Doughnut Economics

I recently read an article in TIME magazine about an interesting new economic theory called Dougnut Economics. The concept was first introduced by the British economist Kate Raworth in a 2012 Oxfam report and then developed more fully in her 2017 book ‘Doughnut Economics: Seven ways to think like a 21st century economist‘.

Raworth proposed the new economic model as a way to address one of humanity’s most challenging problems: how to reduce global poverty without depleting or damaging the planet’s limited natural resources.

The economic theory comes by its name because it is visually represented by two doughnut-shaped discs as shown below. The disc in the center represents a social foundation consisting of the basic fundamental rights all humans ought to have, like access to food & water, housing, education, work, etc. The outer disc represents earth’s ecological ceiling consisting of the environmental thresholds which cannot be exceeded if we want to guarantee the future prosperity of the human species.

The middle green area represents the doughnut, the space where humanity can thrive and progress if the planet’s boundaries are respected. Society’s goal should be to bring all of human life into the “goldilocks zone”; that sweet spot area where everyone has what they need to live a good life, but without overshooting the ecological ceiling limits which would cause further degradation of the environment and jeopardize the health of the Planet.

Capitalism has been the world’s dominant economic system since the 16th century and its adoption by the world’s fastest growing countries has transformed life on earth by helping to lift billions of people from poverty. It is an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Proponents of the Doughnut economic theory argue that capitalism is an imperfect system because it emerged during a time when humanity saw itself as separated from the web of life, one where ecological issues were ignored or labeled externalities.

The broad measure used as an economic scorecard in capitalist economic systems is the Gross Domestic Product or GDP. It is a measure of the total monetary or market value of all the finished goods and services produced within a country’s borders during a specific time period.

The Doughnut economic theory recognizes that economic prosperity depends not only on growth as measured by GDP but on human and natural well-being as well; and it encourages societies to shift to an economic model that is more regenerative and distributive than today’s capitalistic system.

They argue that continued application of 20th century economic thinking is not sustainable or responsible now that the world is aware that the planet is teetering on the edge of a climate breakdown and we know we will witness the death of the living world unless we transform the way we live.

In a doughnut world, local economies would sometimes be growing and sometimes shrinking. It recognizes that growth is a healthy phase of life but endless uncontrolled growth, like cancer, can be harmful to our overall health. Significant GDP growth may be very much needed in low and middle income countries to ensure that their communities can overcome the shortfalls that create deprivations for their citizens, while richer countries would focus not so much on growth but on maintaining their thriving social foundations but at a reduced ecological cost.

Adopting such an economic theory would help balance the inequities that are present in the world today – one where the high living standards of the people in rich countries have them overshooting the planet’s ecological ceiling, while people in poorer countries fall short of the fundamental human rights that comprise the doughnut’s social foundation.

Many economists are skeptical of the doughnut economic theory because in order for it to work it asks humans to magically become indifferent to wealth and income or how well they are doing compared to others. That is a difficult ask when the world includes 7.3 billion people.

Different class and national interests are always fighting one another and it is naïve to believe that globalized capitalism will suddenly transform itself to become more cooperative and gentle; especially when all indicators point towards citizens today becoming more commercially motivated, self-centered and focused on money and success.

I too am skeptical that something as revolutionary as a Doughnut economics system could be universally adopted given today’s political divisiveness, uncompromising culture wars, and money-fueled corporate lobbying interests. Too many rich and powerful people benefit from the economic status quo – and would use their influence within the halls of power to protect their self-interests.

However, the encouraging thing about doughnut economic programs is that they can be run at a grassroots level. Since its introduction many homes, towns, cities, and states have bypassed their national governments and done what they could to apply the concepts behind doughnut economics from the bottom up – to try and help their local societies become more resilient.

Cities have become the laboratories of doughnut economic programs. The simple way that the doughnut economic model captures both the needs of the people and the needs of the planet makes it a convenient tool for leaders to have big conversations about reimagining and remaking the future. Ideas based on doughnut economics are now being discussed, debated and put into practice in academia, business, and in town, city and national governments worldwide.

Amsterdam, Brussels, Copenhagen, Dunedin, Melbourne, Berlin, Portland and even Austin TX are examples of cities applying the new economic concepts as a way to help their cities attain social and environmental sustainability. Since the theory doesn’t lay out specific policies or goals, stakeholders are free to have constructive conversations to decide what benchmarks would help bring their communities inside the doughnut.

Amsterdam’s lofty ambition is to bring all 872,000 of their residents inside the doughnut, ensuring that everyone has access to a good quality of life, without putting more pressure on the planet than is sustainable. They have implemented a true price initiative which takes into account the carbon footprint of the goods and services they produce as well as the living wage requirements of the workers. To satisfy the dual need for more affordable housing and reduced CO2 emissions, Amsterdam has implemented laws making the use of recycled and natural materials mandatory in the construction sector and they have started transforming neighborhood parking lots into community gardens.

Without a series of universal solutions, which do not exist and will probably never exist, it will be up to the politicians and economists to determine which elements of the donut system can be implemented successfully and to what extent. Amsterdam has made a start by applying this litmus test question to all their municipal project decisions: “Will doing this project actually make our community healthy and happy?”

To all my readers, wherever you may be: I hope you are healthy and happy and living comfortably in the sweet spot of the donut – and I hope that you are thinking about what life decisions you can make today to ensure that future generations will have that same chance to have a bite out of the donut as you.

