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OCF Conversation #01: Rethinking Economics For The 21st Century with Kate Raworth


In this episode of the OCF Conversation, Shamir Shehab speaks with Kate Raworth about economic and planetary challenges and possible paths forward.

Kate Raworth is a renegade economist focused on making economics fit for 21st century realities. She is the creator of the Doughnut of social and planetary boundaries, and co-founder of Doughnut Economics Action Lab. Her internationally best-selling book Doughnut Economics: seven ways to think like a 21st century economist has been translated into over 20 languages and has been widely influential with diverse audiences, from the UN General Assembly to Pope Francis to Extinction Rebellion.

Kate is a Senior Associate at Oxford University’s Environmental Change Institute, where she teaches on the Masters in Environmental Change and Management. She is also Professor of Practice at Amsterdam University of Applied Sciences.

Over the past 25 years, Kate’s career has taken her from working with micro-entrepreneurs in the villages of Zanzibar to co-authoring the Human Development Report for UNDP in New York, followed by a decade as Senior Researcher at Oxfam.

She holds a first class BA in Politics, Philosophy and Economics, and an MSc in Economics for Development, both from Oxford University. She is a member of the Club of Rome and currently serves on the World Health Organisation Council on the Economics of Health for All.

Kate has written extensively for media including The Guardian, The New Statesman, Newsweek.com, and Wired.com, and has contributed to many radio programmes including for BBC Radio 4, The World Service, ABC and NPR, as well as television including CNN World News, Al-Jazeera, BBC, ITV and CBC. The Guardian has named her as “one of the top ten tweeters on economic transformation”.

OCF Conversation #01: Rethinking Economics For The 21st Century with Kate Raworth
Kate Raworth

Website | Kate on Twitter

Show notes:

[00:02:27] Kate Raworth introducing her works and shares her inspiration behind Doughnut Economics

[00:05:43] Kate talks about being a renegade economist

[00:08:25] Planetary health in economics discussion

[00:11:49] are mainstream economic theories responsible for the crises we face?

[00:13:49] The problems in the way we teach economics 

[00:16:52] GDP as a faulty growth measurement

[00:19:45] Kate explains the doughnut model

[00:21:56] Rethinking growth for the global south and low income countries

[00:30:11] Navigating institutions, unending growth and wellbeing governments

[00:35:14] Bhutan's approach to measuring economic progress

[00:36:41] Kate's though on institutional role and her experience as a part of the Human Development Report team

[00:43:31] Kate's three messages for today's youth for rethinking economy and the world

[00:49:00] Kate's recommended books

[00:50:59] Doughnut Economics Action Lab and social media address


Shamir Shehab: [00:00:01] Hello, this is your host Shamir Shehab. Welcome to Our Common Future (OCF) Conversation, a podcast that aims to dive critically into the issues of our contemporary world. We hope to help you develop nuanced understanding into issues to reimagine the future of the people, planet, and prosperity. 

The COVID-19 pandemic has laid bare the fragilities and fault lines in our socio-economic and political systems. We have an opportunity to leverage this crisis to fix our systems and bounce forward better.

To make that happen, we need bold thinking and courageous conversations that will help us to understand the realities of our world today and shape the public narrative to aspire for a better tomorrow. 

At OCF conversation, we speak about both major global events to tiny backyard matters, we sit down with some of the most prominent thinkers, leaders, and doers of our time to understand the realities of the world and demystify hidden models to take a peek into our collective future. 

Our goal in each episode is to open up an opportunity to look into issues critically and make you think for yourself, challenge the existing narratives, and inspire your intellectual curiosity to reimagine a better and brave tomorrow.

In this episode, we will be talking about rethinking economics for the twenty-first century. And I am so excited and humbled to have someone whom I have been reading and listening to a lot in recent years. Given the crises we face in this world I think it's fair to say that I am a bit disillusioned with mainstream economic thinking as I couldn't get satisfactory answers to many of the burning questions. I think the economic framework proposed by our guest today answers some of those questions and gives hope to humanity's future. Kate Raworth, a very warm welcome to Our Common Future conversation.

Kate Raworth: [00:02:14] Thank you so much, Shamir. I'm really delighted to be here and looking forward to this conversation with you.

Shamir: [00:02:19 ] I know Kate, you talk about doughnuts and you recommend doughnuts. We will come back to that, whether it is to eat or some economic concept that you actually recommend to people. So before we dive into our conversation, I know  you are very well known around the world, but for some of our audience who may not be familiar with you and your work, if you could please introduce yourself telling us who you are and what you do.

