Thursday, 19 April 2018

Is Mariana Mazzucato saying anything new?



To judge by this review of her book in “Nature”, Mazzucato is not saying anything very original. Obviously I need to read her book before passing final judgement on it. But life is short: I do not have time to read all the books I’d like to, so I normally read ARTICLES by authors before deciding to read their books so as to get some idea as to whether their books are worth reading. (Title of the Nature article is, "How to re-tool our concept of value.")

However, the REASONS for the popularity of her book are obvious: the ideas in it have an obvious appeal for the socially concerned, economically not very literate section of the political left. And we are talking about a VERY LARGE number of people there.

I’ll run thru some of the points in the Nature article in the order in  which they appear in  the article.

The first para mentions the need to deal with “climate disruption”. Well about 90% of the population have worked out that climate change is a serious issue! That’s why the world is spending billions on wind and solar energy production!

According to the second para, Mazzucato is keen on the idea that the market price for goods and services is not a good measure of their value.  Well we all worked that out a century ago, didn’t we? That’s why don’t let alcoholic drinks change hands at free market prices: we place a heavy tax on alcohol because of the damage it does.

And the dodgy nature of market prices also explains why we grab vast amounts of money off taxpayers and spend it on public expenditure items like education and health care. That process amounts to over-ruling market forces.

Next, according to the para starting “The international system…”, Mazzucato apparently claims “only goods and services sold in markets are counted” when it comes to measuring GDP. That’s nonsense: public sector spending is included as well.

Next, we are told the market “stokes inequality”. Well of course: the market price for someone with a low IQ and a drink or drugs problem is often around zero. But we don’t let them starve (though of course there’s always the odd few who fall thru the social security safety net, even in Europe).

The second last para starts "Mazzucato deconstructs several other key trends. These include how the financial sector’s “casino capitalism” mislabels market speculation as the creation of value". Well that idea is not original: in 2009, Adair Turner (former head of the UK’s Financial Services Authority) said that much of what the City of London does is “socially useless”.

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