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The growth fetish and the doughnut: changing the shape of economic thinking

“It’s the economy, stupid!” The phrase made famous by Bill Clinton during the 1992 US Presidential election encapsulated a simple message: the thing voters care about most is their own financial well-being. It follows therefore that a booming economy is a vital component of political and electoral success, so it makes sense that we should be preoccupied by economic growth. Or does it?

There are many critical voices asking how we can expect infinite growth on a planet with finite resources and boundaries. How long can a system which drives an expanding wedge between the haves and the have-nots last? The idea that GDP is an inadequate measure of quality of life is not new but as humankind continues to acquire an ever better understanding of the complexity of the factors shaping our daily existence, economists and scientists are refining the arguments for a change of course and coming up with innovative ways of visualising and building a different kind of economy.

FM4 had the opportunity to pick the brains of two such prominent thinkers on this issue: Kate Raworth and Tim Jackson.

Kate Raworth & Tim Jackson

Kate Raworth describes herself as a “renegade” economist and is the creator and author of “Doughnut Economics” a “playfully serious approach” to the challenge of meeting “the needs of all within the means of the planet.” She is a Senior Visiting Research Associate at Oxford University’s Environmental Change Institute and a Senior Associate at the Cambridge Institute for Sustainability Leadership. Her book has been translated into 15 languages and she has presented her ideas to a diverse range of audiences.

Tim Jackson is Professor of Sustainable Development at the University of Surrey and Director of the Centre for the Understanding of Sustainable Prosperity. The publication of his book “Prosperity without Growth” is described as “a landmark in the sustainability debate”. He says obsession with the “growth fetish” has contributed to rising inequality and political instability.

Kate Raworth and Tim Jackson in the FM4 STudio

Radio FM4

Gennie Johnson spoke to Kate Raworth and Tim Jackson about the doughnut, the growth fetish, what prosperity is, consumerism and the pros and cons of being an optimist and/or a pessimist:

Gennie Johnson: Kate - can you give us a brief explanation of the „doughnut“?

Kate Raworth: I can. It’s a ridiculous name I know. But it’s intending to re-invent the 21st century compass of where we’re trying to get to. So: imagine a doughnut - the kind with a hole in the middle - and imagine humanity’s use of resources radiating out from the middle of that picture. So - in the hole - that’s the place where people are left falling short on the essentials of life. That’s where people don’t have the resources to meet their rights to food, health, education, housing, energy - all the essentials we know are needed for a life of dignity and opportunity. So - get everybody out of the doughnut’s hole into that doughnut itself. But - we can’t overshoot the outer crust of the doughnut either because there we begin to put so much pressure on earth’s life-supporting systems that we begin to kick our delicately balanced living planet out of kilter. There we cause climate breakdown. We make a hole in the ozone layer. Ocean acidification, air pollution, chemical pollution. We start pushing our home out of balance. So in a sentence - the aim of the doughnut is to meet the needs of all people within the means of the planet and I think that is what the 21st century economy is for.

And both of you are basically saying that we have to re-think growth. Tim - your book is called „Prosperity Without Growth“. You talk about a „growth fetish“ - what do you mean by that ?

Tim Jackson: The idea that the system that we’ve been working under and the economics that we’ve been using has been obsessed if you like with the idea that more is better. And I was struck very early on - so in this work that I was doing was very much driven by the idea that if you expand the economy infinitely on a finite planet, at some point you’re going to run into problems. And that’s been an issue that’s been talked about for 40 years or so , so it’s not new but when I sat down in the Sustainable Development Commission to think about the work of the Commission in relation to the economy, that was the issue that we took as being what we would look at: where are we now in relation to planetary boundaries and an expanding economy and the first thing that really struck me - and it’s interesting thinking about the inside of the doughnut - the social conditions that we want to be able to meet.

But the first thing that struck me was some work on poverty that was done back in the 1970s by - in particular in the UK - by a man called Peter Townsend and he talked about how poverty was not just about income and it wasn’t even just about material conditions.. It was around our sense of dignity and purpose and meaning and our ability to participate in life and the access we have to good or bad services. It was a multitude of things that characterised poverty. And it’s a multitude of things that characterise affluence: when you ask people what they mean, what matters to them what they mean by doing well by prospering actually they talk first about family and about friendship and about health and about their community - and then somewhere on the list is income - of course - but it isn’t the thing that people talk about first. And I was very struck by that – that actually you can tease these two things apart. You can think about what it means to prosper. And it’s not the same thing as having more and more. Not even more and more food, but certainly not more and more stuff, it is much more psychological, social in its dimensions and we can think about how to deliver those things without trashing the planet.

