Doughnut Economics
Part 1: The Author
I want to first talk about who the author is before we review the book. That way, we will know if the book has some legitimacy behind it, why the author wrote the book, and what points the author wanted to get across. Like understanding an artist's motivation behind a complex painting, this provides us with the context needed to understand the book.
Kate Raworth is an economist and author whose book, "Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist", challenges traditional economic thinking and presents a new vision for a sustainable and equitable global economy. Raworth is a Senior Associate at Oxford University's Environmental Change Institute and has previously worked for the United Nations Development Programme. Is is also a professor of practice at Amsterdam University of Applied Sciences, and also co-founded the Doughnut Economics Action Lab.
In "Doughnut Economics", Raworth presents a new economic framework that aims to balance the needs of people and the planet. The book argues that the traditional goal of economic growth is unsustainable and should be replaced with a new goal that focuses on meeting the needs of all people within the limits of the planet's natural resources. Raworth presents her "doughnut" model as an economic framework that defines ecological and social boundaries, ensuring that economic growth does not come at the expense of the environment or society.
Raworth wrote "Doughnut Economics" to challenge traditional economic thinking and offer a new vision for what our economies can and should do. She believes that economic growth has become an end in itself, and that we need to rethink our economic goals and practices to build a more sustainable and equitable global economy.
The main points that Raworth wants people to take away from her book "Doughnut Economics" are:
- Change the goal of the economy
- Understand the economy as a complex system
- Embrace ecological and social boundaries
- Create a regenerative economy
- Design to distribute
- Be agnostic about growth
- Use markets to deliver
Part two: The Book
Now that we understand the author and her motivations, lets go into the book.
The book is divided into three parts. The first part lays out the case for a new economic framework, while the second part presents the seven key ways in which we can rethink economic theory and practice. The third part presents a roadmap for how we can put these ideas into practice.
Chapter 1: Changing the Goal: From GDP to the Doughnut
In this chapter, Raworth critiques the traditional economic model that relies on GDP growth as the main measure of economic success. She argues that GDP growth alone is not a sufficient measure of progress, and that we need a new economic model that prioritizes social justice and environmental sustainability. Raworth introduces the concept of the "doughnut" - a visual representation of the economic model that ensures that everyone has their basic needs met (the inner ring of the doughnut) while staying within the ecological limits of the planet (the outer ring of the doughnut).
Chapter 2: The Embedded Economy
In this chapter, Raworth explains how the economy is not a separate entity from society and the environment, but rather it is embedded within them. She argues that the economy is dependent on social and environmental systems, and that ignoring these systems will lead to economic and social problems. Raworth introduces the concept of the "social foundation" - a set of minimum standards for human well-being, such as access to food, water, education, and healthcare. She argues that the social foundation must be met before we can start thinking about economic growth.
Chapter 3: The Seven Ways to Think Like a 21st-Century Economist
In this chapter, Raworth offers seven ways to think like a 21st-century economist, which are as follows:
- Change the goal - instead of focusing on GDP growth, prioritize social justice and environmental sustainability.
- See the big picture - recognize the economy as a complex, dynamic system that is embedded within society and the environment.
- Nurture human nature - acknowledge that humans are not rational, self-interested beings, but rather we are social and emotional beings.
- Get savvy with systems - understand that the economy is a complex system with feedback loops and tipping points.
- Design to distribute - create an economic system that distributes wealth and power more equitably.
- Create to regenerate - design an economy that regenerates natural resources and fosters ecological resilience.
- Be agnostic about growth - question the assumption that economic growth is always desirable, and recognize that there are limits to growth.
Raworth argues that adopting these seven ways of thinking can help us create a new economic model that prioritizes social justice and environmental sustainability.
Chapter 4: From Divide to Distribute
In this chapter, Raworth critiques the traditional economic model that promotes the concentration of wealth and power, leading to social and economic inequalities. She argues that a new economic model should prioritize the distribution of wealth and power to create a more equitable society. Raworth introduces the concept of the "doughnut of social and planetary boundaries," which illustrates the need to meet the needs of all people while respecting the ecological limits of the planet.
Chapter 5: Create to Regenerate
In this chapter, Raworth argues that the economy should be designed to regenerate natural resources and foster ecological resilience. She introduces the concept of "circular economy," which promotes the reuse and recycling of materials to minimize waste and environmental degradation. Raworth also discusses the importance of regenerative agriculture, which focuses on building healthy soil and ecosystems to increase food production while minimizing environmental damage.
Chapter 6: Be Agnostic About Growth
In this chapter, Raworth questions the assumption that economic growth is always desirable. She argues that unlimited economic growth is unsustainable and leads to social and environmental problems. Raworth introduces the concept of "doughnut economics," which promotes a balanced approach to economic growth that respects the ecological limits of the planet while meeting the needs of all people.
Chapter 7: Getting There
In the final chapter, Raworth discusses the practical steps that can be taken to create a new economic model that prioritizes social justice and environmental sustainability. She argues that we need a new mindset that values social and environmental well-being as much as economic growth. Raworth also discusses the importance of community action and political engagement in creating a more sustainable and equitable economy. She concludes by arguing that a new economic model is not only possible but necessary to create a more just and sustainable world.
Overall, "Doughnut Economics" presents a compelling vision for a more sustainable and equitable global economy. By rethinking our economic goals and practices, we can build a system that supports the well-being of all people while protecting the planet's natural resources for future generations.
Part 3: The Takeaways
This is where every reader will have a different response. I want to write about my thoughts on the book, what I took away from it, and more. First, while this book doesn’t directly address climate change, it talks about a very common theme that I've read about in previous books. The idea is that climate change is not a personal problem but a structural one caused by how we view and measure the economy and what we consider success. As such, I believe this book is a must-read for those who want to better understand the "How we got here" part of the climate crisis. From this point, Raworth explains a crucial point – we must create a new system that is so good that the old system becomes obsolete.
Secondly, we should stop looking at the war on climate as just climate change. Instead, we should be labeling it as planetary boundaries. Climate instability is just one of the many boundaries that humanity has crossed in moving towards our modern age. As such, this book directly connects with the planetary boundaries founded back in 2009 by the Stockholm Resilience Center, led by Johan Rockström. These two share a lot in common.
Thirdly, Kate describes another common point I've read about when discussing planetary boundaries or staying within the doughnut, which is how we present information to different audiences. In the introduction, she gives a story about the church and how priests have to memorize and design bibles, but they use panes of glass on church windows to describe the story of Jesus. As such, she clearly shows that when educating people, you need to follow two general types of presentations:
- The experts. She explains that experts should use complex formulas, data points, jargon, and so on to explain the situation to other experts.
- The general public should instead be shown clear images of what is happening and NOT be shown formulas or data points because it is not clear.
This is a big takeaway for me when presenting complex information. You need to adapt it to your audience. That is pretty straightforward, but my significant takeaway is that I should be sharing more images in my PowerPoint presentations with businesses instead of showing complex formulas to make it clear and memorable to viewers what I am trying to present. I should leave looking at formulas and data points in detail to my team.
