by Kate Raworth
new goal.. meeting the needs of all w/in the needs of the planet
the doughnut.. the sweet spot of humanity
i don’t know if the sweet spot of humanity can include measuring/money [ie: diagram has 4 parts: market, state, commons, household..]
adding page while reading George Monbiot’s out of the wreckage..
to succeed.. we must destroy ourselves
the thought of ‘success ness’ is destroyer..
the genius of Kate Raworth’s book – doughnut econ.. lies in her comprehensive reframing of the subject.. she does this by redrawing the graphs thru which economics see the world.. to ‘make assumptions explicit and blind spots visible’
diagram has 4 parts: market, state, commons, household..
unless children are loved, looked after, fed, *taught **basic skills at home and taken to ***school, they will have no means of joining the ****workforce, except at the lowest level, when they grow up
this is why i hadn’t yet added a page of hers/doughnuts.. ie: what are **basic skills..?.. we’d do best to zoom our more to basic needs.. and what can we *teach..? we learn from being curious and around people who are modeling the things we are curious about.. hg child ness.. ***school is one of the ‘frames that created’ this mess.. ie: science of people in schools ness.. as is ****work..
household, id’d by some thinkers as the core econ, makes everything else possible.. by ignoring this sphere, and treating unpaid labour as no labour at all, .. despite the gains made by feminism, women remain the principal providers of the core econ: the carers w/o whom everything falls apart..
Raworth, whose work is the most considered and far reaching of the materials i have read while researching this book..
we keep missing it.. because we keep just looking at what is in view
*to break the growth hegemony, we need new metrics..t..: measures of well being rather than expansion..
maybe we need *to just stop measuring..
we might also need new money… monetary design helps determine the form that commerce takes..
commerce: the activity of buying and selling, especially on a large scale; social dealings between people
via first defn.. we need to get away from buying/selling.. via second defn: social dealing shouldn’t be measured.. moneyed.. if we care about betterness.. freedom.. well being.. whatever you call it
developing new currencies could encourage both the protection of the gifts of nature and the distribution of the wealth arising from them
oy – same time i see Raworth suggesting the new currency be shaped like a doughnut
money anchored to productive value – such as a basket of commodities – would reduce the incentive to exhaust those commodities
? if we need incentive.. big red flag we’re doing it wrong
the virtual wealth on which the financial sector feed could no longer be detached from the real wealth on which all of us survive and thrive..
they aren’t connected at all.. only in that if we insist on the virtual/financial ness.. we compromise the real wealth.. they can’t be a team.. we’ve been proving that for years..
so how might any of this be implemented? it seems to be that a necessary (though insufficient) step is to take control of public budgets..
? we need to stop measuring
given that there are general social benefits that only govts can provide, and given that ineq and exclusion cannot be sensibly addressed w/o a redistribution of wealth thru taxation and public investment,
lady in ny – this (participatory budgeting) just feel like democracy, and the way decision should be made in the city. (on practice began in 1989 porto alegre where around 50 000 people are typically involved in developing of budget)
1\ imagine if we weren’t spending all our time.. on all the measuring 2\ that is not the best way to do decision making in 2017.. we have the means to hear every voice.. not just a good consensus of 50 000.. or however many beyond 1..
participatory budgeting is, i feel, an essential component of a politics of belonging..
if we want to belong.. we have to disengage from getting value from measuring..
in porto alegre it has led to a situation that many politicians consider impossible: large numbers of people demanding that the city council raise their taxes..
municipal budget not enough.. challenge is find ways to extend process in two directions: citizens to determine greater portion of local budget, and to intro participatory budgeting at the state and national levels..
too much ness
democracy becomes fainter as scale increases..
maybe in the past.. but not today.. if we 1\ redefine democracy 2\ use tech as it could be
the larger the scale of any form of politics, the harder it is to ensure that *popular control remains a live proposition..t
we can do better than *popular control.. both words are killing us
once we begin to gain control of he budgets that belong to us, our engagement w the public investment is likely to proliferate into ever bigger questions: what is the economy for? who does it serve? what dos it ignore? how could it be better design?
sounds like stuvoice ness.. not truly free questions.. should be asking if a and a are happening..
in seeking answers, we are *drawn almost inexorably towards the principles raworth id‘s: to meet the needs of all w/in the means of the planet.. her reframing of the economy **allows us to see what we were unable to see before..
inexorably: in a way that is impossible to stop or prevent.
*good principles.. not inexorably drawn.. ie: i don’t see her reframing as addressing those id’s.. better than now perhaps.. but still a bandaid.. and not what we’re capable of..
**true perhaps.. but it doesn’t allow us to see enough..
we have to go deeper
Tim O’Reilly (@timoreilly) tweeted at 7:31 AM – 25 Mar 2018 :
I am loving @KateRaworth’s book Doughnut Economics. It puts #inequality in a far broader context, connecting a great many 21st century problems with a single vision. Every business leader and every policy maker should read it. For a quick summary, see https://t.co/harwQvlLlC (http://twitter.com/timoreilly/status/977900852085075970?s=17)
imagining business and policy as irrelevant..
notes/quotes from book:
parter (@romankrznaric) and to our children.. like all children, deserve to thrive in a safe and just 21st cent
who wants to be an economist?
she (yuan yang) told me ‘i realized that i just had to master this material (exams at london school of econ on horizon), rather than tying to question everything. and i think that’s a sad moment to have as a student
it’s an extraordinary situation. no other academic discipline has managed to provoke its own students – the very people who have chosen to dedicate years of their life to studying its theories – into worldwide revolt.. their rebellion has made one thing clear: the revolution in economics has indeed begun.. its success depends not only on debunking the old ideas but more importantly on bringing form the new.. bucky: you never change things by fighting the existing reality. to change something, build a new model that makes the existing model obsolete..
