Kate Raworth’s 2017 book Doughnut Economics has three main themes: the Doughnut itself, the shortcomings of mainstream economics, and reformist proposals about how society should be organised. We will discuss these in reverse order, finishing with the one that offers the most interesting ideas about humanity and the world we live in.
Most of the ideas in the book about how society should be organised are fairly standard left-wing reformist fare, such as firms being owned by their employees. In the peer-to-peer economy, everyone can become both a maker and a user. There should be community currencies, alongside national currencies. Rather than commercial banks creating money when they offer a loan (a claim which misunderstands how banks function), central banks can issue new money to every household. Tiered pricing, whereby the more people consume, the more they pay, will ration use of resources and benefit the less well-off. Economies should be regenerative by design, recycling carbon, water and so on. These schemes, however, leave capitalism in place and so will not solve current problems.
Tomelilla, a small town in Sweden, is attempting to apply some of the principles of Doughnut Economics (Guardian, 17 July). This includes, for instance, revamping an existing building rather than building a new ice rink. This is an example of the Doughnut Economics Action Lab (doughnuteconomics.org), which has several hundred member organisations across the world, and is intended to put the Doughnut ideas into action. The trouble is that it all assumes the continuation of capitalism and so will not be able to go beyond a system which prioritises profit over caring for the planet and its inhabitants.
Raworth argues that economics as taught nowadays is rooted in the mindset of the 1950s and even the 1850s, with little or no discussion of what the aims of the economy should be. In reality, the free market has never existed, as markets are strongly shaped by laws, institutions, cultures and so on. Nor is there such a thing as free trade: power relations always influence cross-border flows. Unpaid labour is ignored, as is the fact that the economy exists within society and the living world. At the heart of economic theory is Homo economicus, ‘solitary, calculating, competing and insatiable’, whereas humans are in fact reciprocating, interdependent and ‘deeply embedded in the web of life.’
The book’s subtitle is Seven Ways to Think Like a 21st-Century Economist, which would involve, for instance, acknowledging an embedded economy with social, adaptable humans which is distributive and regenerative by design and agnostic about growth. There are some good points here, but humanity would still be stuck with capitalist economics.
As for the Doughnut, this is ’the space in which we can meet the needs of all within the means of the planet.’ It is shown via a diagram of a doughnut, with two rings and an empty interior. Its inner ring sets out the basic requirements of life, including sufficient food, water, sanitation, energy, education, housing, all achieved with gender equality, peace and justice. But these are not currently being met, as millions ‘lead lives of extreme deprivation’. One person in nine, for instance, does not have enough to eat, and millions of children die each year from easily preventable illnesses. And the richest 1 percent of the world’s population own more than the other 99 percent put together.
The outer ring relies on the notion of planetary boundaries proposed by Earth-system scientists, an ecological ceiling that humans need to keep within: these include climate change, ocean acidification, chemical and air pollution, freshwater withdrawals, and ozone layer depletion. Most of these are associated with specific levels that should not be crossed. But at least four of them have already been transgressed: climate change, land conversion, nitrogen and phosphorus loading, and biodiversity loss. Biodiversity loss, for instance, is at least ten times the recommended rate, and the amount of carbon dioxide in the atmosphere is above what should be aimed at.
The idea behind the Doughnut is to meet everyone’s basic needs while keeping within the planetary boundaries that will prevent environmental catastrophe. ‘Raworth’s fundamental assertion is that a sustainable and just society can be realized only if a global economic system can be put in place that will allow as many people as possible to thrive in the space between these upper and lower boundaries’ (Kohei Saito: Slow Down).
As an illustration of the problems faced by humans, the Bulletin of Atomic Scientists recently moved its Doomsday Clock to just 89 seconds to midnight, the closest it has ever been to catastrophe. This was partly because of the war in Ukraine and the risk of nuclear war, but it was also on account of climate change, emerging and re-emerging diseases, and so on.
Raworth uses an Embedded Economy diagram to illustrate how energy plus living matter and materials are employed within Earth and society, while heat and waste matter are output within the market, the state and finance. But more constructive is the idea of a butterfly economy, whereby renewable materials are used and the two wings involve regenerating and restoring (repair, recycle etc). An economy cannot be completely circular as it is not possible to re-use all materials, so speaking of a cyclical economy is more helpful. The latest Circularity Gap Report argues that the global economy is in fact becoming less circular than it was a few years ago.
The Doughnut is not a solution in itself but a framework for examining some possibilities and looking at how a system designed to meet people’s needs could work while remaining inside the limits that have been identified. A socialist world, without classes or borders or the profit motive, would be by far the best way of addressing these issues and achieving the goal of, as Saito says, thriving within the boundaries.
Paul Bennett
Blogger's Note:
Kohei Saito's Slow Down was reviewed in the May 2025 issue of the Socialist Standard.
No comments:
Post a Comment