Rethinking Endless Growth With Doughnut Economics

Standard economics models based on infinite growth are fundamentally incompatible with action to address the climate crisis. Economist Kate Raworth explains her approach to economics based on balancing human needs with Earth’s finite resources.

Kate Raworth is a self-described renegade economist and the author of Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, which has been translated into over 20 languages. The book is a radical attempt to rethink foundational concepts of economics and to create a new framework for a sustainable economy that doesn’t depend on “infinite growth.” Prof. Raworth came on the Current Affairs podcast to talk with editor-in-chief Nathan J. Robinson about how we can think more clearly about the economy, which should be “designed to thrive, not grow.” This interview has been edited and condensed for grammar and clarity.


In your book, you show how the prevailing concepts of mainstream economics are limited, and, in fact, destructive if followed rigidly. You try to think about new ideas we can use to replace our problematic economic concepts. In your education, as you came to the discipline of economics, where were the first places in which you began to notice problems or inconsistencies in the things you were being taught that produced the kinds of frustrations that eventually led to your work in developing these alternatives?


I didn’t study economics in school. And so I was on a very eager game of catch-up in university to learn everything that many of my peers had already studied for two years. So I devoured my textbooks. I was a very good, obedient, absorbing student. And I really enjoyed learning the concepts. My disquiet began when I really wanted to study issues in relation to the environment. I was at Oxford University in the early 1990s. There was no option to study that. It just didn’t exist. But it was part of public economics. So we learned about it as an externality.

We learned about supply and demand in the market, and the point where supply and demand curves cross, there’s the price, and anything that falls outside of the market contract, any impact, good or bad, that affects other people who weren’t part of that contract, is called an externality. And we would talk about all environmental problems—whether it’s chemical pollution of a river from a factory, or climate change, or acid rain—as environmental externalities. And I thought it was hugely problematic to talk about something as fundamental as the way the living world works as an “externality.” And it’s only called an externality because we’ve decided to put the market at the center of our vision. That’s framing. As global ecological crises have deepened and expanded and become more extraordinarily devastating, the idea that we should call these externalities just becomes, to me, utterly, utterly infeasible. This is an alarm bell for all of us; we can’t carry on this way.

I also got very frustrated when it came to welfare economics. And we would often say, taking the initial income distribution as given, what kind of interventions can improve distribution? And I would think, “Why do we always take the initial income distribution as given? Why don’t we start with the fact that we need to ensure the basic minimums to all?” So I was really frustrated by the limited way in which I felt that social issues were erased.

Then it really expanded for me when I started teaching again at universities and I started dipping into what was going on in economics decades later. And I was just astounded that, despite all the critiques, despite the global financial crisis, despite deepening ecological crises, the same starting point was there. The textbooks had barely changed. And, in fact, what I heard from students was more and more that things had become extremely mathematical. So studying economics is really a lot of math problem sets, one after another, and many of the students who went into it with an interest in the politics of the economy, who wanted to talk about power relations, who wanted to talk about social relations, they were filtered out by the very intensive focus on math as the first language of economics. What has really frustrated me over the years is that what’s being taught now, I think, in so many universities worldwide, is just not what students need to be learning. It’s not fit for these times.


Let’s go back to the idea of externalities as inadequate to describe the ecological crisis. So the mainstream way of framing environmental problems is that the market is this mechanism that is relatively pristine but has these kinds of minor dysfunctions. So, for example, carbon emissions are minor dysfunctions because you make a contract, and you don’t incorporate the environmental costs that the production, use, and sale of fossil fuels requires. And so the way you start to think about solutions to problems like that is, Well, okay, we need to then put a price on that cost that is being shifted around. So that’s why economists love carbon taxes. That’s how they deal with climate change. But I think what you’re saying is that this whole framing implicitly suggests that the problems are unfortunate accidents or blips, rather than fundamental aspects of the system. The framing leads to misunderstanding.


So, first of all, I think a good economist would say, “Oh, carbon emissions is not a minor aberration from the market”; a good economist will say it’s a major aberration. This is an externality. For example, the UK has said this is the biggest market failure of all time. So a good economist will say these are externalities, and I recognize they’re absolutely major. So they’re not always treated as trivial.