Kate: [00:02:47] Oh, of course. So I'm a 50 year old British woman living in the U.K. I'm based in Oxford, and way back in the early nineteen nineties, I went to university to study economics because I really wanted to learn the mother tongue of public policy. I wanted the tools that I believed were the ones that were going to help me be part of changing the world for the better. In the nineteen eighties, I saw the ozone layer open up with a great big hole. I saw oil disasters, the Bhopal gas disaster and the famine in Ethiopia. And I remember just thinking, I want to be part of the big global team that helps to change this however I can. So I went to learn economics and I got really frustrated. And, as you said, disillusioned by the concepts that I was being taught, they just put the issues that I cared most about, like environmental integrity and social justice. These were at the margins of what we were being taught barely on the syllabus. And so at the end of my education, I was embarrassed to even call myself an economist. I never wanted to introduce myself that way. I'll keep the story short, but I walked away from academic economics. I immersed myself in the real world economy.

Kate: [00:04:10] I worked three years with craft producers in the villages of Zanzibar. I worked 4 years at the United Nations on the Human Development Report, which very actively reframes development away from economic development to human development. I worked for Oxfam for a decade. And then I drew this diagram that aimed to be a compass for 21st century prosperity, a picture of what human progress should be about. It's not about economic growth and silly though it sounds it came out looking like a doughnut. I turned it into a book called Doughnut Economics, which was Doughnut Economics: Seven Ways to think like a 21st Century Economist. This was me coming back to economics, saying, right, let's be part of rewriting economics and flipping it on its head. That came out in 2017, and I've been amazed by the traction that it's had ever since. It tells me that the world is hungry for change. Way beyond the field of economics, even in real practice, in policy and business and government. So I've set up an organization with a co-founder called Doughnut Economics Action Lab about putting these ideas into practice, and I'm really delighted at the opportunity today to discuss why we need to do that and what that practice looks like.

Shamir: [00:05:28] Great! Thank you very much, Kate, for this brilliant elaborate introduction of yourself. And I read something in your bio that you call yourself a renegade economist. So for our audience, could you please explain what does that mean?

Kate: [00:05:43] So as I say, when I graduated from university, I never wanted to introduce myself, hello, I'm an economist, because I was embarrassed by the implications of what that means. I think that economics is missing a lot of what matters in the world. So I stopped using any label for myself. If people said, What do you do? What is your profession? I had no label for it and no way to describe myself. And it was actually after the 2008 financial crisis, when many, especially in high income countries, the global financial system was really shaken. The banking crisis and mainstream economists began to say, oh, we need to rewrite economics to reflect financial realities. And I thought, wait, if we're going to rewrite economics, we're not only going to rewrite it for financial realities. Let's write it for ecological realities and social realities. And that's when I began to move back towards economics and be part of flipping it on its head. I still didn't want to call myself an economist, but someone said to me, oh, you should be a renegade, and I thought, I can go with that. I can be a renegade economist. That feels like a good way to introduce myself. So it's part of a playful coming back to academia, but also challenging it, saying it's time for change and we're going to challenge it, maybe from the outside of academia, with engagement, with activism and the playful disruption that causes.

Shamir: [00:07:11] Excellent! I think that’s a perfect segway to dive deep into the topic. There have been a number of significant reports that came out in recent years. Perhaps the latest one being the IPCC’s 6th Assessment Report. And previously, there was this IPBES report on global assessment on biodiversity and ecosystem services. I think just last week there is one that is on the  state of world trees. These reports are compiled by world leading scientists and scholars from all over the world  and they are in essence basically saying that the planet that we call home is sick, may be in a critical state like in the ICU. And according to many researchers, many of the socio-ecological processes that underpin and support life system on planet earth are actually reaching the tipping points which means beyond which the changes  would be irreversible, we will not be able to repair them. So I am curious to know Kate, how would you characterize the state of the health of our planet?

Kate: [00:08:25] So first of all, let me say that this was something I was never even invited to discuss in my entire economics degree. We never talked about the living planet. It wasn't a part of the syllabus. And so let's start with an economic worldview that actually puts it in the syllabus now, let's start by saying that we recognize our economy is a subset of society. It is a social construct and human society is part of the living world. We are dependent upon it for everything. Now we are beginning to realize that our planetary home and this is the only known living planet in the universe, so we should pay it due respect. Our planetary home has a series of life supporting systems that make life on Earth, work and thrive, and these life supporting systems include having a stable climate, having fertile soils, having healthy oceans, ample biodiversity, having a protective ozone layer overhead and what the reports that you've just mentioned, the scientists have again and again and again documented in painful statistical detail that humanity is on course for breaking down these life support systems on which we all depend. We are pushing ourselves beyond tipping points where we change the system fundamentally in ways that we can no longer then pull back.

Kate: [00:09:56] We can't say, Oh whoops, we don't want to be here. Let's go back. You can't go back from that tipping point. It's like going over a waterfall. You can't climb back up it. So we are at a very high risk, and these are known as the nine planetary boundaries protecting a stable climate, protecting biodiversity, keeping the ozone layer integral, water cycle, fresh water cycle, overnutrifying soils. This was discovered, and I really thought of clearly by our system scientists little more than a decade ago in the framing of nine planetary boundaries and is actually the starting point for me of drawing the doughnut, it was the motivation to put it at the front and center of our economic thinking. Economics means the art of household management, so let's start by understanding our planetary household. And when we look at this science, we see we are literally in the process of destroying the life support systems of our planetary home. So this must be a critical priority. Immediate concern for all economists.

