What is the doughnut economy?
How flawed is our economic model? Is it solely responsible for social inequality? What about climate change and political upheaval? Could a simple doughnut be the solution?
This year's meeting of the World Economic Forum (WEF) had a strong focus on the causes and effects of global inequality. The wealth gap has been pointed to as a source of deep dissatisfaction among the world's population, leading to a marked rise in anti-establishment feeling.
Income and wealth inequality has been on the rise in the majority of OECD countries since the late 2000s and a report from Oxfam earlier this year stated that the eight richest people in the world have the same collective wealth as 3.6 billion of the poorest.
Several academics and economists have suggested that the solution lies with a complete overhaul of the economic system. Proposals such as a Universal Basic Income, wealth distribution and a vastly reduced working week are some popular examples.
One notable solution, championed by Oxford University’s Kate Raworth, is doughnut economics.
What are doughnut economics?
The idea is that in order to harmoniously coexist with our environment and each other, there are target boundaries within which we should aim to be i.e. the doughnut 'filling'.
However, exceeding our environmental limits pushes basic resources out of the doughnut and failing in our social targets leaves people stranded in the middle 'hole'.
What Kate suggests is a drastic overhaul of our economic model to bring both extremes back into the doughnut. In her book, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, she wrote:
“Humanity’s 21st century challenge is to meet the needs of all within the means of the planet. In other words, to ensure that no one falls short on life’s essentials… while ensuring that collectively we do not overshoot our pressure on Earth’s life-supporting systems, on which we fundamentally depend.”