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Kate Raworth - Doughnut Economics: Seven Ways to Think Like a 21st Century Economist (2017)



What if we started economics not with established theories, but with humanity´s long-term goals and how to achieve them? This is the question, Kate Raworth asks in her book "Doughnut Economics". She criticizes that our economical acts and decisions are based on the economic theories of the 1960s, which are mainly focused on a continuous and infinite growth. She suggests an update to the 21 st century economy, which accounts not just for our well-being and prosperity, but for that of our planet as well. To make the missing factors in classic economies visible, she developed a "Doughnut Model", which includes twelve aspects of our social foundation, as well as nine planetary boundaries and explains that the ideal space of our economy is between these two elements. Her work is a wake-up call to transform our capitalist worldview, which is targeting to growth, into a more balanced, sustainable perspective that allows both humans and the planet to thrive.
Florian ROSS
Kaposvár University, Doctoral School in Management and Organizational Sciences,
H-7400 Kaposvár, Guba Sándor u. 40.
What if we started economics not with established theories, but with humanity´s long-term goals and how to
achieve them? This is the question, Kate Raworth asks in her book “Doughnut Economics”. She criticizes
that our economical acts and decisions are based on the economic theories of the 1960s, which are mainly
focused on a continuous and infinite growth. She suggests an update to the 21st century economy, which accounts
not just for our well- being and prosperity, but for that of our planet as well. To make the missing factors in
classic economies visible, she developed a “Doughnut Model”, which includes twelve aspects of our social
foundation, as well as nine planetary boundaries and explains that the ideal space of our economy is between
these two elements. Her work is a wake-up call to transform our capitalist worldview, which is targeting to
growth, into a more balanced, sustainable perspective that allows both humans and the planet to thrive.
Keywords: New Economics, sustainable development, economic model, ecological
Did you know that global warming will increase between 1.03,5 °C until 2100? (Kessel,
2000). An associated rise of sea level is also expected and due to that, the number of people
at risk from flooding by coastal storm surges is predicted to increase from the current 75
million up to 200 million in a scenario of midrange climate changes. (Patz et al., 2005).
Further impacts of this warming to the planet like nature catastrophies, droughts or
famines can just be estimated. These threats are not new. When Kate Raworth grew up in
the 1980s in London, the problem was already existing and when she saw that bad news
in television, she knew that she wanted to work one day in a profession, where she could
make the world a better place. So, she decided to study economics in Oxford and after
graduating, she started working for the Unites Nations and later for Oxfam. After twenty
years of work for these organizations, she came back to the Universities of Oxford and
Cambridge to work as a professor. In 2017, she published her book “Doughnut
Economics: Seven ways to think like a 21st century economist”. This paper will give an
overview about the book´s key points and will figure out further research questions.
From Raworth’s point of view, the current economic market system has three major
weaknesses. The first one is the ecological context, which is not included in that model.
Regional and Business Studies (2019) Vol 11 No 2, 81-86
Kaposvár University, Faculty of Economic Science, Kaposvár
doi: 10.33568/rbs.2409
Ross: Kate Raworth - Doughnut Economics: Seven Ways to Think Like a 21st Century Economist
Everything is about increasing growth rates but forgets about the planet and its needs.
The second one is work, which is not accounted. This includes all kinds of work which
is invested in parenting or doing the housework. Helping other people without getting
paid is counted to that, too. All that is work and creates value, but does not appear in
any calculation. The last weakness is inequality. As known, the difference between the
richest and the poorest people in the world is strongly increasing and the current market
system intensifies that problem (Davies et al., 2015). Those failures were the motivation
for Kate Raworth to develop the Doughnut Model and the consequential advice.
Indeed, the model really looks like a doughnut (Figure 1). The inner circle of the
Doughnut represents our social foundation, which means all the basic needs we have
like water, food or housing. The outer circle represents our ecological ceiling. These
boundaries, like climate change, air pollution or land conversion were not invented by
Kate Raworth, but scientifically evaluated by a group of scientists under the
administration of Johan Rockström and Will Steffen. (Rockström et al., 2009).
Figure 1
The Doughnut model?
Regional and Business Studies Vol 11 No 2
If we stay between these two limitations, we are in the safe and just space for
humanity, where all people can live in wealth and prosperity and where we do not
shoot over the planet’s boundaries. If we fall inside the inner circle, the people have
to suffer because they cannot cover their daily needs. If the use of resources and
environmental pollution are so high that they hurt the planet, the economy crosses
the ecological ceiling and goes outside the outer circle. At the moment we are outside
of both boundaries. So, how can we ensure that we stay inside the safe and just space
for humanity? Kate Raworth suggests to renew the way of how we think about
economics and comes up with her 7 ways, to think like a 21st century economist.
