Economic orthodoxy in no way equips for the challenges of the 21st century, the 'renegade economist' Kate Raworth tells Five Books. It's time to rethink basic concepts and paradigms, and redraw the boundaries.
Kate Raworth is a renegade economist focused on exploring the economic mindset needed to address the 21st century’s social and ecological challenges, and is the creator of the Doughnut of social and planetary boundaries.
Why should we rethink economics? Aren’t things going well? I read, for example, in Bill and Melinda Gates’ annual letter that, worldwide, 120 million more children under five years old survived and thrived over the past 25 years than would have done had mortality rates stayed where they were in 1990, and that’s just one indicator of a world that is getting better thanks to economic growth.
Human well-being in the last century was imagined to depend precisely on these kinds of indicators alone: on child mortality or education. The Millennium Development Goals, set in the year 2000, were very much focused on meeting basic rights and needs such as health, education, food, clean water and sanitation, access to employment and so on. But today we’re in the middle of a paradigm change in our understanding of the nature of human well-being. I drew this new paradigm as a picture of doughnut—the kind with a hole in the middle—precisely to show that there are essentially two sides of human well-being. One is to meet the needs of all so that every person has the chance to lead a life of dignity and opportunity and community. That means needs such as food, healthcare, housing, political voice, gender equality. But we also depend upon the fundamental integrity and stability of this extraordinary planet’s life-giving systems: a stable climate, fertile soils, healthy oceans, ample freshwater, abundant biodiversity, a protective ozone layer. Our well-being is intimately interwoven with these, and as we know they are under unprecedented stress. So, all is not well in the world and that’s why we need to rethink economics.
“The economics that we’ve inherited—largely 20th century thinking rooted in 19th century theory—in no way equips us to understand 21st century challenges”
I like to go back to the root of economics which means ‘the art of household management.’ When the ancient Greek philosopher Xenophon first wrote a book called The Economist, he was writing about the management of a single estate. Should you trust your wife to run the household accounts? How do you manage your slaves? Towards the end of his life, Xenophon shifted to think about the management of the city state—his home town of Athens—pondering how to tax imports and exports, and whether others should be allowed others to come in and work. It was two thousand years later that Adam Smith raised our sights to the next level up, to the nation state, and asked why does one nation thrive while another seems to stagnate? Today, I think ours is the generation that must raise its sights once again, beyond the household, the city and the nation to the planet: it’s time to take on the economics of the planetary household. And we need to ask ourselves this question: how do we manage our extraordinary planetary home to meet the interests and needs of all of its inhabitants? So, to me, ours is the era of planetary economics. Whatever the answer, one thing is clear. The economics from the last century that we’ve inherited—largely 20th century thinking rooted in 19th century theory—in no way equips us to understand 21st century challenges, given what we now recognise about our wellbeing, our interdependence with the living planet, and the ways in which we are fundamentally running it down.
What do you hope to achieve with your book Doughnut Economics?
I have tried to write the book that I wish I could have read when I first went to university to study economics. Growing up in the 1980s and seeing a hole in the ozone layer, famine in Ethiopia, and the Exxon Valdez spewing out its oily contents into Alaska’s waters, I left school knowing I wanted to work for an organisation like Oxfam or Greenpeace, and I believed that the best thing I could do was to equip myself with the mother tongue of public policy: economics. I thought that if I understood economics then I’d be able to address these issues and help tackle poverty, social injustice and environmental degradation. I had a fascinating education at university, with brilliant tutors, but I found that mainstream economics brushes these issues to one side. It talks, for example, about the environment in terms of ‘environmental externalities’—well if you’re going to talk about the living world as an externality then you’ve already told me how important it isn’t.
