I see a lot of books presuming to explain what’s wrong with the economy and what to do about it. Rarely do I come across one with the consistent new paradigm frame, historical depth, practical sensibility, systemic analysis, and readability of Doughnut Economics by Kate Raworth. Especially unique and valuable is her carefully reasoned, illustrated, and documented debunking of the fatally flawed theory behind economic policies that drive financial instability, environmental collapse, poverty, and extreme inequality.
"an authentic real-world economics for the 21st century can grow.' Hmm, even Korten is still pushing the growth mantra.
Need to remove the growth virus from money itself. Legal Tender is a legal contrivance, and when issued in the form of debt is nothing more than a pyramid/ponzi scheme. The quantification of debt wrongfully applies the algebraic concept of exponential growth - compounding interest - upon money. The distinction between usury and interest is an arbitrary legal determination with no basis in mathematics. Nothing can grow forever at an ever-increasing rate. As time moves on, the emphasis of ever-increasing growth becomes omnipresent, is quantified and institutionalized in the societal structure, encouraging over consumption, over development, and excessive expectations, pushing economic stress to its upper limit of expansion, eventually inciting conflict and spawning War to insure growth.
Beyond Legal Tender is a truly Free Market where money is adaptable and flexible, in balance with individual needs, societal needs, environmental needs, and the needs of the greater reality.
The economic model that I construct to understand economics is primarily based on transportation, ie, the distribution half of the production/distribution model of essential goods and services. Those who control the means of transport, control the economy. Historically, sailing vessels, shipping canals, steamboats and railways empowered the industrialist elite. In our modern age, the automobile and airplane enable the elite control over the economy.
Consider the global economy as a means to distribute goods the longest distance. The lesser, though no less fundamental economies - national, State, regional and local economies all function at shorter distance transport and travel but are disempowered when dedicated to serve the global economy.
Consider the automobile as an urban/suburban travel mode that likewise disempowers the lesser, though no less fundamental modes of travel - walking, mass transit and bicycling. If we could not drive as much as we do, we would need to develop regional economies (consists of innumerable local economies) supported by State and national economies. Just as automobile-dependency unsustainably disempowers other modes of urban/suburban travel, the global economy first empowers large-scale manufacturing which depends upon a global market and secondarily disempowers local/regional/state and national economies.
This economic model makes a good argument for a carbon tax; the further distances of transport and travel require more fuel/energy by which the carbon tax acts as a disincentive to large-scale manufacturing, and an incentive to small business activity.
Yes, growth because:
If the economy grows, it allows either:
a) a stable population to live better; or,
b) a growing population to maintain a standard of living
If the economy doesn't grow, it requires either:
a) a stable population maintaining it standard of living; or,
b) an increasing population reducing its standard of living
Humans have proven incapable of voluntarily maintaining a constant level of population over the planet as a whole. While there may be pockets of decline (e.g., Japan and parts of Western Europe absent immigration) these exceptions tend to prove the rule.
A sustainable economy looks like Zero Population Growth. That this is not the first thing that that people think about is proof Homo sapiens are doomed to fail.
I won't add that a sustainable population might be 1-2,000,000,000 because everyone would have a major brain seizure.
from the article:
The inner circle represents the social foundation of what a high-performing economy must provide for every one of Earth’s 7 billion-plus people.
i agree with your point, 'formerly' that our species should reproduce responsibly. i'm not ready to throw out numbers, however and, of course, per capita consumption plays a big role in environmental devastation. when i arrived at the line quoted above, i did wonder if korten believes humans are ready to stop doubling and redoubling human population at an ever increasing rate. in her ted talk kate rawoth mentions our responsibility to "protect the environment." i would change the wording to "respect the environment!" as long as our species continues to believe we are in charge of the earth we will continue to make decisions based from our arrogant, anthropocentric, limited and narrow point of view which makes us humans the most dangerous animal on the planet.
Not quite everyone, 'formerly' – I agree with you 100%. "Sustainable Growth" is an oxymoron.
If we humans don't humanely begin to stabilize and then reduce our own numbers, Mother Nature will sooner or later do it for us - or to us - and the results will be neither humane nor pretty.
Unfortunately, it appears that "Wall Street" expects - and Tweetle-Dumb has promised - an annual growth rate of around 4%. At an annual growth rate of 4%, it takes just under 18 years for something to double - the economy, the population, the amount of CO2 in the air - whatever. So in about 70 years - for Wall Street investors to remain happy - our economy needs to double (x2), and double (x4), and double (x8), and double yet again – to 16 times its present level. Ain't gonna happen.
World population is growing at about 2% annually, at which rate it takes 35 years to double, so in 70 years - barring famine, pestilence and war - the earth's population will be about 4 times its present 7+ billion, or about 30 billion people. I don't think that's gonna happen either.
(Were it not for immigration - and the children of immigrants - due to a gradually declining birth rate, the population of the U.S. would have stabilized at a very high, but possibly sustainable for a while, 260 million people around 2050. It's currently on track to hit close to 400 million of the world's most resource-consumptive and pollution-generating people by 2100. A typical 'third-world' immigrant increases his or her 'carbon footprint'
by a factor of 12 to 16 within ten years of arriving in the United States . . . )
Two billion is the utmost upper limit for human population to continue to exist and now because of centuries of destructive energy burning and resource depletion it's probably much less. IMHO I think the human species is doomed but again I've always been a pessimist. A quick shift to a democratic socialism with bottom up organization, a rapid shift in food and energy production and voluntary population reduction might be able to save mankind. But I'm not placing any bets. Also I have no children so I've done my small part.
