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Doughnut Economics: How a Doughnut Represents a Different Approach to Economic Thinking

This is a brief overview of Kate Raworth’s ideas expressed in her book Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist. In it, she provides her own perspective on current models of economics and why these should be adapted in a new age of economic thinking.

She’s critical of the idea that a country’s success is based upon its pursuit of GDP growth. GDP (Gross Domestic Product) is the overall wealth of a country, and some argue that the constant growth of GDP is the most important factor.

They believe that if a country’s wealth grows, even if it mainly benefits the extremely rich, this wealth will naturally ‘trickle down’ to the rest of society. 

However, Raworth and others argue that this focus on growth has only created an increasingly divisive society with deep inequalities due to lack of distribution. The economy may be ‘growing’ but people are still being negatively affected. 

On top of this, many economies are not incentivised to consider the environmental impact of the ways in which society is run. The waste from excessive use of energy on a day-to-day basis has an increasingly negative impact on the environment. This is very much a central theme in Raworth’s research. From air pollution to ocean acidification, these issues are extremely problematic and are deemed to become much worse if deliberate action is not taken.


How do we cater to the needs of the people while limiting the damage to the environment?

This is where Raworth’s idea of Doughnut Economics is expressed. The ring of the doughnut represents the ideal state of society; where needs are met for the people and earth’s resources are sustained.

The theory is based on the areas that have been deemed to be minimum social living standards by the Sustainable Development Goals (under the United Nations).

While certain objectives, such as gender equality, can be attained without affecting the environment, there are other issues that need more careful consideration.

Let’s take energy for example. Not sufficiently distributing energy such as heating, means that people will struggle with the basic need to stay warm and cook food for survival. This is a shortfall (the hole in the doughnut).


However, those who excessively use non-renewable energy per capita are causing great damage to the climate. This region (on the outside of the doughnut) is known as the overshoot.

Ultimately, the goal is to stay within the doughnut, where renewable energy is used and, importantly, distributed throughout society.

Similar to Raworth’s model, Bristol Pay will seek to emphasise the importance of sharing resources and working together in order to improve the livelihood of those in the city. 

The organisation aims to make sure that no one is left behind and the use of local payment platforms is as inclusive and effective as possible. 

Overall, it will be interesting to see the ways in which Raworth’s theory might be implemented as actual policies in cities throughout the UK.

Kate Raworth – ‘Economies that are divisive by default must become distributive by design’

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