What does a healthy economy mean for a country?
What does a healthy economy even look like?
Does it seem so?
What about such?
Economist Kate Raworth shared a very interesting answer to this question on the TED Interview podcast. And it challenges an idea that most economists take for granted.
We live—especially in the West, especially in the last 150 years—in a society that believes very strongly that growth is a sign of progress. And to an extent, this is true.
We love to see our children grow.
We love watching nature grow in the spring. Growth is a wonderful, healthy phase of life. But in our economies, it's like we've turned to Peter Pan economics—the economy that never wanted to grow up. It wanted to grow and grow forever. And it becomes a permanent phase.
But we already know, in our own bodies, in our own lives, that there is another side to this growth metaphor that we love so much. If I told you, my friend went to the doctor, and the doctor told him that he developed, which already feels completely different.
Because in our own body space,
we know that when something tries to grow continuously within this healthy, vibrant life, it's a threat to the health of the whole, and we do everything we can to stop it.
are But when we step into our economies, for some reason, we think that endless growth is growth. And now we are in serious trouble because we are used to endless growth.
According to Simon Kuznets, he was first asked by the US Congress in the 1930s to come up with a number to measure the output of the economy.
America can say we produced so many tons of steel and so many bags of grain—but can we add it all up?
So they ordered him to do it and he said,
"Yes, I can. I can add them all to one number." national income, which we now know as GDP—but he gave it with a caveat.
He said that the welfare of a nation can hardly be known from this number, it should not be confused with welfare, right?
Because it doesn't tell us anything about the unpaid care work of parents, it doesn't tell us anything about the value created in communities, because it doesn't have a price, and it's a measure of the flow of economic value.
It tells us nothing of the living world, the forests,
the mines that go down to produce so much. But the convenience of this one number, the temptation, was such that the politicians pressed it under their armpits and moved on. And we ended up in a horse race of achieving GDP growth.
The dream is that GDP can continue to grow, we can achieve increasing financial returns, but that we can double the use of the Earth's resources.
We can use less carbon and less metals, and minerals and plastics, and we can use less of the Earth's surface, and separate the two: ever-increasing GDP and declining resource use.
It is a wonderful dream;
I wish it were true. We are in a time of environmental emergency, ecosystem collapse. We need to drastically reduce our use of Earth's resources, and we are nowhere near that. So I offer it as a compass for 21st century prosperity.
And this compass, even though it listens, it looks like a donut with a hole in the middle. So imagine from the center, humanity's use of Earth's resources from the center of this picture.
So in the hole, in the middle of the donut,
that's where people don't have enough resources to make ends meet. It's where people don't have access to food or health care, education or housing or gender equality or political voice or energy. And we don't want to leave anyone in that hole.
We want to get everyone on a social footing of well-being, so that all people on this planet can live lives of dignity and opportunity and community.
And in low-income countries, it makes perfect sense, yes, let's see the economy grow in ways that invest in health and education and transportation for all. It was a 20th century project.
We are in the 21st century.
We have earth system scientists starting to look at the effects on climate, and the loss of soil and acid rain, and the hole in the ozone layer, and the extinction of species. And they said stay. We are neglecting our planet.
While growing to meet human needs, we have lost sight of the fact that we are heavily dependent on this delicately balanced living planet. This is the only one we know from there.
And when we use Earth's resources in such a way that we begin to stretch ourselves beyond the planet's living capacity, we are literally undermining the life-support systems on which we depend.
do So, wait, just as there is an internal limit to the use of resources, and what we call poverty and deprivation, there is an external limit to the use of human resources.
This is environmental degradation.
And we're destroying the planet we depend on. So there you get the donut, you get the inside, which leaves nobody behind in the hole.
But don't overshoot the outer ring either. And thus the form of development changes fundamentally. It's no longer the linear growth rate we hear about all the time in the financial news. This is balance.
To me, one source of true hope is that we understand it deeply on the surface of our bodies. You go to the doctor, the doctor will say, enough food, but not too much, enough water, oxygen, exercise, sleep, whatever you like — enough, but not too much.
Our health is in balance. And if we can carry this metaphor from the human body to the planetary body, we give ourselves a tremendous opportunity to understand the profound interdependence of our world.
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