Fixing markets isn't enough. We have to actively shape and create them and tilt the playing field in the direction of the growth we want. Mariana Mazzucato More Quotes by Mariana Mazzucato More Quotes From Mariana Mazzucato Mainstream economic theories popular in the last several decades have tended to downplay the government's role in markets and to increase skepticism about even that more limited role. Austerity, particularly in Europe, has added to the problem. It has not worked, even on its own terms. Mariana Mazzucato roles government europe Companies prefer to put money in the pockets of shareholders or to hoard cash rather than to raise wages or invest. Mariana Mazzucato cash pockets wages Our current model of capitalism and the dominant ideas in policy making have led to a failure of investment by both the public and the private sector in the things that drive productivity, and which affect its distribution. Mariana Mazzucato policy-making investment ideas The actual division of labor must be reflected in the division of the rewards (and prices, which is the way the consumer gets rewarded). Mariana Mazzucato rewards division-of-labor way Rethinking capitalism means rethinking the role of the public sector, the role of the private sector, the role of finance, and the relationship between them all. Mariana Mazzucato finance roles mean Growth in productivity has diverged from growth in the share that working people can expect right across advanced economies, but this trend started earlier and has been more pronounced in the U.S. Mariana Mazzucato trends growth people Real median household incomes in the U.S. were basically the same in 1989 as in 2014. But we are also seeing similar challenges in the U.K. in the stagnation of real wages. Mariana Mazzucato income real challenges Another similarity of Brexit and Trump's campaigns was an attack on so-called elites. This is not so much a failure of capitalism as of its high priests in the economic profession, for which we must all take some responsibility. Mariana Mazzucato economic campaigns responsibility If we look at the complexity of the challenges facing western societies today, we see that the problems are not really about outsiders, but have their roots much closer to home. Mariana Mazzucato challenges roots home Brexit and Trump's election are forcing countries to come up with new radical ideas. Mariana Mazzucato election country ideas An interesting attribute of public banks is that they don't only de-risk the downside, but also get a share of the upside. Mariana Mazzucato risk share interesting The globalized nature of production and innovation means that the benefits don't necessarily stay in the country where the investments are made. Mariana Mazzucato innovation mean country If we look at Germany's infrastructure policy, it has been driven by its mission-oriented focus on green infrastructure. This affects both innovation and infrastructure, old industries and new. The German steel industry, for example, has adapted to the policy by lowering its material content through a 'repurpose, reuse and recycle' strategy. Mariana Mazzucato innovation focus example While infrastructure is of course important, it must be part of a bigger vision. The point is not to simply dig ditches but to steer those investments towards transformational growth. Mariana Mazzucato vision growth important As a businessman, Donald Trump has been associated with some of the worst excesses of a particular style of value-extracting and asset stripping capitalism: set up businesses, let them fail, avoid paying suppliers, use bankruptcy laws to avoid taxes for decades, then set up another business somewhere else. It is this model that is the cause of many problems we see today. Mariana Mazzucato style law somewhere-else With a Trump administration we don't know enough yet to make predictions, but if past behavior is any indication, I am not encouraged. Mariana Mazzucato administration behavior past Too many politicians seem to reach for 'infrastructure' as the default answer to investment, as if roads and bridges were the answer to everything. Even the IMF and the World Bank seem to mainly offer infrastructure spending as an alternative to austerity, although they are right to focus on the need for investment. Mariana Mazzucato focus bridges needs
