# Doughnut Economics  ## Metadata - Author: [[Kate Raworth]] - Full Title: Doughnut Economics - Category: #books ## Highlights - As the ingenious twentieth-century inventor Buckminster Fuller once said, ‘You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.’ ([Location 99](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=99)) - Tags: [[Economics]] - Worldwide, one person in nine does not have enough to eat. ([Location 114](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=114)) - Tags: [[Economics]] - Two billion people live on less than $3 a day and over 70 million young women and men are unable to find work. ([Location 116](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=116)) - Tags: [[Economics]] - as of 2015 the world’s richest 1% now own more wealth than all the other 99% put together. ([Location 119](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=119)) - Tags: [[Economics]] - over 80% of the world’s fisheries are fully or over-exploited and a refuse truck’s worth of plastic is dumped into the ocean every minute: at this rate, by 2050 there will be more plastic than fish in the sea. ([Location 126](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=126)) - Tags: [[Economics]] - The global middle class – those spending between $10 and $100 a day – is set to expand rapidly, from 2 billion today to 5 billion by 2030, bringing a surge in demand for construction materials and consumer products. ([Location 132](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=132)) - Tags: [[Economics]] - Back in the 1930s, John Maynard Keynes – the Englishman whose ideas would transform post-war economics – was already worrying about the role played by his profession. ([Location 148](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=148)) - Tags: [[Economics]] - The Austrian economist Friedrich von Hayek, best known as the 1940s father of neoliberalism, ([Location 152](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=152)) - Tags: [[Economics]] - Humanity’s journey through the twenty-first century will be led by the policymakers, entrepreneurs, teachers, journalists, community organisers, activists and voters who are being educated today. But these citizens of 2050 are being taught an economic mindset that is rooted in the textbooks of 1950, which in turn are rooted in the theories of 1850. Given the fast-changing nature of the twenty-first century, this is shaping up to be a disaster. ([Location 171](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=171)) - Tags: [[Economics]] - Below the inner ring – the social foundation – lie critical human deprivations such as hunger and illiteracy. Beyond the outer ring – the ecological ceiling – lies critical planetary degradation such as climate change and biodiversity loss. ([Location 203](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=203)) - Tags: [[Economics]] - Between those two rings is the Doughnut itself, the space in which we can meet the needs of all within the means of the planet. ([Location 205](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=205)) - Tags: [[Economics]] - It draws on diverse schools of thought, such as complexity, ecological, feminist, institutional and behavioural economics. They are all rich with insight but there is still a risk that they will remain separated in silos, each school of thought nestled in its own journals, conferences, blogs, textbooks and teaching posts, cultivating its niche critique of last century’s thinking. The real breakthrough lies, of course, in combining what they each have to offer and to discover what happens when they dance on the same page, which is just what this book sets out to do. Humanity faces some formidable challenges, and it is in no small part thanks to the blind spots and mistaken metaphors of outdated economic thinking that we have ended up here. ([Location 216](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=216)) - ‘Students must learn how to discard old ideas, how and when to replace them … how to learn, unlearn, and relearn,’ wrote the futurist Alvin Toffler. ([Location 222](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=222)) - Tags: [[Economics]] - From prehistoric cave paintings to the map of the London Underground, images, diagrams and charts have long been at the heart of human storytelling. The reason why is simple: our brains are wired for visuals. ‘Seeing comes before words. The child looks and recognizes before it speaks,’ wrote the media theorist John Berger in the opening lines of his 1972 classic, Ways of Seeing.23 Neuroscience has since confirmed the dominant role of visualisation in human cognition. Half of the nerve fibres in our brains are linked to our vision and, when our eyes are open, vision accounts for two-thirds of the electrical activity in the brain. It takes just 150 milliseconds for the brain to recognise an image and a mere 100 milliseconds more to attach a meaning to it.24 Although we have blind spots in both of our eyes – where the optic nerve attaches to the retina – the brain deftly steps in to create the seamless illusion of a whole.25 ([Location 230](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=230)) - Tags: [[Economics]] - As a result, we are born pattern-spotters, seeing faces in the clouds, ghosts in the shadows, and mythical beasts in the stars. And we learn best when there are pictures to look at. As the visual literacy expert Lynell Burmark explains, ‘unless our words, concepts and ideas are hooked onto an image, they will go in one ear, sail through the brain, and go out of the other ear. Words are processed by our short-term memory where we can only retain about seven bits of information … Images, on the other hand, go directly into long-term memory where they are indelibly etched.’ ([Location 239](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=239)) - Tags: [[Economics]] - In the 1970s, sociologist Erving Goffmann introduced the concept of ‘framing’ – in the sense that each of us views the world through a mental picture frame – to show that the way we make sense out of our jumble of experience delineates what we can then see. ([Location 357](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=357)) - Tags: [[Economics]] - Pre-analytic vision. Worldview. Paradigm. Frame. These are cousin concepts. What matters more than the one you choose to use is to realise that you have one in the first place, because then you have the power to question and change it. ([Location 360](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=360)) - Tags: [[Economics]] - The difficulty lies not in the new ideas, but in the old ones which ramify, for those of us brought up as most of us have been, into every corner of our minds.’ ([Location 364](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=364)) - Tags: [[Economics]] - The possibility of shaking off old mental models is enticing, but the quest for new ones comes with caveats. First, always remember that ‘the map is not the territory’, as the philosopher Alfred Korzybski put it: every model can only ever be a model, a necessary simplification of the world, and one that should never be mistaken for the real thing. Second, there is no correct pre-analytic vision, true paradigm or perfect frame out there to be discovered. In the deft words of the statistician George Box, ‘All models are wrong, but some are useful.’39 Rethinking economics is not about finding the correct one (because it doesn’t exist), it’s about choosing or creating one that best serves our purpose – reflecting the context we face, the values we hold, and the aims we have. As humanity’s context, values, and aims continually evolve, so too should the way that we envision the economy. ([Location 366](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=366)) - Tags: [[Economics]] - There may be no perfect frame waiting to be found but, argues the cognitive linguist George Lakoff, it is absolutely essential to have a compelling alternative frame if the old one is ever to be debunked. Simply rebutting the dominant frame will, ironically, only serve to reinforce it. And without an alternative to offer, there is little chance of entering, let alone winning, the battle of ideas. ([Location 373](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=373)) - Tags: [[Economics]] - At the heart of mainstream economic thinking is a handful of diagrams that have wordlessly but powerfully framed the way we are taught to understand the economic world – and they are all out of date, blinkered, or downright wrong. They may lie hidden from view but they deeply frame the way we think about economics in the classroom, in government, in the boardroom, in the media, and in the street. If we want to write a new economic story, we must draw new pictures that leave the old ones lying in the pages of last century’s textbooks. ([Location 396](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=396)) - Tags: [[Economics]] - First, change the goal. 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. And that goal is encapsulated in the concept of the Doughnut. The challenge now is to create economies – local to global – that help to bring all of humanity into the Doughnut’s safe and just space. Instead of pursuing ever-increasing GDP, it is time to discover how to thrive in balance. ([Location 414](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=414)) - Tags: [[Economics]] - Second, see the big picture. Mainstream economics depicts the whole economy with just one, extremely limited image, the Circular Flow diagram. Its limitations have, furthermore, been used to reinforce a neoliberal narrative about the efficiency of the market, the incompetence of the state, the domesticity of the household, and the tragedy of the commons. It is time to draw the economy anew, embedding it within society and within nature, and powered by the sun. This new depiction invites new narratives – about the power of the market, the partnership of the state, the core role of the household, and the creativity of the commons. Third, nurture human nature. At the heart of twentieth-century economics stands the portrait of rational economic man: he has told us that we are self-interested, isolated, calculating, fixed in taste, and dominant over nature – and his portrait has shaped who we have become. But human nature is far richer than this, as early sketches of our new self-portrait reveal: we are social, interdependent, approximating, fluid in