Upstream - Doughnut Economics with Kate Raworth

Episode Date: April 3, 2017

When you think about economics, what images come to mind? Maybe a supply and demand graph? Or a blackboard with complex equations scrawled across it? These images are based on a 19th century view of economics, one that is outdated and even dangerous, as we're beginning to see more and more. In this Upstream Conversation, we explore why the economy should look more like a doughnut. In her new book, Doughnut Economics, renegade economist Kate Raworth explains why it's time to explore new images that tell different stories about the economy. Kate walks us through the many aspects of her proposal for a new picture of economics, while discrediting some of the old assumptions and exploring new solutions. Our conversation moves readily from economic history to complexity, from system design to wealth inequality, and from poverty to…doughnuts.  This episode of Upstream was made possible with support from listeners like you. Upstream is a labor of love — we couldn't keep this project going without the generosity of our listeners and fans. Please consider chipping in a one-time or recurring donation at www.upstreampodcast.org/support If your organization wants to sponsor one of our upcoming documentaries, we have a number of sponsorship packages available. Find out more at upstreampodcast.org/sponsorship For more from Upstream, visit www.upstreampodcast.org and follow us on Twitter, Instagram, Facebook, and Bluesky. You can also subscribe to us on Apple Podcasts, Spotify, or wherever you listen to your favorite podcasts.

I think that's probably been the most pernicious result of this desire to be like physics, to look for the laws of motion, as if the economy, the way the world works, was driven by these laws that we needed to discover. I think that's really led us astray over the last hundred years and has given rise to a very strong neoliberal story that let the market do its work. Market forces, again, the language of mechanics, market forces will bring the economy into its right position. Don't get in their way. They will sort things out. You are listening to an upstream conversation

with Kate Raworth, author of the book titled Donut Economics, Seven Ways to Think Like a 21st Century Economist. Kate and I met up for this interview in an apartment in London. Welcome, Kate. Thank you. Let's start with a little bit about your background and how you came to do the work that you do. Okay, so when I was a teenager, I was a teenager in the 1980s, and the TV news was the way I came to see the world so I saw the Exxon Valdez spewing its contents out into Alaska's pristine waters I saw the Ethiopian famine a hole opening up in the ozone layer and as I think those images from the tv screen are the reason why when I came to the end of school I wanted to work for say Oxfam or Greenpeace I wanted to tackle the social environmental issues

that I saw challenging the world and I believed that if I was going to do that well I needed economics because it was the mother tongue of public policy. It was the language of influence. So I thought if I learn the toolkit of economics, I can apply it to these issues and try and make the world a better place. Very heartfelt, naive, open. That was where I was coming from. And so I went to university, studied economics. the issues that I was studying the theories we were taught really frustrated me because most of the things I cared about were brushed aside or seen as marginal or externalities tangential to the main theory as if they weren't the major concern so I was really frustrated by

what I was being taught and after four years of study economics, I decided to walk away. I didn't want to go on and deepen into further studies because I just didn't feel connected to the underlying theory that it was all based upon. So I walked away and I wanted to immerse myself in the real world economy. I worked for three years in the villages of Zanzibar with micro entrepreneurs. Then I worked at the UN on the Human Development Report, so at a very different angle, looking at the overview of human well-being. And over the years, I worked for Oxfam for a decade, but over that time I realised I hadn't walked away from economics because you can't, because the world is framed in economic languages.

And I realised that rather than fighting against it it I wanted to walk back towards it and try and reclaim economics try and reclaim its roots I mean economics from the ancient Greek means household management and when Xenophon first wrote a pamphlet called the economist he was talking about the management of a single estate how should you manage your slaves and your vineyards? Should you allow your wife to be in charge or not? And towards the end of his life, he looked up to the next level. He looked at the management of the city-state, his hometown of Athens, and began to think about the economics of managing that.

And then 2,000 years later in Scotland, Adam Smith raised our sights to the next level and said, actually, economics is about managing the nation state and asking why one nation thrives while another has not yet taken off. Well, I think it's time for us to move to the next level and go from the household to the city to the nation. Now it's the planetary household we need to think about. So to me, economics in the 21st century means's the planetary household we need to think about so to me economics in the 21st century means managing our planetary household and there could be no more urgent and exciting cause to be involved in we need a generation of household managers who are managing our planetary home in the interest of all its inhabitants so in that vein in that spirit I've walked back towards economics and

want to reclaim that word and broaden it so that we actually start to think about managing our households this century so you mentioned one of the one of the challenges one of the problems you see with economics is the kind of how how limited it is in scope when it's taught. So that's part of the problem. What else do you see as the main fundamental economic challenges that we face today? What are the kind of the flaws in our current economic system, either the way we think about it, or the way that it plays out in our lives? So in the way we think about it, because I've really focused on going back to the theory. So many people are saying we need a new economic story. We need a new narrative of what the economy is. And I agree with that.

