Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
by Kate Raworth
As part of this year’s summer reading, I picked up a copy of Kate Raworth’s bestselling Doughnut Economics. Part of its allure, along with its reference to a large, sticky cake, was that it was an economics book written by a woman. Yes, there are notable female economists; I could cite Joan Robinson, one of the Cambridge economists who played a major role in post-Keynsian economics; Christine Lagarde, head of the IMF, and journalists Stephanie Flanders, now heading up Bloomberg Economics and Gillian Tett of the FT, who was one of the first people to warn that the financial crisis was looming. However, as a profession, economics is woefully lacking in women.
Its other allure was that it offers a radical and provocative take on how economics should be viewed in the 21st century, asking the reader to reimagine the purpose and role of economics in our society. To quote Raworth, “what if we started economics not with its long-established theories, but with humanity’s long-term goals, and then sort out the economic thinking that would enable us to achieve them?”
Raworth posits a fascinating and compelling case and, like all good business books, structures them around seven key points. Her main thesis is one of prioritizing the well-being of people alongside an ecological ceiling of planetary pressure that we should not go beyond; an economic model (the doughnut) that sits on the twin principles of fairness and sustainability.
Economics plays such an important role in our everyday lives and drives so much decision making in our society that I’m pleased when books by economists fly off the shelves. Of course, I shouldn’t be surprised. A survey last year found that over 80% of people said that economics was relevant, or very relevant, to their everyday lives and yet how many of us truly understand the mathematical models or assumptions (rationale economic man anyone!) that underpin economics and drive our political and policy choices. As Andy Haldane, Chief Economist at the Bank of England has gone on record saying following the financial crash, it was not only the neoclassical model of the economy that was ‘found to be lame’, but that policy makers place too much reliance on narrow technical models, to our peril.
As the author notes in her conclusion, it could be argued that her view is optimistic, naïve even, given the challenges of globalisation, climate change, conflict and widening inequalities across the world. But surely, therein lies the reason why her views, and others like them, might just work.