The "tell" in Doughnut Economics: 7 Ways to Think Like a 21st Century Economist by Brit academic Kate Raworth is right at the beginning when she describes the dilemma of a well-born Chinese woman.
Yuan Wang arrived at Oxford University to study economics. Born in China and raised in Yorkshire... [she] was determined to make a difference in the world.
She thought that economics was the way to do it, but soon got "frustrated."
She found the theory -- and the maths used to prove it -- absurdly narrow in its assumptions.
See, that's the basic religious and cultural meaning of "life, the universe, and everything" for the well-born youngster. They want to do something creative, to make a difference. I call it Activism Culture.
And that is the underlying agenda of Doughnut Economics. How can we activists deploy economics to make the world a safer and a juster place, given that the two big problems are the Ecological Ceiling of planetary pressure or a Social Foundation of human well-being?
Well, current macroeconomics does not represent a useful knowledge base for dealing with an Ecological Ceiling of planetary pressure or a Social Foundation of human well-being. Something new is needed, and it must not be based on the economics of old that just wanted to increase GDP. The economics of Paul Samuelson and his hydraulic Circular Flow diagram just isn't going to solve climate change or transition from exponential economic growth to a sustainable economy and society.
The big problem with Kate Raworth is that economics cannot tell humans what to do. It is only an analytical tool to help humans get an idea of what might happen if they change the economy in accordance with the demand of well-born activists. Let's look at the seven things she thinks economics should be about in the 21st century. And my critique.
| Proposal | Raworth's Justification | My Opinion |
| Change the Goal from GDP | to the Doughnut | Any "Goal" is political or religious |
| See the Big Picture | beyond market to "embedded economy" | But this is no longer economics but the entirety of human knowledge |
| Nurture Human Nature | with socially adaptable humans | This is religion, changing humans' experience of life's meaning |
| Get Savvy With Systems | understand complexity | Good idea, and recognize that no government or globalist plan will understand complexity to the depth it needs to |
| Design to Distribute | create economy that is distributive by design | You mean double down on the welfare state? Economics can probably help you understand that this is doomed to failure |
| Create to Regenerate | recycling by another word | Well, yeah. If you work on externalities, the cost of our actions on other people, you can help |
| Be Agnostic About Growth | because it won't last forever | I think it is fair to believe that when growth tapers off, or even declines, today's and tomorrow's economics have No Idea what to do about it. |
OK. How many of these seven things come within the purview of any economics? The point about economics is that it is an attempt to understand the market and human action in a market system. And one aspect of that is to understand how government action affects the market and the behavior of market participants. One of the conceits of economics is that it is "value free." Thus Hilary Putman and his The End of Value-Free Economics. But economics tries not to impose its values on human interactions; it just tries to understand them. But anybody at all serious about economics tends to realize that as soon as you start imposing your values on human interaction, by government or by church, you pretty soon experience negative economic impacts as people find it harder to live their ordinary day-to-day lives
The bottom line about Doughnut Economics is that it is not really about economics. It is all about politics. That has been the faith of left-wing believers since at least Marx, that by political means it is possible to create a juster society. So the honest thing to do would have been to call the book Doughnut Politics: 7 Ways to Think Like a Lefty Activist. Or, if you like, Doughnut Activism: 7 Ways to Change the World.
Of course, politics is not really mentioned in Doughnut Economics, not as such. But when you imagine the human world as a doughnut with an Ecological Ceiling and a Social Foundation, and if you experience penetrating the Ecological Ceiling of planetary pressure as causing an "overshoot of pressure on Earth's life-giving systems", and if you experience a fall through the Social Foundation below as "a lack of life's essentials such as food, education and housing" there is an unsaid assumption that educated and caring people -- activists -- are called upon to do something about it. And how are they going to do it? Obviously, by their domination of the political, cultural and secular religious institutions of global society. They are going to tell the rest of us what to do, because they know.
Suppose Raworth is right, that we have to Do Something about climate change and lack of justice in food, education, and housing. But is there is one thing we know it is that top-down direction of the economy does not work. Then the question becomes: what do we do when the elite and activist supervision of things environmental and social falls short of the mark? For instance, just this week I read about a minor cock-up on the doughnut front. In western Europe there was a lack of wind in the North Sea last week, worst in 20 years. That meant that natural gas plants had to step in and generate electric power to make up for the power that the wind turbines weren't generating and that meant that natural gas prices went through the roof and that meant that fertilizer factories closed down and that meant that carbon dioxide supplies for the food industry were cut off and that meant that grocery stores may run out of food.
Golly who knew?
See that's the problem with our current global ruling class. They know, they know, that they are the smart ones, and they know, they know, that their solutions to the world problems are what it is going to make the world Build Back Better. And the best way they know is to change things with politics and government.
But that is not how the world works. The world is "one damn thing after another," as someone said. Economics is the study of just how, with one damn thing after another and the help of the price system and the individual efforts of millions of people, somehow humans manage to struggle on from day to day. And, in the last 200 years, increase real per capita income by 3,000 percent. It asks: how did that happen? Not because of wise, knowledgeable elites and academics but by anybodies with a new idea changing the world, and fixing mistakes on the way, mistakes that you and I never hear about.
Kate Raworth and her student Yuan Wang beg to differ. They have a better idea. Maybe they do. But what happens when there is a small glitch in the Matrix, the most windless week in the North Sea in 20 years? Well, then the market system and its pricing steps in. And you may not like the result.
