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Economist Mariana Mazzucato breaks through thanks to the corona crisis: ‘Pumping thousands of billions into the system is not enough’

Ask Mariana Mazzucato what her recent highlights have been, and there’s a waterfall of speech. About the Pope, for example, who cited her economic work as an example for the ideal world after corona. And about how her ideas are clearly visible in the European corona rescue packages. And did we know that upcoming US President Joe Biden’s new team had asked her for advice?

Mazzucato is fashionable.

“But my biggest highlight was the work I was able to do in my own London borough of Camden,” says the Italian-American economics professor at University College London over the phone as she walks, a little hurried, from one appointment to another. In Camden, a neighborhood with all the known problems (and joys) of ethnically mixed neighborhoods, this year she chaired a committee to help the neighborhood emerge from the corona crisis in a more sustainable and social way.

“Our aim is that all new social rental properties in Camden CO2-become neutral. And we work together with schools and youth centers to provide healthy meals there, among other things. ”

Neighborhoods like Camden are at the forefront of tackling the crisis, Mazzucato says. “We are stimulating citizen participation in new ways to let people decide for themselves how they want to live after the pandemic. Politicians and policymakers often look to big, abstract ideas. But tangible change takes place at a local level, where people just live every day. ”

Mazzucato has argued for years that capitalism cannot survive in its current form. She argues for a much more active role for the government in the economy. It must formulate major social objectives together with citizens: missions or moonshots, as she calls them. Such a mission would be a CO2-neutral economy or clean oceans, or preventing people from dying from cancer, or setting up a sustainable and safe transport system for people and goods, or a society without a digital divide.

Conservative people often say I want a Soviet-style planned economy. Nonsense

So grand, ambitious goals, which the government formulates together with citizens and businesses. In January Mazzucato’s new book will be released, Mission Economy, which is intended as “a recipe book” for policy makers.

Cheerful and amazed, she talks about her collaboration with the Pope in the past Corona year. “He is really radical, and provocative when it comes to what change is necessary. To be honest, I’m surprised he hasn’t been thrown out of the Vatican yet. That place is not really known for its revolutionary way of thinking. ”

In the presentation of many corona rescue packages, at least in words, a lot of attention was paid to sustainability and equal opportunities. Nice Mazzucatian, isn’t it?

“Yes, in theory for sure. I also advised the European Commission, didn’t I? The pandemic has exposed a lot. Do we have an adequate care system? Apparently not. Do we pay sufficient attention to the social position of people who work in the handyman economy, with a zero-hour contract? Apparently not. So it is only logical that we should ask ourselves more emphatically whether we value public goods, such as healthcare, sufficiently. Or is our policy too focused on private companies making a profit?

“And then we still have education. My four children still had access to education during the lockdown, thanks to excellent technology. But that does not apply to many children in London. You do not have to travel to a developing country for that. Suddenly, education can no longer act as an equalizer. The pandemic has revealed that we need to use technology much more to tackle major problems, instead of widening the gap further. ”

How can economic policies based on ‘missions’ help?

“I have been arguing for a different definition of the terms ‘public good’ and ‘public goods’ for some time now. Until now they have been rather limited. Public goods are mainly the things that the government has to do because it is too difficult for business to make a profit, such as clean drinking water and defense.

“We need a much stronger framework to achieve major social goals. And that is why we need to formulate more courageously where we want to go, especially after this crisis. Be braver in establishing what is public purpose is, or the common good. ”

According to Mazzucato, this is not a new idea: the development of the internet stems, for example, from the mission of the American government to build a secure communication system. And GPS grew out of the mission to get humans to the moon. Hence the term moonshot, which Mazzucato often uses.

“If you formulate policy more proactively with the general benefit in mind, you can achieve social goals faster. Governments must form markets. ”

Did governments shape markets like never before with their corona rescue packages this year?

