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.
It seems like everyone I talk to believes that 2020 was a terrible year. It’s easy to understand why given the COVID-19 pandemic, the global recession, numerous episodes of racial injustice, refugees fleeing their homes, continued global warming, and to top it off, a bitter election year battle for the soul of the America.
Every day we are assaulted with negative news about wars, shootings, protests, pollution, inequality, poverty and the proliferation of nuclear weapons. These stories suggest that the world is in bad shape and many people living today are convinced that things here on earth have never been worse.
Despite all the depressing news coverage, people ought to be told that the world has actually never been better than it is right now. As hard as it is for us to believe – humans, as a species, are doing a lot better than we ever have.
That is the conclusion that Harvard professor and acclaimed science writer Steven Pinker comes to in his 2018 Ted Talk and in his book Enlightenment Now. Pinker argues that the world is not that bad. In fact, he says when you look at all of the objective data, our world is in the best shape it’s ever been and humanity is improving every day. He concludes that now is the best time in the history of the world to be alive.
We know that people did not live well in the distant past, regardless of how much money they had. For the vast majority of human history — if you were lucky enough to survive childbirth, life really was nasty, brutish and short. It was lived at the edge of starvation, and to modern eyes it looks unpleasant, boring and sometimes terrifying.
Pinker uses numerous categories as a yardstick to measure the variety of ways that the world is better for humans now compared to the past:
We’re all Living Longer
The average life expectancy of people today compared to the past clearly shows that humanity is flourishing. Just 250 years ago, one-third of children in the world’s richest countries did not live to see their fifth birthday. Today, even in the world’s poorest countries, more than 94% of children survive past their fifth birthday.
The life expectancy of a person born in England in the year 1558 was 22 years old! It slowly increased over the next few hundred years but it wasn’t until 1907 that the average life expectancy reached 50.
Today the average worldwide life expectancy is 70 years old and in developed countries it is over 80. There is nowhere on Earth where life expectancy is less than 50.
The advancements we’ve made globally in the last 100 years, even in our poorest, most war-torn countries, are incredible. The life expectancy in Somalia today is higher than the highest life-expectancy of any country in the world 100 years ago. In this respect even the poorest of third world countries is better off today than the richest, most powerful countries were in the early 20th century.
It is hard for those of us living today to imagine living during a time when so many people died so young. But all you have to do is walk around an old cemetery of people who lived in the 17th and 18th centuries to get an idea of how commonplace it is to encounter the gravestones of infants and children who died at a very young age; and how remarkable it is to encounter a gravestone of someone who lived past 80.
As an example, during a recent hike I came upon an old cemetery and was struck by the tragic family gravesite of Ansel & Esther Howard. They had three daughters: Sally born in 1825, Silvia born in 1827 and Nancy born in 1834. All of them died young. Nancy in 1836 at the age of 2, Silvia in 1845 at the age of 18 and Sally in 1846 at the age of 21. What heartache their parents must have suffered.
Family Gravesite of Ansel & Esther Howard
We’re Healthier Now
A big factor behind the gradual increase of human longevity has been incremental advancements made by the medical field over time. The discovery of antibiotics, vaccines, targeted medicines and proven disease treatment protocols – along with the increasing availability of clean tap water – have kept us alive and made our lives less miserable.
Our increasing knowledge of the human machine and how to keep it healthy has directly led to more people adopting healthy lifestyle regimens (diet, exercise and sleep) that when followed prevent or delay the onset of aging related diseases.
Thanks to the discovery of antibiotics like penicillin, developing an infection does not have to mean death or the amputation of a body part; and thanks to vaccines, virulent contagious diseases like Smallpox (which was responsible for the deaths of more than 300 million people in the 20th century) no longer terrorize the earth.
We’re Safer Now
If you only paid attention to the news, you would probably think that crime is at an all-time high, when in actuality the American crime rate is at a 50 year low and roughly half of what it was in 1990. In the last thirty years alone, the homicide rate has dropped from 8.5 per 100,000 to 5.3 per 100,000.
