Mission Economy: A Moonshot Guide to Changing Capitalism – Slightly off target

Mission Economy: A Moonshot Guide to Changing Capitalism

Author: Mariana Mazzucato

ISBN-13: 978-0241419731

Publisher: Allen Lane

Guideline Price: £20

One of the more rueful passages in Barack Obama’s volume of presidential memoirs is a controversy that attracted little attention outside of the US. The Obama administration supported the solar and wind sector during the financial crisis. Solyndra, a solar panel company, received a $535 million loan. Their product became uncompetitive, the company failed and the loan was lost. Allegations of severe mismanagement were made. Recriminations were loud and politically damaging.

Obama writes that he “couldn’t help but fume ... at how Solyndra’s failure stood to overshadow the Recovery Act’s remarkable success in galvanising the renewable energy sector”. The controversy overshadowed the development of the renewable energy sector in what the memoir describes as a “clean energy moonshot”.

Moonshot projects are endeavours of unique ambition that transcend limitations by extraordinary imagination and effort. They achieve what looks impossible. As societies confront many challenges, from climate change to Covid, the demands for exceptional achievements are great. Their pursuit involves the State developing new ways of engaging with economies and societies and managing very high levels of risk and return.

Mariana Mazzucato is the leading economist in analysing the frontiers of engagement between modern states and the private sector. In The Entrepreneurial State (2013) and The Value of Everything (2018), she argues that states are extremely valuable sources of innovation. The creation of value needs to be better protected by more active governments. This agenda is supported by multiple examples from advanced technology and pharmaceuticals.

The author is highly respected for her work with governments all over the world. This reputation and status are richly deserved. Mazzucato’s insights into the roles of the public and private sector and their part in creating transformative innovation are deeply relevant to many important political debates today.

This experience inspires Mission Economy: A Moonshot Guide to Changing Capitalism. The opening pages acknowledge that the challenges facing governments are unique because their solutions require action across many dimensions: social, economic, political and technological.

The author argues: “We must solve them – not merely accommodate them – by focusing policy making on outcomes. And this means getting the public and private sectors to truly collaborate on investing in solutions, having a long-run view, and governing the process to make sure that it is done in the public interest.”

Crude argument

This contention devalues the millions of policy processes, particularly across democracies, achieving or seeking to achieve this. The subtle inference of continual public sector underperformance, or even incompetence, does not do justice to the existing focus on the common good.

Life expectancy has grown, educational levels have increased and living standards have improved in recent generations. These are not accidental outcomes. The argument that “governments focus on fixing things when they go wrong, rather than on improving the everyday lives of citizens in imaginative ways” is more than a little crude given the efforts of teachers, public health professionals, public transport planners and, dare I suggest, politicians.

Modern states have not flailed, lived remotely from or been uncaring about these challenges. They have made a difference. Yes, progress has stalled – tragically, it has reversed for too many – but in the decades since the US landed a man on the moon, transformative and positive change has occurred for billions.

Mission Economy then steps up when it diagnoses the difficulties of modern capitalism and government. The author returns to her familiar and exceptionally important theme of the devaluation of the role of government and the public sector. The role of the state should be revalued: “Government policy is not just ‘intervention’. It helps to shape markets ... ”

This argument is lucidly developed when Mazzucato rebuts five myths about government. She argues that too much of contemporary political debate revolves around the size of budgets and government. Not enough attention is paid to non-financial resources such as training and expertise.

The second part of Mission Economy uses the Apollo 11 moon programme as an example of how states can achieve the most demanding of goals. Six qualities are identified as essential to success. They include tolerance of higher levels of risk, partnership between the private and public sector. and long planning horizons.

Deeper understanding

It is important to note other more recent examples of the endeavours that meet the standards of this book. The particle accelerators developed by Cern in Switzerland have enabled a deeper understanding of the very nature of our universe. The development of quantum computing could change the possibilities of human understanding across all areas of scientific research.

This section makes the case for co-ordinated government activity “to fulfil public purpose”. However, again, this is what most state activity aims to achieve. Fair critiques of competence and lack of ambition can be developed. Mazzucato, to be fair, is leading thinking to respond to such criticisms.

However, to question intentionality is more than a little reminiscent of the critique that state and political activity is mostly designed to further the interests of bureaucrats and politicians.

The success of the Apollo programme and the many demanding challenges that societies now confront are used to develop the concept of missions. They “must be understood not as siloed, big endeavours, perhaps the pet project of a minister, but rather as bold societal goals which can be achieved by collaboration on a large scale between public and private entities”.

The book contains “mission maps” for a variety of challenges, from adjusting to ageing societies and narrowing the digital divide to cleaning our oceans. These maps may divide readers. The idealism of Moonshot Missions might not sit easily with the evocation of “cross-sectoral innovation” and a “portfolio of projects and bottom-up experimentation”.

The insights of the author are evident in the quality of the final chapter, Good Theory, Good Practice: Seven Principles for a New Political Economy. These principles include calling for a new approach to creating value within economies through the more active shaping of markets. The implicit vision is of a modern mixed economy, with the state and market offering their best to create more than the sum of their parts.

Awesome challenges

The experience by modern states of a pandemic, the existential challenge of climate change and the ever accelerating development of artificial intelligence and new computing technologies are awesome challenges. Combining them may affect more than individual societies – it may change our civilisation.

The author is right to continually reject a reactive and minimalist definition of the state. She argues that to “steer our understanding of public interest, it is useful to consider public goods not as corrections of market failures but as common objectives. Common goods are the result of collective imagination.”

Modern states will have to evolve. The vocabulary of statecraft will change.

Those familiar with the work of Mazzucato may find the creativity of her thinking diluted by a familiar analogy of aiming for the moon and the restatement of familiar themes. Readers eager for an introduction to this important economist should begin with this book – but skip the diagrams.

Paschal Donohoe is the Minister for Finance