Shamir: [00:11:04] So what you have said, it looks like we are already overshooting the planetary boundaries in some parameters. I don’t know if at any point in modern human history the future of humanity is challenged in so many ways. So the way I see it, the devastation and collapse of our life-supporting system is a recent phenomenon, maybe of the last 200 years. So, I am curious to know, what has actually led us to this critical stage? Who and what is responsible? Has mainstream economics -  19th century economic theory, model and thinking - in some ways shaped and contributed to these crises?   

Kate: [00:11:49] So let's just think about the many crises that we face and I think of the 21st century, beginning with multiple crises from the global financial crisis to the climate and ecological crisis to the Covid crisis that we've all been enduring. And there are many more. It's fascinating to think of these crises that have sharp inequalities of gender and of race, of wealth and power between the global north and the global south. And they show us how deeply we are interconnected with each other and the rest of the living world. But these crises also emerge from the very systems that we've created, and I think they emerge from systems based upon the idea that progress is endless expansion, endless accumulation. So all nations pursuing GDP growth, no matter how rich that country already is, and I'm sitting at one of the richest countries in the world and it's richer than nations have ever been in human history. So here I am, sitting at one of the richest points of humanity. And yet the politicians and economists in my country think that the solution to all of our challenges lie in yet more growth. Now, I imagine from the perspective of Bangladesh, that must seem absurd. That the desire and the dependence upon growth in even the world's richest countries is endless. To me, this is a very fundamental part of what's wrong with our economic mindset that we think progress is endless growth no matter how rich we already are. But I do think that the fundamental approach of mainstream economics and the neoclassical approach that's being taught does lead us into the challenges that we've got of the economy that we've inherited. So let me ask you, if you ever studied economics at school or university, do you remember what was the first concept that you were taught?

Shamir: [00:13:45] Supply and demand curve?

Kate: [00:13:49] Well, thank you very much. You know what, that is the same answer the entire world over which in itself is quite weird. I can't think of any other subject that you could say to students everywhere. What was the first thing you learned? And it's the same diagram. So supply and demand. Now what that does on day one of the course says welcome to economics students. Here is supply and demand. It puts the market at the center of our vision. It tells us that the economy is essentially the market, and it means price is the metric of concern and therefore that the metric by which we will assess our economy. And then it says, well, anything that falls outside of this price contract between the seller and the buyer, we have a name for that. It's called an economic externality. Well that means that we find the breakdown of the living world that we've just been describing is literally called an environmental externality. And I think to me that we should study economics with concepts that tell us to think about the breakdown of the living world as an environmental externality is a big signal that this framework is just not fit for our times. So the first concept is supply and demand. Then let's think about the character of humanity that has been taught in these courses for decades. It's a character who's known as a rational economic man, and we'd have to think of him as a man being somebody without dependence, without children or old parents to care for directly day in, day out.

Kate: [00:15:20] He'd be standing alone, independent, single minded with money in his hand, with ego in his heart, with a calculator in his head and with nature at his feet. Now the real challenge of this character that students have been taught for decades and researchers have found is that I'm being told that he is like us, that here's a good model of us. In fact, students start to become more like him. They begin to admire him by his traits of self-interest, of competitiveness. Over time, as they study economics, they value these traits more instead of, say, altruism and collaboration. So who we tell ourselves shapes who we become. The models that we teach and learn are very, very powerful because they remake us now. Put that together. Supply and demand, here is the market. Rational economic man, this is your competitive, self-interested character. Put that together with the idea that progress is endless growth. These, to me, are the three fundamental concepts that sit at the heart of a neoclassical mindset and that have indeed deeply contributed to us having global industrial revolution and endless pursuit of material growth. That means we are getting to the point where we are breaking down the life support systems of our planet. That's why, at the same time, it is transforming our industries. We need to transform the economic worldview that's taught in schools and universities worldwide.

Shamir: [00:16:52] Yeah. So what I hear, Kate, you are saying that GDP is probably no longer a fit for measuring the progress in our society. If that is so, what is the alternative model? What do you propose?

Kate: [00:17:08] So let's just look back at GDP. It was created in the nineteen thirties almost a hundred years ago by a very brilliant American economist called Simon Kuznets, who was asked by the US Congress to come up for the first time with one number to measure the output of the American economy. And he did. But at the same time, he said. Don't confuse this with the welfare of the people, it cannot be used to measure that because it's missing unpaid caring work in the home. It's missing the value of community and it counts only what's sold through the market. It's not recording what is being destroyed or used up in the process, so it counts the value of timber sold. It doesn't count the cost of the forest that's been chopped down. Simon Kuznets had all the caveats, all the warnings from the beginning, but the temptation of this number was so strong that it became at the center of governmental policy making and international tables comparing the progress of countries, so it became a competition to grow the fastest. Now how do we replace that? One of the reasons actually I created the doughnut was exactly to put a much better vision of metrics that we want at the center of our vision. We don't need a single number. If I offered you a car. And said, hey, I've got a really nice car for you to drive, by the way, I've made it easy for you.

