Mark Goyder is a senior advisor to the Board Intelligence Think Tank. He’s the founder of Tomorrow’s Company and co-author with Ong Boon Hwee of Entrusted: Stewardship for Responsible Wealth Creation.
Last week I woke early with a strange dream still vivid in my memory. I had a collection of doughnuts: I was calling out to family and friends and then throwing a doughnut their way.
The only explanation I can offer for this strangeness was a tweet that I had read the previous day.
It was by Kate Raworth, the creator of Doughnut Economics. She uses this metaphor to describe two boundaries within which a sustainable economy must live. An inner boundary that stops anyone in our society from lacking the basics that they need to live. And an outer boundary which represents the limits imposed by nature and the scarce and precious resources on which we depend.
Here is Kate Raworth’s Tweet:
“Yesterday I spoke on @BBCRadio4 to challenge Truss’s rally cry for ‘growth, growth, growth’. It’s tough figuring out how to overturn a deeply entrenched paradigm in just a few sentences — I gave it a go. What else would you have said?”
Having listened to Kate Raworth, here is what I would have had her say.
I wouldn’t start with growth. I would start with why we say we want growth.
I’d say we want an economy that flourishes because we want human beings to flourish,
So what we all want is growth in whatever it is that helps people to flourish.
What makes people flourish? It starts with being healthy, well-nourished, well-housed, and well-educated. And inheriting from those who came before us a reasonably safe and settled place to live in. And passing on at least the same, if not better, to those who come later.
That is only the start. People need activity to flourish. They need physical exertion, mental challenge, work, love, community, and self-esteem. And, of course, in all except a subsistence society, they need financial income to pay for many of the things that make human flourishing possible.
When living standards are threatened by inflation, ballooning energy costs, and a housing shortage that makes owner occupation and affordable renting inaccessible, it is natural that political debate focuses on income.
Yet robust economic growth does not start with financial activity. Finance is a lubricant, an enabler of flourishing, a necessary but not a sufficient condition. Adding more GDP doesn’t necessarily lead to more people flourishing. If more people die on the roads that creates more economic activity as measured by GDP. If growth in GDP were the key to flourishing, I might choose China or the USA as the country that had got things right. The USA ranks 17th and China 71st in the 2022 World Happiness Report. India is recording the fastest GDP growth spurt and the most dramatic decline in happiness. Instead, the evidence suggests countries like Finland (8th for happiness taking the most recent three-year average) or Switzerland (5th) where people enjoy more of the things that make for flourishing — access to health and education and decent apprenticeships, for example.
Create a flourishing society, one which values what it has received from previous generations and one which is determined to pass on its inheritance in better condition, and you will have economic growth as a by-product.
This is what John Kay means by obliquity. In any situation, there are multiple, often conflicting, goals. There are important things that are achieved by aiming not directly at them, but as a by-product.
When our political leaders try to narrow the debate down to an exclusive focus on economic growth and the financial incentives required to achieve it, it is hard for others not to follow them on to this ground. But resist they must if they are to fulfil their duty to the citizens who may elect them as leaders.
Oddly, it seems to take the existential threat of war to re-balance our political priorities. In discussing the sacrifices made in World War One, Prime Minister Lloyd George said
“There are millions of men who will come back. Let us make this a land fit for such men to live in. There is no time to lose. I want us to take advantage of this new spirit. Don’t let us waste this victory.”
In World War Two, as the bombs dropped, there was a ferment of discussion about the better country we might become. That was when we laid the foundations for the NHS, the welfare state, and compulsory secondary education.
So, returning to Kate Raworth’s question, how about a different metaphor — the image of the harvest.
As Sarah O’Connor pointed out in the Financial Times recently, most people don’t know what GDP growth means. Most people do understand about harvest. Sowing and reaping. Think of growth in the economy in these terms. Those who understand the harvest appreciate unpredictability. That’s true of the economy too. Bond markets and labour shortages. Hailstones and drought.
We need to plant now in order to reap benefits later. We have to think about retaining the quality of the soil so that our children can enjoy future harvests. We need to think about harmony — with nature, with communities, between generations, and with all the complex systems upon which our economy depends. That is a language that relates the economy to human flourishing.