Kate Raworth Quotes

For over 70 years economics has been fixated on GDP, or national output, as its primary measure of progress. That fixation has been used to justify extreme inequalities of income and wealth coupled with unprecedented destruction of the living world. For the twenty-first century a far bigger goal is needed: meeting the human rights of every person within the means of our life-giving planet.

drop the economist’s beloved notion of ‘externalities’, those incidental effects felt by people who were not involved in the transactions that produced them — such as toxic effluent that affects communities living downstream of a river-polluting factory, or the exhaust fumes inhaled by cyclists biking through city traffic. Such negative externalities, remarks the ecological economist Herman Daly, are those things that ‘we classify as “external” costs for no better reason than because we have made no provision for them in our economic theories’.21 The systems dynamics expert John Sterman concurs. ‘There are no side effects — just effects,’ he says, pointing out that the very notion of side effects is just ‘a sign that the boundaries of our mental models are too narrow, our time horizons too short’.

Instead of immediately focusing on making markets work more efficiently, we can start by considering: when is each of the four realms of provisioning — household, commons, market and state — best suited to delivering humanity’s diverse wants and needs? What changes in technology, culture and social norms might alter that? How can these four realms most effectively work together — such as the market with the commons, the commons with the state, or the state with the household? Likewise, rather than focusing by default on how to increase economic activity, ask how the content and structure of that activity might be shaping society, politics and power. And just how big can the economy become, given Earth’s ecological capacity?

In contrast to Pareto’s pyramid and Kuznets’s rollercoaster ride, its essence is a distributed network whose many nodes, larger and smaller, are interconnected in a web of flows.

Worldwide, one person in nine does not have enough to eat.8 In 2015, six million children under the age of five died, more than half of those deaths due to easy-to-treat conditions such as diarrhoea and malaria.9 Two billion people live on less than $3 a day, and over 70 million young women and men are unable to find work.

argues the evolutionary psychologist Gerd Gigerenzer: we have survived and thrived not despite our cognitive biases but because of them. These so-called biases are the underpinnings of our heuristics, the unconscious mental shortcuts we take every time we use a ‘rule of thumb’ to make decisions. Over millennia, the human brain has evolved to rely on quick decision-making tools in a fast-moving and uncertain world, and in many contexts those heuristics lead us to make better decisions than exact calculations would do.

Imagine, for starters, if central banks were to take back the power to create money and then issue it to commercial banks, while simultaneously requiring them to hold 100 percent reserves for the loans that they make — meaning that every loan would be backed by someone else’s savings, or the bank’s own capital. It would certainly separate the role of providing money from the role of providing credit, so helping to prevent the build-up of debt-fuelled credit bubbles that burst with such deep social costs.

…environmental quality is higher where income is more equitably distributed, where more people are literate, and civil and political rights are better respected. It’s people power, not economic growth persay, that protects local air and water quality. Likewise, it is citizen pressure on government and companies for more stringent standards, not the mere increase in revenue that compels industries to switch to cleaner technologies.

Likewise, rather than focusing by default on how to increase economic activity, ask how the content and structure of that activity might be shaping society, politics and power. And just how big can the economy become, given Earth’s ecological capacity?

Here’s the conundrum: No country has ever ended human deprivation without a growing economy. And no country has ever ended ecological degradation with one.

Out of all of these power relationships, when it comes to the workings of the economy, one in particular demands attention: the power of the wealthy to reshape the economy’s rules in their favour.

Such redistributive policies can be life-changing for those who benefit from them. But they still may not get to the root of economic inequalities because they focus on redistributing income, not the wealth that generates it. Tackling inequality at root calls for democratising the ownership of wealth, argues the historian and economist Gar Alperovitz, because ‘political-economic systems are largely defined by the way property is owned and controlled’.

Today we have economies that need to grow, whether or not they make us thrive. What we need are economies that make us thrive, whether or not they grow.

Governments have historically opted to tax what they could, rather than what they should, and it shows.

As a result, we are born pattern-spotters, seeing faces in the clouds, ghosts in the shadows, and mythical beasts in the stars.