Free Essay. Doughnut Economics: 7 Ways to Think Like a 21st Century Economist

Published: 2023-03-17
Free Essay. Doughnut Economics: 7 Ways to Think Like a 21st Century Economist
Type of paper:  Essay
Categories:  Knowledge Economics Books
Pages: 7
Wordcount: 1795 words
15 min read

Economics is paramount to public policy. It is dominating the way we make our decisions for the future, guiding investments of multi-billion dollars, and shaping the way we respond to climate change, inequalities, and other social and environmental challenges defining our times. However, the fundamental ideas of economics are far much outdated over centuries. Yet, worldwide college courses are still teaching them and are still utilized when addressing critical issues in business and government. This essay will be developing its discussion, reviews, and insights from Kate Raworth's book: Doughnut Economics: 7 Ways to Think Like a 21st Century Economist" pertaining to the issue of economics.

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By 2050, human societies will be shaped by influential policymakers, economic students, and citizens. However, the economic mindsets that are being taught trace back its roots to the 1950s textbooks, which in turn, are based on the 1850s theories. The 21st Century has such experiences as such challenges as financial crises, extreme inequalities, and climate, thus, could be shaped disastrously. If we keep sticking to economic storybooks from the previous centuries, we are definitely standing a little chance of being able to write new economic stories that fit our times.

Renegade economist Kate Raworth thinks that it is time to start revising the way the thoughts of economics are for the 21st Century. In Doughnut Economics, she highlights seven significant approaches for fundamental reframing the understanding of what economics is and does. In her writing, she points out how the addition to growth can be strategically broken, that is, redesigning money, Along the way, she points out how we can break our addiction to growth; redesign money, business, and finance in order to serve people; and as well as creating economic designs which are distributive and regenerative.

The book is pursuing an ambitious goal: that is, to formulate a new set of rules and insights that will be guiding the global economy and aid in tackling challenges common in the present day. Kate Raworth displays a clear vision that is inspirational to interested academic readers. The books manifest the significance of images in the way the world is understood as built around her conviction that images are crucial in how we understand the world. Raworth utilizes metaphors ranging from a Polanyiesque embedding of an economy that is nestling within society and Earth, to the Doughnut. An intuitive image of the Doughnut has been used: its interior represents human deprivation, and the exterior represents planetary degradation. Between them are rings layers. The "social foundation" ring and the "ecological ceiling" ring have the "safe and just space for humanity" as shown in the figure below:


The book is typically to be symbolic by the use of Doughnut, especially for an instance where the 21st Century goals get into the Doughnut; the readers are invoked to figure out the economic mindsets will be giving out the best chances of attaining the goals. Raworth's book is revolutionary and contrarian while dissecting seven fundamental principles of economics that she wishes to have them updated on the verge of making the discipline of economics to be useful. She highlights the seven ways that will facilitate thinking like an economist of the 21st Century as follows:

Change of goal, whereby, in order to measure progress, such predominant factor as GDP has to be abolished as the 21st-century calls for economic goals which are far more global and ambitious, essential to meet the needs in the planet;

Asking about the contribution of the economy in a wider perspective, that is 'seeing the big picture' - whereby the market is not self-contained, and that the society is where the economy has been embedded more as opposed to the way it is assumed by the economists;

Nurture human nature rather than the unworthy people who are isolated and self-interested. Time has come to have new portraits of humanity being embedded in the hearts of economic theories so that the economies can start nurturing the best out of human nature. This strategy gives us a greater chance to thrive together;

Get savvy with systems that are, having thought to revolve around feedback loops and the system rather than the mechanical equilibria dictated by supplies and demands. The economists of 21st-century economists are embracing evolutionary thinking and complexity. When economics have dynamic thinking at their heart, new insights are opened up that will be vital for understanding financial markets. The economy, therefore, has to be a system that is ever-evolving;

Developing a design that will be distributive instead of debunking just as in Kuznets Curve's 'growth will produce equality.' extreme inequality is a design failure. The 21st-century economists recognize the fact that there are several approaches to designing economies to be far more value distributive generation. This implies that it is surpassing beyond income redistribution income to wealth pre-distribution, like the wealth lying in the land control, enterprise, and the power of creating money;

Having a creation that regenerates rather than debunking equally as in the Environmental Kuznets Curve's 'growth will clean it up.' Environmental degradation is resulting from an industrial design that is degenerative. The 21st Century is calling for economic thinking which will be unleashing the potential of developing regenerative designs so as to enhance the creation of a circular, non-linear, economy as well as restore human participation in life's cyclical processes in Earth; and,

Prioritize on thriving people irrespective of the par of economic growth that is being 'agnostic about growth.' Our current economies need to grow, whether they are making us to thrive or not. Perspectives radically flip, thus inviting us to become agnostic about growth as well as exploring our economies in terms of learning to live with or without it. Economics are correctly addicted to growth in terms of such factors as finance, politics, and society.