1. Change the goal
Economics is about consumption and as known, the best indicator of how much an
economy consumes is the GDP. This is probably the most important figure to
measure. It is expected that the GDP grows from year to year up to 5% and if an
economy does not fulfill these expectations, it is deemed bad. Donella Meadows, an
American scientist said: “Growth is one of the stupidest purposes ever invented by
any culture. We´ve got to have an enough.” (Raworth, 2017). Raworth notes, that this
20th century strategy of growth pushed a lot of societies into deep inequality and the
world into an ecological collapse. A high quantity of people falls short with their daily
needs, but at the same time, we are pushing too much pressure to our planet and our
livsustaining systems, which led to climate changes or the breakdown of
biodiversity. It is time to get into the sweet spot of the Doughnut and to replace the
goal of endless growth for a new one, a 21st century goal. This goal is clear from
Raworth´s point of view: To cover both, our as well as our planets needs and to live
in balance with our environment.
2. See the big picture
Traditional economics describes the economy always with the same picture, the
circularflow diagram between companies and households. In that description,
economy is an isolated system without any relations to other systems. That theory
presumes that the markets are so efficient to let them run free, the state is too
incompetent to meddle, everyone benefits from trade and that the society quasi does
not exist. So, the triumph of the markets was almost inevitable and have been driving
us to financial and ecological crises. Also, the statement that the financial markets
cannot fail was clearly disapproved in the global financial crash, which puts the first
theory into question, too. Raworth says, it is time to draw the economy in a new way,
where it is embedded in larger systems like the society, the earth or the solar system
with the goal to put it in service to life.
3. Nurture human nature
In the focus of economics is the Homo Economicus. According to definition, it is a
rationally thinking person. To visualize the Homo Economicus, he can also be
described as a person who stands alone, with the money in his hand, the calculator
in his brain, knows every price and has the nature at his feet. It can be observed that
the more economy students study, the more selfinterested the Homo Economicus
Ross: Kate Raworth - Doughnut Economics: Seven Ways to Think Like a 21st Century Economist
becomes. Kate Raworth says, we cannot keep living in that way, we have to change
ourselves from self-interested to socially reciprocating, from fixed preferences to
fluid values and from isolated to interdependent ones. That will give us the
opportunity to nurture human nature, and due to that, more chances to get in the
safe and just space of the Doughnut.
4. Get savvy with systems
Raworth shows that economy is a complex, constantly changing system and not a
simple, stable one like the economists in the 19th century invented. Those economists
were inspired by Newtons laws of physics of how the planets were moving, so they
were looking for laws to describe the market movements. The result was that they
were trying to transform their ideas into maths and developed models, which are
based on equilibriums. The fault in this calculation is that economy is too complex
and depends on too many factors. Furthermore, equilibriums do not always exist.
Systematic thinking is more helpful to understand the dynamics of economics a,
which can be summarized in a pair of feedback loops. Because of that, Raworth says
that 21st century economists do not see themselves as engineerswho control the
economy, but as gardeners who take care and shape it.
5. Design to distribute
The basic for that way is the Kuznet curve, which says that when an economy
develops, market forces first increase and later decrease economic inequalities. It
means that the income per capital first rises to a maximum and causes inequality,
until it can decrease it. Raworth criticizes that the economic inequality is not an
economical need, it is more a design error. 21st century economists have to recognize
that a lot of possibilities exist to design economies with the result of more equality
when distributing their created values. It means that it is much more, than just
distributing incomes, but wealth. Especially when that wealth comes from possessing
land, companies, and technologies or from the creation of money.
6. Create to regenerate
Economics regarded a clean environment for a long time as a luxury good, which
was just available for the higher classes. That way of thinking was forced by the
environmental Kuznet curve, which indicates that the environmental pollution has
to increase first, until the economic growth can decrease it. Raworth disagrees with
that theory because there are no proofs that this will happen. She says that the
environmental damage is a result of a degenerative orientation of the industry and
that we need a new economical thinking in the next century, which has a regenerative
orientation and a more circular approach. We should change our business model
which eats up the planets resources and spits out just waste into a system, which
turns waste back into valuable goods.
