Doughnut Economics

Kate describes her doughnut as “a compass for humanity in the 21st century.” In contrast to the supposed circular flow of goods and money that’s depicted in our current economic model, Kate’s doughnut gives a more holistic picture. The hole of the doughnut represents humanity putting no pressure on the planet—which is impossible to get to because we need to use resources to satisfy basic human rights. The idea is to get humanity over the “social foundation” line and into the doughnut itself (the sweet edible part), which is a place that balances kindness to the planet (safety) with respect of human rights (justice). If we continue to push the limits of Earth’s life support systems we will continue to live, unsustainably, beyond the ecological ceiling and outside the boundaries of the doughnut. At the doughnut’s centre are all the components that must be considered in a successful new economy, while the issues represented at its exterior are the ways we overshoot the mark. Kate says that in order to find our way back into the doughnut’s “sweet spot,” we must reassess the way we shop, eat, travel, work, vote and volunteer.

I guess it was a quest for certainty we were on. I mean the analogy to mechanics and physics is obviously very appropriate in the sense that people are trying to find more and more certainty. And one of the things you talk about is that we need a new portrait of humanity at the heart of economics. That there’s something around human nature and self-awareness and maybe even psychology for how we design our societies and economics. How do you reflect on that?

So there’s this rational economic man, the little Lego character at the heart of economics. Again I think the economists whose ideas lie behind this portrayal of humanity would curl their toes in their graves if they could see the caricature that’s resulted. Adam Smith was the father of this thinking but he actually had a nuanced view of humanity. Yes, on one hand he recognised that self-interest can be powerful for making markets work, but he likewise recognised that our interest in others is essential for making society work. And he celebrated our sense of generosity, public spirit, justice, compassion. He said, “These are the traits most useful to other men.” But his nuanced vision of humanity was too nuanced for those who wanted to create mathematical models. And so John Stuart Mill was the first to simplify Smith’s vision. Mill said in the 1840s, “Political economy”—which is what they called economics in those days—“does not