Doughnut Economics: a feminist economic philosophy
Lauded, in that time-worn and relentlessly parochial way, as the “father of economics”, Adam Smith wrote his his magnum opus An Inquiry into the Nature and Causes of the Wealth of Nations in 1776. It set the terms for economic debate and discussion for the next century and a half. Economists J.M. Keynes and Milton Friedman reworked Smith’s theories for the 20th century and their theories dominate the economic theory taught in universities all over the world. Policymakers who will shape this century are being taught ideas out of the textbooks of 1950, based on theories drawn up in 1850.
Putting it simply, 20th century economic theory says “growth is good”. But with governments across the world declaring a climate crisis, humanitarian crises deepening, and global suicide rates rising amongst many, many other things, it is clear that this is not working. One of the biggest holes in this theory is ignoring the unpaid work of carers - mostly women - though no economy could function without them. Perhaps injecting economics with a good dose of feminism will fix it?
Daddy Economics Adam Smith was a huge racist. And, when he wrote The Wealth of Nations he was 43, unmarried with no kids, and he had just moved back in with his mum. It really matters who writes about economics.
At the Auckland Writers Festival in May, economist Kate Raworth argued that the basic principles of our economy were designed along the idea of ‘rational man’ which is a concept that simply doesn’t exist in reality. Asking us to visualise, Raworth said, “If you took a selfie of 20th century economics, you would see the figure of a man with self interest in his heart”. But humans are not the rational economic man – and we need to redesign the idea that our economies run on the principle of humans acting constantly in profit motivated, rational self interest.
With her internationally-acclaimed book ‘Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist’, Raworth may have cracked it. The book has been translated into 15 languages and has won a cult following among executives, government officials and urban designers. The book has a blunt message: Flaws embedded in conventional economic theory are behind everything from extreme inequality to the exploitation of women to the climate breakdown and pollution that threaten life on Earth.
Raworth says “Instead of economies that need to grow, whether or not they make us thrive, we need economies that “make us thrive, whether or not they grow”.
But the book doesn’t just smash the widely accepted economic wisdom. It sets out a new philosophy summed up in the image of the doughnut. The inner circle represents the “social foundation” — the natural resources that the human race needs to thrive. The outer circle represents the “environmental ceiling” — the limits of what nature can safely give. Inside the doughnut hole, people are deprived; while outside the doughnut, they are consuming too much.
Raworth believes that if we can retool economics to keep us somewhere safely between these two extremes, then we may yet avert civilization-collapsing disaster.
As well as describing a better world, this model allows us to see, in immediate and comprehensible terms, the state in which we now find ourselves. At the moment we transgress both lines. Billions of people still live in the hole in the middle. We have breached the outer boundary in several places, as the image below shows us.
We need to put two principles at the heart of 21st century economics: It must be distributive and regenerative by design. Think renewable energy, open source software, and employee-owned or community-owned companies as this philosophy in action. Raworth summed it up as: “Keep atoms local, bits can go global”.
In the q&a part of the session, an audience member asked “Is Doughnut economics feminist?” Raworth replied, “Absolutely because at the heart of economics is the unpaid work of women in the home and their communities”.
Doughnut Economics sets out a new world order that demands transformative innovation and aims to deliver a new economic model that allows us to thrive while saving the planet. Sounds like what modern progressive dreams are made of. But to truly achieve its goals, we have to confront the “power relations” elephant in the room. We need a democratic working-class politics that can confront entrenched interests. Are we brave enough to take on this challenge?
- Anna Beard, Insights Specialist