values, and dependent upon the living world. What’s more, it is indeed possible to nurture human nature in ways that give us a far greater chance of getting into the Doughnut’s safe and just space. ([Location 421](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=421)) - Tags: [[Economics]] - Fourth, get savvy with systems. The iconic criss-cross of the market’s supply and demand curves is the first diagram that every economics student encounters, but it is rooted in misplaced nineteenth-century metaphors of mechanical equilibrium. A far smarter starting point for understanding the economy’s dynamism is systems thinking, summed up by a simple pair of feedback loops. Putting such dynamics at the heart of economics opens up many new insights, from the boom and bust of financial markets to the self-reinforcing nature of economic inequality and the tipping points of climate change. It’s time to stop searching for the economy’s elusive control levers and start stewarding it as an ever-evolving complex system. Fifth, design to distribute. In the twentieth century, one simple curve – the Kuznets Curve – whispered a powerful message on inequality: it has to get worse before it can get better, and growth will (eventually) even it up. But inequality, it turns out, is not an economic necessity: it is a design failure. Twenty-first-century economists will recognise that there are many ways to design economies to be far more distributive… ([Location 430](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=430)) - Tags: [[Economics]] - Sixth, create to regenerate. Economic theory has long portrayed a ‘clean’ environment as a luxury good, affordable only for the well-off. This view was reinforced by the Environmental Kuznets Curve, which once again whispered that pollution has to get worse before it can get better, and growth will (eventually) clean it up. But there is no such law: ecological degradation is simply the result of degenerative industrial design. This century needs economic thinking that unleashes regenerative design in… ([Location 441](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=441)) - Tags: [[Economics]] - Seventh, be agnostic about growth. One diagram in economic theory is so dangerous that it is never actually drawn: the long-term path of GDP growth. Mainstream economics views endless economic growth as a must, but nothing in nature grows for ever and the attempt to buck that trend is raising tough questions in high-income but low-growth countries. It may not be hard to give up having GDP growth as an economic goal, but it is going to be far harder to overcome our addiction to it. Today we have economies that need to grow, whether or not they make us thrive: what we need are economies that make us thrive, whether or not they grow. That radical flip in perspective invites us to… ([Location 446](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=446)) - Tags: [[Economics]] - Once a year the leaders of the world’s most powerful countries meet to discuss the global economy. In 2014, for instance, they met in Brisbane, Australia, where they discussed global trade, infrastructure, jobs and financial reform, stroked koalas for the cameras, and then rallied behind one overriding ambition. ‘G20 leaders pledge to grow their economies by 2.1%’ trumpeted the global news headlines – adding that this was more ambitious than the 2.0% that they had initially intended to target.1 How did it come to this? The G20’s pledge was announced just days after the Intergovernmental Panel on Climate Change warned that the world faces ‘severe, pervasive and irreversible’ damage from rising greenhouse gas emissions. But the summit’s Australian host, then Prime Minister Tony Abbott, had been determined to stop the meeting’s agenda from being ‘cluttered’ by climate change and other issues that could distract from his top priority of economic growth, otherwise known as GDP growth.2 Measured as the market value of goods and services produced within a nation’s borders in a year, GDP (Gross Domestic Product) has long been used as the leading indicator of economic health. But in the context of today’s social and ecological crises, how can this single, narrow metric still command such international attention? ([Location 464](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=464)) - Tags: [[Economics]] - To any ornithologist, the answer would be obvious: GDP is a cuckoo in the economic nest. And to understand why you need to know a thing or two about cuckoos, because they are wily birds. Rather than raise their own offspring, they surreptitiously lay their eggs in the unguarded nests of other birds. The unsuspecting foster parents dutifully incubate the interloper’s egg along with their own. But the cuckoo chick hatches early, kicks other eggs and young out of the nest, then emits rapid calls to mimic a nest full of hungry offspring. This takeover tactic works: the foster parents busily feed their oversized tenant as it grows absurdly large, bulging out of the tiny nest it has occupied. It’s a powerful warning to other birds: leave your nest unattended and it may well get hijacked. ([Location 475](https://readwise.io/to_kindle?action=open&asin=B01BUOGF58&location=475)) - Tags: [[Economics]]