By Anders Lorenzen
Kate Raworth, the distinguished Oxford economist, has during an address at the Hay Festival laid out her vision for how to shape the economy in the 21st century that addresses climate change and resource scarcity.
She has recently become known with the publication of her book Doughnut Economics, in which she explores the idea of re-thinking the concept of economic development within planetary and social boundaries.
Speaking to the enthusiastic and engaged audience at the literature festival in Hay-on-Wye, an idyllic village in rural Wales nestled behind the Brecon Beacons National Park, she highlighted examples from across the world where regenerative and decentralised economies are benefitting people and the planet. She argues that we need to reform the fundamentals on which modern capitalism is founded in other words, neoliberalism, to an economy that prioritises equality and human well being within planetary boundaries.
She believes that in the case of a new 21st-century economics, we should practice it first and then theorise about it later.
She says today’s mainstream extractive mindsets where profit is the ultimate goal makes it more or less impossible to prioritise human wellbeing, and we, therefore, need to move towards a generative mindset where we optimise and reuse resources and move away from a throw-away culture. She cites the global food giant Unilever as one example. She claims that, because of the way capitalism is designed, the company is stuck between two opposing economic philosophies, even after a great effort to move towards a more regenerative mindset. She argues that, across the world, many of these transitions are already happening and that we are witnessing a fascinating psychological drama about how businesses are reinventing themselves. Many of these technologies are expensive, and she refers to how expensive solar panels were in the 1970’s. Today, however, due to mass adoption the price has fallen to an all-time low and year by year keeps dropping, which has made solar panels a common sight in many countries and neighbourhoods. She believes that the solar success story will be replicated with many of the next waves of exciting regenerative technologies and initiatives, and in the future, we could see these technologies becoming the new norm.
The core shape of this future society, she argues, is to utilise the power and ingenuity of people, the greatest resource we have. We should regenerate feelings of a community by creating co-housing projects, growing and sharing food together, energizing local economies and moving away from just a globalised economy. She argues that this brings people together, and is therefore good for human well-being and for the planet.
However, her message also came with a call to action. People should not become complacent and confident that this transition will happen regardless. We should become activists and help shape the transition whether we do that as consumers, producers, investors, employees, employers or just as citizens.