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00:00Well, Mariana Mazzucato's new book is called The Common Good Economy, A New Compass, and Mariana is also professor of
00:05economics, of innovation and public value at UCL, and she joins me now.
00:10Professor Mazzucato, as always, thank you so much for joining us.
00:12This is a great book because it also has quite a lot of common sense.
00:16Like, if you look at the global economy and you look at the UK, what's going on that doesn't feel
00:21right right now?
00:22So, there's no lack of ambition.
00:23Just think of what happened with this government.
00:26They come in, they adopted these five missions.
00:27I was actually quite honored.
00:28They cited my previous book, On Missions, but then we don't achieve them.
00:33But this is a global issue.
00:34We have the Sustainable Development Goals since 2015, super ambitious, no poverty, no hunger, life below our oceans, climate change,
00:41gender parity, so on and so forth.
00:43So, the book says it's actually by design, not by coincidence, that we're failing.
00:48Because if at best we think of the role of government as fixing a market failure, as opposed to shaping
00:54the economy for people and planet,
00:55then, of course, any sort of policy, even those that are pretty well informed and might have some common sense,
01:00the word you just used, will fail because it doesn't actually lead to transformation.
01:04We don't have a goal-oriented economy.
01:06We don't pay enough attention to putting those goals in the contracts from the beginning instead of picking up the
01:12mess after.
01:13Mariana, when you talk about goals, what is it?
01:15Is it about measuring or is it actually about not being distracted?
01:18No, no, goals, things like reducing the digital divide to zero, net zero goals that everyone talks about, but then
01:23we don't achieve it as the teenagers tell us, blah, blah, blah, blah, blah.
01:27Goals around health.
01:29Just think of what happened during COVID.
01:30The goal wasn't the vaccine.
01:32The goal should have been to make sure that everyone in the world who wanted to be vaccinated could be.
01:36And that depends on how we produce the vaccine.
01:39So the book is all about how do we produce with good at the center so we don't then produce
01:44badly and then think that we can just correct the market failure later.
01:47And I have a bit of a historical section in the beginning.
01:50I know that your program actually likes to talk about details.
01:53We love details.
01:54Anyway, so the historical section actually looks at how political philosophy has been more ambitious than political economics.
02:02Because Aristotle, but also Michael Sandel today, these are philosophers, old and new, said we need the telos, the goal,
02:09but also the police, not the police.
02:11Policy?
02:12The community.
02:13No, no, community.
02:14Yeah.
02:15And so how we build community, how public and private work together, how capital and labor work well together.
02:22And that's definitely not happening in a moment in capitalism where the labor share of global income is at one
02:26of the lowest it's ever been.
02:27How the state works with civil society organizations, including trade unions.
02:31Now, this matters, but what does it mean to put good in the contracts?
02:36Just think of water.
02:37Water is a huge problem.
02:38We have sewage in this country, in the U.K., in our rivers and seas because of how we have
02:43mismanaged water.
02:44How could Thames Water not have within the contracts they had with the state that they actually had to invest
02:50in the infrastructure and reinvest profits instead of just giving it out to shareholders?
02:55Put the good result in the contract from the beginning.
02:58And, by the way, 80 percent.
03:00Mariana, do you need that in the contract?
03:02Contracts.
03:03If you have a chief executive that wants to do good, does it have to need?
03:07That's random.
03:08As much as I love those chief executives, and you and I often meet in these places where, you know,
03:13the global business are there.
03:16And that's very important, by the way.
03:18You know, someone like Paul Paulman, when he was running Unilever, very important how he talked about a goal-oriented,
03:24purpose-oriented company.
03:25I do not dismiss that at all.
03:27I celebrate that.
03:28But, sorry, it's not enough.
03:29If it's not coming back to water, 80 percent of industrial wastewater is not recycled.
03:35Now, it's the state that's giving the water rights to Pepsi-Cola, Anheuser-Busch, and so on.
03:40Why is that need to recycle not in the contract?
03:43Let's also look at some good examples.
03:45The steel sector, which in the U.K. right now is very much in the headlines.
03:49Because in this country, we always go back to privatize, nationalize, privatize, nationalize, as opposed to govern it for the
03:55common good.
03:56In Germany, because they actually had a goal, the Energiewende, they made sure that all the money, public money, from
04:02the public bank that went to the steel sector was conditional that the sector innovate and invest towards reducing.
04:07The material component of production throughout the whole supply chain.
04:11Here, we haven't done that.
04:13Do we have good quality politicians?
04:15Do we have good quality civil servants to actually push it through?
04:17Because the main difference that I've always been told between, for example, our societies in the West and China is
04:22that China ace have long term.
04:24So they say, look, 10, 15, 20 years.
04:26And actually, civil service attracts the best of the best.
04:28Sure.
04:29So you might remember now.
04:30I can't remember because you very kindly invite me on a lot.
04:33But one of my, well, my last book was called The Big Con, the infantilization of our government.
04:39So this lack of capacity and capability is not, you know, because of the earthly deterministic forces.
04:45It's due to choices we have made to outsource so much of that capacity, to consultify it.
