It is exciting to hear Kate Raworth talk about how we have to rethink the economy. Her ideas might not be new (as she herself states), but she has reformulated them in a way that will overthrow how you think about economics. The bottom line is that we need to restructure the economy to be in line with society’s needs as well as the planet’s ecological boundaries.
On the 8th of January, The Resilient City Hub organised a live stream of the Doughnut Economics event at Pakhuis de Zwijger. Afterwards we invited the following speakers for a panel discussion:
- Anne-Marie Hitipeuw (Chief Resilience Officer of the municipality of The Hague
- Martijntje Smits (Technology Philosopher)
Rene Kleijn (Associate professor at the Leiden University Institute of Environmental Sciences)
Of course there are many questions when it comes to changing the economic system. Is it possible to change? Where do we start and who is responsible? We touched upon three major issues during the panel discussion, which we have summarised for you below!
How to change the goal of economic growth?
For governments it is hard to base their policy on aspects other than economic growth figures. If we want to change to a new economic model, we need different tools to measure its impact. Moreover, we may need to de-link economic growth from other goals such as creating jobs.
Anne-Marie: What would work for me is if you can translate the Doughnut Economics into measurable changes. Raworth has worked a lot on ecological footprint and experienced how important it is to show what the impact of changing to another economic system is. We need to have other kind of tools to show the impact. One example is jobs: In The Hague we have seen a decrease in jobs. For us, the municipality of The Hague, this is a sign of a declining economy. In other words: we need different tools to understand the economy.
In reaction to this, Rene Kleijn states that we have to "De-Link" growth with things like jobs. Of course it is not a good sign if the unemployment rate increases, but that doesn't necessarily means that we need economic growth.
Martijntje Smit goes on to mention how hard it is to change a system which only sees consumers and producers. We have to radically experiment with other kinds of systems on a small scale to see how this new system works out. Otherwise we won't be able to change.
Economics is not a science
Economics is seen as a religion which gives us answers to everything. We think that economics has to deliver models that describe our society. Instead we should get rid of the idea that economics can provide us these models and answer what we are as a society. We should put economists in a more modest place and ask ourselves: Is economics really a science? Or should we see it as an art such as history or philosophy? (NOTE: we asked this question to Kate Raworth the next day and she answered: 'I see economics as a "practice" like "medical practice". And like medical practice is in service of people, economics should be in service of the society.')
From the audience, Nena (MSc student Industrial Ecology) states that for her the most important message in Raworth's book is that we have to change the education in economics. But how are we going to change the educational economics? It is so heavily institutionalised; ideas are reproduced for years and years, over and over again. How can we change what is being taught in universities?
Rene Kleijn: "I don't have an answer for you now, but what I can say that it also depends on the students. What do they want to learn? A lot most of them want to be successful in business or in the current society as it is. But every now and then I get an application from an economics student who is heavily disappointed in what they were taught in economics."
Luckily there is an economics student, Patrick, in the audience. Patrick states that Kate Raworth's model is not such big a change at all. She still leaves growth in the model, but puts a "bottom and a top" on it. Martijntje Smits agrees that Kate Raworth can be much more radical. According to Martijntje, Kate changes the current paradigm for another, instead of putting economics in a more modest place in our society. Economy is a religion in our society. The idea that the model should be the "best description" of how society looks like is still not eliminated in her book.
Ranking as a rewarding system - change the matrix.
A new matrix is needed to decide if an organisation, municipality of even country in preforming well. This can be a solution for changing to a doughnut economics.
Sarah (Psychology student) comes up with the brilliant remark; she has seen that a ranking is a very powerful way to influence policy. For example, with the invention of the Sustainabul (a ranking for universities on sustainability) the Leiden University suddenly takes measurements for sustainability. She believes that we have to create a new matrix with which we can measure how well a municipality, company, organisation or institute preforms. For example, if your municipality is rewarded for changing your waste system from being managed by private companies to being managed by the municipality you will get extra points.
All in all, it has been an engaging evening of discussions between the panel and audience. The concept of doughnut economics has provided quite some food for thought!
Watch the after movie!