The Rest Is Politics: Leading - 22: Kate Raworth: Doughnut economics and thriving in balance

Episode Date: June 12, 2023

In the 21st century, the impact of financial and environmental crises can be felt by all. But how do we marry the nature of the economy with the ever depleting means of the planet? Rory and Alastair discuss the radical doughnut economic model with economist Kate Raworth to unpick how it could work politically, and how it is already helping cities to thrive in balance. TRIP Plus: Become a member of The Rest Is Politics Plus to support the podcast, enjoy ad-free listening to both TRIP and Leading, benefit from discount book prices on titles mentioned on the pod, join our Discord chatroom, and receive early access to live show tickets and Question Time episodes. Just head to therestispolitics.com to sign up. Instagram: @restispolitics Twitter: @RestIsPolitics Email: [e-mail] Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Thanks for listening to The Restis Politics. Sign up to the Restis Politics Plus. To enjoy ad-free listening, receive a weekly newsletter, join our members chat room and gain early access to live show tickets. Just go to therestispolities.com. That's the restispoletics.com. Welcome to the Restis Politics leading with me, Alistair Campbell. And with me, Rory Stewart. And we're interviewing today a woman who is here, I have to say something by popular demand. We've had quite a lot of people saying, why don't you get Kate Rayworth on the podcast? And we'll describe you as a renegade economist.

I think that's how you describe yourself. I'll take that. As a renegade economist who feels that we have to cure ourselves of the obsession with growth in our economies, who wants us to think of the economy in a completely different way. She defines it as donut economics on which she wrote a book in 2017. And it's a theory, but it's also a theory that's being practiced in some. parts of the world, particularly at a local level, but I think she would like to see it happening at an international level. She's an academic at Oxford and at Amsterdam University, and she's

previously worked in overseas development at the Overseas Development Institute for the United Nations Development Programme for 12 years as a senior researcher at Oxfam. So I know she and Rory will have lots to talk about on the charitable front as well. So thank you for being here. Pleasure. Welcome. And I guess we'll get on to Donod. economics and what it is and what it, what you mean by it. But first of all, as an economist, I'd love to know your sense of how you see the debate about and around and in economics that happens in the political arena, starting maybe with the UK, but possibly more generally. Okay. So I feel that we are really stuck. Let's start with the UK, actually. I think we've

come to a very narrow political framing that I thought we were getting away from. Where in the recent months we've had politicians on both sides of the house saying the goal is growth, growth, growth. I find that alarming because we are destroying the only known living planet in the universe and billions of people worldwide and in this country cannot meet their most essential needs. So we should be rooting our economies in meeting the needs of all people within the means of this delicately balanced living planet. So how do you, as a politician though, if you, you're not going to say we want to grow the economy, the only alternative you have is to say we want to shrink the economy. No, you say we want to thrive. We want to thrive, right? I mean, growth is a wonderful, healthy phase of life. That's why we love to see our kids go. That's why we love to see our gardens grow. But nothing in nature succeeds by growing forever.

Everything in nature grows and then grows up and matures. And that's what enables it to thrive. That's why oak trees grow for 300. then they thrive. So hold on. So imagine you, I know you're not, but imagine you're a politician, okay, and imagine you're standing for office at the next election in the UK. How do you frame what you're saying as a political message? Because ultimately in a democracy, you've got to persuade people. And you're arguing for something fundamental as a change in the way we think about the economy and therefore the way we live. So I'm going to proactively argue for what we're for. We are for a UK that thrives. That means people have. good jobs in communities. Their kids go to good schools. They breathe clean air as they bike to

school. People feel respected and belong and they needed. We are regenerating UK nature, which is amongst the most depleted in the world. We are bringing back the life supporting systems of this country so we have fertile source so we can provide for ourselves. Isn't that what people actually want? It's a vision that makes far more sense on the doorstep than saying, oh, we want GDP to grow by 2% a year? Whose growth is that? Whose pockets does that get into? So I think it actually speaks much more to what people want, which is why these ideas are taking off in towns and cities and communities, because it makes sense to people in their lives. Kate, thank you very, very much for coming on the show. We're going to apply Alistair's golden tester strategy to you. So Alistair's

golden tester strategy, which I'm sure you know, along with all our listeners, is that you have to define donut economics in a word, a phrase, a sentence. and a paragraph. So very unfairly, would you mind beginning with your great idea of donut economics in that form? In a word? Donut. Definitely. Definitely on brand. Yeah. Vagod, yeah. In a phrase? Yeah. You've got to meet the needs of all people within the means of the living planet. Okay. In a paragraph? A sentence. In a sentence. That was kind of a sentence. That was my sentence. All right. You want a phrase? Stop trying to grow endlessly. It's time to thrive in balance. Yeah. And a paragraph? In a paragraph,

The 20th century economic obsession with endless growth is destroying the living planet and creating massive inequality. It is time instead of trying to grow endlessly to grow up and learn to thrive in balance so that we meet the needs of all people and we come back within the means of the only known living planet in the universe. What's not to like? Okay. Now, I'm now looking at a picture of your donut. It looks quite complicated to me. I'd like you to explain it to our listeners in a way that they're quite bright. But, you know, let's just assume that some of them aren't as bright as you and I are.

