Mariana Mazzucato Has Reinvigorated the Most Important Battle in Economics
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Highlights
- Smith also highlighted what he considered to be the great enemy of production: monopolistic power. Rentier landlords, mercantilist protectionism, and competition-stifling guilds were impediments to the market’s freedom.
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As Mazzucato elaborates, Marx’s contribution was not, strictly speaking, the tying in of labor with value. Rather, it was his recognition that the capitalist form of production created a new form of society, characterized by class realities and relationships markedly different from what came before.
- what mattered was not occupation per se, but whether labor produced surplus value.
- While economists can continue to distinguish between monopolistic, oligopolistic, and competitive markets, the far more political question of whether market-based value extraction can be parasitic fades from view.
- Interestingly, Mazzucato points out that Keynes prefigured modern concerns about finance’s brain drain of engineers and scientists with his quip that, rather than participating in a success story of laissez-faire capitalism, “the best brains of Wall Street have been in fact directed towards a different object.”
- Rather than simple matchmaking, they act strategically to channel their revenues, especially into interest payments and toward shareholders. This logic fuels speculation bubbles, which are then continually refinanced through securitization and other strategies for inflating assets without investment.
- Welsh Water is owned and operated as a not-for-profit operation by a single-purpose private company for the benefit of customers, with its board made up mostly of independent directors who do not play an executive role.
- In particular, the true investments and risks which have driven modern innovation are far more collective efforts in her reading. In contrast, many of the rewards have been captured and privatized by tendencies similar to those in finance, and in the classic rent problems of thinkers like Smith.
- But in her analysis: “research has shown that two-thirds of the most innovative drugs (new molecular entities with priority rating) trace their research back to funding by the US National Institutes of Health.”
- Finally, we get a look at first-mover advantages and network effects: collective realities which generate the user base and mass data which companies effectively privatize in terms of value.
- Rather than lean and efficient services, privatization appears to have led to administrative bloat, price inflation, and a gutting of state capacity.