Perspective Matters

This contribution uses a few key issues of our 21st century democracies and presents the solutions to be found in a new economic paradigm called Doughnut Economics, a concept of Oxford economist, Kate Raworth. The term sustainability carries with itself good assumptions and proposals for our economy, our business society and for humans. However, this article will articulate how important it is for sustainable work to develop within an economic framework which is set to work towards the right goal.

The sustainability of today needs to shape the current economic paradigm transforming it with in mind the principles embedded in the seven ways to think like a 21st century economist. Awareness of what is wrong of the old paradigm and why and where the change needs to happen are essential to not let sustainability be used merely as a buzzword by big businesses dominating media and public but for sustainability to be a driver for real and actual change.

...sustainability arose from the Brundtland Report of 1987, entitled ‘Our Common Future'

The term sustainability arose from the Brundtland Report of 1987, entitled ‘Our Common Future’. It defined the term ‘sustainable development’ for the first time and it calls for a forceful economic growth and development which is socially and environmentally sustainable’ Its publication was sparked by the oil crisis of ’73 and a series of environmental accidents (oil spills and nuclear accidents) as well as many human rights being denied at the expenses of profit-making businesses. Global and national inequalities were already spreading, and ecological and other radical economists were already arguing against the problems and structural inefficiencies of this economic system for our environment and for society.

Today, democracies are broken between elitism and the people. The failed attempt of populist and non-populist forces to represent the people’s will and needs raises voices, anger and protests throughout our democratic regimes. In France, Jacline Mouraud represents the people bringing light on the nexus of inequality and the ecological crisis.

The failed redistribution of capital and resources and the lack of will of governments to become environmentally sustainable is destroying societies and the environment. The short-term(ism) is too restrictive, it can’t cope with what is needed. How long can the people carry on living with frustration, disappointment, anger before a revolution from the people begin? Will it begin?

In London, Lambeth Bridge and many others were occupied in name of the Extinction Rebellion revolt. A movement devoted to disruptive, non-violent disobedience in protest against ecological collapse. The people are speaking with the only power they have, their voices and movements in masses.

...a smarter, more distributive and careful use of resources and goods and services

Environmental disasters, peaking evidence of the biodiversity loss in the last 50 years should make the economy slow down and realize it is not growth that is needed but a smarter, more distributive and careful use of resources and goods and services already produced. However, oil production is about to hit 100 million barrels per day. Why oil demand is expected to grow until 2030? Why investments in tar sands in Canada keep rising? Why is it that many Western countries have done almost nothing in regard to the Yemen and Congo crisis (which cause social, environmental and economical rural destruction) where the reasons behind it are clearly economical? Why is it that in Germany, whose energy transition (Energiewende) was supposed to be an exemplar model for the world, protesters are being beaten up by police as they try to defend the 12,000-year-old Hambacher forest from an opencast mine extracting lignite (dirtiest form of coal)?

The answer is growth, GDP growth. We might see more electric vehicles, control and limit food waste, see the numbers of start-ups concerned with recycling, up-cycling and circular models growing, foundations, NGOs and scientific institutes fighting deforestation and soil erosion in African countries which are the most susceptible to it however it doesn’t fully matter how many good things we do, preventing climate breakdown means ceasing to do bad things. But how can we cease to do bad things when the system in place sells those bad things as profitable and valuable factors to GDP growth?

...importance of efficient public systems such as education, health care, public transportation, community inclusion, equality, standard of living...

We should analyse GDP Growth deeper. GDP stands for gross domestic product and it accounts for the amount of goods and services produced in a country in that given year. Economic growth occurs with any increase in GDP over the previous year but the distinction between actual production and potential production is relevant when thinking about development and not only growth in numbers. Countries focused on actual production showing high increases in GDP Growth and hence performing well on the international economy may show no potential production.

If that actual production is reached by an unsustainable use of resources, an unsustainable and unjust use of human capital, forgetting about the importance of efficient public systems such as education, health care, public transportation, community inclusion, equality, standard of living and so on, that economy will gradually deteriorate and eventually perish being like a sailor who wrongly planned its use of resources and energy to survive travelling the whole world. Indeed, economic growth can be of two sorts.

We can have economic growth with development, meaning better standard of livings, longer lives, education, health, equality for all and with no development, meaning higher incomes for some, greater inequality, pollution, environmental degradation and community depletion.

Developed economies of the West have grown following the growth paradigm which allowed them to reach the high standards of living they have today, but those standards have not spread equally. The economic growth seems to have been one without development and with no care for the people for a just share and for the environment, resulting in civil outbreaks and the people’s discontent.

Sunita Narain - a famous Indian environmentalist and named one of the most influential people in 2018 by Forbes, has long been fighting for environmentalism...providing access to energy, water, sanitation and stopping deforestation

Indeed, growth has been pursued along the disagreeable outcomes related to the basic economic questions of what to produce, how to produce it and to whom the results of production are actually distributed. Searching for the consequences of this paradigm, developing countries provide a stronger evidence of the harm and damage that this paradigm does.

This growth myth sold as the only path to development to developing countries landed into higher poverty and inequality following national income generated only from resource extraction and the production of agricultural commodities, causing deforestation land degradation water pollution over-fishing air pollution and climate change. Sunita Narain, a famous Indian environmentalist and named one of the most influential people in 2018 by Forbes, has long been fighting for Indian’s environmentalism of the poor.

Sunita’s arguments follows that if pollution in rural villages is not tackled, by providing access to energy, water, sanitation and stopping deforestation, then ecological refugees will not stop overpopulating the urban areas, leading to higher pollution, not only for the poor but also for the rich. Air is a public common good. The inter-connection between environmental pollution and inequality is too strong for the current paradigm to solve any of the two, as the pursuit of GDP growth is precisely the cause of both inequality and environmental pollution.

In an economic sense, the opportunity cost of pursuing this growth paradigm without development is too costly when weighting in the real consequences. Indeed, Herman Daly defined it ‘uneconomic growth’ as this growth without development is doomed to only damage the economy and deplete its resources in the long term.

Growth with development means in Kate Raworth’s terms finding a sustainable dynamic balance which allows humanity to thrive in that just and safe space between environmental and social boundaries.

The Doughnut shows how important the social foundation is in relation to the ecological boundaries. Kate Raworth is one of the first economists, being mainstream, which captures attention challenging the economic status-quo and what’s more providing a feasible realistic picture and model which can finally replace the outdated model of GDP Growth as the goal of any economy.

Change the goal is one of the seven ways to think like a 21st century economists, a book that is worth to read for anyone wanting to envision a different system and for anyone wanting to understand much of the intrinsic causes that led our economies and societies to behave in the way they do.

Indeed, another very valuable point that Kate Raworth challenges is the so-called homo oeconomicus, this rational self-maximizing being that all of us are supposed to be which does not consider our social character, our inter-dependency and co-operation and our fluid and not fixed preferences. We are influenced and affected by the social structures in which we live in, be them institutions or social norms through which we continuously interact. What happened is that all of us, Zoon Politkon assumed to be Homo-Oeconomicus, we became one as such.

Amartya Sen - winner of the Nobel Prize, formulated the Human Development Index ... the failure of GDP to measure a country’s well-being and its population living standards

Kate Raworth is leading the path to restore a healthy picture of who we truly are, social beings with much more characteristics than merely self-interest and with higher desires in life that to simply maximize our utility which sees as the only constraint, a budget constraint. Amartya Sen, winner of the Nobel Prize in 1998 questioned the view of homo oeconomicus, as purely self-interested actors and formulated the Human Development Index, because of the failure of GDP to measure a country’s well-being and its population living standards. Economic development is the sustainable increase in living standards for a country, typically characterized by increases in life span, education levels and income.

Kate Raworth challenges the so-called "homo-oeconomicus", this rational self-maximizing being that all of us are supposed to be which does not consider our social character

We need to start redesigning a new political system which is led by facts. The technologies of today allow for vast amounts of data to be gathered at practically no cost. Politics is becoming less and less transparent and many of the most important decisions, such as investments in mining activities, food and trade policies, are a factor of nontransparent governments, and in many cases citizens are have a hard time feeling supported as they are left feeling that their right to choose has been taken away.

Applications of technologies such as block-chain to the political system could democratize a system which is not democratic and could allow citizens to present their needs and solutions in a transparent way through the use of apps or websites. Giving the opportunity to citizens to directly ask questions would enforce the social contract as it would increase participation while carrying the capacity to really stimulate new insights that politicians may have been too blind to see.

New ways of thinking are taking foot to replace the outdated ones. Biomimicry is the imitation of the models, systems and elements of nature for the purpose of solving complex human life. Ecosystem thinking is at the base of the success of the recent technological developments such as decentralized block-chain, the IoT and cloud computing. Permaculture develops twelve principles which rotate around three key areas: fair share, earth care, people care. In my opinion, these are the ethos of sustainability and resonate with the known triple bottom line approach in business vocabulary.

As we have lost the connection with nature and our biological origin, we have also lost the connection with our souls and our spirituality which is demonstrated by the growing trends and the visible benefits on human well-being in practising yoga, mindfulness, sports and being outside. Until now most generations have been sucked into the belief and idea that work is a duty and not a pleasure, that the reasons to work were strictly economical and ones of survival.

...we are not rational, self-maximizing, economic beings but we have higher purposes and desires in our life than merely financial ones

Today a stronger desire to find one’s purpose, to seek the right path and to follow its own aspirations brings humans not only closer to themselves but also to nature, increasing that attentiveness and care for the planet. It also brings us one step closer to the realization that we are not rational, self-maximizing, economic beings but we have higher purposes and desires in our life than merely financial ones.

A new consciousness is developing, and a new consciousness needs a new language which does not depict one as the winner and one as the loser, one as the rich and one as the poor as that installs a mentality of wanting that poor to continue to lose so that the rich can continue to win. This new language is being developed through models and concepts such as the Doughnut in economics which is an essential building block for change as economics is lastly the mindset that shapes society.

This language is spoken with words of non-violence, is spoken with words that come from the awareness and consciousness of the being within nature and of the wholeness of humanity. The oneness and the detachment from nature have brought us on this path which now shows to be lethal for nature and for all of its species, including us.

Greta Bertozzini is our main contributor and editor at Sustainability: Through The Looking Glass. She is passionate about economics, sustainability, and circular economies. Find more from Greta on our members page.

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