A Better World ● Today

Does Doughnut Economics help me to make changes that will actually help to get us into that very Doughnut? A personal review of the book.

After seeing a documentary in The Netherlands (Tegenlicht d.d. 26-11-2017) introducing Kate Raworth and Doughnut Economics I was intrigued. Was this possibly the answer? The answer I’ve been looking for in terms of how to organise my life so I actually don’t need more planets than we have available. Will this book show me the way? Because, frankly, the task is daunting. Not to mention that it is sometimes impossible to know if what I do actually has impact, whether positive or negative.

The first thing this book has done for me is that I will no longer feel stupid when economists talk about economics. In so many cases I felt it didn’t add up, but I didn’t say anything due to lack of arguments. I’m not an economist, after all. For a good reason the last chapter of the book is actually called “We are all economists now”!

Economics as a profession (or science, as they like to call themselves) has long chosen to exclude a big part of our daily lives. Simply put, the things that involve money exchange are marked as valuable. This has been pictured in the Circular Flow Diagram, to be found in every book about economics says Raworth.

But that can’t be all there is. In fact, in the quote below is clearly stated what has been left out. There are so many other things we all do, that have value. Maybe not monetary value, but value nonetheless.

….the Circular Flow Diagram identified people primarily as workers, consumers and capital owners, the Embedded Economy diagram invites us to acknowledge our many other social and economic identities. In the household we may be parents, carers and neighbours. In relation to the state we are members of the public, using public services and paying taxes in return. In the commons we are collaborative creators and stewards of shared wealth. In society we are citizens, voters, activists and volunteers.

Why this Embedded Economy thinking makes so much sense for me has to do with what actually makes us (me!) happy. Of course I feel a spark of joy when I buy a new dress or a new book. But long term happiness actually comes from are all the other things where money does plays no role at all. It is when I get to contribute to the happiness and wellbeing of others that I experience long-lasting happiness myself. This takes place in the household, in public spaces, in the commons and society. It happens where people meet.

The second thing this book has done for me is breaking the daunting task up into pieces. Some of those pieces are as daunting as they were before. Some now have a perspective from which I can see actions I can take. But don’t expect this book to break down the Global Goals to your personal level. I don’t think it is intended to do so, either. It is presenting a new way of thinking, which will most definitely help to bring it down to a personal level at some point.

One of the things that remains out of my league is the question of distribution. We know all to well that much of our wealth, or simply money, ends up in very very few places. Raworth does a very good job explaining how things work and how that happened, it remains a very complex problem and a very strong system. It is hard to see where I can start to make a difference there. I hold on to the thought that in system dynamics reaching a tipping point might actually speed things up quite suddenly. Maybe this systems will unravel and change for the better sooner than I can imagine.

Thirdly the book gave me a punchline that sparks a conversation every time I use it. “Meeting the needs of all, within the means of the planet.” A conversation that tends to go in a different direction then it usually does. In this one sentence the whole challenge is captured. It is about inclusion, diversity, good life, healthy earth and it applies to everyone. So everyone I meet finds themselves in this one sentence. I takes the responsibility from an abstract “they have to fix it” level, to a “what does this mean for me” level. Still not an easy one to answer, but at least it feels closer to home. I actually don’t meet people that think doing nothing is a good idea. It is just that they also feel discouraged, confused and lack guidance on where to start.

To be able to take on the very big tasks we need many contributors. People that show what they do, not tell others what to do. Raworth doesn’t give one size fits all answers and I salute her for that. The world is far too divers for that. She does give guidance that all of us can apply to our lives and that can lead to action and connection. The book is well written, has a thoughrough backing of research and is optimistic in its tone. We need especially the latter. If we only tell the doom and gloom stories, nothing will happen. People will close their ears and walk away. This book makes it everybody’s problem and at the same time everybody’s solution.

I’m left wondering what my next step is going to be. What does my personal, or rather household doughnut, look like? Can I get a visual of shortfall and overshoot for my situation? And from that, can I start to find answers to the question what to do?

Summary and notes on each chapter of Doughnut Economics

Who wants to be an Economist?

