Deirdre McCloskey and I recently published a book on The Myth of the Entrepreneurial State for AIER and the Adam Smith Institute (if you buy it, please review it on Amazon). On the AIER website, we have a short piece summarizing one of the book’s arguments.

A few friends asked us the reason why we spent so much time dealing with Mariana Mazzucato and other authors who are retrying to rejuvenate the fallacious ideas of “industrial policy”. Here’s our answer:

In a 1974 interview with Reason magazine, Milton Friedman noted that, “It’s fortunate that the capitalist society is more productive, because if it were not it would never be tolerated. The bias against it is so great that, as it is, it’s got to have a five-to-one advantage in order to survive.” (We would say more like thirty-to-one, the gain since the 18th century from the coming of liberalism.) It is why Mazzucato’s argument is so persuasive to so many. People in a primitive way distrust the price system, and distrust the impersonality of exchange among strangers. Better a sweet family of, say, 330 million people guided by a visible hand of government as a pater familias, advised in its coercions by Professor Mazzucato. If you can persuade people that the market economy does not innovate—no five or thirty to one—they will be happy to renounce it, as people have frequently since socialism was first imagined.

As a little evidence of the traction, these ideas are gaining. Consider this paragraph:

It is often said that every crisis is an opportunity for change and transformation. What we are experiencing is now the third crisis in the space of the last 15 years and this time Italy, Europe and the West have the opportunity to make a real breakthrough that, on the contrary, has been missing after previous episodes of crisis.
Europe has been able to take up this challenge in particular through the Next Generation EU program, through various other initiatives, to which Italy has made a decisive contribution and for which a new pact between public and private, as well as a new strategy for the organization of public presence in the economy, is needed…

This is the Italian prime minister talking to Parliament on November 2nd. Prime Minister Conte is advised by Mariana Mazzucato, who expressed the same views a number of times (see, for example, this blogpost of mine). Consider also Klaus Schwab’s “great reset” (I’ll write more on it in a later post). This rhetoric is very appealing for politicians and is a form of storytelling they envoy, as it boosts their role and importance. For this reason, we tried to contribute to dispel the “myth of the industrial state”.