The donut effect of nutty donut economics.

 

 In economics, the donut effect has to do with the 'hollowing out' of city centers. Obviously, this can only happen if commuting is fast and cheap. There are 'external economies' from living large in the suburbs with others of your ilk, rather that occupying a cramped apartment with prostitutes and costermongers as your neighbours. 

One reason rail-technology developed rapidly in England was because the well off wanted to get the fuck away from stinky, cholera afflicted, inner City areas. COVID revived talk of the donut effect.

More recently, a nice lady named Kate Raworth has proclaimed a 'doughnut economic model'. It's about how communities can redistribute income within themselves while making themselves 'net zero' by using their own shit to provide 'biogas'. The problem is obvious. As South Park pointed out,  such communities will produce toxic levels of smugness. The most paranoid, antagonomic, nutters will seize agenda control. Sensible people will run away. There will be a hollowing out of this utopia because it will be adversely selective of shitheads. The thing will be like a Gandhian Ashram or Auroville unless there is some covert real estate Ponzi scheme aspect to the thing based on an oligarchy manipulating zoning laws and thus extracting rents behind the scenes. 

 The Guardian gushes over Raworth thus-

....there are few templates for an economy that radically shrinks the world’s carbon footprint without also shrinking our quality of life.

Sure there are. But only very sciencey people know what they are. Raworth studied PPE at Oxford. In other words, she is as stupid as shit.  

The economist Kate Raworth believes she has a solution. It is possible, she argues, to design an economy that allows humans and the environment to thrive.

The first rule of Mechanism Design is that it must appeal to self-interest- i.e. it must be 'incentive compatible'. If you have a template which only nutters and virtue signallers are attracted to, the thing won't scale up. What you have is a cult or a bogus ideology which might support a bit of Tiebout sorting which yield 'Manorial rents' in an opaque manner.  

Doing so will mean rejecting much of what defined 20th-century economics.

What defined it was stupidity. Smart people gained control rights over billions of dollars worth of resources. They might employ some Economists and Accountants and Actuaries and Psychologists and so forth but what really mattered was developments in STEM subjects.  

This is the essential premise of her only book, Doughnut Economics: Seven Ways to Think Like a 21st Century Economist,

In the 21st century, guys with Mathsy Econ PhDs could get paid quite well by Bezos or Musk or other such billionaires who were changing the world by directly controlling hundreds of billions of dollars worth of resources. The prestige of the economist had fallen back to what it had been before the Great War- i.e. nothing at all.

which became a surprise hit

with silly people 

when it was published in 2017. The book, which has been translated into 21 languages,

David Icke has been translated into 25 

brings to mind a charismatic professor dispensing heterodox wisdom to a roomful of students.

Stupid students- sure. 

“Citizens of 2050 are being taught an economic mindset that is rooted in the textbooks of 1950,

if they did PPE- maybe. But who the fuck would do PPE unless they wanted to be a rent extracting waste of space- i.e. a pol or 'policy advisor' or other such talking shithead? 

which in turn are rooted in the theories of 1850,” Raworth writes.

Rubbish! Keynes in 1920 thought America had become a net food importer because of diminishing returns. But practical people knew that the State itself only arises because of scope and scale economies.  Non-convexities create 'natural monopolies' or represent 'uncorrelated asymmetries' associated with correlated equilibria of an Aumann, not Nash, type. This silly bint wasn't taught this stuff. My students, back in the late Eighties, were. That is why they still sometimes send me a nice bottle of Single Malt while expressing the wish that they could sleep as restfully, now, at the pinnacle of their careers, as they had in my Econ tutorials when they were spotty faced adolescents.

By exposing the flaws in these old theories,

that had been done once and for all before she was born.  

such as the idea that economic growth will massively reduce inequality,

Perhaps, the Kuznets curve- an empirical observation- is meant. If labor moves from the primary to the manufacturing sector, inequality initially rises before falling. But, by the late Seventies, when I got to Uni, nobody expected anything save Layard type Tax based Incomes Policy (if the Unions agreed to 'solidarity wages) to achieve any such thing.

