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

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.

Explainer

Culture

Digital

30 July 2024

5 min read

How tech harvests our humanity

The second in a three-part series exploring the implications of technology.

James Lawrence

James is Canon Missioner at Blackburn Cathedral. He researches technology and theology at Oxford University.

In the first article, I painted a picture of the ordinary person using modern technology, for example, social media on a smart phone. I noted that advocates for modern technology seem to have two basic principles: that technology is natural and neutral. In this next article I want to introduce the philosophy of Martin Heidegger and show how he pushes against these two basic principles and invites us to think again about modern technology. Heidegger’s instinct, as a twentieth century philosopher, is to be suspicious that things are not as they seem, he casts his suspicious gaze over modern technology and sees a way of being that technology encourages that exists underneath the technologies that we use every day.

What Heidegger wants to show us about modern technology is not related to specific concerns about particular technologies but instead a general suspicion about the ‘essence’ of technology, or, you could say, the spirit of technology. He doesn’t want us to immediately jump to pragmatic questions about how to use technology, as if the primary question is how to make any given technology better or more moral. Instead, Heidegger wants us to take modern technology together as a whole and ask, “What is the essence of this?” Heidegger’s contention is that “technology is not an object or set of objects, nor a way of handling objects with tools, but a form of being the world. It is not something we choose to refuse, but the environment in which modern humans come into existence.”

Heidegger argues that underneath any piece of tech that we might use in our day-to-day lives, technology at its core has already completely changed the way that we as a society understand and interact with the world and everything in it. We live in a technological age and as members of a technological society and so we have been shaped by (to use Christian language, we have been ‘discipled’ by) the spirit of the age to see the world around us. Heidegger suggests that we now see the world as broken down into useable bits that can be categorised and reformed to suit our needs. As Mark Wrathall puts it, the essence of technology is to train us to “experience the world as calling on us or drawing us. To transform everything into stock pieces, so that they can be placed into a vast inventory of options.”[2] Growing up in a technological society means that we see the whole world as an Amazon warehouse a place of seemingly limitless options that can be called upon depending on our needs and quickly delivered.

A piece of technology such as the smartphone points to a wider ‘spirit’ of technology which intends to position everything, even human beings, as replaceable resources within a larger system.

The central word that Heidegger uses to describe the essence of technology is gestell which is not an easy word to translate into English, but two possible translations would be ‘positionality’, or ‘enframing’. His point is that the essence of technology is to remove objects, people, and things from their natural environment and position them so that they might become useful, a resource, available for our manipulation. When Heidegger says that the essence of technology is gestell he is pointing to the way that modern technology extracts objects from their contexts and turns them into a quarry to the plundered. There are of course obvious ways in which humanity has always extracted resources from the natural world: we have always quarried for energy (coal, oil etc) or chopped down forests for wood. By claiming that the essence of modern technology is gestell, Heidegger wants us to notice that in the modern world, it’s not just quarries or forests that we mine for resources but now anything and everything can be turned from being a singular object in the world into a recourse for extraction. Everything has become what Heidegger calls “standing reserve.”

Think again of a smartphone, it is just one of the billions of devices that sit on shelves or, having already been purchased, live in someone else’s pocket. Inside each device are thousands of transistors and circuit boards each of which again are stockpiled in warehouses ready to be replaced if needed or used for some other purpose. Your phone is connected to a network of nodes each of which can be replicated or replaced if needed, no node is unique. Your latest phone has no unique or prize relation to you, it’s just the latest upgrade which will be recycled in a year or two when the next upgrade becomes available. The person from whom you bought the phone is equally replaceable, just a faceless employee completing a set of controlled and pre-arranged tasks that are designed to be completed by anyone and no one in particular. Likewise, you as the consumer are considered to be little more than “standing reserve” by the companies that supply you with your smartphone and access to their networks. One of many millions of nodes in their system that has been analysed so that your preferences can be expertly mapped to the range of services that they provide. Within that system, you are completely replaceable. A piece of technology such as the smartphone points to a wider ‘spirit’ of technology which intends to position everything, even human beings, as replaceable resources within a larger system: “Every item within this standing reserve is reduced to a position, actively waiting to be called on. Heidegger insists this is no judgment on the radio, the internet, or the smartphone user. It is just the way in which the essence of modern technology interacts with humanity… Heidegger provides a diagnosis of our modern age and the way in which we humans have placed ourselves under the sway of modern technology, as a resource standing within a network which seeks, ultimately, to place, represent, and think of every entity as an object within an all-encompassing system.”

Let’s return to the original thought experiment at the start of the first article: a mother playing with her child, who immediately reaches for her phone to capture the moment when her child does something particularly cute. An advocate for modern technology, like Steve Jobs, may look at that interaction and see only the benefit: a mother wanting to remember a beautiful moment with her child extends the capacities of her brain using a digital tool to aid her memory. But Heidegger would be more suspicious, he would look at that moment and argue instead that the essence of technology is to turn everything, even a precious moment with a cute baby, into a resource to be used at a later date. The unique moment of joy and delight between parent and child becomes caught and codified such that it can be found and replayed at will or easily replicated to send to others. At the extreme end of the spectrum are so-called content creators who reduce themselves to just another resource to be harvested on social media.

So that is Heidegger’s diagnosis of our technological age, in the final article in this series we will consider Heidegger’s solution and consider what a particularly Christian response to Heidegger’s diagnosis might look like.