Kate: [00:18:28] It doesn't have a dashboard telling you the speed and how much petrol there is and the revs of the engine and the temperature of the engine doesn't have all that information. I've combined it into one dial. And so it just goes up and down. You would not want to drive that car because it would not be safe. If you went to the doctor, you don't want the doctor just to give you just give me one number about my health. I don't want one number. I want to know about my digestive health and my blood pressure and my weight. I want a dashboard of metrics. So we already use dashboards and we know that they're valuable to help keep something complex in balance. So we need a dashboard that puts together human well-being and ecological integrity. And I think this century, we've got data on our side. If Simon Kuznets were alive today, remember in the 1930s how little data, how little information was available to him if he was alive today, I really believe he would say, hey, don't do what I did. Don't make one number. You've got the potential of creating a fantastic dashboard and you've got data visualization. You've got real live data possibilities. This is the century of data. Let's use that to create a complex dashboard for the complexity of the economy that we know we want to capture.

Shamir: [00:19:45] And  could you please explain a little bit more about your doughnut model that you shared?

Kate: [00:19:56] Ok, so here's the donut. Think of it as a compass for twenty first century prosperity. So think of humans, humanity's use of Earth resources radiating out from the center of this picture. That means that the hole in the middle of the doughnut is a place where people are left falling short on the essentials of life. It's where people do not have the resources they need for food, water, health care, housing, transport, communication, income belonging in community. These are crowdsourced from the world's governments, they are social priorities of the Sustainable Development Goals, and the power of that is that all the governments in the world have already agreed that every person in the world has the right to live above this social foundation, not falling short on the essentials of life. Also so far, so good. Now as we meet these essentials of life, every person in the world. Of course, we are using Earth's resources in how we built homes and how we eat, how we provide water, how we create energy. And so we start to put pressure on Earth's life supporting systems. And we must make sure we don't overshoot this ecological ceiling because there we would put so much pressure on Earth's systems and resources that we would begin to kick our planetary home out of balance. We would create climate breakdown, we acidify the oceans, we create a hole in the ozone layer. We use up the diversity of the world and create a monoculture. We pollute the soils and drain dry the rivers. So these nine planetary boundaries create the ecological ceiling that protects the life support systems of our planetary home. We must not overshoot these. So put it very simply, the goal of the donut is to meet the needs of all people within the means of the living planet. And to me, this is our 21st century challenge and our project and our opportunity.

Shamir: [00:21:56] That's great. But I have a question for countries like Bangladesh, particularly the ones in the global south. There is still a long way to go to meet  the socio-economic needs, what you call social foundation, health, education, peace, gender equality and so on. And I’m sure you're familiar with the work of Jason Hickel and others, who argue that with our continuous growth, particularly in the global north, will not ensure a safe operating climate for humanity as it will cause overshooting of the planetary boundaries. Thus, the world needs to shift to a degrowth or post-growth future. But growth in the near future is inevitable in the global south to ensure basic socio-economic needs, but as studies have shown, decoupling is not possible, that will cause further ecological degradation in the global south while ecosystems are already fragile and the environment is crumbling. 

So I'm curious to learn, Kate, if you were a policymaker in Bangladesh,  what are your thoughts for countries like Bangladesh in the global south given the stage of development they are in. How would you approach economic growth vs ecological degradation? How would you balance between the two, I know there isn’t an easy answer but what should be the starting point?

Kate: [00:23:27] So first, let me say, and I'm going to bring the doughnut back again. No person should be falling short on these essentials of life, and in countries like Bangladesh, we know from data and we have a Bangladesh national donut, we can show it that many people, as you just said, are falling short on the essentials of life. So it is an absolute priority for countries like Bangladesh to ensure that everyone can meet their essential needs. This is part of human rights. Now the challenge is to find ways of doing this in ways that don't take the path that all high income countries before took, which was to do it in such a degenerative way that has destroyed the life support systems of our planetary home. So I want to say, first of all, that I fully expect Bangladesh's national economy to grow. I fully expect that to show up in GDP growth because if you're going to ensure that everybody has the income and the ability to meet their needs, this is going to show up as growth. I have absolutely no problem with that. And also the population is growing, so it's going to show up as growth. This makes sense. But the growth of the economy isn't the most important indicator that always I would come back to. As well as this economy is growing and over time, are people's essential needs being met. And we will be measuring the national donuts of countries around the world to ensure that nobody is left in this hole. Now the question that you go on to say is How do we do this? Does it inevitably mean destroying the environment? I see before I go back, I want to say one other very important thing.

