By Kate Raworth
Reimagining economics for planetary sustainability
Subject
Themes
Mainstream economic thinking faces a crisis of relevance in the twenty-first century. Built on outdated assumptions from the 1850s and codified in mid-twentieth-century textbooks, economic theory has failed to prevent financial crashes, address extreme inequality, or halt environmental degradation. The fixation on GDP growth as the primary measure of progress has justified vast disparities in wealth whilst driving unprecedented damage to planetary systems. A new economic framework is urgently needed, one that meets the needs of all people within the ecological limits of Earth.
Mainstream economic thinking faces a crisis of relevance in the twenty-first century. Built on outdated assumptions from the 1850s and codified in mid-twentieth-century textbooks, economic theory has failed to prevent financial crashes, address extreme inequality, or halt environmental degradation.…
Doughnut Economics emerged during a period of profound questioning about mainstream economic orthodoxy. The 2008 financial crash exposed the inadequacy of economic models that ignored banks, debt, and systemic risk whilst assuming markets naturally equilibrate. Austerity policies imposed in its…
For over seventy years, economics has fixated on GDP growth as the primary measure of progress. This singular focus has justified extreme inequalities whilst driving unprecedented environmental destruction. National leaders meet annually to pledge higher GDP targets, treating economic expansion as…
Human activity now operates at a scale affecting fundamental Earth system processes. For most of history, our impact was negligible compared to natural forces. The Holocene epoch, spanning 11,700 years, provided remarkably stable conditions enabling agricultural civilisations to flourish. This…
Extreme inequality defines the contemporary global economy. In 2015, the richest 1% owned more wealth than the remaining 99% combined. Between 1988 and 2008, over 50% of total global income growth was captured by the richest 5%, whilst the poorest 50% gained only 11%. Within countries, inequality…
Contemporary capitalism suffers from addiction to GDP growth. Economies are structured to require perpetual expansion: when growth falters, unemployment rises, business failures multiply, and debt burdens become unsustainable. Political leaders face electoral punishment for presiding over recession,…
Industrial civilisation has operated on linear, degenerative principles: extract resources from nature, transform them into products, use them briefly, then discard them as waste. This take-make-use-dispose model treats Earth as an infinite source of inputs and infinite sink for outputs. Both…
Economic thinking lost sight of its purpose when GDP growth became the dominant measure of progress. Political economy originally aimed to secure livelihoods for all within thriving communities. Adam Smith sought plentiful subsistence for people and revenue for public services. Yet by the twentieth…
GDP growth became economics' dominant goal not through careful deliberation, but through a gradual abandonment of purpose. Early political economists articulated clear aims: Adam Smith sought plentiful subsistence for people and revenue for public services. Yet as economics aspired to scientific…
Mainstream economics depicts the economy through the Circular Flow diagram, showing money flowing between households and firms in a self-contained loop. This image, first drawn by Paul Samuelson in 1948 using plumbing metaphors familiar to engineering students, became economics' most reproduced…
Economics built its theories on a peculiar portrait of humanity: rational economic man, self-interested, isolated, calculating with perfect foresight, and fixed in preferences. This caricature, though never intended as realistic description, became embedded in economic models and policy…
Mainstream economics promised that growth would eventually even out inequality and clean up environmental damage. The Kuznets Curve suggested inequality must worsen during industrialisation before improving, whilst the Environmental Kuznets Curve predicted pollution would similarly worsen then…
Economics inherited mechanical metaphors from Newtonian physics, depicting the economy as a stable system tending towards equilibrium. Supply and demand curves cross at an equilibrium price, like a pendulum coming to rest. Markets clear through the mechanism of price adjustment. This mechanical…
Economic thinking shapes the world whether we realise it or not. It determines which policies gain support, which behaviours receive rewards, and which possibilities seem imaginable. For too long, economics has been treated as the exclusive domain of specialists deploying technical expertise. Yet…
By Kate Raworth
Subject
Themes
Mainstream economic thinking faces a crisis of relevance in the twenty-first century. Built on outdated assumptions from the 1850s and codified in mid-twentieth-century textbooks, economic theory has failed to prevent financial crashes, address extreme inequality, or halt environmental degradation. The fixation on GDP growth as the primary measure of progress has justified vast disparities in wealth whilst driving unprecedented damage to planetary systems. A new economic framework is urgently needed, one that meets the needs of all people within the ecological limits of Earth.