Doughnut economics

I found a great podcast episode called “Building a thriving economy for people within our planetary boundaries”[1] as part of The Ellen MacArthur Foundation's podcast series on “The Circular Economy”. The episode features an interview with Kate Raworth who explains her concept of Doughnut Economics and how it is now being applied at city-scale by Amsterdam. Kate is wonderfully erudite and compelling, and I urge you to listen to the episode if you have a spare 40 mins. You may not agree with everything in it, or feel that it is unrealistic but it is always refreshing and inspiring to hear people with passion speak eloquently about what motivates them.

So, the Doughnut Economy – I will paint it with words, if I can! Imagine you are looking down on a ring doughnut, with it laid out for you in 2D. Now think of the inside surface or “ring” of the doughnut as representing the minimum requirements for human wellbeing. In counter-point, the outside of the ring represents the Planetary Boundaries i.e. the set of criteria which we should not be exceeding if we want to live within the means of the planet's resources. Inside the hole in the middle of the ring are all the people of the world whose basic needs we are not meeting. Outside of the ring we are exceeding the planet's capacity to cope.

The basic idea behind this (and I am editorialising here so check out the podcast if curious!) is that the GDP (per-capita) constant economic growth driven dogma that dominated the last century is not nuanced enough and has failed to take into account both human wellbeing and planetary resources/ ecosystems. These “externalities”, when left out of a pricing mechanism, result in a distortion of the basic point of economics – to help us decide how best to use limited resources (including our time). Kate essentially argues that with the tools now at our disposal we should be looking towards a dashboard of indicators to aid us that include these externalities rather than the distorting lens of GDP.

There's a lot of other good stuff in there too. The idea that a healthy “doughnut economy” should be distributive as well as regenerative. That it should take into account the unpaid work done in households and communities as well as the classical private and public sectors. What it all boils down to though is a vision of a world where we can all live sustainably and live well... inside a doughnut of course!

Pipe dream? Aspirational? Nothing wrong with that. We need bold alternative visionaries like Kate and like Dame Ellen MacArthur, the around-the-world yachtswoman who has now dedicated her life to making the circular economy a reality. What's abundantly clear is that the “constant economic growth” model is incompatible with the realities of a finite world and that we are definitely hitting the “limits of growth” that can be accommodated with this model. It helped bring millions out of poverty but at what cost to our planet, its ecosystems and those left behind?

It's time for something new.


[1] The original version of this blog mistakenly directed to a different episode, also featuring Kate Raworth, “Building thriving cities fit for the 21st century”. This was corrected 2021-03-05.


Entry 59 of my participation in the “100 Days to Offload” challenge – find out more and join in!

2021-03-01 #100DaysToOffload #sustainability #podcasts #economics

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