Kate: [00:25:05] Let's also recognize I'm sitting in the UK, right? I'm sitting in the country that is at the heart of the history of colonialism, and we have to also recognize that the relationships between countries is incredibly important. So we can't just take one country at a time and treat it as if it's an independent, sovereign nation that's responsible for its own history and its own future. Countries have been colonized and have seen extraordinary extraction of resources, and this still goes on in finance rules and in trade rules and in debt obligations that are imposed upon them in current land grabs in the current impacts of climate change. There's a very powerful and deeply unjust history between the global north and the global south. So I also want to recognize that countries like Bangladesh, I believe, have a very strong claim to not only finance, for adaptation to climate change, but a very strong claim to transforming trade rules, transforming finance and assistance and technological assistance to enable them to grow their economies in ways that meet people's needs while staying within planetary boundaries. If I could show you that the national donut of Bangladesh, and let's hope we can bring it up on the screen to show people who want to look at this, we can absolutely do that. Bangladesh has a lot of human shortfall in the middle of the doughnut, but is not overshooting any of the planetary boundaries on a per capita basis.

Kate: [00:26:38] Now it's an unprecedented pathway. How can countries like Bangladesh, like Malawi, like Indonesia and others, meet the needs of all their people for the first time without overshooting planetary boundaries in the way that countries before them have done? This is unprecedented. And it absolutely needs a course for international assistance and on the basis of justice and reparations for past exploitation. But it's going to require innovations in industry and policy and business in the countries themselves. We need to see two big shifts in the dynamics of our economies internationally. We've inherited linear industrial systems that are degenerative by design, where we take, make use and then lose Earth's resources, and we need to become regenerative by design so that resources are used again and again. And of course, many communities in Bangladesh and many and elsewhere in the world would say, but we have traditionally been regenerative. Before the arrival of plastics, we used and reused everything. This was a circular cyclical, was part of our culture and our economy. How do we reclaim that practice? But now, with the modern materials and the higher living standards that every person has a claim to, how do we provide energy and food and water and housing in ways that actually use materials in a regenerative way? An amazing challenge, by the way, for 21st century Bangladeshi young economists. I mean, an absolutely incredible opportunity to say, how do we design our economy so that it meets people's needs in a regenerative way? But we've also set a dynamic I want to talk about. We've inherited divisive economies that have driven value and opportunity into the hands of a few.

Kate: [00:28:28] We've seen the rise of the global one percent, but also within many nations, the rise of millionaires or billionaires. And meanwhile, many, many working people have seen their wages stagnate. We've got to turn that divisive design and dynamic into a distributive one where value and opportunity are shared far more collectively. Now, one of the most basic and fundamental things you can do for distributive design is invest in public health, invest in public education so that every person can fulfill their basic human potential. That's the most incredible way of investing in the wealth that lies in every human body, but also creating public transport networks, creating far more equitable access to housing to public facilities so that everybody has a distributive access to opportunity in society. So just to summarize, we need to go from degenerative to regenerative and from divisive to distributive. Now what that will exactly look like in Bangladesh, I would not be the right person to say because I'm not embedded in your culture, knowing the society, knowing the opportunities, the policies, the barriers and all the brilliant innovations that can be made, but I have every confidence that there are brilliant people in Bangladesh with the skills, and I know some of them and the inspiration of people who are bringing their skills home and saying, What can we do to provide renewable energy to everybody? What can we do to ensure that we create cities for the future? New settlements that actually welcome everybody and start to be part of a regenerative future?

Shamir: [00:30:11] That's brilliant, thank you Kate. One of the challenges I see is that for a country like Bangladesh, the major economic institutions are in fact embedded in a global system, which is the neoliberal economic order. The  countries are in competition with each other. They don't want to see that they are lagging behind from others in some of the matrices. And growth is the most dominant feature in the political narrative, so growth is the primary goal at any cost and it comes at the cost of ecological degradation. So how countries like Bangladesh should approach to transition to a wellbeing economy or the model that you explained earlier. 

Kate: [00:30:59] So this is indeed one of the lock ins to growth in my book Doughnut Economics, the last chapter is about all the ways in which we have created economic structures that depend upon unending growth. And one of the political dependencies is this competition between nations. By the way, it's equally true amongst the richest of countries. Think of the members of the G20. What gets them into the G20? A big part of that is that economic power, that economic size. So no country wants to lose its place in that G20 family photo. And if any country alone said, oh, we're going to stop pursuing growth and we're going to pursue a more flourishing society, they may worry that they're going to be booted out by the next emerging powerhouse. They're no longer a member of the G20 so that competition and that anxiety about are we growing and how are we growing compared to the countries we compare ourselves to? It exists all the way through. I have to say it's the same with wealthy people. We know that the Forbes rich list that comes out every year, even the people in the top 10, they're probably some of the most worried about are they going up or down? They are the multi-billionaires in the world, and they are anxious about whether they lost their status in the top 10. So this comparison is a really dangerous lock in.

