Stale doughnuts

Book review of 'Doughnut Economics: Seven Ways to Think Like a 21st Century Economist'

Doughnut Economics

Seven Ways to Think Like a 21st Century Economist 

Kate Raworth 

Random House

374 pages; Rs 699

A confession: This reviewer is not especially fond of books with numerals in their titles or sub-titles. They remind him of either self-help books such as Steven Covey’s Seven Habits or manuals such as Six-Sigma guides. Business travellers pick them up at airport bookshops in the hope of becoming more successful or better technocrats by the time they land at their destinations. Some exceptions, such as Alvin Toffler’s The Third Wave or Ruchir Sharma’s latest with a sub-title of “Ten Rules of Change in the Post-crisis World” are more serious and engage readers and reviewers alike, albeit not uncritically.

Kate Raworth’s first book with a numeric sub-title is more of an enigma. She is didactic but not a self-help guru or a technique trainer. She has been there and done that, including stints in Africa and Oxfam, with a detour to the United Nations to write sections of the Human Development Report, before settling down to teach and research what she calls 21st century economics in the ivied groves of academe. She has all the fine modern sensibilities about equality, ecological balance, environmental sustainability (most of which she believes classical or neo-classical economics lacks), which she proudly and justifiably wears on her sleeve.

She has been a student of economics but it is evident that the more she studied it, the more disenchanted she became with it. So when she found young people questioning the relevance of conventional economics in the wake of the 2008 crisis, she believed a revolution of sorts was in the offing. She had been writing articles and presentations on these themes as also running a dedicated website. The time was ripe for compiling these thoughts into a volume.

At its essence, the economic universe of Ms Raworth is shaped like a doughnut (more on this later). In the inner hole are the basic needs such as food, shelter, water, health, education, gender-and income-equality, among others.  Existence in the annular space is balanced, but within the hole it is marked by shortfalls and that outside it is overshooting the resources.  

Seven yardsticks are proposed to analyse the consequences of economic actions: Changing goals (not just the gross domestic product, but the doughnut); the big picture (not the self-contained market economy but society as a whole); nurturing (not just the rational individual but a socially adaptable one); savvy systems (not mechanical equilibrium but a dynamic one); distribution (not as a consequence but a design parameter); regeneration (again, not as a consequence but a design parameter); and, finally, growth agnostic (not limitless).

Mr Raworth writes engagingly on each of these replete with anecdotal and major evidence, expressive graphics and draws on her own experiences to illustrate the various points. She admits that her optimistic vision of “a global economy that creates a thriving balance thanks to its distributive and regenerative design” may “seem foolish, even naïve” in our conflict- and crisis-ridden world. But she is confident that “there are enough people who will see the alternative, the glass-half-full future, and are intent on bringing it about. I count myself amongst them”.  

There are others as well. George Monbiot, a British political activist who offered a reward to people for a peaceful citizen’s arrest of former British prime minister Tony Blair for alleged crimes against peace, wrote in The Guardian, “I see her as the John Maynard Keynes of the 21st century: By reframing the economy, she allows us to change our view of who we are, where we stand, and what we want to be.” Surely, only ideological fellow-travellers would engage in such hyperbole, because the book has not exactly set the Thames or the Cam on fire since its publication.

Ms Raworth writes with a proselytiser’s zeal on her research which “is focused on exploring what planetary and social boundaries imply for rethinking the concept of economic development”, so one is not surprised that issues are presented in the binary of good versus bad. But that process sometimes entails setting up straw demons and slaying them. Few mainstream economists have ever espoused the growth-at-any-cost and devil take the exploitation angle even in earlier eras and certainly not now. The Masters of the Universe who engineered the subprime crisis, the fictional Gordon Geckos and the real Jordan Belfort, are on no one’s list of economists. And there are many distinguished ones, including Nobel Laureates (not among Ms Raworth’s favourites) who have pioneered thinking on the commons, distributional justice and sustainable development.

Economics is not just a positive discipline but also a normative one. It analyses what is and goes beyond it by providing rules for judging what is fair and desirable and thus ought to be. Environmental impact studies and audits are now part of the economist’s tool kit. How well and effectively they are used is another matter, but surely their absence is not an issue. Need one remind Ms Raworth that the United Nations Development Programme walked away from the Narmada Project funding when the 21st century economic thinking was still a generation away?

Finally, the doughnut. Surely this unhealthy, cholesterol- and sugar-laden piece of junk food ought not be the chosen symbol of new-age concerns!  Wouldn’t an inner-tube flotation device of the same geometry, which teaches kids how to swim, have been a better one?