A healthy economy should be designed to thrive, not grow | Kate Raworth — Transcript

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1. 0:04Have you ever watched a baby learning to crawl?
2. 0:08Because as any parent knows, it's gripping.
3. 0:10First, they wriggle about on the floor,
4. 0:12usually backwards,
5. 0:13but then they drag themselves forwards,
6. 0:15and then they pull themselves up to stand,
7. 0:18and we all clap.
8. 0:20And that simple motion of forwards and upwards,
9. 0:24it's the most basic direction of progress we humans recognize.
10. 0:29We tell it in our story of evolution as well,
11. 0:32from our lolloping ancestors to Homo erectus, finally upright,
12. 0:36to Homo sapiens, depicted, always a man,
13. 0:39always mid-stride.
14. 0:43So no wonder we so readily believe
15. 0:45that economic progress will take this very same shape,
16. 0:49this ever-rising line of growth.
17. 0:53It's time to think again,
18. 0:56to reimagine the shape of progress,
19. 0:59because today, we have economies
20. 1:03that need to grow, whether or not they make us thrive,
21. 1:08and what we need, especially in the richest countries,
22. 1:12are economies that make us thrive
23. 1:14whether or not they grow.
24. 1:16Yes, it’s a little flip in words
25. 1:18hiding a profound shift in mindset,
26. 1:21but I believe this is the shift we need to make
27. 1:24if we, humanity, are going to thrive here together this century.
28. 1:30So where did this obsession with growth come from?
29. 1:33Well, GDP, gross domestic product,
30. 1:35it's just the total cost of goods and services
31. 1:37sold in an economy in a year.
32. 1:40It was invented in the 1930s,
33. 1:41but it very soon became the overriding goal of policymaking,
34. 1:45so much so that even today, in the richest of countries,
35. 1:49governments think that the solution to their economic problems
36. 1:52lies in more growth.
37. 1:55Just how that happened
38. 1:57is best told through the 1960 classic by W.W. Rostow.
39. 2:02I love it so much, I have a first-edition copy.
40. 2:08"The Stages of Economic Growth: A Non-Communist Manifesto."
41. 2:12(Laughter)
42. 2:14You can just smell the politics, huh?
43. 2:17And Rostow tells us that all economies
44. 2:19need to pass through five stages of growth:
45. 2:21first, traditional society, where a nation's output is limited
46. 2:25by its technology, its institutions and mindset;
47. 2:28but then the preconditions for takeoff,
48. 2:31where we get the beginnings of a banking industry,
49. 2:33the mechanization of work
50. 2:34and the belief that growth is necessary for something beyond itself,
51. 2:38like national dignity or a better life for the children;
52. 2:42then takeoff, where compound interest is built into the economy's institutions
53. 2:48and growth becomes the normal condition;
54. 2:51fourth is the drive to maturity where you can have any industry you want,
55. 2:55no matter your natural resource base;
56. 2:57and the fifth and final stage, the age of high-mass consumption
57. 3:01where people can buy all the consumer goods they want,
58. 3:04like bicycles and sewing machines --
59. 3:06this was 1960, remember.
60. 3:09Well, you can hear the implicit airplane metaphor in this story,
61. 3:15but this plane is like no other,
62. 3:18because it can never be allowed to land.
63. 3:22Rostow left us flying into the sunset of mass consumerism,
64. 3:26and he knew it.
65. 3:28As he wrote,
66. 3:31"And then the question beyond,
67. 3:34where history offers us only fragments.
68. 3:38What to do when the increase in real income itself loses its charm?"
69. 3:46He asked that question, but he never answered it, and here's why.
70. 3:49The year was 1960,
71. 3:51he was an advisor to the presidential candidate John F. Kennedy,
72. 3:54who was running for election on the promise of five-percent growth,
73. 3:58so Rostow's job was to keep that plane flying,
74. 4:01not to ask if, how, or when it could ever be allowed to land.
75. 4:07So here we are, flying into the sunset of mass consumerism
76. 4:11over half a century on,
77. 4:13with economies that have come to expect, demand and depend upon
78. 4:19unending growth,
79. 4:20because we're financially, politically and socially addicted to it.
80. 4:26We're financially addicted to growth, because today's financial system
81. 4:29is designed to pursue the highest rate of monetary return,
82. 4:33putting publicly traded companies under constant pressure
83. 4:36to deliver growing sales, growing market share and growing profits,
84. 4:40and because banks create money as debt bearing interest,
85. 4:43which must be repaid with more.
86. 4:45We're politically addicted to growth
87. 4:47because politicians want to raise tax revenue
88. 4:49without raising taxes
89. 4:51and a growing GDP seems a sure way to do that.
90. 4:54And no politician wants to lose their place in the G-20 family photo.
91. 4:57(Laughter)
92. 4:59But if their economy stops growing while the rest keep going,
93. 5:02well, they'll be booted out by the next emerging powerhouse.
