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A new one-diagram critique of mainstream economics

In honor of a talk about to start at the New School for Social Research and to begin to offset all the talk here and elsewhere about policies that best address issues of economic growth and fair distribution without a reminder of other things that matter, I present at the top of this post a graphic by economics critic Kate Raworth, who is author of a book based on the diagram called “Doughnut Economics.” I have posted on work by Dafermos, Nikolaidi, and Galanis to incorporate environmental constraints into a stock-flow-consistent economic model. The diagram is explained on this page at the author’s site. Mainstream economics allows for no biological or ecological limits whatsoever. That is one reason such points of view are in need of getting through from time to time in a blog like this one. (Caveat: I have not read the book.) In essence, the diagram is made up of (1) an inner boundary imposed by the need to produce goods and services for various essentials, including even gender equity and (2) an outer boundary imposed by multiple ecological constraints. Surpassing the latter boundary (breaking any one of the ecological constraints) would eventually lead to the end of life as we know it for the human species. The idea is when designing policy to try to stay within the space between the two circles–in a livable and sustainable intermediate zone–rather than to, say, reach some point on a frontier of feasible combinations of GDP and fairness, as some mainstream economics textbooks economics would have it.

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