- December 8, 2020
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Kate Raworth’s book "Doughnut Economics" is a wake-up call to transform our capitalist worldview obsessed with growth into a more balanced, sustainable perspective that allows both humans and our planet to thrive. The claim that markets have destroyed the environment is subject to a similar response. Kate Raworth’s Doughnut Economics (DE) dissects the assumptions and implications of neoliberal economics – the economic theory that underlies GDP growth-focused public policy worldwide. The name derives from the shape of the diagram, i.e. Buy the UK edition Available in all good UK bookshops and at Amazon UK and Amazon USA. Ensuring everyone in the world lives well above the Doughnut’s social foundation (in terms of healthcare, education, housing, food, water, energy use, mobility, and so on) will obviously lead to an increase in economic activity and hence global GDP. The doughnut places life’s essentials in the centre; food, water, income and health care for example, and just to state the obvious, none of these are seen as critical in traditional economics. But economic ideas can have extraordinary staying power. Ouch. It is a necessary condition for reducing poverty and ecological damage. The latest entry in this endeavor is Kate Raworth’s Doughnut Economics. The success of that basic economic insight has generated immense cognitive dissonance among many progressives. If you want to look deeper into the Doughnut, and Doughnut Economics, join us at Doughnut Economics Action Lab where we dive into much more detail on what it means for transforming our economies. 1-Sentence-Summary: Doughnut Economics is a wake-up call to transform our capitalist worldview obsessed with growth into a more balanced, sustainable perspective that allows both humans and our planet to thrive. Growth is not desired for its own sake, but precisely because there is both theory and evidence to demonstrate that it is a necessary, but not sufficient, condition for reducing poverty and ecological damage, not to mention increasing the level of education, health, and longevity of the population, especially for women. It is an ambitious book whose objective is to change the ways economists think and the economics is framed in order to respond to the “limits to growth”. Doughnut Economics. Unfortunately, Raworth’s new model does nothing to improve the likelihood that such measures will address the problems she identifies, and often misdiagnoses. When it comes to the workings of the economy, one power relationship in particular demands attention: the power of the wealthy to reshape the economy’s rules in their favour. The dough provides a “safe and just space for humanity”. The doughnut, itself, represents the safe and just space where people within a mixed economy can thrive. Yes, I think this growth addiction is the mother of all long-term economic challenges, and I certainly don’t have all the answers, but I tried to address it in the book because it doesn’t go away if we simply don’t confront it. The Scandinavian countries have understood that even supporting a generous welfare state requires domestic economic growth, which has led them to cut business regulation and taxation in ways that have given them freer markets than in the US. Power is at play in myriad places throughout the economy and society: in daily household decisions about who cares for the kids; in boss-versus-worker wage negotiations; in international trade and climate-change talks; and in humanity’s domination over other species on the planet. And if you agree with them all, I’d sincerely like to understand how you proposing resolving the challenge they create. But five facts (or views) of the world drove me to do so: My attempt at resolving it, as you know, is to advocate an economic mindset focused on creating economies that are regenerative and distributive by design and, simultaneously, to overcome the structural dependence of high-income countries on endless GDP growth. New metrics would measure genuine prosperity, rather than the speed with which we degrade our long-term prospects. In a stellar, eye-opening talk, she explains how we can move countries out of the hole -- where people are falling short on life's essentials -- and create regenerative, distributive economies that work within the planet's ecological limits. In this lesson, students will revise features of the circular flow and Doughnut Economic models from the previous lesson, 2040 – Comparing Economic Models – Economics – Years 9 & 10, before exploring a real-world example of Doughnut Economics in action. Contributed by Joe Montero. But we really enjoyed Kate's response to a strong critique of her thesis from the rising star economist Branko Milanovic. Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist (Kindle Edition) Published February 23rd 2017 by Chelsea Green Publishing Kindle Edition, 320 pages Author(s): Kate Raworth. It does not acknowledge that global GDP must rise significantly to end poverty. DE demonstrates how its assumptions are not valid in a bounded world with a limited “ecological ceiling” – the earth’s ecological carrying capacity. In Doughnut Economics, Oxford academic Kate Raworth lays out the seven deadly mistakes of economics and offers a radical re-envisioning of the system that has brought us to the point of ruin. In fact, there are many reasons to think political institutions are unable to provide the information and incentives to do so. White River Junction, VT: Chelsea Green Publishing. Unsurprisingly, the political wish list that her new model produces is pretty much the same list that progressives have wanted for the last century or more. Steven Horwitz is the Distinguished Professor of Free Enterprise in the Department of Economics at Ball State University, where he also is Director of the Institute for the Study of Political Economy. You can’t eat GDP, but economic growth is what enables us to feed, clothe, and shelter each other better and better. At the very least, people who make that argument have to explain how a housing boom produced by the combination of government central banks, government-enforced housing policies, and government-sponsored enterprises like Fannie Mae and Freddie Mac in the US, was somehow caused by “free markets.” The claim that markets are responsible is made as if it were obviously true, despite legitimate counter-arguments. He wrote an article that appeared in The Pen yesterday. The Doughnut is a visual representation of the bounds of human existence: the social foundation needed for wellbeing, below which no-one should fall, and the ecological ceilings of planetary limits which we should not exceed. The latest entry in this endeavor is Kate Raworth’s Doughnut Economics. My top line view? If empirical research into human behavior has told us anything over the last 30 or so years, it tell us that we, Homo sapiens, are far more nuanced than this. You can find details here – and … Doughnut Economics review: Top 5 takeaways. 4. I chose a different gateway to the future and I think many millions of others do too. It is an ambitious book whose objective is to change the ways economists think and the economics is framed in order to respond to the “limits to growth”. See you in the Action Lab! It is a necessary condition for reducing poverty and ecological damage. Book review by Branko Milanovic. Current ‘green’ innovations are marginal and their progress is minimal compared to ‘what needs to happen’. BM: 1st critique: “The book doesn’t acknowledge that global GDP must rise significantly to end poverty.”. Why it's time for Doughnut Economics - Raworth - 2017 - IPPR Progressive Review - Wiley Online Library This makes it evident that the ideas of development are deeply rooted in contemporary culture. For over 50 years, economists have deployed the set of ideas known as “public choice theory” to analyze the group decision making under political and other institutions. Market-driven growth has turned women from baby machines, effectively owned by their husbands, into educated, full participants in the modern economy. 320 pages, ISBN 978-1 6035-8674-0 Cloth ($28.00) The theory said politicians should run surpluses in the good times and deficits in the bad times. “Abandon every hope, who enter here”. That is, would real, human actors within the institutional context of politics have the right incentives and information to produce the outcome that theorists like Raworth say they should? Raworth’s indictments of the discipline are a familiar list: homo economicus is unrealistic, economics doesn’t predict crises, it cannot account for the use of natural resources and the damage economic growth does to them, and it equates economic growth with “human well-being.”. Economic theory has a key role to play to inform policy and reforms which will enable us to live within the doughnut, but we need to change how we see, think, teach and practice economics to do so. Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, by Kate Raworth, is a book examining classical economic thought and how it is changing in the 21st Century. Towering thinkers turn out to have feet of clay. It is an ambitious book whose objective is to change the ways economists think and the economics is framed in order to respond to the “limits to growth”. Economics theory is very narrow in its assumptions and in recent years, particularly since the financial crash of 2008, many economics students have been seeking a revolution in approach that is not just about linear growth into infinity. Instead of recognizing the ways in which markets have addressed one of the left’s major concerns (severe poverty around the world), progressives, most of whom are not formally trained in economics, continue to attack both economics as a discipline and economists’ belief in the power of markets to address the condition of the least well-off. Doughnut Economics, by Kate Raworth (Chelsea Green, 2017) is an interesting book that goes in the right direction in the sense that it promotes a circular economy, but it leaves you with the impression that it missed that extra step that would have lead it to define the goal in the right