Profile of Mariana Mazzucato, the economist who's swaying both left and right politicians with talk of "the entrepreneurial state"

Mariana Mazzucato (previously) came to prominence after the publication of her 2013 book The Entrepreneurial State, which described the way that robust state spending on large-scale R&D was critical to the kinds of commercial technological "breakthroughs" that the private sector liked to take credit for, and argued that the decades-long drawdown in public spending on the theory that governments were bloated and inefficient had stalled economic growth and technological progress because private firms systematically underinvest in research.

Mazzucato is a left-wing economist, but she is critical of the left's framing of economic controversies, saying that leftists overemphasize "wealth redistribution" and ignore "wealth creation" -- the latter being something states are absolutely essential to. In Mazzucato's framing, redistribution attacks the problem of inequality too late, after a small number of people have been able to hoard the lion's share of benefits from state investment, and then seeks to claw some of that money back.

But if economic critiques are focused on wealth creation, with the state assuming its rightful place at the center of this process, then it becomes natural to insist that (for example) governments receive royalties or other benefits from the use of publicly developed resources.

It's a framing that's gained widespread support on both the left and the right, attracting supporters like both Elizabeth Warren and Marco Rubio.

It part, the success of Mazzucato's framing is due to her emphasis on language, substituting words like "create" and "invest" to describe state spending, rather than neoliberal terms like "fix" and "spend."

I am generally in favor of this framing, but also concerned that it spells the end of any idea of a "commons" arising from government work -- for example, in the USA, products of the federal government are all in the public domain, meaning that anyone can access US Geological Survey map data (as opposed to the UK, where the government-created ordinance survey maps can cost hundreds of thousands of pounds to license if you want to build a new service on them).

The rich public domain of publicly created works is a significant leveler of economic power in the USA -- and where it has been compromised, it has given power to large, monopolistic corporations of exactly the sort that Mazzucato is worried about (think of how allowing states to privatize their laws has created price-gouging monopolies that charge the public for access to their own lawbooks).

By contrast, the fact that every Congressional portrait is in the public domain means that I, a writer for a small, independent news-site, have access to high-quality portraits of every federal US politician for free, which is an enormous boon to my own work.

It's not enough to say that public goods should be free for noncommercial use, either. Think of the paywalled lawbooks: we want lawyers, especially lawyers who work pro-bono representing indigent clients and have little capital, to be able to read the law for free. Erecting a paywall around the law erodes those lawyers' ability to represent indigent clients, because they will have to do more paid work to cover the cost of access to the law. Meanwhile, white-shoe firms representing the fatcats those indigent clients are fighting will have no problem paying to subscribe to the law. While it's true that giving the law away for free lets the wealthy get something they could afford to pay for, it also makes it free to the poor. And since means-testing is an expensive boondoggle that the wealthy find easier to game than the poor, limiting free legal access to "deserving" lawyers would just exacerbate the problem.

I'm not sure how to square this with Mazzucato's reasoning. It may be politically more palatable to emphasize the debt owed by beneficiaries of publicly funded goods than it is to argue for redistribution per se, but I'm afraid that eliminating the commons around publicly funded goods and replacing it with a paywall will have the opposite effect to what Mazzucato intends.

Dr. Mazzucato’s platform is more complex — and for some, controversial — than simply encouraging government investment, however. She has written that governments and state-backed investment entities should “socialize both the risks and rewards.” She has suggested the state obtain a return on public investments through royalties or equity stakes, or by including conditions on reinvestment — for example, a mandate to limit share buybacks.

Emphasizing to policymakers not only the importance of investment, but also the direction of that investment — “What are we investing in?” she often asks — Dr. Mazzucato has influenced the way American politicians speak about the state’s potential as an economic engine. In her vision, governments would do what so many traditional economists have long told them to avoid: create and shape new markets, embrace uncertainty and take big risks.

Meet the Leftish Economist With a New Story About Capitalism [Katy Lederer/New York Times]

(via Memex 1.1)

(Image: Simon Fraser University - Communications & Marketing, CC BY)