There is also less conflict between countries today. Before the advent of modern democracies most of the world was run by fanatics and madmen like Attila the Hun and Genghis Khan who would destroy entire cities and murder their populations over the slightest provocation.
During the 1950s, there were an average of six international wars per year going on, with approximately 250 people per million dying war-related deaths. In the last ten years the world has averaged only one war per year with less than 10 people per million dying per year. There has also been a reduction in the number of nuclear arms from more than 60,000 in 1988 to 10,325 in 2017.
There are still far too many conflicts in the world, but as hard as it might be to believe, there are much less of them than there ever have been before.
And let’s not forget that a great Civil War was fought to eliminate the scourge of a robust slave trade that abducted millions of Africans, shipped them to foreign shores where they lived in bondage and were subjected to the atrocities of rape, beatings, family separations, lynchings, racial hatred and political disenfranchisement.
Other developments over the last 50 years years that have served to make us safer include:
Labor laws ensuring greedy businesses do not exploit children or force workers to toil under unsafe operating conditions.
Civil rights laws preventing discrimination against employees and job applicants on the basis of race, color, religion, sex, national origin, disability, or age.
Department of Transportation agencies establishing codified safety standards for automobiles, highways, railroads, aircraft, boats and the safe transport of hazardous materials.
Because of our adherence to these safety standards over the last century we’ve become 96% less likely to die in a car accident, 88% less likely to be killed on the sidewalk, 99% less likely to die in a plane crash, 95% less likely to be killed on the job, and 89% less likely to die from a natural disaster.
Environmental Protection regulations protecting the nation’s air, land and water from being polluted by the waste generated by the Industrial Revolution.
Prior to these environmental protections laws, the industrial waste generated by factories was allowed to be dumped directly into the environment poisoning the air, land, and water and sickening the people who came in contact with it. Thirty years ago in the US, there were 35 million tons of hazardous particulate matter in the air, today that has been reduced by 40% to 21 million tons.
As a young boy growing up in the 1970’s I remember there were rivers that were considered too polluted to fish because they were downstream from a paper mill or factory. Other rivers had no fish because they had been killed from the sulfur dioxide and nitrogen oxide compounds that poured into the streams in the form of “Acid Rain”. Today, these rivers run clean and the fish thrive.
There is Less Poverty Now
Global poverty is one of the worst problems that the world faces. The poorest in the world today suffer with diminished health because they are often hungry, poorly educated and have no reliable access to electricity, plumbing or medical care.
For much of history, only a small elite enjoyed living conditions that would not be described as ‘extreme poverty’ today. But with the onset of industrialization and rising productivity, the share of people living in extreme poverty started to decrease. Over the course of the last two centuries, one of the most remarkable achievements of humankind has been the reduction in the share of people that are living in extreme poverty.
Two hundred years ago 90% of the people in the world suffered from extreme poverty, today less than 10% do. As recently as 50 years ago, half of the people in the American South lived in extreme poverty and had no hope of improvement – but today no southern state has a poverty rate higher than 20%.
Cutting the global poverty rate in half since 1990 has translated into approximately one billion less starving, desperate people in the world today.
The trend continues to be positive due to globalization of the world’s economies and government social programs that provide aid to the needy. It is important however, for us living today to recognize how incredibly privileged we are to live at a time when, thanks to technological advancements, even the poorest citizens live in more comfort than the richest kings of yesterday.
We’re more Educated Now
When my mother was a young girl growing up in the 1930’s she was lucky to attend elementary school through the 7th grade. She was part of a farming family and her father thought it was more important for her and her seven siblings to stay home and help him run the farm.
That was the norm back when children were put to labor at an early age on the farm or in the factories. Educating children was not a priority or a requirement, so many children never participated in formal school training.
Before the 17th century, only 5% of Europeans could read or write. Today, more than 90% of the world’s population under the age of 25 can read and write. Literacy is at an all-time high and a more educated populace has had a direct effect on lowering the global poverty rate.
