Kate Raworth’s groundbreaking work, Doughnut Economics, has been making waves in economic circles since its publication in 2017. This innovative approach to economics not only challenges traditional economic thinking but also serves as an excellent example of design economics. In this article, we’ll explore how Doughnut Economics aligns with the three key tenets of design economics.
Tenet 1: Acknowledging the Evolution of Human Cultural Systems
The first tenet of design economics recognizes that “human cultural systems evolve from and respond to social change, environmental realities, and technological innovations.” This understanding that all paradigms have a lifespan is fundamental to Raworth’s Doughnut Economics model.
Raworth’s work directly challenges the outdated paradigm of infinite growth on a finite planet. She argues that the goal of perpetual GDP growth, a cornerstone of 20th-century economics, is both ecologically destructive and socially divisive. Instead, Doughnut Economics proposes a model that responds to our current environmental realities and social needs.
The doughnut-shaped diagram at the heart of Raworth’s model visually represents this evolution. The inner ring of the doughnut represents the social foundation below which lie shortfalls in human well-being. The outer ring represents the ecological ceiling beyond which lies environmental degradation. Between these two rings is the safe and just space for humanity – the “sweet spot” of the doughnut.
This model inherently acknowledges that our economic systems must evolve to meet the challenges of the 21st century, including climate change, resource depletion, and growing inequality. By doing so, Doughnut Economics exemplifies the first tenet of design economics, demonstrating how economic thinking can and must evolve in response to changing social and environmental conditions.
Tenet 2: Embracing Inclusive, Interdisciplinary Approaches
The second tenet of design economics calls for “inclusive, interdisciplinary approaches that account for dynamic systemic change.” This principle is deeply embedded in the framework of Doughnut Economics.
Raworth’s model breaks away from the siloed thinking that has long dominated economics. Instead of focusing solely on financial metrics, Doughnut Economics incorporates insights from environmental science, sociology, psychology, and other disciplines. This interdisciplinary approach allows for a more holistic understanding of human well-being and planetary health.
For instance, the social foundation of the doughnut includes elements like education, health, and social equity – factors often overlooked in traditional economic models. The ecological ceiling, meanwhile, draws on earth system science to define planetary boundaries for climate change, ocean acidification, biodiversity loss, and other environmental factors.
Furthermore, Doughnut Economics encourages inclusivity by emphasizing the importance of participatory decision-making. Raworth argues that economics should be accessible to all, not just experts, and that communities should have a say in shaping their economic futures. This aligns perfectly with the call for inclusive approaches in design economics.
The model also accounts for dynamic systemic change by recognizing the interconnectedness of social and ecological systems. It acknowledges that changes in one area can have ripple effects throughout the entire system, necessitating adaptive and flexible economic thinking.
Tenet 3: Promoting Economic Literacy
The third tenet of design economics emphasizes that “economic literacy informs and drives social and political discourse.” This principle is central to Raworth’s work and her efforts to popularize Doughnut Economics.
One of Raworth’s key achievements has been making complex economic concepts accessible to a wide audience. The visual simplicity of the doughnut model, combined with Raworth’s clear and engaging writing style, has helped to demystify economics for many people. This increased economic literacy empowers citizens to engage more meaningfully in social and political discussions about economic policy.
Moreover, Doughnut Economics challenges the notion that economics is a field reserved for experts. Raworth argues that everyone should be equipped with the tools to think like a 21st-century economist. By promoting this kind of economic literacy, Doughnut Economics helps to create a more informed and engaged citizenry, better able to participate in shaping a “free, equitable, and flourishing society.”
Raworth’s work also emphasizes the importance of reframing economic goals. Instead of focusing solely on GDP growth, she encourages people to think about what economies are really for – meeting the needs of all within the means of the planet. This shift in perspective can lead to more nuanced and productive public discourse about economic policy and its impacts on society and the environment.
Conclusion: A Well-Baked Example of Design Economics
Kate Raworth’s Doughnut Economics serves as an excellent example of design economics in action. It acknowledges the need for economic paradigms to evolve in response to changing social and environmental conditions. It embraces an inclusive, interdisciplinary approach that accounts for the complex, interconnected nature of our world. And it promotes economic literacy, empowering people to engage more meaningfully in discussions about our economic future.
As we grapple with the challenges of the 21st century, from climate change to inequality, we need new economic thinking that can rise to meet these challenges. Doughnut Economics, with its alignment to the principles of design economics, offers a promising path forward. It demonstrates how we can redesign our economic systems to serve both people and planet, creating a “safe and just space for humanity” that is sustainable for generations to come.
By embracing models like Doughnut Economics and the principles of design economics, we can move beyond the limitations of traditional economic orthodoxy and create more adaptive, inclusive, and sustainable economic systems. As Raworth herself might say, it’s time to make economics fit for the 21st century – and Doughnut Economics is certainly rising to that challenge.
Prompt: Vinny Tafuro | Composed: Claude 3.5 Sonnet | Edited: Vinny Tafuro