George Monbiot is very taken with a new book, the Doughnut Economy.
So what are we going to do about it? This is the only question worth asking. But the answers appear elusive. Faced with a multifaceted crisis – the capture of governments by billionaires and their lobbyists, extreme inequality, the rise of demagogues, above all the collapse of the living world – those to whom we look for leadership appear stunned, voiceless, clueless. Even if they had the courage to act, they have no idea what to do.
The most they tend to offer is more economic growth: the fairy dust supposed to make all the bad stuff disappear. Never mind that it drives ecological destruction; that it has failed to relieve structural unemployment or soaring inequality; that, in some recent years, almost all the increment in incomes has been harvested by the top 1%. As values, principles and moral purpose are lost, the promise of growth is all that’s left.
Richer countries tend to have better environments, unemployment is falling, so is global inequality. The really remakable thing about the last 40 years of economic growth is how pro-poor it has been…..yep, reality ain’t getting a look in there, is it?
We cannot hope to address our predicament without a new worldview. We cannot use the models that caused our crises to solve them. We need to reframe the problem. This is what the most inspiring book published so far this year has done.
In Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, Kate Raworth of Oxford University’s Environmental Change Institute reminds us that economic growth was not, at first, intended to signify wellbeing. Simon Kuznets, who standardised the measurement of growth, warned: “The welfare of a nation can scarcely be inferred from a measure of national income.” Economic growth, he pointed out, measured only annual flow, rather than stocks of wealth and their distribution.
And absolutely everything in the book is standard economics. It’s a slightly different emphasis, yes, but that’s all it is. Sure we should be using NNI not GDP and so on but it’s a tough thing to calculate and it takes some years. Thus as a management tool it’s not all that good. Why not value household labour as well? We know how to do that, it’s at minimum wage. Yes, externalities exist and we’ve known for a century how to deal with them, Pigou Tax.
It just ain’t different.
But the opening chapter is absolutely glorious. She notes that since 1990 extreme poverty has halved around the world – you know, this neoliberal globalisation thing, the greatest reduction in human misery in the history of our species.
Therefore, and it is therefore, we must entirely change economic policy.