Doughnut Economics is neither about scale nor time. It’s all about design.
Kate Raworth will speak at Ouishare Fest 2021, an in-person festival that will take place in Paris from June 23-25 and will address the world’s biggest issues in the economic, technological and political fields through the lens concept of “time”. Interested ? More information on our website here !
In your major book “Doughnut Economics”, drawing pictures appears like making a revolution. Why are pictures much more powerful than words?
Kate Raworth : If you just take all the words that are written inside the doughnut, I don't think anybody would blink. However, when you put them in a shape in these two concentric circles, it empowers people, they can go into a conversation more confidently. I began to read about the power of imagery and I discovered that over half of the nerve fibers in our brains are connected to our eyesight. If we show an image of something and some unrelated text with it, we tend to believe that the image is correct. We then adapt the text in our mind to fit the picture. Our eyes are pattern spotters. That is why we see dogs in the clouds and ghosts in the shadows.
We need to deconstruct that world where pictures are seen as illustrations. George Lakoff says people's lives are significantly influenced by the conceptual metaphors they use to explain complex phenomena. Nicholas Copernicus, in the 1500s, drew the known solar system that Ptolemy had first drawn with the static earth at the center. I love the story of him waiting until he was on his deathbed before he dared to publish this because he knew that this picture was revolutionary. Pictures can cause a deep philosophical crisis in humanity's position in the universe, as they are very hard to delete.
I think of the images from the mainstream economics textbooks as intellectual graffiti. Graffiti is really, really hard to scrub off. If you ask people who have studied economics, they remember the pictures but don't remember the equations. Rather than focusing on what is wrong with the old pictures, we must come up with new ones to replace them. In every chapter of my book, there is an old picture and a new one to replace it. Images determine what we make visible and what we leave invisible, what we put at the center and what we leave at the periphery, and that shapes everything.
We all know trust is playing a key role in economics. Do pictures build trust?
K. R. : Words can become very loaded and people use them in different ways: capitalism, socialism... Pictures somehow circumvent this history, and they can be a boundary object where we can meet. During a workshop, if someone is drawing a diagram, everybody will be pointing to it and contributing. Some of the best workshops you can attend are the ones where you end up with this quite wild picture type on the wall. Using the power of pictures, they can build trust and establish a shared vision in that sense. And, of course, they allow us to connect to metaphors, which are one of the most powerful ways by which we understand the world.
Your book invites us to go beyond narrow approaches in order to gather all emergent ideas through economics. What is the common ground of these “heterodox” approaches in economics?
K. R. : When I was setting out to write Doughnut Economics, I read all of the economics I'd never been taught, beginning with ecological economics positioning the economy in relation to the living world. I read about Feminist economics recognizing the value of unpaid carebut also complexity economics, recognizing the dynamics of how the world actually moves, behavioral economics, and institutional economics recognizing power and the importance of the design of institutions. I brought together a lot of strong schools that are often called heterodox economics. I wanted to see what would happen if they danced on the same page. Otherwise, there is a risk that each of them becomes an issue-based response to mainstream, dominant economics. We need to create an alternative that brings them together.
Of course, what I presented was incomplete. I wish I had the capacity to write more about the global inequalities and relationships between nations based on their histories. Jason Hickel wrote a book, The Divide, which is about the history of our world and the economic relationships between countries. It gives us a far more useful starting point that begins with human value and the living world. I wrote the book Seven Ways to Think, and then I held a competition saying “well, let's make a point on how incomplete this list is”, with Rethinking Economics, a student movement. We had truly amazing responses from people showing there were so many other ways that we could bring a new economic thinking.
We have to move from the pyramid with us at the peak to the web with humanity embedded inside it.
Where do you see bridges within economics and beyond it? For instance, how do you see the articulation between accepting the limits of our planet and accepting our own limits as human beings?
K. R. : I don't think in terms of limits.In fact, I think in terms of health and equilibrium. And again, now we're back to metaphors, right? Human health is something that we all understand. We know we have two lungs, one heart, one stomach, a respiratory, nervous, skeletal and muscular system. So, we understand we're made up of complex systems that work together and that's what keeps us alive. We know that health lies in the balance between all those systems. Just as the human body combines these multiple systems, so does the planet. It has a carbon cycle, a hydrological cycle and a nutrient cycle. It has a protective ozone layer and it has a web of life. Every child learns about the biology of the human body in school. They must learn about the planetary body, too.
What really matters is the design of the company itself and these five design traits: purpose, networks, governance, ownership, finance.
Philosophers such as Philippe Descola invite us to nurture a relationship with the rest of life on earth, such as animals, plants. To what extent does this statement relate to economics?
K. R. : I think that Westerns economics is really damaging in the way it presents humanity. It depicts a very narrow portrait of who we are. This little picture of a man standing alone, money in his hand, ego in his heart, a calculator in his head and nature at his feet is deeply damaging on many fronts. It tells us that we succeed through self-interest and competition. We have to move from the pyramid with us at the peak to the web with humanity embedded inside it. It's very similar to Ptolemy putting the earth at the center of the system and Copernicus saying, no, no, no, the earth is just one of the elements moving around. Satish Kumar has a relevant point about this. He went to the London School of Economics and asked, “Where is your Department of Ecology in the London School of Economics? How can you teach economics if you don't understand ecology ?”
I no longer talk about the environment because it's not alive, by definition. I prefer talking about the living world. So, there's a lot of learning we need to do with the words and pictures we use so that we wisely place ourselves in relation to the rest of the living world.
How can we make sure that business model transformation, especially that of big companies, is quick enough to deal with climate emergency? Everybody agrees on the need to change but it's all about time.
