Explainer
Economics
Culture
6 min read

How to pick an economic approach that really adds up

Assessing doughnut economics, Paul Williams asks what’s the economy for and who does it really serve?

Paul Williams, the CEO of Bible Society, worked for over a decade in business in London and then as an academic theologian in Canada.

a round table with empty chairs is seen from above. An orange is the only item on it.
Meina Yin on Unsplash.

“Anyone can see that our economic system is broken.”

This is the conclusion of Kate Raworth, author of Doughnut Economics, and her assessment has garnered positive endorsements from figures as diverse as George Monbiot, Andrew Marr and Sir David Attenborough. 

Yet to judge by the discussion surrounding the Chancellor’s Autumn Statement, our political class is not included in this broad perspective that Raworth claims. In what is widely understood as the early skirmishes of an election campaign, anticipating the moment when the country’s voters have another opportunity to indicate the direction of travel they hope for, the focus is on who will be better or worse off by this or that tax cut or benefit change. If anything is broken it is not the economic system but something like ‘the government’s economic management’ (Labour) or ‘public sector productivity’ (Conservative).  

If you are worried, as Raworth is, by “relentless financial crises,” “extreme inequalities in wealth” and “remorseless pressure on the environment” then it seems that both the government and the opposition believe that the solution is more economic growth, albeit with some barely discernible differences in fiscal and regulatory policy. 

Our contemporary political discourse is dominated, regardless of party, by the mainstream economic paradigm in which the market generates economic growth and the state functions to keep things on track by taxing and redistributing some of the surplus to those who for whatever reason didn’t do as well as others in the process. It also provides some additional incentives to business and other organisations to act in the public interest, for instance by subsidising green energy or taxing fossil fuels. Both parties, it seems, support this approach. The difference between them concerns how best the state manages the economy to get the most out of it, how the resulting surplus is distributed, and what kind of further incentives are needed. 

Visualising doughnut economics

An economics diagram in the shape of a doughnut.
Source: Doughnut Economics Action Lab.

For Raworth, on the other hand, the first thing to ditch is the assumption that economic growth is the right goal to pursue. The ‘doughnut’ of doughnut economics is an alternative to GDP as a measure of progress. It name is derived from the visual depiction of the idea of an economy that operates in the space within two limits – ensuring the human rights of each person on the one hand, and staying within the means of the planet on the other. This concept refuses to conceptualise the economy as a closed system in distinction from the social and environmental systems on which it depends.  

Raworth also wants to shift the emphasis away from the individual rational chooser of economic theory toward a more social understanding of human flourishing. And in direct contrast to the mainstream paradigm sketched above, in which the market’s job is to deliver economic wealth and the state’s job is to worry about distribution and regulation, Raworth wants an economic system designed from the outset to ensure a more equal distribution and to actively regenerate the environment. 

The economic system itself is like an engine that can be put to whatever purpose you want. It generates wealth and wealth can be put to all kinds of uses, good or bad. 

How might we evaluate this? Nobody disagrees that financial crises, extreme inequality and environmental damage occur and are bad. A good number of mainstream economists find Raworth’s aims laudable and worth pursuing, because we do need a better measure of success and improved models of human behaviour and ways to incorporate and limit externalities like carbon emissions. Yet they also find her analysis of economics a caricature, as many of the developments in economics over the last few decades seem to be ignored. 

For her harshest critics, Raworth fails to give due credit to our current economic system for the incredible reduction in global poverty that it has already enabled, provides very little by way of actionable policy ideas, and is full of erudite but wishful thinking. 

Yet the popularity of Doughnut Economics reflects a deep sense amongst many of us (some mainstream economists included) that something is seriously wrong, alongside an instinctive identification with the kind of values and changes that Raworth seeks. 

 The vital question is: what is our economy for? If we can get a better sense of what purpose we want the economy to serve, it may prove easier to identify whether it is achieving that, or is in some sense ‘broken.’  

But to ask this question is immediately to step away from the mainstream paradigm that dominates our public discourse in framing the economy. For mainstream economics, questions of purpose are ethical questions and those questions are explicitly left to the actors within the economic system and the state acting on their behalf. The economic system itself is like an engine that can be put to whatever purpose you want. It generates wealth and wealth can be put to all kinds of uses, good or bad. 

These ancient texts suggest that our mainstream paradigm is seriously adrift if it imagines that our economic system is morally neutral.

For many people the idea that the economy itself can be separated from ethical questions will automatically raise an alarm. Certainly, for Christians it ought to. The Bible firmly resists the idea that wealth and its generation is morally neutral. Even the most superficial reading of the Scripture alerts to the inherently spiritual and moral quality of economic activity. Fruitful work is part of what it means to be made in the image of God in the garden of Eden. The product of work is offered to God in worship. The Law is full of commands to deal justly, use fair weights and measures, consider health and safety in the building of a house, and give yourself, your family and your animals a rest (to name but a few). Jesus tells us that you cannot serve both God and money. The pictures of the New Creation in both Old and New Testaments include economic imagery – The Old Testament book of Micah envisions an end to war with everyone living “under their own vine and fig tree” (a vision of peace and economic flourishing) and the New Testament book of Revelation depicts the product of human work being offered up in worship before the throne of God.  

Overall the Bible sees the economic, social and environmental dimensions of life as interwoven and interconnected. Take the Sabbath, for instance. It is not only workers who get (or are commanded to take) a Sabbath once a week. The command extends to the whole community - and even to animals. Every seven years, the Sabbath Year provides a rest for the land and for those struggling with debt – the land must be fallow and allowed to regenerate, and all outstanding debts cancelled. Sabbath and Jubilee are deeply intertwined (the Jubilee was effectively a sabbath of sabbaths, taking place after seven sabbath years) and the Jubilee was the theological paradigm chosen by Jesus to explain his own mission and ministry. Quoting the prophet Isaiah, he said:  

“The Spirit of the Lord is on me, because he has anointed me to proclaim good news to the poor. He has sent me to proclaim freedom for the captives, recovery of sight for the blind, to set the oppressed free, to proclaim the year of the Lord’s favour.” 

These ancient texts suggest that our mainstream paradigm is seriously adrift if it imagines that our economic system is morally neutral. And Raworth is closely aligned with the biblical vision insofar as she insists on the importance of an economy that exists not for its own sake, in some independent sphere, but explicitly to enable people, communities and creation to flourish together.  We need to ask what our economy is for. And this is as good an answer as you might find.  

Review
Culture
Film & TV
Hospitality
4 min read

The Paddington paradox

With a tip of his hat, he brings a trace of grace to every life he touches.

Krish is a social entrepreneur partnering across civil society, faith communities, government and philanthropy. He founded The Sanctuary Foundation.

A cartoon bear, wearing a blue duffel coat and red hat, rests his arms on a rock against a mountainous background
Paddington ponders Peru.
StudioCanal.

It appears that Paddington, the nation’s favourite unaccompanied asylum-seeking bear, has finally been issued with a British Passport, 66 years after stowing away on a boat from South America and two years after eating marmalade sandwiches with Queen Elizabeth II on her Platinum Jubilee.  In the brand-new film Paddington in Peru, we discover what happens when he uses his passport to return to his country of birth to visit his old Aunt Lucy.  

Will Paddington be reunited with the kind-hearted bear who brought him up after he was orphaned in an earthquake? Where will this leave the Brown family, who have been fostering him for the best part of seven decades? Indeed, where will it leave the rest of us who have embraced Paddington as one of our own? Will Paddington even return to 32 Windsor Gardens, London? 

It is not only his address and passport that evidence Paddington’s Britishness. This bear, who has captured the hearts of children and adults alike, has become as quintessential a British icon as Harry Potter and James Bond. This despite his Latino heritage, his status as an unaccompanied asylum-seeking bear, as well as his vast array of cultural faux pas. His earnestness, modesty, curiosity and unfailingly polite manners more than compensate, it seems, for his frequent dramatic mishaps and his uncertain immigration status.  With a tip of his hat, he brings a trace of grace to every life he touches – from refuse collectors to antique collectors, from convicted criminals to window cleaners.  Everywhere he goes chaos is met by kindness, compassion and positive transformation. 

Paddington seems to typify the best of what Britain stands for. Everything about his story is a celebration of the power of British hospitality. His creator, Michael Bond CBE, was inspired by the incredible hospitality of the people of wartime Britain who gave sanctuary to evacuee children in the Blitz as well as the families that provided loving homes for Jewish children fleeing the Nazis via the Kinder Transport in 1939. He once told a reporter: 

“We took in some Jewish children who often sat in front of the fire every evening, quietly crying because they had no idea what had happened to their parents, and neither did we at the time. It’s the reason why Paddington arrived with the label around his neck”.   

Aunt Lucy in the first Paddington movie makes this connection most clearly. She reassures Paddington who is nervous about what awaits him at the end of his dangerous journey, saying:  

“Long ago, people in England sent their children by train with labels around their necks, so they could be taken care of by complete strangers in the countryside where it was safe. They will not have forgotten how to treat strangers.” 

Despite the xenophobia that frequently comes across in our media, there are many Great British people who haven’t forgotten how to treat strangers. 

I wish I was as confident as Aunt Lucy about our country’s memory. When I watch the news and hear the anti-immigration rhetoric from some of our politicians, I fear that too many people in Great Britain have forgotten how to treat strangers.  

The Bible recognises the enormous potential for amnesia on this issue.  In its first five books there are no less than 36 reminders to welcome the stranger: hospitality was always supposed to be a priority of personal and national identity. Later on in the Bible we are shown what this looks like by Jesus, who welcomed the sort of strangers nobody else had time for – the poor, the downcast, the marginalised, the vulnerable, the sick, the homeless, the forgotten, the unpopular and the ethnically suspect. Finally, towards the end of the Bible there is another reminder in the book of Hebrews:

“Don’t forget to welcome strangers.” 

Despite the xenophobia that frequently comes across in our media, there are many Great British people who haven’t forgotten how to treat strangers. Tens of thousands of families have made rooms available to Ukrainians fleeing war over the past three years. Churches and charities and communities and schools and workplaces seem to have a wonderful habit of embracing those who are different, or who need a helping hand.  

This is what I call the Paddington Paradox: despite all the talk of tightening our borders, and reducing immigration, despite a summer of racist riots and yet another spike in hate crime cases, despite growing pressures on limited housing supply, and cost-of-living-related struggles, we love to think of our country as a hospitable one. We celebrate the welcoming of strangers – from the Kinder Transport to the Homes For Ukraine scheme. One of our most beloved national treasures is an asylum-seeker, albeit also a fictional bear.  

This week is my foster son’s birthday and so I am taking him and some of his friends to the cinema to see Paddington in Peru. To my surprise nearly all his friends’ parents have asked to come too! We are all looking forward to seeing how Paddington and the Brown family fare as they make a perilous journey on a small boat into the Amazon rainforest, and are forced to rely, once again, on the kindness of strangers.