But I think the mere framing of them as external means that most economics courses begin like this: Welcome to economics. Day one, let’s start with the market. Here we go. Because this is a great device to understand how supply works, how demand works. Look, it’s the point they cross, it’s market price, we get equilibrium. It’s a fun and engaging place to start. But I find it an extremely politicized and weird way to start.

Economics comes from the ancient Greek: oikonomos, the art of household management. So if we’re going to manage our household, we need to ask ourselves, first, what is our household? And what is the nature of our household? And who are its inhabitants, and in whose interest are we managing this? And if we don’t begin by saying, “What is the purpose here? What is our goal here?” then how on earth can we know what success looks like? So I don’t think we should ever start with, Welcome to economics, here’s the market. Let’s start with a much bigger vision of what the goal is.

Secondly, let’s come back to markets. Look, Adam Smith was onto something. Markets are incredibly powerful. He extolled the virtues of the invisible hand. The use of this phrase has gotten blown way out of proportion. But he was onto something: that the market mechanism is extraordinary in its ability to coordinate the needs or the wants of millions or billions of providers and customers who may never need to meet, may never need to talk through the price mechanism. So there’s something very, very powerful there. There’s just two problems. Firstly, markets only serve those who can pay; the rest they ignore. Secondly, markets only value what’s priced; the rest they exploit. So these are really big problems. And the mainstream answer is, Well, let’s start with markets.

For the kind of neoliberal political context that certainly the UK and the US have had over many decades, we start with markets first. This will be the first best way to solve things through the market. Now, where these kinds of big market failures come up, Oh, then let’s bring in the state. The state may need to come in—with a tax or with a quota or with a public good—and correct for the market failure. The argument then—and it’s a political argument—very quickly goes, Oh, but maybe there will be state failure. Maybe this state’s intervention will actually make things worse, maybe the state will get it wrong. So maybe the state should actually stay out of the way. Now, this is a very political positioning, a kind of ideological boxing match between the market and the state. Are you here for the free market, laissez-faire capitalism or are you a state-loving socialist? This boxing match was the obsessive ideological debate of 20th century economics.

Of course, there’s a lot else going on there. But, merely saying, Oh, we start with the market, things are externalities, there are occasionally market failures, or there might be some very important market failures, and that’s when the state steps in—I just don’t think it’s the right way to start [when what we need to ask is,] how can we most effectively provision for our wants and needs within the means of a delicately balanced living planet? It may well be that actually public provisioning or commons provisioning is a far more effective starting point than the market.


What comes across very strongly in your book is that the questions that we choose to start with and build economic science around really affect what we end up doing in ways that are political, even if they look quite neutral. You have this list. There was a professor who said, These are the big questions of macroeconomics. And the questions listed are: What causes economic output to grow and fluctuate? What causes unemployment? What causes inflation? And how are interest rates determined? And these seem like value-neutral questions, in that it’s a cause-and-effect question. We are studying the growth of economic output. But what you point out is that these questions that economics concerns itself with really, really matter in ways that aren’t necessarily noticed.


Absolutely. And so those questions are from the opening slide of the opening lecture of the first year course in macroeconomics at Oxford University, around 2016. So I went in and asked, if I was a student today, what is macroeconomics? And there’s no planet there. There’s no sense of the living world. There’s no mention of energy. There’s no sense of whether the economy is compatible with conditions conducive to life. It’s just talk of output. Again, there’s growth, and will it generate output? So there’s an implicit assumption there that the macroeconomic question is, How do we create growth, and then what will be the consequences on employment, inflation, interest rate? It’s just macroeconomics that doesn’t exist on a planet. It hasn’t yet realized that the economy is a subset of the living world and must therefore be designed to be compatible with it. 

So this was one of the moments when I was just astounded. We are this deep into a climate and ecological crisis, and this is what’s taught as macroeconomics. The students sitting in that room are going to be the policymakers of 2050, along with students all over the world who are studying economics today. Some of them will become economists. Some of them will become politicians. Some of them will become business leaders, others lawyers, journalists, community organizers, activists, residents. And this economics is shaping their worldview. Is this really going to provide them with the mindset, the worldview, the tools, and the ambition for transformative change that needs to be in place by 2050? Not a chance. They deserve to be taught something so much richer and wiser than this.