Oh, get off. Hey, hey. Very, very simple terms, explain your donut. Okay, think of a donut, the kind with a hole in the middle, right? And think of humanity's use of Earth's resources radiating out from the middle of that picture. The hole in the middle is a place where people are frustrated. falling short in the senses of life. It's where people do not have the resources they need for health and education and housing, political voice, income, right? These are the human rights

of all people. So leave no one in the whole. Get everybody out of that middle circle. But as humanity collectively use Earth's resources, we start putting pressure on the life support systems of our planetary home. We start to cause climate breakdown and we acidify the oceans and we create a hole in the ozone layer and we withdraw too much water. Is this the outside of the day? This is the outside ring, right? So leave no one in the hole, but don't go over the outer ring either, because there we break down the very planet that sustains us. So the sweet spot of the donut, in fact, the only, the donut itself, the sweet that you eat is that habitable zone between extreme poverty on the one hand and destroying the planet on the other. It's the zone where humans

ought to live. You got it. And so the shape of progress changes, right? The 20th century, and in fact, you still hear it in parliaments and in economics departments and in economics departments, today, I think it's the 20th century shape of progress. It's an exponential curve, an ever-rising line of growth that goes through the ceiling. The 21st century shape of progress is thriving in balance between that inner and outer circle. It's more like a heartbeat. And actually, I believe that if we're going to give ourselves half a chance politically and socially to learn this, we need to reconnect what we already know in our own bodies, right? Every one of us understands that health in the human body is about balance enough food but not too much enough heat but not too much

enough water oxygen you name it enough enough enough enough enough water oxygen you name it enough enough but not too much we get that and if something tries to grow endlessly in our bodies we call it cancer and we move in as fast as we can to end it we deeply understand that health lies in balance if we can take what we deeply understand in the human body to the planetary body and then move our political language and it's an appealing political language you can talk about thriving, right? It makes so much more sense in our life. I've never heard a politician have thrive in a slogan. I have. I'm hearing towns and cities and regions around the world. They're starting to talk about a thriving economy, living well within the means of the planet. This is to me the 21st century

politics we need. I'd love to sort of take you back to your earlier career and maybe begin with poverty in Africa. I guess you worked with the ODI in Africa, is that right? And then you worked later with Oxfam and with UNDP? Yes, after university I was what's called Nodi fellow so I worked in the Ministry of Trade and Industries of Zanzibar for three years. So I was based, I was going around working with barefoot communities in the villages trying to see how I could support them in improving their livelihoods on which they were utterly dependent for their very most basic needs, yes. I mean, it's something I struggle with a lot and I'd love to hear your reflections on it. How do you find a way of reconciling what needs to be done for the

dream poor in the developing world, people who are living on less than $2 a day, who are on the edge of starvation and the very different types of structural problems that we face in the UK and how you reconcile justice inside the UK with the much bigger problem of global injustice. Well, I would start by saying in those countries, whether it's Tanzania or Malawi or indeed Bangladesh or India, people who cannot meet their most basic needs, that is where you want to see the growth of their incomes and the growth of public services. that serve them, right? So we absolutely want to see them rise so that they have the health and education and transport and decent housing to meet their fundamental human rights. So to me,

that's where, if anywhere in the world we want to see economic growth, that's where it's going to happen. And it's got to be distributive. So it's actually shared and it's got to be regenerative so it doesn't destroy the planet as it happens. That's a completely different situation from, say, the UK or any European or high-income nation. As we know, we are a hundred living in the richest countries ever in the history of humanity. These nations are richer than nations have ever been before. And we are massively overshooting our pressure on the planet and excessively using resources and energy. So we just face a completely different trajectory if we want to thrive. And it's about reducing our overshoot of energy and resource use.

Let me just sort of stick on that for a second, because I think this is really interesting. You feel presumably that we are quite close to the carrying capacity of the planet that are. We're way over the carrying capacity. Sorry, I didn't mean to interrupt you, but we are so massively over the carrying capacity of the planet. We, our system scientists are just telling us again and again, we are about to hit tipping points from which there's no return. So we're way over the carrying capacity of the planet. In terms of our ecological impact. So that really means that we're not going to be able to continue globally GDP growth. for much longer. We're going to have to stabilize the global economy and cease growing it. Otherwise,

the ecological impact is going to be very extreme. And I want to speak first in the metrics of the Earth. So we need to massively reduce our global carbon use, for sure, our global material footprint and our excessive use of fertilizers, right? Let's start with the real metrics. GDP, money is an invented human measure. So I wouldn't want to speak of it in fundamental terms. We've got to come back within our pressure on the planet. Massive reduce of resource use. What does that mean for GDP? Globally, I don't anticipate that that means globally we can keep on growing. But it's the high-income countries where it's clearest that they need to move fastest.

And that's why we come into this challenge of can we have green growth. I can't see. I'm really happy to talk more than that. But I can't see the feasibility of having the GDP that we've always wanted, two and a half percent a year, please, coupled with the unprecedented reduction at speed and scale in energy and material use that's required in high-income countries. Final one, and then to Alistair, because I think this is where the politics again comes in. Broadly speaking, per capita GDP in the world, if you divide, I don't know, the hundred trillion dollars that we say the world economy's worth, divided by 8 billion people, we end up with a number

which is about a quarter of the GDP per capita that we have in the UK. And that would seem to imply to me that if we were going to improve the living conditions of the extreme poor, there would have to be a reduction in the per capita GDP in the wealthy world. And that would mean that it would be quite difficult if we reduced by 75% per capita GDP in the UK to pay for our government, which consumes about 44% of our GDP at the moment. So again, I wouldn't put it in GDP terms because I think it gets too reductionist too quickly that we're going to move money like that. We need to, in the UK, live within our share of Earth's resources, which means we massively need to decarbonise our

economy, but actually also we need to reduce our material footprint. How we do that in terms of its relation to economic activity is a separate transformation, is a separate innovation that we need to make. It's not about taking, literally just taking GDP money from one pocket and putting into other. What ultimately matters is energy and materials. Money is merely a means to having command over that. So we need to decarbonise and create a circular, cyclical economy with massively reduced energy demand and can have very good quality lives within that. But I'm with you in terms of it certainly doesn't, I don't believe we can continue to have the growth that the 20th century brought because that was deeply dependent on fossil fuel energy and those days have gone.