Now, some countries and I'm going to speak from the global north perspective where I'm seeing some countries shift on this. Some countries and it tends to be smaller ones. Interestingly, it tends to be countries that have a female prime minister or a female leader, are saying, okay, let's not try and have the biggest GDP. We're probably not going to win at that game anyway. So let's go and do something more interesting. Let's pursue well-being. I'm talking about countries like New Zealand, Scotland, Wales, Iceland, all of them with female leaders saying we're going to pursue a wellbeing economy and it's very closely related to the doughnut. But we're pursuing human well-being within ecological thriving. And there's a small group of them that's come together the Wellbeing Governments Group, and they're starting a new group now. To me, we're in very early days of this and it's interesting that a few leaders have come away and said, okay, you can. You can keep playing that growth game, have fun, we're going to go away and do something more interesting. Now I realize again, I'm talking about countries that are already extremely high income compared to the rest of the world. I think there will emerge and I don't know where it will emerge from, but amongst lower income and middle income countries, and we sometimes see it in places like Ecuador, countries that say we are or Chile is now writing a new constitution with new values at the heart.

Kate: [00:33:55] Well, where will this emerge from? Let's say within the broad spectrum of global south countries, where will emerge a group that says we are not here to pursue GDP growth. We are here to meet the needs of all of our people within the means of the planet. And let me say again, doing that, meeting the needs of all of our people within the means of the planet may well lead to GDP going up in some of the low income countries. I fully expect it to, but GDP going up is not the goal. It's part of the pathway in this phase of our development. So I think that's going to happen because the last thing I say on this is even though most politicians still stand on the public stage and talk about what's happened with GDP quarter on quarter, off the stage, every single one I've ever met says we know this is not the right measure to be judging our country's success by. We know that this actually doesn't deliver what our population want when they go to the ballot box. So we know it's wrong and that's why you hear them say we want green growth or sustainable growth, clean growth, good growth, lasting strong, balanced growth. They're always adding adjectives before the word. It shows they actually want something else.

Shamir: [00:35:14] You mentioned some of the countries from the Global North as well as Global South including Ecuador and Chile who are increasingly moving towards a wellbeing approach. I'm curious what your thoughts are on a small country called Bhutan in South Asia? How do they approach their economic progress or progress in general?

Kate: [00:35:37] So I should absolutely have mentioned Bhutan right there where I was giving those examples. Bhutan, of course, is famous for saying, we're going to actually come up with a Bhutan Gross National Happiness Index, so we've got a concept of gross national happiness. And we're going to gather metrics and we're going to measure gross national happiness. It's the leading example of a country saying we're going to go in a different direction and we're going to put metrics behind it. Now, I'm not familiar enough with the details of what's in that index to give a critical assessment of it, but it's a very good example. Thank you for bringing it. It's a very good example of a country saying we're going to pursue a different project. And I have to say so many politicians and thinkers and leaders from the global north go to Bhutan. They all seem to want to go to Bhutan and learn from what Bhutan is doing and being inspired by Bhutan. So again, it's a great, powerful example of even if a country is small or indeed low income in monetary sense, it can really provide leadership globally that another way is possible and we're going to pursue it.

Shamir: [00:36:41] At this stage, I would really love to know what role the global economic institutions like the World Bank, IMF, etc. actually have in rethinking development and well-being. You were part of the team that compiled the Human Development Report. I think that's generated a lot of discussion and shaped development discourse in certain ways. So when it comes to global economic institutions like IMF, World Bank, what role do you see, Kate, they can play and should play in rethinking economics and development? Maybe declare GDP obsolete as a measure of progress and popularise a new progress matrix may be like the genuine progress indicator or something like that. What are your thoughts on the role of institutions broadly?

Kate: [00:37:36] Let me say first that it was a real privilege for me to be part of the team at the Human Development Report. And of course, let's remember the history of that report that the World Bank was producing all the way through the 70's and 1980's, the World Development Report, which was an assessment of countries GDP. It gave rankings of countries and their GDP growth rate. It was fueling that competition. And it listed them from the richest to the poorest. And it was actually two South Asian brilliant thinkers. So Mahbub ul Haq, who had been the former finance minister of Pakistan and he got his old university friend Amartya Sen, who needs no introduction, brilliant economist who thought about human capabilities first, not markets. Mahbub and Amartya got together and they said, let's create a counterweight to the World Bank's report that puts economic progress first. Let's put human development first. And they launched that report in 1990 with a new metric that put long and healthy life, good education and income per person into the index. And it changed so much and it was radical at the time. So they were brilliant. They were brilliant advocates. They used one big institution, UNDP, to really transform the paradigm against what the World Bank had been doing. And the biggest compliment to them, I would say, is that over the years, the World Bank began to revise its own world development statistics and including in all of them, all of the human and social and ecological data that the Human Development Index had prompted.

