Red (Velvet) Scare

It would seem a specter is haunting Europe — the specter of doughnut economics. A few months after Amsterdam’s decision, Copenhagen’s city council voted to draw up a plan to adopt the model. Barcelona, Brussels, and the Canadian city of Nanaimo soon followed. Irish president Michael D. Higgins praised doughnut economics at a speech in October 2020, while US cities including Portland and Philadelphia have also explored the model.

To many on the Right, doughnut economics shares much with another more widely known specter that once haunted Europe. (One libertarian opponent of the framework described it as “pretty much the same list that progressives have wanted for the last century or more.”) For her part, however, Raworth has been clear that doughnut economics isn’t necessarily a prescription for socialism or for capitalism — or, for that matter, for any known economic theory:

Sometimes when I present the ideas of doughnut economics, people say, “Is this capitalism? Is this communism? Is this socialism?” And you think, “Really? Are these the only choices we have? The isms of the last century? Can we not come up with some ideas of our own?”

And yet, despite its ambivalence toward the great “isms,” doughnut economics hasn’t been ruffling feathers among the continent’s powers in business and government — instead, it’s rallying their support. In 2018, Raworth was invited to speak at the World Economic Forum, and in 2019, she spoke at the BNP Paribas bank–sponsored High Yield and Leveraged Finance Conference. Former Brexit secretary and hard-right Tory MP David Davis is, according to Raworth, doughnut-curious. And, according to Balkenende, the former Dutch prime minister, former Unilever chief executive officer Paul Polman “knows all about [Raworth’s] book.”

So why is an ostensibly postcapitalist economic system appealing to so many of Europe’s most powerful figures and institutions? Amsterdam’s case offers some answers.

The “Amsterdam Approach”

A city’s journey into doughnut economics begins with a “city selfie” — a study of the city’s social and ecological well-being. Amsterdam, by its city hall’s own 2020 analysis, isn’t looking so good: The city is overshooting planetary boundaries in terms of land use, waste generation, fertilizer use, ocean acidification, and carbon emissions. Many Amsterdammers, meanwhile, are struggling: Almost 20 percent of city tenants are unable to cover their basic expenses after paying monthly rent.

To address these problems, Raworth suggests that Amsterdam should make “two big, dynamic changes.” First, the city should abandon its linear, take-make-dispose economy and replace it with a circular economy, in which products and materials are kept in use for longer. Second, the city should move from centralized to distributed “opportunity and value,” so that wealth is shared “with all in society who cocreate it.” Both goals sound eminently sensible. So why, one must wonder, have they not become reality before now?

Raworth and her followers would have you believe that at the root of Amsterdam’s social and ecological crises is a dearth of good ideas — that up until recently, no one had thought to pursue an economy in which everyone’s basic needs were met, or in which humanity’s demand for ecological resources didn’t exceed the earth’s regenerative capacities. There are even anecdotes that would support that notion. For instance, as Raworth tells it, an official with the Netherlands’ Ministry of Economic Affairs and Climate Change told her that hearing about doughnut economics was “like rain falling on barren land.” Amsterdam’s deputy mayor for sustainability, Marieke van Doorninck, reports finding the model equally revelatory: “I was brought up in Thatcher times, in Reagan times, with the idea that there’s no alternative to our economic model. Reading the doughnut was like, Eureka! There is an alternative!”

If one is under the impression that Amsterdam’s problem is a deficit of creative ideation, it would follow that a deluge of input and enthusiasm from as many people as possible is necessary. This is exactly what’s being solicited in Amsterdam. The Amsterdam City Doughnut report, for instance, claims that the city is ideally situated to enact “transformative action” because of its award-winning “Amsterdam Approach” to “collaborative innovation,” which involves connecting “diverse city stakeholders,” including “neighborhood initiatives, start-ups and civil society,” to the “established institutions of government, business, and knowledge institutions.” The Amsterdam Doughnut Coalition, a network of individuals and organizations supporting Amsterdam’s doughnut transformation, suggests a similar approach in its 2019–20 annual report:

We focus on those 1%ers, the creators, initiators, the ones that practice first and theorize later. It doesn’t matter whether they are stagiaires [interns] or CEO’s [sic], as long as they have that contagious positive energy that we desperately need to make systemic change happen.

Doughnut Economics Has a Hole at Its Core

Bringing about systemic change, however, isn’t just about harnessing “contagious positive energy.” It’s also — to borrow the Doughnut Coalition’s lingo — about dispelling entrenched negative energy. Doing that requires struggle beyond the intellectual combat that Raworth has been waging against mainstream economists.

This is something the city’s environmentalist left knows well. For decades — long before anyone heard of doughnut economics — they’ve pushed for an economy that provides a decent life for all while maintaining the health of the planet. But their efforts to democratize, decommodify, and decarbonize the economy to that end have largely been squashed by the city’s ruling class, which has instead ushered in an era of lower tax rates for the wealthy, financial deregulation, shrinking social benefits, and deflated labor union participation.

