Doughnut Economy

The Intellectual Roots

The Doughnut model builds on earlier critiques of mainstream economics:

• Fritz Schumacher ("Small is Beautiful"): Advocated for "enoughness," local economies, and appropriate technology that is simple and tailored to local needs.
• J.C. Kumarappa ("The Economy of Permanence"): This Gandhian economist argued that human activities must be harmonized with nature's cycles and limits.

The Doughnut Model Explained

The model provides a visual framework for a new economic goal: to create a world where both people and the planet can thrive. It consists of two rings, creating a doughnut shape that represents the "safe and just space for humanity."

The Social Foundation (Inner Ring)

This is the inner boundary of the doughnut, representing the essentials of a dignified life that no one should fall below. Falling into the "hole" signifies human deprivation.

• It includes: Sufficient food, clean water, access to healthcare and education, decent income, equity, and a political voice.

The Ecological Ceiling (Outer Ring)

This is the outer boundary of the doughnut, representing the Earth's environmental limits based on the Planetary Boundaries framework. Going beyond this boundary means ecological overshoot.

• It includes: Climate change, biodiversity loss, chemical pollution, and other critical planetary systems.

The Safe and Just Space for Humanity (The "Dough")

This is the regenerative and distributive space between the two rings. It's the sweet spot where humanity's needs and rights can be met without overshooting the planet's ecological limits. This is the goal space for the 21st-century economy.

Shifting the Goal: From "Growing" to "Thriving"

Doughnut Economics fundamentally challenges the traditional economic goal of endless GDP growth.

• The Critique: Raworth argues that the obsession with GDP growth is outdated and unsustainable. It has led to massive inequality and ecological destruction by overshooting at least four planetary boundaries.
• The New Goal: We should aim for economies that "make us thrive, whether or not they grow." The objective is to reach the safe and just space of the doughnut and then thrive within it, not to grow forever.

The New Design Principles

To create this thriving economy, Raworth advocates for two core design principles:

1. Be Regenerative by Design: Instead of a linear "take-make-waste" system, we should create a circular one that mimics nature, closes loops, and runs on renewable energy (similar to Cradle to Cradle).

2. Be Distributive by Design: Instead of concentrating wealth and opportunity in the hands of a few, we should design our economies to share value more equitably from the outset by democratizing technology, knowledge (open source), and power.

Exam Tip: You must be able to draw, label, and explain the Doughnut model, clearly defining the Social Foundation, the Ecological Ceiling, and the Safe and Just Space for Humanity. Understanding the core goal shift from "growing" to "thriving" and the two key design principles (regenerative and distributive) is also essential.