Many of the issues I cared about, I had to hunt for around the margins of the syllabus, so in the end, I walked away from academic economics. But after working in the villages of Zanzibar for three years, with the United Nations for four, and then a decade with Oxfam—immersing myself in real-world economic challenges—I realised that we’re not going to get to the root cause of these issues unless we rewrite economic theory to make it fit for our own times. Many people think economics is essentially about equations but underlying every equation is a model, and underlying each model is a very basic visual diagram that sneaks so quietly into the backs of our heads that we don’t even realise it’s there, shaping how we think from the get-go. I wanted to change this.
Your first choice is George Lakoff and Mark Johnson’s Metaphors We Live By. How does it help to address the challenges that you identify?
I first read this book innocently, I could say, in the late 1990s. I was part of the team writing the Human Development Report at the UN at the time, and we were talking about ‘lifting people out of poverty’. One of my colleagues, the philosopher Christian Barry, remarked that it sounded a bit like a helicopter airlift. What’s behind this idea that we ‘lift’ people out of poverty? And what is poverty—is it a hole? Then we started talking about the metaphors that we do development by, and I came across this book and was fascinated to go into the roots of the linguistic power of metaphors and to realise that almost everything we say is riddled through with metaphors. I just used one there—as if language were a plank of wood and metaphors are the holes that the woodworms leave. Everything we say is imbued with metaphors that we don’t even notice because they’re structured into the English language.
So, I was just fascinated to become aware of all the metaphors embedded in the way I was speaking and, therefore, shaping the way I was thinking about what was and what wasn’t possible. Like if people are ‘lifted’ out of poverty, is it something they therefore can’t get out of by themselves? Must they be lifted out by others? And the air-lift metaphor already embeds in us the idea that there’s a passive victim that’s rescued by someone who heroically comes along and lifts them out. That metaphor is already framing and delimiting what we can imagine is possible.
So, I read this book a long time ago and didn’t think about it actively in terms of economics until, years later, I came around to wanting to go back to the roots of economics. Aware of George Lakoff’s more recent work, Don’t Think of an Elephant, I remembered the power of his arguments and I went back to this book, and was really struck by two things in it. The first is the role of what the authors call orientational metaphors, and one of the most fundamental ones that’s in use in the English language is that good is forwards and good is up. Hence we say: ‘things are on the move again,’ or: ‘we seem to be going backwards,’ ‘why are you looking so down?’, ‘I’m feeling up again.’ We have this very basic physical orientation in the world thanks to our bodies. Think of when a child first starts to crawl: first they go awkwardly backwards, then forwards, and then eventually they pull themselves up to standing, and we all clap. There’s this sense of forwards and upwards as progress, and we apply it throughout our lives.
Is there anything wrong with that?
No, forwards and upwards is indeed a part of life and growth. But taken too literally and simplistically it becomes deeply embedded in the way that we interpret the world. No wonder that it so quickly gets adopted in economic language. Think of a graph of a nation’s GDP, gross domestic product, the policymakers’ aim is to keep it moving always upwards. Any deviation from that is bad. And listen to the metaphors that people use to talk about the economy, such as talk of ‘the green shoots of recovery’ which imply that the economy is a plant. Of course we all want our plants and gardens to grow, just as we want our children to grow. Well my children are now aged eight and are growing very fast but I sincerely hope at some point that they’ll stop growing because, otherwise, they won’t be able to sit with me at my kitchen table.
We know that growth is not an unalloyed good because if I were to tell you I went to the doctor and she told me I had a growth, you know that this would be bad news. When something starts to grow uncontrollably within a healthy living system it will disrupt the very system on which it depends, and in our own bodies we call it cancer. We should look again at the way that nature grows: plants don’t keep trying to grow bigger forever, they grow until they are mature, and can thrive that way for decades, even centuries. So, I found it fascinating to use this book’s insights into the orientational metaphor to understand why the idea of growth is so deeply rooted in our social and economic aspirations, but also to go back and examine the underlying metaphors in economics texts—how they actually limit and frame the way we see economic possibilities. And if I want to be part of changing economic thought, how can I do so by challenging and changing these metaphors that we use? We can’t get rid of metaphors in our language. We need them—that’s how we communicate: we liken one thing to another by experience. But we should replace metaphors that are outdated with metaphors that are more fitting for our times.