And I would love to know from your perspectives how this comes into politics. Or unless do you disagree with what I'm saying that we need to massively reduce our energy use and our material footprint in this nation, in all high-income nations, to respect the rights of people worldwide. If you don't disagree with me, I'd love you to join me in thinking, how do you bring this into politics? You're both immersed in the world of politics. How can this become part of the political conversation? I've only ever heard two MPs, Caroline Lucas and more recently Clive Lewis, ever speak to challenging the growth mantra in politics and all other MPs are court in it because it's so dominant that to dare to speak against it, the onus is on you, as it is on me right

now, you're asking me, Rory, to prove how we can utterly transform the world, whereas if you stick with it, nobody asks you how the heck are you not going to go to the wall, because we're going to the wall. And I want to flip that onus. The onus, I think, is on those who call for growth to explain how on earth this makes sense on this deeply destabilized planet. Just to pick that up directly, listening, I mean, I've watched your TED Talks, I've read your book. I've read these leaflets that have been put out by different cities that are practicing some of the stuff that you've been preaching for years. And I find it incredibly appealing. But every time I see any of it, I think, oh my God, as a political strategy, I don't see how

that is ever going to be successful in the current climate. So something like Caroline Lucas, who's been brilliant at prosecuting her pro-planet, pro-environment, called it where Green Party view. and she's won her seat, but she does it from a perspective of knowing she's not actually having to fight for the political support of the country. And I guess my big worry about this is how you can do it in a democracy

because the scale of the change you're asking for is so big. And if you take something like China, when you talk there about Malawi in the countries that are, you know, need growth, China has presided over the biggest elevation from poverty of millions of people by, I would argue, adopting a pretty capitalist approach to the world and in a dictatorial way. So I guess my worry is how you do what you're trying to achieve, the principles of which I support,

in democracies with very, very short timeframes. Totally agree. Many politicians would say, I know what I need to do. I just don't know how to get reelected when I've done it. And that's why I think you're seeing some of the most progressive places say, let's hold a citizen's assembly. Let's bring, use sortition, let's bring together a randomly selected group of around 100, citizens residents of our place. Let's introduce them to experts who can introduce them to the scale of this topic and see what they come up with. And time and again, what's coming out of these citizens' assemblies is that the people who are not trying to get reelected because

they are citizens thinking of the long view, they come up with far more long-termist, progressive and ambitious policies than, as you say, politicians feel they're able to. But would those policies get political support, which you have to have to be able to put them into practice? Well, I think then it comes down to how do you structure citizens' assemblies? Do you say, have a citizens' assembly, it'll be nice to hear your recommendations. Or does a politician government say, let's hold a citizens' assembly and let's actually commit to taking account of what the people of this nation are saying they want to happen? And let's put it into practice. I just want to dig in a little bit more into this.

Without being too cheeky, sometimes you say that you're agnostic about growth. But it sounds to me that actually you're profoundly worried about growth. You're more than agnostic. I would have thought that if you really think, and you have every reason to, that we're exceeding the carrying capacity of the planet, you would want production and consumption globally to decrease. Is that right? And I sometimes think maybe you're being a bit political. You don't really want to say that because you don't really want to follow through the implications of that. Oh, okay, no, thanks for bringing that up. That's not why. When I wrote Donodd Economics and I was arguing, let's move away from being addicted to growth to becoming agnostic about growth. One of the reasons was because I was thinking about countries around the world. I was trying to write principles that could be applied in many places. So whether it's in the UK or in Turkey or Malawi. And I think we need to move away from thinking growth is the trajectory that matters to actually what matters is the dynamics of being regenerative. working with and within the cycles of the living world, and being distributive so that value that's created in the economy is shared far more equitably with everyone who co-crates it. So to me, the fundamental dynamics become regenerative design and distributive design. And what happens to GDP is more like a consequence of pursuing those. But the consequence to GDP in the UK would be negative.

And would that matter, in your view, if we went into a recession, what's technically defined as a recession, would that matter? It would absolutely matter to go into what's technically defined of a recession because here's, and let me come to the point of what I actually deeply mean about being agnostic about growth. It would mean an economy that can thrive without being utterly dependent upon endless growth. So I put it this way, we have an economy that needs to grow, whether or not that makes us thrive. And what we need is an economy that makes us thrive, whether or not it grows. And so actually it's quite radical to be agnostic about growth in a high income country because it means we need. We need a economy that makes us thrive, whether or not it grows. And so actually it's quite radical to be agnostic about growth in a high income country. Because it means we need to be. need to create our economy so it's no longer dependent on endless growth. As you just said, Alistair, it currently is dependent on endless growth. And if it doesn't grow, it goes into recession. And it's tragic. It's massive implications. People lose their jobs. We lose the funding. There's immediate knock on effects. That's because our economies are structurally, financially, politically and socially dependent on endless growth. In order to separate ourselves from that dependency, we need to take the growth dependency out of our economy.

This is what I wish was being taught in every macroeconomics course, in every university. That growth doesn't matter? Not that it doesn't matter. Let's start by recognising that we are currently, we have economies in high income countries, particularly let's focus, that are structurally dependent on endless growth. And if growth isn't going to be possible, because we, as we're already saying, we need to massively reduce our energy and material use. And that may not be compatible with growth.

And if that's not possible, we need urgently smart policies. and politics that starts to remove the structural dependency on endless growth. I'm pushing a little bit here, but again, you said may not be compatible. I think you actually believe it's not compatible. You don't believe that you can somehow decouple growth from consumption of precious resources. You're not somebody who believes that some magic green growth solution, which is going to allow us to grow happily without having a catastrophic planetary impact. You really don't think it's compatible with GDP growth, right?

