Center for Humane Technology | Your Undivided Attention Podcast Episode 29: A Renegade Solution to Extractive Economics Kate Raworth: So, the problem begins right on day one. When I give talks about doughnut economics to groups of students or midlife executives, I'll often say, "What's the first diagram you remember learning in economics?" And it's the same the world over, supply and demand. Tristan Harris: That's Kate Raworth. She calls herself a renegade economist. A few years ago, she sat down and drew a new economics chart in the shape of a doughnut. Her chart includes the whole picture, not just of what we buy and sell, but the parts of our lives that mainstream economics often leaves out or oversimplifies. For example, here's how she looks at the story about Vietnamese farming communities. Kate Raworth: There are parts of rural Vietnam where they're famous for their rice paddy fields. And these households aren't particularly well off, and so somebody had an idea like, "Hey, let's have them come, and having home-stay tourists." You get to stay with a family, you get to be there. Great. And it did well, and it expands, and it expands. Tristan Harris: That's good, right? I mean, growth means everyone is better off. Kate Raworth: And now it's expanded to the point that those families are utterly dependent upon the income from the home-stay tourists, and actually they're not really doing the farming, so they're having to just try and maintain it so it still looks good. So it almost becomes a mirage of what it is that people are coming to visit. That real thing has been lost in the sheer fact of their arrival in numbers. Tristan Harris: The literal and figurative soil beneath their feet has been neglected and discarded. The substrate of these people's lives has become just slightly and subtly more shaky, but they have a new economic foundation, so they seemed to be getting by. Kate Raworth: And then COVID hits and the visitors are gone, and their economy has stripped out because what they had come to depend on is gone. Tristan Harris: And this isn't just happening in rural Vietnam, maybe it's happened in your town, or city, or on your block. Properties were transformed into Airbnb units almost overnight, and then the feeling of that place changed. There were fewer people to care about the schools, or the potholes, and the parks, or the noise they're making above your head. And maybe a few people made more money, the tourism economy grew, but then the model collapsed with COVID. At least for a little while, people prioritized short-term growth without thinking about the whole system, so parts of that system disappeared. Tristan Harris: And technology is what makes this rapid shift possible. But Kate is asking us to notice those shifts and think bigger. As we get all this economic efficiency, is there something else that we're losing, and are we really adequately meeting people's needs? In Kate's book, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, she lays out a model and gives us a guide for going from a 20th-century paradigm to an evolved 21st-century one that will address our existential scale problems. I'm Tristan Harris. Page 1 of 29 Center for Humane Technology | Your Undivided Attention Podcast Episode 29: A Renegade Solution to Extractive Economics Aza Raskin: And I'm Aza Raskin. Tristan Harris: And this is Your Undivided Attention. Tristan Harris: I'm just so excited, Kate, to have you on the podcast. Welcome to Your Undivided Attention. Kate Raworth: Oh, big pleasure. I reckon you're a renegade technologist, and here we go. Tristan Harris: Let's go. Maybe we should start with your background just to introduce you to many of our listeners and how you became a renegade economist. Kate Raworth: Okay. I'm 50 years old, so I was a teenager in the 1980s. And having grown up in the '80s and seen a famine in Ethiopia in a hole in the ozone layer and the Exxon Valdez spilling its oil all over Alaska, I thought, "Well, I want to learn the language of public policy. I want to be able to tackle these things." So I skipped off to university to study economics, and was quickly disillusioned and frustrated because it didn't tackle the things I cared about. They were there in the margins. I studied economics for four years actually, but then eventually walked away from the discipline because I found myself, whenever I met somebody, I never wanted to stick my hand out and say, "Hello, I'm an economist," because I just don't want to own that. Kate Raworth: So I became a generalist. I had no sense of disciplinary identity, and worked with UN and worked with Oxfam and became a mother of twins, immersed in the unpaid care economy. So I had these twin babies in 2008, and suddenly the world's financial markets collapse. And I'm hearing on the radio all these economists saying, "We need to rewrite economics to reflect financial realities in this crisis." And I just thought, "Well, I'll be damned if we're only going to rewrite economics for that, because we need to rewrite economics for decades to reflect the ecological crisis we face of climate change and to reflect the social crisis of people whose interests and needs fall out of the bottom of economics because they're not reflected in the market." Kate Raworth: So that was what brought me back towards economic, seeing that there was this moment. Somebody once said to me, "Oh, you're a renegade economist." And I thought, "Ah, you put the word renegade in front of it. I can go with that." And it draws people in, "What's a renegade economist then to?" Well, let me tell you what needs to be rewritten. So I find myself coming back towards economics. I drew this diagram of a doughnut in 2012, just a very simple picture, looks a bit like a doughnut, and it went, boom. It went viral almost overnight. And I was fascinated by the power of this picture, and that made me realize there's apparent pictures, there's apparent metaphor, and this is an opportunity to start rewriting economics. Kate Raworth: So I sat down and I read all the economics texts that I'd never been taught. So I started reading about ecological economics, and feminist economics, and behavioral economics, and complexity economics, and thought, "What happens if I try and make all these ideas dance together on the same page?" And it came out as doughnut economics. Page 2 of 29 Center for Humane Technology | Your Undivided Attention Podcast Episode 29: A Renegade Solution to Extractive Economics Tristan Harris: Many of our listeners maybe would question, why are we on a podcast that normally talks about the interaction of technology and society suddenly talking and focused purely on economics? And I think it's important to make a quick parallel to the work that you're doing in the film, The Social Dilemma, the inventor of the Like button, Justin Rosenstein says at the end of the film that this really isn't just a technology problem, it is an economic problem. And he says, I think very clearly that so long as a whale is worth more dead than alive and a tree is worth more as two-by-fours than as a living tree, we humans, we're the whale, we're the tree. Now, we are the thing that is being strip mined into dead slabs of predictable human behavior instead of the living, breathing consciousness or choice making, if there is such a thing as free will. Tristan Harris: Whatever extent of free will we might have is worth more when it's not free and it's in steady, predictable, dead slab of human behavior than if it is a living breathing citizen or a healthy growing child. That child is worth more if she is addicted, narcissistic, polarized and disinformed because that means that this business model of monetizing, commodifying and polluting your attention commons is successful. So I think that insight, that the film is actually making a point, that there is a problem with our core economic logic. And I think the question is, what is that problem? And I think that when we identify that, I think it's similar, I suppose, from what I've read and love about your work, what was the core thing that when you're noticing what was wrong or inadequate about economics, what were the places that your attention was looking? Kate Raworth: The problem begins right on day one. When I give talks about doughnut economics to groups of students or midlife executives, I'll often say, "What's the first diagram you remember learning in economics? And it's the same the world over, supply and demand. So the question is, what do we put at the center of our attention on day one? Because what we place there becomes central and we build everything around it. So when we start with, "Welcome to economics, here's the market." So many things have already happened. Number one, we've said, "Well, the economy is of course, it's all about markets," and we've stuck supply and demand there with this little crisscross of two lines.