Doing the Doughnut at the G20?

This weekend the G20 are meeting in Argentina, with the aim (they say) of ‘building consensus for fair and sustainable development’. Since they collectively generate 85% of global GDP, whether they do or don’t transform their economies will profoundly affect us all. So how close to the Doughnut’s safe and just space are the G20?

Here’s one way of assessing it, using the pioneering national doughnut analysis by Dan O’Neill, Andrew Fanning, Julia Steinberger and Will Lamb at the University of Leeds. Using the best-available, internationally comparable data, they scaled the global concept of the Doughnut down to the national level for over 150 countries (only including those for which there were sufficient data – as a result, Saudi Arabia is unfortunately missing from this G20 analysis. The EU28 group is also not available for this analysis).

In essence, national doughnuts aim to reflect the extent to which a country is meeting its people’s essential needs while at the same time ensuring that its use of Earth’s resources remains within its share of the planet’s biophysical boundaries.

Since Argentina is hosting the talks, let’s take its national doughnut as an illustration. The aim is to fill the centre circle in blue, while not overshooting the green ring of the biophysical boundary. Like many countries worldwide, Argentina is both falling short on some social dimensions while already overshooting multiple biophysical boundaries.

The methodology for these national doughnuts is a work in progress, of course, but the indicators and data underlying them are improving year-on-year, and when taken as an overview of 150 countries, the initial analysis reveals some valuable 21st century insights.

In the chart below (made in collaboration with Andrew Fanning), humanity’s sweet spot – living in the Doughnut – lies in the top left-hand corner: a place where all social thresholds are met, without transgressing any biophysical boundaries.

So what does this 150 country overview reveal? Three insights jump out.

1. We are all developing countries now. The Doughnut challenge turns all countries – including every member of the G20 – into ‘developing countries’ because no country in the world can say that it is even close to meeting the needs of all of its people within the means of the planet. (If you are wondering which is that one country closer than the rest, it’s Viet Nam – but is it heading for the Doughnut, or moving straight past it?)

2. New development pathways need new names. There are currently three broad clusters of countries making very different 21st century journeys, as labeled in the version of the diagram below:

A. Countries that are barely crossing any planetary boundaries, but are falling very far short on meeting people’s needs, including G20 members India and Indonesia. The development path that these nations must now pursue has never taken before. Copying the degenerative industrial path of today’s high-income countries (Group C), would most likely collapse Earth’s life-supporting systems.

B. Many middle-income, ‘emerging’ economies – including G20 members like Brazil, Russia, China, Argentina and South Africa – are both falling short on social needs while already crossing biophysical boundaries. These countries are now making future-defining investments in urbanization, energy systems and transport networks. Will these infrastructural investments take them further away from the doughnut, or start bringing them towards it?

C. Today’s high-income countries ­– including G20 members like the US, UK, France, Germany and the EU 28 itself – cannot be called developed, given that their resource consumption is greatly overshooting Earth’s boundaries and, in the process, undermining prospects for all other countries. These high-income nations, too, are on an unprecedented developmental journey: to sustain good living standards while moving back within Earth’s biophysical boundaries.

D. No country is yet in sweet-spot cluster D (for Doughnut!) – so how many years until some are there, and which will make it there first?

Given that the labels ‘developing’ and ‘developed’ no longer make sense in the 21st century context, how can we best rename these four clusters of countries? In comments on this blog, and on Twitter, please do share suggestions for inventive and memorable names for these very different country clusters facing the Doughnut challenge. Naming is framing, so let’s rename and reframe the future of development…

3. Transformative goals demand transformative approaches. Given that none of these three development paths have been pursued before – let alone have yet been achieved – it would be bizarre to think that last century’s economic theories, policy prescriptions and business models would equip us for what lies ahead. Getting into the Doughnut is our generational challenge and it demands transformational mindsets, models and action in economics, policymaking, and business.

As the world’s major economies, the G20 should be leading this transformation, with countries starting in all three country clusters. But since a key current criterion of G20 membership is having a large GDP, each country is geopolitically locked in to pursuing GDP growth to keep its place in the annual G20 Family Photo. So for leadership on the Doughnut Challenge, look, instead, to the Wellbeing Economy Governments, or #WeGO, an emerging grouping of countries – among them New Zealand, Scotland and Iceland – that are focusing on economic wellbeing and have a far greater chance of putting regenerative and distributive policies into practice.

Let me leave the G20 with the question that this summit should be asking:

111 thoughts on “Doing the Doughnut at the G20?

  1. 1 December 2018 at 12:22

    Hi Kate

    Great approach and love the idea of rethinking the developed/developing dichotomy. One element you might also think of incorporating maybe state capability. Great book I am reading https://global.oup.com/academic/product/building-state-capability-9780198747482?cc=gb&lang=en&. I found it quite shocking in terms of the lack of progress in building state capability but that may just reflect my ignorance.

    It seems to me that a key differentiation must be between countries with capable states and those without them. Without a capable state, it seems very difficult to see how a government can move a country to within the doughnut. The question then arises to what extent companies (presumably generally highly capable) acting within such states have a duty to support the state moving to within the doughnut (rather than the opposite). Then there is a question over their purpose and accountability…

    Given lack of state capability in most countries in spite of or maybe because of developed countries actions, it seems unlikely that they can be the ones driving the transformation.

    Cheers
    Henry

    1. Jo Miller
      1 December 2018 at 16:08

      Hi Henry,

      A really interesting perspective. The question for me (which perhaps reflects my ignorance :-)) is: what do we mean by a ‘capable state’? It sounds like it ought the be a useful thing to have in order to enable the right type of activities to emerge, but what would it look like?

      Thoughts?

      NB – I come with a circular economy interest – a vision influenced by how living systems work – waste = food, renewable energy, regenerative by design etc. A set of simple systems principles / attributes which focus on the maintenance and regeneration of stocks and flows of resources, energy, knowledge and money. The current weight of activity in this ‘collective school of thought’ is unfortunately primarily around closing loops and new ‘leasing’ models where businesses can extract more value from ever limited resources, with little detailed work on the wider societal benefits of this thinking (Kate’s distributed economy being an exception).

      Jo Miller

      1. Henry Leveson-Gower
        1 December 2018 at 17:24

        Hi Jo, yes an interesting question. The first test the authors did was send 10 mis-addressed to all 100+ countries and see which ones were returned to sender in line with agreed international policies. So the question was whether a state could implement an uncontroversial international policy and of course most couldn’t. Letters were never returned.

        This is then generalised to any form of government service or regulation system through other research. The proposition is that the ‘Developed’ countries insist on what they see as best practice policies and programmes but ‘developing’ countries don’t have the capacity to deliver them. They are inappropriate for the context.

        Developing countries then become trapped in a system where they have to ‘pretend’ to meet developed country requirements on paper to keep aid, investment, lending etc flowing while actually not delivering real on ground benefits. They tick the boxes. The result is not good for anyone, a dysfunctional system. If anyone tries to break out of it, they show the truth up and so are seen as a danger and eliminated!

        So in terms of your interest, any circular economy system developed in the North and applied to the South would almost certainly fail but look as though it wasn’t. More generally any proposal that requires governments to implement policies to meet say greenhouse gas targets or protect forestry etc would be likely to fail even if it didn’t look like it.

        The suggested answer is bottom up problem solving out of which institutions emerge… I am though only a bit into the book!

        cheers
        Henry

    2. 2 December 2018 at 23:26

      Hi Henry, I agree, state capacity is crucial (and I hope to check out that book, thanks). Companies may be highly capable, but capable at what? As you say, their purpose and accountability are key.

      1. Laura
        4 December 2018 at 14:34

        Agree! Important to expand the ‘capable state’ conversation with an understanding that technical capacity (the skills, systems and processes through which a state delivers public goods) isn’t the ONLY parameter for judging state capability … the ways in which a state deploys its capacity (no matter how sophisticated or rudimentary) can be malignant and then you have high-capacity states whose ‘accountability and values’ anchors are mis-aligned, so they end up way outside the doughnut.

      2. Tuan
        8 December 2018 at 19:12

        Hi Kate

        Please check out Bill Mitchell’s and Thomas Fazi’s book Reclaiming the State

        https://www.amazon.com/Reclaiming-State-Progressive-Sovereignty-Post-Neoliberal-ebook/dp/B076DDVCZW

  2. 1 December 2018 at 12:33

    Great analysis and interpretation Kate.. thank you for sharing.

    Gulin Yucel
    Istanbul

  3. 1 December 2018 at 12:51

    Go #WeGO!
    Leadership is not primarily/exclusively to be expected from governments/countries, though.
    What other collective actors that transcend nations are in a position to lead the way & our thinking & our methodology?
    Who can best show the doughnut to be a reality?

    1. Dichasium
      1 December 2018 at 14:07

      Who can best show the doughnut to be a reality? Is there even a ‘best’ way? So many are trying. ER are trying to unite us. Even if some can ‘lead the way’, who/how can it actually be done sufficiently? Maybe some learning can be used but not, apparently, without calamity on a massive scale?

    2. Jiveen
      2 December 2018 at 23:18

      Good question. Cities?

  4. 1 December 2018 at 12:53

    Fascinating. thanks for sharing

  5. 1 December 2018 at 12:58

    Love it, love it, love it.

    Can we find a way to link up with Extinction Rebellion folks as ER internationalises. This country-by-country analysis provides a clear ‘target’ for their proposed Citizens’ Assemblies.

    https://theecologist.org/2018/nov/29/extinction-rebellion-uk-ghana

  6. Ian Barrett
    1 December 2018 at 13:04

    Hi Kate,

    I can see the O’Neill approach adds something, but the metrics chosen are a bit iffy. On the UK analysis discrimination is rife for many equality groups and sub-groups: BAME and disabled people in terms of employment, young black males in terms of criminal justice, disabled people in terms of poverty/health/care, single mums in terms of income. There’s nothing on homelessness, job security and income inequality. And land-use change – not sure how this is measured – doesn’t appear to address issues around habitat quality and protection or loss of biodiversity.

    If one wants to try and use this methodology to set policy directions to move the UK into the donut, then far more detail and some different measures are needed. How about % of people receiving the real Living Wage or above the Poverty Line?

    1. 2 December 2018 at 23:32

      Hi Ian, these are all good points. As I see it, the team in Leeds were looking to create a set of internationally comparable doughnuts and hence were constrained by internationally relevant metrics and available data. So the result for any individual country is not going to feel as accurate and relevant as nationally-chosen metrics. Which means that there is a parallel project of creating nationally bespoke versions of the doughnut which use the most relevant and best available data for each nation. A team at Oxfam had a first go at doing this some years ago

      https://policy-practice.oxfam.org.uk/publications/the-uk-doughnut-a-framework-for-environmental-sustainability-and-social-justice-344550

      and I’m starting to work with some people to make bespoke city doughnuts so watch this space!

      1. Michael Gill
        3 December 2018 at 04:34

        I have things to add, but I can only post what I have already written. If you send me an email address I should very much like to contribute. West Australia.
        Regards Michael.

  7. Mark
    1 December 2018 at 13:22

    thoughts on names;
    A – Seed countries, their doughnuts are still small and we don’t know how they will grow.
    B – Cog countries, their doughnuts are spiky and irregular.
    C – Supernova countries, they have exploded past sustainable limits in a bright but ultimately short lived and self destructive manner
    D – Doughnut countries – doing it right.

  8. Nathan Hunt
    1 December 2018 at 14:13

    Great article and analysis. I normally the Global Footprint Network’s HDI vs Eco Footprint to show the magic sector to aim for in development, but might even prefer this .
    Guess the descriptors and pathways should be food themed:
    ABCD = Hungry, Needy, Greedy, Happy.
    ABCD = Eat more, Eat wiser, Eat less, Eat well.

    1. katherine
      1 December 2018 at 18:54

      excellent article and really sums it up
      how about four from the 7 dwarfs
      D – happy
      C- grumpy
      B- Dopey
      A – sleepy

  9. 1 December 2018 at 14:15

    Hi-I have a comment about Canada’s position on the graph…living in Toronto, and seeing first hand how many folks are homeless, needing medical/psychological care(being homeless, go figure!)…and of course you see the economic inequality folks here are willing to tolerate…I just don’t see this as sustainable. We are inside the graph’s sweet spot socially but outside the biophysical boundary…the US too.

    I see homeless folks, some of whom are walking the city at 70 plus years old and pushing a little shopping buggy around with everything they have left in the world (besides their misery)…I don’t suppose they see THEIR Canada as being ‘equitable’ and ‘sustainable’…

    1. 2 December 2018 at 23:38

      Hi Todd – you are absolutely right, and this is one of the challenges the team at Leeds faced making a set of doughnuts based on global standards using available internationally comparable data.

      As I said it the blog, the methodology is a work in progress and I think it will be important in future iterations to bring out the very kinds of deprivation that you describe.

  10. David Norris
    1 December 2018 at 16:38

    Kate, you are awesome. Thank you so much for putting this together. I feel much stronger to advocate for change when I’m informed; thank you for better arming me!

  11. ing. Bill Holdsworth
    1 December 2018 at 16:45

    Good to hear from you Kate. I did try hard to get you engaged with the Dutch city of Nijmegen who are this years designated Green City of Europe. But have fallen down on a number of issues.

    I was waiting for your response but it seems to have got lost.

    The whole architectural community of our different nations need to step up to the mark. They have also lost their way as to designing for health and cities that are carbon neutral. A possibility has emerged where I can kick-start a series of lectures at a University School of Architecture in London. Doughnut economics will be an integral part of it.

    Sadly as I enter my 90th year with over 65 years of eco-design thinking, writing and developing many people seem to not wish to reply to any pitches. I still have my ‘marbles’ and constructive and visionary thinking.

    1. Neil swift
      1 December 2018 at 21:34

      Not too sure how architects can make real in roads as it’s those that commission buildings that have to be persuaded. Goverments aren’t going to regulate against corporate interests. That said we have to strive to show communities we can make a difference. What ever the outcome architects will certainly be in demand with their unique holistic skill sets.

    2. Pat Scott
      1 December 2018 at 23:41

      Good for you Bill, still contributing at 90! Are you and others familiar with How to Thrive in the Next Economy by John Thakara? He is an architect and designer who has a breadth of knowledge. His book has hundreds of examples from many countries of social/ecological change as it is happening now. I admire greatly the work Kate Raworth is doing but we must never forget humans are animals and are evolving socially and behaviourally, where they are, regardless of what governments are doing and because of what governments are enabling. The range of changes is too great to describe here, I thoroughly recommend the book.

    3. 2 December 2018 at 23:35

      Hi Bill, so sorry I couldn’t be involved in Nijmegen – the extent of travel I am doing is a challenge as a mother of young children. The series in London sounds great – please do let us know more via https://www.kateraworth.com/contact – I promise we will follow up!

  12. Barbara
    1 December 2018 at 17:03

    Thank you Kate for this great post !

    All countries are “DOUGHNUTTING COUNTRIES”, when they have not yet reached the optimal doughnut formulated per country.

    When they have reached the optimal Doughnut, they are called “DOUGHNUT COUNTRY”

  13. 1 December 2018 at 17:28

    I have liked the ‘doughnut’ concept for some time … and have been trying to think how its foundation could be used to strengthen the processes that are used to ‘manage’ the global socio-enviro-economic system.

    I graduated from Cambridge in 1961 and am now ‘post-career’ and unconstrained by any institution. My formal training is in engineering, economics and accountancy. My experience has been as a corporate CFO and consulting in development assistance and humanitarian relief. I see better metrics as a key to a getting to a better world. More and more GDP and bigger profits (to increase stock prices and wealth) without equally powerful metrics for social progress and environmental impact guarantees disaster.

    The doughnut thinking embraces this in a useful way … but it must be translated in a way that enables decision making … we need what I call management metrics. Country level is interesting, but not actionable. Somehow everything must be coherently numbered at a much more granular level … the individual, the family, the community, the city, the country. The same framing of numbering should also be deployed for organizations (for profit, not-for-profit, governmental) and also for processes and products.

    Every discreet entity should be numbered using the concept that a beginning balance sheet for all the capitals is changed by activities … similar to a P&L account … to become a new balance sheet for all the capitals. This is how business manages for profit … I argue that a similar construct can be used to manage within the socio-enviro-economic system.

    Bottom line … the world will run fine when almost 8 billion people get on the same wave to do everything in a sustainable way …. and the rich few people and companies get to understand that their behavior has been and continues to be unsustainable and society is going to know about it and hold them accountable (including clawing back accumulated wealth to pay for the environmental remediation that is going to be essential and hugely expensive).

    I like the doughnut … I see it as a foundation for a lot more!

    1. Ian Barrett
      3 December 2018 at 13:52

      Sorry, but this is way too complicated. The brilliance of the Donut is its simplicity and loads of different sets of metrics for different scales (levels of granularity) and different kinds of beasties (cities, companies, families) goes against that.

      1. Nation states can take action by legislation, regulations,standards, taxation, providing financial support and disincentives, enabling action at lower levels, and ceding sovereignty to multinational agencies.
      2. We need a restricted set of meaningful measures/indicators that apply at local level (neighbourhood, village, town, county/city) and can be aggregated to give a national picture and allow international comparison (e.g. the work on Local Sustainability Indicators done for Local Agenda 21 or homelessness or recycling rates).

      I like the idea of adding a 3rd dimension to the 2D donut as one could add more detail. Which is essential in getting a grip on issues like equality where one needs to address all the protected characteristics not just female/male gender equality or race, but the different experiences of M/F/TGBT and, say, Black men and women..

      I don’t understand the ‘capable state’ comments. As Kate says: capable of what? It seems to me that some basis for judging the degree of commitment to/success in achieving policies designed to address the main components of the donut would be far more useful.

    2. Tuan
      8 December 2018 at 19:20

      Hi Peter

      We won’t get anywhere near the Doughnut unless we shed the fake macro economics knowledge that have been peddled by mainstream economists for the last 40 years, and embrace Modern Monetary Theory, so that we can use our 5,000 year old monetary system to mobilise 7.6 billion humans to rebuild and regenerate our home planet into a healthy and safe environment where ALL OF US can thrive and lead meaningful lives.

  14. Thomas Beale
    1 December 2018 at 17:32

    The grid is nice work, but I think A/B/C/D sectors/categories is not the primary way to understand it. What clearly does happen, and could happen is that countries start solving poverty and well-being problems without initially paying attention to external costs on the environment. So they tend to go from bottom left to top right (totalitarian countries follow a somewhat different path, never trying too hard to solve social needs…).

    At some point of relative affluence, countries start to experience the downside of their environment (CO2 emissions, chemicalisation of waterways, urban air quality etc, health problems), and start to think about remediating. The possible path from the top right is up-and-over to the doughnut, making a ‘question mark’ shape. This would mean reducing the biophysical footprint but ultimately curtailing some social freedoms too (maybe everyone just can’t have a car).

    Clearly bad pathways can be followed as well – just keep going right and/or up, for example.

    If we accept that the best trajectory of any realistic country is going to be that question mark shape, then the challenge to save the planet ecologically is to do at least 2 things:

    a) speed up the trajectory – get out of the top-right part ASAP and
    b) narrow the trajectory (helvetica-narrow question mark 😉

    Achieving more radical paths from bottom left to the doughnut quadrant would require very radical rewiring of economies such that business loses most of its unilateral rights, and is put in the service of society, which would have total regulatory control. Right now, the prevailing paradigm is society in the service of business. Turning it around most likely means redefining the notion of profit to a cost-plus concept, or removing it entirely.

    1. 2 December 2018 at 23:41

      I’m with you on the sprit of much of what you write – and love the call for all nations to promote the helvetica-narrow question mark!

  15. 1 December 2018 at 17:52

    Hello Kate,
    Earlyer this year I asked you if it is possible to give me your birthday and hour, so that we ( professional astrologers) can make a chart of you, because we will learn why some people on earth have the good ideas that helps menkind to a better world.

    We = Dutch Society of professional Astrologers (AVN)
    And I am the editor in command (I don’t know the right English word) of our magazine AstroFocus.

    Please help us learning!
    Kind regards,

    Dré Aukes

    1. 2 December 2018 at 23:42

      13 December 1970 “just in time for Sunday lunch” my mum tells me. So let’s say noon.

  16. Deanna Pumplin
    1 December 2018 at 18:06

    I’m curious how much corporate/university/media interests influence government/economic policies. It’s not only states that need to be on board for the concept of a well being economy, especially with regard to its connection with the natural world, which is the foundation of well being of all living beings and upon which the human species depends. For instance, the agricultural development vision for Africa being pushed by Gates Foundation, Cornell University and Nature magazine concerns me, as it continues the many destructive practices of high tech corporate sponsored food production: https://www.independentsciencenews.org/environment/the-gates-foundations-ceres2030-plan-pushes-agenda-of-agribusiness/

  17. Peter van den Engel
    1 December 2018 at 18:18

    Since it’s all about personality and in relation to “having a donut” I would suggest group C is “Spoiled” (scoring high on social needs/ but disregarding planetary needs), group B is “Egocentric” (both scoring low on social and planetary) and group A is Asocial (as in anti, but good on the planetary level).

    You can also imagine portrets going with it for visualization, containg some humor.

  18. Tuan Nguyen
    1 December 2018 at 18:21

    Hi Kate

    We do need to mobilise the 7.6 billion humans on the planet to move us to the Doughnut sweet spot asap. For that, we need to utilise our 5,000 year old monetary system better by ditching the toxic macroeconomics fake knowledge peddled by othodox economists like Simon Wren-Lewis, and enforced by neo-liberal governments all over the planets at the moment, and yes that includes New Zealand and Scotland unfortunately, and by adopting the Modern Monetary Theory #MMT framework.

  19. Jess
    1 December 2018 at 19:38

    Than you for this report and the easy to present/understand summary graph. This will make a great conversation starter, both in my home country Canada and my present home in Brasil, shifting thinking beyond too-often-divisive narrow-minded political into the necessity of addressing big-picture goals.

  20. Henrik Nordborg
    1 December 2018 at 20:30

    Dear Kate. Thanks for this analysis. As for the names, how about “Socially Inept” and “Ecologically Inept” countries. Countries in quadrant B could be labelled “Totally Inept”.