So I don't think it's compatible with GDP growth, but you know what the future is unseen and there are many different ways we can organise our economy. So I'm not going to definitively say it is not possible because all we have, all the empirical evidence comes obviously from the past. But the evidence that I see makes me deeply sceptical of that possibility. Whereas what I find in politics and in economics and economic advice to politics, it leans the other way. It leans in the direction of hope. It's too early to give up the possibility of coupling. Now, when we lean into the hope and the possibility, the optimism and the kind of technological optimism, I find that ethically really problematic because if that optimism turns out to be false, when push comes to shove between green and growth, you can bet you know what's going to get the shove. It's going to be the green because we're structurally dependent on growth. And so I think it's actually an ethical obligation to remove the growth dependency from our economies rather than hope and promise that it's going to be possible to carry on with GDP growth. So yes, in my agnosticism, I lean very much towards this ain't going to deliver.

We've got some decoupling and we need all the decoupling we can get, but we are not moving anything fast enough at the speed and scale required. So fundamentally, I think what you're saying and many other people are saying is that the scale of the problem is so vast and the actions we're taking. are tiny compared to the scale of the problem. And actually, I sometimes think that, unfortunately, even with some very good initiatives in the UK, that they're very admirable,

but they're not matching the scale of the planetary challenge. I agree. And given the size of that planetary challenge, and given, as I say, on the maths of it, if we were going to create an equitable world, we would be shrinking incomes in the UK by 75% to put it down to a global average. It's difficult for me not to feel

that that's not really consistent with the types of democratic politics that we have at the moment. That's sort of going to Alice's point that how does your economics tie into political economy? What sort of state do you imagine can actually respond to a crisis of that magnitude? I think we could have a, well, first of all, citizens assemblies, I believe, are starting to actually advocate the kinds of policies that are required. I really want to flip it round to both of you, though, because I haven't heard you disagree with me. And if you agree with me, then the question is how do we transform the political dialogue, the reality, the facing up to the scale that's required.

And instead of carrying on with a narrative that is putting growth first and then promising that we can tuck some green inside it, actually putting the scale of planetary challenge being open about it and making it central to our politics and talking far more openly about how deeply we need to transform our economies and all high. income economies need to transform together. So moving towards, for example, far more democratic ownership of enterprise, by which I mean rather than companies that are owned by shareholders that hold them to account every quarter to show that they've got growing profits, growing margins, growing market share, which drives growth in that business. What if we move towards companies that are owned by their employees, by the community, with nature on the board? And these kinds of companies are emerging, whether it's Patagonia, whether it's faith in nature. This is a different

kind of enterprise that's possible to evolve that can put not profit primacy, but it's mission primacy. Indeed, there's companies coming to us at Donut Economics Action Lab saying this could be our logo. This is what we're for. We're not in business to max out profits. We're in business to sequester carbon. I read the paper you did on that. And I knew some of the names, but I knew very few of them. And this has to be done by leadership. I get that. I think that you're probably looking for a government that is going to flip it in the way that you say, that is going to be led by somebody like Caroline Lucas. But I guess what Rory and I are trying to put across you is what feels like a gulf between the scale of change that you're calling for in the way that people live their lives, in the way that businesses run themselves, in the way that the world works, and the political realities in democracies. And I just wonder whether, you know, I'd love to sit down with you and try and work out a political strategy to how you might get this getting more traction.

But along the way, I see an awful lot of people in the advanced democracies losing their seats and losing their power. And that in the end becomes like the climate change debate has moved in phenomenally far. Yeah. Okay. And that's been done by campaigners and politicians and people facing up to realities. but it strikes me that you're saying something even bigger than that. Yeah, I am. Because climate change is just one of what we can call nine planetary boundaries,

one of the life-supporting systems of our planet. And if we just go climate, climate net zero, we're being reductionist all over again. But let me put this back. So we set up Donut Economics Action Lab after my book Don't Economics came out because when the book came out, I was just immediately approached by councillors, by mayors, by MPs, actually, who said, well, how could we put this into practice? I want to do this. What would

it mean to do this in my town, in my city, in my district? By teachers saying, this isn't on the syllabus spell. This is what the students should be learning. I'm going to teach it anyway. By companies saying, we want to put this in practice in our company. So we set up an organization for people who already wanted to start doing it. The city of Amsterdam adopted it at the heart of their policy to become a circular city in the height of COVID in 2020. Six weeks later, the city of Copenhagen voted, say actually we're going to explore what it means for our cities. These are democracies. Brussels capital region, the sector of state for ecological transition.

She said, I'm going to put this at the heart of our strategy. I want all of our civil servants to be learning this. It's happening. Glasgow is currently doing... That's the answer to your question. That's how you develop it. You have to have real cases. Well, it's happening.

So what's interesting to me is it's not happening at the national level. I'm not surprised. It's not happening at the national level. It's happening locally. Okay, part of the issue maybe, if you're really asking us sincerely about this, I think is that some of this is not biting hard. The impacts of these programs that you're talking about are not yet having a fundamental impact. Just to understand the impact of which programs are talking about. Either the initiatives from individual companies are not fundamentally transforming our market economies.

So there are companies doing that, but they're doing it on a voluntary basis. There isn't government regulation pushing it through the whole economy. the initiatives that you're talking about in Cornwall or Glasgow are quite small scale. And the problem is that, well, I mean, one example I think, which was quite dramatic in the UK, was we'd all been very comfortably talking about a proper price for energy and that unless we priced energy fairly, people weren't going to change their behaviour. But as soon as gas prices shot up last year and household bills went up, almost everybody abandoned it overnight.

