Wick Welker's Reviews > Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist

Our current capitalistic model is linearly regressive.

This is a big ideas book. Its enormous and sweeping hopes are only paralleled by its unachievable aspirations. Don't get me wrong, I really enjoyed this book and Raworth is pretty brilliant and demonstrated impressive knowledge of the disastrous economic model in which we live. She's more of a do-good philosophizer than an economist. This is the exact type of book that conservative right-wing neoliberals snicker at while denouncing snowflake ideology. And that's okay because I'm pretty sure Raworth is completely right about everything said in this book.

The main thrust of Doughnut Economics is that economic theory that started in the mid 1900s came out on the completely wrong foot. It grew into a culture and society that equates GDP growth with social prosperty. Current western capitalism, which has ushered the anthropocene era from unfettered growth, is based on a common-believed cast of characters: the market is ever efficient, business is always innovative, the commons are a necessary tragedy and the state is an incompetent blubbering fool which must be used only to protect property. The Earth and its resources and not even considered in the current model. We believe the economy is a circular model: labor and consumption go round and round and then government and trading siphon off revenue and return some back. It assumes that the economy is a closed system and that growth is the only viable goal.

Doughnut Economics turns all this upside down. The Earth and its resources should be the foundation of the economy with the goal of having an economy that is regenerative and profitable. The commons have creativity which should be unleashed rather than burdened with mindless labor. The market is important but can easily unleash inequality as a design feature. The state is vital to rule keeping. And the household is the main driver of the economy which is completely ignored in tradition economic model. If it weren't for the household and the unpaid work that mostly women do, the current economic model would instantly collapse. Everything we need to know about what really drives the economy can be learned from the fact the Adam Smith wrote the Wealth of the Nations while in his 40s, living with his mother.

Government subsidy and investment actually helps growth as we have seen in tons of government investment in variouss technologies in the later half go the 20th century which allows for tech to take off. The big point is that economics isn an open system within a larger system of chaos which must be flexible. Old economic models are too rigid.

Economic growth and GDP obsession is not a panacea for inequality. Our current model is linearly degenerative which destroys the environment and only concentrates wealth. GDP and economic growth are not exponential but actual on a sinusoidal curve. There is a point where a nation must not be so obsessed with GDP growth because it will force unhealthy behavior like immigrant scapegoating, financialization, hollowing out of the middle class, speculative bubbles and the privatization of public goods to create impotent revenue streams.

This is a great book for dreamers.