What is Doughnut Economics?
“For over 70 years economics has been fixated on GDP, or national output, as its primary measure of progress. That fixation has been used to justify extreme inequalities of income and wealth coupled with unprecedented destruction of the living world. For the twenty-first century a far bigger goal is needed: meeting the human rights of every person within the means of our life-giving planet.” – Kate Raworth
The goal of meeting the needs of all people within the means of the living planet can’t happen with our current economic thinking, policies, or institutions.
Doughnut Economics calls for an economic mindset more appropriate for the context and challenges of the 21st century, by drawing on insights from diverse schools of economic thought – including ecological, feminist, institutional, behavioral, and complexity economics.
Oxford economist Kate Raworth has set out seven principles for thinking like a 21st-century economist in order to bring the world’s economies into a safe and just space for humanity:
- Embrace a new goal. Our economies are currently based on the goal of endless GDP growth, which fails to meet all our needs as it damages our planet. It is time to work toward a new goal: thriving in a safe and just space, or, as we like to call it, getting into the Doughnut!
- See the big picture. We often hear about the power of the market to provide for us, but we must take a step back to see the big picture of the economy as embedded within, and dependent upon, society and the living world.
- Nurture human nature. Doughnut Economics recognizes that humans aren’t just self-centered, acting in isolation, or behaving in predictably “rational” ways, but are caring beings, adapting to their social context, and can nurture cooperation.
- Think in systems. Doughnut Economics understands that economies are nonlinear complex adaptive systems like the roots of a forest, with independent agents, and not based on linear, reductionistic, or equilibrium models like the cogs of a machine.
- Be distributive. Extreme inequality is a design failure of our current economic system. We recognize that there are many ways to design economies to be far more distributive of value among those who help to generate it.
- Be regenerative. Environmental degradation is the result of degenerative industrial design. We can create a truly circular economy instead of thinking that someone else will clean up our mess.
- Aim to thrive rather than to grow. It is time for us to recognize that nothing grows forever – living systems also need time to mature. Doughnut Economics rejects the idea that economies should grow whether or not they make us thrive, and advocates for an economy that makes us thrive whether or not it grows.
What is the Doughnut?
The Doughnut is the core concept at the heart of Doughnut Economics. It can serve as a compass for thriving humanity in the 21st century that meets the needs of all people within the means of the living planet.
The Doughnut consists of two concentric rings forming a doughnut-shaped space, where humanity can thrive in a space both ecologically safe and socially just, between two boundaries. The Ecological Ceiling ensures that humanity does not collectively overshoot the planetary boundaries that protect Earth’s life-supporting systems. The Social Foundation ensures that no one is left falling short on life’s essentials.
Designing the Doughnut
The Doughnut Economics Action Lab (DEAL) has run workshops for businesses, city departments, foundations, and other organizations that want to explore this question, and the implications are transformational.
At the heart of these workshops is a focus on design, but not the design of products or services or even office buildings, but the design of the organization itself.
Five key design traits profoundly shape an organization’s ability to become regenerative and distributive by design, and so help bring humanity into the Doughnut:
