“The Planet is Literally Burning” – Kate Raworth on ‘Doughnut Economics’

Ahead of her 8-part 'Doughnut Economics Live' lecture series in Hilary term, our editor Jason Chau sat down with the economist and bestselling writer Kate Raworth - the founder of 'Doughnut Economics' for a discussion on the economic concepts we need for the 21st century and why we should reform our curriculum now.

It’s always a privilege to be able to interview someone when you have just finished reading their book. The opportunity of conveying whatever inspiration and enlightenment you feel from their ideas while they are fresh in the vicinity of your mind is always excitingly magical. Interviewing Kate Raworth on the same day I finished her 2017 international bestseller ‘Doughnut Economics: Seven Ways to Think Like a 21st Century Economist’ was exactly that for me, and the conversation that followed enhanced my reading experience exponentially. 

Ms. Raworth is an economist based at Oxford University’s Environmental Change Institute. In her book, she came up with a new economic model, drawn in the shape of a doughnut – hence the name ‘doughnut economics’ – in which basic human needs and the boundaries of our planet are balanced to ensure human and planetary wellbeing. Joining Ms. Raworth in our interview are Helny Hobbs from Rethinking Economics Oxford and Bhagya (Bobby) Raj from Oxford Climate Business Network, who have been pushing for a change in Oxford’s economics curriculum and why we need to teach students new economic concepts that fit our time. Our conversation started with a brief description of what ‘doughnut economics’ is, in Kate’s own words.

Jason Chau: For those who have not read or are not familiar with the concept, what is ‘doughnut economics’ briefly?

Kate Raworth: Doughnut economics starts with the doughnut. It’s a concept that says how do we aim to meet the needs of all people within the means of the living planet. To me this should be the goal of economics. Economics means the art of household management. This is the era of planetary household management, and we should be asking ourselves how can every person lead a life of dignity, community, and opportunity within the means of this delicately balanced living planet. If that’s the goal to live in a world where we can thrive, what concepts would we be teaching to students so [they can be] competent economists and managers of the planetary household? That’s Doughnut Economics

Doughnut | Kate Raworth

Diagram of Doughnut Economics

JC: What is Rethinking Economics Oxford? What do you want to achieve with your movement and why do you think your cause is so urgent and important?

Helny Hobbs: Our aim is broadly to change the economics curriculum in Oxford, to make it better suited to deal with problems that we face today and help people on the planet.

KR: I was so struck by the rise of the Rethinking Economics movement. When I was a student, there was no internet so we had no ways of communicating and if we were dissatisfied with Economics, many of us just thought maybe there’s something wrong with me. I think what happened after the financial crash is that many students found themselves embarrassed in the local pub because their friends were saying “Come on, you study economics, you should know what’s going on.” But the economic models they were being taught didn’t reflect the true roles of banking and money. This was the beginning of a lot of the student movement.

I think Rethinking Economics has been such an important pressure that is coming into Universities worldwide. The very students who have turned up and taken on large debts to study are finding on arrival that one of the first things they have to do is help rewrite the curriculum. This should not be their role. 

I’m really thrilled to see Rethinking Economics here in Oxford, and I think it’s really important to listen to the students who are going to become the journalists, politicians, lawyers, economists, the policy makers, the architects, the business leaders and community activists, they need to have the mindset to equip them to take on the challenges that they are inheriting. 

Bobby Raj: As an economics student at Cambridge 10 years ago, I actually wanted to change my degree in third year to management or something else. I got so disillusioned with the course and the curriculum that I was learning from. I don’t think the movement [to reform the curriculum] was at the same level as it is now.

I’m so happy to be in [Oxford] in a leadership role at the Said Business School with the Climate Oxford Business Network, where I’m able to bring these topics into discussion. To be honest, as far as business schools go, we’re pretty progressive, but I would still like to see more discussions on issues such as climate as opposed to profit maximisation and efficiency. As a climate activist, I’m really glad to see that Rethinking Economics Oxford is doing this as well for undergraduates, for the fresh minds at 18 years old who are coming into the most traditional courses in the UK. 