  21. Michael Oxer, Victoria, Australia
    1 December 2018 at 20:58

    More deep thinking and output from Kate. Thanks, Kate. Need your work to be picked up in Australia. Am wondering where ‘Belt and Road’ might impact, and across a growing list of countries?

  22. Neil swift
    1 December 2018 at 21:42

    A great article. I’m no economist but could it be useful to have comparable data for English counties? With more devolution doughnut economics could get some local traction. Counties are quite competitive?

    1. 2 December 2018 at 23:44

      Hi Neil, here’s the closest thing I have seen at the UK county level.
      http://www.thrivingplacesindex.org/

  23. David Needham
    1 December 2018 at 21:54

    I am fervent about your economic analysis but worry about the name Doughnut – a name with insufficient gravitas to be taken seriously by those who need to take it seriously and have the power to do something? e. g. World leaders. In my mind it is Toroid economics. But hey, what’s in a name..

  24. John
    1 December 2018 at 22:44

    Where would Bhutan likely fall here? With their measure of GNH, surely they have more of an innate understanding of the balance that needs to be struck?

    1. 2 December 2018 at 23:45

      Unfortunately Bhutan (and Cuba) are missing from the set due to insufficient data.

  25. Pat Scott
    2 December 2018 at 00:50

    I wonder where Bhutan fits into this model. There is a well-viewed TED talk https://www.youtube.com/watch?v=7Lc_dlVrg5M on Bhutan which seems to be on the right track

  26. Pat Scott
    2 December 2018 at 00:52

    Remarkable serendipity that John and I posted the same question at the same time.

  27. Tuan
    2 December 2018 at 07:41

    Dear Kate

    This is what #MMT Macro Accounting looks like, the accounting appropriate to the tasks of government, that Stephanie Kelton alluded to in her Presidential Address ( https://www.youtube.com/watch?v=WS9nP-BKa3M&feature=youtu.be&fbclid=IwAR1Da5wCL_H4vA1I0AY6nOmsZXGy-NnMvbV6Kwxq4xncYEHMBaF4fYV7wTg ). Although specifically addressing the economy of the US, these Macroeconomic Accounting Principles are directly applicable to every monetary sovereign nations on Earth. And we will need this Macro Accounting to move every nations on Earth into the Doughnut.

    Brief Outline of Macroeconomic Accounting

    Michael Hoexter, Ph.D. #GISPscholar

    A brief sketch of what Macroeconomic Accounting would entail, and how it might replace inappropriate business accounting for accounting appropriate to the tasks of government.

    If one accepts that the line of economic reasoning from Keynes to #MMT is valid, one would need to accept the need for such a system of government accounting. The fundamental point of Macroeconomic Accounting is to keep track of how the financial resources and dynamics in the economy, including those originating in and authored by government, effect real resources and dynamics, among them and including the welfare of the citizenry and humanity more generally (if leaders are so inclined to take into account the welfare of people beyond national borders, which I would advise).

    Unlike Microeconomic Accounting, Macroeconomic Accounting must assess inventories and potential future inventories of real resources as part of the budgeting process. Real resources mean people, physical infrastructure, physical capital, and ecosystemic resources. Additionally Macroeconomic Accounting should assess the distribution of financial resources within the private sector both by demographic groups, by class, and by economic sector.

    The following are steps in the Macroeconomic Accounting process, steps which may seem thunderously obvious yet are often assumed or overlooked.

    1.Survey and Prioritization of Macroethical Commitments: Within Own Political Tendency and Within the Population.

    The Macroeconomic Accounting process has to start with what are both the common held “highest goods” that the population values and also what are the “highest goods” of the political tendency or theory from which a politician starts out. While non-numeric in nature, assessing what are the priorities of the society overall, beyond government and its fiscal policy should determine what government actually undertakes in its operations.

    However a simple empirical survey of popular views won’t necessarily lead to an optimal outcome: political leaders are supposed to lead, so they may present a new and “better” solution, that was not previously conceived by the population (i.e. a public survey of the US population in 1932 would not have resulted automatically in Social Security being implemented a few years later).

    Examples of priorities found in some political tendencies and in the population would include: Health Care for All, Housing For All, Free Education, Climate Stabilization, Sustainable Society, National Security, Tolerant Multi-Gender/Gender-Fluid Society, Crime Reduction, Higher Wages/Incomes, Anti-Corruption, Realization of God’s Kingdom on Earth (for religious fundamentalists), Hastening the Second Coming of Christ (for Christian fundamentalists), Strengthening the Traditional Family (for social conservatives).

    2. Inventory of Real and Financial Conditions.

    The next step in Macroeconomic Accounting is to make an assessment of the reality of society and the environment using, as much as possible, quantitative methods, creating an inventory of both real and financial conditions. Many government agencies, at least before Trump’s campaign to increase the production of ignorance, had been keeping track of these data. Areas of assessment should include:

    Employment, Wealth and Income Distribution Data

    Health Status and Access to Healthcare (Mental and Physical)

    Housing Condition Status; Homelessness

    Food production, availability and nutritive quality

    Distribution of and Performance of Educational Institutions

    GHG Emissions: Total, by Activity, by Sector, by Region

    Trends in Climate; Local, Regional Endangerment from Effects of Global Warming

    Land Use Trends and Changes; Emissions from Land use Changes

    Economic Sectoral Distribution of Productive Assets & Employment

    Material, Toxin, and Waste Flows within the Economy both by Activity and by Region/Locality.

    Distribution of Military Assets and Ongoing International Conflicts

    Distribution of Diplomatic and Foreign Aid Assets

    Government Investments in Science and Research

    Government Investments in Cultural Institutions and Activities.

    3. Prioritize and Categorize Real Needs.

    While the US federal government is already involved in many aspects of US life, reflected in the complexity of the budget and of countless government agencies, change in budgeting and rule making should be directed by real needs informed by ethical commitments. From the inventory in step 2 above, a list of priority needs would need to be developed that is in part influenced by step 1 macroethical commitments. Some of the needs identified may not be amenable to government action so the following categorization should be used:

    a. Priority-Need Soluble Within Private Sector w or w/o Political Commentary

    b. Priority-Need Soluble Largely via Government Rule Making and Rule Enforcement

    c. Priority-Need Soluble Largely by both Rule-making and Government Spending or Tax Policy

    4.Propose Political Program/Budget To Ameliorate/Solve Priority Needs.

    Many who are ensconced within politics are already committed to a certain set of policy solutions and start here at this step. However there are advantages in terms of openness and political discussion in taking one’s time going through steps 1-3 to arrive at “best possible” policy proposals and a complete political program. If one can go back and “show one’s work”, one’s arguments are stronger for a particular policy.

    Current large-scale policy solutions under consideration by those on the progressive left are:

    a. Medicare for All

    b. Free post secondary Education

    c. Student Loan Debt Jubilee

    d. Green New Deal/Climate Mobilization (I prefer second)

    e. Carbon Tax

    f. Job Guarantee

    g. Job Guarantee/Universal Basic Income Combination

    h. $15/hour National Minimum Wage

    i. Enhanced Social Security/Public Pension System

    j. Postal Banking

    k. Reinstatement of Glass-Steagall/Strict Bank Re-Regulation

    l. Financial Transactions Tax

    m. Reinstatement of Highly Progressive Taxation Including of Estates

    n. Strict Regulation of Internet Commons/Tech Monopolies

    o. Reinstatement of Strict Anti-Trust Laws

    p. Public Finance of Elections/Banning of Dark Money and Corporate, Large Donor Donations to Political Campaigns

    q. Increase Funds for Public/Social Housing

    r. End an Interventionist, Militarist Foreign Policy

    s. Stop US support for Authoritarian & Warmongering

    t. Regimes/Principled Support for International Human Rights

    5. Rough Draft Pricing of All Budget Lines and Tax Proposals

    The next step involves costing out each individual budget line over a single year or multi-year timeframe. This is a somewhat more conventional budgeting activity in that spending lines of the budget must at least mobilize resources from both the government and the private sector to achieve the program or institutional objective of that program.

    However at this point no effort should be made to balance the amount taxed with the amount spent. Instead each spending proposal and taxation proposal should be estimated to achieve the optimal realistic policy impact in any given year or in tranches over a multi-year period to achieve an overall objective or mission. For instance, the level and progressivity of income taxes should be levied to achieve a certain level of income equality as, as well as maintain the liquidity of private sector actors in a reasonable and fair manner. Alternatively a carbon tax should be levied in the amount to achieve real behavior changes in energy and resource use and not to target a certain total revenue. What will make this a macroeconomic accounting activity however, is that the real impacts on the area of policy targeting will determine amounts of spending or taxation, not the amount of imagined “revenue” available.

    6. Initial Assessment of Inflationary/Deflationary Pressure and Crowding Out.

    The total draft budget lines (negative by convention) and tax proposals (positive by convention) will be added together and an initial deficit or surplus (most likely a deficit) will be assessed. As per the earlier part of this piece, it should be assumed that a deficit is desirable, though the size of that deficit will then be subject to further modeling with regard to its potential negative impacts. A general target range for the deficit will be announced but more important specific modeling of any inflationary or deflationary impact of spending and taxation on specific sets of vital goods and services. Also realistic assessment of where government may be crowding out private economic activity in areas where it is determined that such crowding out is undesirable. In some areas, crowding out and socialization/nationalization of economic activity will be desirable, such as in health insurance, or, in my view, a national publicly-owned railway infrastructure.

    7. Adjustment of Budget Lines to Minimize Inflationary/Deflationary Pressure and Undesirable Crowding Out

    Tax or spending lines will be adjusted to maximize desirable and reduce undesirable effects as per the overall macro ethical commitments/prioritization and real world needs in steps 1-3. As per the reality of capitalism and the crises we currently face, erring towards larger deficits means that more attention should be paid to inflationary pressures and perhaps specific inflation dampening taxes and programs (such as special bond issues) could be offered.

    8. Budget Finalized and Presented for Vote – With stabilizers included in the package, the budget should be presented for vote.

    9. Mid-year Monitoring – Once passed and implemented, the budget should be assessed in 6 months to adjust for increased policy impact or for stabilizing financial impacts. In addition to adjustments.

    Stephanie Skelton Presidential Address

    1. 2 December 2018 at 23:47

      thanks for this Tuan, I know and admire Stephanie’s work and will come back to read this full address soon.

  28. Tuan
    2 December 2018 at 07:46

    Dear Kate

    The existential threat to humans trying to adapt to the massive climate change taking place right now is the lethal willful ignorance and fake knowledge that infest the brain of mainstream economists advising our politicians on how NOT to use our 5,000 year old monetary system to mobilise the 7.6 billion humans across the planet to regenerate and rebuild our home planet into a healthy and safe environment for all of us to thrive and lead meaningful lives.

  29. 2 December 2018 at 10:28

    Hi Kate. I really love this chart – fundamentals so clear. Labels could be:

    A Seed Countries
    B Fast Growers
    C Overgrown
    D Sustainable

    I am thinking about how best to capture the vision of what a sustainable country would look like. We certainly need local circular economies to replace linear Global supply chains. But to make local production and recycling economically competitive requires big changes to our economic model (carbon taxes, material/waste taxes, basic income). Very struck how this matches the vision advanced by Gandhi 100 years ago of self-sufficient communities, although he lacked some of the technology to make it work efficiently.

