The Invention of Government, starring Mariana Mazzucato
By Alberto Mingardi
In an op-ed in the New York Times, Mariana Mazzucato offers a summary of her last book, The Value of Everything. The book is both a polemic against marginalism, which she considers a cover-up for laissez-faire (as if Jevons, Marshall, Walras, or Menger were champions of unfettered competition), and a plea for more government intervention in the economy.
Mazzucato does not argue: she tells a story, sometimes very effectively. Here’s the story in a nutshell:
When the economy is in crisis, whom do we turn to for help? Not corporations — it’s governments. But when the economy is flourishing, we ignore governments and let corporations soak up the rewards. This was the story of the 2008 financial crisis. A similar story is unfolding today. Governments have spent trillions on stimulus packages without creating structures — like a citizens’ dividend, which would reward public investment — that turn short-term remedies into the means for an inclusive, sustainable economy. This gets to the heart of what fuels inequality: We socialize risks but privatize rewards. In this view, only businesses create value; governments merely facilitate the process and fix “market failures.”
If only there were a mechanism by which these corporations were taxed!
I don’t know if you have seen The Invention of Lying. In the movie Ricky Gervais lives in a world where nobody ever lied; he is the first who come up with the idea and builds his success on it. It seems to me that Mazzucato may star in a similar movie, The Invention of Government. Her narrative that we socialize risk but never properly compensate governments fits very well a world where taxation does not exist. Sadly, that is not the world we live in.