A Post-COVID-19 Doughnut-Shaped Economy
Updated: Aug 4, 2020
By Lauren Adams
Themes: Economy, Environment, Policy
Economics is the main driving force of politics, public policy and decision-making in capitalist societies. In the 21st century, we continue to use centuries-old models of economics – with contemporary characteristics, namely neoliberal ones – to set the ideological tone, political policy direction and economic practices. Our neoliberal capitalist economic model is increasingly ineffective in helping us to understand our current moment and it has become easier to envision the end of the world than changes to capitalist societies (Malleson, 2014). We are in desperate need of a new model that puts people and the planet at the centre of decision-making before it is too late. During the post-coronavirus era, as nations look to rebuild, we fundamentally need to transform, not reform, our economies. In 2017, economist Kate Raworth proposed a revolutionary new model called Doughnut Economics that is built on a social foundation with an ecological ceiling in order to break the cycle of a growth-at-all-costs-and-profit mentality (Raworth, 2017).
In this article, I argue that in the post-coronavirus era, our capitalist systems need to be transformed using radical economic models as a framework, such as the doughnut model, in order to put our social and ecological needs at the forefront of decision-making rather than ongoing exploitation of people and planet for profit. I will begin by providing an overview of the doughnut economic model, then discuss why we need to radically transform, not reform, our current approach to our socio-economic lives. I will then highlight how we can put the model into practice.
A Doughnut Shaped Solution
What is Doughnut Economics? The Doughnut model of economics was developed by acclaimed economist and author Kate Raworth in her book, Doughnut Economics: Seven Ways to Think Like a 21st Century Economist, and gets its name from the doughnut-like shape, as illustrated in Figure 1. The Doughnut identifies the social foundation required to ensure that everyone lives within a “safe and just space” (SJS framework), and that we respect and live within the ecological ceiling/limits of our planet (Raworth, 2017). The inner circle of the Doughnut represents a social foundation designed and established on prior research utilizing a version of the Sustainable Development Goals as a base measurement that emphasises the importance that each person has their basic human rights and needs met. The outer circle represents our ecological ceiling and the nine planetary boundaries within which humanity must remain in order to continue to thrive. We have already crossed four of these boundaries: climate change, nitrogen and phosphorus loading, land conversion, and biodiversity loss. (Raworth, 2017). The goal is to stay within the doughnut so that all of humanity has their human rights met and to prevent overshooting the planet’s boundaries, also described by Raworth as the space for a regenerative and distributive economy (Krauss, 2017).
In her book, Raworth (2017) sets out the seven ways to think like a 21st century economist and challenges economists, businesses and individuals to center their decision-making on the principles as summarized below:
Change the goal: stop prioritizing the use of GDP as the predominant measure of progress.
See the big picture: raise questions around how the economy fits into the bigger picture and most importantly, how do we adapt our system for the long-term health of our planet?.
Nurture human nature: we need to change ourselves and our systems from self-interested, isolated, rational economic mindsets to become interdependent in order to bring ourselves into the “safe and just” space of the Doughnut.
Get savvy with systems: thinking in systems and feedback loops rather than in the mechanical supply-demand equilibria of our market system (Krauss, 2017), i.e. a circular economics.
Design to distribute: focus on designing economies to reduce inequality and distribute income and wealth, debunked mindset of the “growth will produce equality” from the Kuznets curve (Krauss, 2017);
Create to regenerate: highlight the importance of circular and regenerative models rather than business models which consume the planet’s resources, again debunking Kuznet’s curve.
Be agnostic with growth: prioritize thriving people and planet irrespective of economic growth. Replace the traditional exponential growth curve with an “s” curve to live in harmony with our environment (Ross, 2019, p. 85).