    There is also a strong motivating argument – as Global supply chains get automated they hollow out local economy employment, creating a huge wealth distribution problem. Local circular economies, supported with a Basic Income not only solve this problem, but can create a new sustainable model that works within the doughnut. A lot of interest right now in Community Wealth Strategies that help this transition, but a lot more work still required to understand what a truely sustainable community would look like.

    1. Tuan
      2 December 2018 at 19:50

      The existential threat to humans transitioning to the Doughnut is the willful ignorance and fake knowledge that infest the mind of mainstream economists – like Simon Wren-Lewis – advising our politicians on NOT how to utilise our 5,000 year old monetary system to mobilise the 7.6 billion humans across the planet to regenerate and rebuild our home planet into a SAFE and HEALTHY place where we ALL can thrive and lead meaningful lives.

    2. 2 December 2018 at 23:48

      many interesting ideas here, thanks!

  30. Trevor Mansfield
    2 December 2018 at 10:42

    Really interesting: Makes me wish I had studied Economics now.

    One thought on the ABCD graph: Would it be possible to add directions of travel over time? Eg re-doing the analysis for each country on data from around 10 years ago and comparing with the current position. If you could add arrows to the graph, I wonder how many would be pointing towards the Doughnut.

    1. Tuan
      2 December 2018 at 19:53

      Never say never Trevor. Bill Mitchell is starting the online #MMT University in March 2019. Will you be enrolling?? I will be for sure.

    2. 2 December 2018 at 23:48

      that is the dream! I quite agree, that’s what we want to know.

  31. 2 December 2018 at 10:54

    Great stuff as always Kate

    Here are my thoughts for the A, B, C group names:
    A = Aspiring
    B = Basic
    C = Carboniferous

    All the best

    Michael

  32. 2 December 2018 at 13:19

    This is an incredibly powerful way of presenting the issue of economic wellbeing, economic development and planetary sustainability. Thank you for putting this into this frame of reference, Kate.
    I haven’t a clue as to what to call each of your categories of countries but will start thinking about it. I like Michael Pawlyn’s ideas (above) except that carboniferous is probably not something that will be snapped up by the media easily.

  33. Anke Sitter
    2 December 2018 at 15:23

    Thank you very much for sharing!
    At this point I was exactly looking for those information!

    Want to scale down the Doughnut for the regio I live and was looking for examples, how to do.

    I also thinking about to make it practical for companies, just in a pragmatic way and searching for a way to combine what is happening within the company, but also what effect its decisions have, thus somehow making the doughnut 3-dimensional. Have some first thoughts, not mature enough to share, already 🙁

    1. 2 December 2018 at 23:50

      Great! You could see what others have said here and share your own ideas. https://discuss.doughnuteconomics.org/

  34. Brigid Finlayson
    2 December 2018 at 17:00

    Hi Kate
    I love your work and share it widely. The doughnut model is a very helpful way to conceptualise the problem. The challenge is to bring it into policy decision-making.
    Many thanks and keep going.

  35. 2 December 2018 at 18:11

    It’s great to see the sharing of ideas to give all of humanity a map towards the doughnut/toroid – I agree the term “doughnut” may lack the credibility and health-consciousness that we need 🙂 so I like the term “toroid”.

    To build on comments in this post about measuring the capacity of a nation/state/entity to move toward the top-left of the graph, this is where I believe the third-dimension of the doughnut/toroid comes in.

    Trying to squeeze humanity into a two-dimensional space could be improved by increasing the “volume” or height of the doughnut/toroid. The third dimension could represent the “adaptive capacity” of a nation/state/entity.

    A taller doughnut/toroid = A greater progressive ability to intelligently sense, learn from and respond to humanity, life forces and existence.

    Measuring adaptive capacity is not quantitatively defined because it is at the frontier of human and social development. As a global species, we have not had to deal with the magnitude and momentum of the threats that we presently have upon as before, but we do have smaller examples from history that we can learn from. Jared Diamond’s book, “Collapse: How Societies Choose to Fail or Succeed” provides some rich examples of the dynamics in collapsing societies such as Easter Island, the Maya, the Greenland Norse and the Henderson Islanders.

    Measuring adaptive capacity would include adaptive assessments of
    – cultural resources, value systems, world views & beliefs
    – quality of the support systems for innovation, prevention and strategic foresight
    – levels of self-authorization, adaptive persistence and dedication to humanity’s progress.

    We will need a taller doughnut/toroid to avoid imperilment of our species.

    I’m energized about studying how we can apply the doughnut and appreciate the other resources that contributors to this post have provided. I’ll provide another resource that I’ve been involved in: Human Venture Learning. This organization is striving to increase humanity’s adaptive capacities. Feel free to check out the programs and reading resources on their website: http://humanventure.com/

    1. 2 December 2018 at 23:52

      great ideas, thanks for sharing! Yes, torus is a far less silly name, but almost no one knows what one is!

  36. 2 December 2018 at 18:16

    Significance

    Our analysis shows that there are two distinct groups of national economies, roughly equating to developed and less developed countries. The economies of countries in each group are pushed toward two different equilibrium points by differences in the feedbacks between natural resource consumption, population growth, and gross domestic product. Both equilibrium points are unsustainable under population growth. The inertia that is generated by resource dependence means that extensive structural change in the economic system is required to achieve sustainable use of natural resources; it is not possible to “develop to sustainability,” and many developed countries have simply externalized costs. Our results have profound implications for aid programs, human wellbeing, and development goals.

  37. Nick Gallie
    2 December 2018 at 21:10

    Brilliant!

  38. Chakradhar Mahapatra
    3 December 2018 at 06:13

    Hi Kate, Nice innovative approach. I have following ovservations:

    The best-fit linear regression of the data presented clearly shows Y = mX – C relationship; where
    Y = Social Thresholds Achieved (STA),
    X = Biophysical Boundaries Transgressed (BBT) m = Slope of the Straight Line
    C = Minimum BBT required to start STA

    Following three conclusions can be made from the above relationship:
    1) Achievement of STA is dependent on /at the expense of BBT consumed.
    2) Some minimum Transgression (BBT) is needed to start Achievement (STA).
    3) Country specific values of m (slope) i.e. Rate of Achievement vs. Rate of Transgression needs to be examined?

    The approach to the concept “Limits to Growth” by Club of Rome was based on the above relationship (www.clubofrome.org).

    However, we need to bring Human Ingenuity (HI) into the equation. HI like Artificial Intelligence (AI) is going to determine how countries in future can leapfrog from Quadrant A to D with minimum BBT. But to achieve AI potential, we need to consume some BBT. The key question is how to minimize that without sacrificing quick & continuous STA for Quadrant A countries?

    Cheers.

  39. Pim Snoep
    3 December 2018 at 13:13

    Hi Kate, on the subject of naming=framing I would suggest the terms ‘depletion’ countries or economies and ‘repletion’ countries or economies. Repletion in the sense of ‘refill’ or ‘make up for it’. One could talk e.g. about depletionary countries for now because repletionary don’t yet exist.

    Kind regards,
    Pim J. Snoep

  40. 3 December 2018 at 13:26

    Intriguing analytical framework. I like how it captures the essence of a social target beyond just growth.

    For my “two cents” I propose a few ideas. First, I suggest we need to reframe the conversation, especially as it relates to the West’s obsession with “free-martketism,” the idea that broad societal
    challenges can only be solved by decentalized markets. The problem the West faces is that any discussion that suggests centralized coordination gets labeled as evil socialism.

    My suggestion is to frame government-sponsored economic policy as Sustainable Capitalism, as opposed to traditional Supplier Capitalism which is what created our unsustainable reality in the first place. By framing coordinated social programs in terms of economic sustainability rather than humanitarian objectives I believe society, especially Western society but specifically the US, might finally get past the shadow of Cold-War socialism, and in doing so balance humanitarian, economic and environmental goals.

    Second, I believe it’s essential that consumers and employees understand that they represent the nucleus of economic activity. This is the opposite of the supply-side narrative that casts suppliers at the center of the economic universe. It’s important for a couple of reasons. First, personal consumption is in fact the largest component of economic activity and the driver of most economic decisions, although supply-side economics treats it as being dependent on the activities of suppliers. As a result, the needs of consumers and employees are economically under-represented. For only by consumers and employees gaining their rightful place at the economic “table” will they receive the correct signals to balance growth with sustainability. Also, by shifting economic power to the demand-side of the economy, consumers and employees will better be able to influence political and economic decisions.

    And third, I believe that we need to acknowledge that solutions to move society into quadrant “D” will probably not be Government-sponsored as they will require a transformation of ingrained political/economic power structures, something that’s unlikely to occur. Rather, I suggest that the impetus for meaningful movement into quadrant D must be grassroots driven. However, in order for grassroots movements to acquire the power necessary to influence political and economic decisions to a meaningful degree they will need to organize themselves into networked, community structures that can capture and direct the power of potentially millions of people. To this end, I envision some broad brush strokes for what this might look like, which you may read about at https://realismnow.com/index.php/civic-media-network/

    1. Ian Barrett
      4 December 2018 at 10:16

      There are a number of interesting thoughts here (and more in the essay) but the underlying philosophy is very biased by US culture and realities. Especially in respect of its rather mechanistic, highly structured, market-based (albeit markets that are community-influenced and controlled) and consumption-oriented approach. The focus on benefits and activism equalling power and influence also makes me feel uncomfortable because it necessarily excludes a lot of people who lack the money, skills and opportunity to participate in umpteen ‘communities of place and interest’. Such as those with: disabilities, carers, mental health issues, poor communication skills, lack of internet access. I was particularly struck by the absence of the word ‘altruism’ or any equivalents and what seemed to me as a focus on ‘stuff’ and monetised services rather than social capital and free goods.

      Those of us living in Europe (I can’t speak for those elsewhere) already have strong traditions and, in some places, established structures at various geographic scales that are taking collective action on single and multiple issues from support networks to collective purchasing to campaigns on environmental problems like plastic waste. In the UK we have long established charities, community groups like the Women’s Institute. Many places have local currencies, co-ops, community food banks, etc. Until the Tories sold most of local services off to their rich, right-wing funders we had day care centres, libraries, locally controlled schools, and the NHS of course. Moreover, British local government evolved because civically-minded groups came together to provide clean water, sewage systems, energy, transport, tackle air pollution and all sorts of things food safety to the use of children in factories.

      Grassroots action is undoubtedly part of the solution, but governments can and have sponsored some of this through initiatives like Community Plans and setting standards. I think a better, if messier, way forward is to use the Donut to identify which issues need action at different geographic levels and/or communities of interest, see which existing groups are already addressing them, and channel support to those organisations. We already have most the tools and techniques – Planning for Real, crowdfunding websites, legal structures – to do this. What is lacking is any clearly articulated and positive ‘visions’ of what a sustainable society and localities might look like economically, socially, environmentally, technologically. And that’s where the Donut comes in.

