Rich Burkmar

An economically curious ecologist

Doughnut Economics – Seven Ways to Think Like a 21st-Century Economist 

Raworth, K. (2018). Doughnut Economics: Seven Ways to Think Like a 21st-century Economist. India: Random House Business Books. 

Front cover of Doughnut Economics

I wish I’d read it years ago. To my old way of thinking, all economists are narrow-mindedly focused on the accumulation of financial wealth and largely careless of the consequences of that pursuit on society and the ecology of the planet. In truth, most of the influential economists working today in the heart of our political and social structures do fit that image. But Kate Raworth is an economist of a different order altogether. Doughnut Economics reveals her as a true iconoclast in both senses of that word: firstly in her detailed and deep-thought critique of the tenets and institutions of mainstream economics and secondly in her approach to rubbing out its most treasured visual models and drawing new ones, fit for the 21st century, in their place.

I’ve been aware of Doughnut Economics for a few years (both the book and some of the images inspired by it) but never felt sufficiently compelled to read it. The word economics was not guaranteed to get my pulse racing! But having had my interest in post-growth economics awakened by several other books, notably Jason Hickel’s Degrowth and Tim Jackon’s Prosperity Without Growth, it quickly found its way to the top of my reading pile. 

With a strikingly visual approach, Raworth lays out each of her seven ways of thinking like a 21st century economist – essentially the seven tenets of doughnut economics – using an illustration which she contrasts to a well-known illustration from the textbooks of mainstream economics. The example below shows, on the left, the classic ‘circular flow’ model of mainstream economics and, on the right, Raworth’s model for the ’embedded economy’.

The Circular Flow model of mainstream economics
The embeded economy model of doughnut economics

Raworth eloquently exposes the shortcomings of the circular flow model, for example the complete absence of the economy’s social dimension and its massive ecological costs. She then goes on to explain a new approach – the embedded economy – which properly positions the economy within society and the living world, shining a light on the interdependence of the economy and these ‘externalities’ of the classic model. There are six other visual contrasts, each with an accompanying critique of the mainstream economic approach and exposition of the approach of doughnut economics. It’s a joy to read – never turgid – and as convincing in its logic and arguments as it is in its pictures. 

There is one image from the book, above all others, that encapsulates its message – the doughnut itself. The doughnut is, …well, doughnut shaped: its outer ring representing the ecological ceiling of the safe and just living space for humanity, beyond which we are living beyond the means of the planet to sustain itself (and us); the inner ring representing the social foundation below which people cannot meet their basic needs for a good life. The illustration from the book is in black and white but the colour illustration, shown below, is widely accessible on the web. It shows how, according to the best ecological and social science, we are currently far from operating within the safe and just space for humanity. This book shows how we could get there.

The Doughnut - Kate Raworth and Christian Guthier/The Lancet Planetary Health

Raworth takes us through all this in a relentlessly optimistic tone, making you really feel that a transformation of our economy is not only desperately needed but also inevitable. She is clear that the path of this reformation will require both top-down changes – the incremental reformation of our political, social and economic structures away from growth-dependency – and bottom-up – groups, communities and local government putting the principles of doughnut economics into action in imaginative and novel ways. Most of the early reformation is likely to be bottom-up because of the inertia of national politicians and institutions locked into the growth paradigm. In the 2022 afterword to the edition of the book I read, Raworth describes some of the bottom-up innovations already inspired by doughnut economics, notably the decision of the municipality of Amsterdam, in 2020, to embrace it as the starting point for public policy decisions. Here she also describes the Doughnut Economics Action Lab (DEAL) founded since the original publication of the book as a way to promote these bottom-up approaches and outlines some of their insights on how to enable effective change, including “go where the energy is” and “don’t waste time knocking on shut doors” . 

The John Maynard Keynes of the 21st Century

GeorGE monbiot: Guardian

George Monbiot declared that Kate Raworth is “The John Maynard Keynes of the 21st century” (I know that because its printed on the front cover!) and I’m inclined to agree. Over the coming decades, Doughnut Economics will very likely become regarded as a seminal work in the construction of a post-growth economic paradigm. I very much hope so at any rate, because I’m convinced that the future of my children and grandchildren depends upon it.