That’s what fired me up to write this book and to read all the economics that I’d never been taught. I was never taught any ecological economics, which starts with saying the economy exists within the living planet: deal with it; design for it. I was never taught feminist economics, complex economics, behavioral, institutional, commons theory. So I wanted to see what would happen if I brought all these fields of schools of thought, which are often called heterodox economics, together. There’s loads of wisdom in them, but they’re often fragmented. There are feminist economists over here and the ecological economists over there. What if we bring them all together and make them dance on the same page? That’s what I was aiming to do in this book.

And to go back to where you began. One could focus on critiquing mainstream economics, and there’s been a lot of critique. But we are past times of mere critique. And I think one of the most powerful ways of protesting is to propose something new. So it was very clear to me that I didn’t just want to critique what was there. You have to be able to propose something else. It doesn’t mean that something else is perfect or true or correct or right. Or eternally the right way. It’s the beginning of a different journey. And so I put a lot of energy into [thinking about what I would offer as] replacement. And I was really compelled by the images. And so when I look back over my economics textbooks, and I see these images, I remember the images way more than any equations, way more than the way that supply and demand are embedded in the back of my mind. Pictures are like intellectual graffiti. They are very hard to scrub out. So the best thing to do is paint a new mural over the top. So I want to replace your picture with a new one. And that’s what I was aiming to do in the book.


The doughnut is your new way of thinking. But you look at the mental picture that is drawn for us by contemporary mainstream economics and talk about how we could revise that picture to be more accurate. You talk a lot about the way that we think of the economy as flows of water. There’s this kind of emotional feeling that there’s something good about going up and to the right, and there’s something bad about going down or regressing. You talk about these heuristics that structure all of our conceptions of what is good. So perhaps you could talk a little more about the way that these very simplistic conceptions take us astray.


One of the deepest metaphors that we live our lives by is the notion that forward and up is good. This comes from a book by George Lakoff called Metaphors We Live By. And we have that embedded in our language. When things are moving forward, we’re on the up. Why are you looking so down, you know, we took two steps forward, and one step back? Forward and up is good; growth is good. And so no wonder we so quickly fell for the idea that this exponential growth curve is the shape of progress. We use the metaphor in our language. We love to see our kids grow, we love to see our gardens grow, growth is good. Growth is indeed a wonderful, healthy sign of life. But nothing in nature succeeds by growing forever. In fact, think of anything you value, love, or care about. And then imagine what would happen if it grew forever.


Other than cancer, as you point out.


Which is not something we particularly love or value. In fact, the moment we discover a [cancerous growth] in our bodies, we move very fast to stop that because cancer is [dangerous] and threatens the health of the whole. We understand that health lies in balance. Our bodies are healthy when they’re balanced. So there’s this deep metaphor that forward and up is good. And so the idea of the endless growth curve has been a success. It’s shocking to me that this is still taught in courses.

I ask anyone who has studied economics, Did you ever have a lecture where the professor said, Oh, now today, what we’re going to do is ask ourselves, is growth possible? Is endless growth possible in this country? Is endless growth necessary in this country? Is it feasible? Is it coming? And what would we do if not? That almost never happens.

Paul Samuelson, a brilliant economist, loved his equations and was really into the complexity of economics. He was at MIT in the 1940s. And it was a time when lots of former servicemen were returning to college having not got a degree except being in the war. They were studying engineering, and like in many disciplines, they studied a little bit of economics on the side. And Paul Samuelson’s boss came to him and said, Paul, I’ve got a problem. The students just hate the economics we’re teaching. Please, will you put your equations aside for a semester and just come and teach economics 101. Make it good economics. And Paul Samuelson couldn’t resist. And he understood the power of framing. He said, I don’t care who writes the nation’s laws or crafts its advanced treaties, so long as I can write its economics textbooks. The first lick is the privileged one impinging on the beginners, tabula rasa, in their most impressionable state. And he knew, right there, the power of the first concept, the power of the first picture. What I first present to you, front and center, tells you what to focus on and what’s at the periphery. It tells you what’s made visible and what’s left invisible.

