Last month the annual Kilkenomics Festival, a economics-comedy festival, took place in Kilkenny, and as usual featured a number of interesting panels on environmental and social issues.
This year UK economist Kate Raworth came to Kilkenny to discuss her theory of “Doughnut Economics”, which reorients traditional economics around the planetary boundaries concept, as the diagram below illustrates. She began by explaining that “at the beginning of the 20th century economics had no goal and it got a cuckoo goal of GDP growth”. Now “it’s time to chuck out the cuckoo from the nest and get a goal we actually want”. Kate explained that the hole in the middle of the doughnut is where “people are falling short of lifes essentials”. She stressed that “we want to get everyone into the doughnut but not go outside the crust of the doughnut”.
The panel went on to discuss how 20th century economic theories are not appropriate in the context of 21st century ecological changes. Much of the discussion focused on the difficulty of valuing natural and social capital in pounds. One of the panellists, Henry Leveson-Gower, founder of Promoting Economic Pluralism, noted that the approach to environmental economics in the 1970s and 80s was to value everything, but “for this to work you have to keep the threat to the environment in place; we’re going to destroy it unless you pay us money not to destroy it”.
Another panellist, Peter Antonini, an economics lecturer in University College, London, suggested that a common denominator is needed for decision-making and that money is a useful measure in this regard. He suggested also that economics is not suited to being used in an activist way, to achieve a goal.
Henry countered that some branches of economics e.g. complexity, feminist, institutional economics, “don’t need pound signs”. He suggested that measuring everything in terms of money means we “crush things and don’t properly value the things that don’t fit neatly.”
Kate agreed, arguing that the assumption in mainstream economics that money is the best incentive is not borne out in behavioural economics. She noted that “different approaches bring out different behaviours in people”. She also highlighted the power of words, suggesting that the more we are told about the concept of “economic man”, the more we come to believe it.
Kate suggested that we need to talk about “planetary household management”, highlighting that the economy has “four provisioning sections – market, state, household, commons”. However, the household and commons are not included in GDP “because there’s no money; utility cannot be measured in money”. Supporting her point, Henry concluded that “mainstream economics tries to start from the individual and work out, but it doesn’t work”. Instead, it is about the “values and behaviours of tribes… we need to create organisations and institutions where people will act on values, and we need to reorganise our companies”.
Naoise Nunn, co-founder of the festival, hosted a panel on “Social Capital and Public Life: Why we cannot prosper with broken communities”. Although it had no common panellists, this session picked up where Doughnut Economics left off, discussing the “associations that we have that are typically outside the market” and the value of community networks.
One of the panellists, Robert Shrimsley, the Managing Editor of FT.com, described social capital as “how many people around you who will do something for you that isn’t in their immediate interest…It works when people have a common cause that overrides their individual needs”. He also cited the book Bowling Alone by Robert Putnam. However, he cautioned that things that work well at local level don’t always work at a national level, which is more diverse, with more opinions.
Another panellist, Nicholas Gruen, CEO of Lateral Economics, introduced the idea of the Dunbar number, developed by anthropologist Robin Dunbar, who suggested that we are only capable of having close social relationships with up to 150 people. After 150 you need to develop institutions to function. He also suggested that social capital cannot be developed from the top down i.e. from government level, and mentioned the Family by Family initiative in Australia as bottom-up social capital building.
The final panellist, Simon Kuper, a journalist with the Financial Times, stressed that “loneliness is increasing and there needs to be some kind of collective intervention”. He suggested that populism brings people together and appeals more to lonelier people.
The all-male panel ended with an interesting discussion about gender balance, after an audience member asked why there were no women on the panel. Naoise Nunn explained that more women than men are invited to speak at Kilkenomics, but every year they end up with more male panellists. Robert Shrimsley suggested that women might “turn up, see what we’re talking about and say no thanks”. Do female economists feel alienated by current economics paradigms and discourse? Something for Kilkenomics to address next year perhaps.