So are you both thinking along the lines of a re-think of prosperity which Tim you’ve just said - many people have already re-thought it - what is a prosperous society? Is it one in which we have enough income to buy the latest smart phone or tablet or is it one which looks after the health and well-being of ourselves as well as protecting the planet?

Kate: Well this word prosperity - sometimes people think it means financial riches. Actually it was Tim’s work that made me first re-think about it and I understand from your work it’s that which we hope for. What are we hoping for? That is what our prosperity is and so it comes back to our deepest desires and beliefs of what a good future looks like. So I would really like to reclaim that word and enrich it with our full understanding of what well-being depends upon. The 20th century was very much fixated around: if we have good houses and cars and more income, we can buy more things and this is the good life. Now we understand so much more about our dependence upon planetary stability. But also - as Tim’s saying - on community and actually the relations around us that often get eroded when people are in a rush to earn more income, they’ll leave the community, push ahead, go alone and only realise what you’ve lost when it’s gone. And I think there’s really a fascinating resurgence of valuing community.

I don’t want to over-generalise here, but isn’t it the case that many governments are still thinking along those lines of growth - GDP?

Tim: Yeah, there’s no doubt about it. I mean that word „fetish“ - which actually wasn’t coined by me but by a Nobel prize-winning economist called Joseph Stiglitz - in relation to the GDP - it really is a kind of fetish that still sits at the heart of our understanding of how the economy works. And to some extent it’s that obsession with it that we have to let go of and I think we have to let go of it for a number of reasons. The philosophical reason as we’ve been saying it that it doesn’t necessarily mean the same thing as prosperity as doing well. It’s not just about more is better - sometimes less is better and we’re not able to distinguish between those things in an economy that’s concentrating on growing. But there’s another slightly more dangerous aspect to that fetish which is: as we chase the GDP, this growth in the GDP, the expansion of the economy, we legitimise all kinds of activities that are creating huge problems in society. So because we think that investment is really critical to growing the GDP, we create a whole bunch of loose money in the economy, make money easier to get and all it does is create bubbles of speculation that then crash the economy. And as we do that we also manage to create huge inequalities because we’re just prioritising this one idea that the economy has to grow and it doesn’t of course benefit the worst off in society and that’s exactly what we’ve seen.

Are there also political implications of what you’ve just said, in terms of the growth of populism for example?

Tim: That’s exactly where I see the dangers that have arisen from an obsession with growth. We’ve pushed at this growth word and we’ve decided that because that matters most we should make investment easier, we should make money more fluid, we should protect the interests of the owners of that investment, the shareholders. And in the financial crisis and after the financial crisis the first casualty of that was public spending on social investment for the poorest people in society. So we bailed out the banks and we imposed austerity on the poorest in society. That’s the political implication of an obsession with growth and it’s also the political foundation for instability, the social instability, the populism that we’re seeing around us.

What about jobs Kate, because we’ve often been led to believe that growth leads to jobs - if you don’t have growth in the traditional sense where do jobs come from in this world that you’re describing?

Kate: In the last century that was a pretty good assumption to make. If you look back at the connection between growing economies and employment creation there was a pretty tight correlation for many decades after the wars that the economy’s growing and jobs are coming back and it was such a tight correlation that a man called Arthur Okun drew up what was known as Okun’s Law that as the economy grows, unemployment falls and this became again one of these ideas about a law of economics - that we can steer our economy on a narrow metric of GDP and it will fix unemployment and by the way it’ll fix the trade deficit, the budget deficit, it’ll fix inflation , fix all sorts of problematic things so that correlation was there. Well it’s been coming apart. And I think one of the charts, one of the economics diagrams that has actually hit the public eye in recent years is the image of GDP per capita apparently rising, but the wage taken home by the average worker flat-lining. And that’s been happening in the UK and in the US. And it goes back to this point that people make - well, you say the economy’s growing, that’s not my growth. So there’s been a real separation of the returns. Certainly in the UK we’ve seen that of the profits made by companies, a far greater share is now going into the dividends of shareholders rather than to the workers themselves - so who’s getting returns of growth is a huge question. So first of all - let’s give up the idea that growth itself is going to create jobs. But we need to think about re-distributing access to work and re-distributing what’s even seen as work. I do paid work - many people do paid work - and then as parents we also go home and do an awful lot of unpaid caring work whether we’re caring for our children, our partners, ourselves, our own parents - I see all of this as work, some of it highly valued, but some of it very poorly paid. And vice versa, some of it actually what (the anthropologist) David Graeber would call crap jobs..