K. R. : Big companies can do much on time. Look what they did to face Covid: they transformed their workplaces, they allowed their staff to work from home, they redesigned their work practice structures and so on. When they want to do it, they can do it. I don't think it's about time. I think it's about design.
I've been working with companies since 2012. And I've been part of fascinating conversations with multinationals, social enterprises and start-ups. They want to focus on the design of their products first, on what materials they are made from, what wages are paid in the supply chains, etc. But actually, what I think really matters is the design of the company itself and these five design traits :
- Purpose: why do you even exist as a company?
- Networks: who are your suppliers, customers, allies and partners in the industrial ecosystem? How are you reinforcing your values and your purpose through them rather than getting undermined by them?
- Governance: who has a voice in decision-making? Have you written it into your articles of association? What metrics determine your public success? What incentives do you give to middle managers?
- Ownership: how is the company owned? Whether the company is owned by its employees or its customers, by its founding entrepreneur or family, by shareholders or venture capital or by the state has really important implications.
- Finance: Where is financing coming from? Do you want double digit returns year on year? Do you invest here because you want a fair financial return, and/or because you want to see a social and ecological transformation within your company?
Regarding finance, BlackRock said they would not invest in companies that don't address climate change. To what extent can this contribute to changing the design of big companies?
K. R. : Words are nice, but put it into action. There's a real risk in the world of financial institutions and investors using this language of environmental, social and governance issues. If you dive into what they're doing, it's very superficial.
You see expectations in the field of investment, people are saying we need to marry double digit returns for investors with performance on Environmental, Social and Corporate Governance. I think this should be the other way round. We want double digit cuts in a company's material footprint on the world. We will then deliver the financial returns that are compatible with that transformation that must be made. The planet is dying, but investors want their 15 percent.
From your own experience, is there an ideal scale for companies or cities to apply the doughnut economy and change their design? We often hear “we are too small, or we are too big”...
K. R. : It's not about scale. It's about design. A multinational company owned by a family that actually has quite radical values can be part of some really transformative practices. Similarly, if you have a three-person social enterprise or start-up that designs its ownership, financing and purpose, it can also be a strong driving force for transformation. When a startup suddenly hits a phase where it needs to grow, it goes where financing is available; from venture capital. It immediately brings in a completely different kind of ownership and the risk to transform your purpose : “it's time to grow up and be sensible because we're in big business now.” And suddenly, the company that was set up for purpose is being driven by finance and profit.
You must know Boltanksi and Chiapello work, The new spirit of capitalism. Are you afraid at some point that the doughnut economy, like every other concept or innovation, ends up swallowed by capitalism?
K. R. : Yes, absolutely. What's going to happen when the doughnut meets the mainstream? Is the doughnut going to genuinely transform the mainstream or is the mainstream going to swallow the doughnut and turn it into a tool? This is, of course, the predominant question that we are working on. By setting up Doughnut Economics Action Lab, we are continually aiming to balance openness with integrity. We've made it open, we’ve put the concept in the Creative Commons, we invite people to adapt it and to apply it in their towns and cities, in their classrooms and in their companies. There are a trust and a risk to that. So, we also trademarked the name Doughnut Economics. We set out principles of practice. We set out conditions, dos and don'ts of Doughnut Economics. We’re building a worldwide community of people who are using it. We have a tool on our website, which is called “When Business Meets the Doughnut.” It's a workshop you can go through and you can ask a series of questions about your business. You cannot use it as a company in a presentation in branding and social media, because then you begin to turn it into a marketing tool. We want to invite business into the conversation. We want people to discuss how they are transforming their business, not just their products, but the deep design of their business.
What are your takeaways from the Doughnut Economic Action Lab. What works? What are the achievements for concrete application at business or city scale?
K. R. : What works? Peer-to-peer inspiration. It's one thing for me to talk on a stage or on a podcast about how you could bring the doughnut to the city. But when a city does it, Amsterdam for instance, then that inspires other cities phenomenally. And so, in Doughnut Economics Action Lab, we put a lot of attention on highlighting the work of practitioners because we know that teachers get inspired by teachers, cities by cities and businesses by businesses.
We go where the energy is, meaning that we never knock on a shut door. People who are choosing to use the doughnut are the change makers who really want to engage with it. Just about yesterday, we had our first online working session with partners interested in using it, not in a global north context, but in a global south context.
We're a very small team. We're just eight people: we’re looking for a lot of traction first. An ecosystem of new economic practitioners and organizations is emerging: B Corp, Economy for the Common Good, We Alliance, Doughnut Economics, Regenerative Action… They are all showing that ideas evolve and there are many different ways that might work in different contexts. It's really important that we recognize this is a huge teamwork. If we think again about the power of networks, we have enough shared purpose to know when to pass on opportunities to others that we trust. Ideas spread out rather than scale up. We don't want to get bigger and bigger.
Lastly, Doughnut Economics Action Lab is a very intentional name. It's about action. We've got a book full of ideas. Now let's work with those who want to put them into action. The way we're designing our own organisation is our own biggest experiment. It takes risks, and we don't know how it will go. We're learning all the time. It's challenging and exciting.
Kate Raworth is an economist focused on making economics fit for the 21st century. Her book Doughnut Economics: seven ways to think like a 21st century economist is an international bestseller that has been translated into 20 languages and was long-listed for the 2017 Financial Times & McKinsey Business Book of the Year award. She is co-founder of Doughnut Economics Action Lab, working with cities, business, communities, governments and educators to turn Doughnut Economics from a radical idea into transformative action. She teaches at Oxford University’s Environmental Change Institute and is Professor of Practice at Amsterdam University of Applied Sciences.