Book review: Doughnut Economics
I admit to having not really liked Kate Raworth’s doughnut image when I first saw it. After all, a doughnut is a deadly mix of white flour, sugar and fat. Then again, that’s sort of apt if you think of life in high income countries today: attractive but easy to overdo and in the end not that satisfying. However, Kate’s choice of image had impact. In development circles it became a very useful illustration of that sweet spot between alleviating poverty and eroding the ecological support system.
Her latest work is the result of three years’ research and writing. It attempts to bring economics – and how it is discussed – within reach of everyone with even half an ambition to understand the nature of that subject today and how it might evolve in future. This represents her return to economics, which she studied at university before embarking on a long career in practical development work in Africa, at the UN headquarters in New York, and a decade at Oxfam. Coming full circle, she found that the discipline is essential to understanding our choices, but is increasingly disconnected from our own experiences and is widely misunderstood.
Bringing economics within our grasp is no simple task, and to have achieved it – as with the doughnut itself – with simple diagrams and elegant prose to encapsulate an idea or set of relationships in a way that is resonant, memorable and very useful deserves a great deal of praise. It is easy to make things complicated, to pursue the detail, to look properly ‘academic’ and knowledgeable. It is a mark of profound understanding to be able to relate the essential, to use the appropriate metaphor and a carefully crafted sentence – enough but not too much. It’s a kind of doughnut approach itself: positioning economic understanding within a safe and just space (yes, economics is steeped in values and morality). One of Raworth’s messages is that we need to contextualise our economic thinking. Context brings meaning, after all. The economy is not like a machine that operates on the world, but is something embedded within it, more like the heart and its circulatory system. In this respect, she makes good use of the insights from contemporary science – the science of systems. In one sense she is helping our understanding of economics ‘get with the programme’ (it is strange that economics seems so often stuck with mechanistic assumptions of equilibrium, of ‘X’ marks the spot supply and demand, of individuals as independent decision makers). The danger, perhaps, is that Raworth’s prose is so direct that some will mistake it for mediocrity, arguing that the economy deserves to be more opaque, more of a mystery than it really is. Like priests, economists sometimes act as though they were essential intermediaries between the laity and God.
‘Is Raworth a serious economist?’ I have heard that question a few times already. She is certainly serious about the work: there are fifty-nine pages of notes, references and bibliography to get stuck into. It’s better to ask, ‘Does she make sense?’ In interview she is clearly on top of her subject. As a self-confessed generalist she will be treated with suspicion in some quarters, but an interdisciplinary approach is very much to the good if it is a systemic understanding we are looking for. And we are.
Although the book is a working through of seven ways to think like a 21st century economist, it’s good to ask where the circular economy fits in. Unsurprisingly, it’s one of the seven, and the notions of ‘dynamic complexity’ and an ‘embedded economy’ – two of its crucial elements – are also on the list. Kate uses a clear and simple version of the ‘butterfly’ diagram which, in passing, has done much for the Ellen MacArthur Foundation in its efforts to advance understanding of a circular economy. The logo of the Foundation is a version of her embedded economy, drawn to suggest a dynamic relationship. Doughnut Economics goes much further than this however, although some strands are visible in A Wealth of Flows.
Raworth’s book contextualises the circular economy, if you are minded to think that way, as not just a digitally energised ‘solution-set’ for resources, and as a good way to find additional value. She sees it as part of a broader transformation of thinking and action, the outlines of which have been recognised for many years but whose time may be at hand as existing economic structures become increasingly fragile. If you are not minded in that direction then Kate’s work may seem irrelevant or even fanciful or utopian. That would be a grave error of judgement in my opinion, especially as the existing economic ways of thinking are just as guilty of the utopian charge: they are nothing less than a guide to an ideal society. Perhaps it comes down to which utopia you find most attractive.
Doughnut Economics is an excellent book, supported by a number of equally creative short animations that will soon become, I predict, a frequently used stimulus in educational workshops across the world. Even if you are minded to reject some of the arguments presented you will have learnt a lot about economics, its history, its significant present challenges, and the way in which a consistent and well-framed narrative can literally change the world.
Find out more about Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist and check out ‘Create to Regenerate’, on of Raworth’s seven animations on Doughnut Economics: