The Sweet Spot: Balancing People, Planet, and Prosperity through Doughnut Economics
The CRB, under the “Rethinking Capitalism” initiative, is asking tough questions on the future of American business education. How are business schools implicated in the current state of the world, our communities, and the environment? What is our role in reshaping business school education? How may we culturally redefine the purpose and social responsibility of business? And what is the movement that’s needed to envision, then create, the future we need?
On December 5, 2024, the CRB hosted Haas alum Franziska Raedeker and Julian Kraus-Polk, members of the California Doughnut Economics Coalition (CalDEC), to explore the creation of regenerative and distributive economic systems in California and introduce the Haas community to the principles of thinking like a true 21st century economist in our brave new ecological crisis stricken world. John Lund-Delaossa, CRB Student Advisory Board Member, set the initial tone for the gathering drawing on a number of touch points in our current growth-addicted economic system:
- Ecologically, we’re witnessing severe environmental degradation and extreme biodiversity loss. There’s been a 73% average decline in monitored wildlife populations between 1970 and 2020, while 2024 is certain to be the hottest year on record, with temperatures likely to average at least 1.55°C above pre-industrial levels
- Socially, we see that almost 40% of Americans can’t afford an emergency expense of $400. Similarly, by current rates, it would take 518 years for black households to reach income parity with white households. This comes at a time when, for example, the arms industry is seeing record stock market gains and billionaires’ collective wealth has more than doubled in the last 10 years, from 6.3 trillion to 14 trillion dollars.
- Through all this, we witness the ongoing and deliberate dismantling of our democratic system at national, state, and local levels through corporate influence and strategic divestment, and the continued farce that only “infinite growth forever” will save us.
This system clearly isn’t working for everyone and we have to imagine a world beyond growth for the sake of future generations and a habitable planet.
Doughnut Economics, a term coined by Kate Raworth, is a growing international movement and practical economic model that provides hope for the future through the intentional redesign of an economy that meets the needs of people while staying within planetary boundaries. The enclosed circular model, as Raworth shared in her 2018 TED talk, was inspired from indigenous cultures across the world that interact with our environment in a reciprocal manner, acting as an integral part of nature rather than as a separate entity. At its core, the system is designed to be mindful not to overshoot our planetary boundaries, as opposed to the current growth-obsessed systems that are accelerating climate change, air and water pollution, and biodiversity loss.
The main component of Franziska and Julian’s presentation was to introduce the basic concepts and principles that underpin this circular economic model by unveiling the California Doughnut Snapshot, a visual and analytical assessment tool published this year designed to assess California’s ecological and social well-being within the framework of Doughnut Economics.
The assessment looked at 42 social and ecological indicators to begin visualizing California’s economic performance with the input of various experts and stakeholders across the state. In this initial assessment, the CalDEC research and policy teams found that 89% of ecological indicators overshot our planetary boundaries leading to challenges like ocean acidification and poor air quality, however, ozone depletion was the only ecological indicator that California did not exceed (thank you, CARB and Environmental Justice advocates). Furthermore, 100% of the social indicators fell short of delivering basic needs for all California residents such as food security, affordable housing, political representation, and a liveable income. While the grim outset of this tool’s snapshot of California’s efforts to meet the basic needs of its residents and natural environment, the speakers shared that there are several local pathways the public can take to reverse our current trends. Some examples included sharing the assessment with your local state and city elected representatives as well as with members of the research and academic community.
A critical component of this event was to build the community and network of people who dare to imagine a society that does not depend on infinite growth and think differently about business’s role in society. Students were eager to learn how the Doughnut Economics principles and indicators of progress could be integrated into their core classes as well as their everyday decision-making. While the framing for the snapshot is still a work in progress, CalDEC speakers invited the audience to support their efforts to keep refining this living document so the tool can be more robust in its assessment capabilities.
We welcome you to keep in touch with the speakers and other members of CalDEC. It’s easy to feel isolated and paralyzed by the gravity of the climate crisis and social inequities we see everyday, but as American educator and activist Mariam Kaba puts it, “hope is a discipline.” Each and every one of us has the capacity to do something that can impact the world around us in a positive, distributive, and regenerative way. With that said, while individual action is an important component of systems change, the economic and financial systems we live within today were carefully and intentionally designed to extract and exploit as much labor and other resources as possible to continue concentrating capital and power for a few. Thus, governments, corporations, and other powerful actors do not get a free pass out of being held accountable for the current social inequities and ecological crises simply because the desire for individual action exists.
We welcome you to practice hope with us and continue questioning the status quo through the Coalition for Responsible Business which you can sign up for updates on this page. You can also access the full Snapshot report here and stay connected with the growing international and more importantly local Doughnut Economics movement.
About the Author: John Lund-Delaossa is a third year EWMBA (25’) and active member of the CRB student advisory board.