And they introduced a price cap on energy, which, ran against even very conventional economic logic, because it turned out that the public was not willing to pay a fair price for energy. So what frightens me here is that when it really begins to have intense felt impacts on individual lives, it's going to be much more difficult to sustain. I think that's true. And I think in the Netherlands, actually, they've realized their use of nitrogen. They're calling it a nitrogen ceiling. They're far too nitrogen-intensive in their agriculture and they've literally got to reduce their national nitrogen use and this then creates, it can create a very polarised national politics about between agriculture and

between the urban areas. I think that's just the beginnings of a future. So this is all to come. We are going to face huge pressures on resource use on if we want to decarbonize and switch to batteries, the coal bolt, the lithium. The prices of these materials is definitely going to rise and it's going to become very real. I think we're going to face far more material constraints that we are not yet setting ourselves up to prepare for. So I'm talking about let's prepare for that now. Let's take away the growth dependency. Let's create a circle economy that brings jobs back into the UK because you stop trying to minimize labour and max out on energy, minimize energy and material use and bring in more people. So there's a very labor intensive circular

a creative economy that can be created. All right, go, Rory. Let's just take a quick break. Hi, everybody. It's Dominic Samark here from The Rest is History. Now, some of you may have heard me on your show, The Rest is Politics, when Rory was away and I was filling in and enjoying Alastair Campbell's tremendous banter. And I'm back to tell you about our new series on The Restis History, which is all about Britain in the 1970s, a period with a lot of uncanny resemblances to our own. So right now we're living through.

a moment when oil shocks generated by war in the Middle East are rippling through the world economy, when Britain feels like it's sunk in a bit of a malaise, people are arguing about Europe, the government has got a few issues with the trade unions, and we have a kind of, I suppose you'd say governing elite, a kind of political class that is really struggling to come to terms with all of these issues, and people are asking if Britain is governable at all. So there are a lot of parallels between that Britain, that I'm describing, which is our Britain, and the Britain of the mid-1970s. So in this series that's coming out on the rest is history, we'll be looking at these

and other issues. We'll be talking about the rise of Margaret Thatcher, obviously a colossal figure in our political life even now, whether you love her or loathe her. And we'll be talking about the very first Brexit referendum of 1975, a subject that I'm sure Rory and Alistair will have strong opinions about. We'll be talking about the fall of the Labour Prime Minister Harold Wilson and we'll be talking about one of the grimmest moments in Britain's economic history, the moment in 1976 when we had to go cap in hand, as people said at the time, to the International Monetary Fund, the IMF, for a then record bailout. Now, if that sounds good to you, how could it not sound good to you? Of course it sounds good to you. We have a clip for you to listen to at the end of this episode. And if you want to hear more, just search for the rest is history.

wherever you get your podcasts. Welcome back to the rest of politics leading with me, Rory Stewart. And me, Alistaira Campbell, and Kate Rayworth. You've very justly turned it round on us and said, do you or do not agree that the planet is in unbelievable problems? And we do. And I guess you're also encouraging us to agree that we cannot continue to grow and that actually we may need to shrink our economies,

particularly in the developed world, if we're to allow any space for people in the poorer parts of the world to have better lives. And then you asked us, well, what are we going to do about it? And we're still sort of trying to work our way through. But my guess is our instinctive answer would be this is a horrifying question, that the political consequences of this are unbelievably extreme. It's not just a question of coming up with a good slogan or finding some well-meaning people in a citizens' assembly.

This would require such an. extraordinary transportation. I mean, just keep sort of coming back to this, but we currently spend nearly a trillion a year on our government. And to get the UK economy down to the kind of size it would need to be, to be just with the other economies in developing world, it would be smaller than what we currently spend on our government. And that means health, education, and a lot of other things simply couldn't be funded, even if we tax people at 100%. So I think you understand. understandably, in order to sell something you passionately believe in, have an incentive to make it seem easier, more attractive, fairer.

But I worry that you are shying away from the sort of very extreme negative catastrophic consequences on individual lives, from which the political problems will come. I think the most catastrophic consequences on individual lives sincerely will come from the breakdown of the living world, whether it's, the direct impacts of climate change or whether it's the indirect, huge disruption to humanity when whole continents are on the move because where they have been born has become uninhabitable, or indeed the breakdown of trade when harvests fail around the world. So that is the real disruption that I believe we need to avoid because by that point, it is out of human hands and we are responding to the breakdown of the planet. I completely agree with you though, Rory, that the scale of what's required is massive and it goes beyond and I don't, I'm going to push back on you. I'm not just offering a mere nice slogan. I think how we frame economics really matters. And I think growth is a really nice little slogan that doesn't work anymore. And citizens assemblies are like the seeds of future politics. I know you're being playful and you're pushing back, but I wouldn't dismiss them. Political spaces deeply.

democratic spaces where people are actually choosing to take a longer view and calling for radical politics? For the record, I'm a huge support for Citizens' assemblies. I mean, I was, I think one of the first politicians to really push Citizens' assemblies. And I think they do extraordinary things. And I think they unlock political problems very powerfully. I'm just not quite sure they have the power to unlock a problem of this size and scale. I agree they don't. How much as this is about our, you talk about our addiction to growth. But how much of it is actually about our addiction as individuals, not just to societies, but to consumerism. How much of this is just about the fact that we consume endlessly? And I was fascinated by, I didn't know about this guy, Edward Bernays,

who's Sigmund Freud's nephew, that you seem to think is the sort of the godfather of consumerism. Yeah. Yeah, I do. And so I would say, actually, consumerism is one of the ways in which we're addicted to growth. It's one of the social lock-ins to endless growth, because generations have believe that to do well means that we'll get a bigger house, that my kids could live in a bigger house, that they could fly further for a better holiday, that they could have more cars, right? So this consumption and the acquisition has been a very 20th century symbol of doing well. And I think Brunais, Edward Bernays, played a huge role in that. He created 100 years of propaganda, as he called it himself, to convince us that we transform ourselves by buying something

more. Is that what people mean by retail therapy? Is that what retail therapy is? We feel better if we spend. Yeah, because he figured out, I think he took his uncle's psychotherapy and realized that our deepest desires are to be belonging, to be respected, to be admired. And he connected that to the latest phone, that jacket, this car.

So we're marketed these products as if this will make us feel belonging or admired. And if he was still alive, I'd say, well, Edward, well done. You know it worked. Now, please join the other team. Could you please help us unravel a hundred years of this propaganda so that people actually feel that they belong through community? Let's rebuild the commons. Let's rebuild the places we live and actually find value and connection where it's real, which is in being needed and seen and belonging and respected as part of the community, we're part of the work we do, and reducing this extraordinary consumer spent that we've grown up with.

