Rethinking Economics: Is Endless Growth Sustainable?

Can we truly consider an economy "healthy" when faced with dwindling resources and increasing inequality? The conventional model equates progress with perpetual growth, but what if we challenged this assumption? What if we shifted our focus to a new economic compass, one that prioritizes meeting the needs of all people within the means of our planet? This is the core concept behind doughnut economics.

The Illusion of Endless Growth

For the past century and a half, particularly in the Western world, we've operated under the belief that growth is synonymous with progress. While growth is a natural and positive aspect of life – we celebrate the growth of children and the flourishing of nature – its application to economics has become problematic. We've embraced a "Peter Pan economy," one that perpetually seeks to expand without considering the consequences.

Imagine a friend visiting the doctor and receiving news of a "growth." This immediately raises concerns because, within the context of a living organism, unchecked growth poses a threat to the overall health and well-being. Yet, when it comes to our economies, we often fail to recognize the parallels. We've become addicted to endless growth, pursuing it relentlessly despite the mounting evidence of its detrimental effects.

The GDP Fallacy

In the 1930s, economist Simon Kuznets developed a single metric to measure a nation's economic output: the Gross Domestic Product (GDP). While this provided a convenient way to aggregate economic activity, Kuznets himself cautioned against equating GDP with overall welfare. GDP fails to account for crucial factors such as:

• Unpaid care work performed by parents
• Value created within communities
• The depletion of natural resources

Despite these limitations, politicians embraced GDP as the primary indicator of progress, leading to a relentless pursuit of economic expansion. The prevailing dream is that we can continuously increase GDP and financial returns while simultaneously decoupling from our dependence on Earth's resources. This would involve reducing our consumption of carbon, metals, minerals, plastics, and land. While this vision is appealing, it remains largely unrealized.

Doughnut Economics: A Compass for the 21st Century

In an era defined by climate emergencies and ecosystem collapse, we must drastically reduce our resource consumption. To guide us toward a more sustainable and equitable future, we need a new compass. Doughnut economics offers such a framework.

Imagine a doughnut. The hole in the center represents the social foundation – the minimum standards of living that all people should have access to. This includes essential resources like food, healthcare, education, housing, gender equality, political voice, and access to energy. The goal is to ensure that no one falls into this hole.

Balancing Needs and Planetary Boundaries

As we strive to meet the needs of humanity, we must also acknowledge the ecological ceiling – the outer limits of our planet's capacity to absorb our impact. Earth system scientists have highlighted the detrimental effects of our activities on the climate, soils, ozone layer, and biodiversity. We are deeply dependent on a delicately balanced living planet, and we cannot continue to undermine its life-supporting systems.

Therefore, just as there's an inner limit to resource deprivation, there's an outer limit to ecological degradation. The space between these two boundaries – the doughnut itself – represents a safe and just space for humanity to thrive.

Shifting the Shape of Progress

The shape of progress must fundamentally change. Instead of pursuing endless exponential growth, we must strive for balance. This concept resonates deeply with our understanding of personal health. Doctors advise us to have enough food, water, oxygen, exercise, and sleep – but not too much. Our well-being depends on finding equilibrium.

By extending this metaphor from the human body to the planetary body, we can begin to grasp the profound interdependence of our world. Doughnut economics provides a framework for navigating this complex relationship and creating a future where both people and the planet can flourish.