youtube 2022 Introduction to Regenerative and Distributive Design
youtube 2017 Change the Goal – 1/7 Doughnut Economics
updates (14/2022) scroll down for book, articles and reviews
Oxfam LSE How can a Book Change the World? The theory of action behind Kate Raworth and the Doughnut Economics Action Lab We’re ending the LSE’s ‘Cutting Edge Issues’ lecture series with some real gems. Most recently, it was Kate Raworth, originator of the doughnut, presenting her work in trying to turn a book into global action via the Doughnut Economics Action Lab (DEAL). read summaries here
cnbc.com 25/3/2021 Amsterdam bet its post-Covid recovery on ‘doughnut’ economics — more cities are now following suit by Sam Meredith
reviews and discussion
‘I see [Raworth] as the John Maynard Keynes of the 21st Century: by reframing the economy, she allows us to change our view of who we are, where we stand, and what we want to be.’ George Monbiot’s Guardian review
‘This is sharp, significant scholarship . . . Thrilling.’ Times Higher Education
Are there holes in “doughnut economics”? Kate Raworth responds to Branco Milanovic’s crtique
“The book is probably better than its competitors in the area. For example, Raworth’s discussion of inequality where she argues for the equalization of endowments rather than expansion of policies that redistribute current income, makes lots of sense. Suggestions for the use of various incentives to make companies more environment-friendly are also plausible. Perhaps even the imaginative use of electronic currencies may help.
Yet the book fails to convince for three reasons. First, [Doughnut Economics] never faces … the fact that if everybody in the world is to … to have income level equal to the current median in the rich countries, world GDP would have to increase three times … Second, numerous examples of companies and people who do innovative “green” things are listed … but their importance is never assessed. … Third, the interpretation of the current phase of globalized capitalism is, in my opinion, wrong. Rather than … becoming more cooperative [it is] going exactly in the opposite direction … The world Kate has in mind is a world essentially devoid of major social contradictions. It often comes close to the world of Bastiat’s “universal harmonies”. … “
read all of Branko Milanovic’s review here plus reply by Kate Raworth, discussion + comments
“Although she claims to be agnostic [about growth], her sympathies clearly lie with [degrowth and] “… she sets out some fascinating ideas – rethinking the nature of money, reforming finance, changing the nature of taxation, new metrics…” that seem “…thoroughly original and brilliant way to get past the insane optimism of the exponentionalists, and the sloppy oppositionalism of the degrowthers.
Wonderful, but what influence will the book have? Because in some ways Doughnut Economics is an example (albeit a particularly brilliant one) of what I call IIRTW (‘If I Ruled the World’) thinking. There’s a cursory nod to the nature of power, but the implicit theory of change seems to be to invoke a sort of progressive/environmentalist version of Silicon Valley – a movement of smart, dedicated people building a New Jerusalem. Their brilliance will identify the win-win solutions, while some ill defined political upsurge will overcome the blockers. Together they will save the world. …”
“Instead, degrowth is still largely caught in the phase of economic and cultural critique of growth regimes. An example would be Kate Raworth who builds on the work of Daly, Jackson, Victor and others to develop a model of the ‘doughnut economy’, which George Monbiot exaggeratedly hails as the work of the ‘Keynes of the 21st Century’.79 Consisting of outer circles made up of the earth’s planetary boundaries or ‘life support system’ (Rockström) and inner rings of society, economy, household, state and market, Raworth manages to integrate environment and socio-economic factors in very suggestive ways.
Yet, like Daly, Jackson and others, her critique of growth economics has no politics. Given it is couched in such general terms, it would be difficult to know where to locate it politically. In other words, the ‘doughnut’ is neither a political economic analysis of particular nation states (as it stipulates no transitional fiscal, monetary or other policies), nor is it a global strategy that is explicitly anti-capitalist. It outlines seven guidelines that are admirable, but as with other contributions in this genre of fusing environmental, human rights and social justice development goals, Raworth sidesteps all the difficult issues of how to actually transform capitalist political economies.