You have an amazing series of intellectual predecessors, don't you? You know, potentially going back to James Stewart and John Stuart Mill, but definitely Schumacher, well, did Donatella Meadows. I mean, all these extraordinary people who, particularly in 1970s, were beginning to talk about the limits of growth. This is going to be the most intellectual newsletter we've ever had, Roy. That was a good little blast that was. All the books that are going in this week. Oh, my God. So how much is it, just give us a bit of a sense of your intellectual formation.

How much do you feel you owe to predecessors and coming there? And what have you learnt from what works and what didn't work? I mean, the limits of growth in 1970s sold 30 million copies. People were very, very excited by the idea. And yet since then, the global economy has gone in an enormous hockey stick. I mean, we're just consuming everything faster than we ever have before. Yes, partly because after the limits to growth came out and people were alarmed by it, a whole counter movement mobilised to discredit it, rubbish it, say it didn't make sense,

it wasn't true, they got it all wrong. Actually, the latest plots show that we are on track for what they call business as usual. But let me come back to your earlier question. I mean, I studied economics at university because I wanted to learn the mother tongue of public policy. I was a teenager of the 1980s, so grew up seeing the famine in Ethiopia, a whole emerging in the ozone layer. I remember Frank Boff on nationwide saying there's something. called the greenhouse effect, right? So I wanted to be part of tackling these things. And I thought, if I learned economics, I'll have that mother tongue of public policy. I can help in that very

earnest teenage way that's invaluable. And when I went to university and studied, study economics, I was really frustrated by the syllabus because these issues were peripheral. You couldn't even study environmental economics. Inequalities and the living planet, I felt, were at the edges. It was all about growth? It was almost unquestioningly about growth. We never, there was never a moment where we ever said, what is the goal, it's growth, is that the right goal? What happens if it's not desirable, not feasible, not possible? We never question that. And now, decades later, I speak to students in universities. It's the same. They are not being invited. I mean, let me say, there are a few exceptions. But the mainstream syllabus does not invite them. It starts with the market of supply

demand which puts price at the centre of our vision and then means we're talking about everything in monetary terms. That's a very political move. Why are we jumping to the market immediately? It tells us that humanity is rational economic man. We're competitive, we're self-interested and we dominate over nature. And it tells us implicitly that growth is the goal. So I was really frustrated by the economics. I was taught. That's why I didn't stay on and I didn't want to be a PhD economist. I didn't feel pride in that name. That's why I went and worked in Zanzibar. for three years. I immersed myself in the real world economy. I worked at the UN on the human development report, which reframed economics in the work of Amartya Sen, from putting

the economy at the centre of our vision to human well-being at the centre of our vision. I worked for Oxford for a decade. And then I had kids and became a mother. And then there was a financial crisis and the economist started saying, oh, we need to rewrite economics to reflect financial realities. And I thought, I'll be damned if we're only going to do it for that. Where would you put donor economics on a, what Roy and I, in our political, world would define as a traditional left-right spectrum. Where would you put that on that spectrum? If we've got sort of, I guess if you've got, you know, Jeremy Corbyn over here and Milton Friedman and Margaret Thatcher over here, where would you, I'm not saying they're the most extreme,

but within that understandable framework, where would you put donut economics? So first I'm going to say, I don't want it to belong in either of those wings because that's what I'm giving you the whole spectrum. I know you are. But surely, I mean, which, Surely all politics should be about meeting people's human rights living within the means of this only known living planet in the universe. So I'm delighted that, say, in the Netherlands, it has had appeal across the political spectrum from the party for the animals to the Christian Democrats. And in fact, in the UK, I've been contacted by members from the Conservative Party, Liberal Democrats, Labour Party, Green Party. The only two you've said have challenged the growth agenda, have been Caroline Lucas or Clive Lewis, who's Clive is. identified as being on the left of the Labour Party. It feels left wing. Is that a deaf thing to say?

Definitely left wing and more socially minded and green minded. Let me put in those very simple terms. Politicians come to it and say, this resonates. And so the major principles are being regenerative of the living world. Actually, I think that appeals across the spectrum and being distributive by design. It all resonates with me. I just, I keep seeing the obstacles in the politics of it. And that means we've got to change our political system as well. Yes. Yes. So that's why I think Roy is right about to say this is about such fundamental change that maybe feel people find it too scary.

Well, the not changing is, I tell you, way more scary, way more scary. It's worth maybe just digging one more time into your statement that growth is embedded in the way that our society's work. So I've heard people say that growth underlies not just our, the discipline of economics, but the welfare state, the nation state. Talk to us a little bit more about why growth is so fundamental to the way we structure our worlds. And give us examples of what growth dependency, how it feels in our welfare state or a nation state. Why are they gross dependent? Because we have created money, the current system of money we have, and let's talk about

the UK particularly, is that commercial banks create money as debt-bearing interest. Right. So it has to be repaid with more. So that's embedded in the way that we create money because we have companies that are owned by shareholders who want to see an increasing dividend every quarter. So that forces companies to focus on growing rather than becoming regenerative. I talk to corporate finance law officers who say we want to become regenerative, sustainable. We want to pay decent wages through our supply chains. But we have to show every quarter that we're growing because we chase labor productivity. So, as you've saying, if you have a non-growing economy in a structure where companies are trying to be more and more productive, you'll create unemployment and you'll get the unemployment line, which is huge political red flag and devastating in people's lives.

