Economics and the state of the world - Book Reviews part 1

By: Angela Prentner-Smith, Founder and MD of This is Milk

The first book is Donut Economics by Kate Raworth. ​

Effectively, the author takes you through the history of economics and the flawed thinking that has led us to the near collapse of the human species.   

She explains throughout the book that the way we have continually looked at growth has been purely from the perspective that economics takes from the Earth. 

The measure of a country on a global scale is generally through economic growth. Gross Domestic Product (GDP) growth is the only indicator. Some of the flawed thinking through capitalism and this economic model is that the market and GDP will always get us out of any problems, whether it's environmental, cultural or anything else. Repeatedly, we fall back to this economic thinking based on one diagram, which is ultimately flawed.  

The flawed methodology is continuously repeated through educational establishments, through every economic student that goes through the system they are taught this flawed logic that GDP will always get a country out of whatever problems it has, and that this is the measure of growth.  

But we now know that that's not the case because we are seeing erosion of community, the planet, our climate controls, and a lot of inequality based on this flawed economic thinking.   

Donut Economics presents to us that there's a different way of looking at this that actually considers impacts across every factor of society; equality, environment, connection with people - the things that really matter to us as humans.  

This sort of thinking is starting to gain traction now and is aligned to quite a lot of South American thinking, for example, instead of more European capitalist thinking that has taken the globe over. It's ambitious, promising and gives an alternative viewpoint. I think it gives a little bit of hope that there is another way to do this.  

What always sticks in my mind is that we talk about economic reasons to do things, but economics is not real. It's something that is made-up by humans. It is entirely changeable. We decide to do things, and we decide to measure them the way that we do. Economics works the way it does because we decided it works that way, and as we've seen, it keeps rich people rich. That's what it tends to do ultimately.  

We have to start thinking in a more balanced and measured way. I feel that this book is quite a hopeful book. I would definitely recommend it. 

Then for something a little less hopeful, but around the same ilk is the Panama Papers from Bastian Obermayer and Frederik Obermaier, which takes you through the chronicling of the uncovering of what became known as The Panama Papers. 

​The premise of the book is around the concept of shell companies, legitimate companies that are created to only exist on paper, with no assets or operations. They're effectively fake. They often have fake board members, fake Chairperson. Often, they ask or appoint less fortunate people to start up the shell company. These people often live in poorer towns, and they've been given cash for their role, which prevents the taxation of considerable wealth and the types. 
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Many prominent figure heads are often involved in these shell companies including major world leaders, as it’s a way for the wealthy to basically avoid paying taxation into the countries that they live in. 

It's a book that opens you up to how corrupt the world really is and doesn't give you the hope that potentially Donut Economics does. It shows you the extent that corruption exists across the globe and the length that rich people will go to protect their wealth. It also shows the redistribution of wealth does not think of the needs of the planet, people or community. 

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Later this month we celebrate Book Week Scotland but here at This Is Milk, we celebrate books monthly!  

We hold our monthly TiM book club on the second Tuesday of each month at 12pm, where we discuss not only books, tv shows, movies, podcasts, anything you’ve enjoyed consuming over the month and want to share. Anyone is welcome to join us. If you would like to join our book club or you’re interested in hearing more, please email [email protected] 

Read the second part of this blog by clicking the button below.

Book Reviews part 2