Meet the Leftish Economist With a New Story About Capitalism

from NYTs

Mariana Mazzucato was freezing. Outside, it was a humid late-September day in Manhattan, but inside — in a Columbia University conference space full of scientists, academics and businesspeople advising the United Nations on sustainability — the air conditioning was on full blast.

For a room full of experts discussing the world’s most urgent social and environmental problems, this was not just uncomfortable but off-message. Whatever their dress — suit, sari, head scarf — people looked huddled and hunkered down. At a break, Dr. Mazzucato dispatched an assistant to get the A.C. turned off. How will we change anything, she wondered aloud, “if we don’t rebel in the everyday?”

Dr. Mazzucato, an economist based at University College London, is trying to change something fundamental: the way society thinks about economic value. While many of her colleagues have been scolding capitalism lately, she has been reimagining its basic premises. Where does growth come from? What is the source of innovation? How can the state and private sector work together to create the dynamic economies we want? She asks questions about capitalism we long ago stopped asking. Her answers might rise to the most difficult challenges of our time.

More here.

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  1. Of course we are destroying the environment with our economic activity, and air conditioning is a big part of that. And this contrast between scientists studying in a cold room is like the irony of each of them traveling to his conference instead of videoconferencing from wherever they work, burning tons of jet fuel to do so.

    The first thing an indigenous tribe in the Amazon does when setting up a new village is burn the jungle down to the ground, in order to drive out noxious insects and troublesome plants. We have always done this. Now there are so many of us it threatens the planet’s ability to absorb our activities and continue to grow.

    The environment is vital, and yet it always loses democratic elections—look at Jay Inslee, governor of Washington state, who was the first democratic candidate to pull out of the race this year. These questions are so challenging to our system of civilization that they outflank us time and again. Finding a way to make our comfort and wealth acquisition and interpersonal politics adapt to environmental considerations has been fitful and probably always will be. What we need are practical solutions that can win in democratic elections, and what it will take is probably a demonstration of economies of scale in some new technology that satisfies all the stakeholders and changes our behaviors indirectly.

  2. Capitalism is the system we have right now. And if we are going to stay with that system, then we need to use it for greater social benefit, instead of just a select few corporations. If we are going to have such a large socialized government, then shouldn’t they be heading innovation, not staunching it? Perhaps instead of just place a choke hold on certain parts of the market the Government doesn’t like, it should help fund the parts that it does. For example electric cars were primarily funded by the government, and now Teslas are a popular brand of car that is influencing how people think about the potential of Eco-friendly cars. Her point on investing is also interesting because she talks about how the government constantly is having to “bail out” the market, becoming the “last resort investment” into the market, and that we should change the way we think about that. And I definitely think it would make more sense in a lot of ways, if we have our tax dollars going towards growing the economy, instead of into federal bureaus whose only jobs are to restrict the market.

  3. Mariana Mazzucato provides a perspective on the state of the current capitalist economy that I believe most people trying to become more familiar with the subject should meditate on and try to understand. Capitalism has its fair share of issues stemming from its profit incentivizing, unequal nature of going about things, but advocates for a fairer system often tend to not be grounded in reality, and have little to no comprehension of the drivers of the system that has formed the most successful economies to ever exist. The same criticism can be made for citizens anywhere on the political spectrum, making this an amazing article to show anyone who is open to other opinions on how the economy actually functions. I believe the author did an excellent job emphasizing the importance of the state in providing funding for some of the most ambitious and society altering projects that have changed how we live. this point is ignored time and time again in favor of wealth distribution too often. Although wealth distribution is a valid issue that needs to be addressed in on way or another, a strategic mind would definitely begin talking about wealth creation as this economist has. By basing her economic arguments in the reality of a competent state that has pushed us in the right direction of economic growth quite often, a new dynamic is presented to small government advocates which give them an exponentially more appealing reason to consider that the world is not as black and white as they may think it is.

    To further the author’s point, the U.S. government’s role in creating modern day Silicon Valley, a hotbed of technological innovation that may very well be the birth place of the next invention to change the world, is a prime example of why we cannot under utilize such an influential power that has a track record of developing profitable business. Directing public dollars towards the right things and outlining how we should invest as a nation to create the best economy possible is a conversation that will attract people from any background. There cannot be levels of influence of this magnitude without a consideration for the risk associated, and that is where I think much contemplation is required to refute established organizations like the Cato Institute whose expressed purpose is to heavily refute any narratives that involve government power. There was a lack of explaining the downside of government intervention and how it can inhibit growth in the article, but I imagine that is more indicative of the article rather than the economist.

    Mazzacuto does an excellent job at presenting her view of the economic debate in a way that everyone can understand. I am extremely happy that political candidates have taken this to heart, as I am sure that it will make for much more substantive conversation across parties than we are generally used to. I also appreciated her calculated progressive points like “If we continue to depict the state as only a facilitator and administrator, and tell it to stop dreaming, in the end that is what we get” where we get a more blunt statement of what kind of government she wants, but also it follows a long explanation of wealth creation that undoubtedly makes her opponents much more receptive to the things she is saying.