Tim: Bullshit jobs!

Wer „Bullshit Jobs“ definiert

Der Anthropologe David Graber im Interview mit Boris Jordan.

Kate: Bullshit jobs! And those can be poorly paid too. So the real disconnect between valuable work and what gets paid well. And I like thinking back to the „economic man“ that’s put at the heart of theory. We’re told he hates work and he loves luxury, he’s always wanting to minimise the amount of work he does and just wants to be paid the most and buy luxuries. Actually, look at how people truly behave: we’re not work-hating, we’re purpose-seeking. And then when you try and understand people’s behaviour through the lens of purpose, you can understand why they might have a bullshit job by day but might come home in the evening and actually volunteer or collaborate on the internet or throw themselves into unpaid work where they have purpose. And can we create an economy that more greatly connects purpose to pay? That’s why I love Tim’s work on care and culture and creativity - really putting the fundamentals of wellbeing at the heart of what 21st century jobs might be.

Tim: There’s a sort of curious kind of paradox at the heart of this whole work question. Because if you ask which jobs matter in the economy - they would be those jobs that provide for quality of life. And if you want to start with what matters to people - people’s health and therefore care - it’s an absolute fundamental to look after those jobs. You might also want to protect things like the craftsmanship that goes into building and maintaining beautiful stuff or you might want to think about culture. We’re here in the city of culture in which that tradition of artistic creativity has been the foundation for society for hundreds of years. And yet there’s a curious fact about all of those jobs. All of those jobs require people’s time. The care is obvious. It just doesn’t make sense to ask nurses to see more and more patients every hour. In the creative arts, it doesn’t make any sense to ask the Vienna Philharmonic to play Beethoven’s 5th symphony faster and faster each year. I guess my point is that there’s an aspect of work of jobs which is about our participation in society in the service of other people - whether it’s the service of their cultural enjoyment or whether it’s the service of their physical care - that is a part of what it means to work. And yet for a traditional economist, all of these jobs are problematic in terms of growth because you can’t squeeze human time out of them. Whereas if you squeeze human time out of them by asking your nurses to be more and more productive, you make their jobs impossible and you make the outcome of their jobs less successful. And so there’s a whole set of activities that would give us loads of jobs but that don’t work from a conventional perspective. If you’re only focusing on growth, you wouldn’t get those jobs because they’re not susceptible to that productivity growth that underlies economic growth. So to me it’s about protecting not just a conception of what work is – a part of our prosperity – but actually protecting those places where we are working in each other’s service in very creative, fundamental ways which are the foundation of quality of life in society.

What do we do when it comes to mass consumerism? Because we know we have to do something...

Tim: Turn it off! Is there a switch ? I haven’t found it yet ..

Kate: Well this one fascinates me and it’s a great story in Vienna. Because a man called Edward Bernays was the nephew of Sigmund Freud. And here in Vienna Sigmund Freud invented psychotherapy and really began to understand people’s deep desires that underpin their strange and inexplicable behaviours and our desires to be regarded and included and loved and admired and the strange things we do to get that. And his nephew took his uncle’s psychotherapy, he went to America and turned it into retail therapy. Bernays invented what he called propaganda. He invented the public relations industry and he realised if he could connect these deep desires - to be admired to be included, to be regarded to be desired - if he could connect it to this jacket or that car, he had our hearts and our wallets on a string. And he invented consumerism in this way. He persuaded women that they should smoke because cigarettes were torches of freedom. He persuaded Americans they should eat bacon for breakfast because this was a hearty breakfast. And in the process most of the best - many of the best psychologists of the last 100 years - have been drawn into the advertising industry and used their skill to convince us - as (the writer) John Berger would say - „advertising sells us one and only one - proposition again and again which is that we improve ourselves every time we buy something more“. And I want to invite Edward back here almost a century later and say „well, well done. It worked - you did really well - now could you please join the other team? How do we unravel this tight connection you’ve made between people’s sense of self-worth and self-evolving and regarding and the need to buy things - how do we disconnect that ?“

What if you abolished the advertising industry ?

Kate: it’s certainly one step and some cities have taken it. We don’t want advertisements in public places, we want public art!

Who’s done it? where has that happened?

Tim: I think Sao Paulo in Brazil had a policy where they banned public advertising for some period of time. And in Scandinavia there are a number of bits of legislation that prevent advertising to young children at certain times on television so there are ideas around restricting advertising and it is a useful way to think. But I think in a way there is a deeper task to do which is to explore why that was so successful - that Bernays experiment if you like of creating the „hidden persuaders“ in Vance Packard’s view. And there was another book called „The Science of Desire“ which was very influential to me when I was thinking about this and it was again about creating a science of desire, it was about creating consumerism and it is interesting to think of it as a social construction. But it wasn’t an empty social construction. In a way, I’m not so much sure about what Bernays was doing, but certainly what Vance Packard and to some extent, Ernest Dichter were doing - they were creating consumption consumerism as a sort of framework of meaning and purpose in the world. And there’s a lovely quote from Ernest Dichter where he looks at a chain of refugees who’ve just left their home and are on the move and he says „hollow hands clasp ludicrous possessions because without them we are truly lost“. And this idea actually that we cling to material things because they create a sort of framework of meaning for us and if that’s the case then it begins to answer your question „what do we do about consumerism?“. Consumerism has played a fundamental role in connecting people to each other in a society in which for example, religion is no longer as powerful as it used to be and in which there is not a framework of meaning that people can cling to, to make sense of their lives. And consumerism offers them that, it says: here’s a bright shiny world and it’s accessible to everyone and even if you don’t get it, it’ll be available for your kids and things will go on getting brighter and shinier into the future and I think a part of the answer to your question actually is to ask what is going to supplant that? Where does this framework of meaning come from? Where does our sense of purpose come from in a new society, in a new economy? If we’re refugees from this place how can we let go of those ludicrous possessions and actually still have something to cling to? Which to me is one of the most interesting questions in the whole conversation.

Are you both optimists ?

Kate: I’m not an optimist. I don’t think we should be optimists. I say this slightly tongue-in-cheek but I say: don’t be an optimist if that makes you relax. I’ve heard people say - oh come on, lighten up! People are ingenious and there’s technology and we’ve solved it before and we’ll sort this. Well if optimism makes you go there, don’t be an optimist. But likewise don’t be a pessimist if it’s going to make you give up. I hear people say it’s too late, we are too many, it’s too hard, there’s no time. Well if you take that attitude it’s true, it won’t happen. So don’t be an optimist if it makes you relax, don’t be a pessimist if it make you give up. Be an activist - I don’t mean in a stereotypical way. I mean be active in whatever roles and networks you’re in in life. If you’re a CEO have the guts to transform the way you lead the company, if you’re the newest employee dare to question how things are done, if you’re a student put up your hand and ask a difficult question of your professor, start changing that syllabus. If you’re a parent in a neighbourhood - work with your community - who else around you has already wanted to do something. We can all be active and influential in our networks. There was a 17-year girl in the audience of the conference room this morning, she came up to me afterwards and said „I didn’t dare ask a question because I’m just a high school student“. I said „But that makes you so powerful in the room! Next time tell me that you’ll stand up and say: I am 17 and I have a question. Because that is the source of your power and you can reach 17-year olds in a way that none of these adults can.“ So - be active - because if you’re not active these days that means you’re an “inactivist” and who can go down in history saying they were that!?

Tim: Someone once called me a „rose-tinted pessimist“. I’m not quite sure what it meant, I think it was an insult at the time. But I kind of like Gramsci’s take on it being „a pessimist of the intellect, an optimist of the will“. And I do think that belief in the ability to make things better is an incredibly important aspect, it’s an incredibly important quality that we have to hang onto. And we know even just from something as basic as sports psychology, if you give up that optimism of the will, of that will to succeed, then you’re as often as not on the losing side. And there is a point that’s a little bit like that now. We’re in a position which appears impossible: we’re in the 94th minute of a 90-minute game and we’re 2:1 down and there’s a goal to be scored and so there’s not much to be gained from being a pessimist in that situation and quite a lot to be gained by being an optimist. I mean that’s the extraordinary thing that kind of creativity that comes out of nowhere in moments of challenge - actually is among the strongest, the most laudable qualities that human beings have.

(The interview with Kate Raworth and Tim Jackson was recorded in November when they were in Vienna as speakers at the „Growth in Transition“ conference.)

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