JC: You argue that conventional economic frameworks such as the circular flow diagram are fundamentally flawed. Do you think that these concepts should be removed from curriculums?

KR: These concepts were brilliant insights at the time, created by brilliant economists who often knew themselves that these were flawed [given the limited data they had]. There’s a wonderful quote from John Maynard Keynes and he said “Economics is the science of thinking in terms of models joined to the art of choosing models which are relevant for the contemporary world.” We must now choose models which are relevant for the contemporary world, one with climate and ecological breakdown. 

Moreover, economists today are not only white men, we are women, we are people of colour from many backgrounds. So we are not seeing the world from the perspective of a privileged man in a colonial nation, and we need to bring these diverse perspectives into everything. 

Yes, I would remove these old diagrams. To me every single one of these diagrams is inviting us to frame the economy in a way that is profoundly destructive to our capacity to act well. How can we in this world, when the planet is literally burning, talk about the death of the only known living planet in the universe as an environmental externality. If aliens want to destroy all life on earth, they wouldn’t need to invade us. They would merely need to convince us to talk about damage to our planetary home as an environmental externality. I cannot bear that, 30 years after my education, I come back to this university, and many others, and still this is how the living world is framed, and how we educate our economists.


Our interview with Kate Raworth, Helny Hobbs and Bobby Raj

JC: Many students graduate from Oxford and other top universities with the hopes of working for big financial firms in investment banking or asset management, or management consulting. Do you think that is a culture that we need to change? Do you think that perpetuates the 20th century economic model that may create catastrophic consequences?

BR: I think students generally think through the university fees, the debt they’re in and they look at the job market. They feel like they have to go to more high earning professions [like banking and finance], even if they don’t necessarily want to. I’ve seen that in the MBA and I’ve seen that when I graduated from Cambridge. 

HH: The amazing thing about academia is students are meant to be exploring ideas at a point in their lives where they don’t really need to think about money. It’s sad that economics has felt to me like it’s structured to train people to do a specific kind of high paying job like a robot. It’s just not in the spirit of academia at all. It really dampens people’s passion for the subject, and I really don’t think any academic subject should be set up in that way. 

KR: There’s been a real problem with the financialisation of education. Students taking on large debt will have to leave and look for a financially lucrative job afterwards. In other countries, like Denmark or the Netherlands where education is either free or much more affordable, I see students with a much greater choice and ability to actually take the skills they’ve learned and actually help start to transform the world rather than have to suddenly find a high paying job in order to pay off those fees they’ve incurred. 

Secondly, I think there’s a real problem with the ratings of universities themselves. For example, I know business schools around the world have been ranked in terms of the starting salary of their graduates. And of course that creates a pressure in the business schools to encourage their students to go into these very traditional high paying industries. Fortunately there are initiatives to create a new ranking of business schools, such as the Principles of Responsible Management Education (unprme.org) in which schools are ranked much more on the basis of the social value and impact that their students are having. 

Thirdly, there are at least two large groups of people who come to study economics: some who come to join the system by learning the existing language and tools of the system, and some who want to transform the system. What I’m seeing is that those who come to transform the system are actually pushed out of it because they’re disillusioned that the issues that they want to transform are taught [in a way that] marginalises those issues. 

We need to create space in economics for both kinds of students. The ideas that I have brought together in Doughnut Economics will empower students and people who want to transform the world by making sure that the issues that need transforming are on the page on day one. We don’t start with supply and demand. We start with an economy embedded in the living world. 


JC: How do you want the economics curriculum to change and what do you think are the immediate steps Oxford, and frankly all universities, should take to initiate this reform?

HH: We’re currently researching and writing up a white paper that we are going to present to the economics department of what changes we think should happen. I think it’s important from the outset that neoliberal economics is framed as just a way of doing economics and that you don’t come in and are told that that is all what economics is. That involves including other types of economics within the first year curriculum like feminist economics and ecological economics and bringing other optional modules in if people want to take them in years two and three. Even within those modules, there’s an issue that [they are taught] from the standpoint of externalities and [that needs to be changed]. There’s just a long way to go to diversify the kind of economics that’s taught. 