7. Be agnostic with growth
Traditional economists regard constant economic growth as essential, but in nature
nothing grows infinitely. We have to realize that the economic growth must
Regional and Business Studies Vol 11 No 2
eventually reach a limit. Kate Raworth suggests that the traditional exponential
growth curve has to be replaced by the s curve, focusing on a level where we can
cover both, our as well as our planets needs to live in harmony with our environment.
Kate Raworth offers with Doughnut Economics a completely new way, a 21st century
way of economical thinking. The interesting point is that her ideas are not that new
as they seem, it is much more back to the economic roots, which we might have lost.
Economics comes from the Greek words oikos (household) and nemein (manage or
distribute) (Singer, 1958). That definition leads inevitably to the question if it is really
householding what the 20th century economics stands for because householding is
about working with the resources which are available and not overshooting them.
But how to avoid an overshoot when the economies are aiming for infinite growth
rates on a finite planet? Is that even possible?
Kate Raworth doesnot recommend concrete actions, how to transform her
theories and to apply them, but after reading that book, a thinking process is started
and that is probably one of the authors goals. But how can we ensure that the book´s
results will influence our future economies? From my perspective, there is just one
way. We will not be able to change economics overnight, but we can change it in the
future, when we realize that the students of today are the decision makers of
tomorrow and due to that fact we should rethink, what we teach at universities,
because the key to change lies in education.
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Patz, J.A., Campbell-Lendrum, D., Holloway, T., Foley, J.A. (2005): Impact of
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Ross: Kate Raworth - Doughnut Economics: Seven Ways to Think Like a 21st Century Economist
Singer, K. (1958). Oikonomia: An Inquiry into Beginnings of Economic Thought
and Language. In: Kyklos, 11. 1. 29-57. p. doi: 10.1111/j.1467-
Correspondent author:
Florian ROSS
Kaposvár University
Doctoral School in Management and Organizational Sciences
H-7400 Kaposvár, Guba Sándor u. 40.
... Quando a sociedade consegue se manter dentro de tais margens, é possível que todos prosperem de forma segura. 11 Transpondo os limites da prevenção para um modelo similar (Figura 1), teríamos uma área do círculo verde na qual as ações preventivas são eficazes para obter aquilo que Gérvaz e Péres denominaram a tarefa da prevenção: reduzir a morbidade e a mortalidade precoce sanitariamente evitáveis. 12 Aquém do limite do círculo, a prevenção é incapaz de superar os determinantes sociais desfavoráveis quando as condições de vida desiguais fazem com que as ações preventivas percam sua potencialidade, ou mesmo redundem em medicalização das condições de vida, sensíveis basicamente a ações de Promoção da Saúde. ...
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... (1234567890) Dragulanescu, 2014). As a consequence, new models such as degrowth (Martínez-Alier et al., 2010;Sandberg et al., 2019;Trainer, 2020), green growth (Capasso et al., 2019;Ulucak, 2020;Ojha et al., 2020;Sandberg et al., 2019), limits to growth (Meadows et al., 1972), doughnut economics (Raworth, 2012;Ross, 2019), steady-state economy (Czech & Daly, 2004;H. Daly, 1991) and ecological economics (Daly, 1991;Daly & Farley, 2011) have emerged that emphasize on ecological sustainability. ...
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This paper proposes to observe a day’s break as the Planet Day (While the proposed day can also be named as the Gaia Day (after James Lovelock), Planet Day seems to be simpler and easier name for better understanding by the masses and greater connect of the issues with them. Hence, here the proposed day is termed as the Planet Day) every month to allow the nature to heal and ensure sustainability of the planet in the long run. Based on the concept of sustainable degrowth, the paper carries out benefit–cost analysis of the proposed Planet Day and presents a framework based on extensive literature review, secondary data analysis and stakeholders’ (Here, participants are referred to as one of the "stakeholders" in the sense that every human being who lives on this planet is accountable for the harm done to it and is impacted by ecological degradation. Hence, they are supposed to contribute to healing of the nature through appropriate initiatives both individually and collectively. In addition to the common residents, there are other stakeholders of the ecology as well such as the government, the business enterprises, and manufacturing firms, etc.) perceptions through a non-random convenience sample survey. The paper finds that the net benefit from the Planet Day amounts to be USD 9002.37 billion across the world and USD 102.48 billion for India per annum. The respondents also perceive the proposed Planet Day as ecologically and economically beneficial and thus support the idea of healing time for the planet. However, a critical challenge is to take different stakeholders on board, ensure their active participation, and design appropriate institutional mechanisms for its successful implementation.