One of George Lakoff’s key points is that one will not prevail in debate and campaigning if one uses the frames and metaphors of one’s opponent. And, as I understand it, you’re saying with Doughnut Economics is ‘look, this is the frame you need to use.’
Exactly. As Lakoff argues, conservatives in the US are more likely to have studied business and to be savvy to marketing and the power of communication, and they understand that you need to bring that into political communication. Hence they tend to use frames, slogans and motivating language very powerfully. Whereas, the left or the progressives will more tend to think ‘if I show you the facts and statistics, you’ll agree with me’, and so don’t draw on the power of framing so effectively. So, his argument is that progressives should reframe debates in their own language—because you’re really throwing yourself onto your opponents’ turf if you merely try to negate their frame. The classic example that he gives is US conservatives advocating ‘tax relief’. Who could possibly be against tax relief? It’s a relief, therefore tax is a burden and whoever takes it away is a hero. Just with one word – ‘relief’ – they’ve created a powerful frame. To counter this position, instead of saying ‘I’m against tax relief’, you need to argue for, say, ‘tax justice’, which is a completely different frame and shifts the terms of debate. So, never engage in a debate using your opponents’ terms; always create a competing frame. One way I think of this is that sometimes the best form of protest is to propose something new.
“When something starts to grow uncontrollably within a healthy living system it will disrupt the very system on which it depends, and in our own bodies we call it cancer”
Lakoff is a master at showing us the terrain of verbal framing. I find his work incredibly inspiring, and what I wanted to do with Doughnut Economics was to focus on the counterpart—what I call visual framing. Just as words frame understanding, so do pictures. In writing my book, I wanted to reveal not only the verbal metaphors of economics but also the visual metaphors. These are drawn into the most basic diagrams of economic theory that many professors think are mere illustrations on the side of the page to accompany the equations. But, in fact, anyone who knows about visual cognition will tell you that as many as half of the neurons in our brains are implicated in seeing, and what is processed in our visual cortex often remains in our brain for decades, which is why you will recognise someone from your primary school in the street if you happen to pass them. Visual frames are powerful because they slip into our minds almost effortlessly: they don’t have to be put into words that can then be interrogated. That, to me, is the hidden power of visual framing. What’s more, the power of the frame is often not what is drawn on the page but what is not shown. Again, because it’s never put into words, we rarely realise what’s missing.
The day I realised this power of visual framing for rewriting economics—it was 5th August 2015—I was sitting in a café on the Cowley Road in Oxford, doodling ideas in my notebook and suddenly realised that I could sum up the story of old economics in seven key images that encapsulated those powerful frames, and I could replace them with seven new images that begin to set out an alternative frame. I think of these visual frames as graffiti on the mind that lingers long after the words and equations have faded and, as with most graffiti, they are extremely hard to scrub off, so the best thing to do is to paint over them with a new mural. In my book I wanted to highlight these old frames, show how they limit our thinking, show how they directly influence thinking and policy today, and then replace them with new visual frames that are far more fitting for our times.
Your second book is Thinking in Systems by Donella Meadows (2008). How does it help you rethink economics?
This was the book that most made me realise I had been taught in a very particular paradigm because, for the first time, I encountered a completely different starting point for thinking. My first response was to feel really cross: why, as an economist, wasn’t I taught to think like this? Economics is actually a subset of systems thinking, one which sets out some very constrained assumptions in order to make market theory work. So, it was a real revelation for me to discover such a different approach to thinking and analysing challenges. The essence of systems thinking is that most of the interesting patterns that we see in the world—from the dynamics of family relationships to the boom and bust of stock markets, from the rise of the 1%, to the collapse of ecosystems—are very effectively understood if we think of them in terms of feedback loops. All things are interrelated and some have very strong reinforcing feedback effects: say, the more chickens you have, the more eggs you get, and the more eggs you have, the more chickens you get. Other relationships have balancing feedback effects: when I get hot, my body sweats in order to cool me down, for example. Most of the interesting relationships and patterns that exist in the world can be best understood as the interplay of these loops.
“The essence of systems thinking is that most of the interesting patterns that we see in the world are very effectively understood if we think of them in terms of feedback loops”
To be straight-up, this book isn’t an easy read because Meadow’s sets the concepts out quite technically in the opening chapters. But it’s very discursively written and full of great examples from her experience in life. I’ve recommended it to people enthusiastically and they’ve sometimes come back saying that it was quite hard work. But I loved it because I felt, at last, I’m not just being taught a set of specific assumptions that I’m required to take on board and accept as the tenets of economics. Rather, I’m being taught how to see and interpret patterns in the world. Living in Oxford, I can go to Otmoor on a winter’s afternoon and watch a hundred thousand starlings gathering in the sky, making extraordinary patterns in a murmuration. Every bird is following a fairly simple rule, something like ‘keep an inch from your neighbours and when your neighbours turn, then turn’. But the emergent effect of all these birds following the same rule is an unpredictable, awe-inspiring pattern in the sky. From there you can think, actually, that’s not so dissimilar to the way that stock markets behave. We can do a far better job of understanding patterns such as these in the world if we bring systems thinking to bear.
Meadow writes that “it is in this space of mastery over paradigms that people throw off addictions, live in constant joy, bring down empires, get locked up or burned at the stake or crucified or shot, and have impacts that last for millennia.” Towards the end of the book we find observations such as “expose your mental models to the light of day”, “honour and respect and distribute information”, “use language with care and enrich it with systems concepts” and “stay humble, stay a learner, celebrate complexity, defy disciplines”. This is something like wisdom literature—or perhaps bumper stickers for green geeks.
You’ve jumped right to my favourite section and quote in the book. The first half of the book can seem quite hard going: you’re learning a new way of thinking and hence need to acquire the core concepts that underpin it. But the further you go through the book, the more and more playful it gets.
At the very end of the book there are two chapters that I absolutely love. One is ‘Leverage points: places to intervene in a system.’ If we believe systems need to be changed, how can we change them effectively? Very low on Meadows’ list is tinkering with prices which is typically the first place that conventional economics tells us to go. Sometimes, of course, prices can be an effective place to intervene, but in economics we restrict our options almost exclusively to financial variables, and this is often not enough. Actually, as she spells out, the higher you go up her list of leverage points, right up near the top is changing the paradigm. And when I was beginning to write Doughnut Economics and came back to this book, I had this lovely sense of ‘well, that’s just what I’m aiming to do.’
The following chapter, ‘Living in a world of systems’—contains advice on how to be an effective systems thinker. It’s about staying humble and getting to know the beat of a system before you even try and change it—understand how it’s working now and understand what’s already working before you charge in and start trying to tweak it. This is really excellent advice for anyone who thinks that they’re intervening in an economy or any other complex system that looks like it’s not working. There’s a particular quote on changing paradigms that I have marked in my copy of the book. It says, “You could say paradigms are harder to change than anything else about a system, and therefore this item should be lowest on the list, not second-to-highest. But there’s nothing physical or expensive or even slow in the process of paradigm change. In a single individual it can happen in a millisecond. All it takes is a click in the mind, a falling of scales from eyes, a new way of seeing.”