way. Doing so was not compatible with the incentives facing politicians who prefer to spend more and tax less in order to stay in office. A Financial Times “Best Book of 2017: Economics”. It dominates our decision-making for the future, guides multi-billion-dollar investments, and shapes our responses to climate change, inequality, and other environmental and social challenges that define our times. In Doughnut Economics, Oxford academic Kate Raworth lays out the seven deadly mistakes of economics and offers a radical re-envisioning of the system that has brought us to the point of ruin. In Doughnut Economics, Oxford academic Kate Raworth identifies seven critical ways in which mainstream economics has led us astray, and sets out a roadmap for bringing humanity into a sweet spot that meets the needs of all within the means of the planet. 3. In spite of its title, Doughnut Economics is a serious book by someone with a strong background in both academic economics and development policy. We see such coordination all about us thanks to the market. Doughnut Economics Summary – If it’s human to err, economists are just like the rest of us – they make mistakes. Writing in a clear and engaging style, Kate Raworth explains to the general public … It's open for debate, so watch as it develops. That people like Raworth simply assume that politicians will do what theorists think best, regardless of whether political actors have the incentives and information to do so, means there is a giant hole in the center of their intellectual doughnut. Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth is out now, published by Penguin Random House. To pitch an … Photo by Sharon McCutcheon on Unsplash. Branko, you argue that Doughnut Economics fails to convince for four reasons: 1. The central premise of Doughnut Economics is that humanity’s 21st century goal should be to end poverty for all, and do so within the means of the living planet. Kate Raworth (born 1970) is an English economist working for the University of Oxford and the University of Cambridge.She is known for her work on the 'doughnut economics', which she understands as an economic model that balances between essential human needs and planetary boundaries. These are: Food security Health Education Income and work (the latter is not limited to employment but also includes things such as housekeeping) Peace and justice Political voice Social equity Gender equality Housing Networks Energy Water My first Summer book to read and review is Kate Raworth’s very successful “Doughnut economics: Seven ways to think like the 21st-century economist”. Buy the US edition hegemony of economic theory is absolutely necessary if we are going to render our current political-economic systems sustainable since “economics is the mother tongue of public policy, the language of public life and the mindset that shapes society.” The “doughnut” which she prescribes as a solution is a straightforward visual guide to 21st Growth-centric thinking is so deeply ingrained in economics that it has become the water we swim in – but, as I argue in the book, I think it profoundly influences economic worldviews and creates an expectation of and belief in the possibilities of endless GDP growth, even in the richest of countries, and even though there is no evidence that it can be made compatible with preserving the integrity of Earth’s life-supporting systems on which we (yes, we) all depend. High-income countries and individuals have a moral obligation to create ecological space so that others have the chance to lead lives free of deprivation, while protecting Earth’s life-supporting systems, which are fundamental for conditions conducive to human thriving. Growth is not desired for its own sake. As I write in the book. TED: Doughnut Economics. The role of economic growth and the power of property rights to provide the means and institutional structure to encourage better management of resources is a better story. A Financial Times "Best Book of 2017: Economics”. BM 2nd critique: “Current ‘green’ innovations are marginal and their progress is minimal compared to ‘what needs to happen”. The book elaborates on her concept of doughnut economics, first developed in her 2012 paper, A Safe and Just Space for Humanity. In the outer ring are our challenges; pollution of water and air, climate change, the … The doughnut replaces those measures with a framework that includes an outer limit (outside the ring) of economic activities which harm the environment and an inner limit (the hole in the ring) of economic activities which harm society. Her contribution is a new visual model of the economy that sees it embedded in the center, with the state, the household, and the commons, as a series of concentric circles (like a doughnut) including “society” and the earth. 2. Aside from the fact that, by many measures, the environment is faring better than it was a generation or two ago, Raworth’s claim ignores the environmental damage done by the same sort of state-directed economies that she wants to expand.
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