There is no such thing as bad weather, only unsuitable clothing

Humans have reached a point in their evolution where they can use technology to manufacture artificial climate silos in their homes, cars, and workplaces that insulate them from the effects of uncomfortable weather conditions. Even on the field of play, athletes labor under precisely controlled environmental conditions designed to prevent their performances from being disrupted by wild card weather elements.

This capability to create our own ideal environment is a relatively new phenomenon. It was only 250 years ago when the first efficient wood stoves were invented and only 100 years ago in the 1920’s when cars started to be mass produced. My mother who is 93 grew up in a house that had no indoor plumbing or home heating (except for the kitchen stove). The first new car I bought in 1982 did not come with air conditioning.

Back then, weather conditions were a big deal because you couldn’t avoid them. It was not really possible to separate life’s activities from the daily whims of Mother Nature. By necessity, people were exposed to the elements every day and had to learn to adjust their lives according to the ever-changing weather conditions.

They never knew what surprise weather conditions they would have to face when they woke up and would have been astonished at the advances in the meteorological sciences which gives us the capability to predict future weather events.

Today, we take it for granted that we can get accurate weekly, daily and hourly weather forecasts for any location in the world; but the value of this foresight is diminished by the fact that most people don’t even bother to check weather forecasts any more because our technology can overcome the weather. The outside weather now has very little impact on our life.

I was not sheltered from the weather when I was growing up. I had a paper route that required me to get up before sunrise to deliver newspapers to the homes in my neighborhood. Spring, Summer, Winter and Fall under hot, cold, rain or snowy conditions I delivered those papers. I walked to school on the other side of town in all kinds of weather conditions. I camped out with my friends in their backyards, at the city playground, and at the town cemetery. I spent many hours out in nature fishing, hiking and trapping with my father and brothers.

It is a shame, I think, that most people try to avoid having any direct exposure to the elements. I think the avoidance of what many people refer to as “bad weather” has taken some of the fun, excitement and wonder out of living. Some of the most memorable moments in my life have occurred when I stepped outside to embrace the elements head on.

Moments such as:

• Laughing while running with my children through the puddles on my street in my bare feet and shorts during a rain storm that broke up a prolonged heat wave.
• Paddling down a frosty river in an aluminum canoe during a cold and windy November afternoon to help my older brother check his trapline – my hands and feet numb from the 10 below zero wind chill.
• Walking home from a card game at a friend’s house during the great Blizzard of 1978 and losing my sense of direction in the whiteout conditions.
• Riding around with my Dad in a DPW snow plow, cleaning up the streets of the city after a big snow storm.
• Fly Fishing in the middle of a rain storm, catching one trout after another, only stopping when a bolt of lightning suddenly came down out of the sky and struck a tree on the other side of the river, setting it on fire.
• Walking home from my job late at night in the middle of a light snow flurry and being mesmerized by the big snowflakes doing a dance as they floated slowly down illuminated by the parking lot flood lights.
• Listening to the rain fall on the roof of my tent while camping – the repetitive sounds of the rain drops lulling me to sleep.
• Playing soccer with my colleagues after work during the steaming dog days of summer and drenching ourselves with water (and cold beer) to cool down.
• Standing in the face of gale force winds at the top of Mount Monadnock while doing some Fall hiking – the temperature 50 degrees cooler at the top than it was at the base of the mountain.

Sure, I was wet and cold or uncomfortable from the sun, heat and wind during many of these moments; but that is what made the moments even more memorable to me. We become so used to our creature comforts and living within such a narrow range of climate conditions, that it becomes remarkable to us when we choose to step outside and expose our bodies and our senses to something new and different.

I’m glad that I was taught not to fear bad weather, otherwise I never would have gathered first hand experience of the fury and majesty of our remarkable planet. I am in agreement with Alfred Wainwright who once wrote “There’s no such thing as bad weather, only unsuitable clothing”.

Wainwright was an author, illustrator and naturist who devised the popular Coast to Coast walk in England.  A shy and unhappy kid, Alfred hated to be inside. To escape, he began walking up to 20 miles at a time; and creating detailed maps and drawings of his local area and all the places he visited in England.

Wainwright believed that the precious moments of life are rare and to be treasured:

“The precious moments of life are too rare…we should hoard them as a miser hoards his gold, and bring them to light and rejoice over them often. We should all of us have a treasury of happy memories to sustain us …to be stars shining through the darkness.”

He also believed that direct exposure to nature in all its forms was one of the the surest pathways to create happy memories:

“Oh, how can I put into words the joys of a walk over country such as this; the scenes that delight the eyes, the blessed peace of mind, the sheer exuberance which fills your soul as you tread the firm turf? This is something to be lived, not read about. On these breezy heights, a transformation is wondrously wrought within you. Your thoughts are simple, in tune with your surroundings; the complicated problems you brought with you from the town are smoothed away. Up here, you are near to your Creator; you are conscious of the infinite; you gain new perspectives; thoughts run in new strange channels; there are stirrings in your soul which are quite beyond the power of my pen to describe. Something happens to you in the silent places which never could in the towns, and it is a good thing to sit awhile in a quiet spot and meditate. The hills have a power to soothe and heal which is their very own. No man ever sat alone on the top of a hill and planned a murder or a robbery, and no man ever came down from the hills without feeling in some way refreshed, and the better for his experience.”

Alfred Wainwright

So if you want to create new perspectives and feel a powerful stirring in your soul, I suggest you take Mr. Wainwright’s advice and find yourself some suitable clothing that allows you to get out and experience the weather in all its forms. Be one of the people who feels the rain and not one of the crowd who just gets wet!