Well, I don’t. Although it does fascinate me more and more. Especially since I’ve come to understand Economics has not always been a science and to many it will never be a science. It started out as part of philosophy and worked its way up(?) to the hard sciences. Up to the point where, as the books states controversially so, a Nobel Prize was instilled for it.
But economy is everywhere. I can’t get round it. I’m part of it, whether I like it or not. And now this book has brought economics to a point that even I want to understand it. It takes economics away from the myth of “forever growing” to a story that includes all; meeting the needs of all, within the boundaries of the planet. Yes, thank you! I’d like to know how to work on that.

If you choose to read only one chapter in this book, let it be this one. It sketches the history and root of economic thinking. It addresses the “the map is not the territory” mistake we all too often make; a model is just a model, not the real world. It ends with a brief explanation of the seven ways to think like a 21st-century economist.

1 Change the goal – from GDP to Doughnut

How did we actually come to measure GDP and how did it become such an important figure for understanding how we are doing? Meaning that we are only doing well if GDP grows. That has been and still is the general line of thinking, in economics, in politics and in business.

What is never mentioned it that the person coming up with GDP ended up to be one of its greatest critics, simply because all the caution he added to it from the beginning was ignored. He insisted that there can be no growth “just because”. There are many questions to be answered. Why grow? For what purpose? At what cost? “Objectives should be explicit: goals for “more” growth should specify more growth of what and for what.” (page 40) Others who were mindful of these questions too, like the authors of the 1970’s report “Limits to growth”, have long been put aside as too radical.

What brought it home for me was the, actually rather obvious, comparison to nature. It is all around us and we are part of it. In nature nothing grows forever. It can’t. Well, sometimes it can and that’s what we refer to as a cancer. Trees don’t grow indefinitely, nor do humans. They grow to a certain limit and then live a hopefully good life.
This is a great introduction to the main message of the book; The Doughnut. It is Kate Raworths answer to letting go of the focus on GDP and focus on humans to thrive instead. To enable us to thrive we basically need two things; a healthy planet and a healthy social system. The outer and inner boundaries of the Doughnut. So it becomes a search for balance, in between those two boundaries.

2 See the Big Picture – from self-contained market to embedded economy

….the Circular Flow Diagram identified people primarily as workers, consumers and capital owners, the Embedded Economy diagram invites us to acknowledge our many other social and economic identities. In the household we may be parents, carers and neighbours. In relation to the state we are members of the public, using public services and paying taxes in return. In the commons we are collaborative creators and stewards of shared wealth. In society we are citizens, voters, activists and volunteers.

No better sum up of the second chapter than the quote above. Raworth shows how narrow our view has been all this time. How many things have been taken “backstage” for reasons of simplification. For me it clarifies, as other writings by other authors have done (like “How much is enough?” Robert and Edward Skidelsky and “Utopia for realists” by Rutger Bregman), why I find it so hard to understand that in our current society what you do only seems to matter if you make money with it. If you run a household, take care of your neighbours or volunteer and choose to spend the majority of your time on that, all too often you are not taken seriously. To this day, although less and less so, I struggle with my sense of self-worth in connection to making money or not. If we adopt the Embedded Economy diagram, all of this becomes part of our total economy and is therefore part of what we value. How different the world would be!

3 Nurture Human Nature – from rational economic man to social adaptable humans

When a certain field really wants to be a science, having a main character that is actually quite unpredictable in his/her behaviour is of course not very useful. Hence Homo Economicus entered the stage; rational, self-interested and wonderfully predictable. The fact that even the early thinkers about economics like Adam Smith actually wrote about what makes us truly happy, got lost in the time that passed since 18th century. Adam Smith is best known for his book The Wealth of Nations and does indeed write about the role of self-interest to make markets work. However he also states that it is in our nature to find happiness in contributing to the fortune of others. Sounds really hard to believe in this day and age, doesn’t it? It is almost impossible to free yourself from advertisements that have as sole purpose to ensure you believe one thing and that is that buying stuff will make you happy. Even though there is plenty evidence that that happiness is very short-lived. What actually makes us happy has mostly to do with relations and experiences. Not stuff. How to build an economy around that?

