Doughnuts: Utopian and Scientific

I delayed reading Kate Raworth’s 2017 book, Doughnut Economics for too long. I have often heard it cited as a foundation of a new sustainable economics, but over the years I have been disappointed by too many books and talks with similar promises. Most are delivered with a zealous belief that economic theory has never thought of the issue of concern and is blissfully ignorant of some key truth. And they often end up in “panacea economics”: if we just used different economic measures/counted unpaid work/valued caring or the environment/controlled bank credit/used alternative currencies/introduced this or that tax/etc, we would solve our economic problems.

There is nothing wrong with many of these proposals, and I have been part of researching and advocating for a few of them, but they become panacea economics when they are held up as simple and singular answers to fundamental structural issues.

Against this background, I was pleased to find that Raworth’s Doughnut Economics was of a different order. While some of her historical analysis and her call to reimagine economics as a doughnut (rather than a linear progression) have hallmarks of panacea writing, she is clear that her work is not a singular answer but only an entry point to a new (and still-to-be-developed) economic thinking. However, I still found the book hugely frustrating and hopelessly utopian – for reasons I will explain that later.

The doughnut

The economic doughnut is a “safe and just space for humanity” in between a social foundation level below which people’s basics needs are not met, and an ecological ceiling above which the economy is damaging the planet. As a concept, it is similar to the Goldilocks zone in astronomy where planets that could sustain life need to be within a given range of distances from their star (not too hot, not too cold).

The basic diagram of the economy as a doughnut, with the inner edge – the social foundation – defined by 12 basics, including food, water and sanitation, energy, healthcare, housing, education, a minimum income, and support networks, as well as social and political equality, peace and justice. On the outer edge, the ecological limits are defined by 9 ecological crises including climate change, biodiversity loss, land and water degradation and various pollutions.

The metaphor of the doughnut is useful, and made more powerful by Raworth’s explanation of the role of simple diagrams in capturing mainstream economics and selling a particular way of thinking. The basic supply and demand graph, the circular flow diagrams of the economy, and the economic development curves which legitimate increasing equality, all shape our understanding of the economy. They also limit other ways of thinking. Hence the need to draw a different diagram of how the economy works in the real world.

But the doughnut is more than just a summary image to define the terrain and task of economics. The doughnut is populated by very specific and real issues. As per the diagram above, the inner edge – the social foundation – is defined by 12 basics needs, and the outer edge, is defined by 9 specific series of ecological limitations.

These components are all measurable and can be plotted on the doughnut to see which areas are in shortfall and where we are exceeding our ecological limits. In the following diagram, the dark wedges below the social foundation show the proportion of people worldwide falling short of those particular basic needs, while the dark wedges beyond the ecological ceiling show where we are overshooting the planetary boundaries. (The appendix of the book has the actual data).

The doughnut diagram showing which areas are in shortfall (all, in different proportions) or exceeding ecological limits (climate, biodiversity loss, land conservtaion, and nitrogen and phosphorous loading).

As an image of our economy, this doughnut is more useful and nuanced than the traditional graph of every-growing Gross Domestic Product (GDP), but of itself it tells us very little about how to get to that safe place or the dynamics within that space. And it is in that explanation that the doughnut starts going stale.

Critique

Having set out the context and the challenge of this new economic thinking, much of the book is then about the barriers and pathways to get to the sweet-spot of what she calls the regenerative and distributive economy.

The distributive economy has distribution and fairness as central to its structure, rather than as a social afterthought once the economy has happened. It requires s shift from a faith that growth will eventually lead to greater equality to more purposeful actions to address inequality.

The regenerative economy requires a similar shift from a linear economy (natural resources -> production -> use -> waste) to a circular economy designed not just to reuse resources, but also to regenerate natural processes.

It is hard to argue with the vision or the social and ecological imperatives at play, but the whole discussion proceeds as if the economy is designed by rational thought operationalising particular theories. In contrast to the work of Erik Olin Wright that I have examined previously, in Doughnut Economics there is no sense of economic relations as being conflictual processes for control and use of resources, or of class or institutional formation around those interests. There is no theory of state power, and vested interests are limited to a few paragraphs on corporate backlash – presumably within a set of political rules and structures which are already set (in the sense that they are never questioned).

Thus, the barriers to change seem to be always about old and inappropriate ways of economic thinking – with the main culprits being the false assumptions and narrowness of economic theory, the blindness to the ecological and social base, and the addiction to growth. This is a familiar litany, but it is frustrating and at times misleading. For instance, most economics I have read understands that GDP measures production and is not a welfare measure. The goal of GDP growth is ubiquitous, but not for deep-seated psychological reasons or because of theoretical blindness. It is a goal because economic theory posits a relationship between production (GDP), employment and the quantity of money (and therefore inflation), and if GDP decreases there will be substantial unemployment and the deprivation of basic needs. This problem rates just two pages of discussion and is “solved” by a few tweaks to the tax system, shorter working weeks, and a hope of “innovative experiments”.

These innovative experiments are in fact key to Raworth’s path forward: the envisaged “economic evolution” is seen to happen one experiment at a time. Accordingly, much of the argument is a reprise of particular initiatives which address one or more of requirements of the new economy. When reading such lists, it is always hard to know the context of the initiatives, whether their claims are true and most importantly, whether they are quirky one-offs or replicable and scalable models for change.

The example closest to home is the Sundrop farm near Port Augusta which uses seawater and solar power to grow greenhouse tomatoes. While this is industrial-scale farming producing around 17,000 tonnes of tomatoes per year, the discussion begs the question – if this is an exemplar of a new approach, why is it singular? Why hasn’t the rest of the industry changed? The proposition that this is just because other producers are stuck in old ways of thinking appears shallow given the way that other innovations tend to spread across markets.

To be fair, Raworth acknowledges that state support will be needed to support the transition of these experiments into new economic practice, and much of her own activism has been towards informing government policy and frameworks. But there is little consideration of how or why the state would do this (whose interests it acts in), how it would get the money or regulatory power to intervene, or how it would overcome the opposition from the losers from such interventions. Presumably, a well-informed electorate simply votes such policies into existence.

It is in this sense that I mean the book is utopian – not a fiction, but (as the title of this post hints[1]), utopian in the Marxist sense. It lacks a macro-theory and program that could mobilise the power to force historic change. Changes in economic metaphors and individual case studies simply do not add up to the structural and material changes needed to create a new economy. I desperately wanted a broader political economic analysis.

That said, I also think the socialist movements that followed Marx were impoverished by their myopic focus on state power and their failure to incorporate “utopian” projects into a program of change.

Accordingly, I hope that it is possible to utilise Raworth’s doughnut economics framework in a more radical political economy.


[1]              The title is a play on Engels’ Socialism: Utopian and Scientific, where he distinguishes the “science” of Marxism grounded in material conditions from the previous religious and reformist socialisms based on paternalistic projects and rural and worker cooperatives. The science claims were always dubious, but distinction of materialist and idealist politics is useful.