In addition, patriarchal dominated systems around the world are now being pressured to offer equal education opportunities for the women in their country that were denied in the past.
We’re more Productive Now
Constant advancements in science and technology have been the foundation underlying most of the reasons why humans are better today. Poverty, life-expectancy and quality of life are all better because science is being harnessed to make us more productive.
Take hunger as an example. Back in the 1970s, many people were concerned that the world would not have enough food to keep up with the growing population. That fear was portrayed in the old movie Soylent Green. Food shortages would have been a major problem indeed, had not science made remarkable advancements in the areas of agriculture and food-resource management which enabled the food industry to exponentially increase their crop yields.
People also have more free time today to devote to productive pursuits because new labor-saving gadgets have been invented that dramatically reduce the amount of time we spend doing housework. In the last 100 years, the average time spent doing housework has fallen from 60 hours a week to fewer than 15 hours a week! That gives modern humans an additional 45+ hours per week to spend pursuing productive activities, making it possible for women to leave home, join the workplace, and make positive contributions to society.
Finally, the advent of the world-wide Internet and global cellular communications has had a tremendous multiplying effect on society’s productivity. We take it for granted today that most everybody has a smart phone genie in their pocket that, within seconds, can connect them to anyone at any time, give them precise directions on how to navigate to any destination, play any song ever recorded or answer any question that they can think up.
None of this technology existed 20 years ago. Think about how amazing it is that you can find just about anything you want within seconds – a book, a movie, a new pair of boots. We get to live in the kind of world that used to be imagined only in science-fiction novels. My 92 year old mother, who we are training to use an iPad, stares at us in wide-eyed wonder when we show her what she can do with the device. She can attend her Church service, visit with her grandchildren and watch her soap opera all without leaving her chair!
Of course, constant communication and information overload also plays a part in explaining why everyone is so convinced that things in the world are so bad now. Everything is so immediate, the entire world laid out in real-time before us – and that can be scary and stressful.
But the information overload may actually help save us because it makes us look the world in the face and confront all the evil that has nowhere to hide anymore. We can’t pretend George Floyd wasn’t unjustly killed because we all watched him slowly murdered by the police on our TV screens and Twitter feeds. In a sense, the outrage, horror and disgust that gets generated by exposing these heinous events actually helps keep the world from spinning further out of control by bending the arc of the moral universe further toward justice.
Contemplating all the ways that the world is better for humans today compared to the past was a good exercise for me because, as my wife reminds me, I do have a tendency sometimes to focus on the negative (when I do this, my wife calls me Eeyore because my behavior reminds her of the gloomy sidekick character portrayed in the Winnie the Pooh children’s books).
You can always fool yourself into seeing a decline if you compare the constantly bleeding headlines of the present with the rose-tinted memories of the past.
Pinker concludes that while the world still has plenty of problems to solve, it’s healthier for us to look at the big picture and see the glass as half full. “We will never have a perfect world, but there’s no limit to the betterments we can attain if we continue to apply knowledge to enhance human flourishing and if we think of issues like climate change and nuclear war as problems to be solved instead of apocalypses in waiting.”
I have a new appreciation for all the blessings that come with living in the present age, I feel grateful to be a beneficiary of all the progress the world has made, and I look toward the future with optimism, in the hope that it will be an even better world for my grandchildren.
So, I salute 2020 as the best year ever! Henceforth, whenever I feel my inner Eeyore rising, I will remember how good I have it and remind myself to always keep on the sunny side of life.
There’s a dark and a troubled side of life There’s a bright and a sunny side, too Though we meet with the darkness and strife The sunny side we also may view
Keep on the sunny side, always on the sunny side Keep on the sunny side of life It will help us every day, it will brighten all the way If we’ll keep on the sunny side of life
Lyrics to old Folk Spiritual “Keep on the Sunny Side of Life” as sung by the Carter Family
Words to Live By... 