Now, at the end of Doughnut Economics on page 258 Raworth has "Table 2. The ecological ceiling and its indicators of overshoot" including Climate Change,Ocean Acidification, Freshwater Withdrawals, and so on, as compiled by Steffen et al. "Planetary boundaries: guiding human development on a changing planet," an article in Science in 2015. For each indicator Steffen et al. have proposed a planetary boundary. For carbon dioxide it is "at most 350 ppm" and we are at 400 ppm and rising.
Well? Is rising CO2 a problem? Experts say it is. And anyone that disagrees, including retired experts, is stigmatized as a "science denier."
This, of course, is the way it has always been in human history until quite recently. Anyone that challenged the received wisdom, as promulgated by elite academics and soothsayers was stigmatized, and perhaps executed as a heretic, an evil opponent of the Truth.
Or, as Bryan Magee writes in Philosophy and the Real World: An Introduction to Karl Popper,
[A]ll, or almost all human societies of which we have knowledge seem to have an interpretation of the world which was articulated in some myth or religion, and in primitive societies any questioning of its truth is usually punished by death.
Obviously this approach to human society has not changed much. The method of Soviet Russia and Maoist China was to direct society from the top and to punish, often by death, those that objected.
But our era has thrived on an opposite idea, that Magee calls "the era of criticism." In this notion all theories, scientific, economic, and political, should be constantly tested and criticized. And out of the criticism we will discover and develop new theories that resolve the problems -- and there will be problems -- in the current theories.
Kat Raworth imagines that her Doughnut Economics is a critique of "neoliberal" economics that she represents as coming from the folks that formed the Mont Pelerin Society in 1947. Maybe. Only I get the feeling that she has never read the books by Ludwig von Mises and Friedrich von Hayek and Co. Reading Doughnnut Economics I do not detect the least whisper that she knows anything except the mainstream economics that goes from the classical economists to Marshall to Keynes to Samuelson. Samuelson is the guy she goes after. Well, I never paid Samuelson no nevermind, because I think his macroeconomics misses the point. I experience western macroeconomics as a crude effort to help welfare-state politicians avoid crashing the economy, and not really providing an insight into the way that the capitalist economy works. So how do you like them apples?
Let's get back to the big issue, climate change, the basic justification for Raworth's Rule of the Experts.
For instance, the UN's IPCC has sponsored the development of dozens of computer climate models. All of them predict significant warming of the planet, year on year. But the models all "run hot." They have predicted higher temperatures that have transpired in the record.
So? Well, in Magee's notion and Karl Popper's notion, we now start to subject the models and their assumptions to rigorous critique and try to figure out why they have prophesied an increase in temperatures in excess of the actual record. Is it because they misunderstand the way the climate works? Is it because they can't simulate the intertropical convergence zone? Is it because the models aren't detailed enough? Who knows?
And anyway, is it a problem if temperatures increase? And how would we know? The temperature record shows that the Earth has been quite a bit warmer than the present, as recently as the Roman Warming and the Medieval Warming. On the other hand, the Earth is presently in an "interglacial" period in the middle of an Ice Age in which CO2 in the atmosphere has been down to 180 ppm. And scientists say that C3 photosynthesis stops at about 150 ppm, meaning all the plants die.
But let us assume that the scientists are right and that global temperatures are increasing and the reason is the increase in CO2 due to burning of fossil fuels. If we do nothing, what happens?
Well, what happens is that humans adapt to the new climate. We move grain agriculture northward. And if the deserts move northward from Africa into southern Europe we migrate northward. And if the sea level rises we move cities inland. Is it possible that we encounter a real crisis where millions of humans perish? Certainly. And there will be wars and rumors of wars and frightful outcomes. Kinda like things have ever been.
But what we do not know is if the outcome from doing nothing is worse than the option of letting our educated betters decide for us.
For instance, our betters tell us, on the one hand, that we are running out of fossil fuels, and on the other hand that fossil fuels are going to change the climate. Well, if fossil fuels run out, that will take care of that, right? No more warming from increased CO2. And it's not as if we don't have the knowledge and technology to create nuclear fission plants. And it is not as if we are probably close to effective nuclear fusion energy.
See, the problem with the whole Ecological Ceiling thing is cui bono. Who benefits? And the answer is that a climate crisis benefits people like Kate Raworth that seem to go from international conference to international conference advising corporate execs on the right and proper way to respect the Ecological Ceiling.
Just as the problem with the Social Foundation thing is also cui bono. "Doing something" about social problems, for the last century, has been all about politicians buying votes from the proposed beneficiaries of programs to prop up the Social Foundation. Because justice.
Now my particular prejudice is that I believe that politics and government and elite academic ukases are the wrong way to deal with almost everything. Carl Schmitt says politics is about friends vs. enemy, and killing the enemy if necessary. It is all the other things, from work and markets and social interaction and religion and culture that really make the human world go round.
So my question to the Kate Raworths of the world is: are you really sure that your doughnut model -- even if it is a sensible understanding of the human world -- can really be managed with politics? And do you think that the stigmatization of people that disagree with you as enemies, that is inevitable in politics, is going to solve anything?
I'm sure you have never thought about such question in such terms. Of course not, because nobody ever taught you to think like that.
And anyway, Carl Schmitt was a Nazi. So there.
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