this book takes up his challenge, setting out seven mind shifting ways in which we can all learn to think *like 21 cent economists.. by revealing the old ideas that have entrapped us and replacing them w new ones to inspire us, it proposes a new economic story
why limit it to the story to *econ.. ?
the word ‘economics’ was coined by the philosopher xenophon in ancient greece. combining oikos meaning household w nomos meaning rules or norms, he invented the art of household management, and it could not be more relevant today. this century we need some pretty insightful managers to guide our planetary household, and ones who are ready to pay attention to he needs of all of its inhabitants..
imagine if we only had 2 rules/norms.. for our global home.. ie: talk with self.. talk/be with others.. 2 convos .. as model.. a means to listen to all the voices.. everyday.. as it could be
economics is the mother tongue of public policy, the language of public life and the mindset that shapes society
john maynard keynes: the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerfully than is commonly understood.. indeed, the world is ruled by little else.. practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist’
friedrick von hayek.. disagreed violently w keynes on almost all questions of theory and policy, but to this matter they concurred..
when hayek given noble prize.. said.. had he been consulted on this creation, he would have advised against it.. because.. the noble prize confers on an individual an authority which in economics no man ought to possess.. the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally..
despite such misgivings from the 20th century’s two most influential economists, the dominance of the economist’s perspective on the world has only spread, even into the language of public life.. ie: patients as customers; forests as capital; media news focus on stock market
given the dominance of economics in public life, it is no surprise that so many uni students, if given the change, opt to study a little as part of their ed.. econ 101 as staple part of broad ed… the language and mindset of econ o 101 so pervades public debate that it shapes the what we all think about he economy: what it is.. how it works.. what it is for.. these citizens of 2050 are being taught an econ mindset that is rooted in the textbooks of 1950.. which in turn are rooted in the theories of 1850
i headed to oxford.. to get the skills i believed would prep me for the job (end poverty and environ destruction).. but the econ theory on offer left me frustrated.. because it made awkward assumptions about how the world worked.. while glossing over the very issues i cared about most..
on leaving uni econ.. i spent: 3 yrs in zanzibar women running micro businesses.. w/o running water/electricity; 4 yrs in manhattan writing un human development report and watching power games; 10 yrs oxfam on human rights and climate; 1 yr maternity leave.. twins
thru all this, i gradually realised the obvious: that i could not simply walk away from economics because it shapes the world we inhabit and its mindset had certainly shaped me, even if thru my rejections of it.. so i decided to walk back towards it and flip it on its head..
let’s flip it out..
what if we started econ not w its long established theories but w humanity’s long term goals.. and then sought out the economic thinking that would enable us to achieve them
if humanity’s 21st cent goal is to get in to the doughnut, what econ mindset will give us the best change of getting there
why econ..? or.. if econ as household rules.. let’s try 2 convos
words are processed by our short term memory where we can only retain about seven bits of info.. images, on the other hand, go directly into long term memory where they are indelibly etched..
so your donut is insightful/grokkable to the situation/problem.. but perhaps this image offers more of an actual other way..
paul samuelson.. decisively placed imagery at the heart of econ thought.. known as the father of modern econ..70 yrs at mit.. he was enamoured of equations ane diagrams but crucially, he believed they were suited to very diff audiences: in short equations were for the specialists; pictures for the masses
7 ways: 1\ change goal (from gdp to donut balance); 2\ see big pic (w/in nature & powered by sun); 3\ nurture human nature (beyond rational/fixed to interdependent/fluid); 4\ get savvy w systems (from mechanical to complex); 5\ design to distribute (ineq is not an econ necessity – thinking growth to even it up.. beyond redistributing income to exploring way of redistribution wealth, particularly the wealth that lies in controlling land, enterprise, tech, knowledge and the power to create money); 6\ create to regenerate (thinking growth will clean it up); 7\ be agnostic about growth
1 – change the goal (from gdp to doughnut)
a secure living and jobs for all in a mutually thriving community: not bad for a first stab at defining the goal (despite the tacit disregard of women and slaves that came with the times)
jobs not a good goal for humanity
utility (as value in conventional econ theory).. is defined as a person’s satisfaction or happiness gained from consuming a particular bundle of goods..
how to measure..? leave aside for a moment the catch that bns of people lack the money needed to express their wants/needs in the marketplace.. and that many of the things we most value are not for sale..
econ theory is quick.. too quick.. in asserting that the price people are willing to pay .. is a good enough market place proxy for calculating their utility gained.. add to this the apparently reasonable assumption that consumers always prefer more to less, and it is a short step to concluding that continual income growth (and therefore output growth) is a decent proxy for every improving human welfare..
mis direction.. goes back to 1930s.. us congress commissioned economist simon kuznets to devise a measure of america’s national income.. came to be gnp.. by 1950s.. overriding policy objection in industrial countries..
soon growth was portrayed as a panacea for many social, econ, and political ailments… so elections won via promising higher growth rates..
in last decades of 20th shift from gnp to gdp (w/in borders).. but insistence on output growth remained… in fact it deepened.. an addiction that lasts to this day
as gnp reached the height of its popularity in the early 60s kuznets became one of its most outspoken critics, having warned from the start that ‘the welfare of a nation can scarcely be inferred from a measure of national income’
this always happens.. how to keep from it..?.. 7 bn people alive
economists and politicians alike tucked it (his critique) quietly to one sie: the appeal of a single year on year indicator for measuring econ progress had become too strong..
so gdp became de fact policy goal.. to enquire whether further growth was always desirable, necessary, or indeed possible became irrelevant, or political suicide..
one person willing to risk political suicide.. donella meadows (72): growth is one of the stupidest purposes ever invented by any culture.. we’ve got to have an enough
kuznets : distinction must be kept in mind.. between quantity and quality of growth.. between costs and return.. between short and long term..
economist and politicians.. *along w the rest of us.. are searching for words (and pics) to articulate a greater econ purpose than growth.. how can we learn to talk again of values and goals and **put them at the heart of an economic mindset that is fit for the 21st century
*really..? are our souls really craving that convo..? i’m thinking the convo our souls are craving is.. ie: what are you curious about today..
this focus seems like a distraction to what our potential is today ie: rev of everyday life.. where daily it’s.. a story about people grokking what matters..
one promising place to start is by looking to the long lineage of unsung economic thinkers whose aim was to put humanity back at the heart of economic thought
why not just have hunamity be the heart..? ie: does economic thinking matter to humanity..?
1819 jean sismondi (human welfare).. 1860 john ruskin (no wealth but life.. happy humans); late 20th cent ef schumacher (small is beautiful).. manfred max neef (belonging).. big picture thinkers such as these have for centuries offered alt visions of what the econ is for.. but their ideas have been kept far from the eyes/ears of econ students..dismissed as the touchy-feely school of ‘humanistic econ’
could say humanistic project began to go mainstream w work of amartya sen.. (nobel prize).. focus , sen argues, should be on ‘advancing the richness of human life.. rather than richness of the econ in which human beings live’
agree.. but why do we have to live in an econ..?
instead of prioritising metrics such as gdp, aim should be to enlarge people’s *capabilities
how about just their *opportunities.. ie: equity – everyone getting a go everyday.. (and assuming 100% of us are capable.. so instead of spending our days measuring – things we can’t even measure – we just assume)
such as to be healthy, empowered, and creative.. so that they can choose to be and do things in life that they value
this sounds too much like needing to help others.. charity.. et al.. ie: if not abused/manufactured.. people are already healthy, empowered, creative.. we don’t need to enlarge that (except now as temp detox.. shell restoration)
and realising those capabilities depends upon people having access to the *basics of life – adapted to the context of **each society – ranging from nutritious food, healthcare, and education to personal security and political voice
i’d say we focus on *just 2 basics.. deep enough for **all of society/societies.. and then trust us to take care of the rest.. otherwise we get things like ie: compulsory ed, forced labor because of debt, et al..
so here’s a compass fit for the journey ahead..
your donut is great.. (p 38).. like as a pitch or a diagram in a text book..very insightful.. but maybe not simple enough for a global compass.. i’m just thinking.. compass is already in each heart.. 2 convos a day as the day.. would wake us all up to that compass (those 7 bn compasses).. changing daily…
first.. what enables human beings to thrive..
inner ring – its social foundation – sets out the basics of life .. 12 basics: food, water, energy, ed, healthcare, housing, income & work, peace & justice, political voice, social equity, gender equality
i think we just focus on equity – everyone getting a go everyday.. then most in your list become irrelevant to a list.. ie: ed, healthcare, income, justice, voice, gender equality..
ie: gershenfeld sel
since 1949 international human rights norms and laws have sought to establish every person’s claim to the vast majority of these basics, no matter how much or how little money or power they have..
i don’t buy those as basics.. i think there are just 2..
*what will it take now that we are in the anthropocene, to sustain the benevolent conditions that we knew in our holocene home: its stable climate, ample fresh water, thriving biodiversity, and healthy oceans..?
*what it will take.. alive people..
affluence w/o abundance ness.. ie: dial back or intoxication..
their interconnectedness demands that they each be understood as part of a complex socio ecological system and hence be addressed w/in a greater whole..
what if we each were to mentally map our own lives on to the doughnut, asking ourselves: how does the way that i shop, eat, travel, earn a living, bank, vote, and volunteer affect my personal impact on social and planetary boundaries..
back in ancient greece when xenophon first posed the econ question.. how should a household best manage its resources? he was thinking about single household.. turned to city state..2000 yrs later adam smith turned to nation state.. not.. ours is era of planetary state
yeah.. i think we created (per intoxication) the need to focus on city and nation states.. i think planetary state has been w/in us all along.. so really.. perhaps.. this is the era to simply get back to us.. our indigenous us..
doughnut provides compass.. but what determines whether we can actually move into its safe and just space? five factors certainly play key roles: population, distribution, aspiration, tech and governance..
ok.. fine .. call them that: population (one – so #’s don’t matter), distribution (have/need ness), aspiration (zinn energy & thurman alive laws), tech (as it could be), govt ( 2 convos.. ie: 3 and 30 ness)
2 – see the big picture (from self-contained market to embedded economy)
samuelson’s 1948 classic, economics.. the circular flow diagram.. turned out to be a hit for teaching the masses: households supply labour and capital in return for wages and profits.. and then spend that income buying goods and services from firms.. circular flow
flow would be uninterrupted if not for three outer loops – banks, govt, trade.. that divert some income for other uses.. but taken as a whole .. closed and complete
trouble lies in what it (diagram) leaves invisible.. john sterman: most important assumptions of a model are not in the equations but what’s not in them; not in the documentation, but unstated; not in the variable on computers screen, but in the blank spaces around them.. ie: makes no mention of energy and materials..
characters: market; business; finance; trade; state
characters not required on stage: household; commons; society; earth; power
let’s restore sense from the outset and recognize that far from being a closed, circular loop, the economy is an open system w constant inflows and outflows of matter and energy.. the economy depends upon earth as a source.. likewise depends on earth as a sink for its wastes.. .. earth itself, however , is a closed system because almost no matter leaves or arrives on this planet: energy from the sun may flow thru it, but materials can only cycle w/in it
redrawing the econ as an open subsystem of the closed earth system is the major conceptual shift intro’d by ecological economists..
econ’s fundamental resource flow is not a roundabout of money but, rather, a one way street of energy.. and nothing can move, grow or work w/o using that energy
the vast majority fo energy that powers today’s global econ is from the sun.. some of the solar energy, such as sunshine and wind, arrives in real time each day.. some has been stored in recent times, like energy bound up in crops, livestock and trees.. and some stored up since ancient times.. fossil fuels of ol, coal,and gas.. which of these sources of solar energy the econ uses matters a great deal..