And he drew this very simple diagram of the economy: think of two tanks with pipes connecting them. So they’re running in a loop in a circle, and then you draw them like literally a series of radiators, all joined up by pipes. And there is even a hand pump of water flowing around between these pipes. One of these tanks is households with a household income, and one of these tanks is business. And his point was really important. His point was, When households have incomes, they spend them. And that money becomes income and revenue for business. And when businesses get revenue, they hire people. And that turns into wages for households. And so the revenue flows and so do the goods and services. He drew it like radiator pipes. He was teaching engineers, so he wanted to make this familiar to them. But he drew it as a contained, closed system with water flowing round and round these pipes. It became the fundamental model that all students are still taught today. And it’s called the circular flow of income and goods. And it looks like the economy is a self-contained closed system. But it’s missing the fact that the fundamental input in the economy, and input into labor, is energy, which is taken from resources from the living world. There is no input from the living world.

There’s also, by the way, no input of unpaid caring work—the reproductive care, the cooking, washing, cleaning, sweeping, raising the kids, getting labor, and reproducing labor so that one is fresh and ready for work at the factory door tomorrow. So nature is missing; unpaid care is missing. The commons are missing as well. Now, if the fundamental diagrams of our economies are missing some of the most fundamental sources of well-being and life on which we actually depend, they are not going to lead to good economic policies. So this just tells us that the first pictures we draw and teach and learn and reproduce, matter.


I want to go back to what you were saying about growth. This is so important. There’s a part in the book where you say that economists are actually afraid to draw out the long-term pattern of growth. You say you should sit down with economists with pencil and paper and say, Could you please draw me the long-term trajectory of economic growth because it presents us with two choices. Either it’s drawn with exponential growth that goes up toward infinity, which, if we conceive of what that would be like, is impossible. Or you have to treat growth as eventually leveling off, which is incompatible with the theory of infinite economic growth. And for mainstream economists, the first option is awkward, the second is unconscionable. And you say that if you find the Economist who’s willing to play this game, you call it the Medusa of economic theory. It’s a monster.

So part of it is that we have this simplified conception that growth is good. Politicians are talking about how much the economy is going to grow next year. We all want growth. We don’t want a recession. We don’t want the economy to contract. But when we think about the implications—when we get beyond this simplified, short-term line and think about how this plays out in the real world—we find that, actually, it just doesn’t work at all.


And this deep presumption of endless growth is really extraordinary. Because we’ve had at least a century of growth in high income countries, it’s just become normal. And I think a lot of it is due to the fact that there was cheap energy available. And so we have gotten used to the fact that we’re riding on this rising escalator and so we build in a growth dependency and a growth presumption to everything we do: 3.5 percent, please. President Kennedy was elected in 1960 on the promise of 5 percent growth. He turned to his economic adviser and said, Do you think they can make good on that 5 percent? Growth was the panacea to end all ills.

I’m in the UK; you’re in the U.S. We live in two of the richest countries in the entire history of humankind. It’s shocking that in both of our countries, there are so many people who live in abject poverty and are forced to go to food banks and face extraordinary insecurity. How can our countries, the richest in the world, enjoy that and allow that?

Also, these countries are richer than almost any country before and yet our economists and our politicians will tell us that the solution to our problems lies in yet more growth and endlessly. The presumption that’s written into the models and into the conversation is, is well, 3.5 percent growth. By the way, it’s been slowing. We’re seeing this kind of long-term decline in the rate of growth. And there’s a very fascinating debate about whether we’re heading for stagnation, whether it’s going to level off or not. But where are the conversations about growth no longer being possible? Because growth cannot be sufficiently decoupled from our impact on the living world. How do we remove the growth dependence that’s been written into our economies? How do we take that up? This should be the most gripping question of our time. This should be the premium research focus of so many economists and divisions. We should be experimenting. How can we loosen this grip of the need for growth, whether it’s through productivity, whether it’s through the way we fund our pensions, whether it’s through the way we think we escaped from unemployment? How are we going to escape from this because if growth isn’t coming, we really need to learn how to manage it?

A brilliant ecological economist called Peter Victor wrote a book called Managing Without GrowthSlower by Design, Not Disaster. And that’s the choice. Are we going to allow ourselves to face a disaster of economies that can no longer grow—because they cause ecological breakdown, or because growth just peters out? Are we going to actually design ourselves into this more mature phase of a post-growth economy?


A very serious problem is that it’s really difficult to think of an alternative guiding paradigm. As you point out, these conceptions of growth as being the ultimate good stay with us, in part, because of the design of institutions. And they also get stuck in your head. … Without an alternative, there is such great power in the existing heuristics. It’s difficult not to admire how simple and compelling the story of neoclassical economics and Friedmanite economics is. And so you have the doughnut, which is an attempt to convey that the current model is not sustainable. How are we going to think about the principles that could guide a rational and sustainable economy?