Illuminating visual diagrams are no substitute for mass political movements or answers to how these political movements can sustain support from millions of citizens once degrowth or ‘post-growth’ strategies make employment in existing material growth sectors unviable. This is a dilemma that no analyst can solve in theory. However, one can be guaranteed of failure if deep-seated illusions are held about a possible smooth transition to a ‘doughnut economy’. Helping people redefine their existing notions of economics is very important. Regrettably, major social change will most likely be bitterly resisted and will probably involve the use of violence by those with wealth and power who have the most to lose.”
Kate Raworth articles
Doughnut Economics – excerpt
“Equilibrium theories dominated macroeconomic analysis through the second half of the twentieth century , and all the way up to the 2008 financial crash . The ‘ New Classical ’ variants of equilibrium theory – which assume that markets adjust instantly to shocks – jostled for attention with so – called ‘ New Keynesian ’ variants that assume there will be adjustment delays due to ‘ sticky ’ wages and prices . Both variants failed to see the crash coming because – being built on the presumption of equilibrium , while simultaneously overlooking the role of the financial sector – they had little capacity to predict , let alone respond to , boom , bust and depression . With such ill – fitting models dominating macroeconomic analysis , some big – name insiders began to critique the very theories that they had helped to legitimise . Robert Solow , known as the father of neoclassical economic growth theory and long – time collaborator of Paul Samuelson , became an outspoken critic , first in his 2003 speech bluntly entitled ‘ Dumb and Dumber in Macroeconomics ’ , then in analyses that mocked the theory’s stringent assumptions . 6 The general equilibrium model , he pointed out , in fact depends upon there being just one single , immortal consumer – worker – owner maximising their utility into an infinite future , with perfect foresight and rational expectations , all the while served by perfectly competitive firms . How on earth did such absurd models come to be so dominant ? In 2008 , Solow gave his view :
“I am left with a puzzle , or even a challenge . What accounts for the ability of ‘ modern macro ’ to win hearts and minds among bright and enterprising academic economists ? … There has always been a purist streak in economics that wants everything to follow neatly from greed , rationality , and equilibrium , with no ifs , ands , or buts … The theory is neat , learnable , not terribly difficult , but just technical enough to feel like ‘ science . ’ Moreover it is practically guaranteed to give laissez – faire – type advice , which happens to fit nicely with the general turn to the political right that began in the 1970s and may or may not be coming to an end .”
One thing that is clearly coming to an end is the credibility of general equilibrium economics . Its metaphors and models were devised to mimic Newtonian mechanics , but the pendulum of prices , the market mechanism , and the reliable return to rest are simply not suited to understanding the economy’s behaviour . Why not ? It’s just the wrong kind of science .
No one made this point more powerfully than Warren Weaver , the director of natural sciences at the Rockefeller Foundation , in his 1948 article , ‘ Science and Complexity ’ . Looking back over the last three hundred years of scientific progress , while simultaneously looking forward at the challenges facing the world , Weaver clustered together three kinds of problems that science can help us to understand . At one extreme lie problems of simplicity , involving just one or two variables in linear causality – a rolling billiard ball , a falling apple , an orbiting planet – and Newton’s laws of classical mechanics do a great job of explaining these . At the other extreme , he wrote , are problems of disordered complexity involving the random movement of billions of variables – such as the motion of molecules in a gas – and these are best analysed using statistics and probability theory .
In between these two branches of science , however , lies a vast and fascinating realm : problems of organised complexity , which involve a sizeable number of variables that are ‘ interrelated in an organic whole ’ to create a complex but organised system . Weaver’s examples came close to asking the very questions that Newton’s apple failed to prompt . ‘ What makes an evening primrose open when it does ? Why does salt water fail to satisfy thirst ? … Is a virus a living organism ? ’ He noted that economic questions came into this realm , too . ‘ On what does the price of wheat depend ? … To what extent is it safe to depend on the free interplay of such economic forces as supply and demand ? … To what extent must systems of economic control be employed to prevent the wide swings from prosperity to depression ? ’ Indeed , Weaver recognised that most of humanity’s biological , ecological , economic , social and political challenges were questions of organised complexity , the realm that was least understood . ‘ These new problems , and the future of the world depends on many of them , require science to make a third great advance , ’ he concluded .