“Governments are now pumping thousands of billions into the system. The problem is, that’s not enough. Even after the financial crisis, thousands of billions were pumped into the economy, most of which ended up in the financial sector. That money hardly strengthened the real economy. That is why it is now so important that you more consciously determine a direction when injecting these enormous sums of money. ”

Surely the European recovery fund and the Green Deal have formulated quite explicit goals, such as sustainability and less inequality?

“Yes, I was just about to say that. That is the positive story of this year. In the past, the question of whether you received European aid depended mainly on how hard you cut back. Now it is in any case also partly dependent on how well you tackle climate change, how well you digitize or work on reducing inequality. ”

Although her ideas are increasingly visible in innovation and crisis policy, this is still insufficient for Mazzucato. “The European Union has already decided to have its innovation policy guided by five missions, such as eliminating cancer and making the economy more sustainable. But this way of thinking – basing your economic policy on social missions – must be introduced more widely. It must be pulled even further out of the innovation policy ghetto, and placed more at the center of policy-making after the crisis. ”

At the same time, criticism of overly rigorous government intervention is increasing. A state that tries to determine the economic direction, that has turned out to be rather risky in the past?

“I am often attacked by, let’s put it nicely, conservative people who say, ‘Oh, Mazzucato wants a Soviet-style planned economy.’ Nonsense. I want governments to be more self-confident in determining their direction and to dare to make brave choices about their investments. For example, they can help achieve the sustainable development goals that we have agreed at the UN. ”

Economists warn against ‘sunflower capitalism’, with companies turning like sunflowers to the government, which determines everything. Then they become too cautious and lack incentives to remain financially healthy. The government will come and rescue them anyway.

“Yes, we shouldn’t do that just like that. My point is precisely that the government must set conditions. Above all, it should not carry out everything itself, but ensure that companies and citizens get to work with it. In France, the government set pretty strict requirements for CO2-reduction of aid for Air France. This was less the case with the state aid to easyJet in the United Kingdom or to KLM in the Netherlands.

“What I call the ‘entrepreneurial state’ is a confident state that gets a good deal for its money. The state achieves this by sharply defining its conditions: green investments, fair treatment of employees. If you participate in that mission, the government will help you. If not, find out for yourself. ”

How is the Dutch government doing in this area?

“Apart from the downright stupid tax rules for international companies, there are very ambitious plans for a circular economy in the Netherlands, for example in Amsterdam. That is hopeful. But also quite hypocritical. The Netherlands tries to do a lot of good, but at the same time it is the place where countries and companies get away with bad things. ”

Also read the earlier NRC series of articles on the return of the state to the economy

Suppose it is 2023 and the recovery is going as you hope. What do we see when we take a detour in Camden or Amsterdam?

“I think the healthcare sector can change quickly. Then we need fewer bureaucratic hospitals and nursing homes that are more locally organized. The pandemic has wreaked havoc in nursing homes, so it’s clear that things have to change. I think that in 2023 we will see genuinely new forms of care emerge, in which people are central, instead of the care organizations themselves.

“There will also be a new, decentralized social infrastructure, so that people will receive better care and, for example, can live more affordably again. And if we walk past company buildings by then, we see that start-ups and larger companies have regained their social usefulness. ”

Do you really think so?

“Yes, that is not a castle in the air. Just look at Denmark. Start-ups and also companies that have been around for some time are together the main suppliers of green high-tech services within the sustainable energy sector to China. That is a growth market of more than 1,700 billion dollars (1,387 billion euros) in total.

“The success of Danish companies has been boosted by the fact that Danish cities and the national government set enormously ambitious goals in the field of sustainability. For example, they encouraged start-ups to create new services and products.

“The point is not that the state has to do everything itself. The government determines the direction together with citizens, then innovative citizens and companies swarm in that direction. The state is then a catalyst for all kinds of cooperation and innovation from the bottom up. Hopefully we are really going that way now. ”

Economist Mariana Mazzucato breaks through thanks to the corona crisis: ‘Pumping thousands of billions into the system is not enough’
Source link Economist Mariana Mazzucato breaks through thanks to the corona crisis: ‘Pumping thousands of billions into the system is not enough’

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