But the most powerful stories are the ones told with pictures. And if we don't redraw the pictures, it's going to be very hard to tell a different story. And what I've done over the last couple of years in writing my book Donut Economics was to go back to the pictures that I was taught even in my first economic lectures what are the first pictures were introduced to because images are so powerful they unlike words and equations which sit in the front of our brains they go into the visual cortex at the back of our brains and they linger long after the words and equations have faded.

I think of them like graffiti on the mind. They are almost indelibly imprinted there unless we take care to unearth them and choose to put something in their place. So I'm concerned that the fundamental pictures of economics are far more powerful than most economics professors would ever imagine that they are and that we need to go back and redraw them if we're going to reimagine the economy let me give you one example if i said to any so anybody who studies some

economics what's what's the first diagram you learn in economics supply and demand thank you very much supply and demand and demand. And anyone who's studied economics can immediately see it in their mind. It's a pair of crossing lines like a giant X. Right there, when that image goes up, all sorts of messages are being told. The first message is the economy is the market. And the market is self-equilibrating. Well, those are very, very big assumptions, but they go sweeping past as the student is told to focus on learning how this diagram works and how the lines will move and how price balances things.

The fundamental assumptions are laid out and never really discussed. I want to go back and discuss those, because actually the economy isn't just the market, and the market isn't self-equilibrating. So we need to redraw the pictures if we're going to have a new understanding this century. So one of the things that I did while I was a student studying economics at Schumacher was try to think about what is economics and I got to the point where I was like oh my gosh it's our relationship to ourself, how we determine our self-worth. It's our relationship to each other, whether I see you as a competitor or a collaborator, how I act to you if I'm altruistic or mean. And then my relationship to earth, whether I see it as a resource or a waste bin or my larger self. So I got to the point where I was like, wow, economics is everything.

So how would you define or describe economics? You said the management of the household, but you know, so if it's not just the market, is there a way that you describe it? So I think of economics as meaning household management. And as you just said, well, that could be everything. I think of it in terms of when we think about managing our household what do we think the household is how how big is that vision of what's included there what's the purpose of the economy what's the purpose of economic activity um so what is it and what is it for and who are we in the economy who how do people behave or how should they behave is what theories try to tell us um and how how do things move how to think how does the economy

move does it have underlying patterns underlying laws so that's the sphere i think of the economics theory but the economy itself is a nebulous thing and and i've come to just think of it in quite simple terms let's let's just talk about the economy in terms of the sphere in which we produce and distribute products and services to each other even if you take that very narrow understanding of it already we can say something quite powerful which is it's not just the market and the state which was the 20th century debate it should it be this market it's led by the market how much can the state intervene Keynes said the state can do a lot Hayek said the state should get out of the way the 20th century was a boxing match between the market and the state as if these were the only two economic actors I like to think of it if it was a sphere

I would draw it into four quadrants and say you have first the household, the home in which care and unpaid goods and services are provided to the members of the household every day. It's often called the core economy because it's where things begin, it's where people are nurtured. So you have the core economy of the household. Yes, we have the market, which is based on monetary exchange. We have the state, which is based on public provisioning. And we have the commons, which is based on self exchange. We have the state, which is based on public provisioning. And we have the commons, which is based on self-organization. So when you have the household, the commons, the market, and the state, and you think of those as four very different but interacting forms of provisioning for products and services that we need, I wouldn't want to live in an economy that

didn't have any one of them. because actually they're all incredibly valuable. And once we look at the four of them and start asking questions like, well, when is self-organising the most effective way of providing something? Maybe in a babysitting circle where parents create little coupons and swap babysitting hours with each other. That is the commons. That's a creation of the comm commons and it's a fantastic way of self-organizing when is the market most effective when is the household actually the most effective way of providing the unpaid care love of parents to their children is core provision from the household when is the state most effective and then we can start to see actually there are really interesting interactions between these four different ways of provisioning. And often they work best when they work together.

So think of an NGO. For example, I worked for Oxfam for many years. Oxfam would hire its staff through the market. It would sometimes take funding from the state to implement projects. It worked with partners and allies around the world who are often self-organising communities. And every single member of Oxfam's staff and team was coming from a home in the morning and was raised by a family. So all of the work is always encompassing all four of those provisioning. I would love the first lecture in economics, if it had to start even narrowly with

this provisioning, to say, let's look at these four ways. Let's think of examples that you've been immersed in, even just today. How have you been involved in the household, the commons, the market and the state today? And you'd realise that just getting from your home to your lecture, that you'd drawn on all four of them and you'd contributed to all of them.

