There are major flaws in today’s economic (mainstream) thinking – says Mariana Mazzucato. What is value? Depending on the answer, we see the economy and how it works quite differently.
Mariana Mazzucato – Who is she?
She is a professor of Economics at the University of Sussex. She is one of the growing future stars of Economics. That is especially noteworthy because she argues against mainstream economics. Usually that means you’re writing against windmills. Her work, though, is readable and ignites a spark of hope that we will one day lead to economists that are advocating for the many, not the few. Want to read more about her? Go here.
Value – traditionally questioned
The discussion about whether or not someone produces value for the economy was a major concern for all the classic economists like Adam Smith, David Ricardo, Karl Marx or John Maynard Keynes. Over time the boundary that would seperate the players in an economy who produce surplus from those who only extract it shifted. Today the concept is not discussed at all, which is a failure of economists in general. Especially because in modern times, since around the 1970s so to speak, there was a particular shift in that boundary. It resulted in treating many of the rent-seeking activities on the stock market as value-creating. This shift, Mazzucato criticizes, ultimately lead to many of today’s problems from a lack of investment over growing inequality to the burst of the housing bubble of 2007.
Correcting the Narrative
The (wrong) thinking about value has sunk deep into the public economic narrative. The marginalist theory that was born in the early 20th century roughly says that a price will naturally reflect what value a product or service has for its consumers. Everything that has a price thus also creates value. High prices then mean high value. And we want high value to be produced for our economy to grow. The problem is just: This narrative is wrong. There are many products that although they have a (high) price on the market do not generate as much value or any at all or even actually extract it from the economy. Mazzucato gives insight using many examples from banking, GAFA or pharmaceutical companies. Her goal is to change the narrative about the term and more and more governments are listening to her advice. Hopefully this will soon result in according policies.
Enjoy The Value of Everything:
amazon.com | amazon.co.uk | german (2019) amazon.de | english amazon.deMaybe you want to read her old book “The Entrepreneurial State” (Review here) as well:
amazon.com | amazon.co.uk | english: amazon.de | german: amazon.de
Also take a look at our latest other curated content
- Quality Coverage #3: Tax Scandal in Europe
- The Value of Everything by Mariana Mazzucato – Non-fiction Books #5
- The Entrepreneurial State by Mariana Mazzucato – Non-fiction Books #4
- Cyberwar: How Russian Hackers and Trolls Helped Elect a President What We Don’t, Can’t, and Do Know by Kathleen Hall Jamieson – Non-fiction Books #3
- Barack Obama Bücher-Empfehlungen – Berühmte Leser #1