We're politically addicted because, and I think the really big one actually politically is the due politics of it, right? No leader wants to lose their place in the G20 family photo. But if your nation stops growing while the rest keep going, you may be booted out by the next democracy. Laging Powerhouse. So the geopolitics, and it's very real these days with Russia, Ukraine, China, the geopolitics of having a place at the table creates a collective action problem that every nation is continuing to pursue growth in order to keep up with its rivals or allies. To me, that's not an economic problem. That is a geopolitical problem. That's a international relations. I would love to see schools of government taking on. How are we going to get over

that collective action problem? But to come back to the welfare state and to, you were talking about taxation. I mean, in a country like the UK with a sovereign currency, the government spends money into existence. It doesn't raise money from taxes and say, oh, how much did we get this year? What can we do with it? The UK government spends money into existence, spends money into healthcare. So we can choose to spend money on whatever we value so long as we don't overshoot the capacity of the economy to produce and therefore generate inflation. So to me, this comes back again to our economics education of how we think about government, works. But you, even in your answer there, you've given me three of four more reasons that make

this in the current climate. Hard. Politically virtually impossible. Right. In the short term. Yes. So therefore, you've got to be part of a long-term movement. And I guess that's what you're trying to, what you're trying to create. That's why I wrote a book on 21st century economic mindset, because I cannot bear to know that students are going to university today and still being taught a deep presumption that high-income countries will obviously grow and that's obviously the goal and that the death of the living world. So when Kier-Starmer comes up with these five missions for government and the first one is about growth, does that make you as an individual more or less likely to vote Labour? That makes me more passionate to change that messaging.

But do you see from his perspective of how hard it is to say whatever the opposite might be? Well, you don't have to say we don't have to say we want to be the slowest growing economy in the G7. You say we want to thrive. We want, you know, you can mobilize and excite people by saying we want to bring back UK nature. But I think the problem is that you can say that. But eventually on the today program or question time, somebody's going to say, wait a sec, thrive is a code for you want to be the slowest growing economy in the G7. Because in the end, that is what you want, right?

No, that's not what I want. I want to thrive. I'm not interested in our position in the G7. G7 and I want all G7 nations to come back within Planned your boundaries. Okay, but you don't want us to grow, right? So at some level, if you were a politician, somebody would pin you down and say, honestly, Kate, you don't want us to grow. Sure.

And partly, this is why I say this, because I'm not a politician. And therefore, I'm not constrained by that fearsome question that I will be politically hit sideways. I feel actually those of us who aren't politicians have all the more obligation to speak to this alternative economics that makes actually should be, the economics that's being taught and students are flocking in universities wanting to learn this because they know it equips them for the future that's coming. But the idea that what I say should immediately be repeatable and defensible by one of today's politicians who are trapped in... You're trying to get them out of the trap? Yes, by modeling it, by demonstrating it, by speaking

this language, by showing that there are mayors and companies and cities around the world that's saying we're getting behind this. For me, the approach is to start building. in critical mass that means it actually becomes a space where politicians can choose to stand. And they are. You know, the European Commission this month is holding a conference called Beyond Growth and is questioning the growth dependency of Europe. I think one of the reasons why is because they're seeing that some of Europe's leading cities, Amsterdam, Barcelona, Copenhagen, Brussels, these cities are saying, yeah, we're

engaging with economic economics because we want to focus on a vision of threat. driving. That's why I am going with what's coming up slowly but from below. It starts to build a critical mass. I don't believe we're going to suddenly get top down change and politicians are going to switch their narrative. Tell us a little bit just as we move towards the end about what it's been like to become a major, major campaigner, to become the voice of a huge movement, to have your name associated with this very, very strong iconic idea. Are the moments of doubt? Are the moments of anxiety? What does it? it feel like to suddenly go from being a respected UN staffer or Oxfam employee to suddenly

becoming somebody who is supposed to be speaking for saving the planet? I mean, how does that work psychologically? I hope it's a still respectable thing to do to be with. How does it work psychologically? I left my job at Oxfam to write a book about the new economic mindset that I think the world's needs. Because going back to your earlier question, it's absolutely built on a huge inheritance and the work of decades, indeed centuries of economic thinkers whose work contributes to these ideas from Herman Daly's to Donella Meadows, from Amartia Sen, and I wanted to bring their ideas together and make them dance on the same page. And when my book came out in 2017, I was just amazed by the number of people,

politicians and business leaders and community activists and teachers, who showed up and said, yes, we've been waiting to do this. And this gives a language and a visual to what I already want to do. So that's, for me, psychologically, it's really energizing because what I'm discovering is there are so many people whose view isn't represented in the current political narrative because there's no room for it who already want to put this into practice. So I'm working with them and it's an incredible distributed community of people popping up. I've never once tried to persuade or lobby or convince anybody to use these ideas and what's energizing. about it is the people are coming, say, we want to use the ideas. They express what we already want to make happen. So I find it highly energizing. Are there moments of doubt? Of course there's

moments of doubt. Will the world transform in time? Well, it doesn't look like it. But if I wake up every morning, think, okay, then what should I do? I cannot see for myself, I cannot see a better thing to do than to keep working with the people who are already starting to make this happen. because change always seems impossible until it's done. And we know that there are tipping points. We know there are tipping points in the earth system. There are also social tipping points. There's an energy building around this.

And so I'm just going to keep on working with that energy and see where it emerges and we just follow it. I never knock on a shut door. So I'm not interested in lobbying politicians or anybody who doesn't want to hear it. I'm not trying to convince anybody. Because there are so many people for whom this makes sense. So we're bringing that groundswell together. to show the seeds of a possible future,

to show what it looks like in community and in a company. And you may not have heard the company. But you know what? You haven't heard of Apple. You haven't heard of Apple decades ago, and up it arises. You hadn't heard of Amazon until it. So we've heard of some of them.

Let's make them come through. That's for me. I get a huge amount of energy from it because these are people who actually see possibility and they don't just, you know, it's what I always say. Don't be an optimist if it makes you relax. And say, oh, we're going to do it

because people are ingenious. and there's technology, because that ain't going to happen. But don't be a pessimist if that makes you sit back and say, it's too hard, we're too late, we are too many, it's too difficult, we're too stuck, because if you sit back, well, it's going to be true. So be in action, get into action and whatever you're doing. I'm working with the people who are in action.

