Top positive review
4 people found this helpful
on 6 November 2017
If we believe much of what passes for the political narrative of the last 40 years it would be easy to imagine that it is the state that stifles innovation, restricts enterprise and burdens citizens and businesses with unnecessary regulation, wasteful expenditure and life sapping tax policies. As with every argument, there may be some truth there, lurking in the intellectual undergrowth, but how much of it is a shaky justification for perpetuating the currently socially injurious power relations?
What the Left and indeed the Centre Right in British politics has needed a core of ideas and beliefs (as well as credible historical examples /policy ideas)that can justify the idea that the role of the state in the politico eco-system is vital to the future growth and prosperity of the economy. This rigorously researched, tightly argued, accessible book is indeed a sturdy intellectual platform for those readers who feel that free markets are only part of the story in the way that the modern economy functions. Readers of a more Libertarian hue, will also have much to ponder here. Understanding the role of state and its promotion of enterprise and innovation will undoubtedly turn more than a few heads!
Here are some of the core ideas:
Industry – farming, consumer electronics, construction, aviation, banking to name but a few has always relied upon sought state intervention in one form or another: subsidy, protectionist policies, ‘bailing out’, tax breaks, incentives, regulatory frame works and so on. The corporate world likes government when it is acting in the interests of business but the tone changes when some degree of reciprocity or responsibility is required.
Engineering firms, chemical producers, capital goods producers, defence contractors have regularly get to taste the honey of public largesse, sometimes just to keep capacity or expertise ( see shipyards) available. The drug industry of course has a major customer in the form of the NHS.
Business needs government in times of recession to exercise its influence in the economy via expansionary fiscal and monetary policies. The only problem is of course, corporations are notoriously adept at managing their revenue flows to reduce their tax liabilities to negligible proportions whilst taking full advantage of all the opportunities that operating in an advanced economy such as the UK offers.
Primary research is essentially a public good. Mazzucato suggests that companies such as Apple benefit from research undertaken elsewhere. The genius of Steve Jobs was to harness ideas (such as touchscreen technology) and incorporate them into a pleasing consumer products. This is product development rather than the sort of research that can lead to fundamental shifts in technology or scientific understanding such as provided by nuclear research or the development of the internet. Research has become increasingly from state sponsorship and the activities of universities, not corporations. The private sector takes advantage of such research without paying their due.
The state fosters enterprise, it creates opportunities for business, it educates citizens, and it can create new markets (green power). The state can do so much more then be a market gatekeeper and corrector of market failures. In short, markets need government. What government has to do is gain expertise, be prepared to ‘fail’ sometimes and become more confident in the way that it can motivate markets to think more long term and be more socially responsible. Theresa May is already thinking along these lines her ideas on a UK industrial strategy.
What I have described above is but a few of the ideas that Mariana Mazzucato outlines in this invigorating book. Read it and see what more of interest there is to glean.