Then we start with a much richer picture of economics. So that's just one example how the simplicity of sticking up a supply and demand diagram totally limits what we think the economy is. So you've talked about the supply and demand diagram. And then also, you start the book Donut Economics, which comes out on the 6th of April this year, you start it with a powerful statement that you say, the most powerful tool in economics is not money nor even algebra. It is a pencil. Because with a pencil, you can redraw the world. And I think part of that goes back to what you were saying before about reimagining and the image within economics. But also, you bring in this assumption of economics being that which relates to money or algebra or equations or diagrams. So if you were to take that problem or that challenge,

and you were to go upstream to the root of it, why have over history, why has economics become reduced and reduced to numbers and diagrams and this type of thing why has it come to this that is a great question and it fascinates me as to how it's become framed so narrowly i would say one of the major reasons why economics has been reduced to a very particular kind of diagrams and very particular numbers and algebra is, I would say it goes back to 1870, when in the UK there was William Stanley Jevons, who was an engineer who was becoming an economist. In Switzerland there was Leon Walras. In Austria there was Karl Menger. They wanted to make economics a science as respectable as physics. This was the ambition.

They saw the towering genius of Isaac Newton, who had discovered the underlying laws of motion of the world. And he could describe the movement of falling apples or rotating planets with his physics. And on it had been built incredible empires and they wanted they explicitly said we want to make economics as respectable science as physics and so they took it directly as a metaphor just as a pendulum swings to rest because gravity pulls it down so markets are drawn to equilibrium because prices pull them into position and they they loved playing with

this metaphor they even drew their diagrams in the style of Newton so if you look back at Jevons's diagrams of supply and demand they were drawn in the style of Newton's diagrams of a falling object so it was the desire to be like physics which then again drives the mathematization not just from the diagrams resembling physics but but then the mathematisation to pin this thing down, but also to find out the underlying laws of motion. And I think that's probably been the most pernicious result of this desire to be like physics, to look for the laws of motion as if the economy, the way the world works was driven by these laws that we needed to discover. And I think that's really led us astray over the last 100 years and has given rise to a very strong neoliberal story that let the market do its work.

Market forces, again, the language of mechanics, market forces will bring the economy into its right position. Don't get in their way, they will sort things out. In your book, Donut Economics, you redraw economics. You go from these Newton-like forms and algebraic equations to something more circular, something with space, with maybe even ambiguity or potential for looking different in different places and value oriented as well. So can you talk about that new model, that drawing that you have come to be the leader of? So the donut. So tell us about it and how does this change how we look at economics? So in the book, I'm critiquing the old ways of drawing, but I believe we're at a point in the world where critique is not enough.

You have to go beyond and you have to be propositional. You have to stick your neck out and say, I believe in this. I stand for this new diagram, even if it's evolving and it's imperfect. And so that's what I've tried to do in the book, showing old economics through seven diagrams and now replacing them with seven propositions for new diagrams that are part of a 21st century journey that we're on and one of them is focusing on what is the goal of the economy well the old diagram that told us what the goal of the economy was was one almost now had to be drawn because it

was so implicit in the language it was the goal GDP growth, which is just an ever-rising line going up, up, up. This deeply rooted notion that forward and up is good. So we have an ever-rising line of GDP growth. But we know that GDP growth and growth itself is not bringing all the well-being that we want in the world. The process we have now of GDP growth is leading to extraordinary environmental degradation and extraordinary inequalities as well. So I wanted to replace that with a new vision. And the one I've drawn,

slightly crazy though it sounds, looks like a donut, an American one with a hole in the middle. So if you imagine an American donut with a hole in the middle, that hole in the middle is the, the whole donut is trying to represent a vision of the world in which we can meet the needs of all within the means of our planet that's

the vision of human well-being that is depicting so that every person has the resources and the abilities to meet their needs and rights to food water health, health, education, housing, community, connection, energy, political voice. So we can meet all of those so that we can all lead lives of dignity and opportunity, but that we can do so within the means of the planet, within this extraordinary benevolent phase of our planet's history, the last 11,000 years in which the planet's stability has been so generous to allow humanity to flourish. So the donut tries to capture that in one image. So if you think of this American donut with a hole in the middle, when people are falling short on life's essentials,

they would be falling into that hole in the middle of the donut. That's a space of human deprivation. And we want to get them out of that hole in the middle and into the donut itself. But if we put too much pressure on Earth's life-giving systems, such as on the climate system or the freshwater cycle or the oceans or the ozone layer, we would push our planet out of this extraordinary stability that it's given us. And that would be like going beyond the doughnut's outer crust. So you don't want to fall short on human well-being into the

