Who started capitalism? We’ll bet you think its Adam Smith, the Grand Poohbah of the Law of Supply and Demand.
The Dutch claim it was one of their merchants who created the first stock exchange. Whoever it was, there is currently considerable sympathy in Holland for the “Doughnut” views of British Economist Kate Raworth. She recently proposed that the capitalist system, which has guided many nations of the world towards prosperity in earlier centuries, is fatally unable to respond to the world’s climate emergency.
Instead of a never-ending capitalist struggle to build higher and higher every nation’s gross national product, Raworth describes a world where the “sweet spot” of human prosperity is a doughnut shaped ring. It lies between a “social foundation,” below which much of the world struggles to escape poverty, and a “environmental ceiling” above which most in the wealthiest countries are living a life of excess that threatens the planet.
Pursuit of this doughnut shaped “sweet spot” cannot be described as capitalism, which pursues individual and national prosperity by relentless unfettered growth. And yet, in capitalism’s birthplace of Amsterdam, policies are being implemented in pursuit of this “sweet spot,” policies that indeed threaten to shake the very foundations of the capitalist way of life.
From this doughnut viewpoint, the ongoing social challenge will be to lift everyone above the social foundation, by whatever means necessary to house an entire population and maintain them in good health. From a doughnut perspective, social housing for all may be the necessity. Not the free-market builder’s dream of luxury housing that is no longer a socially acceptable reward for dragging individuals and nations above the environmental ceiling. For some, this single thought, heretical to capitalism, should create an immediate backlash against doughnut theories of society. Not, however, in Amsterdam, cradle of capitalism!
There is a lot to take in on this subject, beginning with Kate Raworth’s unconventional views, and moving on towards their implementation in the largest city of the Netherlands.
Read more in Time Magazine: Amsterdam Is Embracing a Radical New Economic Theory to Help Save the Environment. Could It Also Replace Capitalism?
