Kate Raworth Introduction to Doughnut Economics

Summary

In this session on Doughnut Economics, the speaker introduces seven ways to think like a 21st-century economist. These concepts challenge traditional economic models focused on endless growth and promote balance, sustainability, and inclusivity. Key ideas include shifting from GDP growth to thriving within planetary boundaries, recognizing the economy as a complex, embedded system, and emphasizing human cooperation over self-interest. The speaker advocates for distributive and regenerative economies and stresses the importance of rethinking organizational design. Ultimately, they call for practical application of these ideas, fostering experimentation and learning to shape future economic systems.

Takeaways

• 😀 21st-century economics starts with changing how we see the world, not with equations or calculations.
• 🌍 The goal of economic success should shift from endless growth to thriving in balance, respecting social and ecological limits.
• 🍩 The Doughnut model emphasizes leaving no one behind on essential needs while respecting planetary boundaries.
• 🔄 The traditional view of the economy as a self-perpetuating machine is flawed; the economy is a complex, interconnected system.
• 💡 A new economic diagram, the Embedded Economy Diagram, shows that the economy is embedded in society and nature, working within Earth's cycles.
• 👥 The economy should not just be about the market and state, but also include the household and commons as essential contributors to provisioning.
• 💸 Financial systems should be reimagined as services that support human well-being and planetary health, rather than serving extractive purposes.
• 🤝 Human nature should be seen as cooperative, empathetic, and collaborative, not just self-interested, and this should guide economic systems.
• ⚙️ The economy is not a mechanistic system; it is complex and adaptive, requiring stewardship rather than control to guide its development.
• 💰 Economic design must be distributive by nature, ensuring fair sharing of resources and opportunities to address rising global inequality.
• ♻️ We need to transition from a degenerative, linear economic model to a regenerative, circular one that sustains Earth’s resources.
• 🏛️ To reshape economies, we must also transform the design of institutions, focusing on purpose, governance, relationships, and ownership structures.
• ⏳ Growth should not be the end goal; economies must mature and thrive rather than relying on endless expansion, which is unsustainable.

Q & A

What is Doughnut Economics, and how does it differ from traditional economic models?

Doughnut Economics is an economic model that focuses on thriving within planetary boundaries while ensuring that no one falls short on life's essentials. It contrasts with traditional economic models that often emphasize endless growth, typically measured by GDP, which can lead to ecological degradation and social inequality.

Why does the speaker emphasize that 21st century economics should not start with calculations and equations?

The speaker argues that economics should begin with how we see the world, through images and models that influence our understanding of society. Calculations and equations are not the starting point; instead, the focus should be on the social and ecological context of economics.

What is the main goal of Doughnut Economics?

The main goal is to find a balance between meeting the social foundation (basic needs for all) and respecting the ecological ceiling (planetary boundaries), creating a thriving society that does not over-exploit natural resources.

How does the Doughnut model compare with the 20th century economic focus on growth?

The Doughnut model replaces the idea of endless economic growth, which is often pursued at the expense of the planet, with the concept of thriving in balance. The focus shifts from exponential growth to sustainability, ensuring that no one is left behind while staying within the Earth's ecological limits.

What is the Embedded Economy Diagram, and why is it important?

The Embedded Economy Diagram illustrates that the economy is a subset of society, which is embedded in natural systems. It highlights the interdependence of the economy, society, and the environment, which traditional economic models often overlook by treating the economy as a self-contained system.

What critique does the speaker offer regarding the portrayal of humanity in traditional economic models?

Traditional economic models depict humanity as 'Rational Economic Man,' a narrow character driven by self-interest and material gain. The speaker argues that this image is limiting and doesn't reflect the true complexity and social nature of humans. A more accurate model would emphasize cooperation, empathy, and shared responsibility.

How should economies be seen, according to the speaker, in terms of complexity?

Economies should be viewed as complex adaptive systems, not as mechanistic, predictable machines. The speaker suggests that we can steward the economy, guiding it toward sustainable outcomes, but we cannot control it like a machine. Understanding the feedback loops and unpredictable dynamics is key.

What does the speaker mean by 'distributive by design' economies?

Distributive by design economies are those that are intentionally structured to share value and opportunity more equally across society. The speaker emphasizes that inequality is not an inevitable consequence of economics but a result of design choices that can be changed to create more inclusive systems.

What is the problem with the current degenerative economic system?

The current system is linear and degenerative, meaning that resources are extracted, used once, and then discarded, contributing to environmental degradation. The speaker advocates for a shift to a regenerative, circular economy, where resources are reused and waste is minimized, aligning with natural cycles.

What is the role of organizational design in shaping the future economy?

Organizational design plays a crucial role in shaping economic dynamics. The speaker discusses the need for organizations to rethink their purpose, relationships, governance, metrics of success, and ownership structures. Transforming organizations to be more equitable, collaborative, and aligned with sustainable goals is key to reimagining economies.