centre of the doughnut and you don't want to overshoot the planet's capacity beyond the outside edges of the donut. We want to be in that donut-shaped space in between the two. And suddenly, when you draw it like that, the shape or the feel, the pulse of what progress looks like is no longer this ever-rising line going up, up, up, up, up. It's a thriving balance. It's a balance between meeting the needs of all within

the means of our planet. And it's going to take all our human ingenuity this century to figure out how to do that for 10 billion, perhaps more people. All our ingenuity about different ways of governing ourselves, the kinds of technologies we use, the different ways of provisioning, whether through the market, the household, the state or the commons, to figure out how to do that wisely and well. That's what makes it so exciting to be an economist now. As you were saying that, I was just thinking of, you know, limitations on artists can sometimes bring real creativity. And I was just seeing if you're really, your goal is just to grow in terms of profit or GDP, it's quite easy, it's quite a just a never-ending game.

But if you really have to work within this safe and just area for humanity, you have to get really creative. I absolutely agree. The idea of, so the donut is drawn between what's called two sets of boundaries. There are social boundaries in terms of everybody's rights to water, health, education. And there are planetary boundaries. And that's drawn from leading earth system scientists who have said we believe there are nine critical earth system processes that we need to safeguard and keep our pressure within if we don't want to kick earth out of kilter and those ideas of

boundaries some people have responded to me when i've shown them the donors little boundaries i don't like boundaries you know i just want to break through boundaries. But you say, wow, but think of the most creative minds in history. Jimi Hendrix didn't ask for a 21-string guitar. He was extraordinarily creative within the frets and strings that he had. Mozart didn't ask for a bigger keyboard. He got creative within that space. Jackson Pollock didn't ask for ever bigger canvases. He got more creative on that canvas.

So sometimes boundaries are absolutely what drive our creativity. And I think designers, when I posed the donut question to designers, they rubbed their hands with excitement. City developers, oh, wow, this is exciting. How can we provide a city district that meets the needs of all of its citizens and inhabitants within the means of the planet in fact there are some city designers in stockholm who've who contacted me so we're using your donut to design what we call the most livable city districts in the world we want it to be a donut district precisely because we are excited by this design challenge so you you mentioned that part of the first part of the book is really changing the goal

of the system to this thriving space for humanity within these boundaries. So there are a few other initiatives about changing goals of the system, including gross national happiness, for example. So how does it, do you see it as like uh this is part of a of a pluralistic movement to change the goal and they're all kind of very similar or you know how do you how do you connect with those other movements i feel like we're cousins i feel like it is a pluralistic movement because we are only just beginning to try and describe to ourselves a new what we're here for what progress would look like this century. And so as ever, when you're trying to describe something new, it's great to just try and

describe it from many different directions. I've tried to do it through a picture. Others tried to do it through a unified index. So a single index that adds things together like genuine progress indicator or the gross national happiness. Others try to do it through a multidimensional dashboard. It's many ways of describing an elephant. And we need them all. And some people are touched by image. Some people are touched by numbers. Some people are touched by a dashboard.

Some people are touched by words and finding the right phrase. So I like them all. I embrace them all. And different people will see themselves in different ones of these. I think different ones meet different needs. And I think, for example, something like the Genuine Progress Indicator, which is trying to show it in one number, it's trying to replace the single number power of GDP. I want to say, and I see that as a very powerful project, and I worked for four years at the Human Development Report in New York, where we created a single index, the Human Development Index, precisely trying to displace GDP as the way of ranking countries' progress.

without trying to always add them up because the planetary boundaries framework that comes from Earth system scientists like Johan Rockström and Will Steffen, their idea is that these are critical, nine critical systems, each of which must be respected. So each one has an inherent boundary within it. So we can't necessarily add them up and say,

well, you might be over on one, but you're under another. It doesn't matter if you've, you know, let's say sub-saharan africa if the soil is completely degraded it doesn't matter so long as there are enough students with phds you can't balance off poor soil with more education each one of these has a minimum threshold that needs to be preserved so there are some aspects of characteristics that mean it's very, very hard to add it all up. So let's look at it from different lenses. But I embrace all of these. I absolutely think we need the richness. We're on a journey of discovery. And so we need to tell it

to ourselves in many, many different ways. So one of the things that I was thinking about as you were describing maybe why economics has been reduced to these diagrams and equations is because it's so simple and it's so easy to understand. And I remember doing equations where I tried to find the new point of equilibrium if like, say, the price went up or something like that. And it was so nice to just get a number and then get it right. So part of one of your messages, one of the seven messages of the book, is that we need to think in systems and that we need to think in complexity. And that can be challenging to do because it's different than this. And I was thinking, as you said, population will rise. I mean, so there's different dynamics that will change.

