Kate Raworth: How Can We Create A Thriving Economy For Ourselves And The Planet?
GUY RAZ, HOST:
It's the TED Radio Hour from NPR. I'm Guy Raz. So we've all been told that if the economy is growing and if we keep producing and consuming, that's a good thing.
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BARACK OBAMA: We are at a moment when our economy is growing.
BILL CLINTON: This is good news for America and more evidence that our economy continues to surge ahead...
GEORGE W BUSH: So long as we pursue pro-growth policies that put faith in the American people, our economy will prosper, and it will continue to be the marvel of the world.
RAZ: But what if we're wrong? What if growth isn't the answer to a better world?
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PRESIDENT DONALD TRUMP: Moments ago, the numbers for America's economic growth, or GDP, were just released.
UNIDENTIFIED PERSON #1: The economy grew by 7.4 percent.
UNIDENTIFIED PERSON #2: It's just 1.2 percent.
UNIDENTIFIED PERSON #3: ...Grew 4.1 percent.
UNIDENTIFIED PERSON #4: ...Grew half a percent.
UNIDENTIFIED PERSON #5: ...8.2 percent in the April to June quarter.
UNIDENTIFIED PERSON #6: ...Up 2.2. That's a one-tenth lower number than we were originally...
RAZ: Generally, how do we measure - like, how do we know whether an economy is doing well or not? Like, how do most economists measure that?
KATE RAWORTH: Well, that's an excellent question. And you know what? It never actually gets asked in an economics degree. I mean, wouldn't you think, when students were studying economics, that the first thing you'd ask is, well, what is an economy for, and what does success look like? But that never actually comes up. It's just skipped right over.
And so how you measure how well an economy is doing just becomes a deeply assumed turning towards GDP growth. Throughout my education and far too much throughout the education of students today, the assumption that, well, if this policy and that policy will lead to growth, job done.
RAZ: This is Kate Raworth.
RAWORTH: I am a renegade economist. I'm passionate about rewriting economics so that it's actually fit for this century that we are in.
RAZ: Most if not all policymakers, economists, they all agree this is a good thing, that growing an economy is good. It increases prosperity. I mean, it would almost be political suicide - right? - for somebody to say, growth is a bad thing. Let's stop it. But in general - right? - most of them agree. The consensus is that growth is good. It spreads prosperity.
RAWORTH: It is indeed. It is a deeply powerful narrative. It could almost be political suicide to question it. Of course, that's exactly what Bobby Kennedy did in the 1960s, and he made a very famous speech. His brother, John, ran for election in 1960 on the promise of a 5 percent growth rate. So it was - the growth narrative was absolutely at its height as John F. Kennedy was elected. But then Bobby comes along some years later, and he questions it.
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ROBERT F KENNEDY: If we judge the United States of America by that, that Gross National Product counts air pollution and cigarette advertising.
RAWORTH: And he says, in essence, GDP measures everything except that which we fundamentally value - the laughter of our children, the prosperity of our own lives, the health of our communities.
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KENNEDY: It measures neither our wit nor our courage.
RAWORTH: It's been questioned for many, many decades. And this questioning, I think, is just getting stronger and stronger. And it's time to replace it with something fit.
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KENNEDY: It measures everything, in short, except that which makes life worthwhile.
RAZ: Kate Raworth picks up this idea from the TED stage.
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RAWORTH: Global GDP is 10 times bigger than it was in 1950, and that increase has brought prosperity to billions of people. But the global economy has also become incredibly divisive, with a vast share of returns to wealth now accruing to a fraction of the global 1 percent. And the economy has become incredibly degenerative, rapidly destabilizing this delicately balanced planet. Our politicians know it, and so they offer new destinations for growth.
I think it's time to choose a higher ambition because humanity's 21st century challenge is clear - to meet the needs of all people, within the means of this extraordinary, unique, living planet so that we and the rest of nature can thrive. Progress on this goal isn't going to be measured with the metric of money. We need a dashboard of indicators. And when I sat down to try and draw a picture of what that might look like - strange, though this is going to sound - it came out looking like a doughnut.
But let me introduce you to the one doughnut that might actually turn out to be good for us. So imagine humanity's resource use radiating out from the middle. That hole in the middle is a place where people are falling short on life's essentials. They don't have the food, health care, education, political voice, housing that every person needs for a life of dignity and opportunity. We want to get everybody out of the hole, over the social foundation and into that green doughnut itself.
But we cannot let our collective resource use overshoot that outer circle, the ecological ceiling, because there we put so much pressure on this extraordinary planet that we begin to kick it out of kilter. We cause climate breakdown. We acidify the oceans, a hole in the ozone layer - pushing ourselves beyond the planetary boundaries of the life-supporting systems that have, for the last 11,000 years, made Earth such a benevolent home to humanity.