We find it very hard to think of an alternative. That’s true. Let’s also recognize that it’s incredibly hard to imagine how the current system that we have is going to turn this crisis around and bring us back to Earth. I find that even harder to imagine. So it’s absolutely key that we follow a critique with a proposition. We need to know what we’re for. And that’s exactly why I drew the doughnut diagram as a new starting point that grounds us not in the presumption of endless growth, that doesn’t take the market as the starting point, that doesn’t take endless growth as the starting point. It takes human life and a thriving planet as the fundamental starting point. And once we establish this is what we value, this is the purpose that we’re pursuing, then we can ask ourselves what kind of economy will give us even half a chance of achieving this.

And suddenly you find that the onus of proof has shifted. It’s no longer about social and environmental values and making a better business case for why I should act on them. Now it’s: Bring me your existing policies and government structures and businesses and explain to me how they actually belong in a future economy that aims to meet the needs of all people within the means of the living planet. Actually, many of today’s designs will fail on that test. So it’s time to shift the onus of proof. Which parts of today’s existing economy actually already work, and which need to be utterly redesigned?

Raworth’s Doughnut


To give people the perhaps easiest way of thinking about this doughnut conception of the economy: in every dimension of life, there’s obviously such a thing as too little, and such a thing as too much. You can be seriously deprived—we can think about a plant that is shriveled and withered and not nourished. Or we can think of excess—weeds that have gone wild and clearly need to be chopped back a little bit. And when we start to think about the concept of balance, and we start to think about the ideal range, then we can start looking at how the economy should grow with those criteria in mind. So in the center of the doughnut is deprivation and shortage; and the outer rim of the doughnut is excess, doing things that are destructive. Is that a fair description?


That’s pretty much it. Think of a doughnut. If we think of humanity’s use of earth’s resources radiating out from the center of the doughnut, then the hole in the middle is a place where people are left falling short on the essentials of life. That’s where people don’t have the resources they each need for food and healthcare and education, housing, political voice, and income. So leave no one in the hole. Get everybody into that juicy doughnut itself. But as we collectively use earth’s resources, we know that we start to put pressure on our planetary home. And we can put so much pressure that we actually risk destabilizing the life-supporting systems of this planet. We know that we can cause climate breakdown, we acidify the oceans, we create a hole in the ozone layer, we destroy the integrity of ecosystems. So there’s an outer limit—as you said, you can have too little and too much. And I think we can leave no one in the hole falling short of the essentials of life, but don’t overshoot the limits of this life-supporting planet.

So the shape of progress is no longer the ever-rising line of endless economic growth. It’s no longer forward and up through the ceiling. It’s balanced. And we already know this when it comes to health and our own bodies. We need food, but not too much. We need warmth, but not too much. We need oxygen. But actually too much of that will kill you. We need exercise, but not too much. We know that our personal health and our bodies are like little planets. They are delicately balanced, complex adaptive systems with a digestive and respiratory system, a skeletal, muscular, and nervous system, all interacting with each other. And they all need to be in balance. And that’s called health. We can take that understanding of health from the human body, now to the planetary body.

Then, to me, the 21st-century shape of progress and the meaning of health and economic health lies in that balance of meeting the needs of all people but doing so within the means of the living planet. And then it’s an utterly different economics degree course. It’s utterly different from the economic advice we’re providing to ministers. It’s utterly different kinds of businesses that we’re running now that we’ve refocused around this goal that actually works for the 21st century.


One of the critiques of degrowth is that it means a reduction in living standards. We want to see growth because we want to see a constant improvement in the material standards of people’s lives. But I take your argument to be in part that what we should be focusing on is the ideal conditions for human life and we shouldn’t be assuming that a constant, never-ending increase in the volume of consumer goods is the way to reach the optimum human lifestyle.


That’s right. With degrowth, we want to reduce our impact on the living planet. This is particularly true for high income countries that have such excessive carbon and material footprints in the world. I think it’s closely tied to the historic American dream, particularly that we measure our success, even at the personal household level, in terms of more being better. I will have done well by my kids if they live in a bigger house than I did, or if they have more cars than I did, or if they travel more for the holidays than I did. There comes a point where this is an absurdity at the personal level.