And so how do you recommend beginning to think in systems to beginning to think of this as a complex system and not just a equation yeah so i think this shifting our mentality from understanding the economy through the lens of mechanical equilibrium which is what we got from jevons and and valras and those who wanted to be like Newton, from mechanical equilibrium to the dynamic complexity of systems, it is absolutely, complexity can be overwhelming. I would say actually some of the reasons why Trump's message in the US is very appealing to people is because it sounds like it's coming away from complexity and I'm coming with clear, simple solutions to things. I think he speaks in a very anti-complexity way, which is a relief if you're quite overwhelmed by the complexity of the world. But it's, I believe, not the right

solution. We need to embrace that complexity because we can be smart designers within it. So one of the things I think is most important to realise is that when we were understanding economics through the lens of mechanical physics, the economists were searching for laws of motion. And there are three laws of motion that I think they thought they stumbled upon, which have so dangerously shaped economic stories over the last century and 50 years. And the first one we've talked about, it's the idea that markets are self-equilibrating. So don't interfere. Laissez faire. Get out of the way, the market will sort itself out.

And this is a fundamental neoliberal story based on the idea that it will, that this is a fundamental law of motion, that the prices will pull the market into equilibrium and the equilibrium will be good. But there are two others that have been incredibly powerful. And one was created in 1955 by Simon Kuznets, drew something called the Kuznets curve. And it's a story of inequality. And if just for anyone listening, imagine in your head, a child drawing a picture of a hill. It starts with a slope going up, and then it peaks and then it slope comes down the other side, like an upside down you. And this very simple little picture was drawn in the 50s saying, we think that inequality works like this. As an

economy grows, first, it gets more unequal. We're not quite sure why. But this seems to be happening, but then it gets more equal again. So the story was, don't worry. If inequality is rising, don't worry, because more growth will sort it out. It has to get worse before it can get better, and growth will make it better. And it was the same story on the environment. And just really quick,

do you think that's partially because of trickle-down theory, that it goes up, but then more people will get jobs and work? Is that inherent in that curve? So trickle-down is absolutely part of the explanation for why we think this curve happening it's kuznets thought it was because people were moving from the rural areas to the urban areas he wasn't actually convinced by it but he said i think i'm seeing this pattern in the data he didn't have enough data what's happened was he didn't have enough data at the time and he wrote very carefully full of caveats i don't think I have enough data. This is 95% guesswork. It would be terrible if this became a sort of dogma, but this is what I seem to be seeing. It became a terrible dogma. It became

the story. Don't worry about inequality because it has to get worse before it will get better. The Kuznets curve tells us this is an economic law of motion. That justifies trickle-down theory. Thomas Piketty's book in 2014 was probably the moment at which that story ended. He said it is not happening. In fact, countries that think they've gone over the hump, it's getting worse again. In the OECD countries, inequality is worse than it's been in 30 years. There is not a hill going up and then down. There is no law of motion. It's all a matter of design. It's how you design your economy,

how you design the role of money, the distribution of wealth, the deep power distributions underneath shape the design. And it's the same story in the environment. There's an environmental Kuznets curve. It says, don't worry about pollution. It has to get worse before it gets better. That too is being disproven.

It doesn't get better. It just gets sent somewhere else. So we're getting rid when we get rid of that equilibrium thinking we're getting rid of these old economic laws of motion and then we move to complexity really quick you said there were three so you said sorry the first one is the supply and demand yes the market will equilibrate itself the second one is kuznets curve about inequality it has to get worse before it will get better the third one is Kuznets' curve about inequality. It has to get worse before it will get better. The third one is the environmental Kuznets' curve. Oh, on pollution, just like inequality, that also has to get worse before it gets better. And so they've taken us through, let's have

neoliberal economies ruled by markets. If you think things are unequal, don't worry, that's going to sort itself out. In fact, more growth will sort it out. And if you're worried about the environment, you environmentalists, you know know pushed into a corner don't worry because the law of motion shows that that has to get worse but then it'll get better that too growth will sort it out so we've been told growth will solve these it hasn't happened it isn't like that because there are not these fundamental laws of motion. The economy is complex. It's a matter of how it's designed that throws up all these patterns with emergent properties and feedbacks that are continually happening. Now, on the one hand, you can say,

once I start thinking in terms of complexity and systems, that is overwhelming. On the other hand, you can say, that is so exciting because it means that if the economy is always evolving given the design patterns that are put into it how we design money how we distribute wealth who owns land who owns intellectual property this all reshapes the dynamics of the economy that means we're all designers and that's empowering because where i put my money how i spend spend my money, how I create intellectual property, do I put it in the commons or do I patent it? All these small decisions that I make are helping to create a critical mass of an evolving system. So actually, we all have a hand in reshaping this evolving system. And the more that we think about its underlying design properties,