So this double-sided challenge to meet the needs of all within the means of the planet, it invites a new shape of progress - no longer this ever-rising line of growth, but a sweet spot for humanity, thriving in dynamic balance between the foundation and the ceiling.
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RAWORTH: I'm not against an economy spending more money on the goods and services people need. The problem I have with the current obsession we have in our economy's growth is that we are structurally addicted to growth. We've structured the expectation of an ever-growing GDP into our financial system, into our political system, into our social lives.
And so the design principles that politicians and economists should be looking at and reporting on is showing whether our economies are regenerative and distributive by design. And then whether or not the GDP - goods and services sold - is going up or fluctuating, or down a bit and then up, or up and bit and then down, that's a secondary thought because where we want to get to is somewhere not just for more growth, but an economy that meets the needs of all within the means of the planet.
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RAZ: So if our addiction to growth is the problem, is there a way to rethink how we live? From the clothes we wear, to the food we eat, to the materials we use to make everything around us, could we reframe all of that to build a more circular system? Well, today on the show, we're going to explore that very idea and how most of the things we need today are already right in front of us. And for Kate Raworth, this circular approach could be the key to a new kind of economy, an economy that would not only help our planet but also imitate the way it works.
RAWORTH: So let's think about the structure and the design of, let's say, 20th century industry. I would call it linear and degenerative. It's linear because think of a long pipe. We take us materials - energy and materials - we stuff them in the pipe. We process them, make them into things we want, use it for a while and then throw it away.
So it's this take, make, use, lose linear process. And it's degenerative because it's running down the living planet on which we depend. It's polluting the waters, creating a hole in the ozone layer. It's deforesting the land. It's filling the atmosphere with excess, you know, waste, carbon dioxides. So it's degenerative. We need to move away from that linear process to a circular one in which the waste from one process becomes food for the next. And if we want an example, nature is, like, jumping up and down, with her hand in the air, saying, look at me. Look at me.
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RAWORTH: I'm the example you need. I've been circular for 3.8 billion years, please. And I'm thriving. You could learn a lot from me. There is no waste in nature. Everything decomposes and comes back as something else. So nature is the ultimate example of circular, regenerative design.
RAZ: This - I mean, if we could create this kind of cyclical system, are there any hints of it happening anywhere around the world that we can start to look at and say, OK, that's - that's a model for us?
RAWORTH: Yes, it's popping up all over in the way that most of the good things in life do. It's never going to be in one place. But I see it in individual industries or in particular countries. So in cars, there's a company called Open Motors who are making 100 percent electric, modular cars that actually you won't need to own. Why would you want to own a car? Gah (ph), you just want to get somewhere. It'll be a self-driving car. It'll be mobility as a service.
In countries - China, actually, is really taking circular economy seriously and looking across its own economy. It's popping up in different places there. In cities - so the city of Amsterdam, the city of London is saying, hey, we really want to take this seriously. So let's jump out of a single product and a single industry and let's look across it through a city scan and ask ourselves, where does all the material flow in this city? And how can we loop materials 'round here instead of having them being shipped all over the world.
And then, at an industry level, there's a company like Bio-bean, who will collect coffee grounds from cafes all over a city and turn them into what they call Coffee Logs. They can be used in fires, as an energy source. So just like the best things in life, it's popping up all over because this is an idea that once people get the idea, then they look around at the industry they're in, the city they're in, the country they're in, the community they're part of and say, and what would it mean to start closing the loops here?
RAZ: Yeah. I mean, you describe yourself as a renegade economist. Do you ever feel like you're fighting a lone battle?
RAWORTH: Oh, I don't feel alone at all. And the ideas I'm talking about, of course, have been around for many decades.
RAZ: Sure.
RAWORTH: And just as with the renewable energy sector - right? - it's been around for decades. And there were some funny tinkerers who put solar panels on their house roof in the '70s, and people thought they were quirky. And people just persist and persist and keep going until the scale begins to build, the technology improves. And you know what? One day it just makes sense. Even in your pocket, it makes sense to do this instead of buying gas and coal and oil. And I believe this transition is going to do the same thing.
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RAWORTH: I just want to jump away from the old economic thinking that rules so much of the world. And how do we leap into today's understanding with the science that we recognize now about our dependence on our planetary home that we are rapidly pushing out of balance? How do we quickly bring that into economics?
But I profoundly believe that 21st century economics of regenerative and distributive design, it's going to be practiced first and theorized later. So if I want to convince you, I'm not going to spew out a theory. I'm going to show you examples and take you to places where it's popping up. And we see it on the ground. We see that it's working. We see that it makes sense with the planet. It makes sense with the community. And one day, the textbooks will catch up and start telling the story.
RAZ: That's economist Kate Raworth. Her book is called "Doughnut Economics: Seven Ways To Think Like A 21st-Century Economist." You can see Kate's full talk at ted.com. On the show today, ideas about building a circular world. I'm Guy Raz, and you're listening to the TED Radio Hour from NPR.
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