I live in the city of Oxford, and there are cars parked bumper-to-bumper all the way down the street. Now, if we double the number of cars, they’ll just pile up on top of each other. There are too many cars. My family and I decided to get rid of a car. We don’t want a car; we want mobility. So I use a bike for local trips. I am a member of a car club. So there’s a car about 200 meters away that I rent every time I need one. Otherwise, I take the bus or the train. I’m really happy with my mobility options. It shows up less in GDP because I bike myself around most of the time rather than driving cars. So I’m not generating national income in achieving my mobility. But I think this is a higher standard of living. And I think if we move to a much more low carbon transport, it will generate less money for the economy, but be a far better standard of living.

So within our own psychology we need to detach from the idea that material possession is a sign of success. And, of course, this idea arose through a century of consumer propaganda that always intends to sell us more because that has generated profit for companies. It’s very beneficial for companies to say, Buy more stuff. Oh, something broke. Buy another one, a bigger one. Or, you need three, actually, in different colors. There’s a psychological realization of what we’ve been duped into. And I think many, many people are stepping away from that and saying what I really want now is a sense of sufficiency, and I want to declutter my home, and I want to downsize. I see a generation of young people who say, I want a few possessions because I want to actually have lighter feet. And I want to be mobile. So it’s a different mindset. I’ll have done well by my kids if they have anything like a chance of having a stable climate for their entire lifetime. That’s the new metric of the legacy that we’re bequeathing to those who come after us.


What you said reminds me of a diagram I saw recently about a highway expansion project that is happening in Houston. An eight-lane highway is becoming a 12-lane [Editor’s note: It could actually become a 24-lane highway] highway because the current highway is too crowded. And so now it’s more than the width of a football field. Your book makes us think, Ok, we can keep doing this a few more times, perhaps. But if we want the human species to have a future that lasts hundreds of years, or thousands of years, where’s this going? You can’t add additional highway lanes forever. At a certain point you have to rethink the entire project of getting around the city of Houston. Infinite economic growth runs us into really hard limits. And we might run into them at a point where we’ve destroyed a lot of the things that are valuable about this precious planet that we inhabit.


It makes me weep to hear that. This is actually one thing economists have been really good at and have known for a long time. Basically the story with highways is, Build it and they will come. You’ll get more traffic to fill those lanes. For heaven’s sake, don’t build more lanes; put in a dedicated bus lane. The city of Curitiba in Brazil got this right from the 1970s. They have dedicated vacated bus lanes that are fast and affordable. It’s the fastest, smartest way to get in and out of the city. And it should not have to compete with traffic. Put in a train. Let’s move to shared public transport that’s affordable and accessible to all, rather than more highways. In other cities like Seoul, there was a 10-lane highway going through the middle of the city, which had actually been built over a river. They’ve taken out the entire highway and brought back the river. They’ve brought back nature to the center of the city. So maybe in a decade’s time, you’ll be telling me that the now 12-lane highways have actually been removed. They’re bringing back the river, and they’re just going to have a train running through it.


This was Texas, so don’t hold your breath.


Also, they’re going to have massive traffic jams. Congratulations. Every one of those cars is going to be producing carbon emissions. And if you say, Oh, no, but they’ll all be electric, okay. But there’s a heck of a lot of material and emissions used in producing those cars. And so every traffic jam has an impact not only on the quality of air in Houston but also on climate change around the world. And I’m thinking every day about the extreme heatwave that’s happening in Pakistan and parts of India, where people live in temperatures that are a threat to human health. As I was saying, we want some warmth, but not too much. This is too much. We are globally interconnected. And we can no longer say, Well, this is a choice for the city of Houston. This is causing climate breakdown that is violating the right to life of people on the other side of the world. And we have to take responsibility for creating policies and transport systems that, in the highest income countries, are massively overshooting planetary boundaries.

And the terms “developed countries” or “advanced countries”—I recommend removing those words from our language. I’m sorry. I’ve never been to a country that has the right to call itself developed or advanced. Because the UK and the U.S.—which would normally be considered developed or advanced—are massively overshooting planetary boundaries. So the way we are living in our countries is destroying the opportunities of people to live secure and healthy lives around the world, and we’re destroying the life support systems of our country. And there’s nothing developed about that. There’s nothing advanced about that. We have to transform our economies and have a huge responsibility to do so.