That’s what excites me about the power of visual framing. If you can show someone a picture that makes them say ‘I’ve never seen things like this before’ they may well feel empowered to ask new questions that arise from that picture. I discovered the power of doing this back in 2012 when I first drew the doughnut diagram and published it with Oxfam. I was absolutely gobsmacked by the reaction to it. So many people were saying ‘I’ve always thought of development like this and now I’ve got the diagram, I feel like I can ask new questions, I can challenge the system, and this is a beginning of a new way of thinking about economics’. It’s extraordinary what power a picture has to start changing the paradigm. So, this is the leverage point I’ve chosen to work on. It’s long-term, it doesn’t mean you change policy tomorrow, it’s focused on making ideas accessible to the generation of students who are at school or university today and helping to embed broader perspectives in their minds. Because the thing that makes me really angry is that this generation of students today are going to be the policy makers of 2050 but they are still being taught economics from the textbooks of 1950 based on the theories of 1850. And they know it. That’s why many of them are rebelling, organising at universities worldwide to demand a new syllabus. I’m passionate about bringing into their education images like the doughnut that begin to describe the 21st century context.
Your next choice, Cradle to Cradle by Michael Braungart and William McDonough (2002), is at first sight quite a technical book about industrial systems design.
I read this book with excitement in a single sitting because it helped me to reimagine how industry could be designed to work with, rather than against, the cycles of the living world. And, for me, realising that economics is a question of design was a very important part of the insight. Back in the 19th century, economists were desperate to make economics a science as reputable as physics, and so they modelled it on Newtonian physics, and since Newton had discovered the physical laws of motion, they set off a century-long search for equivalent economic laws of motion. But these turned out to be spurious. Economics is actually far better thought of as a question of design. If you shift into a systems thinking space and reflect on Donella Meadows talking about how we can intervene in systems, we’re effectively stewarding a dynamic system, helping to redesign it towards our own goals. And this book Cradle to Cradle is all about design. As Braungart and McDonough say, design is the first signal of human intention. The book really made me think that economics should aspire far less to be like physics, searching for laws, and more like architecture and design, by asking what kinds of institutions we need—from the design of business to the way that property is owned or shared. Each of these institutional arrangements is a form of design, and each will create different patterns in the economy.
“Why only be less bad if actually you could do good?”
This book explores how to design industrial systems based on some very clear principles like: waste equals food. Nothing in nature goes to waste; it all goes back as food for the next process. So how can we create industrial processes that go from cradle to cradle to cradle, endlessly reusing earth’s materials? You often hear people talking about creating a ‘more sustainable’ world, and ensuring that our business will be ‘better for sustainability.’ We seem always to be teetering towards being less bad as though the best thing you could be is almost not bad at all. But in this book the authors break through the glass ceiling of imagination and say, ‘why only be less bad if actually you could do good?’ Why, for example, aim for agriculture that releases as little carbon as possible from the soil when could you pursue another agricultural model that actually sequesters carbon? How can industrial processes help to regenerate the living world instead of merely avoiding running it down? I love the ambition.
Again, it’s a paradigm change. And it all comes down to the question of design. So for me, this book helped in dislodging the metaphor I’d inherited that economics is like physics and we are searching for laws, to taking on a 21st century outlook, which is that economics should be more like architecture, and focus on the design of institutions. This is deeply political because we come to talk about power: about who owns enterprise, who owns the power to create money, and who owns the land. We put power at the heart of economics which, of course, was always missing.
Your fourth choice is Think Like a Commoner by David Bollier. He writes, “the commons is less about ownership as we usually understand it than about stewardship. Ask indigenous peoples if they ‘own’ the land and they will reply that the land owns them.” How is this relevant?
The 20th century economics that I was taught puts markets at its heart. In nearly every talk I give, I ask ‘what is the first diagram that economics students learn?’ The answer is always the same: supply and demand. As if the economy was merely the market and markets were in equilibrium—well that’s two untruths in one sentence. This idea, that to study economics, first of all we must study markets. Really? Is that where we must begin? And once the market is introduced, the idea of market failures soon follows, as if where the markets fail then perhaps there might be a role for the state. But then again perhaps the state won’t be competent enough to do this, so maybe we should just leave it to the market after all. So, there’s an extraordinary dominance of market thinking.