And yes, I have huge doubts about whether we can do it or not, but this is the best thing that I can see that can happen. And it's energizing, working with people who are actually putting new ideas into practice. Well, you've given us lots to think about, and lots to talk about. Thank you very much for coming on. I'm just going to be listening out to Alistair, the next time you start talking about thriving economy. I'm very pleased to say it. And also your last answer there was bang on message for the book that I've just written. So we've got to

stick together on that one. It's called But What Can I Do? And you almost use my favourite quote of all time. Go on then. Everything is impossible until you make it happen, Nelson Mandela. There we go. Yeah. Good luck. To us all. Thank you very much indeed. Thank you. So Rory, Kay Rayworth, Donut Economics. What do you think? Well, I think, I don't know whether you'll feel this. I bet we both do, which is we both probably will feel a bit disappointed with ourselves because we will have come across as a little bit the sort of stiff older people being super cautious. And she was making a very, very, very powerful, very idealistic argument. And in her in terms of very logical arguments, with the planet's in trouble, and we just can't continue to grow like this. And we were slightly saying we just can't see how we sell this politically.

And I guess both of us would have liked to be bolder, more idealistic and less kind of stick in the mud. Did you feel that? I felt exactly that. I felt that I was in the presence of somebody who'd had a really interesting take on the world, very idealistic, which is a good thing, not a bad thing, really felt it very, very deeply, and you and I were both like the, we were sitting there, virtually every minute I was thinking,

how do you sell this politically? How do you actually make this happen politically in our current politics? And I was even then starting to think, do you know what, the only way you can actually be able to do this if you lived in a dictatorship. Yeah, well, because it's so difficult,

isn't it? Because, you know, we've been talking a lot about Japan on the podcast recently, and that's the country which has, had no growth for 30 years. And it's very, very problematic. I mean, young Japanese are in despair. Their incomes are lower than their parents where they feel real pessimism. And our economies are built around growth. I mean, she admits this. But I think she's somebody who wants to say, in a sense, I don't care. I don't care that it's going to be difficult. I don't care that it's

difficult to sell politically. I believe there is no alternative. I believe that we are exceeding the carrying capacity of this planet, that we're going to blow up the climate, that we're going to destroy our ecosystems and our biodiversity, and you cannot have infinite growth in a planet with finite resources. It's got to stop. But my goodness, if you think about the problems we had even, you know, my hero, Theresa May couldn't even get through a relatively sensible, mild change on funding adult social care, you know, how on earth you're supposed to get through something that says that the country as a whole is going to stop growing or actually, I mean, as you pointed out, technically what she's talking about is recession, you know,

a political party campaigning for recession. I mean, where I also do agree with it, and, you know, I had a birthday recently and my kids and Fiona know this. I'm terrible to buy birthday presents for, because I just don't care about, I don't need and want lots of different consumer goods and all that sort of stuff. And I think we can all make our own choices individually. And I feel, I sort of feel, I wish we could all be like she's saying that we should be. But I sort of feel it goes against the grain of what we've all been sort of taught to feel and to think and be ambitious and what that means and to aspire and what that means. But I also think as an outrider within a debate, if you think about it, about something as big as the climate debate.

I mean, she's right that the climate's in real peril. But at the same time, the extent to which the debate has gone from almost being barely part of the debate and now right at the center of it, you need outriders in that. You've needed outriders the whole way. So it could be that, you know, that what she's on about will, and she talked about places like Amsterdam where the policies that she's, the ideas that she's been putting forward integrated into policy formulation. So it can have an effect.

I guess what she's got to hope is that eventually you reach some kind of tipping point. And I think it's also possible that in 150 years people will listen to it and say she was completely right. What on earth were wrong with Rory and Alastair? You know, why were they arguing? Because, of course, social change is always like that. If you think about arguments around slavery or women's votes or gay marriage, there will have been many, many moments where people like you and me back in the time will have been saying, well, I agree with you.

You know, ethically, I agree with you. But politically, this is unbelievably difficult or economically. It's going to be very difficult to get it through. I mean, it's obviously a much smaller scale on what she was talking about. But I write in the book about when I was a journalist constantly being harangued by Ash, the campaign organization trying to deal with smoking. And, you know, we literally used to drop their press releases in the bin. and throw our cigarette ends on them, you know, to say, and yet now there's not a newsroom

in the country, and in most parts of the world, where you smoke. So change comes, but, and you're right, along the way, you meet a lot of people saying, oh, I'm not sure about that, a bit too radical, bit too fast, maybe you've got to go a bit slower. But the ones who go fast, you know, other people maybe will catch them up. And goodness, I mean, and we'll be, we're in the middle of so many of these debates the moment, because climate change, biodiversity, one of them. AI is another one, you know, which again, we should get on to more. But I mean, it is a question of one group saying, oh, I don't know, it's going to give us another group saying this is going to change the world. You better adjust to it. Your politics better adjust to it.

I mean, we are in a world of very, very radical choices because we're getting to a moment, I guess, where our industrial capacity, our computing capacity is posing opportunities and dangers that nobody's seen before and probably business as usual is going to become less and less of an option. She did say that now I'd heard her talk about it, that I'd start to notice people saying thrive. And actually, you know, when I spoke at the Canadian Liberal Party conference recently, Justin Trudeau did use that very word. There we are, you see, so maybe she's going through us. Thrive. Yeah, thrive.

Yeah. All right. Well, thank you for that. I thought that was good for us, pushed us into places we maybe weren't comfortable going. I'm going to make a bit of a pitch that maybe we should get someone on to push us on AI as well. And otherwise, thank you very much. And I hope people enjoyed listening to Kate Rowarth, even if they might have been more inspired by her idealism than they were by our attempts to sort of point out the problems. See you soon.