Book Review: On Squeezing
a New Economic Paradigm into a Doughnut
By Don
Curren
Is it
possible to convey a new economic paradigm through a doughnut?
In her 2017
book Doughnut Economics: Seven Ways to Think Like a 21st Century Economist,
the UK economist Kate Raworth wagers that it is.
Setting aside
the doughnut issue briefly, Doughnut Economics is a worthwhile read.
It’s concise
(almost to the point of being underdeveloped) and relatively easy to read. But
within those confines, it offers a thumbnail sketch of conventional economics,
a lucid and damning assessment of its failings, and compelling suggestions for
new approaches.
The book is
premised on the idea that transformational change in the way our economies
operate is urgently required. “Ours is the first generation to deeply understand
the damage we have been doing to our planetary household, and possibly the last
generation with the chance to do something transformative about it,” Raworth
writes, and that perspective informs the entire book.
Doughnut
Economics is tightly structured around the seven ways of thinking that Raworth
alludes to in her title: changing the goal, seeing the big picture, nurturing
human nature, getting savvy with systems, designing to distribute, creating to
regenerate, and being agnostic about growth.
There’s much
in the book that’s useful and illuminating in relation to our current civilizational
predicament, particularly the emphasis on the under-appreciated work of
pioneering systems theorist Donella Meadows.
The doughnut intended to
illustrate that an economy functioning optimally should be in a sweet spot between
underserving the population that relies on it and, on the other extreme, consuming
so much of the natural resources it relies on that it becomes unsustainable.
The hole in
the doughnut represents the shortfall that plunges at least some of its
participants into poverty and immiseration. The outer edge represents the
environmental limits beyond which an economy can’t go if it’s to remain
sustainable.
Below is a
version of the environmental doughnut that appears on Raworth’s website:
The green circle – the “doughnut” - symbolizes the sweet spot Raworth believes we should be aiming for
Raworth is
deeply committed to the doughnut, as indicated in the title of the book itself.
The question
is whether tying a complex vision of economic transformation into a simple and
potentially risible symbol like a doughnut is the best way of making the case
for it.
Personally,
I’m not sure.
But in one
of the most interesting chapters in the book, Raworth makes an effective case
for the power of simple visual images to convey ideas, both in general and in
economics in particular, citing the use of images in Paul Samuelson's highly
influential textbook on economics as an example of the latter.
On the other
hand, it does leave her open to charges of oversimplification, and to the risk
of incredulity on the part of readers skeptical that issues of such importance
and complexity can be encapsulated in something as mundane as a doughnut.
Whatever one
feels about the doughnut and the other metaphors and images Raworth employs,
Doughnut Economics is a well-thought-out and factually well-informed book that
address some of the key issues confronting economists – and the rest of us – in
the pivotal early years of the 21st Century.
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