The word ‘the commons’ usually comes into people’s economic education just with one phrase—or frame—that you hear which is ‘the tragedy of the commons’. It comes from a paper written by Garrett Hardin in 1968 and the idea is that if you have open pasture land that everyone can use, it will get overgrazed and it will be run down. Therefore, the commons are tragic and they need to be privatised or controlled by the state. But as the work of Elinor Ostrom has shown, there are actually many commons that today are managed and stewarded well by communities. And they are not open access: they are common pool resources that are carefully managed according to a set of rules and practices by their members. So, the commons don’t have to be tragic. They can be a triumph.
My economics education began in this typical way, with markets at the centre and then, in the periphery, the state is a sort of backup option which might not always perform very well. That, I think, is a very neoliberal framing that has dominated for over thirty years. I would much rather start economics with the idea that we can produce and distribute goods and services through four fundamental kinds of provisioning. And I’ve drawn it—this is one of the key visual reframings at the heart of my book—which I call the ‘embedded economy diagram’. The economy is made up of four provisioning forms. The first is the household, where we all begin every day. It’s outside the market but it’s the space of care and wellbeing. Of course, it’s the unpaid work of women that dominates in the household and that was forgotten by the founding fathers who wrote the economics textbooks. So, you’ve got the household. You’ve also got the market where people produce goods and services on the basis of price and exchange. You’ve got the state, where goods and services are produced with public funding. But you’ve also got the commons, where people self-organise—get together without the market, without the state—and produce goods and services that they value.
“In the 20th century, the ideological boxing match between the market and the state squeezed out space for recognising other forms of economic organisation”
GDP reflects production by the market and the state but it excludes value created in the household or the commons. I think those have been massively neglected areas of economic organising which can be very valuable, especially with the potential of the digital commons this century. I’m really struck by the number of people who work in the sphere of economics who’ll ask, ‘what is the commons? I’ve never heard about this’. That’s because in the 20th century, the ideological boxing match between the market and the state—‘are you a free-market capitalist or a state-loving socialist?’—squeezed out space for recognising other forms of economic organisation. Women’s work in the household was just seen as domestic hence dismissed, and the commons were declared to be tragic, and ended up being colonised by markets, thanks to the patenting of traditional knowledge. We need to open this space up again. And the first way to open it up is to name it. As David Bollier says so effectively in this book, we lack words and concepts for naming spaces where markets can’t reach, and spaces where commons organising really does work, and so we need a much richer language around this. He does a great job of introducing in clear and simple terms what the commons are and shows that we all engage in them every day. He gives us the chance to reimagine the commons and recognise their potential as one of the key provisioning sectors in the economy.
Your final book is Marjorie Kelly’s Owning Our Future: The Emerging Ownership Revolution. Early in the book she says “ownership is the original system condition.” And, as I understand it, her argument is that there’s a wealth of new possibilities out there.
This book absolutely hit the spot for me because it helps make clear that business can be structured and designed in such a way that it can actually help bring about the kind of industrial change that Cradle to Cradle is describing, that it can actually help bring humanity into the Doughnut, to help meet the needs of all within the means of the planet. The way that we often think about business is that since it is out to make a profit for itself, it will inevitably undermine communities and run down the living world in the process. Is it possible to turn that around? I’ve presented the Doughnut diagram to hundreds of businesses over the last five years and heard very different reactions, ranging from those who would just do nothing—‘the business of business is business; everything we’re doing is just about legal and so we’ll just carry on’—all the way up to the highest aspiration of ‘what we see as our core purpose in the world is precisely captured in that Doughnut diagram: we see ourselves as helping to bring humanity into that space.’ And I was fascinated by what it is about the set-up of different businesses which means they will respond in these different ways.