The plain fact is, if your productivity rises and your income grows you become more equal to guys who inherited wealth. Indeed, you may overtake them. 

The problem with communities which redistribute income and live in harmony with nature is that if their productivity falls relative to others, sooner or later, their control rights to land will be challenged. 

or that humans are merely self-interested individuals, Raworth wants to show how our thinking has been constrained by economic concepts that are fundamentally unsuited to the great challenges of this century.

Why stop there? Why not show that if our thinking is constrained by Newton's law of gravity, we will not be able to levitate and thus rise to the great challenges of this century? 

To Raworth, the ideal economy of the future can be captured in a single image: a ring doughnut. Its outer crust represents an ecological limit,

This describes the economy of the present world. There is an ecological limit. That's why the US does not fire off all its nukes to celebrate the Fourth of July.  

while its inner ring represents a social foundation.

Every Society has a social foundation. The trouble is, if it doesn't do smart things, it might get invaded or descend into anarchy.   

To step beyond the ecological limit will damage the environment beyond repair.

Which is why we should try to avoid all out nuclear war.  

To fall below the social foundation will mean some people go without the things they need to live well, such as food, housing or income.

Sadly, we will all have to adjust our ideas about what it means to 'live well'. But, thus has it always been. Condorcet came up with a cozy little utopia. Malthus pointed out that even if it contained population growth it would soon face invasion or massive immigration. 

Her argument is that economies must be designed so they operate inside this ring,

and then Putin invades or millions of refugees try to get inside that ring.  

enabling humans and the environment to flourish.

so first we must establish a World Government. After that, why not ban dicks? Dicks cause RAPE!  

The doughnut is premised on three central ideas: the economy should distribute wealth fairly,

In which case there won't be an economy. Why bake a cake if other people get to slice it up?  

regenerate the resources that it uses,

Why not just eat your own shit?  

and allow people to prosper.

Currently, Neoliberalism is holding them down and fucking them in the ass. This prevents them from retraining as bereavement counsellors and thus becoming gainfully employed.  

None of this, Raworth argues, should depend on economic growth.

What's more, nobody should be permitted to die unless they really really want to. 

When Raworth arrived at Oxford University to study politics, philosophy and economics in 1990,

it was already obvious that PPE was shit. Those nutters pretended it was the Economist's task to produce a menu for the Politicians. The truth was Economists couldn't produce a menu. They could only eat their own shit.  

the only mention of the environment on her course was in an optional paper called Public Economics.

Nothing wrong with Pigouvian taxes or even Chichilnisky's Carbon trading scheme.  

Whereas the economists of the early 20th century tended to see their subject as a social science, many of their successors regarded themselves more like physicists, whose job was to uncover the laws that supposedly governed how the economy worked.

By 1990, some actual rocket scientists were becoming billionaires. Mathematical Finance made some quants very rich. They could change the world by themselves without bothering to talk virtue signalling bollocks.  

In her first year, Raworth studied with Andrew Graham,

a policy advisor to the utterly useless Harold Wilson. Callaghan and Healey did a U turn after that senile sack of shit resigned, but it was Thatcher who, more by luck than cunning, broke the power of the Unions by letting the real exchange rate rise dramatically. It was over the course of the Eighties that everybody realized that British economists had shit for brains. The odd thing was that Lamont- worst Chancellor ever barring Kwarteng- was actually quite smart. After 1992, when Soros made billions betting the Treasury was yeller, nobody would give the time of day to Economists. A political party was welcome to appoint a fucking Witch Doctor as its Chief Econ Advisor and nobody would raise an eyebrow. This was because there was no point bucking the markets. 

one of the few economists at Oxford to take issue with the narrowing purview of the discipline.