Building Back Better & Stronger
Why do we need new and radical economic models? Because we are in a social and ecological crisis. Our current reality in the era of a global pandemic and in the age of the Anthropocene is exposing the plague of neoliberalism and highlighting the exponential and detrimental impacts of the virus on marginalized populations as explored at length throughout this blog. Additionally, as the world’s economies halted during social isolation and country wide quarantine, data and research has shown reduced emissions around the world highlighting an unprecedented global example displaying the dramatic effects our combined ecological footprint has on our natural environment (Stone, 2020). This data compared across the pre and post-coronavirus era will continue to shed light on a global scale as the need to radically transform our economies becomes increasingly apparent.
For far too long, as demonstrated on a new scale during this time of crisis, it becomes clear that we have accepted the use of economic models and practices that continue to allow a profit-at-all-costs mentality that perpetuates infinite social inequality and permits the destruction of our planet (Stone, 2020). In the post-COVID era, we need to build back better and stronger by re-conceptualizing our economic lives and radically transforming, not reforming, our current approach using models such as Doughnut Economics.
The tipping point is here. In addition to the inequality people and communities are facing due to the pandemic, societal turmoil has been further exacerbated by the injustice faced by Black communities in the United States and globally. The Black Lives Matter movement and protests across the US and around the world are demonstrating social unrest, which historically depicts the beginning of social and political transformation. It is the responsibility of us all to use this unprecedented time to learn, engage and act to bring about systemic change. A united “we” needs to spend more time and energy pushing our leaders to adopt models like the Doughnut as alternative forms of economics while reshaping our global society (Malleson, 2014, p. 210). Visualize the transformational change we can create if economies around the world adopted and adapted the Doughnut model to suit various community’s needs. And imagine the change that could come if the Doughnut was at the center of every boardroom and household table when making decisions about the future.
There is No Planet B: Doughnut Economies in Practice
The Doughnut model was used in 2018 to measure the resources used in over 150 nations associated with meeting basic human needs within planetary boundaries. The research found that no country meets basic needs for its people at a sustainable level of resource use (O’Neill et al., 2018). If countries were to use the Doughnut model in the post-COVID-19 era to rebuild, nations would begin to move towards sustainability, and individuals’ lives would be transformed, recognizing that this is a substantial challenge globally (O’Neill et al., 2018).
Can the Doughnut Economic model be put into practice? It already has. In April 2020, Amsterdam announced that they would embrace the Doughnut model to mend their post-coronavirus economy and invited Kate Raworth to join the city’s post-pandemic economic planning efforts (Boffey, 2020). Amsterdam will use the model to transform the way they are evaluating various competing needs, while considering the impacts on the planet. The Doughnut will act as a framework for how Amsterdam looks at competing issues, including how to prioritize the need for affordable housing vs. environmental impacts of construction (Boffey, 2020). As Amsterdam utilizes the model, they will become a case study moving forward and provide opportunities to learn the model’s limits and how to adapt to continue placing people and the planet over profit.
The Doughnut model is not perfect, and it is imperative that cities and economies that adopt the model revise it to fit within their values and cultural norms. For example, researcher and educator Teina Boasa-Dean is working with a group of female leaders to adapt the Doughnut model to apply it in New Zealand utilizing perspectives and values of Indigenous and marginalized groups (Juhi, 2020). The goal of the model is not to provide a perfect solution, it is to provide a new lens for viewing economic decision making that strives for progress by putting people and the planet above profit. There is no Planet B. We are in dire need of regenerative solutions before we surpass the nine planetary boundaries and can no longer look back.
There is an urgent need to act now. We must spend more energy and resources to conceptualize alternatives to the current forms of capitalism. Our decision-making on micro and macro scales must be radically transformed across the globe before the detrimental impacts on our planet are past the point of no return. It is our collective responsibility to learn, engage and act to transform our current reality to rebuild a more promising future for generations to come. In the post-coronavirus era, our capitalist systems need to be transformed using radical economic models such as the Doughnut model, by placing our social and ecological needs at the forefront of decision-making rather than the ongoing exploitation of people and planet for profit.
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