econ 101 – typically made up of: household, market, commons, and state.. all four are means of production and distribution..
on adam smith’s mother taking care of him for free.. while he fostered the script of work for pay
household provision of care is essential for human well being..
a flip side to the market’s power (mobilize info about people’s wants and cos t of meeting them): it only values what is priced and only delivers to those who can pay
not a flipside.. cancer
that is why the market’s power (over stresses earth’s sources and sinks) must be wisely embedded w/in public regulations and w/in the wider econ, in order to define and delimit its terrain..
or.. let’s just find a nother way to facil resources/waste
(just after saying..haven’t ever seen a *true free market).. hardin’s description of commons as ‘tragic’.. he was most probably right about that, but ‘open access’ is far from how successful commons are actually governed
we don’t know that.. because we’ve also never seen true free people
eilon ostrom.. rather than being left as ‘open access’ those successful commons were governed by clearly defined communities w collectively agreed rules and punitive sanctions for those who broke them
i don’t think rules and punitive sanctions will ever work.. am thinking if they did work.. commons would have taken over the world by now
the state should be: 1\ providing public goods (ed, health care, roads) 2\ supporting caring role of household.. (maternal/paternal leaved, investment in early yards ed.. and support for seniors) 3\ laws/institutions to unleash commons 4\ regulations in institutions.. (banning toxic pollutants, insider trading, protecting worker’s rights)
imagining both aren’t currently public goods.. both making us less healthy
imagining life w/o work.. frees us all up to care for each other.. all ages
imagining commons sans laws/institutions .. laws are the thing that keeps keeping us not us.. so hoarding et al
mariana mazzucato .. points out that the basic research behind every innovation that makes a smart phone ‘smart’ – gps, microchips, touchscreens and internet itself – was funded by the us govt.. the state, not the market, turns out to have been the innovating, risk taking partner, not ‘crowding out’ but ‘dynamising in’ private enterprise – and this trend holds across other high tech industries too such as pharma and biotech
wow.. are you kidding.. could say the exact same thing .. but switching to.. it’s the state/govt’s fault none of it is working for humans..
such state leadership is now needed worldwide to catalyse public, private, commons and household investments in a renewable energy future
3 – nurture human nature (from rational economic man to social adaptable humans)
if we head towards that future continuing to imagine, conduct and justify ourselves as homo economicus – solitary, calculating, competing and insatiable – then we stand little change of meeting the human rights of all w/in the means o four living planet..
5 broad shifts in the depiction of who we are.. can be nurtured in ways that help us move into the safe/just space for humanity
john stuart mill (1884): political economy ‘does not treat the whole of man’s nature.. not the whole conduct of man in society.. it is concerned w him solely as a being who desires to possess wealth‘.. to this desire for wealth, mill added two other exaggerated features: a deep dislike of work and a love of luxuries..
in israel, 3rd yr econ majors rated altruistic values – helpfulness, honesty and loyalty – as far les important in life than did their freshman equivalents.. robert frank: by encouraging us to expect the worst in others, it brings out the worst in us: dreading the role of the chump, we are often loath to heed our nobler instinct..
one experiment in us found that after corp execs were asked to solve simple riddles involving words such as: profits, costs, growth, .. they tended to respond to their colleagues’ needs w less empathy and even worried that expressing concern for others at work would not seem professional.. change one word and you can subtly but deeply change attitudes and behaviour (on study titles: consumer reaction vs citizen reaction)
thruout 20th cent widespread use of the word ‘consumer’ grew steadily in public life, policy making and the media until it far outstripped the word ‘citizen’.. happened in language books and newspapers in the med 1970s…
justin lewis: unlike the citizen, the consumer’s means of expression is limited: while citizens can address every aspect of cultural, social and econ life.. consumers find expression only in the market place..
weird societies: western, educated, industrialised, rich and democratic
bowles and gintis: we weird ones typically practise what is known as ‘strong reciprocity’ we are conditional cooperators.. (tending to coop so long as other do too) but also altruistic punishers )ready to punish defectors and free riders even if it costs us personally).. and it is the combo of these two traits that leads to the success of large scale coop in society
not buying that .. unless you’re assuming weird is not us/natural.. that’s a whale at seal world..
deep values that bernays masterfully tapped into have since been systematically researched w profound results. since the 80s the social psychologist shalom schwartz and colleagues have surveyed people of all ages and background in over 80 countries, identifying ten clusters of basic personal values: self direction, stimulation, hedonism, achievement, power, security, conformity, tradition, benevolence, and universalism.. when it comes to nurturing human nature three things stand out in their findings
first all ten basic values are present in us all, and each one of us is motivate by their full array but to widely differing degrees that vary between cultures and individuals..
not buying that .. that’s a whale at seal world..
thanks to bernays, brands and retailers have been nudging us for almost a century in the implicit messaging of ads,.. but public policy can be designed to nudge us too..
on moving from dominant to dependent.. one practical way to address this would be to teach and embody eco literacy in every school so that coming generation develop a world view based up on understanding the living world’s interdependent systems that make life on earth possible..
serious..? it’s school that is intoxicating our natural indigenous ness
a greater diversity in experimental research will no doubt reveal some more fascination differences between people and culture.. but may find have way more in things in common
let’s try .. look at.. a deep research
initial evidence suggests that monetary payments often crowd out existing motivations by activating extrinsic rather than intrinsic values
indeed.. 10 day cares et al
traditional econ policy presumes that a reliable way to change people’s behaviour is to change relative prices.. prices certainly do matter..