the more exciting it can be to be part of that redesign process. So rather than feeling overwhelmed by complexity and trying to run away from it, I think it's exciting to lean into it. Think about what are the fundamental patterns. We need to create an economy that's regenerative, that reuses its own resources, so that it's working within the processes of life. We need to create an economy that's distributive resources rather than concentrating them in the way that the capitalist economies that we have today have done so how can we be involved in that redesign process as as you're speaking i'm thinking yeah it's definitely not just an image because inherent in the image um i'm guessing the idea is to actually measure to find some way to

measure the inner circle so are people feeling that their needs are being met and then also measuring the planetary boundaries so that then you can know where you are know where you want to be and then get creative within the complexity of that space so i'm imagining kind of like a step is to start measuring and to start looking is that absolutely so the donut diagram i've drawn if we go back to think of it in the donut it's divided up so the inner circle that in the inner hole is divided into 12 spaces and i've got measurements for that so at the global scale we can say that you know 11 of people are undernourished and don't have enough food to eat um so we can and for each one of those dimensions there is around

you know at least many millions of people who are falling into that space in the middle. And then also we can measure on the planetary boundaries. And the Earth system scientists who've measured that say that we are already over or for planetary boundaries. So we're over on climate change. We're over on the amount of land that's been converted from its natural coverage. We're way over on fertilizer use, nitrogen and phosphorus. And we're way over on fertilizer use, nitrogen and phosphorus. And we're way over on biodiversity loss. So the state of the world now, when we do put those measurements on, is that many millions of people are still falling short on life's most basic essentials

of income, health care, access to energy, clean energy, political voice, equality within society. And yet we've already gone over four planetary boundaries. So once you put, as you say, put those metrics on, you see this is the state of the world we're in. We're outside of the donut on both sides. We've fallen below it, fallen below on its shortfall, and we've gone into overshoot beyond its outer boundaries. And to me, when we see that image, the 21st century challenge is clear.

It's to come into the donut from both sides, to eliminate the shortfall on life's essentials for everybody to make sure everybody has the resources they need but to do that simultaneously with coming back within planetary boundaries if we think of previous attempts to get people out of poverty it's been focused on ensuring everybody has the resources they need but without that attention to the planetary boundaries. So for the first time, our journey forward is unprecedented in that sense. Because we're eliminating poverty at the same time as coming back within planetary boundaries. That's why it needs all the creativity we can throw at it. So you're speaking a lot at the international level and even maybe the national level.

Is there a way to measure this within yourself? Because I'm just imagining taking an ecological footprint quiz for myself was really helpful to see where my own consumption was and how many earths it would take if everyone lived the way that i live so is there is there a way to to do that for one's own i can imagine that one could take the donut framework and say i'm going to you draw on the metrics that exist you could use carbon footprinting nitrogen footprinting land footprinting water footprinted to start measuring an individual person's impact on planetary boundaries and you could likewise ask yourself i mean when i what the way i imagine it is imagine putting the donut diagram on a table

and sitting at that table with your own life and asking yourself how does the way that I shop eat travel bank volunteer demonstrate how does the way I do all of these things affect humanity's ability to ensure that everybody lives above the social foundation but that we come back within the planetary ceiling am i buying tea that is fair trade and i know that people are being paid a living wage and that it is respecting the ecological systems in which that tea is grown or am i just buying the cheapest cheapest tea that i can get from you know the shop so how how are my purchasing choices affecting that and we could think of it very much on a personal scale. You can also take it up to the scale of a town. In fact, there's one town in South Africa called Kokstad.

It's the fastest growing town in KwaZulu-Natal. The municipality there, together with youth and a consultancy service, took the donut. And they said, we're going to use this to revision the future of our town and the young people there said well into the social foundation along with health and education and water we want to add fun because we want this to be fun which i thought was fantastic but they said what how does our town need to develop in such a way that it meets the needs of all within the means of the planet so you can take it from the personal level to the town and all the way up to the globe and also at the national level whether we create exact metrics for it it's a project that could be done i think the most power though lies at the paradigmatic level at revisioning what progress

looks like um so we could go down that step and some some people love the metrics, but you don't need to have the numbers to feel the fundamental idea, the revision of what it's about. And so one of the seven invitations to think like a 21st century economist at the end is to go from growth addicted to growth agnostic. And you've talked a little bit about growth. What do you mean by that? How are we growth addicted? And how could we be growth agnostic? So the drive to replace GDP has been going on for over a decade.