That third great advance got under way in the 1970s when complexity science – which studies how relationships between the many parts of a system shape the behaviour of the whole – began to take off . It has since transformed many fields of research , from the study of ecosystems and computer networks to weather patterns and the spread of disease . And although it is all about complexity , its core concepts are actually quite simple to grasp – meaning that , despite our instincts , we can all learn , through training and experience , to be better ‘ systems thinkers ’ .
A growing number of economists are thinking in systems too , making complexity economics , network theory , and evolutionary economics among the most dynamic fields of economic research . But , thanks to the lasting influence of Jevons and Walras , most economics teaching and textbooks still introduce the essence of the economic world as linear , mechanical and predictable , summed up by the market’s equilibrating mechanism . It’s a mindset that will leave future economists deeply ill – equipped to handle the complexity of the contemporary world .
In a playful ‘ look back from 2050 ’ the economist David Colander recounts that , by 2020 , the majority of scientists – from physicists to biologists – had already realised that complexity thinking was essential for understanding much of the world . Economists , however , were a little slower on the uptake and it was not until 2030 that ‘ most economic researchers believed that the economy was a complex system that belonged within complexity science ’ . 9 If his history of the future should turn out to be right , it may well be too late . Why wait until 2030 when we can ditch the ill – chosen metaphors of Newtonian physics and get savvy with systems now ?”
diefarbedesgeldes Interview mit Kate Raworth
Amazon Rezension Rüdiger Opelt, Autor von ” Die neue Welt: So retten wir die Zukunft”
Die Volkswirtschaftslehre ist die einzige Wissenschaft, die ihre Studenten in einen Massenprotest getrieben hat. Eine wachsende Zahl von Studenten will die zentralen Themen der amerikanischen Ökonomieprofessoren nicht mehr akzeptieren. Diese stellen nämlich Gleichungen auf, die aus den 1950er Jahren stammen und auf den Prämissen der 1850er Jahre fußen. Damit sind die Probleme des 21. Jhdt. nicht zu lösen.
Der Nobelpreis seit 1969 gibt den Nobelpreisträgern eine Autorität, die sie über Staatslenker und Vorstände stellt, ungeachtet dessen, dass sich die beiden wichtigsten, Keynes und Hayek, diametral widersprechen. Die großen Wirtschaftsinstitutionen dieser Welt bevormunden Staaten und Konzerne, ungeachtet der Krisen und Fehler, die dabei ständig passieren.
Dies hat mit Entstehung und Zielsetzung der Ökonomie zu tun. Die Wirtschafts-wissenschaften sind gut darin, Gewinne, Umsätze und Bruttonationalprodukte zu maximieren. Das BNP wird aber auch durch Tätigkeiten maximiert, die unseren Planeten zerstören und die Einkommensschere vergrößern. Still und heimlich hat sich die Wirtschaftswissenschaft in den Dienst der wenigen Reichen gestellt, die immer mehr Gewinn und Umsatz machen wollen, ohne Rücksicht auf Armut und Umweltzerstörung.
Bei aller mathematischer Genauigkeit (oder immer noch erschreckender Ungenauigkeit) ist dieses Modell nicht mehr zielführend. Wenn die Umwelt zerstört ist, stürzt auch die Wirtschaft ab. Wenn die Mehrheit am Wohlstand nicht partizipiert, kommt es zu einer Revolution, das zeigt die Geschichte.
Die Wirtschaftstheorie braucht also eine neue Zielsetzung, die ein Gleichgewicht in Ökologie und Wohlstandverteilung anstrebt. Das nennt Raworth die Donut-Ökologie. Zwischen 2 konzentrischen Kreisen bewegt sich die ringförmige Fläche des sinnvollen Wirtschaftens. Nach innen wird dieser Ring durch die Armut begrenzt, die es zu verkleinern gilt. Nach außen wird die Wirtschaft durch die Umweltzerstörung begrenzt, die es ebenfalls zu verkleinern gilt. Jede Wirtschaft ist also nicht nur nach ihrem Gewinn, sondern auch nach ihren Umwelt- und Armutskosten zu beurteilen. Daraus entsteht ein völlig neues nationalökonomisches Modell, das Raworth in diesem Buch sehr klar beschreibt.
I consider Kate’s video a go-to for understanding and applying Bill Sharpe’s Three Horizons Framework.