94. 5:06And we are socially addicted to growth,
95. 5:08because thanks to a century of consumer propaganda,
96. 5:12which fascinatingly was created by Edward Bernays,
97. 5:15the nephew of Sigmund Freud,
98. 5:18who realized that his uncle's psychotherapy
99. 5:21could be turned into very lucrative retail therapy
100. 5:24if we could be convinced to believe that we transform ourselves
101. 5:28every time we buy something more.
102. 5:32None of these addictions are insurmountable,
103. 5:35but they all deserve far more attention than they currently get,
104. 5:40because look where this journey has been taking us.
105. 5:42Global GDP is 10 times bigger than it was in 1950
106. 5:46and that increase has brought prosperity to billions of people,
107. 5:50but the global economy has also become incredibly divisive,
108. 5:56with the vast share of returns to wealth
109. 5:58now accruing to a fraction of the global one percent.
110. 6:02And the economy has become incredibly degenerative,
111. 6:06rapidly destabilizing this delicately balanced planet
112. 6:10on which all of our lives depend.
113. 6:13Our politicians know it, and so they offer new destinations for growth.
114. 6:17You can have green growth, inclusive growth,
115. 6:19smart, resilient, balanced growth.
116. 6:21Choose any future you want so long as you choose growth.
117. 6:26I think it's time to choose a higher ambition, a far bigger one,
118. 6:31because humanity's 21st century challenge is clear:
119. 6:36to meet the needs of all people
120. 6:38within the means of this extraordinary, unique, living planet
121. 6:43so that we and the rest of nature can thrive.
122. 6:47Progress on this goal isn't going to be measured with the metric of money.
123. 6:51We need a dashboard of indicators.
124. 6:53And when I sat down to try and draw a picture of what that might look like,
125. 6:58strange though this is going to sound,
126. 7:00it came out looking like a doughnut.
127. 7:03I know, I'm sorry,
128. 7:04but let me introduce you to the one doughnut
129. 7:07that might actually turn out to be good for us.
130. 7:09So imagine humanity's resource use radiating out from the middle.
131. 7:12That hole in the middle is a place
132. 7:14where people are falling short on life's essentials.
133. 7:17They don't have the food, health care, education, political voice, housing
134. 7:21that every person needs for a life of dignity and opportunity.
135. 7:25We want to get everybody out of the hole, over the social foundation
136. 7:28and into that green doughnut itself.
137. 7:31But, and it's a big but,
138. 7:35we cannot let our collective resource use overshoot that outer circle,
139. 7:39the ecological ceiling,
140. 7:41because there we put so much pressure on this extraordinary planet
141. 7:44that we begin to kick it out of kilter.
142. 7:47We cause climate breakdown, we acidify the oceans,
143. 7:50a hole in the ozone layer,
144. 7:52pushing ourselves beyond the planetary boundaries
145. 7:55of the life-supporting systems that have for the last 11,000 years
146. 8:00made earth such a benevolent home to humanity.
147. 8:04So this double-sided challenge to meet the needs of all
148. 8:07within the means of the planet,
149. 8:08it invites a new shape of progress,
150. 8:11no longer this ever-rising line of growth,
151. 8:14but a sweet spot for humanity,
152. 8:17thriving in dynamic balance between the foundation and the ceiling.
153. 8:21And I was really struck once I'd drawn this picture
154. 8:24to realize that the symbol of well-being in many ancient cultures
155. 8:28reflects this very same sense of dynamic balance,
156. 8:32from the Maori Takarangi
157. 8:34to the Taoist Yin Yang, the Buddhist endless knot,
158. 8:36the Celtic double spiral.
159. 8:39So can we find this dynamic balance in the 21st century?
160. 8:44Well, that's a key question,
161. 8:45because as these red wedges show, right now we are far from balanced,
162. 8:50falling short and overshooting at the same time.
163. 8:53Look in that hole, you can see that millions or billions of people worldwide
164. 8:57still fall short on their most basic of needs.
165. 9:00And yet, we've already overshot at least four of these planetary boundaries,
166. 9:05risking irreversible impact of climate breakdown
167. 9:08and ecosystem collapse.
168. 9:11This is the state of humanity and our planetary home.
169. 9:16We, the people of the early 21st century,
170. 9:20this is our selfie.
171. 9:23No economist from last century saw this picture,
172. 9:25so why would we imagine that their theories
173. 9:27would be up for taking on its challenges?
174. 9:29We need ideas of our own,
175. 9:31because we are the first generation to see this
176. 9:34and probably the last with a real chance of turning this story around.
177. 9:38You see, 20th century economics assured us that if growth creates inequality,
178. 9:42don't try to redistribute,
179. 9:44because more growth will even things up again.
180. 9:46If growth creates pollution,
181. 9:48don't try to regulate, because more growth will clean things up again.
182. 9:52Except, it turns out, it doesn't,
183. 9:55and it won't.
184. 9:57We need to create economies that tackle this shortfall and overshoot together,
185. 10:01by design.
186. 10:02We need economies that are regenerative and distributive by design.
187. 10:07You see, we've inherited degenerative industries.