crucially, the theory overlooks the fact that *some things may be put in jeopardy when they are given a price
i’m thinking.. *everything
when market norms displace social norms the effects can be hard to reverse as demo’d in experimental study in haifa israel in 1990s
10 day cares et a
merely mentioning market roles can crowd out our intrinsic motivation..
bringing money into the mix, it seems, can significantly alter our regard for the living world..t
indeed.. so begs a design sans money.. ie: short/bit
on warning signal around intro ing cash incentives in social spaces.. furthermore, there are other means of motivating behaviour change – drawing on reciprocity, values, nudging and networks – that may cost far less in both cash and consequences
but not less in compromise.. i’m thinking that thinking we need any kind of (extrinsic) incentive/motivator is a red flag we’re doing it wrong..
what are values, heuristics, norms and networks that currently shape human behaviour
nudges can have a big effect for a small cost and digi tech makes smart nudging easier and cheaper than ever before. take prescription meds for ie: people often forget to take them regularly, undermining both their own health and possibly the drug’s long term efficacy too. in the uk, where an estimated 300 mn l is spent annually on unused prescription meds, researchers found that a simple text message reminder significantly increased the proportion of patients who were taking their meds on time
wow.. great case for doing it wrong.. ie: need an extrinsic incentive to keep us drugging ourselves.. feeding big pharma
on incentives like malala.. to get girls world wide to have higher aspirations for ed.. no prices, no payments, just pride
pride.. lovely.. for an ed system that is schooling the world..
we wasted 200 yrs staring at the wrong portrait of ourselves: homo economicus, that solitary figure poised w money in his hand, calculator in his head, nature at his feet and an insatiable appetite in his heart.. it is time to redraw ourselves as people who thrive by connecting w each other and w this living home of ours that is not ours alone..
indeed.. let’s do that.. ie: 2 convos
4 – get savvy w systems (from mechanical equilibrium to dynamic complexity)
if only .. just before that apple fell – young isaac had also marveled at how it grew.. it might have led him to equally revolutionary insights into the nature of complex systems…today we would be talking not of the market mechanism but of the market organism – wand we’d be so much the wiser for it
i don’t think we can have market organism.. i don’t think they fractally fit..
craving the authority of science, economists then mimicked newton’s laws of motion in their theories, describing the economy as if it were a stable, mechanical system.. but we now know it is far better understood as a complex adaptive system made up of interdependent humans in a dynamic living world..t
so let’s that facil that.. sans market..
if we’re to have half a chance of bringing ourselves into the doughnut, then it is essential to shift the economist’s attention from the apple as it falls.. to the apple as it grows.. from linear mechanics to complex dynamics..
thanks to the last 100 000 yrs of evolution that fine tuned homo sapiens, we humans don’t find it so easy to think in terms of complex systems
don’t we..? isn’t that natural for us..?
for millennia, people lived relatively short lives in small groups, learned from quick feedback (put your hand in the fire: it gets burned) and had little impact on their wider surroundings..
? really.. wonder what helena would say to that.. thinking indigenous ness was/is totally keyed into wider surroundings..
hence our brains evolved to cope w the near, the short term and the responsive, while expecting incremental, linear changed.. add to that our evident desire for equilibrium and resolution: we promise it in our stories, w their happily ever after endings, and seek it in our music w harmonic melodies that resolve.. but these traits leave us ill equipped when the world turns out to be dynamic, unstable and unpredictable..
if our understanding of complexity has been hampered by 100 000 yrs of evolution, then it has been topped off by 150 yrs of economic theory.. that has reinforced our biases w mechanistic models and metaphors.. t
in the late 19th cent, a handful of mathematically minded economists set out to make economics a science as reputable as physics.. and they turned to differential calc – which could so elegantly describe the trajectory of falling apples and orbiting moons – to describe the econ w a set of axioms and equations..
leon walras .. started referring to market exchange as ‘the mechanism of competition’.. they and others likened the role played by gravity in pulling a pendulum to rest to the role played by prices in pulling markets into equilibrium..
william stanley jevons (1870s):
just as we measure gravity by its effects in the motion of a pendulum, so we may estimate the equality or ineq of feelings by the decision of the human mind. the will is our pendulum, and its oscillations are minutely registered in the price lists of the markets.. i know not when we shall have a perfect system of stats but the want of it is the only insuperable obstacle in the way of making economics an exact science
thus founding a field that became microeconomics
in order to make this new theory echo newton’s laws and conform to the rigours of diffy calc.. jevons, walras and their fellow mathematical pioneers had to make some heroically simplifying assumptions about how markets and people work.. crucially the nascent theory hinged on assuming that for any given mix of preferences that *consumers might have, there was just one price at which everyone who wanted to buy and everyone who wanted to sell would be satisfied, having bought or sold all that they wanted for that price. in other words, each market had to have one singe, stable point of equilibrium, just as a pendulum has only one point of rest.. and for that condition to hold, the market’s buyers and sellers all had to be ‘price-takers’ – no single actor being big enough to have sway over prices – and they had to be following the law of diminishing returns.. together these assumptions underpin the most widely recognised diagram in all of microecon theory, and the first one that must be mastered by every novice student: the diagram of supply and demand
*perhaps even more crucially/subtly.. that we call people consumers
1954 – kenneth arrow and gerar debreu.. equation-ized this model of general equilibrium.. has been known ever since as ‘modern macro’
70s.. several smart theorist realised foundation of equilibrium theory didn’t hold up.. but implications.. were so devastating for rest of theory that ..seems to have been hidden, ignored, brushed aside in textbooks and teaching.. leaving students unaware that anything was fundamentally out of whack w equilibrating pulleys and pendulum of the market mech
warren weaver, director of natural sciences at the rockefeller foundation.. 1948: three kinds of problems that science can help u to understand: simplicity, disordered complexity, organised complexity… weaver’s ie’s came close to answering questions newton’s apple failed to prompt.. what makes an evening primrose open when it does.. why does salt water fail to satisfy thirst.. is a virus a living org?.. he noted that economic questions came into this realm too.. ‘on what does *price of wheat depend? to what extent is it safe to depend on the free interplay of such econ forces as supply & demand..