      Ian

      1. Peter van den Engel
        4 December 2018 at 10:41

        I agree. The only criticism on the current approach as far as I am concerned is it basicly only uses the argument of GDP as a background and focusses on countries, including social platform needs/ brought in relation to earth capacity, like clean ear, water and food.
        It is questionable if these connections are that relevant.
        It suggests a cultural competition in relation to differend spending of GDP.

        I believe the social realm itself is far more relevant in relation to its (also material) platform needs, which can be organized by (political) society/ next to individual future potentials related to talent and opportunity, which can be chosen individually overlapping that in different equations.
        .
        Nevertheless the model provides a very usefull picture pattern comparing present and future, allowing for statistical difference values.
        So, a very good start.

  41. 3 December 2018 at 15:14

    Encuentro que es un tema de contingencia, es muy importante que se hable en Latinoamérica de estos temas, invito a que realicen un congreso, seminario u/o charla en Chile de éste tema.
    Saludos,

  42. Ben Felten
    3 December 2018 at 23:09

    There’s a small-ish country that ranks 6 on the social and 1 on the boundaries. It really stands out. But it’s not labelled. Which country is that ?

  43. Ed van Hinte
    4 December 2018 at 16:44

    Dear Kate,
    Kate Raworth reaction

    Even though reality is far more complex than the diagram shows it is a wonderful representation of the moves we need to make. For names of the quadrants I suggest positive words that tell what should be done as if it is already happening:
    A Uplifters
    B Progressers
    C Lighteners
    D Equilibrists

    Not being an economist (because I have always found that economics is a strangely naïve set of models that include incorrect and incomplete assumptions) I propose to elaborate this discipline to much more appropriately fit to what actually happens and should happen in the global household. Running a household is not just a matter of buying and selling. As a matter of fact in terms of spent time, most if it is not.

    Probably the most important category in economics is value. This is not, as it is currently understood, some kind of financial ointment in a jar, that you can add to something at will, but rather a quality that needs to be cultivated in time. I understand the notion of value not in financial terms, but rather in two directions: it either represents a sense of oughtness, of how we feel things should be in terms of right or wrong or somewhere in between, or a sense of potential, of what we feel things can bring to us, for better or for worse.
    These are individual senses partly nourished by social concepts. We can negotiate values, from the straightforward level of who will get to finish the peanut butter, via cutting trees in the neighbourhood, labour conditions and educational quality, all the way to political voting and, occasionally, Big Capital Deals. The point is, that most value negotiations simply are not monetary. Most value represented around you, books, furniture, ingredients, other people, houses, whatever, is not expressed in financial terms. It can be, but money in essence is just a value battery that can support transactions, and transactions are not what economics should be limited to. I know economics is growing and improving, but so far adjustments have been modest.

    Now I have a background in design, mainly working as a critic. Currently design and business are strongly influenced by circular economy framing, as if that would proverbially be ‘the solution’. Maybe it can contribute, but there are some flaws. Products, for instance, are considered to be functional objects, whereas simple observations in daily life demonstrate that they serve to provide convenience, which is immediate availability all the time, and even more to express identity. One may wonder if we really need to exploit all this material and energy just to provide us with the value of certainty of having an electric drill if ever we would need one, and with the value of who we think we are.
    Energy is hardly dealt with in circular concepts anyway. There is this tacit assumption that it is bound to gradually become entirely renewable, but I’m not sure that it is justifiable, certainly if you consider the resources needed to produce and recycle batteries for billions of e-cars. Since that is another thing: growth in energy consumption is assumed to be inevitable, just like growth in material consumption, which is by nature impossible.
    Another parameter that is sadly missed in the circular model is us, with our inequalities, slavery, food, water and education deficiencies, warfare and other characteristics of the human condition.

    I tend to think in practical but rather crude proposals, not so much to offer solutions, but rather to open up different directions of development. The basic principle is to propose principles or rules, like the ones sent in by Tuan, but not focused on macroeconomic accounting.
    Rules may concern policies, but also design concepts and business alternatives.
    An example of the first kind is the obligation for all manufacturing facilities to be accessible to the public, to make sure that visitors, tourists maybe, can witness labour conditions everywhere. This used to be normal. In early department stores products were made ‘in da house’ but soon banned to different locations.
    A design rule could be that vehicles are not allowed to be heavier than their payload. Current cars are totally ridiculous, easily weighing more than ten times as much as their driver. Cars mainly transport themselves, while being more of a very heavy motorized clothing outfit on wheels than a sensible means of transportation. Billions of tons of steel move around on the Earth’s surface every day, totally pointlessly.
    Talking of clothes: they cause excessive slavery while in fact being the McGuffin of shopping and identity expression. It is already normal to enter a shop, don cool things, record results on a phone, show pictures and movies on Instagram and consequently leave without buying anything. Now that could be an immaterial business model: rent out well equipped studio space with prestigious outfits.
    If shopping provides satisfaction the experience itself could be the immaterial object of desire. This is by no means novel: there are exploiters of claw cranes on fairs. They make money by renting out purchasing per unit of time and are a great metaphor for alternative commerce. Time is desirable. The more you have for yourself the better. Consumption could be made cheaper when it takes more time. This is a known fact. It could become a more structured system.
    The examples show that I am not sure economic growth is all wrong. It is just that it shouldn’t depend on material resources and misery for invisible others. What is wrong is social inequality of humans, and exhaustion and demolition of our own place to live.

  44. Amanda
    4 December 2018 at 18:00

    Sorry to be dense but is it not possible to make things just a little bit easier to comprehend? A bit more ‘plain English’? A bit more accessible to a broader audience?

    “Biophysical Boundaries Transgressed versus Social Thresholds Achieved by Nation” – can this not be put more simply? (And so on…)

  45. Linda Lonnqvist
    5 December 2018 at 17:15

    Hello! I’ve actually read your book Kate and let me tell you it’s inspired me big time and given me lots of energy for working towards better economic solutions! Just being able to say, with conviction, “things have changed. We can’t be doing this any more” is a big strength.
    As for your question about how to label the quadrants, I like the gardening metaphor that was brought up in an earlier comment. How about
    A – stunted
    B – over-fertilised
    C – over-watered
    D – thriving
    …hm, a more accurate gardening metaphor might have B with too much… potassium and C with too much… phosphorus, or something, so actually this metaphor wouldn’t work at all. Never mind! But maybe the thought can help someone else come up with something better!

  46. 5 December 2018 at 17:16

    Trying to find cooking analogies. I think Sector C is Cooked!

    You won’t have seen Oxfordshire’s Local Industrial Strategy which is reaching its final stage. Produced by PwC on behalf of the Local Enterprise Partnership, where the subgroups (eg the one I’m on, the so-called Environment and Sustainability Subgroup) have not been consulted, it has not reached the light of day and will not be shown to the public until the Government has signed it off.

    By 2040, Oxfordshire will have doubled its GVA (whatever GDP variant that may be), and I suppose, doubled its population as we are to build 300,000 homes when the Office of National Statistics shows that our expected population would fill only 40,000 (by 2050). We shall have to import 600,000 unexpected people. They can race up and down the motorway to be built to Cambridge, a decision similarly handed down to us by our utterly undemocratic government.

    Rock on.

    1. 5 December 2018 at 19:41

      I have read ‘Doughnut’, and I have tried communicate without success with Kate Raworth in the past.
      Like everybody else who has commented, I think her insights are terrific. However, I tried to ask her to read my weblog
      http://www.clivelord.wordpress.com
      specifically the post ‘Kate Raworth’s doughtnut: What’s missing’.
      I think the universal, unconditional basic (citizens’) income (UBI) (or some brighter idea) is essential to underpin what all reading this see as necessary.
      Kate thinks the UBI is a good idea, but fails to see the relevance to the chapter ‘Be agnostic about Growth’.
      I see she has stopped reading this stream.

      1. Peter van den Engel
        6 December 2018 at 16:07

        I have been thinking about this option, because I agree with you UBI is essential.
        However there are several ways organizing it.

        The classic option is to redistribute already earned money, as the fiscal system usually does/ but for obvious reasons this cannot be done under current accountancy principles because all states excluding China have a serious defecit.

        The alternative would be to distribute it through the central bank, since it allows for endless money printing and does not end in a deficit. Since it cannot obviously.
        However this option might come across as unreliable, because only the state has this right, to be in endless debt.
        Although MMT proposes fiscal debt is actually an asset, I am affraid this will not solve the UBI problem.

        Therefore I have come to a third option, which means altering the fiscal system itself into a reversal distribution of what is already earned and accounted for/ without first adding it to labor costs, since this is nonsense anyway.

        Within these means is included you would still act within current accountancy rules and not result in a deficit and be liniar to the real economy as it presents itself.

        I think its brilliant actually.

  47. Ian Barrett
    6 December 2018 at 17:14

    Maybe I’m just thick, but I don’t understand what any of this means. What does “already earned” mean in the classical option? How does this differ from “already earned and acconted for” in option 3 and why does either lead to debt? Or maybe not in the case of no. 3.

    I have no idea what the bit about adding it (what?) to labour cost means or why that’s nonsense or what the final para means. Liniar? Linear?

    As Amanda said earlier, Plain English please.

    1. Peter van den Engel
      6 December 2018 at 19:01

      I admit without deeper knowledge it might be hard to follow words in a concentrated version of their implied meaning.

      Why it leads to futher debt in option one should be clear: because not enough money is earned.
      Why it leads ro futher debt in option two, is because the central bank would have to clear it by issuing more state bonds. Although it can do this endlessly.

      The third option I am talking about means that the usual conception of having to add fiscal costs to labor costs first, before it can be distributed alternatively is totally unnecessary.

      It might be the fiscal officer believes this is not happening: “you just abandon from a part of money you’ve earned.” But this is not true.
      The employer certainly is going to add this to his labor cost, so he still makes the same amount of money as before. Although this is hidden in a gradual process of course, or obscured accountancy pretending higher costs happened elsewhere. Easy tric.

      What I mean with earned, in the third option, means anything which is swapped in the national consumer economy. Which is bought/ but mostly not locally produced. So the state cannot tax that as labor.
      What it does tax is consumer needs, which in consequence also inflate in cost.
      Both inflations are unnecessary.

      It only blocks what otherwise would have been reached. The actual price of the article, or the labor when it’s local, is not that high. It’s half of that at least.

      So, when you you stop adding fiscal costs to these products; employers should be told not to do this anymore and checked on it; you can simply swap the price which it is sold for (only transactions are counted in accountancy) and redistribute that exact amount alternative (like a clone version of it).
      It’s a similar version of what the current system is doing already, but only in (double) inflated costs.

      Now you would in both cases reach a much higher end distribution than is the case now and not create more debt at all!
      Just use the fiscal system you’ve already got. But use a slighty different accountancy.
      It also would not influence the value if your currency, on the contrary. Because you economy expands.
      Meaning more things being able to be done/ not necessarily more goods wasted, because you establish the general level, how you want to distribute it.

      1. 6 December 2018 at 22:30

        I too find Peter van den Engel’s posts hard to follow, but can this help? (I wish Kate was following this discussion)
        1 The UBI should provide basic needs, and no more, as defined in any society.
        2 If the sums available do not add up to what is required that society is already bankrupt.
        3 That is certainly not the case in Britain. Although personal income tax is not necessarily the most appropriate way of financing it, for simple illustration figures by Murphy & Reed (reference in my weblog: http://www.clivelord.wordpress.com)
        suggest a flat tax rate in the region of 60% would suffice.
        4 However, this will rise as the economy contracts, as it will anyway, just not as seriously as if climate breakdown progresses.
        5 Small deficits may be temporarily necessary, but overall long term tax and UBI must balance.
        There is more in my weblog.

        1. Peter van den Engel
          6 December 2018 at 23:04

          “2 If the sums available do not add up to what is required, that society is already bancrupt”…
          All western economies and Japan leading the pact, have a trillion dollar, euro, pound, yen, you name it, deficit. Meaning unpayed debt.
          I am sorry, but you are a financial illiterate.
          Nevertheless everyone is free to have utopian ideals of course.

          1. 7 December 2018 at 01:09

            Simple abuse does not advance the debate.
            You start by agreeing with the UBI in principle, yet now you seem to imply that paying for it is unrealistic.
            I do not claim financial literacy, and you may be correct about debt levels, but my belief that in the UK current income is sufficient to finance a UBI is based on three sources.
            The case for the Universal Credit was set out in ‘Dynamic benefits: towards Welfare that works’, a report by the Centre for Social Justice set up by Iain Duncan Smith, who later became Work & Pensions Secretary. The graphs in that report unintentionally showed that a UBI was feasible, though not without raising taxes on the better off. The Universal Credit (which is mired in difficulties) would cost much less.
            The 60% illustrative tax rate comes from the Murphy & Reed paper (Murphy is a Tax Accountant).
            This figure was corroborated by a private email correspondence with Martin Wolf, Chief Economist at the FT.

          2. Nguyen van Tuan
            7 December 2018 at 03:31

            How extremely depressing to find out that NO ONE on this thread has got ANY knowledge of Modern Monetary Theory.

            1. Tax DOES NOT FUND ANY GOVERNMENT SPENDING EVER, let alone a transfer payment like the UBI.

            2. A UBI at a living wage level is a recipe for hyper monetary inflation that will necessitate a punitive tax rate to reign it in. Otherwise, it’s gonna be as usefuls as tits on a bull.

            3. A Job Guarantee that provides meaningful job at a living wage level with full benefits to ANY ONE willing and able provides a price anchor with NO inflation risk.

          3. 8 December 2018 at 00:37

            Sorry, I still find Peter’s and Nguyen’s posts hard to follow. I put Ian’s point in a different form, namely that it is imperative that UBI payments are balanced by taxation of some kind (Ian, I too would not want to see purely personal income tax – that is simply to illustrate the scale of the problem).
            Without balancing taxation, a UBI would be an engine of growth (or inflation). So far as I am concerned, this discussion starts from Kate R’s agnosticism about growth.
            I get the feeling (please disabuse me if I am wrong) that neither Peter nor Nguyen are comfortable with the idea of individuals not having to contribute something.
            I agree with them. However, I am starting from the UK tax/benefit arrangements where means testing creates a work disincentive. the UBI does allow ‘idleness’ as an option, but removes the disincentive – everyone who works is better off than anyone who doesn’t.

          4. Ian Barrett
            8 December 2018 at 13:06

            Good points Clive, see my replies to Peter and Tuan. But I would challenge your apparent view that people in paid jobs should be better off than those who aren’t as it implies unpaid work = not contributing. In reality caregivers, volunteers those who work pro bono, etc do contribute a huge amount. They are in fact a key part of what Kate calls the ’core economy’. A properly designed UBI would address this.

            And in all my time working with a wide range of disadvantaged people I have never met anybody, apart from retired people, that didn’t want to get a paid job because they were ‘idle’.

  48. Ian Barrett
    7 December 2018 at 10:58

    Since the UBI concept would seem to be important in promoting an economically more equal society (at all levels from local to global) I’m going to persist with this. But first: Peter and Nguyen, can the name calling. I (and others on here) may not be familiar with some concepts and jargon, but how are we to become ‘literate’ if you don’t explain and your posts are confusing? And we can definitely do without the sexist language.

    Peter, I am now even more confused. Your reply seems to be conflating comments about government actions on printing money, debt/deficit (which I understood weren’t the same thing), taxation and spending (which I thought was what was meant by monetary and fiscal policy) with the accounting rules for individual employers. The refs to labour costs and things (goods? services?) produce locally (within a country?) don’t make sense to me as, for instance) surely the price of products produced in say China includes labour costs and is taxed via import duties and, when used in other products &/or sold on, VAT? And when I’ve run businesses and charities the accounts also had to cover assets – tangible ones like land and intangible ones like intellectual property. Plus I simply found some of your sentences impenetrable.

    Clive, I did understand your post. The best way to finance a UBI and how to define it seem to be areas worth exploring and I certainly don’t like the idea of funding it solely from a flat rate of income tax. Financial transactions tax a la Tobin?

    Nguyen, I do know about MMT. Or at least the basic assumptions. But you write as if it was the received truth when it isn’t- the clue is the ‘Theory’ bit in the name. But if your point 1 is correct, why does the government keep telling us that we cannot afford to fund the NHS and a proper care system without raising taxes (which they say is a bad thing)? In addition, why does UBI lead to hyper inflation when other forms of transfer payments (e.g. tax-free and pension allowances that disproportionately favour the rich) don’t? Lastly, whilst GDP and similar conventional economic measures don’t assign any economic value to unpaid work (along with environmental damage) it does have a value and seems to me to be essential in moving communities into Kate’s Doughnut.

    As she’s said: “Why does it matter that this core economy should be visible in economics? Because the household provision of care is essential for human well-being and productivity in the paid economy depends directly on it. It matters because when – in the name of austerity and public-sector savings – governments cut budgets for children’s day-care centre, community services, parental leave and youth clubs, the need for care-giving doesn’t disappear: it just gets pushed back into the home. The pressure, particularly on women’s time, can force them out of work and increase social stress and vulnerability. That undermines both well-being and women’s empowerment, with multiple knock-on effects for society and the economy alike.”

    1. Peter van den Engel
      7 December 2018 at 15:14

      Yes, I was referreing to illiterate in the general sense that understanding and definition is of utmost importance in this discussion, especially when it comes down to appointing differential values in their correct function.

      Which are very often misinterpreted even by those calling themselves professionals.
      I have been studying the financial system for many years now based on its underlying natural physics and came to the conclusion the system itsef, as a behavioral pattern, actually does not know (understand) what it is doing. Hence the parallel consequence humans also don’t understand it.
      So “illiteracy” actually is an internal function of the system itself. It can only be described properly when you take a position outside of it, for observation.

      Even the subject of what debt is; interpreted as a designated future time being ‘guilty’; is a misconception of reality.

      To bring some clarity, the concept of UBI is correct, because people should always have the opportunity to design their own future.
      Next to that however the concept of reaching this through taxation is wrong, because this only results in higher expension of costs; represented in labour and its products; so the result is inverted to your goal: to reach a higher degree of distributing wealth. That is, opportunity in general.
      That’s why you need a better alternative.

      A general confusion within the current system, in describing it, is that on the one hand debt is not accepted by its traditional accountancy; also informing politicians; hence unwanted/ but on the other hand is totally accepted by central banks, since they can endlessly print money and so neutralize it to zero.

      While, in paradox central banks represent the top heirarchy of accounting – and the same top hierarchy of politicians are also allowed to have endless debt through issuing state bonds/ while they are telling their citizens never to be in debt, parallel to lower hierarchy accountants which practice your accounting in the real world.

      So there is a general speach confusion about what laws should be implemented.

      When you study the economy as a behavioral pattern, it turns out that overproducing labour is a general exception in the group (society as a whole), so its feed back money system related to that exception does not represent the whole group, which is demand, or otherwise called consumers, the labour group is part of just as well.

      In fact when you study it, it turns out that so called labour costs actually are a translation of consumption needs they have themselves. So labour costs do not exist. Contributing to the confusion alas.

      To solve the problem and to get to UBI, you need two parallel money distribution systems.
      One (UBI) distributes to the demand level to confirm it/ which on its turn confirms labour. As you might have noticed only the demand side possesses over money, otherwise nothing could be bought. It is a misconception to believe money only belongs to labour. That is the inverted translation of reality.

      This distribution also includes voluntary work; and never results in debt, because it is used as a momentum constant: what can be produced which is parallel to demand/ and overlapping that a distribution especially rewarding labour to a higher level of income/ but not just the back translation of the amount of products it produces, because that is part of the momentum constant.
      It does not accumulate over time. Just like your needs do not accumulate over time, but are a constant.

      The general conclusion of all of this is, we as humans should evolve to a next level of common understanding: that our economy is not an accumulating body which acts in imparallel times, which need to be balanced/ but is an at the same time level of functioning, which uses a momentum constant for its balancing. Also expressed in its monetary system.

      A first step towards this is the different use of the fiscal system I suggested. Which has the benefit it can be introduced into the current system without upsetting it.
      Of course maybe there are other solutions as well, but I am just pointing out the negative effects of bad solutions, like raising taxes.
      The other next best solution would be to simply use the central bank for alternative distribution; canceling debt. But that would lack any other connection to the real economy concerning supply and demand: production and consumption.

      1. Tuan
        7 December 2018 at 19:06

        Government deficits, the money supply, and GDP are abstractions that obscure the issues of power and distribution of wealth that are the consequence of a given political system. These abstractions make no sense as ends in themselves. A public deficit just means that a sovereign has spent money into the economy that it hasn’t taxed back. It doesn’t say whether that money was spent on bombs or schools or pure graft. A country can have a high GDP because a small subset of the population sells tons of luxury goods and financial instruments to each other while everyone else starves. Ultimately, what matters is the quality and distribution of resources.

        Those at the very tip of our economic pyramid understand that fiat money is unlimited, but most everyone below believes it to be scarce. We live under austerity and debt. But it doesn’t have to be this way. The idea that we don’t have the “money” to supply essential public goods to everyone is a pernicious myth that can only be maintained so long as we remain ignorant of how money actually functions. But this myth is merely justification for power structures that are ultimately backed by guns and the vastly unequal distribution of our finite planet’s resources. Knowledge is no substitute for political power. It is merely somewhere to start.

        https://thenewinquiry.com/the-world-according-to-modern-monetary-theory/?fbclid=IwAR0XlPq_5VgylIV7zpfJLPfvvEncO5zjl8RwM-gsztmcIm7J5fd_zMX2KYw

      2. Ian Barrett
        8 December 2018 at 10:59

        Peter, I appreciate that you are trying to clarify what you mean but, because you haven’t answered my relatively simple questions in language I can understand, we are ‘talking past’ each other. Let me illustrate this.

        You say: “This distribution also includes voluntary work; and never results in debt, because it is used as a momentum constant: what can be produced which is parallel to demand/ and overlapping that a distribution especially rewarding labour to a higher level of income/ but not just the back translation of the amount of products it produces, because that is part of the momentum constant.
        It does not accumulate over time. Just like your needs do not accumulate over time, but are a constant.”

