Economies across the world haven’t lived smoothly till now. They have flourishing peaks and troughs of crisis. Economists are searching for ways to recover the global economy which is currently going through the hardest of all times. The recovery can be in the shape of doughnut as per what economists of recent times are conceiving.
From the agricultural crisis of the ancient times till 2008 Global Financial Crisis, the world has observed dynamic patterns of growth. Looking at the word ‘growth’, it has both positive as well as negative aspects. It seems so pleasing in the economic world ignoring what it can turn out to be. When a doctor says that in your organs there are some strange patterns of growth, what does it feel like? Of course it will bring a frown to your face and stress to your mind. Similarly, economics is growth-oriented which requires a transformation to meet the needs of the 21st century, i.e., a sustainable development outlook to thrive instead of chasing the GDP growth.
There are human rights that need to be fulfilled for every person within the boundaries of the planet since the resources are scarce and have alternative uses. The picture that can be drawn keeping the social foundation (which includes education, income and work, peace and justice, political voice, social equity, gender equality, housing, networks, energy, water, food, and health) and ecological ceiling (which when exceeds leads to chemical pollution, nitrogen and phosphorus loading, freshwater withdrawals, land conversion, biodiversity loss, air pollution, ozone layer depletion, climate change, and ocean acidification) in mind, Kate Raworth, a Senior Research Associate at Oxford University’s Environmental Change Institution, has shown this way which is in the shape of a doughnut.
In her book, Doughnut Economics: Seven Ways to Think like a 21st Century Economist, she discusses how the old economic theories and approaches have to be changed keeping in mind the 17 Sustainable Development Goals of the United Nations for the challenges to be tackled in the current century. The aim of the doughnut is to not leave anyone in the middle of the doughnut and not exceed the limits of the outer circle exerting pressure on the planet. The area between these two circles is the sweet spot to rely for the economic development where social foundations are prioritized without over-exploitation of the resources.
Further to put the plans for achieving the goal of balance to thrive, she explains how telling of a new story is important rather than continuing with the 1947 story of neo-liberalism where free rein markets overshadow the state as it is incompetent and that of opening the borders of trade, leading to globalization. The commons are tragic, so sell them off. Society? Well, there’s no such thing to ponder on and household chores are to be left with women. The neo-liberal story was proven to be false when the financial crisis hit the economies. The demand for new scripts rose in order to solve the problems and economists like her are now working to supply it, nurturing human nature with factors like empathy, cooperation, and mutual aid. The systems which are inspired by the laws of physics since the 19th century need to be looked into differently with the understanding of the complexity of what economics shows, which is based on changing human behavior. The economies which are centralized and degenerative by default should be distributive by design as more GDP growth cannot even things up instead it promotes the rich. Economies are growing whether or not they thrive but that is not the case which is feasible. Economies should be thriving whether or not they grow.
These approaches by the 21st century economist, Kate Raworth, have been adopted in Amsterdam and even the World Economic Forum has mentioned the world’s recovery could be doughnut shaped post-pandemic.
Nabiha Fatima is a student pursuing B. Com. Hons. from Jamia Millia Islamia.
edited by: Rutba Iqbal
Disclaimer: The opinions expressed in this publication are those of the author. They do not purport to reflect the opinions or views of The Jamia Review or its members.