188. 10:10We take earth's materials, make them into stuff we want,
189. 10:13use it for a while, often only once, and then throw it away,
190. 10:17and that is pushing us over planetary boundaries,
191. 10:19so we need to bend those arrows around,
192. 10:22create economies that work with and within the cycles of the living world,
193. 10:26so that resources are never used up but used again and again,
194. 10:29economies that run on sunlight,
195. 10:31where waste from one process is food for the next.
196. 10:35And this kind of regenerative design is popping up everywhere.
197. 10:39Over a hundred cities worldwide, from Quito to Oslo,
198. 10:42from Harare to Hobart,
199. 10:44already generate more than 70 percent of their electricity
200. 10:47from sun, wind and waves.
201. 10:50Cities like London, Glasgow, Amsterdam are pioneering circular city design,
202. 10:55finding ways to turn the waste from one urban process
203. 10:58into food for the next.
204. 11:00And from Tigray, Ethiopia to Queensland, Australia,
205. 11:04farmers and foresters are regenerating once-barren landscapes
206. 11:08so that it teems with life again.
207. 11:12But as well as being regenerative by design,
208. 11:14our economies must be distributive by design,
209. 11:17and we've got unprecedented opportunities for making that happen,
210. 11:22because 20th-century centralized technologies,
211. 11:25institutions,
212. 11:26concentrated wealth, knowledge and power in few hands.
213. 11:32This century, we can design our technologies and institutions
214. 11:35to distribute wealth, knowledge and empowerment to many.
215. 11:40Instead of fossil fuel energy and large-scale manufacturing,
216. 11:43we've got renewable energy networks, digital platforms and 3D printing.
217. 11:49200 years of corporate control of intellectual property is being upended
218. 11:54by the bottom-up, open-source, peer-to-peer knowledge commons.
219. 11:57And corporations that still pursue maximum rate of return
220. 12:01for their shareholders,
221. 12:03well they suddenly look rather out of date
222. 12:05next to social enterprises that are designed to generate
223. 12:08multiple forms of value and share it with those throughout their networks.
224. 12:14If we can harness today's technologies,
225. 12:16from AI to blockchain
226. 12:19to the Internet of Things to material science,
227. 12:21if we can harness these in service of distributive design,
228. 12:25we can ensure that health care, education, finance, energy, political voice
229. 12:30reaches and empowers those people who need it most.
230. 12:35You see, regenerative and distributive design
231. 12:38create extraordinary opportunities for the 21st-century economy.
232. 12:42So where does this leave Rostow's airplane ride?
233. 12:46Well, for some it still carries the hope of endless green growth,
234. 12:49the idea that thanks to dematerialization,
235. 12:52exponential GDP growth can go on forever while resource use keeps falling.
236. 12:58But look at the data. This is a flight of fancy.
237. 13:02Yes, we need to dematerialize our economies,
238. 13:04but this dependency on unending growth cannot be decoupled from resource use
239. 13:08on anything like the scale required
240. 13:11to bring us safely back within planetary boundaries.
241. 13:15I know this way of thinking about growth is unfamiliar,
242. 13:18because growth is good, no?
243. 13:20We want our children to grow, our gardens to grow.
244. 13:23Yes, look to nature and growth is a wonderful, healthy source of life.
245. 13:27It's a phase, but many economies like Ethiopia and Nepal today
246. 13:31may be in that phase.
247. 13:33Their economies are growing at seven percent a year.
248. 13:37But look again to nature,
249. 13:39because from your children's feet to the Amazon forest,
250. 13:43nothing in nature grows forever.
251. 13:45Things grow, and they grow up and they mature,
252. 13:48and it's only by doing so
253. 13:49that they can thrive for a very long time.
254. 13:55We already know this.
255. 13:57If I told you my friend went to the doctor
256. 13:59who told her she had a growth
257. 14:03that feels very different,
258. 14:05because we intuitively understand that when something tries to grow forever
259. 14:09within a healthy, living, thriving system,
260. 14:14it's a threat to the health of the whole.
261. 14:17So why would we imagine that our economies
262. 14:19would be the one system that could buck this trend
263. 14:22and succeed by growing forever?
264. 14:25We urgently need financial, political and social innovations
265. 14:29that enable us to overcome this structural dependency on growth,
266. 14:34so that we can instead focus on thriving and balance
267. 14:39within the social and the ecological boundaries of the doughnut.
268. 14:44And if the mere idea of boundaries makes you feel, well, bounded,
269. 14:50think again.
270. 14:52Because the world's most ingenious people
271. 14:55turn boundaries into the source of their creativity.
272. 14:58From Mozart on his five-octave piano
273. 15:01Jimi Hendrix on his six-string guitar,
274. 15:04Serena Williams on a tennis court,
275. 15:07it's boundaries that unleash our potential.
276. 15:11And the doughnut's boundaries unleash the potential for humanity to thrive
277. 15:17with boundless creativity, participation, belonging and meaning.
278. 15:24It's going to take all the ingenuity that we have got to get there,
279. 15:28so bring it on.
280. 15:30Thank you.
281. 15:31(Applause)