how could you think deep enough for complexity and still assume market as natural..? ie: wheat dependent on price..?
weaver recognised that most of humanity’s biological, ecological, economic, social and political challenges were question of organised complexity, the realm that was least understood.. ‘these new problems, and the future of the world depends on many of them, require science to make a third great advance’ he concluded..
that third great advance got under way in the 70s when complexity science – which studies how relationships between the many parts of a system shape the behaviour of the whole – began to take off..
i’m thinking market isn’t part of the system.. assuming so messes us up there – compromises us
it has since transformed many field of research.. and although it is all about complexity, its core concepts are actually quite simple to grasp – meaning that, despite our instincts, we can all learn, thru training and experience, to be better ‘system thinkers’
a growing number of economists are thinking in system too making complexity economics, network theory and evolutionary economics among the most dynamic field of economic research
hmm.. thinking econ (at least how we practice it today).. it’s systems thinking.. we compromise our complexity when we assume it is..
but.. textbooks and teaching still into the essence of the economic world as linear, mechanical and predictable, summed up by the market’s equilibrating mech.. its’a mindset that will leave future economists deeply ill equipped to handle the complexity of the contemporary world..
it’s the mindset of money as os that is ill equipping us..
in a playful ‘look back from 2050’ david colander recounts that by 2020 the majority of scientists .. had already realised that complexity thinking was essential for understanding much of the world.. economists however were a little slower on the uptake and it was not until 2030 that ‘most economic researchers believe that the economy was a complex system that belonged w/in complexity science’
*perhaps because econ isn’t a legit/natural system for understanding the world.. or whatever.. i’m thinking rather (again how we practice econ.. thinking some one/rules has to be in charge).. it’s thinking that econ is complex/natural that is the problem..
what is a system? simply a set of things that are interconnected in ways that produce distinct patterns of behavior – .. and it is the relationships between the individual parts – shaped by their stocks and flows, feedbacks, and delay – that give rise to their emergent behaviour
stocks and flows are the basic elements of any system: things that can get built up or run down – just like water in a bath, fish in a sea, people on the planet , trust in a community or *money in the bank
feedback loops are their (stocks and flows) interconnections.. two kinds: reinforcing (positive) and balancing (negative)
delays.. between inflows and outflows.. are common in systems and can have big effects.. stability or stubbornness
donella meadows: ‘lets’ face it, the universe is messy. it is nonlinear, turbulent and chaotic. it is dynamic. it spends its time in transient behaviour on its way to somewhere else, not in mathematically neat equilibria. it self orgs and evolves. it creates diversity, not uniformity. that’s what makes the world interesting, that’s what makes it beautiful and that’s what makes it work.. t
if financial traders were birds, their antics would indeed resemble those of a flock of starlings cavorting in the sky..
origin of monopoly game
say goodbye to economy as machine and embrace economy as organism
i don’t know – we’d have to radically redefine economy (sans money/measuring/control)..
in their book the gardens of democracy, eric lui and nick hanauer argue that moving from ‘machinebrain’ to ‘gardenbrain’ thinking calls for a simultaneous shift away from believing that things will self regulate to realising that things need stewarding.. ‘to be a gardener is not to let nature take its course; it is to tend.. gardeners don’t make plants grow but they do create conditions where plants can thrive and they do make judgements about what should and shouldn’t be in the garden’..
elinor: we have never had to deal w problems of the scale facing today’s globally interconnected society. no one know s for sure wha will work, so it is important to build a system that can evolve and adapt rapidly..
donella meadows: learn to find the ‘leverage points’.. those place in a complex system where making a small change in one thing can lead to a big chance in everything.. she believed that most economists spend too much time tweaking low leverage points, such as adjusting prices (which merely alters the rate of flow).. when they could have far greater leverage thru rebalancing the economy’s feedback loops, or eve by changing its goal (ie: gdp)..
imagine if we let go of money/measuring.. image the leverage there.. if we focus on simply 2 things .. the big (ginormous/small) change would/could be 7 bn alive people.. let’s rebalance that feedback loop
her book.. thinking in systems on prospector request – thank you library
donella: don’t be an unthinking intervenor and destroy the system’s own self maintenance capacities.. before you charge in to make things better, pay attention to the value of what’s already there..t
meadows was a skilled economic gardener in this sense, having spent much of her life watching the dance of social ecological system sin action and observing the value of what was already there… she noted, effective systems tend to have three properties: healthy hierarchy, self org and resilience.. and so should be stewarded to enable these characteristics to emerge
first, healthy hierarchy is achieved when nested system serve the greater whole of which they are a part.. liver cells server the liver, which in turns serves the human body; if those cells start to multiplying rapidly , the become a cancer, no longer serving but destroying the body on which they depend..
in economic terms, healthy hierarchy means, for ie, ensuring that the financial sector is in service to the productive economy, which in turn is in service to life..t
financial ness.. is already a mis copied rna.. already cancer..
this is not organism as fractal
second, self org is born out of system’s capacity to make its own structure more complex, such as a dividing cell, a growing social movement or an expanding city.. in the economy, much self organising goes on in the marketplace thru the price mech.. but it also takes place in the commons and in the household too.. t..all three of these reals of provisioning can self org effectively to meet people’s wants and needs and the state should support all three in doing so
dang.. listen deeper.. to the things you just wrote about..
lastly, resilience emerges our of a system’s ability to endure and bounce back from stress.. equilibrium eco became fixated on max ing efficiency and so overlooked the vulnerability that it can bring.. building diversity and redundancy into econ structures enhances the economy’s resilience.. making it far more effective in adapting to future shocks and pressures..
george demartino (economis and ethicist at uni of denver): when a profession seeks influence over others, it necessarily takes on ethical obligations.. i’m aware of no other profession that has been so cavalier regarding tis responsibilities..
i’d say if you seek influence over others.. your ethics aren’t deep enough.. again.. this is about the rna already not us.. not an organism as fractal..
inspired by demartino.. four ethical principles: 1\ act in service to human prosperity 2\ respect autonomy in communities 3\ be prudential in policy making.. minimise risk of harm.. 4\ work w humility.. principles such as these may one day be included in an economists’ oath, to be recited by aspiring professionals upon graduation.. but w or w/o ceremony what matters most is to bring such ethical principles to life in every econ student’s training and every policymaker’s practice..