The crisis that plagues Amsterdam, the Left knows, is not a crisis of ideas, but a crisis of power: As long as capitalists, rather than workers, retain control of government and industry, the economy will remain a capitalist one, beholden to the same logic of privatization, growth, and ecological exploitation that created Amsterdam’s crises in the first place. “We don’t see doughnut economics as a viable ‘alternative to capitalism,’” Olaf Kemerink, chair of the leftist youth organization ROOD, formerly connected to the Dutch Socialist Party, told Jacobin. “As long as you don’t change the fundamental relations of production and democratize the state, capital will always seek to maximize their profits and the state will maintain that.”

To see this dynamic in action, consider Amsterdam’s housing crisis. In 2018, only 12 percent of the almost 60,000 homeseekers who applied online for social housing were successful; a recent survey, meanwhile, found that the average wait time for social housing in the city is nearly fourteen years. Building more housing is surely part of the solution, but as long as housing remains a commodity, far too few of those new homes will be affordable.

That’s happening on Strandeiland, the city’s newest residential island, which doughnut economics’ boosters tout as a signature example of the framework’s green, socially just bona fides. (Any contractor wanting to build on the island, for example, will need to provide a “materials passport,” so whenever the buildings are taken down the city can reuse the parts.) But of the 8,000 new homes to be built on the island, just 40 percent are being allocated for social housing, while 25 percent will go toward housing with mid-level rents, and 35 percent will fall under the high-end segment. This 40-25-35 ratio is actually a developer-friendly (and hence low-wage tenant–unfriendly) exception to the 40-40-20 ratio rule the city instituted for new constructions in 2017.

The city’s existing affordable housing stock, meanwhile, remains prey to the market. Recent calculations estimate that around 30,000 social housing units in Amsterdam could be “liberalized” in the near future, meaning that “rents can easily be set above €1,000 per month, making them immediately unaffordable for lower- or middle-income groups,” according to Utrecht University’s Gertjan Wijburg. The city of Amsterdam has lobbied the central government to temporarily or permanently freeze liberalized rents at a lower level — and raise the market value threshold that triggers rental liberalizations. Those calls, however, have not been heeded. This February, meanwhile, the city announced it was exploring whether to buy social housing rentals from corporations so they don’t fall into the hands of investors, but that idea also hasn’t moved forward. “In the absence of stronger public commitments, the City has no choice but to accommodate market logics in the search for viable housing solutions,” Wijburg argues.

A strong tenants’ movement could force these and other decommodification strategies to the top of the national agenda. Supporters of doughnut economics, however, aren’t calling for such a movement, since they don’t see the path to a just and healthy Amsterdam as involving conflict with capitalist interests. Deputy mayor Van Doorninck punted a rather different solution to resolving the city’s housing crisis. “There is a lot of capital flowing around the world trying to find an investment, and right now real estate is seen as the best way to invest, so that drives up prices,” she told the Guardian. “The doughnut does not bring us the answers but a way of looking at it, so that we don’t keep on going on in the same structures as we used to.”

Toward Bagel Socialism

If there is an implicit notion in doughnut economics of how the status quo will change, it’s that capitalists, ostensibly presented for the first time with the idea of a more sustainable and socially just economy, will arrive en masse at the rational conclusion that business can’t go on as usual. “We’re maybe trying to work with the coalition of the willing, but I do think the willing could be an example for others,” Van Doorninck says.

It’s a dubious theory, but it goes a long way toward explaining why doughnut economics is palatable to so many so-called progressive CEOs and other liberal elites, who rightly don’t perceive it as a threat. It also explains why Amsterdam will likely struggle to meet its targets for social and ecological justice. To wit, the Netherlands’ central bank expects Dutch GDP to grow 3 percent in 2021, and 3.7 percent in 2022. And the country’s plans to achieve a circular economy by 2050 are only expected to contribute to this growth: The Netherlands Environmental Assessment Agency, a research institute that advises the Dutch government, sees a €7 billion opportunity for the Dutch economy in the transition.

“Kate Raworth’s theory is of course very idealistic, but very naive,” says Tiers Bakker, a councilor with the Dutch Socialist Party. “We don’t need doughnut economics. We need bagel socialism.”

A worker-run economy that meets the needs of all within the means of the planet — call it “bagel socialism” or call it ecosocialism — remains, for now, out of reach in the Netherlands. The Dutch left, Cas Mudde points out, is more fragmented than ever. And as Alex de Jong has argued in Jacobin, the once-surging Socialist Party is in crisis, with declining party membership and leadership that has talked of a coalition with right-wingers. Despite broad support for left-wing policies among the electorate, the party’s share of support in national elections is diminishing.

This is certainly bad timing given the urgency of the current political moment. But it isn’t stopping socialists like Bakker from working right now on small-scale initiatives that demonstrate what a socialist alternative to doughnut economics could look like in Amsterdam, including a Socialist Party program that collects leftover food from local businesses and distributes it to residents without means testing. “In an ideal world we would take the plunge and take decisive action with popular power behind us,” Bakker says. “For now, we must show an alternative model through something as simple but fundamental as food distribution.”

Leading by example is useful, but it’s also insufficient. If we’re to have a livable future, the Left in Amsterdam and beyond will have to seize power, and soon. The facts are clear: We can either have a decent life for all within the means of the planet, or we can have capitalism. And we can’t afford to be agnostic about which fate we choose.