L: Here is the hazard of living with an economist. I actually bought a book for myself called Doughnut Economics: 7 Ways to Think Like a 21st Century Economist, by Kate Raworth. And then I actually read it! Sometimes I even surprise myself.
I'm going to write the next few blogs about this book because I found it amazing. It is quite revolutionary as it describes a very different way to view the world of economic thinking. I loved it. I think Jim will hate it. Because it IS revolutionary, it is strongly dismissed by many. I am certainly not saying that Raworth's thinking is completely right, but it does feel logical to me. So, I remind you as you read Raworth's ideas of the quote from Arthur Schopenhauer, German philosopher (1788 – 1860): All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.
On to ideas that fascinated me...
GDP. From my world view which leans to the left, I have never quite felt right about using GDP as THE measure of macroeconomic success. Is continuous consumption the right thing to promote? And, logically speaking, it cannot keep growing at a 3% rate forever. Even my resident economist repeatedly says that "No tree grows to the sky." Yet the whole economic world is based on the premise that continuous GDP growth is the only way to raise the standards of living for everyone (let's leave that "everyone" alone for a while).
Here's what's happened for the past 190 years.
There is no graph that continues forever on this track. It always levels off if it doesn't crash down.
In 1972, Donella Meadows, a MacArthur Award-winner and systems thinker, co-authored a report called Limits to Growth, which discussed the computer simulation of exponential economic and population growth with a finite supply of resources. (The report's authors are Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III, representing a team of 17 researchers.) She logically stated that infinite growth expectations are stupid, that "we've got to have enough." "In response to the constant call for more growth, she instructed us to ask, 'growth of what, and why, and for whom, and who pays the cost, and how long can it last, and what's the cost to the planet, and how much is enough?'" (Raworth, p. 35)
Doughnut Economics lays out an entirely different way of thinking about this. Raworth suggests being agnostic about growth, working with this conundrum: "We have an economy that needs to grow, whether or not it makes us thrive. We need an economy that makes us thrive, whether or not it grows." (Raworth, p 227)
Thinking about growth agnostically is not simple as it's deeply embedded in cultures. And as Americans, we're frankly addicted to growth, and addictions are hard to overcome.
That's the thing about this book, it makes sense but if Raworth didn't provide examples of work that is already happening in each of the seven areas she addresses, it would all seem hopeless.
Next blog: the doughnut. (Hope it's obvious that if you really want a full picture of this book, you better get it. I'm just going to hit highlights that intrigued me.)