5 – design to distribute (from ‘growth will even it up again’ to distributive by design)
kuznet’s underlying message – that rising inequality is an inevitable sage on the journey towards econ success for all .. the kuznets curve.. (inverted parabola) if want progress.. ineq is inevitable.. got to get worse before it can get better.. no pain no gain.. became iconic
piketty: capitalism automatically generates arbitrary and unsustainable inequalities that radically undermines the meritocratic values on which democratic societies are based..
kuznet curve debunked.. but memory lingers on and is used… to ie: justify bail out of 2008 et al
for most of last 20 yrs at the world bank, according to one of its lead economists.. branko milanovic ‘even the word ineq was not politically acceptable, because it seemed like something wild or socialist’
societies can be deeply undermined by income inequality.. t
income ineq bad not only for individuals but society and environ
true.. but again.. it’s the money that’s causing all those symptoms you list.. we need to quit focusing on measuring things and start focusing on deep needs.. listening/trusting/common-ing (sans money)
ineq does not make economies grow faster: if anything, it slows them down. and it does so by **wasting the potential of much of the population: people who could be *schoolteachers or market traders, nurses or micro entrepreneurs -actively contributing to the wealth and well-being of their community – instead have to spend their time desperately trying to meet their families’ most basic daily needs..
wow.. *careers you listed are ones keeping us from community.. by perpetuating this society based on money as os.. the **potential that is being wasted is the energy from alive people.. who are free to do whatever.. including.. being with and meeting needs of family..
you’ll never get to the donut if you think people going into spaces where they work (on other people’s problems) for most of their day is a given
needed break.. caring labor et al
in the latter half of the 20th cent, policies aimed at national redistribution fell in to three broad categories: progressive income taxes and transfers; labour market protections such as min wage; and providing public services such as health, ed, and social housing.. beginning 1980s.. authors of the neoliberal script pushed back on each one.. thanks to international public outrage over widening ineq’s.. ambition for greater redistribution has returned in the early 21st cent
such redistributive policies can be life changing for those who benefit.. but they still may not get to the root of econ ineq’ because they focus on redistributing income, not the wealth that generates it.. tackling ineq at root calls for democratizing the ownership of wealth, argues .. gar alperovitz,.. t.. because ‘political econ systems are largely defined by the way property is owned/controlled’ so in addition to redistributing income, the economist’s focus shifts towards redistributing sources of wealth too..
distributive design has an unprecedented opp this century to transform the dynamics of wealth ownership. five opps stand out: who controls land; power to create money; enterprise; tech; and knowledge..
we live in a monoculture of money.. so familiar and established that.. we are barely aware of it.. money is not merely a metal disc, piece of paper or electronic digit.. it is, in essence a social relationship: a promise to repay that is based on trust
no.. that’s based on fear.. and i thought you got the 10 day care ness
and the design of money – how it is created, the character it is given and how it is to be used – has widespread distributive consequences.. many options for redesigning it.. what’s more.. diff kinds of money can coexist.. w potential to turn a monetary monoculture into a financial ecosystem
let’s just go with ecosystem of equity and disengage from money.. we’re wasting so much energy.. all these pages of discussions about money.. gone.. not to mention the people living lives day to day.. with money as os
as such schemes spread (likened to paying kids to read but of a diff kind of money..ie: care currency earned for giving care et al).. research is needed to investigate the full ripple of their social effects, and to explore how they can be designed in ways that serve to reinforce rather than replace the human instinct to care for others..
blockchain and ethereum as game changers for complementary currencies
‘the digital revolution is far more significant than the invention of writing or even of printing’ said douglas engelbart.. he may well turn out to be right. but the significance of this revolution for work, wages and wealth hinges on how digital techs are owned and used..
i’d say it could render work, wages and wealth (as we practice it now) irrelevant.. if we quit trying to make it/everything about ownership..
what’s still missing however is a dedicated global digital platform enabling them to collab w researchers, students, enterprises and ngo’s worldwide to develop free open source techs..
imagine such a p2p platform built on all the features that make for top quality collab networks: resource recipes listing the tools, materials and skills required to replicate each item; user rating and reviews of eery design; photos and diagrams tracking how these designs evolve, and portals for similar communities.. such as solar rich urban slums or drought prone villages – to learn alongside each other’s error and successes..
creating such a platform will be disruptive because, says joshua pearce ‘it will become a true rival to the paradigm of tech development that has dominated civilization since the industrial revolution’
but it needs start up funding.. and it needs new forms of open source licensing..
widening such access to the global knowledge commons will be one of the most transformative ways of redistributing wealth in country..t
6 – create to regenerate (from ‘growth will clean it up again’ to regenerative by design)
regenerative industrial design can only be fully realised if it is underpinned by regenerative economic design
and that is currently sorely missing.. making it happen calls for rebalancing the roles of the market, the commons and the state… it calls for redefining the purpose of business and the functions of finance. and it calls for metrics that recognise and reward regenerative success
maybe we let it all go.. so that the ecosystem open enough for all of us.. is truly open enough.. for all of us to be free (i’m thinking sans market and state and rewards)
imagine taking this concept to the next level by integrating complementary currencies at the very design stage of a generous city..just ast blood flowing throughout the human body keeps all of its organs healthy, so complementary currencies could be designed to harness that flow of human activity in ways that keep the city’s infrastructure thriving..
