Is Our Idea of Economic Success Completely Broken? (Your Radical Questions with Kate Raworth)

**Amol Rajan** (0:08)
Hello, and welcome to Your Radical Questions. This is where I put your magnificent questions to one of our magnificent guests. It's a chance to really engage very directly with the brilliant, radical, thought-provoking, brave people that we have on this podcast, to ask them about their ideas for the future. And this week, as you may know by now, because you heard Thursday's fantastic episode, I'm so thrilled to be joined by Kate Raworth, who has fundamentally altered how we think about economics. She wrote a book in 2017 called Doughnut Economics, huge bestseller. It's one of those books that other economists use as a kind of starting point for their own philosophy and worldview. Kate thinks that we should, rather than have this relentless focus on growth, we need to...

**Kate Raworth** (0:49)
Meet the needs of all people within the means of the living planet.

**Amol Rajan** (0:51)
Fabulous. And her big radical idea is that we should have an economic model which puts ecological and social needs first, things like human rights, instead of prioritizing things like GDP per capita at all costs. Anyway, it's all in Thursday's episode. It was a good episode, wasn't it? It was great.

**Kate Raworth** (1:07)
I loved it.

**Amol Rajan** (1:07)
It was absolutely fantastic. And we've had lots of questions. Thank you as ever to all of you who have sent in questions. We had rather a lot because Kate is a very, very, very, very popular guest. As I mentioned on Thursday's episode, she is the most requested guest that we've had.

**Kate Raworth** (1:19)
It's because of my sister.

**Amol Rajan** (1:21)
No, it's not. It's because of you.

**Kate Raworth** (1:22)
It's amazing.

**Amol Rajan** (1:23)
Oh yeah, I forgot I asked about that.
Anyway, here we go. Lots of questions. We're going to rattle through as many as we can. First question, and it's from Toby.

**Toby** (1:32)
GDP condenses all economic activity down into one metric that can assess a country's performance.
Does GDP incentivize a right kind of economic development? If not, do you propose an alternative economic metric, or do you believe that we should move away from metrics like GDP entirely?

**Amol Rajan** (1:48)
Toby, what a fantastic question.

**Kate Raworth** (1:50)
Thank you, Toby. Great question. GDP doesn't add up the value of all economic activity. It doesn't do diddly squat for the unpaid caring work of parents, the cooking, washing, cleaning, sweeping, raising the kids and getting labor ready to go to work every day. That's massively missing. It doesn't count the value of everything that's in the Commons or the community created. It doesn't count the value of Wikipedia, for example. It doesn't count the value of having a stable climate or fertile soils and everything that Earth gives us to make economic activity feasible. So what it does do is reflect the financial value of the goods and services that bought and sold in the economy in a year. And that's a subset of everything that matters. So that's one issue. Simon Kuznets, who was one of the architects of GDP back in the 1930s, he was asked to come up with GDP as a measure for the US economy at a time when they didn't have that, right? They had like tons of steel and tons of timber. And it was really handy to be able to add stuff up for the first time, especially when you've got a war going on in the 1940s. How much do we need to keep going for provisioning for the American population? How much can we take off for the war effort? Really handy to be able to do that.
But even Kuznets himself said GDP can scarcely be taken as a measure of the welfare of society. He knew it didn't count the value of forests as opposed to timber. It didn't count the value of society. It measured income and not wealth. So I think he'd be turning in his grave if he knew that today, really nearly 100 years later, we were still using this one number to rule them all. We live in the era of the data revolution.
Almost many people on the planet have a mobile phone. Actually, we can gather human data about, do people have food and health and education? How's their well-being? We can gather much richer information about people. We can measure the planet with sensors. We can almost in real time, sense the health of this planet. So yes, I would replace that one metric with a dashboard. Actually, there's one I've already drawn. It looks a bit like a doughnut.
We're now going to be reporting on this year on year, together with my colleague, Andrew Fanning. We are going to be updating the data of the doughnut every year.