Doughnut Economics: the bare bones

Doughnut Economics explores how we as humans need to think and act to be able to thrive in the 21^st Century. In 2012, Kate Raworth published the doughnut theory in an Oxfam Report, and later published her book- Doughnut Economics: seven ways to think like a 21st century economist which further explores the mindset needed by humanity to thrive. 

The Doughnut theory has created a space for large scale conversations about reimagining and remaking the future and how this can be good for humans whilst being good for the planet.

The doughnut features two rings: a social foundation that ensures every human has their basic needs met and an ecological ceiling which ensures the environment is sustainable to all life on earth.

The social foundation considers the following factors: energy, water, food, health, education, income & work, peach & justice, political voice, social cohesion, equality, housing and connectivity. These are the basic human needs that we should all have access to.

The ecological ceiling considers: ozone layer depletion, climate change, ocean acidification, chemical pollution, nutrient pollution, air pollution, freshwater disruption, land conversion and biodiversity breakdown. These are the areas in which the environment needs to remain stable.

Essentially, the concept looks at how we can create a safe and just space for humanity whilst utilising a regenerative and distributive economy. So, when we make a decision; create a business; edit curriculums or make policies, we should ask: 

“is it kind to the environment and fair to all people?”

Rather than traditional sets of policies and institutions on economics, doughnut economics is a way of thinking. It recognises that human behaviour can be shaped to be cooperative and caring.

In her book, Raworth describes the seven ways to think like a 21^st century economist:

1. Change the goal- instead of focusing on Gross Domestic Product*, we focus on the doughnut. Aim for thriving people and a thriving planet.

2. See the big picture- instead of thinking that the economy runs itself through buying and selling; consider the fact that buying and selling patterns are affected by local; global and environmental factors (relationships; laws; politics etc)

3. Nurture human nature- People should make decisions on their lives based on factors such as emotions or relationships rather than feeling the desire to always make logical decisions to maximise their own benefit

4. Get savvy with systems- we should learn to understand that the economy does not move towards stable and predictable balance because it is constantly changing due to people, technology, governments, businesses and unexpected events that all influence each other

5. Design to distribute- instead of relying on growth of the economy to even and balance distribution of wealth; distribution should be designed into any economic model to ensure that all people benefit

6. Create to regenerate- instead of expecting growth of the economy to magically regenerate areas of social needs; we should be regenerative by design

7. Be agnostic about growth- instead of being addicted to growth and believing this is always the answer; we should be indifferent towards growth and instead put the focus on improving human wellbeing and protecting the environments of which we live in and globally

   
   

How does a business implement Doughnut Economics?

When implementing Doughnut Economics into a business, the focus must be on the design of the organisation. We need to look at: purpose, networks, governance, ownership and finance and rather than thinking about what value can be extracted, consider what benefits can be generated.

The doughnut principles of practice must be followed by any initiative that is working to put Doughnut Economics into practice, and this includes Boro Doughnut.

1. Embrace the 21^st century goal by aiming to meet the needs of all people within the means of planet. This means that the organisations purpose, networks, ownership, governance and finance are aligned with this goal.

2. See the big picture by recognising the potential roles of the household, commons, market and state in transforming economies. It is important that finance serves the work rather than drives it.

3. Nurture human nature by promoting diversity, participation, collaboration and reciprocity; it is important to strengthen community networks and work with high trust and care for the team.

4. Think in systems by experimenting, learning, adapting, evolving and aiming for continuous improvement. It is important to be alert to dynamic effects, feedback loops and tipping points.

5. Be disruptive by working in the spirit of open design and share the value with all those who co-created it. Be aware of power and aim to redistribute it to improve the equity amongst stakeholders.

6. Be regenerative by working with and within the cycles of the living world. Reduce travel, minimise flights and be climate and energy smart.

7. Aim to thrive rather than to grow, know when to spread the work rather than scaling up.

8. Be strategic in practice, go where there is energy but question whose voices are left out. It is important to balance openness with integrity so that the work spreads without capture. Share learning and innovation to unleash the power of peer-to-peer inspiration.

No matter who you are or what you do, you can apply the doughnut economics to your lifestyle, practice, business and community by focusing on being kind to the environment and kind to humans.

For a visual representation and clear explanation about the principles of doughnut economics, check out the Doughnut Economics Action Lab Youtube channel which has lots of easy to digest short videos.

*Gross Domestic Product is the total value of all goods and services produced within a country. This is worked out using four factors: consumer spending, business investments, government expenditures, and exports.

References/Further Reading:

DEAL. “About Doughnut Economics” Doughnut Economics Action Lab  https://doughnuteconomics.org/about-doughnut-economics

Kate Raworth. “What on Earth is the Doughnut?...” Kateraworth.com https://www.kateraworth.com/doughnut/