Within the seven principles, three of them are claiming claim that growth does not lead to environmental regeneration or wealth redistribution and that generally, growth is a goal that cannot help. That is the reason behind Raworth's suggestion that by design, we ought to be regenerative and redistributive.

The way Raworth attentively chose words throughout the book has some attraction. For instance, when quoting George Lakoff, who is summarizing the US Conservatives' there is the usage of 'tax relief' in comparison to the US left's 'tax justice,' therefore, her significant aided her channeling of public outrage and widespread mobilizing demands for change. The book also has charming anecdotes, like, deriving Monopoly, the popular board game, originally from 'The Landlord's Game.'

In another instance, Raworth is suggesting that economists ought to metaphorically their careers from engineers to gardeners, which is ironic. She gives out a beautiful explanation that gardening involves the hands-on creation of conditions that are necessary for success. Her attractive and appealing metaphors, however, offer no kind of do real policy advice explaining the complicated issues which she is highlighting can be tacked. Instead, there are several statements in the book, for example, 'it is far smarter to create economies that are regenerative by design, restoring and renewing the local-to-global cycles of life on which human well-being depends;' (Raworth, 2017) and 'building diversity and redundancy into economic structures enhances the economy's resilience, making it far more effective in adapting to future shocks and pressures' (Raworth, 2017). Raworth's policy does not practically dwell on such matters as tackling the complexities of economic and integrated environmental accounting as they are move outside what her idealistic vision has in its scope.

Raworth directs criticism to politicians and economists for dwelling on debates about growth, productivity, and economic efficiency, and still hesitates to speak about fairness, rights, and justice, without coming up with policy recommendations which are tangible. She is agitating for having humanity brought at the heart of economic thoughts and is criticizing the likes of the London School of Economics and Harvard, whom she seems to have promoted research for "top" journals, as the journals simply maintain the status quo. She needs a change that will ensure that philosophy and history are taught alongside economics. Her suggestion is useful to the universities and glitters hope against the world's current state, which is gloomy.

Raworth had commendable intentions. The world needs to move away from such organization supremacies as ultra-competition and infinite growth. Her book has opened an essential conversation space for different economists to air their voices in a quest to enhance a better living in the future. Even with the book's several strengths, the question of whether its aspirations were met arises.

The use of Doughnut as an eponymous alternative model in the book poses a question. Established research is built on the Doughnut. The science of the earth system, regarding the framework of planetary boundaries, has been drawn to develop the dimensions of its environment; that is, the "critical ecological degradation" for the outer sphere and the Doughnut's outer boundary in the ecological ceiling. For inner boundary of the Doughnut, that is the social foundation of the "safe and just space for humanity," the author applied the use a boiled-down version of the 17 Sustainable Development Goals (SDGs) of the United Nations to develop floor that will be preventing the inner hole of the Doughnut, that is the "critical social deprivation." The symbolic Doughnut has simplicity as both its greatest strength as well as its greatest weakness since it is establishing questionable conventional wisdom being constituted. The book has drawn SDGs' governance framework, which is universally accepted; however, it has ignored the environmental dimensions from the SDGs. Furthermore, this implies that the Doughnut has made no efforts towards accounting for and even replicating the blind spots of both frameworks. The arts and culture have been ignored in the social sphere, which is also sidelined by the SDGs. Besides, both frameworks have not acknowledged the required trade-offs, for instance, which will be essential between SDGs' sustainable consumption and production, and SDGs' climate action; and does not have critical discussions pertaining to the boundaries or goals which have to be taken precedence.

Secondly, there is a risk of the universal aspiration of the Doughnut being inapplicable to any specific contents. In Chapter 1, pages 28-44 of the book, Raworth gives very little information detailing on her identification of the inner ring of "social foundation" in the Doughnut, sending twelve constituting factors that constitute it. With the inadequate information that regards the source of data for individual indicators (besides the referencing done on the table), one can deduce that the book is predominantly aiming at the interested public, instead of narrowing it down to an academic audience. However, it is clear that Raworth took some liberties with both the SDGs and frameworks for planetary boundaries without a proper explanation on why and how. How and why.

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