I think he was appointed John Smith's Chief Advisor.  

Graham liked to ask students questions about real economic events, such as why city centres decline,

donut effect 

or whether the “Thatcher experiment” had altered Britain’s growth prospects.

Yes.  

“If you want to study economising, you can throw all the maths at it that you like,”

which is why guys who are really good at O.R can become billionaires- like Purnendu Chatterjee. The alternative is to be a useless cunt like Sen.  

Graham told me. “If you want to study economies, you have to embed yourself in the real world.”

One where there is a magic wand which will make everybody very very nice and eager to share their wealth and to run their appliances only upon such electricity as might be generated from their own farts.  

In her second year, Raworth wrote a paper on the idea of development.

Development is what happens when productivity rises.  

“It struck me that it was the first time in my economics degree that we’d discussed what success looked like,” she recalled.

If you want to succeed in getting rich, it is a good idea to figure out a way to be more productive.  

“Until that point, it was just implicit that success was about economic growth.”

Whereas true success is about eating your own shit in a manner which promotes diversity, inclusivity, equity and environmental sustainability.  

In the early 90s, most people without access to life’s essentials lived in underdeveloped economies,

which had low productivity 

and most economists agreed that growth was the best lever to improve their lives.

Sadly, those who disagreed didn't donate their salaries to charity so as to improve their own lives by experiencing a decline in disposable income.  

As banks opened and businesses started investing, transport networks would emerge and education programmes would train workers to do new jobs that paid them higher wages, which governments could then tax back to pay for public services. Few considered the natural resources that all of this would consume, or that the Earth did not have the capacity to sustain endless growth.

The Club of Rome had considered all that before she was born. But their alarmism was counterproductive.  

In 1995, after graduating from Oxford, Raworth moved to Zanzibar, an island off the coast of Tanzania, to take up a development fellowship, part of a scheme that recruited young economists to work as civil servants in poor countries.

If you take Aid money, you have to accept garbage people of her sort from the donor country.  

At the time, Zanzibar was being transformed by tourists, who flew there to stay in the new hotels along its beachfronts.

Just as, previously, Brighton and Blackpool had been transformed.  

Visitors might have imagined Zanzibar as a landscape of tropical profusion, with its coconut palms, seafood and mango trees, but its ecosystem was delicate. The longer she spent on the island, the more Raworth was bothered by the waste created by the island’s booming tourist economy. Single-use plastic bags had recently been introduced, and their bright blue remnants became tangled on the beaches. “I didn’t have the framework to describe it, but this plastic was just arriving and arriving, and there was no system for collecting or managing it,” she recalled. “I had this real frustration that we were praising countries for their development, and yet saying nothing about the ecological damage that was going on in order to achieve that.”

I personally know three people with PhDs, one of whom speaks Swahili, who had written papers about this thirty years ago. The 'framework' for describing such stuff had existed for decades. The thing was a cottage industry.  In India, Environmental Impact Assessment had become mandatory in 1994 though I recall seeing such things back in the early Eighties. In Tanzania, EIA has been mandatory for the last 20 years. One reason for this was that South Asia and parts of Africa had more dudes with Econ PhDs than could be usefully employed. So they helped create a nexus between donors, NGOs and rent seeking bureaucracies such that they themselves could get paid as 'consultants' or for 'project appraisal' or simply talking and writing vacuous bollocks. Sadly, in this field, 'lived experience' and the possession of an incendiary grievance- i.e. being bleck- gives you a competitive edge. Thus, Kate has had to repackage this shite to sell to stupid Europeans. Still, at least she isn't a 'UN special rapporteur on food security' telling the Scots that their wee bairns face massive food insecurity because the vast majority of Scottish Mums lack access to arable land to grow oats to feed their children. Shockingly, even under the SNP administration, many Scottish lasses don't own a single goat. This is what is forcing the population north of the Border to subsist solely on deep fried Mars bars washed down with Buckfast tonic wine.