What if we started economics not with established theories, but with humanity’s long-term goals and how to achieve them? Kate Raworth She highlights the dilemma without proposing a clear solution, but this is no criticism. Raworth calls on us to “become agnostic about growth”, noting that the option of halting it and the option of trying to make it continue indefinitely both seem, in their different ways, intolerable. Yet, as she rightly stresses, the conventional notion of “externalities”, or economic side effects, serves to imply that problems such as pollution are not ones that economists need to make central to their concerns.Īs long ago as 1972, the Limits to Growth report showed that GDP may not be able to increase forever in a world of finite resources. Too many writers, even radical ones, tend to treat “the economy” and “the environment” as separate issues, even though they admit that the one has an impact on the other. Raworth’s distinct contribution is in her emphasis on environmental themes. If you are familiar with the ideas of Hyman Minsky, Daniel Kahneman, Joseph Stiglitz and Ha-Joon Chang, you will not be in for too many surprises, but if not, this book serves as a compact synthesis of modern heterodoxy. The aim is to get humanity into the area between the rings, where everyone has enough but not too much – or, as Raworth calls it, “the doughnut’s safe and just space”. The outer ring represents the “ecological ceiling”, beyond which excess consumption degrades the environment beyond repair. The inner ring represents the “social foundation”, the situation in which everyone on the planet has sufficient food and social security. How is this to be done? Enter the doughnut – a sort of miracle diagram that is apparently going to change the world. We may be far from rational in our individual economic behaviours, yet – she appears to say – if only the problem is framed in the right way, the population can potentially be induced to support the sustainable and fulfilling human goals from which mainstream economics has led us so cruelly astray. On the other hand, she seems overoptimistic about the possibility of changing the predominant neoliberal mindset, essentially through persuasion. She is right that not everything can or should be left to the market, that the “rational actor” model of economic conduct is problematic and that we cannot rely on the processes of growth to redress inequality and solve the problem of pollution. So Kate Raworth’s guide to rethinking the discipline is at one level entirely sensible. Although conventional economics has many well-known limitations, the unorthodox or radical alternatives are not without their drawbacks either. The hungry mariners might be forgiven for feeling a little dissatisfied.
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