... A new mindset is needed to be fit for facing this century's complex systemic challenges. 5 Today's pressure on business organizations to pursue the moral high ground is increasing, and we now see the rise of ubiquitous tension between a sustainable, ethical human society and the economic practices of self-regulating markets à la Milton Friedman. 6 Organizations, entities, individuals, employees and employers have been exposed to these significant changes over the last decades, with special relevance in the world of work. ...
... Sustainability 2021, 13,248 15 of 16 that force them to live in undesirable situations that are below the planetary expectations. On the other hand, photovoice revealed that settling in swampy areas and using biomass fuels, amongst others, exposes slum dwellers to adverse health risks while degrading the environment. ...
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Due to increasing urbanization, many people find themselves living in slums that expose them to several health risks. We explored urban health risks that fall short of the planetary boundaries in an urban slum in Kampala, Uganda using photovoice. We selected, trained, and assigned ten youth (five females and five males) to take photos on urban health risks. The photographs were discussed, and transcripts were analyzed based on the doughnut economics model using content analysis in NVivo 12. Environments and actions of slum dwellers expose them to health risks, and cause them to live at the edge of planetary boundaries. Environmental sanitation challenges, including solid and liquid waste management, excreta management, and food hygiene and safety expose slum dwellers to risks at the edge of the lower boundary of the planet. Urban conditions expose slum dwellers to poor physical infrastructure, undesirable work conditions, pollution, and health and safety challenges. Crime, violence, and substance use were also viewed as vices that make slum environments dangerous habitats. On the other hand, practices like inhabiting wetlands and using biomass fuels in addition to traffic fumes expose slum dwellers to effects associated with living above the planetary boundaries. Urban youth reflected on health risks that have immediate effects on their health and day-to-day living. Urbanization, especially in low resource settings, needs to be cognizant of the ensuing risks to health and thus ensure sustainable growth.
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The EU unveiled a stimulus package as part of the multiannual financial framework (MFF) for 2021–2027 and the temporary instrument designed to boost the economic recovery. This countercyclical response is aimed at avoiding a decline in the EU economy and protecting employment, vulnerable companies and necessity-driven entrepreneurs; however, it should also lay the foundations for a desirable entrepreneurial paradigm for the future that is driven by opportunity and embedded in a Circular Economy aligned to global well-being. We propose a new model that implies a different EU policy which puts entrepreneurship on the path toward and not away from development.
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Identifying and quantifying planetary boundaries that must not be transgressed could help prevent human activities from causing unacceptable environmental change, argue Johan Rockström and colleagues.
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We provide the first estimate of the level and distribution of global household wealth. Mean assets and debts within countries are measured, partly or wholly, for 39 countries using household balance sheet and survey data centred on the year 2000. Determinants of mean financial assets, non-financial assets, and liabilities are studied empirically, and the results are used to impute values to countries lacking wealth data. Household wealth per adult is US$43,494 in PPP terms, and ranges regionally from US$11,655 in Africa to US$193,147 in North America. Data on the shape of the household distribution of wealth for 20 countries, accounting for 59 per cent of the world’s population and, we estimate, 84 per cent of its wealth are used to establish patterns of wealth inequality within countries. Imputations are again performed for countries lacking wealth data, on the basis of the observed relation between wealth and income distribution for the 20 countries with data. The Gini coefficient for the global distribution of wealth is 0.804, and the share of the top 10 per cent is 71 per cent. Wealth of US$8,325 is needed to be in the top half of the distribution, and US$517,601 is needed to be in the top one per cent. Between-country differences in wealth are two-thirds of global inequality according to the Gini coefficient, indicating a larger role for withincountry inequality than in the case of income according to recent estimates.
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The World Health Organisation estimates that the warming and precipitation trends due to anthropogenic climate change of the past 30 years already claim over 150,000 lives annually. Many prevalent human diseases are linked to climate fluctuations, from cardiovascular mortality and respiratory illnesses due to heatwaves, to altered transmission of infectious diseases and malnutrition from crop failures. Uncertainty remains in attributing the expansion or resurgence of diseases to climate change, owing to lack of long-term, high-quality data sets as well as the large influence of socio-economic factors and changes in immunity and drug resistance. Here we review the growing evidence that climate-health relationships pose increasing health risks under future projections of climate change and that the warming trend over recent decades has already contributed to increased morbidity and mortality in many regions of the world. Potentially vulnerable regions include the temperate latitudes, which are projected to warm disproportionately, the regions around the Pacific and Indian oceans that are currently subjected to large rainfall variability due to the El Niño/Southern Oscillation sub-Saharan Africa and sprawling cities where the urban heat island effect could intensify extreme climatic events.