BR: You read a lot about different schools of economics and it’s just funny how at university level, you just seem to adopt neoliberalism as the dominant thought of economics. The people who wrote the course now are from 30, 40 years ago. I can say this for a fact because one of my old bosses who studied economics 25 years before me did the exact same papers as I did, which is just crazy. It’s economics taught from quite a narrow, neoliberal point of view, where assumptions are given but can’t be challenged.

KR: One of the fastest ways that universities are changing is by introducing new masters courses which bring in new ideas. At Amsterdam University of Applied Sciences. , where I also teach, we have set up a Centre for Economic Transformation and are now creating a Masters in Economic Transformation. But, we still need a curriculum reform in Economics 101 – what’s taught in PPE, which is the subject that’s studied by the most students and produces very influential politicians and leaders in the UK. And if students only study Economics for one year, it almost matters more what they learn in that one year because that will shape the worldview of future prime ministers. In courses like PPE, it’s time to go for pluralism and teach many schools of thought. 

I [also] have to say, given the ecological crisis of today, I cannot see how economists can justify continuing to use macroeconomic models that give such invisibility to energy, which I believe is the currency of the world. It’s not money. Energy is the fundamental currency. [We need] more visibility to energy and to material flows and to planetary boundaries and to recognizing the economy is within a biosphere.


JC: And now, for that part that I’m sure everyone is waiting for, can you talk about what Rethinking Economics Oxford is doing in Hilary Term?

KR: Doughnut Economic Live is an in-person eight-week course running through Hilary term (mid-January to March). It is an introductory overview of the Seven Ways to Think like a 21st Century Economist. It’s open to any student from Oxford University or Oxford Brookes University who has come to this city because they are studying economics in some form, whether it’s PPE or development economics or MPP or MBA. If they study economics, they are the first group that’s invited to join this course. 

I’m personally taking this as an opportunity to try out new materials because from what we do here together in Oxford, I will then turn these materials into a course that can be done by students anywhere in the world with Doughnut Economics Action Lab. It’s very important to me to make this accessible to students worldwide: at DEAL our work contributes to the commons.

Each week we’ll take a set of core Doughnut concepts [from my book], but will also introduce how they’re now actually being put into practice by towns and cities, by start-ups and social enterprises, by governments and by community groups, by architects and urban designers – because students want to know what happens when new ideas meet current reality.

HH: The course has been organised between the three groups that we’re representing, independently of the university. As Kate mentioned, we’ve had to move venue quite a few times because of the amount of people that have been signing up. From a rethinking economic standpoint, we’re hoping that this starts a lot of discussions around how the economics curriculum should be changed in Oxford and in Oxford Brookes, and how people can support us in these changes.

BR: What I really like about this is that it’s not just an one and a half hour lecture by Kate. It’s an eight week, structured series where people can really, come to the sessions. One of the aims that we have at the Climate Business Network is how do we bring in these things, not to necessarily change people’s worldviews completely, but to tie in Doughnut Economics into what they’re going to do anyway. The MBA cohort has 65 different nationalities and 48% female. Super diverse. So I think the concepts that people learn from the series can be spread across the world wherever they go off to. There’s a lot of value in that. 

KR: When I was writing Doughnut Economics, in my mind I was thinking, “I am writing the book that I wish I could have read when I was a student.” There is a whole other way of thinking economics that actually is exciting and engaging, and I wanted that to be made available to me. I want Doughnut Economics Live to be the course that I wish I could have attended as a student.

I also know that in this university, there are many brilliant academics who also want to teach new ideas, but are trapped in the confines of the curriculum and the need to get their students through it. It’s so important to open up space in the curriculum so that all academics can actually bring new ideas into that space. The last of the eight sessions will be about discussing how we can take this further in the university. How can students take this back into discussions with their own tutors in their own departments. I think there’s huge possibilities there. To survive, economics really needs to transform and bring in the new thinking that students know they need if they’re going to be effective policymakers in this century. 


For more information on Doughnut Economics Live, please visit here. The free lecture series starts in week 1 of Hilary Term and runs every Monday evenings. To sign up, visit here.