        Earlier you talk about studying the physics of the financial system. Now Newtonian physics defines momentum as “mass in motion” or in mathematical terms p = m * v (where ‘p’ is momentum, m = mass and v = velocity) and Newton’s First Law states that an object will remain at rest or in uniform motion in a straight line unless acted upon by an external force. i.e. objects will remain in their state of motion (or rest) unless a force acts to change the motion. In addition, because momentum is a “vector quantity” the behaviour of an object can only be fully described and predicted by specifying momentum and direction.

        This concept can be applied in economics in relation to the tendency of the values of assets like stocks & shares of particular companies to continue to increase or decrease according to past performance. Unless, of course, the wider economic/technological/social environment changes. As it always does. So neither the parts nor the whole of an economy remain constant just as the Heavens are not unchanging. Which means the phrase “momentum constant” is meangless.

        Going on to state that the momentum constant doesn’t accumulate over time doesn’t make sense. Particularly if one understands that physical objects (and by analogy companies and, possibly, whole economies) can move faster or slower in a particular direction according to the influence of external factors/forces.

        Jumping from that point to asserting that individual human needs (undefined here but normally understood to include basic physical/physiological requirements such as food, water, shelter and clothing AND immaterial things like companionship) are constant, don’t accumulate or change over time is a huge leap. And, in my opinion, wrong because individual’ needs do vary, e.g. with age and the impacts of meeting needs on the environment and resources does accumulate over time.

        See what I mean?

        1. Peter van den Engel
          8 December 2018 at 16:04

          With momentum constant I am referring to the energy/ time equation (which is my central theory, also related to evolution) of a flexible body, not a material mass.
          More parallel to what you describe as the evolution of a stock compared to the performance of a company. Not a Newtonian mass moving through space/ but an internal exchange.

          Yes, it can change, like expand or shrink/ but that is not cumulating over time, like 10 x 10 = 100. It’s a relative equation.
          Our money system starts from goods being produced with a certain value, like 100 x 50, resulting in 5000 capital value. A momentum constant in demand however means you need goods constantly in a certain value. Like 20.
          It is impossible this type of equation leads to a debt in time, nor a surplus.

          That’s why the value our monetary system has accepted, as if it is building surplus or debt over time by adding singles, is total nonsense.
          It only means there is a constant between an amount of production; which is a number of goods/ and the at the same time need for those, which is the constant.
          All you need to do is parallel that, with a constant income. UBI.

          It is totally and utterly irrelevant whether the inverted relation of that should build up its own consumption needs by adding the numbers untill his space is filled. You see?
          That’s why you need, and I am absolutely convinced it will happen in human history, this will be the future model.
          Although I cannot foretell when, since it means quite a paradime shift from the current system.

          The current money system simulates never ending shortages which do not exist. As if humans would not understand the other equation: it is a good thing to reach group demand: because you ARE the group.
          Labour cost IS nothing else than the price of its consumption.

          So, in a constant model like this there is no such thing as debt, insurance, or needing to swap an amount if money from one labour group to the other, as if they had to wait for each other. The current model is utterly stupid and inefficient.

          When you use a fiscal swap, this will always increase labour cost, or that of consumer goods, which were ALREADY produced. So what the hell are you doing? Is this the planet of the apes?

          1. Ian Barrett
            9 December 2018 at 20:06

            Sorry, but this makes no sense. A constant is, by definition, unchanging. Momentum (of an object or, at a stretch, a company or an economy) changes according to the effect external forces. In our current global economy the total amount of goods and services doesn’t meet needs i.e. real shortages are created – that’s why hundreds of millions of people live in poverty and a few have far more money and ‘stuff’ than they could conceivably need. And those needs do change: in relation to the growth of population amongst other things. How can labour costs be the price of consumption when a lot of what the economy does either doesn’t produce anything (derivatives and other socially useless financial activities) or produces things we cannot consume (pollution, weapons systems, infrastructure).

            I absolutely agree that the current system is stupid, but one has to replace it with something people like me can understand and which makes sense. I’m afraid I’m out of this discussion.

          2. Tuan
            9 December 2018 at 20:56

            Peter van del Engel

            It’s extremely misleading and a very bad idea to spoof physics in economics. You cannot use physics to try and understand human behaviour and decision making.

            In economics, context is everything, and context can only be described with a narrative.

            You do not require a narrative to describe the orbit of Mercury, you only need Newton’s equation of gravity, a few initial astronomical observations, and Einstein’s General Relativity to explain the precession of the perihelion.

            You do require extensive narrative to describe what our monetary system is, how it works, and how it impacts the economy. There is no room for physics memes or equations in economics, it’s too complicated for that.

          3. Peter van den Engel
            10 December 2018 at 11:24

            Tuan, you are totally wrong.

            When I am talking about a momentum constant it means for instance the two factors related to breathing, meaning its ‘vector’ is at the same time related to its pace/ and the need for oxigen of the body.
            They cooperate. A differential in one inmediately effects the other and visa versa.
            If you want to call that a narrative, well a somewhat underdeveloped stage of describing reality.

            I am not talking about dead matter cotaining gravity, like Newtons’ laws. The economy is part of a living system/ not a dead machine.

            I do believe the physics I have found: which are based on very solid logic theory, are not yet discovered by science. Einstein for instance has never been able to give a correct discription of what time is.
            It is exactly the understanding of this natural physics, which explains the financial system because nobody understands it correctly.

    2. Tuan
      7 December 2018 at 18:29

      Next time you use your GPS, please say thank you to another theory, the Special Relativity Theory from Einstein, without which the GPS would be as useful as tits on a bull.

      No, #MMT is not new, it dates back to Adam Smith and Karl Marx, and it’s the correct description of how our 5,000 year old monetary system actually works in the 21st century. In case you haven’t noticed yet, the whole planet functions in a monetary economy.

      And this is how you do macroeconomic accounting.

      Brief Outline of Macroeconomic Accounting
      Michael Hoexter, Ph.D. #GISPscholar

      A brief sketch of what macroeconomic accounting would entail, and how it might replace inappropriate business accounting for accounting appropriate to the tasks of government.

      If one accepts that the line of economic reasoning from Keynes to MMT is valid, one would need to accept the need for such a system of government accounting. The fundamental point of macroeconomic accounting is to keep track of how the financial resources and dynamics in the economy, including those originating in and authored by government, effect real resources and dynamics, among them and including the welfare of the citizenry and humanity more generally (if leaders are so inclined to take into account the welfare of people beyond national borders, which I would advise).

      Unlike microeconomic accounting, macroeconomic accounting must assess inventories and potential future inventories of real resources as part of the budgeting process. Real resources mean people, physical infrastructure, physical capital, and ecosystemic resources. Additionally macroeconomic accounting should assess the distribution of financial resources within the private sector both by demographic groups, by class, and by economic sector.

      The following are steps in the macroeconomic accounting process, steps which may seem thunderously obvious yet are often assumed or overlooked.

      1.Survey and Prioritization of Macroethical Commitments: Within Own Political Tendency and Within the Population.

      The macroeconomic accounting process has to start with what are both the common held “highest goods” that the population values and also what are the “highest goods” of the political tendency or theory from which a politician starts out. While non-numeric in nature, assessing what are the priorities of the society overall, beyond government and its fiscal policy should determine what government actually undertakes in its operations.

      However a simple empirical survey of popular views won’t necessarily lead to an optimal outcome: political leaders are supposed to lead, so they may present a new and “better” solution, that was not previously conceived by the population (i.e. a public survey of the US population in 1932 would not have resulted automatically in Social Security being implemented a few years later).

      Examples of priorities found in some political tendencies and in the population would include: Health Care for All, Housing For All, Free Education, Climate Stabilization, Sustainable Society, National Security, Tolerant Multi-Gender/Gender-Fluid Society, Crime Reduction, Higher Wages/Incomes, Anti-Corruption, Realization of God’s Kingdom on Earth (for religious fundamentalists), Hastening the Second Coming of Christ (for Christian fundamentalists), Strengthening the Traditional Family (for social conservatives).

      2. Inventory of Real and Financial Conditions.

      The next step in macroeconomic accounting is to make an assessment of the reality of society and the environment using, as much as possible, quantitative methods, creating an inventory of both real and financial conditions. Many government agencies, at least before Trump’s campaign to increase the production of ignorance, had been keeping track of these data. Areas of assessment should include:

      Employment, Wealth and Income Distribution Data
      Health Status and Access to Healthcare (Mental and Physical)
      Housing Condition Status; Homelessness
      Food production, availability and nutritive quality
      Distribution of and Performance of Educational Institutions
      GHG Emissions: Total, by Activity, by Sector, by Region
      Trends in Climate; Local, Regional Endangerment from Effects of Global Warming
      Land Use Trends and Changes; Emissions from Land use Changes
      Economic Sectoral Distribution of Productive Assets & Employment
      Material, Toxin, and Waste Flows within the Economy both by Activity and by Region/Locality.
      Distribution of Military Assets and Ongoing International Conflicts
      Distribution of Diplomatic and Foreign Aid Assets
      Government Investments in Science and Research
      Government Investments in Cultural Institutions and Activities.

      3. Prioritize and Categorize Real Needs.

      While the US federal government is already involved in many aspects of US life, reflected in the complexity of the budget and of countless government agencies, change in budgeting and rule making should be directed by real needs informed by ethical commitments. From the inventory in step 2 above, a list of priority needs would need to be developed that is in part influenced by step 1 macroethical commitments. Some of the needs identified may not be amenable to government action so the following categorization should be used:

      a. Priority-Need Soluble Within Private Sector w or w/o Political Commentary

      b. Priority-Need Soluble Largely via Government Rule Making and Rule Enforcement

      c. Priority-Need Soluble Largely by both Rule-making and Government Spending or Tax Policy

      4.Propose Political Program/Budget To Ameliorate/Solve Priority Needs.

      Many who are ensconced within politics are already committed to a certain set of policy solutions and start here at this step. However there are advantages in terms of openness and political discussion in taking one’s time going through steps 1-3 to arrive at “best possible” policy proposals and a complete political program. If one can go back and “show one’s work”, one’s arguments are stronger for a particular policy.

      Current large-scale policy solutions under consideration by those on the progressive left are:

      a. Medicare for All

      b. Free post secondary Education

      c. Student Loan Debt Jubilee

      d. Green New Deal/Climate Mobilization (I prefer second)

      e. Carbon Tax

      f. Job Guarantee

      g. Job Guarantee/Universal Basic Income Combination

      h. $15/hour National Minimum Wage

      i. Enhanced Social Security/Public Pension System

      j. Postal Banking

      k. Reinstatement of Glass-Steagall/Strict Bank Re-Regulation

      l. Financial Transactions Tax

      m. Reinstatement of Highly Progressive Taxation Including of Estates

      n. Strict Regulation of Internet Commons/Tech Monopolies

      o. Reinstatement of Strict Anti-Trust Laws

      p. Public Finance of Elections/Banning of Dark Money and Corporate, Large Donor Donations to Political Campaigns

      q. Increase Funds for Public/Social Housing

      r. End an Interventionist, Militarist Foreign Policy

      s. Stop US support for Authoritarian & Warmongering

      t. Regimes/Principled Support for International Human Rights

      5. Rough Draft Pricing of All Budget Lines and Tax Proposals

      The next step involves costing out each individual budget line over a single year or multi-year timeframe. This is a somewhat more conventional budgeting activity in that spending lines of the budget must at least mobilize resources from both the government and the private sector to achieve the program or institutional objective of that program.