These flawed economic models are based on capitalism a flawed system of growth on a finite Earth that;s fed up with humans. She will revolt; humans will be no more and Earth and her remaining creatures will be happy.
i have no problem with writers who seek fame and fortune but i do think any article on a sustainable economy which doesn't refer to capitalism, is simply naive.
A steady-state economy (or zero-growth) is the goal of socialists and has always been since Marx talked of simple reproduction. Socialism is all about creating an ecologically benign relationship with nature.
Of course, there will be a short phase where there an increase in production will be necessary to relieve the worst problems of food shortages, health-care and housing which affect billions of people throughout the world. There will also be action to construct the means of production and infrastructures such as transport systems for the commencement of the supply of permanent housing and durable consumption goods. These would be designed in line with conservation principles, which means they would be made to last for a long time, using materials that where possible could be re-cycled and would require minimum maintenance. When these objectives have been accomplished there would begin an eventual fall in production, and society could move into a stable mode. This would achieve a rhythm of daily production in line with daily needs with no significant growth. On this basis, the world community could reconcile two great needs, the need to live well whilst sharing and caring for the planet, sparing it from excesses.
Capitalism is primarily an economic system of competitive capital accumulation out of the surplus value produced by wage labour. As a system it must continually accumulate or go into crisis. Consequently, human needs and the needs of our natural environment take second place to this imperative. The result is waste, pollution, environmental degradation and unmet needs on a global scale. The ecologist’s dream of a sustainable ‘zero growth’ within capitalism will always remain just that, a dream. If human society is to be able to organise its production in an ecologically acceptable way, then it must abolish the capitalist economic mechanism of capital accumulation and gear production instead to the direct satisfaction of needs.
The problem for a great number of people in the environmental movement is that they want to retain the market system in which goods are distributed through sales at a profit and people’s access to goods depends upon their incomes. The market, however, can only function with a constant pressure to renew its capacity for sales; and if it fails to do this production breaks down, people are out of employment and suffer a reduced income. It is a fundamental flaw and an insoluble contradiction in the green capitalist argument that they want to retain the market system, which can only be sustained by continuous sales and continuous incomes, and at the same time, they want a conservation society with reduced productive activity. These aims are totally incompatible with each other. Also what many green thinkers advocate in their version of a “steady-state” market economy, is that the surplus would be used not to reinvest in expanding production, nor in maintaining a privileged class in luxury but in improving public services while maintaining a sustainable balance with the natural environment. It’s the old reformist dream of a tamed capitalism, minus the controlled expansion of the means of production an earlier generation of reformists used to envisage.
Socialism is a real alternative and the only viable means to achieve the steady state economy sought by so many.
Because the word "grow" is in that sentence? Did you read the article, or watch the video?
It seems like you and some of the other commenters here have just used this thread as an opportunity to give your own narrow opinion instead of opening your mind to considering and playing with a new idea. Just like those economics professors.
Trouble with growth is the exponential factor. For example the current forecast for world economic growth is 3.5%.
That means that the world economy will have doubled in size by 2037 from today. and double again in another 20 years.
Frankly our finite world limits will be tested to destruction before we get there. We are already too profligate to survive as we are. The growth paradigm is a recipe for disaster.
Does the author know about Modern Monetary Theory? It's a good antidote to the raft of falsehoods from the mainstream and Academia. If she builds upon that information we might get somewhere.
David, if you're reading this...I take your articles as pretty much directed to the people, and have taken them this way for a while. I can only take "analysis" these days from writers who summarize lots of info and realationships well...like Mark Weisbrot (Hudson is great, but to argue that DT should prosecute those who surveilled him dissapoints me...not that I believe Russian hackers determined the election). There are problems with these guys though (and the women...Brown & Yves Smith). The problem is the meritocracy bubble...it's somewhat like the beltway bubble. I work with those whom (let's say) are beset with problems more and more Americans want to ignore (esp Republicans want to). That's one reason I'm sensitive to when articles are written to the people vs when they're written to fellow bubblers to make some point. I'm also aware of a group (not the ones I work with) that's able to comprehend things, and at what level. All that said, what's still lacking IMO is application of accurate circular flow diagrams. Just "the basics," David, are light years from the hands of the portion of the public that has any kind of interest at all. The best diagram I've seen (it's dated now, but could be updated) is the one on the upper left at this search. IMO Rose should put it out in the public domain...copyleft. https://www.google.com/search?q=images+stephen+rose+economy+%22american+economy+poster%22&lr=&as_qdr=all&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwis3MSa9NjTAhXD5lQKHXP4C9UQsAQIJQ&biw=1280&bih=855#spf=1
Thanks for your comments. With modern science and technology, there is no reason why we cannot adopt the principle:
"Enough for everybody, excess for nobody". The days for Mansions and a human needing to move ten times his/her body weight to get anywhere (in the "developed" world) needs to be over. That of course necessitates demise of Capitalism as we know it today.
i was happy that kate raworth brought out the importance of bringing together the many related "issues" which together impact the well-being of earth's citizens. too many from our western culture focus on dollar wealth as the key to health and happiness. we should note that the words ecology and economy share the root word, (eco-), referencing Nature or environment. actually, "economy" began as a subset of ecology initially designed to study techniques for preserving natural resources.
encroaching desertification, shrinking rain forests and woodlands, acidifying oceans and melting icecaps indicate that our species has utterly failed to manage and preserve vital natural resources for future generations. the science deniers at once deny what should be obvious and then believe some future technician (deus ex machina) will magically reverse the devastation from our extravagant life-style expectations. we have no right to create problems for future generations!
happy to hear kate apologize for naming her model after junk food, because personally speaking, that picture turns my stomach. gee, if she'd given it more thought, kate might have named her model, "the life saver!" that works, huh?