i think that will only happen if we let go of rewards.. money.. et al
reward residents for a wide range of regen behaviour – all the while encouraging the community to shop locally and travel publicly..
mariana mazzucato (and earlier michel bauwens on the same): ‘we cannot rely on the private sector to bring about the kind of radical reshaping of the econ that is required.. only the state can provide the kind of patient finance required to make a decisive shift
so the state’s job is finance..? so if we bag money.. we don’t need the state..?
the shift to regenerative economic design can be monitored only if it is backed up by metrics that reflect its mission.. monetary metrics alone will inevitably fall far shot of reflecting the value created in ta regenerative econ: financial income is just one narrow *slice of what an economy generates when its aim is to promote human prosperity in a flourishing web of life.. the monopoly of monetary metrics is over: it’s time for a panoply of living metrics.. and instead of focusing on the throughflow of monetary value as gdp was designed to do, the new metrics will monitor the many sources of wealth – human, social , ecological, cultural and physical – from which all value flows
even a *slice.. is enough to compromise what matters.. we have to disengage from money and metrics and monitoring..
oberlin’s dashboard.. minute by minute local ecological flows: carbon emissions.. drinking water used.. wastewater treated..
matters little to change if people not free.. ie: we’re monitoring/watching whales at sea world..
the economist’s role here is key: to design the economic policies and institutional innovations – for enterprise and finance, for the commons and the sate – that will *unleash the extraordinary potential of the circular economy and regenerative design..
if we truly want to *unleash potential.. we have to let go
7 – be agnostic about growth (from growth addicted to growth agnostic)
taylor mali: changing your mind is one of the best ways of finding out whether or not you still have one..t
while both sides had some strong arguments, both too quickly dismissed the opposition’s case, and neither had a singularly complellig answer.. what i needed was to stop trying to answer that question head-on
no country has ever ended human deprivation w/o a growing economy. and no country has ever ended ecological degradation w one.. t
no country has ever ended human deprivation.. growing econ has nothing to do w it..
al bartlett: the greatest shortcoming of the human race is our inability to understand the exponential function’..t
upton sinclair: difficult to get a man to understand something when his salary depends on his not understanding it.. t
promise of even slight gdp growth was secures only at cost of accepting catastrophic climate change..
some in the keep on flying crowd suggest, economic activity, regardless of whether or not it is captured thru market transactions in gdp. that may be true for households, where the value of caring work is given and received directly w no money changing hands.. (and so is already missing from gdp accounts).. it is also true for those engaged in the commons.. w/no money changing hands. but whether or not economic value gets monetised thru the market does matter a good deal to finance, to business and to govt..t
so.. bag those.. why do we have those..?
let’s go w @davidgraeber’s caring labor
our societies, like our economies, have evolved to expect growth and have come to depend upon it: it seems we do not yet know how to live w/o it
some of us.. a lot of us don’t have that luxury.. and.. for all of this.. it’s been only a fraction of human history.. so really.. not that dependent..
besides.. we have the means now to not only facil the change.. but detox us at same time..
we have an economy that needs to grow, whether or not it makes us thrive. we need an economy that makes us thrive, wether or not it grows..
begs we let go
from there (figuring out where addicted/locked in) we can start to ask what it would take to cut loose, and whether there are innovations under way that illustrate some possible options..
let’s try this: short bp
there are of course no easy answers. it will take some decades of experiments and experience to come up w smart solutions given that this problem has been brewing for so long.. t.. which is precisely why it deserves far more attention and analysis now..
it won’t take decades if we’re brave enough to go deeper.. to let go.. for (blank)’s sake
what kind of currency, then could be aligned w the living world so that it promoted regenerative investments rather than pursuing endless accumulation..t
cure ios city.. sans measuring
one possibility is a currency bearing demurrage, a small fee incurred for holding money, so that it tends to lose rather than gain in value the longer it is held..
it’s the measuring of transactions/us that is killing us.. we’d figure out a way to cheat/compromise w demurrage as well
adam phillips: ‘wherever and whenever we are excessive in our lives it is the sign of an as yet unknown deprivation.. our excesses are the best clue we have to our own poverty, and our best way of concealing it from ourselves’
when it comes to consumerism, perhaps the poverty that we aim to conceal lies in our neglected relationship w each other and with the living world..
sue gerhardt: many people are deprived of what really matters..t
new economics foundatoin’s 5 acts that promote well being: connecting to people around us, being action in our bodies, taking notice of the world, learning new skills and giving to others..
let’s go simpler.. just 2: 2 needs
if there is one task that merits the attention of the 21st cent economist, it is this: to come up w economic designs that would enable nations coming towards the end of their gdp growth to learn to thrive w/o it.. t
we are all economists now
we know full well, as an international community, that we have the tech, knowhow, and financial means to end extreme poverty in all of its forms should we collectively choose to make that happen..t
yuan: when we travel around the uk giving talks, we meet people on the train who ask what we are doing.. when we say we think the economists have got it wrong, they immediately know what we are talking about. the financial crisis has turned econ .. this strange and awkward profession – in to an issue of public discussion/debate
the least responsive unis to date (on students countering narrow curricula on offer), say the students, have been the most prestigious ones, such as harvard, and the london school of econ..
yuan: unless uni accepts what you are doing is econ, then it’s not seen as econ
look out for the words, be wary of the equations, but most of all pay attention to the pictures, esp the most fundamental ones, because they go in deep w/o your even realising it..
as donella meadosws made clear, the power of self org – the ability of a system to add, change and evolve its own structure – is a high leverage point for whole system change. and that unleashes a revolutionary thought: it makes economists of us all..