      However at this point no effort should be made to balance the amount taxed with the amount spent. Instead each spending proposal and taxation proposal should be estimated to achieve the optimal realistic policy impact in any given year or in tranches over a multi-year period to achieve an overall objective or mission. For instance, the level and progressivity of income taxes should be levied to achieve a certain level of income equality as, as well as maintain the liquidity of private sector actors in a reasonable and fair manner. Alternatively a carbon tax should be levied in the amount to achieve real behavior changes in energy and resource use and not to target a certain total revenue. What will make this a macroeconomic accounting activity however, is that the real impacts on the area of policy targeting will determine amounts of spending or taxation, not the amount of imagined “revenue” available.

      6. Initial Assessment of Inflationary/Deflationary Pressure and Crowding Out.

      The total draft budget lines (negative by convention) and tax proposals (positive by convention) will be added together and an initial deficit or surplus (most likely a deficit) will be assessed. As per the earlier part of this piece, it should be assumed that a deficit is desirable, though the size of that deficit will then be subject to further modeling with regard to its potential negative impacts. A general target range for the deficit will be announced but more important specific modeling of any inflationary or deflationary impact of spending and taxation on specific sets of vital goods and services. Also realistic assessment of where government may be crowding out private economic activity in areas where it is determined that such crowding out is undesirable. In some areas, crowding out and socialization/nationalization of economic activity will be desirable, such as in health insurance, or, in my view, a national publicly-owned railway infrastructure.

      7. Adjustment of Budget Lines to Minimize Inflationary/Deflationary Pressure and Undesirable Crowding Out

      Tax or spending lines will be adjusted to maximize desirable and reduce undesirable effects as per the overall macro ethical commitments/prioritization and real world needs in steps 1-3. As per the reality of capitalism and the crises we currently face, erring towards larger deficits means that more attention should be paid to inflationary pressures and perhaps specific inflation dampening taxes and programs (such as special bond issues) could be offered.

      8. Budget Finalized and Presented for Vote – With stabilizers included in the package, the budget should be presented for vote.

      9. Mid-year Monitoring – Once passed and implemented, the budget should be assessed in 6 months to adjust for increased policy impact or for stabilizing financial impacts. In addition to adjustments.

      1. Ian Barrett
        8 December 2018 at 12:48

        Tuan, I can see what you are trying to convey and even agree with parts of this approach. But…

        1. Whilst Special Relativity does enable GPS to work neither SR or its daughter the General Theory of Relativity are absolute truths as they don’t work at the Quantum level – and vice versa.

        2. Surely a major thrust of Kate’s approach is that the idea than current macro and micro theories, however old they are and regardless of their history,are fundamentally flawed because they focus only on things that are currently described in terms of money – of which unpaid work like care is one example. She describes these as part of the core economy and including them as key to moving economies into the doughnut.

        3. For most of human history, all or most of economies didn’t use money. Goods and services were bartered, sometimes in exchange for intangibles such as religious salvation or the protection of a chieftan or king, and the main economic unit wasn’t the individual but an extended family, tribe or institutions like monasteries. Much of this still applies in many so-called undeveloped economies or in respect to the vital roles that the knowledge and time contributed to child care by gandmothers is now understood as being vital, in evolutionary terms, to the viability of groups and families.

        I have a suspicion, based on all your posts and please correct me if I’m wrong, that you are equating those who don’t do paid work with people who don’t want to work. Not only is this wrong in terms of those, mainly women, who provide most unpaid care, it is untrue to say that the vast majority of, say, people with disabilities (mental or physical) don’t desire paid work. They do, but many employers regard them .(and women of childbearing age or those that do get pregnant) as potential burdens. I’ve worked with virtually every group that is disadvantaged in this way and I’ve never met anyone who wouldn’t get a job if they could. A UBI that was properly designed would address their needs as well as tackling poverty and avoiding the ridiculous situation of governments paying benefits to effectively subsidise employers who won’t pay a Living Wage. Surely shifting those payments/subsidies to fund a UBI wouldn’t increase debt or inflation and because poor peoplemtend to spend extra income and spend it locally – rather than on expensive foreign holidays and cars – it would strengthen local economies.

        Lastly, love your description of Trump as increasing the “production of ignorance”. If it’s any consolation, we Brits have the Brexit wing of the Tory party and much of the media doing the same thing.

        1. Tuan
          8 December 2018 at 19:52

          Ian

          1. In case your haven’t noticed, every humans on the planet live, work and die in a monetary economy.

          2. There has never been an economy based on barter, ever. Credit was used since the dawn of humanity. Check with the anthropologists. Better still, read David Graeber’s Debt: The First 5,000 Years. It’s available for free here: https://archive.org/details/DebtTheFirst5000Years

          3. I do not confuse work with paid jobs. As long as there are unfulfilled needs in the world, there will always be work to be done.
          For those of us who are unable to do that work, or choose not to, for whatever reason, we must provide them with the same access to the goods and services that the rest of the community enjoys, through a benefit payment.
          For those of us forced into involuntary unemployment in the private sector, or those who wish to contribute to activities not geared to private profit, a government funded Job Guarantee makes perfect economic sense.

          1. Peter van den Engel
            9 December 2018 at 15:50

            Yes, first of all because the commercial sector cannot deliver more jobs anymore.

            I would not read it as a job guarantee/ but as income guarantee, to seek out new jobs which are in an experimental fase, or for studying those.

          2. Tuan
            10 December 2018 at 02:49

            Peter

            The commercial sector is unwilling to deliver ANY services that are not linked to financial profits.

            Since there are unfulfilled needs in the community that cannot be linked to financial profits, the government has to step in on our behalf to get the work done. There is nothing experimental about it.

          3. Peter van den Engel
            10 December 2018 at 10:59

            What you are describing is nothing else than all jobs related to the fiscal system, because none of them result in money profits.

            We already have a fiscal system. The problem is in accounting it results in more national debt at this stage because of globalisation of the economy. This is the general problem, why nothing more can be invested/ let alone constitute UBI.

            To solve the problem you first need a different financial system, not just ideals. This also is efficient, because the current system is quite illogical in creating social inequality.

            Overlapping already institutionalised government jobs, I am certain new jobs will be found/ but first you need an income guaranty, because as you said they are no longer overproducing material goods. We have passed that stage, because it is no longer necessary. The problem is our current financial system only rewards overproducing material labor, in general.

          4. Tuan
            10 December 2018 at 20:40

            Peter

            We live and die in a monetary system, all activities are mediated via monetary currencies issued by monetary sovereign governments, with the exception of the Eurozone, where the member states have relinquished their monetary sovereignty to the European Central Bank, to the great detriment of the well being of their citizens, and you can watch the disintegration of the EU online real time now, courtesy of Emmanuel Macron who is producing and shooting the latest hit show, Les Miserables 2018.

            The point is that the fiscal power of the state has been highjacked by the neo-liberal vampires to line their pockets, instead of directing the spending to benefit the rest of us, and to mitigate the catastrophic consequences of climate change happening on the planet right now.

          5. Peter van den Engel
            11 December 2018 at 12:28

            Tuan.

            You are right all of our activities are guided by the monetary system. That is, it’s strictly meant to be only related to the material needs of humans.

            In evolutionary terms humans are as species from birth guided in their arrow of time by their thermal entropy, meaning finding food (new energy) in its future and temperature protection (clothing, houses; with tools, transport and communication in between for proper distribution).
            The previous animal (biological) evolution, was only related to the first one: finding food – and taking care of offspring of course.
            So, as you notice it travels (expands) to next level relevances to higher eficiency.

            Now in our time; after at least 100.000 years of human evolution; we are at a turning point to enter the next level. Which will be mainly cognition (intelligence) and is no longer a material level related to the thermal environment of the earth.
            In paradox we are at the same time frustrating it…

            It almost comes across as an alien explanation, but the fact our material economy which is responsable, also stresses the fact the logic of our monetary interpretation of what money is; which is inverted to reality; cannot be a coincidence.
            It needs to explain itself again on this turning point.

            This concerns one of the magical interventions evolution applies on our reality, because the effect is it reaches a consciousness level.
            Whether it is design, or just its natural core functioning, makes no difference.
            It’s brilliant.

            The disfunctioning of the EU right now is directly related to its cote debt function/ and the fact many countries have an overweight in consumption in stead of production, which is now primarely expressed in the single currency.
            So, thanks to the single currency/ now the general disfunctionality of the system interpretation is exposed. Which calls for an adaption.
            Therefore I read it as an infringement which will lead to an adaption, because it cannot ignore its core mistake anymore.
            It is a painfull process. But I am not pessimistic about it.

            One thing which is disregarded in England is, it has a very serious core problem ofcits ownv by harboring an illegal state of financial industry right in the centre of London (the city), with its own private untouchable non democratic government.
            In relation to money flight of corrupt elites globally through offshore constructions like Jersy, Bermuda, Kayman islands and Hong Kong.

            I have a faint notion this was the only real reason for orchestring brexit, by an elite which has now drawn his hands back from political responsibillity.
            No less reason for a gilet jaunes movement than in France or elsewhere.

  49. 8 December 2018 at 16:16

    We founded the Regenerate Costa Rica Hub at the University for International Cooperation (www.uci.ac.cr) and Rancho Margot (www.ranchomargot.com) in July this year with many partners including Capital Institute, Regenerative Capitalism, Gaia Institute, Savory Institute, Blueprints.org, and others. We have used the doughnut economy model, the planetary boundaries and the ecological footprint (Global Footprint Network) to prioritize areas of action. Through the integration of environment (functional landscapes), regenerative society and regenerative cultural design, regenerative economics and the Economy for the Common Good, regenerative politics and spirituality, we have developed a holistic approach to capture large amounts of carbon in soil, decrease fertilizer use (and pesticides), increase biodiversity and develop local circular community based economies. We are looking now at how to strengthen local communities with the development of cooperative banks, local food chains under the One Health Approach, and maybe even alternative currencies (looking at cryptocurrencies and the use of blockchain for traceability of the whole system). The use of high tech is also a priority, incorporating the challenges people are facing under the 4th industrial revolution. In the end, we hope to get to have a country with a full regenerative development process that can be converted to permanent sustainability (way beyond green-wash and philanthropy) based on the Well Being Economy under the WE-Alliance.

    Hope to have you Kate very soon here to assist in the process!

    1. Ian Barrett
      9 December 2018 at 22:40

      Sounds brilliant. Any examples of this approach being tried in more developed economies at sub-national level? I’m thinking maybe in ‘rust belt’ communities or depressed rural areas or even poor suburbs in rich cities.

  50. Paul Overby
    8 December 2018 at 16:51

    Probably the biggest problem I have with this theory is that it is based on “per capita” assumptions. I disagree with this is a fundamental flaw of the theory. I am a crop farmer and let’s say there is a fisherman. As people, we are both of “equal value.” But in terms of the resources that we need to be productive to global society, we are fundamentally different. To compare our resources on a one-to-one basis is does not make either social or economic sense.

    I wonder how the donuts would compare if this theory was modified to include 50% weight on per capita basis and 50% weight on a GDP basis.

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