  4. Mariana Mazzucato leans more to the left when you examine her political stance. However, she has an issue that needs to be addressed by both sides of the political aisle. The question at hand is consists of questioning and wishing to help people understand more clearly how economic value is created in the first place. Many people jump to conclusions when considering how to fix the economy, and how to help those in financial distress. Many of the solutions proposed by the people trying to relieve economic pressure revolves around the idea of redistribution of wealth. Mazzucato brings up a more interesting and potentially more helpful alternative way of thinking about the ways to help those in need. Her idea stems from the fact that most people do not quite understand what goes into creating the foundation of economic value and thus arrive at the problem after it has already commenced. Mazzucato has written two books which explore the idea that we should focus more on the development of wealth than the redistribution of wealth. She cites that the left is losing politically around the world and it has to do with the fact that they focus too much of their time on trying to redistribute wealth. Her two books are “The Entrepreneurial State” and “The Value of Everything”. Even republicans such as Marco Rubio, have credited her way of thinking and value the way she believes we need to create economic growth. She wants to merge the capabilities of the private sector and the state to create a more healthy and sustainable economy. Democrat Elizabeth Warren has used Mazzucato”s beliefs to fuel new political plans she has been developing. This new way of thinking will surely revolutionize the way the left and the right work together and the way they compromise on new deals. Mazzucato is right to not directly criticize capitalism but rather try to understand the underbelly of our economy and how we can help it work with more efficiency. She wants to work with both democrats and republicans to let the economy of the world thrive by educating people on how to create wealth rather than to solely redistribute it.

  5. “We need to build an economy that can see past the pressure to understand value-creation in narrow and short-run financial terms and instead envision a future worth investing in for the long-term.” These are the words of Flordia’s senator Marcio Rubio who commented on Mazzucato’s work in the article from the New York Times. I think that we have become a band-aid society. I recently watched a movie where one of the characters, a plumber, was convincing his client to allow him to use copper pipes in his repair. His pitch explained that while copper pipes were the most expensive, they were the most durable. When the other ones were sure to break in five years the other pipes would last twenty or better, therefore the return on investment would be all the money they save by not having to re-fix their piping every few years. So what’s the point of this anecdote – our society clearly chooses to opt for the cheaper pipes. The problem now, of course, is that we have been replacing the pipes time and time again and now we need a whole new network of pipes.

    As the current generation faces the challenge of repairing mistakes that were not forecasted by the previous generation, the voice of Mariana Mazzucato is one worth listening to. Muzzucato is characterized not only an extremely qualified economist but also someone who is liberally versed. Because of this background, she is conscious of what is best for society ethically and monetarily. This is demonstrated by her push for state-provided funding of projects that seem to have great potential. Her eclectic position is also shown in her consciousness on wealth distribution which is commonly not considered capitalistic.
    She commented that in getting her hands dirty she learned and brought substance back to theory. She is a worldly figure that is experienced. Personally, in reading this article I could almost feel the economist’s passion for her work seep through my computer screen. In today’s day in age, we see so much of middle-aged white men representing our society. But more and more figures like Mazzucato are surfacing. I must say this article, even though it mentions past practices that have led to current disruption, gives me hope for reform and change in the future.

  6. First, Congrats to the Leftish Economist on winning her Nobel Peace Prize. This article was a refreshing dip back into economic theories that I desire. Her idea of the U.S government playing an important role in creating innovation and investing in the country is an idea that needs to be implemented with precision, but more importantly carefully with good intentions. One example of the power of the Government toward boosting economic growth is during War. During times of war especially back in the 1900’s we became an industrial powerhouse (that China has become now). We were the world creditor giving money to others due to our economic growth achieved during those times. Although the rewards were great, we did not take into account the risks of such advancement.
    Beginning with the psychological impact it had on the nation. The outcome of the war earlier said it provided great autonomy toward economic growth but at the risk of creating monopolies or generating the first millionaires, giving the appearance to the american people of the “American Dream” (which today is not what it was back then). Also the rise of the economy means someone is getting richer. The business leaders during the World war were greedy, and many did not know that a lot of the big companies were aiding both sides of the Alliances, at the cost of american people’s lives. The Government invested in the country, but only 1 percent came out on top. The psychological impact this had on Americans were sacred consumers, and hard working people that strive to have a American Dream that only helped a few.
    Next, another example of Government investing and innovation is the creation of Silicon Valley, the powerhouse of Technology in the U.S (possibly in the world currently). This creation led to amazing innovation that boosted capacity as well connectivity around the world, but at risk of privacy and true innovation. With Silicon valley first being used for Government interest and then turning into Companies that are close to monopolies. Gave rise to the Surveillance State that many fear are turning into the 1984 George Orwell Big Brother. The government is intruding into our rights and taking them away like what happened after 9/11. Also these tech companies innovation today are for better enhancement of task, and convenience. With the most important innovations are costly like medicine.
    Lastly, I did not come to disagree with the Leftish Economist, but more importantly emphasize the risk, as well as long term impact the Government has in when playing a role in the economy. We must not forget the past and remember that the Economy is more than just markets or buyers and sellers. Economy is about choices, specializations, and relationships which are driven by the people that the Government serves. I’d like to repeat once again congrats on the Leftish Economist in winning the Nobel Peace Prize as well as the importance that when the government does innovate or invest in the country that its for the people first, not corporations or government interest.

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