Saving the World? What Boots and the Body Shop in the UK tell us about Doughnut Economics and the Spirit Level (5 minute read)

Kate Raworth’s Doughnut Economics asks us to rethink our approach to economics.  She argues that part of the reason that people fall for conventional economics is that it tells a story simply. It uses big ideas, diagrams, etc to convince us. What we need is to create a new set of stories, metaphors and diagrams. 

This is where her idea of the doughnut comes from. We live in the middle of the doughnut. Its inner ring represents the social foundations on which our lives should be lived. The outer ring represents the environmental ones. What we do inside the doughnut needs to be consistent with both. Yet,  both at the level of practice and economic ‘theory’ it is not.  

This is a clever way of asking us to re-imagine our view of the world. It makes sense and Raworth knows her stuff as an economist   Her book is immersed in the history of economic thought. She even has a quote which the footnote suggests comes from the papers of Simon Kuznets – the person who pioneered GDP calculations. 

The UK version of Raworth’s book comes with an endorsement by George Monbiot. He says Raworth is ‘The John Maynard Keynes of the 21st century’. She is not quite that. But the problem is that even if she were it is not clear how would that help? Keynesian economists bemoan the fact that they have the better arguments and win hands down on theory but lose when it comes to policy.  The problems go a lot deeper that having the wrong stories, diagrams and metaphors.  

The Problem 

Ideas and arguments matter. But so do other things. Change requires us to identify what the problems are (crudely who the enemy is – structures, institutions, people) and who the agents for change are. In a global world this is a global challenge. 

This seems the essence of Branko Milanovic’s critique of her book. Milanovic thinks there are limited prospects for change because we cannot go back and there is no agent that wants enough change – the very problems that Raworth discusses have got inside our heads and are built into our socio-economic structures. I am not quite as pessimistic, but I understand his angst. Raworth seems to place too much on the power of ideas and small changes.  

The Power of Ideas?

Let us take a sidestep. One of the best books in the last couple of decades has been Richard Wilkinson and Kate Pickett’s The Spirit Level. It is a clear and compelling demonstration of the way that inequalities underpin social and health problems and how those problems could be reduced if the model of more equal societies was followed.  It received fantastic acclaim. But what difference has it made? 

I was fortunate to be able to interview Richard Wilkinson in 2010.  I think it is a detailed and decent interview which situates the argument in terms of the bigger picture and Wilkinson’s own career. I was struck, however, by what seemed an element of naïveté.  The book had had a great reception. The authors had been on a speaking tour of the US. They had met top politicians – including David Cameron, the future Tory Prime Minister in the UK who had all been interested and positive. Wilkinson was buoyant. However, since then, the inequalities have not changed much, and the social problems remain.   This has been driven by the public and private policies of those who Wilkinson thought had been persuaded. So, is the problem bad ideas or something else?  

Small changes – Boots and the Body Shop 

Raworth uses the example [amongst many] of Anita Roddick (1942-2007) and the Body Shop. Roddick is a popular case study of responsible capitalism. Raworth is not uncritical. She notes the problems Roddick had when she took the Body Shop public.   But she does not carry this story through. It is interesting to do so. 

First let us consider the wider cosmetics industry. Has the Body Shop changed it? I can’t really see that it has. Walk around Boots and we see: 

1.     value added but unnecessary ‘beauty’ products male and female – everywhere. Tax dodging Boots long ceased to be a Chemist.

2.     no frills basic ranges hidden away

3.     the price and product differentiation of cheap to produce creams which make unsubstantiated claims to allow them to be sold at huge mark-ups. 

But Body Shop itself is still there and claiming to link to Roddick’s original model.  But Roddick sold it, From 2006-2017 it was owned by L’Oréal in which Nestlé had a stake. Then in 2017 L’Oréal sold it to Natura – a Brazilian eco-friendly cosmetics producer. 

Natura (products aside) has a business model in Brazil like Avon. Except that its relatively poor ‘consultants’ (!) seem to pay up front for stocks. Is this an inducement to entrepreneurship and empowerment or a con to make someone else pay for the capital/ stock costs? 

And what about wider ethics? Body Shop boasted about its support of Community Trade for years.  I have no idea what this? It is the typical kind of the new CSR which makes giant but empty promises. 

Then look inside – look at the people serving – how are they dressed?  Do they have ‘white coats’ like the Boots staff? Did they have that when Roddick ran it? If not let’s think a little but about that and why it is and what that might tell us.

The Question of How we deal with structural pressure is still an open one.

This does not mean that all examples that Raworth gives are wrong. Many are right. We should certainly demand the best be followed. But what this story does show is that huge structural pressures exist even in a small area and that we need to be more sceptical about what those who say they are delivering are actually doing. 

But for anyone struggling with these issues Raworth’s book on Doughnut Economics and Wilkinson and Pickett on the Spirit Level (2009) are still damn good.

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