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A NEW WAY TO THINK ABOUT ECONOMICS: LESSONS FROM DOUGHNUT ECONOMICS

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Economy

A NEW WAY TO THINK ABOUT ECONOMICS: LESSONS FROM DOUGHNUT ECONOMICS

Kate Raworth explains in her book Doughnut Economics seven ways to rethink economics for the 21st century.

Libro economía de la rosquillaIt’s likely you haven’t heard much about this way of thinking—especially if you tend to distance yourself from economics, seeing it as a political matter. We often assume economics is only about GDP, business productivity, or taxes. We outsource our understanding of it to those in positions of political power.

But instead, we should internalize it—starting from something much closer: our personal and family finances.

In fact, the original meaning of economics comes from ancient Greece, where it referred to the “management of the household.” It was about how resources within a home were organized and used.

Of course, the concept has evolved over time through different thinkers. But economics is still deeply embedded in everyday life. It shapes how we manage money, make decisions, and prioritize resources.

That’s why it’s essential to understand how the current economic system influences even the smallest financial decisions in your personal or family life.

A MODEL THAT HASN’T EVOLVED ENOUGH

The book begins by revisiting how economics has been understood over past centuries and comparing it to today’s frameworks. Surprisingly, there hasn’t been a significant shift in economic thinking over the last 50 years.

Now consider this: in that same period, scientific and technological advancements have grown exponentially. Since the invention of the microprocessor, innovation has accelerated at an extraordinary pace.

So the question becomes: If our technology has advanced exponentially, shouldn’t our economic models evolve at the same rate? Why are we still operating under frameworks that seem to move in the opposite direction?

FROM GROWTH AT ALL COSTS TO HUMAN PROSPERITY

Raworth introduces a perspective that places planetary sustainability and human dignity at the center.

She shifts the focus:

One of her key critiques is the dominant economic goal of growth measured through Gross Domestic Product (GDP).

In 1960, the OECD was established with the goal of achieving “the highest sustainable economic growth.” However, “sustainable” referred to sustaining production growth—not environmental sustainability.

This growth is typically represented as an upward-sloping line—a symbol that things are going “well” and should continue indefinitely.

But at what cost? That’s where the real questioning begins.

THE PROBLEM WITH “AT ANY COST”

This idea of continuous growth has led to serious environmental and social consequences:

We are witnessing a system that often prioritizes output over well-being.

So the real question becomes: How do we design an economic model that actually addresses these challenges?

THE DOUGHNUT: A NEW ECONOMIC MODEL

To answer this, Raworth introduces a powerful visual framework: the Doughnut. Instead of a linear model, she proposes a circular one. This model is made up of three key layers:

This middle space represents a regenerative and distributive economy. If we exceed the ecological ceiling, we trigger environmental damage. If we fall below the social foundation, we fail to meet basic human needs such as health, education, housing, and income.

The goal is simple—but transformative: Stay within these boundaries.

A DIFFERENT WAY TO DEFINE SUCCESS

Instead of prioritizing GDP, Raworth proposes a different objective: Expanding people’s real opportunities—to be healthy, empowered, and creative—so they can live lives they truly value. This reframes success entirely.

WHAT DOES “REGENERATIVE AND DISTRIBUTIVE BY DESIGN” MEAN?

Raworth explains it clearly: A distributive economy spreads value as it is created, rather than concentrating it in fewer hands. A regenerative economy works in harmony with Earth’s natural cycles, allowing both humanity and the planet to thrive.

This isn’t just theory—it’s a design principle.

WHAT THIS MEANS FOR ENTREPRENEURS AND BUSINESSES

If every new project—whether a startup, business, or company—considered key human factors such as:

We could significantly increase our chances of operating within this “safe and just space.”

Beyond environmental impact, this approach also drives:

Not just for us—but for future generations, ecosystems, and society as a whole.

A SHIFT IN HOW WE ASK QUESTIONS

To design regenerative systems, we must first change the questions we ask.

This shift alone changes how businesses operate.

KEY PRINCIPLES FROM THE BOOK

The book outlines seven ways to rethink economics:

  1. Change the goal
  2. See the big picture
  3. Nurture human nature
  4. Get savvy with systems
  5. Design to distribute
  6. Create to regenerate
  7. Be agnostic about growth

A POWERFUL HISTORICAL EXAMPLE

One example that stands out comes from the Cree communities in northern Manitoba during the 19th century. When European traders offered higher prices for animal skins, expecting to receive more, the Cree responded by bringing fewer skins. Why? Because they now needed less to obtain what they required.

This challenges a fundamental assumption in traditional economics: that higher incentives always drive more production.

Sometimes, enough is enough.

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It’s time to rethink the frameworks we’ve inherited. Progress doesn’t have to come at the expense of people or the planet. A more sustainable, balanced, and human-centered economy is not only possible—it’s necessary. And it starts with how we choose to think.

 

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