Is economic growth killing the planet?
In her new book “Doughnut Economics: 7 Ways to Think Like a 21st Century Economist”, Kate Raworth describes how, by plastering that question on the front of a building, “rebel economics students commandeered the street in front of the Boston Sheraton to greet the American Economic Association’s annual (2015) conference with their counter-cultural critique.”
She goes on to discuss the outdated and inherent problems in using GDP growth as the primary measurement for the economic success of a country. When growth is the only economic goal, ecological and fair labor concerns are left out of the equation.
She asks, “First, to get our bearings, let’s put GDP aside and start afresh with a fundamental question: what enables human beings to thrive?” Her new economic model, visualized as a doughnut, measures equality, social justice and ecology as the goals for success, instead of growth for the sake of growth.
She defines the outer ring of the doughnut as the “ecological ceiling” where growth is limited by climate change, pollution, biodiversity loss, and ozone layer depletion and negative effects. The inner ring represents the “social foundation of human well being”, and includes minimum requirements for education, income & work, peace & justice, political voice, social equity, gender equality, housing, networks, energy, water, food and health. The area between the outer ring and the inner ring is “the safe and just space for humanity” in a “regenerative and distributive economy”.
Hindsight affords insight. Raworth challenges Keynesian economic assumptions that have been driving worldwide economic planning for nearly 8 decades, and finds them lacking. The record levels of income inequality and the disappearance of the middle class have been accelerated by our focus on rapid GDP growth. The ecological disaster scenarios of global warming and species extinction are funded by the globalization of unrestrained capitalism. If we are to truly be free, our pursuit of life, liberty and happiness must include our working people and our planet.