Kate: [00:39:19] So that project worked. Now, just to come to your question, what role do these big institutions play? So I want to start by recognizing that big institutions and there are many brilliant people within them, but they will probably be the first to admit the big institutions can get very locked in. They are part of the global system, and many of them are funded by and said to be in service to the nations so that their governing bodies sometimes include the national government. So they are in service to the national government. So they're also tied in some ways to what their member nations will agree to sign off. When I was writing the Human Development Report, countries wanted to go through it line by line and they wanted to edit it, and we had to defend against the critiques being edited out. So there's a very fine line. I'm going to be honest, I don't think the economic transformations that we need are going to come from within the existing systems that we have because they get so locked in. And I think they, as most transformations, they come from outside, they often come from an outside of the discipline itself. I think the environmental awakening of economics has definitely not come from within economics. It's come from Earth system science.

Kate: [00:40:36] It's come from the world scientists and the IPCC putting again and again this case that we are destroying the living planet. And then actually, I think very late in the day, economics has said, oh, we better start talking about climate change. It's a good case study of environmental externality. I mean, where was this in the textbooks when I was a student in the nineteen nineties? It was already a problem. We already had the first Conference of the Parties of the United Nations on the Convention of Climate Change, but it wasn't anywhere close to my textbook, so I think economics has come very late to the game. So transformation comes from outside, and I don't think it will come from outside of these institutions. I want to also say I know there are good, really transformative and ambitious people within them. Sometimes they invite me. I've been invited to speak at the World Bank, at UN institutions multiple times. They inviting voices in. But there is a very strong neo liberal and mainstream economic former thinking that decades of economists like myself now in their 40s or 50s were trained in, and now they are in these roles, whether it's in a national government or in international institutions. And it's a lot to change. It's hard in the life and the mindset of an individual and then to write it into new programs and policies to make that change. Where I do see progress happening is in recognition of the need for circular economy and sustainability.

Kate: [00:42:07] And therefore, and then now more moving towards the idea of regenerative design, which goes beyond saying let's be sustainable, which can dangerously sound like let's just keep it just sustainable. Now we've depleted Earth so much we need to regenerate her living systems. We need to restore and repair and rewild. So let's aim beyond that. So this language starts to come in, the concepts start to come in, and then it becomes very critical to say, will these ideas be integrated in a way that waters down the ideas so that they fit? Or actually, will this institution be able to transform so that it moves towards this more ambitious and transformative idea? I always say when business as usual meets a disruptive idea, something is going to get transformed. Is it the idea that it's going to get transformed and turned into a watered down version of itself? Or is it that business as usual, institution or policy or company that's going to get transformed? And this now is the edge of transformation. How does that happen and how do we make sure as activists and I think activists are people who are who are committed to bringing about transformation in many different fields. As activists, we need to ensure that when we meet up with business as usual, it's business as usual that's doing the transforming rather than the vision that we're bringing.

Shamir: [00:43:31] Excellent, Kate. On your very last point of transformation, another hope is probably the young people around the world: how they have been challenging the existing status quo and pushing for change. So I'm just curious, is there any message for especially the young audience who will be listening to this conversation in the global south, how they should rethink, re-engage, and re-envision a system that can ensure a more equitable, resilient and sustainable future for humanity. And it's important because that the very thing that we started with this conversation, the disruption in our socio ecological processes and in our climate system we’re experiencing, the brunt of the effects is going to actually impact the young people, those who were born in the late 20th and 21st century. So what message do you have for these young people, particularly living in the global south?

Kate: [00:44:34] Ok, first, three things. First one is, I would say, never accept an adult saying to you, oh, it's up to your generation now. No adults can pass on the responsibility of the systems of which we as current adults in our 30s, 40s and 50s embedded in the structures of the world. We cannot just pass that on to others. Every person, every adult in a responsible position in the world or indeed in their community, in their family, in their business, in their politics. We all have influence and we can all make change. So any young person, I would say if an adult is, oh, it's up to your generation, turn right back to them and say no, because your generation currently can do so much more. What are you going to do? So that you improve what it is that I will inherit when I come to take over the reins of influence in this sphere? Second, I would say, I think that young people worldwide have learned how powerful they are when they organize. And I think the Fridays for Future movement internationally has been phenomenal. And I know Greta Thunberg is often recognised first and fastest and for good reasons. She was a very powerful young woman taking a stand alone. But that movement is international now, and it must be international because the impact, as you just said, are falling first and hardest and I think longest in the global south and so young leaders from within the global south and these movements in the global south are crucial to unite the action on climate change with global climate justice and a rebalancing between global north and global south and recognizing the power of the global north and the impact it has had upon global south. And therefore the transformation is needed in those relationships. And then the third thing I'll say is that the beautiful thing about our economies, about finance, about business, about government policies is that they are all human inventions. We made them up. We created these systems. There's nothing natural or inherent or permanent about them. In fact, they are continually changing. Now the laws of the living planet, those are worth taking as natural and permanent, and we should learn them and every economist learn them at the beginning of their degree if they want to be part of managing our planetary home. So let's create economies that work with and within the cycles of the living world that are compatible with conditions conducive to life and conditions to human rights. So the beautiful third message is if any young person is interested in economics or interested in policymaking or engineering or law or business or finance any of these fields, these are fields that must be reinvented so that we recode our economies and we design them to be compatible with this planet.