Discovering Marjorie Kelly’s book reinforced for me the idea that smart 21st century economics is all about understanding design, including the design of enterprise. She picks out five underlying traits—traits that she argues enable a business to be aligned with pursuing social and environmental goals. For starters, what is the enterprise’s purpose? Does it have a financial purpose to maximise profits or maximise shareholder returns, or does it have what she calls a living purpose?
But the two are not necessarily contradictory, are they?
Well, if your primary purpose is to maximise your financial return it’s unlikely that you can manage to pursue another, very different goal at the same time. And, in fact, when I talk to senior decision-makers in companies today I see that so many face a tension between their desire to pursue a living purpose on the one hand and the way that they’re also owned and financed on the other. At the heart of her book, Kelly points out that it’s due to the structural design of businesses—how they are purposed, how they are owned, how they are financed, how they are governed and how they are networked with others. These traits make up the DNA of an enterprise and they shape so much of what is possible. In the last couple of years, I’ve spent more time than I expected talking with people in companies who, for example, might want to adopt a really ambitious living purpose which contributes to health and wellbeing in the world, but the company is owned by shareholders, and hence faces a deep tension, with shareholders continually saying ‘actually, your fiduciary duty here is to maximise shareholder returns’, so you can only go a part of the way towards of your greater purpose.
“Instead of focusing on strong leadership and business responsibility, Kelly goes straight to the question of how a company is set up, structured, owned, financed, and networked”
Kelly’s book is eye-opening because instead of focusing, as many authors do, on strong leadership and business responsibility, she goes straight to the question of how a company is set up, structured, owned, financed, and networked, and argues that this corporate DNA will empower, enable, or delimit what you can or cannot make happen in the world. It goes back to systems thinking: if you want to intervene to change the impact that businesses have in the world, then start by changing the purpose and structure.
Models of ownership that are emerging now, such as employee ownership and cooperatives, are what Kelly calls ‘rooted membership’. As she says, there is an irony to the structure of mainstream business which is that shareholders, who may never even set foot inside a company, are seen as the ultimate insiders because they are the owners of it. And in tough economic times, those who work day-in and day-out at the company are made the ultimate outsiders because they get laid off in order to retain the financial value of the company for the shareholders. This is topsy-turvy. So, she advocates ‘rooted membership’ where those who own the company are the ones who actually work within it. In my book I write about this as one way of creating economies that are more distributive by design: in an enterprise that is employee owned, the value created is shared far more equitably with all of those who helped to create it – among employees and those who are connected through the supply chains.
Just in the way that David Bollier’s book is about opening up a new appreciation of the commons in the 21st century—because technologies have changed, because structures of society have changed, the commons have a new chance to flourish if we name it, recognise it and recognise its potential—so too Kelly is opening up new insights into old models of business. People typically think of cooperatives as a 19th century movement but, actually, they are resurgent. What’s more, in towns and cities around the world, local governments are realising that if they encourage employee ownership, it creates what’s called a ‘sticky business’: it will stick around, rather than hot-footing it off to the next low wage industrial centre, because it has a connectedness to the community.
So it’s re-embedding economic activity within the community, within society, within the living world, and has a greater chance of embodying social and environmental value. I really like the way Kelly explores how to bring together different aspects of enterprise design. There’s a great section in the book in which she talks with lawyers who are helping to draw up the legal frameworks for new business models. Just as we only give the commons a decent chance of thriving if we create legal models that allow creative commons licensing, so we need lawyers to help design enterprise models that actually allow a new form of economic activity an equal chance of thriving. I got very exciting about these when I first read the book because, to me, these are design questions and I wanted to put them at the heart of rethinking economics.
In essence, I wanted to bring together ideas about redesigning the commons and enterprise, ideas about living between the boundaries of the Doughnut, ideas about framing and the power of visual metaphors—then wrap it together with systems thinking, and see what would happen when they all danced together on the same page.
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Kate Raworth is a renegade economist focused on exploring the economic mindset needed to address the 21st century’s social and ecological challenges, and is the creator of the Doughnut of social and planetary boundaries.
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