Doughnut Economics is published next week. Here’s why you should be excited

March 29, 2017

     By Duncan Green     

Kate Raworth’s book, Doughnut Economics: Seven Ways to Think Like a 21st Century Economist is published next Doughnut Economics coverThursday. I loved it , and I’ll review it properly then, but here are three excerpts to whet your appetite:

On the importance of diagrams:

‘Think, then, of the circles, parabolas, lines and curves that make up the core diagrams in economics – those seemingly innocuous pictures depicting what the economy is, how it moves, and what it is for. Never underestimate the power of such images: what we draw determines what we can and cannot see, what we notice and what we ignore, and so shapes all that follows. The images that we draw to describe the economy invoke the timeless truths of Euclid’s maths and Newton’s physics in their geometric simplicity. But in doing so, they slip swiftly into the back of our head, wordlessly whispering the deepest assumptions of economic theory that need never be put into words because they have been inscribed in the mind’s eye. They present a very partial picture of the economy, smoothing over economic theory’s own peculiar blind spots, enticing us to search for laws within their lines, and sending us in pursuit of false goals. What’s more, those images linger, like graffiti on the mind, long after the words have faded; they become stowaway intellectual baggage, lodged in your visual cortex without you even realising it is there.

And – just like graffiti – it is very hard to remove. So if a picture is worth a thousand words then, in economics at least, we should pay a great deal more attention to the pictures that we teach, draw and learn.’

On the true story of Monopoly (the board game, not the economic practice):

Fascinatingly, however, the game was originally called ‘The Landlord’s Game’ and was designed precisely to reveal the injustice arising out of such concentrated property ownership, not to celebrate it.

The game’s inventor Elizabeth Magie, when she first created her game in 1903, gave it two very different sets of rules to be played in turn. Under the ‘Prosperity’ set of rules, every player gained each time someone acquired a new property (echoing calls for a land value tax), and the game was won (by all) when the player who had started out with the least money had doubled it. Under the second, ‘Monopolist’ set of rules, players gained by charging rent to those who were unfortunate enough to land on their properties – and whoever managed to bankrupt the rest was the sole winner. The purpose of the dual sets of rules, said Magie, was for players to experience a ‘practical demonstration of the present system of land grabbing with all its usual outcomes and consequences’ and so understand how different approaches to property ownership can lead to vastly different social outcomes. ‘It might well have been called “The Game of Life”’, remarked Magie, ‘as it contains all the elements of success and failure in the real world.’ But when the games manufacturer Parker Brothers bought the patent for The Landlord’s Game from Magie in the 1930s, they relaunched it simply as Monopoly, and provided the eager public with just one set of rules: those that celebrate the triumph of one over all.’
doughnut_full_white400x400On the state of Economics:

‘Many of the most exciting insights driving new economic thinking seem to be emerging from every quarter but economics departments themselves. There are of course some important exceptions to that, but they are too rare. So many of the transformative ideas are originating in other fields of thought such as psychology, ecology, physics, history, Earth-system science, geography, architecture, sociology, and complexity science. Economic theory would be wise to embrace what these other perspectives have to offer. In the dance of the intellects, it is time for economics to step back from soloing in the limelight and join the troupe instead. Less Lord of the Dance and more maypole dance, more actively interweaving its theories with insights arising in other disciplines.’