Liberal Political Economy: The Value of Everything by Mariana Mazzucato
Value - as an idea and as a reality, or at least a pseudo-reality - is at the heart of capitalism. Despite this, the liberal economic tradition which dominates our understanding of capitalism - as well as the way we criticise it - has largely failed to account for the problems value poses. Mariana Mazzucato's book, which is situated within that liberal tradition but which in some ways points beyond it, is therefore a breath of fresh air. In a way that is simultaneously rigorous and precise as well as accessible, she demonstrates that many of the pressing problems faced by modern societies are bound up with the way we think about value, which conditions how we create it.
In this meetup, we'll think about what value is and discuss whether Mazzucato's characterisation of it justifies the conclusions she reaches. Are fundamental changes to the way we create and conceive of value possible within the framework of capitalism, as she claims? Or are value as we know it and the system which it supports intertwined so fundamentally as to require even more radical decisions than the ones Mazzucato recommends?
The book is available from Amazon or wherever you get your readables. Looking forward to seeing folks there!
Modern economies reward activities that extract value rather than create it. This must change to ensure a capitalism that works for us all.
A scathing indictment of our current global financial system, The Value of Everything rigorously scrutinizes the way in which economic value has been accounted and reveals how economic theory has failed to clearly delineate the difference between value creation and value extraction. Mariana Mazzucato argues that the increasingly blurry distinction between the two categories has allowed certain actors in the economy to portray themselves as value creators, while in reality they are just moving around existing value or, even worse, destroying it.
The book uses case studies-from Silicon Valley to the financial sector to big pharma-to show how the foggy notions of value create confusion between rents and profits, reward extractors and creators, and distort the measurements of growth and GDP. In the process, innovation suffers and inequality rises.
The lesson here is urgent and sobering: to rescue our economy from the next inevitable crisis and to foster long-term economic growth, we will need to rethink capitalism, rethink the role of public policy and the importance of the public sector, and redefine how we measure value in our society.
Shortlisted for the FT & McKinsey Business Book of the Year Award
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