LF Excerpts: Reality-based Economics with Renegade Economist, Kate Raworth

Throw out what you think you know about economics. This week, self-described renegade economist Kate Raworth of Oxford University explains how to think like a reality-based economist. And two ecofeminists, one from South Africa the other Mauritius, share a chat under a tree about Marx, feminism, and life on the planet. 

Laura Flanders:Throw out the growth curve. Embrace the doughnut. What the world needs now is planetary, not flat-plane economics. That is the message of a new book by self-described renegade economist, Kate Raworth. For too long our mind's eye map of our economy has been all wrong, she says. Simplistic on its face, wrongheaded in what it tries to depict, and altogether not helpful to a reality-based world with limited human and planetary resources. Lucky for us, Kate's got a fix, seven ways to think like a 21st century economist, and as befits her concern with images and maps, she has sketched out a new picture, not an ever-rising takeoff line or even a humpbacked cosmic curve. It's concentric circles, hence the title of her book, Doughnut Economics. Raworth's an advisory member at Oxford University's Environmental Change Institute and teaches in its masters program for environmental change and management. She's in the United States on a book tour. The book's just out from Chelsea Green Press. Welcome to the program, Kate. Great to have you.

Kate Raworth:My pleasure.

Laura Flanders:So, tell the story of how our map of the economy got so poorly diagrammed and what GIs had to do with it.

Kate Raworth:Well, poor old Simon Kuznets back in the 1930s, the American government asked him to come up with a measure of national income, which he did. And he said when he first produced it, "Don't mistake this for the welfare of the nation." His caveat got put aside because once there was a single number of what the economy was worth and you could compare it to other countries and look at it year and year, we got hooked on growth.

Laura Flanders:And you had that nice little upward going on.

Kate Raworth:That's right. So, this curve. The picture of what economic success looks like in our minds is this ever rising line that just goes up, up, up, up. Endless growth.

Laura Flanders:And what's the problem with that picture?

Kate Raworth:The problem with that picture is if you think about nature, 3.8 billion years of experimentation, nothing in nature from your children's feet to the Amazon forest, nothing grows forever. Things in nature, they grow, healthy phase, but then they mature and come to thrive. What I find extraordinary is that when I studied economics at university and I'll bet anyone studying now, the question as to whether an economy comes to a maturity point and then thrives, it's not asked. What if the economy can't grow forever? What would it look like to create an economy that didn't try to grow forever, but that it thrived? I think these are questions we need to start asking.

Laura Flanders:So, what does it matter if we have a wrong image, and hasn't it been corrected and debunked and challenged?

Kate Raworth:So imagery, what I've learned is imagery is incredibly powerful, and if you open an economics textbook it's full of words, it's full of way too many equations, and often there's a little picture on the side as if just a mere illustration, but any neuroscientist will tell you that over half of the nerve fibers in your brain are serving your visual cortex, and any image goes into the back of your brain and it sit there. It lingers like economic graffiti long after the words and equations have faded. So, we really should pay a lot of attention to the pictures that we use to draw what the economy is and what it's for and who we are and how it works.

Laura Flanders:All right, so you've come up with a picture. It's very different. It's those concentric circles. You call it a doughnut. What's that?

Kate Raworth:I call it a doughnut, so just like the kind of doughnut you guys eat here with a hole in the middle, so imaging that doughnut. In the middle in the hole, that's a space where people are falling short on life's essentials, be it food, water, decent housing, healthcare, education, political voice, so we want everybody in the world to get out of that space of deprivation over what I've called a social foundation, so everybody can lead a life of dignity, opportunity, and community. But we mustn't go beyond the doughnut's outer crust because out there we are overshooting our pressure on the planet causing climate change, acidifying the oceans, massive biodiversity laws, depleting the ozone layer, and we know that these earth system processes, the earth system scientists have said they are like planetary boundaries. They are keeping our planetary home, this extraordinary living planet in the stable state that's so benevolent to us for the past 11,000 years, and we'd be crazy to kick ourselves out. So, we have to get everybody out of the hole in the middle without going over the outer edge.

Laura Flanders:All right. So, what are our tools for doing that if we want to live in that sweet spot, jammy center, if you will?

Kate Raworth:So, till now for the last hundred years let's say, it's been growth. Growth has been the way to get everybody out of deprivation, and economists, because of the pictures they've drawn, haven't even acknowledged the existence of the living world. Well, they haven't worried about. They've called it an externality. Well, when you call something an externality, you've already told me how important you think it isn't. So, economists have worried about getting everybody out of the center, ending poverty. Now we have to have new tools and new ways of thinking to do that at the same time as coming back in. We need to debunk that growth theory, that growth obsession. Actually, I think there are two ideas we need to pursue. We need to create economies that are distributed by design in which the value created is shared far more widely with everybody who helped create it, and we need to create economies that are regenerative by design so that they work earth's living cyclical processes rather than cutting against them.

For 200 years, industrial activity has been based on degenerative design. We take earth's materials, make them into stuff we want, use it for a while, and then toss it away. Take, make, use, lose. It's a one-way system that runs counter to the living world and it's devouring the sources of its own sustenance. Economic theory has told us not to worry, that more growth is needed so that nations can afford to clean things up. But at the global scale, that's simply not true and the effects are destroying earth's life support systems on which we all fundamentally depend.

We can't wait for growth to clean things up because it won't. We need to turn today's economies, which are degenerative by default, into ones that are regenerative by design, ones that run on renewable energy that turn waste from one process into food for the next so that things are never used up, but are used again and again. And in all this, the 21st century economist's role is a crucial one, to harness the potential of business and finance of the commons and the state and of human nature to unleash this regenerative future.

Laura Flanders:Now, you make the point that this will require us to consider a whole lot of players that are not usually in what you describe as the neoliberal script. Name some of them.

Kate Raworth:So, the neoliberal script, and I would say it's the script that's been put on the international stage ever since Thatcher and Reagan came to power, well it's a story that starts the market because the market we're told is efficient so you should give it free rein. Finance, well that, we're told, infallible. Trust in its ways. Trade is win-win. Open your borders. So, we just get out of the way. Players that are ushered off stage, not needed to be seen, the household. That's domestic, right? Just leave it to the women. The commons, well everybody's heard the commons are tragic, so we can just sell them off, privatize those. Earth, earth is inexhaustible so you can take all you want. So, all these essentials of life in the world have actually been marginalized for mainstream economics. You can't even see them in the diagrams. They don't get featured. And when you leave something out of the picture, it gets exploited, crushed, and that comes back to bite you.

Laura Flanders:And the big character we've been encouraged to focus on is that rational man. You have a problem with him, too.

Kate Raworth:I have a big problem with him, actually. So if you read the textbooks, he's never actually drawn. His portrait isn't drawn, but if it was, he'd have to be a man.

Laura Flanders:Of course.

Kate Raworth:He'd be standing alone. He'd have money in his hand, ego in his heart, calculator in his head, and nature at his feed, and the trouble with him is not just how absurdly narrow he is. In fact, one of the fascinating things I learned researching this book is that on being told that he's like us, we actually become more like him. So, research in this country, in the US, in Israel, has found that the more that economic students learn about rational economic man, the more they value self-interest, the less value they give to compassion, to altruism. It's as if I need to become like this model. So, he began as a model of man, he's become a model for man. So it really matters how we tell ourselves who are because that shapes who we actually become.

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