Economics and the Value of Everything

Economics and the Value of Everything: an Introduction to Mariana Mazzucato

In a field dominated by neoclassical orthodoxy, Mariana Mazzucato has upended conventional understandings of the private sector, the state, and even economic value itself to produce work that has seized the attention not only of fellow economists, but also of policy makers across the world—and across the political spectrum. In her first major work, The Entrepreneurial State, Mazzucato recovered the crucial role of the state in “making markets”—that is, in investing in and producing the technologies and capital goods that ultimately make possible major industry, from railroads in the 19th century to the Internet in the 20th. Her second book, The Value of Everything, critiques neoclassical notions of value, which, she argues, conflate productive value with extractive value. 

For example: While some in the private sector, financial firms particularly, claim to be producing value; for Mazzucato they’re simply re-allocating it—while also skimming off the top. But if Mazzucato’s work is critical, it’s also immensely generative, offering policy makers the theoretical foundations for re-envisioning public-sector investment in building and sustaining a more productive—and more equitable—economy. How, thinking with Mazzucato, can we understand the historical and theoretical relationship between the state and the private sector? Which of the two has in fact proven more dynamic, risk-tolerant, and conducive to economic growth? And, if risk is historically socialized, why is profit nearly always privatized? What does a democratic economy look like?

In this course, we will read from Mazzucato’s The Entrepreneurial State and The Value of Everything, as we explore the relative roles of the state and private sectors in the economy; the meaning of “innovation,” investment, risk, value, production, and extraction; and the possible configurations of what might be called “economic democracy.” 

We will ask: what does it mean to make a market? Are all markets to some degree political constructions? What are the historic sources of innovation, and what are the capabilities and limits of the private sector in assuming risk and self-developing new industry? Why, ideologically, do we depreciate state action, and how does it work, in policy terms, to the advantage of private power and profit? What, for Mazzucato, is the “proper” role of private capital? How can we think about various vehicles for state action, from “military Keynsianism” to infrastructure spending to the Green New Deal? And, is economic democracy, as envisioned by Mazzucato, indeed compatible with capitalist property relations?