THE SUNDAY TIMES BESTSELLER'I see [Raworth] as the John Maynard Keynes of the 21st Century: by reframing the economy, she allows us to change our view of who we are, where we stand, and what we want to be.' George Monbiot, Guardian'This is sharp, significant scholarship . . . Thrilling.' Times Higher Education'[A] really important economic and political thinker.' Andrew MarrEconomics is broken. It has failed to predict, let alone prevent, financial crises that have shaken the foundations of our societies. Its outdated theories have permitted a world in which extreme poverty persists while the wealth of the super-rich grows year on year. And its blind spots have led to policies that are degrading the living world on a scale that threatens all of our futures.Can it be fixed? In Doughnut Economics, Oxford academic Kate Raworth identifies seven critical ways in which mainstream economics has led us astray, and sets out a roadmap for bringing humanity into a sweet spot that meets the needs of all within the means of the planet. En route, she deconstructs the character of ‘rational economic man’ and explains what really makes us tick. She reveals how an obsession with equilibrium has left economists helpless when facing the boom and bust of the real-world economy. She highlights the dangers of ignoring the role of energy and nature’s resources – and the far-reaching implications for economic growth when we take them into account. And in the process, she creates a new, cutting-edge economic model that is fit for the 21st century – one in which a doughnut-shaped compass points the way to human progress.Ambitious, radical and rigorously argued, Doughnut Economics promises to reframe and redraw the future of economics for a new generation.'An innovative vision about how we could refocus away from growth to thriving.' Daily Mail'Doughnut Economics shows how to ensure dignity and prosperity for all people.' Huffington Post
Global primary energy consumption amounts to 8.38 billion tonnes oil equivalent (OE) (1996) and is projected to increase by 1.3% per year for the industrialized countries and by up to 9.2% per year for the developing countries. Fossil energy's share was 7.541 billion tonnes OE in 1996 with rising tendency. The order of magnitude of proved reserves of fossil energy sources is 950 billion tonnes OE (1996), and certain present probable and possible reserves will become proved ones in the years to come. Fossil energy will, therefore, remain the number one energy source until far into the next century. The use of fossil energy produced 23.8 billion tonnes of carbon dioxide (CO2) in 1996 with oil and gas contributing about 60% to this figure. It is estimated that continued use of fossil energy will lead to an increase of the average global temperature by 1.0–3.5°C in the coming 50–100 years. Though the forecasts of future CO2-emissions from fossil energy use as well as the magnitude of their influence on global warming are much disputed, the impact of CO2-emissions on global warming itself is widely admitted. There is much dissense on the climatic consequences of global warming. It cannot be ruled out, however, that these consequences may be detrimental to mankind. This has in a sense of a “no regret policy” triggered substantial activity worldwide to decrease emission of greenhouse gases, especially of CO2, and various attempts have been made to set binding limits for the emission of these gases. The harmonized worldwide implementation of CO2-reduction strategies is, however, far from being realized. OECD-countries have made substantial progress in applying these strategies. Nevertheless, the contribution of the industrialized countries to worldwide CO2-emissions is still over-proportionally large. The cost of developing and applying CO2-reduction technologies are tremendous and prohibitive for most of the emerging economies. There is an obligation of the industrialized countries in their own interest to develop and make available these technologies wherever they are needed. The cost/efficiency ratio of CO2-reduction measures must be a decisive criterion for their application. There are serious obstacles, though, to reducing CO2-emissions while satisfying the energy needs of our world, e.g. lacking international harmonization, national needs and egoisms, rapid growth of world population and strongly increasing energy demand of emerging economies. In summing up, though an anthropogenic contribution to global warming cannot be proved for the time being, it cannot be ruled out forever. Therefore, internationally harmonized measures for CO2-reduction have to be taken in the sense of a “no regret policy” to avert potential damage from mankind and, thus, contribute in this sense to a sustainable development with fossil energy.
Correspondent author: Florian ROSS Kaposvár University Doctoral School in Management and Organizational Sciences H-7400 Kaposvár
  • K Singer
Singer, K. (1958). Oikonomia: An Inquiry into Beginnings of Economic Thought and Language. In: Kyklos, 11. 1. 29-57. p. doi: 10.1111/j.1467-6435.1958.tb00247.x Correspondent author: Florian ROSS Kaposvár University Doctoral School in Management and Organizational Sciences H-7400 Kaposvár, Guba Sándor u. 40. e-mail: