Explainer

Economics

Culture

16 January 2024

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

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.

Article

Culture

Israel

Middle East

Politics

27 June 2024

7 min read

Netanyahu’s baffling ability to bounce back

Disliked and embattled, the Israeli premier’s purpose strengthens him.

Emerson Csorba

Emerson Csorba works in deep tech, following experience in geopolitics and energy.

Between two generals wearing camouflage uniforms, a man in a black shirt listens.

Bibi ponders future plans.

Prime Minister's Office, Israeli Government.

Are the dreams of Bibi Netanyahu about to be crushed? As the Israeli prime minister’s coalition teeters, what is remarkable is that he has survived so long. Central to this survival is his purpose – a dream of a secure Israel. We need to unpack such leaders’ dreams and understand why they are so potent.

Langston Hughes, in his poem ‘Harlem,’ asks what ‘What happens to a dream deferred?’ Several possibilities are put forward: ‘Does it dry up like a raisin in the sun? And an alternative: ‘Maybe it just sags like a heavy load?’ And finally ‘Or does it explode?’

It’s possible that Hughes referred to Harlem race riots in the 1930s and 1940s, but no-one knows for sure. The question is what happens when a dream is put on hold – or worse, destroyed – in the face of struggle?

Do we press on? Do we give up? What happens if we press on, and things do not work out? Or perhaps we press on, and things do work out. Hughes’ poem encourages us to ask these questions.

Looking back, Hughes’ poem is interesting but obviously gloomy, without hope. A dream is deferred. It withers, and then vanishes. But what if a dream is – when encountering struggle – maintained, kept in tact? The dream, perhaps nearly lost, emerges in the end, stronger than it was before.

Hughes’ poem is one of struggle and eruption. Not struggle and emergence. It is a despairing poem, one that denies the possibility of resurrection from the brink of death, even if the obstacles are significant.

We all have dreams, perhaps about peace, career, family, community, love, or something else. Inevitably, these dreams are – as dreams always are, in order to test our faith - met with opposition.

In these moments, we have two options: we can believe in what we see – the dream faltering, withering on the vine, ever so slowly. Or we can believe in the unseen, in which the dream re-emerges from whatever resistance it encounters. The former values the material, what we can actually see. The second values and trusts in what we cannot see. This brings us back to the point of faith.

'I have lost count of how many political obituaries I have written about Netanyahu — and how many resurrection stories.’

Nicholas Goldberg

The ability to struggle and emerge, in which death or near-death is followed by resurrection, is a quality that is in short supply in modern political leadership. It is easily – and not surprisingly – overlooked in a culture prone to despair and hopelessness, in which we are met with a new crisis at every corner.

But some leaders have a unique, if not baffling, quality: the ability to struggle and emerge stronger, somehow renewed. They resurrect themselves where this was thought impossible. And when they have this quality, they become unrelenting forces, whatever you might think of them.

No leader better embodies this quality in the political West than Israeli Prime Minister Benjamin Netanyahu (or ‘Bibi’ for short). Netanyahu strengthens whenever he is on the ropes, perhaps because he is on the ropes.

Although a profoundly disliked figure by many, Netanyahu’s ability to struggle and emerge merits serious study from any student of politics. It is worth asking where his ability to struggle and emerge, resurrecting oneself from the depths of despair – in seemingly impossible situations – comes from?

Ishaan Tharoor puts it well in a recent Washington Post article: ‘Yet Netanyahu is expert at defying the odds.’ However, puzzlingly few articles are written on this topic – Netanyahu’s ability to come back from seemingly impossible circumstances.

Columnist Nicholas Goldberg comes even closer to the essence of resurrection in a Los Angeles Times op-ed in 2020, in which he writes ‘Over the years, I have lost count of how many political obituaries I have written about Netanyahu — and how many resurrection stories.’ He later comments on Netanyahu’s single life mission focused on security.

Both articles are more anti-Netanyahu than they are a reflection on the why and how of his countless resurrections. So it is worth asking: what is behind this quality?

A mission is fundamental to resurrection, in which certain politicians find a way through whenever the world counts them out.

While commentators focus on the ills of Netanyahu’s tenure as Israeli Prime Minister – indictments of corruption and possible future jail time, thwarting of a two-state solution in favour of the Abraham Accords, and the security failures that contributed to the October 7 disaster – they fail to consider deeper questions related to Tharoor’s description of Netanyahu as constantly ‘defying the odds.’

Neglected in analyses on Netanyahu is the deep trauma of his brother Yonatan’s passing in the famous Operation Entebbe. Neglected is the fact that he was wounded, sometimes severely, on many occasions while fighting for the Israeli special forces. And neglected is the influence of his father Benzion, a notable academic well-known for his writing on the historical oppression of the Jewish people (and on his own later rejection by the Israeli academic community).

These are powerful, deep-seated experiences if not major traumas, which – as Israeli friends well-acquainted with Netanyahu wisely note – underpin his clear life mission of increasing Israeli security in a dangerous world.

Goldberg puts this mission, even if uncharitably, as follows in his column: ‘Netanyahu has stood for one key proposition: that peace is not to be trusted; it is a pipe dream pushed by starry-eyed doves who fell hard for the likes of Yasser Arafat. According to Netanyahu, only battening down, fighting back hard, building walls and rejecting compromise protects the country.’

Netanyahu provides us with a crucial lesson in political leadership: a clear and simple life mission provides the ability to claim victory from the jaws of defeat, even in the most seemingly intractable of circumstances. A mission is fundamental to resurrection, in which certain politicians find a way through whenever the world counts them out.

A mission – simple because it is grounded in brokenness (the death of his brother) – provides Netanyahu (and other politicians that have this quality) with a strategic and tactical advantage that cannot be replicated by opponents without similar purpose. Such mission is not fleeting but enduring, Netanyahu resisting all temptations that might thwart his single-minded purpose.

In the case of Israel, no other Israeli political leader has operated with the same sense of mission as has Netanyahu over the last two decades. For if this were the case, Netanyahu would not currently be in power.

Our focus therefore should never be on dreams deferred, as per Hughes’ poem, but rather on the realisation of our dreams – underpinned by unique and consistent life missions.

Commentators, focusing on external circumstances – the current direction of the war, certain decisions made, the opinions of well-read ‘experts’ – neglect these deeper human questions at their peril, because the answer to the question of purpose helps people find ways through where none seem to exist. Purpose, not circumstance, allows a political leader to struggle and emerge in circumstances where most others falter.

For wider context, we can here turn to the example of Jesus, whose resurrection follows his trials at Gethsemane. When Jesus prays in Gethsemane, it is not clear how he should act. Jesus does not know what God wants from him. But he knows that he must carry out the will of his Father.

He asks ‘My Father, if it is possible, let this cup pass from me, yet not what I want but what you want’. Jesus is alone in his deliberation. He asks and waits, and in this waiting, the way forward is revealed. Here we see, in its most poignant form, struggle and emergence. Jesus is resurrected three days following his death, when even his disciples had counted him out.

Our focus therefore should never be on dreams deferred, as per Hughes’ poem, but rather on the realisation of our dreams – underpinned by unique and consistent life missions. Discerning these missions is not easy. If anything, there is considerable pain involved in doing so.

Yet, struggle that involves the possibility of failure of a dream, within a consistent and singular life mission, contains within it the seeds of success. The dream emerges intact from whatever short-term struggle it faces, if not strengthened.

A way is found where none previously existed, when those focused merely on the seen long counted a person out. In the long run, mission enables victory: the realisation – not deferral – of dreams.