Woman On A Mission: Economics Agitator/Disrupter Mariana Mazzucato

Mariana Mazzucato, tireless proponent of government-led innovation

Mazzucato may be one of the world’s highest-profile economists since the publication of The Entrepreneurial State.

She expanded the discussion in 2018’s The Value of Everything: Making and Taking in the Global Economy.

> She’s become a fixture on British TV news.

> She has appeared on CNN, PBS, and the BBC’s popular “Desert Island Discs” radio broadcast.

> She gave TED talks this year and last.

> She regularly writes opinion pieces for the likes of the Financial Times and the Guardian.

> She has been profiled by Wired, the Times of London, the New York Times, the Financial Times, Quartz, and Fast Company, among others.

> Along the way, Mazzucato has picked up a fistful of economics awards and become a sought-after advisor to policymakers. South Africa, Italy, and the Vatican drafted her for COVID-19 task forces. > She’s an advisor to the Scottish government on economics, the Organisation for Economic Co-operation and Development on growth, Norway on research policy, and the European Union on research and innovation.

TAKING ON THE CRITICS:

" . . Of course, not everyone buys it. To economist Arthur Diamond of the University of Nebraska, Omaha, Mazzucato’s thesis sounds too much like centrally planned industrial policy, which he argues won’t work because government is inherently unable to foster innovation. In his 2019 book, Openness to Creative Destruction: Sustaining Innovative Dynamism, he argues that what drives innovation is entrepreneurs who are deeply immersed in their subject and able to benefit from serendipity, pursuing hunches, and plain old trial and error.

“Government decision-makers won’t be as immersed in the problems, won’t have the detailed information, and won’t be in a position to follow hunches toward breakthrough solutions,” Diamond says.

Mazzucato’s sharpest critic may be Alberto Mingardi, a historian of political thought who teaches at IULM University in Milan and is director-general of Italy’s free-market think tank Istituto Bruno Leoni in Milan. In 2015 he published a 23-page critique of The Entrepreneurial State with a 32-entry reference list

 

ECONOMICS AGITATORBob SimisonFall 2020 Issue
PHOTO: S. ROBINSON

ECONOMICS AGITATOR

imf.org | 2020-09-01

Mariana Mazzucato, tireless proponent of government-led innovation. The 52-year-old Italian-American is a professor of economics focusing on innovation and public value at University College London (UCL), where she is also the founding director of UCL’s Institute for Innovation and Public Purpose.

Main message: Her main message is that governments around the world need to seize their power to lead innovation for the betterment of humanity.

> She made the case for rethinking the role of government in her 2013 book, The Entrepreneurial State: Debunking Public vs. Private Sector Myths .

In it, she argues that much of private innovation in health care, technology, and elsewhere relies on government-funded research that private enterprise can’t or won’t invest in. “I’m not sure I would have embarked on this had I not seen the suffering on the ground,” she says in an interview. . .

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". . .Mazzucato wrote The Value of Everything, she says, “because even though my ideas in The Entrepreneurial State really caught on and eventually led to real policy change in so many countries, the underlying principles of who was a wealth creator needed tackling head-on, especially the ramifications for basic economic theory about ‘what is value.’”

UNDER-VALUED ESSENTAIL WORKERS

The pandemic puts a harsh spotlight on the issue as many of the workers deemed the most essential—from grocery store clerks to delivery drivers to nurses and hospital orderlies—are also some of the lowest-paid. This partly reflects accounting-related distortions in the economy: GDP calculations count financial services because they generate fees even though they don’t create anything new, but it’s hard to put a value on a sound public health or public education system, Mazzucato says.

“We need to value and resource the essential parts of the economy,” Mazzucato says. “Value has not been shared with the workers, meaning that real wages have stalled behind productivity growth.” In her second book, Mazzucato observes that while the American economy has tripled in size, wages adjusted for inflation haven’t budged in four decades.

As they shore up economies and bail out businesses amid the pandemic, governments should use their leverage to tilt the playing field in significant ways, Mazzucato says. There should be strong conditions for grants and loans, she argues. In return for bailouts, for example, airlines should be required to lower carbon emissions.

In a July 1 New York Times opinion piece, Mazzucato urged “citizens’ dividends” and government equity stakes in businesses linked to government funding. “It is simply admitting that the government, an investor of first resort, can benefit from thinking more like a venture capitalist around societal goals like a green transition,” she wrote. . .