4 Get Savvy with Systems – from mechanical equilibrium to dynamic complexity

The difference between een mechanism and an organism. That’s all it is. We prefer mechanisms, because once established they are always the same. Apples always fall from trees, thanks to the mechanism called gravity. Just one of the carved in stone mechanisms from physics. And why could that not be true for economics? Well, as Raworth explains in this chapter that is because our economy is rather more like an organism. “…a complex adaptive system, made up of interdependent humans in a dynamic living world.” So it is best compared to how an apple comes into being, not to how it falls.

My biggest take away from this chapter is something we’ve all seen and felt, at one point or another. Predictions actually never come true when it comes to our economy. So when we hear or see experts going on about what will happen in the coming year, or 10 years, we zone out. We implicitly know; you actually don’t have a clue. Of course, the maths are correct. The graphs are wonderful. But they are assuming the economy to be a mechanism. That’s why we see the same people, about a year later, explaining new maths and graphs on how things are going to go this time. And at least much to my surprise they get very few questions about the version of a year ago and why that has not happened.

How to deal with that? The book provides a wonderful metaphor; we are all gardeners! As gardeners do not make plants grow, but they are crucial in creating circumstances in which plants can thrive. It is a stretch to repeat the whole thing here, but you get the picture. Gardening requires observation, judgment, selection and so on. It has little to do with “always the same result” mechanisms.

5 Design to Distribute – from “growth will even it up again” to distributive by design

Currently we have a distribution problem. Much of our wealth ends up in very, very few places. Our world is an unequal place. Without explaining this chapter in full detail, we all sense something is not right. But how to change it? That is probably a far more pressing question. How do we start to do things differently, so distribution is part of the design?
As much as I love this book, this is also where it gets hard to bring it back to proportions that I can handle. On my own, or in my by definition limited circles. How do I act differently, in a world that is not yet there? At least not in majority. The changes that Raworth proposes all make sense and at the same time feel very much out of my league. So this particular chapter with all its important clues also felt a bit discouraging.

6 Create to Regenerate – from “growth will clean it up again” to regenerative by design

This chapter is easier to bring back to things I can do. Essentially it is about waste, or what we most often consider waste. Things we don’t use anymore. But they might still be perfectly useable or reusable. For me this also goes back to our need for stuff, assuming that is what will make us happy. We know, thanks to chapter 3, this is not true. Currently it seems we need ever more and /or newer stuff. Before you know it you have an outdated phone, not the latest interior design and fashion that is not up to date. I’ve always found myself looking for timeless items and still accumulated a lot of stuff over time. I recently counted the pieces in my wardrobe and was truly shocked. Especially since I consider myself a conscious shopper.
But back to regenerative by design. Could it be as simple as translating that to “no waste”? The implications are huge. Also in this case I could feel discouraged, if I apply this principle to everything at once. But at the same time, it is a very clear guideline that I can apply step by step. It is a longer term goal that I can start to work towards today, with smaller steps. Experimenting my way to a life that leaves no waste.

7 Be Agnostic about Growth – from growth addiction to growth agnostic

I suspect some hoped for a much firmer stance on this topic. No growth at all! But here it is: “No country has ever ended human deprivation without a growing economy. And no country has ever ended ecological degradation with one.” The challenge in a nutshell. If we want to end up within the boundaries of this proposed doughnut we need to do both; grow economies to end human deprivation and get everyone on this planet above the social foundation. At the same time we need to stay within the planetary boundaries to stop ecological degradation.

So instead of an ever climbing curve, we need to find a way to stabilise it at a good level. The level where we and this planet we live on can thrive. It requires us to think about what we actually need and what addictions we need to cure. Raworth shows us our financial addiction (more money), our political addiction (more power) and our social addiction (more status). There are no easy answers to these. It all starts with awareness and the willingness to act.

We Are All Economists Now

Gandhi said: “Be the change you wish to see in the world”. So as long as I’m a consumer, and I don’t see that ending anytime soon, I’m also an economist. Currently my lifestyle needs more planets than we have, which makes me part of the problem. At the same time, since it is my lifestyle I’m also part of the solution.