Who Wants to Be an Economist?

Can humanity thrive without destroying the planet? It all depends on your representation of the economic purpose, says Kate Raworth, a “renegade economist” working at Oxford and Cambridge universities.

The financial crash of 2008 revealed a disconnect in economics that runs far beyond the financial sector. A disconnect, says Kate Raworth, “visible in the gulf between the preoccupations of mainstream economic theory and growing real-world crises such as global inequality and climate change.” The revolution in economics to answer these challenges has begun, but its success depends “not only on debunking old ideas but, more importantly, on bringing forth the new.”

The word “economics” itself was coined by the philosopher Xenophon in Ancient Greece, combining oikos (household) with nomos (rules or norms). This could not be more relevant today with our planetary household and the needs of all its inhabitants. The world’s richest 1% owns more wealth than all the other 99% put together, while human activity imposes unprecedented stress on Earth’s life-giving systems. Meanwhile, mainstream economics’ projections in 2015 (shortly before Doughnut Economics was written) expected a 3 percent growth per year until 2050, doubling the global economy in size by 2037 and almost trebling it by 2050.¹ No one can seriously pretend that in today’s conditions such a projection is sustainable. The frame of thinking behind the business-as-usual mindset must consequently be questioned and replaced by a constructive one.

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“Economics is the mother tongue of public policy, the language of public life and the mindset that shapes society,” says Kate Raworth. Unfortunately, “[future] 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.” This does not invalidate, of course, economics as such but definitely calls for examining its paradigm. “The twentieth century gave rise to groundbreaking new economic thinking, most influentially in the battle of ideas between Keynes and Hayek. But though those iconic thinkers held opposing perspectives, they inherited flawed assumptions and common blind spots that lay unexamined at the root of their differences. The twenty-first-century context demands that we make those assumptions explicit and those blind spots visible so that we can, once again, rethink economics.”

Here is what this change of paradigm comes down to: “What if we started economics not with its long-established theories but with humanity’s long-term goals, and then sought out the economic thinking that would enable us to achieve them?” It may sound like common sense to laypeople, but it is unheard of to most economists.

For those of us who aren’t economists, the fundamental frame of economic thinking will naturally take the shape of a doughnut. “Below the inner ring—the social foundation—lie critical human deprivations such as hunger and illiteracy. Beyond the outer ring—the ecological ceiling—lies critical planetary degradation such as climate change and biodiversity loss. Between those two rings is the Doughnut itself, the space in which we can meet the needs of all within the means of the planet.”

But there is more to this representation than being relevant by its very simplicity. “As the visual literacy expert Lynell Burmark explains, ‘unless our words, concepts and ideas are hooked onto an image, they will go in one ear, sail through the brain, and go out of the other ear. Words are processed by our short-term memory where we can only retain about seven bits of information. . . . Images, on the other hand, go directly into long-term memory where they are indelibly etched.'”² A picture might well be worth a thousand words, after all. Therefore, beyond its relevance in regard to the boundaries inherent to a sustainable economy, the doughnut has a powerful psychological role to play.

The importance of a clear image cannot be overestimated. As Kate Raworth reminds us, “By depicting the sun—not Earth—at the centre of our solar system, Copernicus’s picture triggered an ideological revolution that would unravel church doctrine, threaten to upend papal power and transform humanity’s understanding of the cosmos and our place in it. It is extraordinary what havoc a few concentric circles can unleash. . . . what we draw determines what we can and cannot see, what we notice and what we ignore, and so shapes all that follows.”

Some might dismiss this suggestion about economics, arguing that it is taught not in pictures but in equations and that its tool is maths, not art. But in reality, economics has always been taught with diagrams as well as equations. As the author reminds us, “. . . diagrams have played a particularly powerful role, thanks to a few maverick characters and surprise twists in the field’s little-known but fascinating past.”

1. PwC (2015) The World in 2050: will the shift in global economic power continue?
2. Visual Literacy: Learn to See, See to Learn, Lynell Burmark.