September 16, 2020
Q&A 002

🍩 Recovery Dimension

Balancing the barrage of V- and W-shaped economic recovery predictions, Freakonomics' Steve Levitt interviews economist Kate Raworth on her 2017 book Doughnut Economics.

She assesses that G.D.P. growth as an indicator of how well a country is doing, is fundamentally flawed. Past a certain point, there is no fundamental relationship between G.D.P. and human well-being.

Trying to come up with an economic diagram explaining her viewpoint, she came up with a circle inside of another circle, basically a doughnut.

"No one should be in the hole in the middle where they're falling short on the essentials of life without food, or water, health care, housing, education, political voice. But at the same time, don’t overshoot the outer crust of the doughnut. There, we put so much pressure on our planet we begin to push her out of balance, and we cause climate breakdown. So, it’s a balance. Meet the needs of all people within the means of the planet."

Levitt continues interviewing policy makers and economists, challenging them on the basic premise that economic structures that are structurally dependent on endless growth can be dangerous. Something we can attest to from our knowledge of fundamental physics: all systems with just a positive growth factor are essentially unstable.