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.