People, well, actually, for 30 years, let's say people coming up with alternative indicators to GDP and some and some powerful ones and compelling ones. But I think we would be wrong to think that just because we came up with a good indicator that better capture what human progress might look like, that somehow this really would just replace GDP as a metric. economies, particularly in high-income industrialized economies with very complex financial systems, those economies have been altered throughout their process, their political level, at the social and cultural level, to become dependent upon growth. So that the financial system, the political political system and even the social system expects depends and demands continual growth of gdp i'll give you examples of that so the financial system demands it because you've got first the financial search for gain as polanyi

wrote in the 1940s that search for gain really transformed how economies were designed and how that attempt to accumulate and the power of capital transforms an economy so that it's structured now around this notion of continual growth. Positive interest rates put in place the need for growth in order to repay those positive interest rates. Politically, nations' economies are addicted to growth. And I would say one of the ways is because every government, think of the G20, they get together every year and there's a portrait taken of all the G20 leaders. I think of that as the G20 family photo. No leader wants to be ousted from the G20 family photo. But if they don't keep their economy growing, they may find themselves ousted by the next East Asian powerhouse that's coming through. So what matters is not absolute wealth of a nation, it's relative wealth in terms of your geopolitical level, every country needs to keep growing in order to keep up with its neighbours in terms of having geopolitical power and military power. How do we crack that nut? That's a real lock-in to a growth mentality. Governments also want their economies to keep

growing because rather than raising taxes, they'd like tax revenue to grow because the economy has grown, not because they had to put the percentage of tax up. So the desire to have low taxes means if tax revenue is going to grow your economy really needs to be growing so you're getting more revenue back another lock-in to that growth mentality and then the last one the social lock-in a hundred years of consumerism kicked off i'd say by edward bernays the nephew of lucian freud fascinatingly he took his uncle's psychological psychotherapy theories and applied them to shopping therapy and realized that he can influence people and persuade them that by buying something new, you will transform your life and make it better. We've been addicted to that psychological consumerism over 100 years. How do we overcome

that now and unhook from that deeply rooted desire now that buying something more is what makes our lives better. So financially, politically and socially, we've been hooked into growth, and hooked into dependence on GDP. And the way I like to think of it is that today we have an economy that has to grow whether or not it makes us thrive. that has to grow, whether or not it makes us thrive. What we need is an economy that makes us thrive, whether or not it grows. And I say very clearly whether or not it grows,

because for some people, they very clearly believe that GDP growth must stop and GDP growth must go down. I think when we look at the transformations that are required in our economies and our societies in terms of shifting to renewable energy, in terms of creating regenerative economics that uses a circular pattern of resource use, in terms of redistributing resources between people. It's not obvious to me whether GDP first needs to go up and then maybe it'll flatten and go down, or maybe it'll go down and then go up.

I can't predict that or foresee that. And I find it strange when people feel such a conviction that it will go up or it will go down. GDP is just the number of goods and services, the value of goods and services exchanged in the market today. It's only one segment of those different forms of provisioning we care about.

So I think of it as a response variable. It should be responding to the design needs of the economy and that means it might go up and it might go down if we're going to be able to allow it to respond it has we have to overcome that addiction to its growth because we're currently locked into it growing so we don't have the space to redesign our economy around it being regenerative and distributive we're still locked into growth yeah so being part of being growth agnostic is again this complexity or systems way of looking at it where you really can't just isolate one thing and and predict where it goes because it's

within a whole complex system of things that are happening yes and i would just say that i think our economy our societies have become deeply um addicted to growth at a very psychological level the the cognitive scientist george lakoff has done some fantastic work on the metaphors we live by and one of the most profound metaphors we live by he says is the idea that progress is forwards and up think of a child learning to crawl and then walk think of of the way we draw humanities, you know, the depiction of humanity coming from the apes and up to homo sapiens. It's drawn as a lolloping ape and then standing up homo erectus and walking, striding forward, forward and up. So we're like in some sort of Peter Pan phase of economics. We think we're always going to be

growing, but nothing in nature grows forever forever and if you take anything that you love and imagine what would happen to it if it grew forever it will either destroy itself or destroy the system upon which it depends i think about cancer right and and people often say well cancer grows forever but even cancer doesn't grow forever because it kills the host on which it depends. So from a systems point of view, growth is a healthy phase that then reaches maturity. Whether it's of a tree, of your children's feet, of the Amazon forest. Why would that not also apply to human activity that's monetized? Why would there not be a point at which it's reached a mature size within the life-giving