The word development is so often used as propaganda. It’s this implicit idea that certain kinds of unsustainable economic activity represent a form of progress to which everyone must aspire. Just to finish up here, I notice that you are, as an economist, unashamed about asking normative questions. Economists often think of themselves as mere scientists, or present themselves as doing positive science. And what is prescriptive or normative is seen as anathema to the cool-headed scientist who is merely explaining how systems work. And I take it that you believe that it is the responsibility of an economist to ask questions like, What should we be aiming for as a species? And how do we get to those things? Moral values seem to have a place in your conception of what economists should do.


It’s more than having a right to ask those questions. Economists have an absolute responsibility to ask these questions. Even if we don’t ask them, we’re implying them anyway. So I absolutely proudly start doughnut economics and say that we have to change the goal. And let’s talk explicitly about the goal. And I put the goal out there: it’s to live within the doughnut. And if you disagree with the goal, fantastic, we can have that conversation about which one of these human rights you think we shouldn’t be realizing. Which one of these life support systems of our planetary home do you think is not really worth respecting? We can have that conversation. At least we’re talking about it. But what happens in mainstream economics is that the strong desire to be a science as respectable as physics means, this is positive not normative. Oh, bullshit. This is not value free. 

What happens on lecture one, welcome to economics—right there you chose the value of talking about the market first. That is a political move whether or not you realize it. And actually the thing that really concerns me is when economists say this is a positive science, I think, my God, you don’t even realize that with every diagram you introduce, you have made choices about what to make visible and what to leave invisible. You’re making visible market transactions; you’re leaving invisible the unpaid caring work that’s been done by women for millennia. You’re making visible industrial capital; you are leaving invisible the living world in which everything depends. Those have political consequences. Those are moral choices. You’re making visible, those who can pay; you’re leaving invisible, those who can’t pay, but you don’t even realize it. I’m terrified. Now, you’re teaching students, and you don’t even realize the moral consequences of the discipline that you’re teaching.

And then let me come to the rational economic man. Robert Frank, who has done some brilliant work in the U.S. showing that every time students are taught this character of a rational economic man, he’s this independent self-formed being who has his own independent opinions. He’s driven by self-interest; he interacts with the world through transactions. He’s ever-calculating; he knows the price of everything. He hates work; he loves luxury. He’s got nature in his feet. The more that economics students learn about this character from year one to year two to year three of their studies, the more they say they value self-interest and competition as economic traits. So these models are performative on us. They’re not only have moral assumptions, they change our morals and change our values and our behaviors. And if we don’t recognize that, what are we doing? We are literally shaping the morals of students and then claiming this as positive science. I mean, it’s outrageous. So I think it’s really important to recognize that every diagram is a metaphor. And the language we use, whether it’s Samuelson’s radiator pipes, or growth. Any economist who talks about growth has a value right there.


We just had Jonathan Aldred on the program. He talked about how economics corrupts us and how these conceptions have all these moral underpinnings that are not noticed. You have that wonderful moment in the book where you compare it to the way that people editing Shakespeare’s plays would describe the characters in the cast list at the beginning of the play. “A treacherous duke” or “a humble manservant” and so forth. And, you say, by describing these characters, they shaped your understanding of the plot before it started. And you say the same thing is true in economics. You have a whole cast of characters for the economy. Finance is infallible. The market is efficient. And these things that seem like mere descriptions actually determine what people do. There are all these normative conceptions baked in.


It’s what Milton Friedman was so brilliant at. He was the master script writer. If you watch videos of him in debate with students in the ‘60s and ‘70s—he was absolutely brilliant at this. He was so quick. Reagan said, The thing you should most fear is somebody saying, I’m from the government, and I’m here to help. And everybody falls about laughing. And this profoundly frames how we think about the economy, and we start to mock government and deride government. The economist Mariana Mazzucato has done some fantastic work—I recommend her work to everybody—showing how much the narrative has been about the market being dynamic and innovative and the state being boring and bureaucratic, and probably we’ll get it wrong, and how much of a falsehood this is, and that we need to actually turn these stories around. Actually, often the state steps in and will take risks where the market won’t tread unless the risk has been de-risked. And then the market will come in and make the profits. So we really need to rethink that market-state relationship and recognize the importance of strong, well-informed and, as she calls it, mission-led state policy.

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