A visual aid for rethinking economics

Kate Raworth started on the road to what would become her signature theory while an economics student at Oxford University in the early 1990s. She realized that the prevailing neoliberal economics in the capitalist industrialized world had a major flaw: The focus on measuring a nation’s strength solely on financial measures such as GDP did not account for the myriad other issues confronting modern society, especially environmental damage.

“You couldn’t study economics of the environment,” Raworth says. “There was no course.”

Through her work for the government of Zanzibar, in Tanzania, and on the United Nations Human Development Report, Raworth was exposed to a wider spectrum of economic thinking. She read Robert Chambers’ work on rural poverty, Herman Daly’s “full world” model of a finite biosphere, and Hazel Henderson’s visualization of a more holistic economy as a layer cake, in which GDP only encompasses the top half of the cake, and the market economy is just the topmost layer of icing.

Raworth was inspired by Henderson’s sheer gumption in visualizing the economy with something as seemingly frivolous as a dessert. She realized that being able to visualize ideas helped them to gain traction in the public imagination.

Then the global economy collapsed in 2008, and capitalist economies around the world plunged into the Great Recession. As talk in the halls of power turned toward restoring the existing world economy, Raworth could see that renewing a commitment to neoliberal economics was a recipe for future disaster.

Raworth saw an opportunity to rewrite the global economic agenda to reflect the entire human and environmental experience.

“I thought, ‘Hang on—­­­­­if this is a moment when economics is going to get rewritten, I’m not going to sit by and watch it only written from the point of view of finance,’” she says.

Thus emerged the visual idea of a doughnut: two concentric rings, the outer symbolizing the world’s ecological ceiling (beyond which lies environmental destruction and climate change), the inner symbolizing the social foundation (inside which is homelessness, hunger, and poverty). The space between the two rings—the “substance” of the doughnut—was the “safe and just place for humanity.”

The world already was overshooting the ecological ceiling and falling short of the societal foundation in many places.

The neoliberal narrative has long claimed we would “grow our way out of inequality,” despite evidence that growth tends to exacerbate existing problems. So how could a re-envisioned economy be put into action?

For Raworth, implementing the ideas right away was key. “I … firmly believe 21st century economics is going to be practiced first, theorized later,” she says.

The Dutch example

Amsterdam was one of the first cities out of the gate. The city had already passed legislation in 2019 to have zero fossil-fuel vehicles in the city by 2030, and by 2050, to have a completely circular economy, meaning the city will avoid waste altogether by re-using, refurbishing, and recycling raw materials.

The Dutch capital’s plan for the next 30 years specifically embraces doughnut economics as its guiding strategy.

“It was a visualization of a paradigm that they were clearly moving toward already,” Raworth says.

The Thriving Cities Initiative produced the Amsterdam City Doughnut report, a holistic look at the city’s local and global impacts on people and the environment. It outlines goals as broad as making Amsterdam a “city for people, plants, and animals,” and as specific as “reduce the city’s total CO2 emissions to 55% below 1990 levels by 2030, and to 95% below by 2050.”

The plan goes beyond just removing combustion-powered vehicles from city streets and aggressive recycling.

“We ship cocoa from Ghana all the way to the Port of Amsterdam,” says Jennifer Drouin, the community manager of the Amsterdam Doughnut Coalition, via email. “By doing that we not only contribute to a large amount of CO2 emissions (and therefore exceed the ecological boundaries) but are also indirectly contributing to child labor in West Africa.”

At the same time, the city is becoming unaffordable to live in, driven by foreign investors and Airbnb owners renting out properties for high rates before the COVID-19 pandemic hit. “Locals literally can no longer afford living in the city,” Drouin says.

Stricter regulations have since been imposed on Airbnb and similar services by the city, Drouin says, and even hotels are rethinking their business models and have offered discounted rates for local residents displaced by the pandemic. The cocoa problem presents different challenges—cocoa is a tropical crop—but at least city officials are more aware of the problem now, a crucial first step.

“I am convinced that they will try and change the way they are importing, and also will think about how they can positively contribute to the labor rights in Ghana,” Drouin says.

Adopting an ambitious re-envisioning of the city’s economy doesn’t come easily. Organizers convened a multi-day series of workshops in 2019 that included municipal, community, and business leaders. The end result was a city “portrait” that considers the city through four lenses: what it would mean for the city’s people to thrive, how the city can thrive within ecological limits, how the city impacts the health of the entire planet, and how the city affects the well-being of people around the world.

Amsterdam’s model is “learning by doing. They’re very keen to experiment,” says Ilektra Kouloumpi, the senior cities strategist for Circle Economy, which has been working with the city for several years.

“To create this process of bringing the doughnut to the city, to take it from a conceptual, theoretical model into practice,” Kouloumpi says, “it makes it turn into a tool for decision-making and for design, and that happens a lot in a participatory format.”

The doughnut workshops in Amsterdam identified several areas of focus, she says, including in the food production chain: bringing sources of production closer to the city, thereby reducing emissions from shipping, but also fostering stronger connections between producers and consumers, and creating more awareness among residents of their relationship to their food.

The workshop attendees also proposed new criteria for undertaking new construction and refurbishing old buildings to maximize the use of recycled materials, Kouloumpi says. But the criteria also have to ensure there are “enough of those new buildings available for different incomes, so that they can provide housing for all levels of income.”

Different cities, different priorities

If Amsterdam was a city already primed to re-make its economy, Philadelphia is still in the early stages of the process.

The city has an action plan to be a zero-waste city by 2035, and was a charter member of C40, says Christine Knapp, the director of Philadelphia’s Office of Sustainability.

A daylong Thriving Cities Initiative workshop in September 2019 brought together city staff from several departments, community leaders and organizations, and businesses to create a city portrait.

“The goal was to hold a second workshop to go deeper, expanding and creating an action plan,” Knapp says.

Then the COVID-19 pandemic broke out, and the city shut down. In June 2020, the city council cut its budget by $222.4 million, and 450 staff were laid off, including the person leading the city’s dedicated zero-waste cabinet.

Philadelphia is also starting from a different point: It’s the poorest large city in the United States, Knapp says, with a majority non-White population, and poor air quality leading to high rates of asthma, especially among children and people of color.

“Philly is a deindustrialized city that’s been hollowed out,” Raworth says. The stark racial injustice was apparent to her during the doughnut workshop.

That put even more emphasis on the need to ensure that an economic recovery also will be a just one. “We can’t just wait until we’re back to normal and [then say], ‘Let’s transform,’” Raworth says. “That never happens.”

Instead, a catalyst must help accelerate change. In 2020, that catalyst was a tragic one: The pandemic ravaged many countries and led to more than 2 million deaths in one year. In the U.S., the stock market and the wealthy continued to see their net worths increase while millions were thrown out of work and are still at risk of losing their homes.

“COVID-19 recovery needs to be a green and just recovery,” Knapp says. “We’re using COVID as a proxy for a climate disrupting event, like a hurricane.”

That’s allowed the city to take a fresh look at legacy problems, such as food insecurity. It was difficult for people to get fresh fruits and vegetables in the early months of the pandemic, Knapp says.

“We get a lot of school meals packaged and sent to us from a location in Brooklyn,” she says. “If we took 10% of those meals and made them locally, we’d have to purchase more food from local farms, hire more people.”

And because the local food system is run largely by people of color, who also are underpaid, that shift in resources could have wider ripple effects. But all those shifts will cost money.

Philadelphia’s poverty and unemployment rates were decreasing before the pandemic, but those gains may now have been wiped out, and the city will continue to suffer without more and continuing support from Congress.

“Unless we have lots of federal support, which we hope will be coming, it will be hard to do anything new or untested,” Knapp says.

Moving forward

The pandemic also forced Portland to scale back its Thriving Cities program. “We were going to be doing community engagement through these Thriving City workshops, to build community awareness about our work on sustainable consumption, but more importantly, to co-develop solutions together with the public for how we choose a low-carbon future for everyone, where all Portlanders can thrive,” Diesner says.

Those workshops were canceled, he adds, and a five-year program that could have formed the basis for city council action was scaled back to a two-year in-house plan that the city’s Bureau of Planning and Sustainability could follow on its own. Still, some existing programs already were in line with the goals of the Thriving Cities Initiative, Diesner says.

In Amsterdam, the Doughnut Coalition and the city government are already looking toward next steps.

Part of the challenge is going to be to get businesses to become more socially focused, Drouin says. “We cannot transform the system when businesses are still dependent on their shareholders’ investment, [which is] mainly money-driven instead of purpose-driven.”

Building public awareness will also be a challenge, she says. “How can we become a doughnut city when my neighbor hasn’t heard of it or doesn’t understand why it is relevant for her? Why should people care about a new economic model when they are struggling to pay their rent or get their kids to school?”

“In the end, we need a co-created dream,” Drouin says, “something we can look forward to, something where no one is left behind, neither the people nor the planet.”

That’s what has drawn so many people to the doughnut model in the first place. “The model is powerful because it’s simple and speaks to everyone,” Kouloumpi says. “The problem is how to bring those people together, this very mixed group, that’s not used to being together.”

Raworth says a lot of that comes down to communication, changing minds one at a time. “It seems like it could take forever to change paradigms,” Raworth says. “But in an individual, it can happen in a blink of an eye, the scales falling away.”

This article is republished from Yes! Magazine under a Creative Commons license. Read the original article.