Doughnut Economics – a review

It is often the case that those who make the greatest impact on history are not those with the most original ideas, but those who can communicate original ideas in a way that commands attention and action. Such is Kate Raworth’s ground-breaking book, Doughnut Economics.

The Economic Alternative

Kate Raworth is an economist who has been a Senior Researcher for Oxfam and worked among the rural poor in Zanzibar. Her argument is simply that there is an alternative to a neoliberal paradigm which considers continuous economic growth, the profit-only motive, indifference to inequality and ecological degradation as the natural state of man (sic). She writes, “The twenty-first-century task is clear: to create economies that promote human prosperity in a flourishing web of life, so that we can thrive in balance within the…safe and just space.”

The argument frequently posited by the right is that in the words of Thatcher, There Is No Alternative (TINA). Free-market economics is the only approach that has been shown to increase human prosperity. All other modes of tinkering with the market have been complete failures. So, Grudem / Asmus make this point in their book, The Poverty of Nations, which I have critiqued here, and a leading Christian Conservative recently suggested to me (albeit tongue in cheek) that the only options were capitalism or “Corbynomic growth theory” and “the Communist Christian Fellowship”. But the point of Raworth’s book is that such false polarities miss the range of possibilities that are available for an economy that seeks human flourishing, but not at the expense of gross inequality and environmental destruction.

The Doughnut Sweet Spot

This is where the metaphor of the doughnut emerges. For Raworth, there is a goldilocks band where our economies are flourishing enough for everyone to enjoy a good standard of living without poverty, but they are not so extravagant that we are destroying the planet and in the process our own long-term health and well-being.

The Value of Images

Of course, a number of economists and social thinkers have made similar point before, but where Raworth’s contribution is unique is the way in which she both details examples of how such a doughnut economics might work, but also communicates her approach with the aid of vivid metaphors, and in particular diagrams. So, for instance, she replaces the now challenged Kuznet’s curve which had suggested that increasing GDP would eventually lead to a reduction in inequality with a network diagram that is redistributive by design.

Reductions in inequality become no longer the mere wishful hope of a more considerate economist, but instead their deliberate policy objective. Similarly, she replaces Rostow’s take-off model of economic growth with one that is intentionally agnostic and in the process provides a brilliant solution to the green growth problem: is it possible for an economy to be green and grow at the same time? Let’s just worry about the green, and leave the growth to itself – is her answer.

It is in these visual and material policy alternatives that the real elegance of this book lies. I suspect her critics will argue that we have heard all this before, and to some extent they are right. In terms of detailed policy guidance, there is not a huge amount that is new in the book. But that is to miss its brilliance. For where Raworth has done a sublime job is to take a series of concrete economic policies and to present them in a way that is captivating and memorable, and yet has real substance within. She has in short shown us that another world is possible and for that I am grateful. Her book is essential reading and I cannot commend it enough.