To Grow or To Thrive: That Is the Question
Sharika Dhar 23 June 2017
Kate Raworth’s Doughnut Economics aims at transforming the current economic mindset which is obsessed with only one aspect of the subject: the GDP, to be more precise, growth. 
 
GDP or gross domestic product is defined as the production of goods and services, within the boundaries of a country, in a year. It is a measure of economic growth and an indicator of the ‘economic health’ of a country.
 
“GDP is a cuckoo in the economic nest. Rather than raising their own offspring, they surreptitiously lay their eggs in unguarded nests of other birds. The unsuspecting foster parents dutifully incubate the interloper's egg along with their own. But the cuckoo chick hatches early and kicks the other eggs and young out of the nest... It’s a powerful warning to other birds: leave your nest unattended and it may as well get hijacked. It’s a warning to economics too: lose sight of your goals and something else may well slip into their place. And that’s exactly what has happened. In the 20th century, economics lost the desire to articulate its goals: in their absence, the economics nest got hijacked by the cuckoo goal of GDP growth. It is high time for that cuckoo to fly the nest so that economics can reconnect with the purpose that it should be serving.”
 
She argues that “instead of prioritising metrics like GDP, the aim should be to enlarge people’s capabilities so that they can choose to be and do things in life that they value... This calls for a profound shift; a shift in the image of economic progress from endless GDP growth to thriving in the ‘Doughnut’.”
 
The doughnut is the 21st century diagrammatic representation of the circular flow of the economy. For years, the circular flow has represented the working of the economy, the key players and interactions between these players to show how the economic engine runs. The doughnut is more of an updated version of it, where the key players are the ‘social foundation of well-being’ and the ‘ecological ceiling on the planetary pressure’.
 
It is shaped exactly like the sweet pastry it is named after. The essence of the diagram is that the factor of social foundation of well-being, which is the inner ring in the diagram, is the point that one must not fall below, as that would indicate the shortfalls in the society. The second factor, the ecological ceiling on the planetary pressure, which is the outer ring of the diagram, is the point that one must not go beyond, as that would represent an overshoot of the utilisation of the natural resources in the ecology. 
 
The doughnut presents the challenge of staying between the two rings; unfortunately, in this present time, we are failing miserably at it. Even with the rapid level of progress we have achieved, we are far beyond the doughnut's boundaries on both sides. So, how do we thrive in such a situation?   
 
Raworth says, “Five factors which will significantly shape humanity’s prospects for getting into the Doughnut’s safe space, which are population, distribution, aspiration, technology and governance,” as these are the core players in policy formations. She adds, “But they cannot bring about the scale of transformation required unless we also transform the economic thinking.”
 
Raworth believes that the current economic institutions need to be revolutionised as the subject matter being taught is outdated. “It’s like the citizens of 2050 are being taught an economic mindset that is rooted in the textbooks of 1950, which in turn are rooted in the theories of 1850.” 
 
For this transformation to happen, she presents seven ways to think like a 21st century economist. More than an immediate answer to the economy’s problems, they aim to radicalise the mindset of the current generation of economists and non-economists. These ‘principles and patterns’ would equip economic thinkers to create a more networked, sustainable and inclusive economy.
 
Raworth believes that the economists of the 21st century might be the first ones to understand the impending problem but are the last to actually make a change. “The task is clear: to create economies that promote human prosperity in a flourishing web of life, so that we can thrive in balance within the Doughnut’s safe and just space.” 
 
She quotes Keynes, “The master-economist must possess a rare combination of gifts. He must be a mathematician, historian, statesman, philosopher... he must study the present in the light of the past for the purposes of the future.
Comments
pradip
5 years ago
If Gandhiji were to be alive today, he'd say something similar. Principle seems basic. A powerful simplicity of female mind. A lateral, courageous way of thinking
Vasudeo Shenoy null
5 years ago
Finally,an economist who thinks beyond Economics
pradip
Replied to Vasudeo Shenoy null comment 5 years ago
You're right Vasudev.
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