The coronavirus crisis is taking our upside-down world and simultaneously shaking it up while forcing us into a collective “time out.” There’s no denying we are experiencing a shock to our economic system as we see just how broken it is. And without the normal flurry of busy-ness to divert us from the system’s profound flaws, now is an opportune time to ask the right questions and make desperately needed changes. Amsterdam is doing just that. Led by a female majority administration, the city will rebuild after Covid-19 using a whole new economic model: the doughnut.
Economist and author Kate Raworth says we need a better construct, with new symbols, in order to shift how we identify and measure economic growth. In Doughnut Economics: 7 Ways to Think Like a 21st-Century Economist, she claims our addiction to “growth” comes at the expense of life on the planet, to put it bluntly. I read this book right after it came out in 2017, and it has stuck with me like rainbow sprinkles on a frosted doughnut. In short, it’s brilliant.
I couldn’t tell you what motivated me to read a book about the economy — a topic that intrigues me about as much as asphalt. Somehow, I managed to get a fancy college education without taking a single Econ class (oops). And my eyes still glaze over whenever I hear numbers about housing starts, the GDP, or the Dow Jones Industrial Average. My basic understanding of economics happened courtesy of my grandfather when he attempted to explain supply and demand and planned obsolescence to me as a kid. My grandpa illustrated the economic ways of the world using a nameless company that manufactured toasters:
- A company gets material from the earth (because it has to come from somewhere) in order to make the toasters;
- They sell the toasters (using advertisements to convince people that they need a toaster);
- But they don’t build the toasters to last, because they want people to buy new toasters.
This was the first time I’d heard the term planned obsolescence, which caused me to scratch my head. I couldn’t grasp why anyone would choose to make a faulty product that wasn’t designed to last as long as possible. It made sense to me like the way that people embrace the idea of “Love One Another” on Sundays, but have no issue going to war on Mondays.
That wasn’t the only head-scratching aspect of his lesson. I remember wondering how long the extract-from-the-earth ⇒ produce ⇒ sell cycle was supposed to continue? I pictured an endless stream of small appliances coming out of the ground until everyone on the planet was standing on a ginormous pile of toasters. Because seriously, in a perfect growing economy-without-end, that’s the direction it would go. (And the direction it’s already going, per The Story of Stuff.)
So, when I read Doughnut Economics, I felt vindicated. I wasn’t that little kid who didn’t “get it.” Actually, I got it quite clearly. The book illuminated my 10-year-old self’s question about never-ending growth leading to an earth drowning in toasters.
While I can’t thoroughly summarize Kate Raworth’s theories, I suggest you read her book if you’re curious — or at least watch one of her videos. Her passion for the subject shines through, and she’s on a mission to educate, which she does quite well. In a nutshell, Doughnut Economics says we need new symbols to help shift how we think about, and measure, economic growth. We have all bought into the notion that growth is always good, and that the graph should keep moving up, up, up.
But with a doughnut framework instead, we look at the economy holistically: not just in terms of money, but also in terms of the health of the planet and all her inhabitants. The doughnut model suggests that the goal for a thriving economy is to stay within its two concentric circles. Any growth that happens beyond the outer circle is undesirable, since it’s harmful to our environment (and the wellbeing of future generations). At the same time, under-productive economic activity that falls within the inner circle is also unacceptable, since it causes harm to society.
It might be tempting to assume that a circle is static, unlike the dynamic arrows of our usual economic indicators. But I imagine the doughnut itself filled with thriving energy. Think Hadron collider and the potential of its power. At the same time, the circular symbol projects stability, as opposed to the precarious nature of a single line that aims for “growth at all costs” while perpetually avoiding a precipitous decline.
Making such an extreme change in how we define “economic success” seems radical and perhaps overly simplistic. I get that. But we need radical change. And while I’ve always thought change is better when it happens slowly, I’m re-evaluating that belief, as we all should. Just look at how fast we’ve rearranged our lifestyles — en masse — around the coronavirus.
Amsterdam’s bold move inspires. But is it something entire first-world countries could pull off? If we use the past as a model, the answer seems to be, No Way. If we look to the future to guide us, the answer is, We Must. In September 2019, then 16-year-old Greta Thunberg said it forcefully to world leaders at the UN: “We are in the beginning of a mass extinction and all you can talk about is money and fairy tales of eternal economic growth—how dare you!” It’s no coincidence that a teenage climate activist from Sweden has captivated the world with her message. At some level, we all know she speaks Truth.
But how do we reconcile our attachment to the “way things have always been” with the call to transform to “the way things could ideally be”? We know that when this Pandemic Pause ends, we can all expect to be pulled back into old routines even as we’ll be staring the same problems squarely in the face: environmental degradation, poverty, homelessness, gross inequality, racism, etc. These vast and desperate issues can put me into a state of paralysis. Because without a magical key to another dimension, I fear we’re on an accelerating countdown to doomsday. It’s where I’m left to hope-against-hope that some genius out there has an 11th hour plan.
Well, one did, sort of. There’s a quote attributed to Albert Einstein that goes something like this:
“If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask. For once I know the proper question, I could solve the problem in less than five minutes.”
The de facto goal of perpetual economic growth may not be the only problem threatening our ultimate survival, but it’s undeniably a big one. And if we took Einstein’s advice, I’d frame the proper question as “How should we measure economic growth for the highest good of humanity?”
Old thinking would be to hold on tight to that erect arrow as the ideal for economic health — and then conveniently ignore its side effects, finding other societal issues to blame. And we’d probably debate whether Einstein’s solution would apply, or whether Einstein even made such a statement.
New thinking shows us a clear vision that our current economic standard is a fundamental problem, and that if we do what we’ve always done, we’ll get what we always got: more of the same struggles. Instead, we will look inward and admit that waiting around for world governments to install a radical life-saving system might come too late. We know our children are not worth the gamble; we re-shape our thoughts to promulgate better ideas. If it doesn’t come from “powers that be,” it has to come from us.
Old way of thinking:
New way of thinking:
In Doughnut Economics, Kate Raworth says that symbols shape our thinking. Indeed they do. Powerful ideas benefit from having powerful symbols. But the only way a bold idea like “Doughnut Economics” can be executed is with strong, compassionate leadership — those willing to put Truth, Love, and Life above Profit & Loss. And guess who’s leading the way with that during our current crisis? (Hint: She’s not just the mayor of Amsterdam; she leads in places around the world.)
Perhaps swapping out the old symbols in exchange for the new one can represent more than a just better way to frame our economy. It can represent gender-balanced leadership, better prepared to serve with compassion and strength. Can you see it…? Yeah, me too.
With so many aspects to creating a healthy economy, how to choose the nonprofit that best complements this post… ? Find out where we decided to contribute in Becoming People Who Sustain the Earth.