systems that sustain us it seems very strange to me that economists have a deeply set belief that it that growth can just continue forever if you admit to yourself or begin to recognize that perhaps the economy's growth might be most healthy if it's like all other kinds of growth in in the universe which is it goes through growth phase and then it matures then we can ask ourselves a question where are we now on that growth journey to which i also don't know the answer are some economies reaching the peak of their growth phase i don't know but if they're growth addicted they won't be allowed to that's why we need to be growth agnostic so that if we're reaching the peak of growth at which it's the the growth phases needs to be allowed to stop and the economy can just

become as some would say steady state it's still large it's as large as it is today but it stops expanding it can only do that if it's no longer addicted to growth and so looking at our relationship to growth is important. And then you also mentioned in your last answer around our relationship to power, because as you said, growth is connected to power, both militarily and economically. And so it was a good point that we also need to look at that. And what comes to mind, I learned recently the difference between two words about power in German, Macht and Kraft. And that Kraft is like power with or power through.

It's a much more kind of accompanying power or supporting power. And then Macht is power over, is dominating, is oppressing. And I was just thinking maybe part of the 21st century economist and politician is re re wording or re-looking at our relationship to power and how how can it be a power with our community or our nation or our people and and the more than human world as opposed to power over other countries that's fascinating yes that sounds very much um needed to to recognize what who is in my community what is the sphere of my community and that the power of nation states and the power of that framing has made nation states

compete against each other and we have this challenge where now military power, geopolitical power, how can we come to have that blue marble moment where we all see our shared planetary home and say, actually, we have the power together to thrive here well? Which is why I like to think of economics moving from that level of the nation state household management to the planetary scale household management and recognizing ourselves all as inhabitants together within it upon which we all depend on our common thriving and the more we recognize those systems the more the language of the commons comes in because we realize we share these global commons of a stable atmosphere of healthy oceans of a protective ozone layer we all depend on these same so we have the power together to protect, restore, and thrive within those if we can be wise enough to do it. So Donella Meadows, the systems theorist, talks about leverage points for change and for systems change. And she mentions that changing

the paradigm is one of the highest points. And you mentioned that, that if anything, you really hope that this book really begins to change the paradigm and that you don't necessarily go into the specific ways in which each, you know, that can be figured out later by metrics or by individual communities. And so I'm wondering about your own theory for change as you release this book and kind of what you hope for it. Your deepest hope for this book as it as it's sent out you spent so many years now working on it and crafting it and now you're

releasing it what is it that you hope for this book first i i love that you just mentioned donella meadows because she has so deeply inspired me and you know sometimes they're in life people who think i so wish i'd met this woman before she passed away because I I'm I would have loved to have had the chance to talk with her so thank you for bringing her into the conversation um when I first drew the donut I was amazed by the response to it and it was through that that I really understood her message about the power of changing paradigms because it's a picture that calls us to think of a new paradigm so as I release this book I'm further expanding and sharing that new way of thinking and I've tried to accompany not just the donut but with all these

new diagrams of economics but one of my deepest hopes for the book is first for those who come across it and read it to always be questioning of the images that we see to know that to tell new stories we need new pictures and to ask ourselves from any diagram that's shown to us what's it showing and what's it not showing what's left out and that's at least as important as what's visible. Second, I hope that it'll inspire people to reclaim the word economics and to say, I so want to be part of managing this 21st century household. And third, to discover joy in economics. I've come across so many students who study economics at university who say,'s all maths where's the politics where's the dynamism where's the the real world issues it's just turgid maths and that's a devastating

fate for a discipline that claims to be the mother tongue of public policy so i hope that people who read this book say actually actually, we can reclaim the meaning of economics, the space of economics. And you know what? I am an economist. I'm a household manager. If I set up an enterprise

and I set it up in a new way, if I bank in a different way, I am a household manager in the way I lead my life because in this extraordinary complex system in which we all play a part, we're all redesigning it through our actions so I hope it helped bring some a sort of theoretical framing that many amazing innovators and doers in the new economic space see themselves say I see how I fit

into that and I feel really empowered by that because I know I'm contributing to something that we so urgently need. Well, thank you for your time. And thank you for the work that you do. Thank you so much. It's a pleasure. You've been listening to an Upstream Conversation with Kate Raworth, author of Donut Economics, Seven Ways to Think Like a 21st Century Economist. For more information about Kate, and to order a copy of her book, please visit kateraworth.com. That's K-A-T-E-R-A-W-O-R-T-H.com. And for more from Upstream, you can visit us at upstreampodcast.org. The smoke is rising in the hallways

The fire's blooming from our boats that break To the morning we run To shoreline Calling us to speak the sun Waves under the earth and throes Casting ghostly shadows Tall like diamonds As we set fire to the sea Snowgates rising in the hallways Flowers blooming from our boats that race

Into the morning