. Raworth argues that the traditional model of economic growth at all costs has led us to an environmental crisis and growing inequality.
She proposes a new framework that takes into account the needs of both people and the planet, illustrated by her famous “doughnut” model.
In this book review, we will explore the lessons that can be learned from Raworth’s work and how they can be applied to create a more sustainable and just world.
Table of Contents
Key Insights
Lesson 1: Economics needs to rethink its goals
Kate Raworth’s Doughnut Economics suggests a new way of thinking about economics. Instead of focusing solely on growth, economists should consider the Doughnut model that balances social needs with ecological boundaries.
The inner circle of the Doughnut represents the social foundation that includes access to basic needs like food and water, as well as abstract social goods like gender equality, political representation, and support networks. Meanwhile, the outer circle represents an ecological ceiling that safeguards the planet’s ability to sustain human life.
The problem is that we have already crossed the ecological ceiling in at least four areas, and time is running out. Therefore, economics needs to change its perspective from endless growth to sustainable development. If we want to get humanity into the Doughnut and build a safe and just home for all, we must act now.
Lesson 2: The limitations of the Rational Economic Man
The Rational Economic Man, a theoretical model of the individual consumer, has influenced economics for centuries. However, its flaws have become increasingly apparent in recent years. Rational Economic Man is a caricature that portrays people as selfish, isolated, and constantly calculating.
Studies show that students who study economics are more likely to approve of selfishness and behave selfishly themselves. This view has even changed the way we talk about the world, replacing the term “citizen” with “consumer.” The Ultimatum Game shows that people’s behavior is not as selfish or uniform as the model suggests. Instead, fairness can trump self-interest.
Therefore, economics needs to align itself with how people behave in real life and recognize the limitations of the Rational Economic Man. We need to develop models that take into account the complexity of human behavior and focus on social and ecological well-being rather than endless growth.
Lesson 3: Economics needs to change from mechanical metaphors to systems thinking
The traditional approach to economics is focused on equilibrium and the idea that markets naturally stabilize themselves. However, this overlooks the unpredictable boom-and-bust cycles of the market, as seen in the 2008 financial crisis. To avoid future disasters, economics in the twenty-first century needs to change, dropping mechanical metaphors and thinking about economies as systems.
Feedback loops can be used to monitor the complex interactions of an economy, and that’s a much better approach than blind faith in the market’s ability to balance itself. Instead of looking for equilibrium, it’s essential to understand the interactions between interconnected variables.
Lesson 4: De-growth and environmental sustainability are essential
Many countries continue to ignore the threat of climate change, and economic models often depict an unpolluted natural environment as a luxury. However, it’s crucial to realize that growth can’t last forever, and it’s not environmentally sustainable. To make the transition to a “green growth” model, we need to become less dependent on growth.
We could close tax loopholes and make use of demurrage to encourage people to spend their money rather than keeping it. By embracing “de-growth” and environmental sustainability, we can get into the sweet spot inside the Doughnut. Our planet depends on it.
Praise
1. Provides a transformative perspective on Economics
Raworth’s book challenges the fundamental assumptions of neoliberal economics that have guided us for the past few decades. She provides a new perspective that aligns with the social, economic, political, and environmental realities of the 21st century. Her ideas have the potential to transform the way we think about and practice economics.
2. Emphasizes the need for collective balance
Raworth’s donut analogy highlights the need to think less in terms of absolutes and more in terms of balance. The book emphasizes the need to move away from individual hegemony and towards collective balance. This idea has the potential to transform our political, social, economic, and religious spheres of influence.
3. Addresses the problem from the consumption and expectation side
Raworth believes that transformative change can be achieved by addressing the problem from the consumption and expectation side of things. She emphasizes the need to live more locally and use technology to achieve this goal. This idea has the potential to promote sustainable living and reduce our reliance on limited resources.
Criticism
1. Promoting a flawed economic philosophy
The book is criticized for being propaganda at its worst, which promotes a totalitarian garbage philosophy as a 21st-century economic plan. The author’s colossal ignorance of history is cited as the reason behind this label.
2. Advocates for state control of resources
The book advocates for state control and distribution of limited resources, which effectively means that the state and private corporate interests will determine what businesses are appropriate. This could lead to the elimination of creative market-based economies and the freedoms that come with land ownership.
3. Risks dehumanizing dissenters
The book’s dystopian dream of making everyone a stakeholder could lead to the dehumanization of individuals who choose to pursue their own dreams and disagree with the state’s dictates. Such individuals could be demonized and eliminated in forced labor camps or through other means.
Conclusion
Doughnut Economics is a great book I’d like to recommend to anyone who is interested in economics. If you spend some time digesting the ideas, it might make a positive impact on your life.
To solve the problems of the twenty-first century, we must reevaluate the economy. With the Doughnut as our guide, we may finally find the right direction. It shows how we can organize our economies to meet societal needs without placing an unsustainable burden on the planet’s natural resources. With any luck, we will make it into the doughnut’s protective ring and then be able to work toward a future in which people and the natural world not only coexist but thrive.
Reforming the global economy is a daunting task that involves several interconnected issues. However, even small changes can make a big difference. In support of fair trade coffee and ethical banking, you can make a positive impact on the world. When you start looking, you’ll be surprised at how many ways there are to alter your immediate surroundings.
Kate Raworth is a senior visiting research associate at the Environmental Change Institute at Oxford University. Raworth’s work is focused on social, economic, and environmental sustainability in the twenty-first century, and he describes himself as a renegade in the economics profession.
Her ideas have been presented to everyone from the UN General Assembly to the Occupy movement. The Guardian newspaper named her one of the top ten tweeters in her field.
Buy The Book: Doughnut Economics
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