Joe: Alright Lewis, pop quiz. If the global economy were a student in a class, what grade would you give it? Lewis: Oh, that's easy. An F. And the F stands for 'On Fire'. We’ve got rampant inequality, a climate crisis, and financial systems that seem to implode every decade. It’s not a star pupil. Joe: I think you’ve nailed it. And our book today argues that the problem isn't just that the student is failing; it's that we're using a completely broken report card. We're grading it on the wrong subject entirely. Lewis: I like that. So we’re not just failing, we’re failing at a test that doesn't even matter. What’s the book? Joe: It’s the widely acclaimed and highly influential Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth. And what's fascinating is that Raworth isn't some armchair academic who’s never left a university library. She spent years working for Oxfam and the United Nations, seeing the real-world damage of our economic models firsthand in places like Zanzibar. Lewis: Ah, so this isn't just theory, it's a framework born from deep frustration with how things actually work—or don't work—on the ground. That gives it some serious weight. So where does she start? What’s the broken report card? Joe: It’s the one number we hear about every single day, the one that leaders and markets worship above all else: GDP. Gross Domestic Product.

Lewis: Okay, but hold on. GDP growth is what every politician promises. It’s supposed to mean more jobs, higher wages, more money for schools and hospitals. It sounds pretty important. Why is it the villain of the story? Joe: Because, as Raworth puts it, GDP is a cuckoo in the economic nest. It’s an imposter that has pushed out the real, intended goal of economics and grown so big and loud that we’ve forgotten what we were supposed to be nurturing in the first place. Lewis: A cuckoo... I like that. A big, greedy bird that demands all the attention. What was the original goal then? What was the original baby bird in the nest? Joe: The original term for economics, from the ancient Greeks, was the art of household management. The goal was to manage our collective household—the town, the nation, the planet—to ensure everyone could live a good life. It was about well-being. But somewhere along the line, we swapped that rich, complex goal for a single, simple number. Lewis: And the irony is just staggering. You told me the guy who invented the whole concept of national income accounting, Simon Kuznets, basically gave a massive warning label with it, right? Joe: He did! Back in the 1930s, he explicitly told the US Congress that "the welfare of a nation can scarcely be inferred from a measure of national income." The inventor of the tool told us not to use it to measure well-being. But we completely ignored him. We got addicted to the simplicity of a single, upward-trending number. Lewis: But what’s so bad about it? What does this cuckoo metric actually miss? Joe: It’s more about what it perversely counts. An oil spill? That’s great for GDP. You have to pay for the cleanup, the lawsuits, the new equipment. A major earthquake? Fantastic for GDP. You get a construction boom rebuilding everything. It counts deforestation as economic gain but doesn't subtract the value of the lost forest. Lewis: That's insane. It's like a doctor measuring a patient's health by how much they spend on surgery. The sicker you are, the "healthier" the numbers look. Joe: Exactly. And it completely ignores huge, vital parts of our economy. All the unpaid care work—raising children, looking after elderly parents, cooking, cleaning—which is disproportionately done by women, is valued at zero by GDP. Adam Smith could write The Wealth of Nations because his mother made him dinner every night. Her work was essential, but in his model, and in GDP, it's invisible. Lewis: So it’s a metric that loves disasters and ignores the very work that keeps society functioning. And yet, leaders are still obsessed. I remember reading about that G20 summit where they all pledged to grow their economies by over 2%, just days after the world's top climate scientists issued their most dire warning yet about irreversible climate damage. Joe: That’s the perfect example of the cuckoo in action. The house is on fire, and the leaders are celebrating because the fire is generating a lot of heat, which they've decided is the only thing worth measuring. It’s a complete and total failure of the goal.

Lewis: Okay, I'm convinced. GDP is a terrible report card. It's measuring activity, not progress. So what's the right report card? What should we be aiming for? Joe: This is where Raworth’s genius comes in. She argues that if we want a new goal, we need a new picture. Our brains are wired for visuals, and for a century, the picture of progress has been a line going up and up forever. She replaces it with something beautifully simple: a doughnut. Lewis: A doughnut. I am one hundred percent on board with any economic theory based on a pastry. What does it represent? Joe: It's a visual compass for humanity. Imagine a doughnut. The hole in the middle is a place of deprivation, where people are falling short on the essentials of life. Raworth identifies twelve of these, based on the UN's Sustainable Development Goals—things like food, clean water, housing, healthcare, education, political voice, and social equity. The goal is to get everyone out of the hole and onto the doughnut itself. Lewis: That’s the social foundation. The minimum standard for a good life. I get that. What's the outside of the doughnut? Joe: The outer crust is the ecological ceiling. These are the nine planetary boundaries, identified by Earth system scientists, that we cannot cross if we want to maintain a stable planet. This includes things like climate change, biodiversity loss, ocean acidification, and chemical pollution. If we overshoot that crust, we start to cause irreversible damage to our life support systems. Lewis: Wow. So the safe and just space for humanity… is the doughnut. Not in the hole, not over the edge, but right there in the delicious, doughy middle. Joe: Exactly. It’s a goal that is not about endless growth, but about thriving in balance. And when you map where we are now, it's a shocking picture. Billions of people are still in the hole, lacking essentials. And we have already overshot at least four of the planetary boundaries, including climate change and biodiversity loss. We are simultaneously failing on both fronts. Lewis: That is a powerful, and frankly terrifying, image. But I have to ask the skeptical question. It's a brilliant visual, I love it. But is it just a pretty picture? I know cities like Amsterdam have officially adopted the Doughnut model. What does that actually mean in practice? Are they just handing out pastries at city hall? Joe: It's a fair question, and it's what prevents this from being just a "faddish call," as some critics have claimed. In Amsterdam, it means every new policy proposal—from housing to business development to transportation—is evaluated against the Doughnut. They ask: 'Does this policy help bring our citizens above the social foundation? And does it do so while reducing our pressure on the ecological ceiling?' It becomes a practical compass for decision-making, forcing them to consider the whole system, not just a narrow financial return.

Joe: And that's the key. The Doughnut isn't just a destination; it's a design principle. It forces us to ask a fundamental question: how do we build an economy that naturally brings us into that safe and just space? Raworth argues this requires two massive shifts in how we design everything. We need to move from degenerative to regenerative, and from divisive to distributive. Lewis: Okay, break those down for me. Degenerative to regenerative. What does that mean? Joe: Our current industrial model is what Raworth calls a linear, degenerative system. We take Earth's materials, we make them into products, we use them for a bit, and then we dispose of them. Take, make, use, lose. It’s a one-way street to a landfill, and it depletes the planet at every step. Lewis: Right, it’s my relationship with cheap electronics. I buy a phone, it's designed to break in two years, and then it becomes toxic waste. Joe: Precisely. A regenerative economy is the opposite. It's circular by design. It's inspired by the living world, where there is no waste. Waste from one process is food for another. This means designing products that can be repaired, reused, or safely returned to nature. It’s about harnessing renewable energy, restoring ecosystems, and participating in life's cycles instead of fighting them. Lewis: Can you give me a real-world example? This sounds great in theory. Joe: A beautiful one from the book is the story of William Kamkwamba in Malawi. He was a teenager who had to drop out of school during a famine. He went to the local library, found a book on physics, and decided to build a windmill out of scrap metal, a tractor fan, and old bicycle parts to power his family’s home. That is the essence of regenerative design. He took discarded 'waste' and turned it into a source of renewable energy to meet a fundamental human need. Lewis: That's incredible. It’s innovation born from necessity, not from a venture capital pitch. Okay, so that's regenerative. What about the second shift, from divisive to distributive? That sounds... controversial. Is this just code for wealth taxes? Joe: That's part of it, what we call redistribution. But Raworth argues we need to go deeper, to what she calls pre-distribution. It's about designing our economy to be more equitable from the outset, so we don't end up with such massive inequality that we have to fix it later with taxes and transfers. Lewis: How on earth do you do that? Joe: It’s about who owns and controls the sources of wealth. Think about enterprise design. Instead of a company where all the profits flow to a few distant shareholders, what about an employee-owned company, where the people who create the value share in the rewards? Or a member-owned cooperative? Or think about money itself. The book tells the story of the Bangla-Pesa, a complementary currency in a slum in Kenya. It allowed local traders to keep doing business with each other even when the national currency was scarce, creating a more resilient and distributive local economy. Lewis: So it's not just about slicing the pie differently at the end. It's about changing the recipe for the pie itself so it's more nourishing for everyone involved in the baking. Joe: That's a perfect analogy. It’s about changing the design of land ownership, enterprise, technology, and even knowledge creation to share value far more equitably from the start. It’s a fundamental rewiring of the system.

Lewis: Wow. Okay. So what I'm really hearing today is that for the better part of a century, we've been trying to fly a plane with a broken compass, pointing only to 'more speed,' and we're wondering why we're heading straight for a mountain. Joe: That's it. We've been obsessed with the velocity of the engine, which is GDP, without ever looking at the dashboard. Lewis: And the Doughnut isn't just a new destination. It's a whole new dashboard. It’s got an altimeter for the ecological ceiling, a cabin pressure gauge for the social foundation, and it tells us whether the passengers are actually safe and well. It's a complete system view. Joe: It is. And it fundamentally changes the job of an economist. It moves them from being a kind of high priest of growth, endlessly predicting the next decimal point of GDP, to being more like a systems gardener. Lewis: A gardener? I like that. Joe: Yes, someone who doesn't make the plants grow but who understands the soil, the water, the sunlight. Someone who tends the conditions for the whole system to thrive. They nurture, they prune, they create the context for a healthy, resilient, and beautiful garden to emerge. That’s the 21st-century economist. Lewis: That’s a much more hopeful image. It makes you wonder, what's the 'GDP' in our own lives? That one single metric we chase—maybe it's a job title, or a number on a scale, or likes on a post—that might be leading us completely in the wrong direction. Joe: That is a fantastic question for everyone listening. What's your personal 'GDP,' and what would your personal 'Doughnut'—that balanced space of thriving—actually look like? We'd genuinely love to hear your thoughts. Let us know. Lewis: This is Aibrary, signing off.