04:51Deloitte was getting paid $1.5 million a day to do test and trace during COVID instead of, you know,
04:57the civil service being invested in to be able to govern these wicked challenges.
05:01And the reason the subtitle of that book, The Infantilization of Government, was used was because a Tory lord, Theodore
05:09Agnew, called it out.
05:11He said, in Brexit and in COVID, we ended up outsourcing all the tasks.
05:15And these civil servants who come into government wanting to tackle wicked, tricky problems are just sitting there seeing Deloitte
05:21send them silly emails.
05:22Because in the end, Deloitte actually, interestingly, was using the knowledge in the civil service.
05:27But really, this issue that we haven't been investing, instead of thinking of big state, small state, what's a strategic
05:33or what I used to call, still call entrepreneurial state that works well with business around problems and catalyzes public
05:41and private sector investment.
05:42And in a country, this one, where we have been under-investing on both the public and the private side,
05:48this is incredibly important.
05:49So one of my favorite chapters is called Access for All and Reward Sharing.
05:53Is this the problem that the U.K. has?
05:56Is this why labor is failing at the moment?
05:57Is it because it doesn't have access to all?
06:00Or is it more of a temperament problem of the prime minister that he just can't hold his party together?
06:05So, OK, a lot of issues there.
06:08One is, no, it's definitely not just the U.K.
06:10However, the U.K., I think, has a particular problem because of the ideology.
06:16So even once labor came in, instead of saying we're going to work with business to solve problems, they said,
06:21oh, we're going to be business friendly.
06:22What does that even mean to be business friendly?
06:25Does it mean to give Palantir all the NHS data as opposed to asking what can we do to actually
06:30achieve really bold health outcomes with well-designed contracts that preserve privacy and working with businesses, small and large, around
06:38the missions that the government had set itself?
06:40And but, you know, what keeps happening across governments is that we socialize risks and privatize rewards.
06:46And the fact that during COVID you had some countries like France that all the support given to Air France
06:52and Renault was conditional that they actually commit to lowering carbon emissions, whereas here we gave 600 million to EasyJet,
06:59no conditions attached.
07:00Now with steel, just bailing them out, maybe putting them into public hands until things are good, then selling them
07:06off for garage sale prices, you know, back to the private sector.
07:09This is a recurring problem.
07:10But that has to be the quality of the politicians.
07:14So we can go down that route and talk about individuals.
07:17And of course, there's many names also floating now and who might, you know, replace Starmer and if you should
07:22be replaced.
07:23I don't think that's the biggest problem.
07:25I think at least, you know, most politicians I meet around the world, of course, there's some that are corrupt.
07:29There's also many corrupt or weak ones in the private sector.
07:32That's, you know, a problem in general.
07:35There's nothing in the DNA of the public sector that is going to create a weak politician or policymaker.
07:40If you don't come in with a strategy and a vision that can then catalyze the much needed investment that
07:48we need in this country, that's a problem.
07:50So if you come in with good ideas, which I think the government had, but without enough kind of gusto
07:55and almost conviction and to really go after those goals in such a way that then business sees kind of
08:01future opportunities in particular areas, whether it's clean growth or different kind of well-being targets, then it's going to
08:07be hard to reverse a cycle of underinvestment.
08:10We are 28th in the OECD for private sector investment.
08:13Everyone always talks about public sector investment.
08:15We forget that business in the U.K., not all, but many businesses are making profits but not reinvesting those
08:21profits.
08:22That's, again, the Thames Water, Carillion, but also, you know, many companies that should be, there should be some pressure
08:29that to work well together means reinvesting in good working conditions and energy-efficient supply chains and really making sure
08:37that we're innovating towards solutions.
08:39But that requires confidence.
08:40And what I see is a lack of confidence.
08:42Who gets it right?
08:43Is there a country?
08:44Is there a leader?
08:44Is it a partnership?
08:45So the books divide into three, theory, policy, places.
08:48The places bit is the bit I got most excited about because I just hadn't really thought how important places
08:53are where we build community, community centers, youth centers, but also public squares, public libraries, public pools in the summer
09:00where so many kids are actually excluded because we have not invested in them.
09:03But also in the global arena, as you know, because, again, the places where we often meet, global South countries
09:10feel that they not have been respected in the Bretton Woods institutions.
09:14They have no voice.
09:15But the middle part of the book tries to tackle what you just asked, which is there's so many good
09:20examples, but they don't scale, right?
09:22So whether it's what's happening in the Amazon, where the indigenous communities are saying, great, you set up an Amazon
09:29fund.
09:29But how about if we actually have a voice, given that we have knowledge?
09:32They have a wonderful saying.
09:34There's a secretary for traditional peoples who I've been working with, Edel Moray.
09:38She says there's people in the forest.
09:40They have knowledge about the hydrological cycle that we were just commenting on.
09:43They have knowledge about biodiversity and preserving the forests as really important carbon sinks.
09:50So why do we have to pay all these NGOs to kind of come in and do good, really recognizing
09:54the value of people for the value creation that they can provide in this collective effort, but then rewarding them,
10:01not in a condescending redistributive way, but pre-distributive way.
10:06And that's one of the key themes of the book, pre-distribution.
10:08Get the relationships right from the start so you don't have to pick up.
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