Kate: [00:47:44] Now, for some people, and probably for most adults, that's a really daunting task. Overwhelming. But others and I think younger generations say note this is a phenomenal opportunity and we're going to seize it. So look at it with the opportunity of what lies ahead. There are so many innovations in technologies, in business models, in community organizing, in city and infrastructure that are waiting to be put into practice. That will make us amazed and delighted, and they'll make us laugh and then make us thrilled that we can live so differently on this planet. And when we start to do that, we'll look back and think, why did it take us so long to transform? Why were we so stuck with the old way? Really in the 2020s that we are still talking about GDP? They'll be amazed. So I see a lot of prospects for young, ambitious young people who want to transform. They have a phenomenal power to make things happen. Some of them I know, some fantastic young Bangladeshis working in solar energy who speaks so powerfully on a global stage about this, and I see, I take delight in seeing older generations from the global north, quite silenced by the energy, the vision, the skills, the intention and the ambition of this new generation. So I'd say, bring it on.

Shamir: [00:49:00] Great point. Thank you so much, Kate. Before we conclude, for those who would like to learn more about doughnut economics and other related concepts that you have discussed in this podcast, do you have recommendations of any books or reading materials that you'd like to share with our audience?

Kate: [00:49:21] I have. I have far too many to recommend.

Shamir: [00:49:26] Maybe top two or three.

Kate: [00:49:27] Okay. So in writing doughnut economics, let me find it here, so in writing doughnut economics I aimed to bring together in this book all of the ideas in economics that I was never taught. I was never taught ecological economics, feminist economics, complexity thinking, institutional economics, behavioral economics. I put them together in this book to make them dance on the same page. So that was my attempt to combine my bookshelves in one short space. But other books that have massively influenced the way I think if people like paradigm change and understanding broadly the way the world works, then this book by Donella Meadows "Thinking in Systems". It's a systems analysis. It's quite philosophical, quite technical in a way, but it completely changed the way I think about the systems nature of our planetary home, the systems nature of human relations. This really profoundly changed me. I have to say I really recommend you mentioned Jason Hickel for people in the global north. I think this is a very valuable book. Jason Hickel's book on "The Divide" to really understand the history of colonialism and the global north south exploitation and power relationships. Many, many people in the global north are not taught this. They don't learn this, we don't understand it. And if we don't understand that history, we cannot transform its future. So I think this is a really powerful book, too. I'll stop there for the moment, but I hope those are good inspirations to get started.

Shamir: [00:50:59] These are great recommendations. Thinking in System is in my reading list, I should perhaps read it soon. And finally, I know you are very active on Twitter, if people would like to follow your work- what you're reading, researching or sharing, how could people follow you? What is your Twitter handle?

Kate: [00:51:57] So my Twitter handle is just my name, Kate Raworth. But I would really love actually to direct people to Doughnut Economics Action Lab because after my book came out, so many people would come up to me after I gave a talk and say, I'm putting this into practice. I'm teaching it in my classroom, I bring it into my business, I'm taking it into our town meeting. I'm bringing it into our government policy meetings, I'm taking it to our community organization. And so we set up Doughnut Economics Action Lab. It's online, so it exists virtually. And anybody, everybody is invited to become a member, if you would like to, or you can simply browse the tools that we put there. All of the ideas have doughnut economics are now in open source. We are sharing them, we're putting them in the commons and inviting people to create with them and innovate and turn them into tools that actually help put these ideas into practice. We've been innovating our tools around what would it mean to put down economics into practice in a city? And we've been working with change makers across the global south in credit, including some fantastic people in Bangladesh who are hoping to say what would it mean to run a project where we bring it? We bring these ideas into practice in our country. So please join the platform. Look for other members in your country or your region, see what's useful to you there. Because this is a global practice, and I truly profoundly believe that 21st century economics is going to be practiced first and theorized later. You will find it in the street before you find it in the textbooks. And so we are bringing together practitioners have done it economics co-creating this future, and it's what gives me energy every day for sure. It's what keeps me excited about this work, seeing how it actually can happen in the world. And it's doughnuteconomics.org. And our Twitter handle is @DoughnutEcon.

Shamir: [00:53:14] Thank you, Kate. We will put that into the show notes also. It was excellent, a great conversation indeed. It's always refreshing to listen to you. I really appreciate and can't thank you enough for all the time that you have taken to speak to us. 

Kate: [00:53:30] And thank you. And I would just like to say, you know, another time I would love, I would love to hear your reflections of what you're experiencing as a teacher in the universities and how these ideas land as an activist and your vision for the future of Bangladesh. And I really hope you'll join Doughnut Economics Action Lab. I would love to have you as part of our community. We're going to be connecting. We're going to be hiring an education lead next year. We're going to be connecting with teachers and schools and universities worldwide to turn these tools into school and teaching materials that can be used in classrooms. And I'm guessing that you would have some pretty good ideas for how to do that really well. So it would be brilliant to have you in the community.

Shamir: [00:54:12] Sounds fantastic, Kate.

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