In her polemic “The Value of Everything: Making and Taking in the Global Economy,” Italian-American economist Mariana Mazzucato takes a well-deserved swipe at the financial services industry for perverting the cause of capitalism.

The financial services industry is akin to the rentiers of the ancien regime of France: they take, but they do not give.

They are leeches on the economy.

So far she has my attention.

What Adam Smith meant by free markets and what the neo-libs mean are two entirely different things, says Mazzucato. For Smith it meant ridding markets of the non-productive forces of the economy; for the neo-libs it means government.

Mazzucato is pretty clear in her assertion that government is not among the unproductive in the economy and for that she relies on Karl Polanyi and to a lesser extent John Maynard Keynes.

She focuses on the evolution of the idea of value in the economy and follows the history of National Accounts to show how this is manifest in our assumptions of what in the economy counts and what does not.

Originally, financial services didn’t count, but as the leeches fed the tax base, and the coffers of politicians, and the GDP figures, they counted more and more.

Her argument is that public sector investment has driven innovation in the past and that to a large extent it will drive innovation in the future. She looks to the development of the Internet as the biggest example of public investment that paid off big time for society, but one where the rewards continue to be reaped by Silicon Valley and their financial leeches, and government gets denigrated.

The successes of Bell Labs she attributes to public investment, where I would have thought it would be a great argument for the monopolists.

If innovation drove the economy in the 20th century, a fair argument could be made that paranoia drove innovation, something that abounds in America. In some cases the paranoia was justified — Hitler, Stalin, and Mao were not pussycats, remember — but did America really have to go to the moon to defeat the evil Soviet monster?

I think not.

Patents, and non-disclosure agreements, and user agreements all protect the high tech capitalists and I would heartily agree that this stuff goes a little too far.

But I would not go as far as to say that unexamined public investment is a good thing.

We have plenty of government, and a lot of it is a good thing. But we refuse to admit that micro managing everything is good. Does America need 50 states that all do pretty much the same thing? Does Canada need 10 provinces each with their own hobbled energy policies?

Do all the little municipalities dotting the landscape need their own payroll systems, their own public health policies, their own school boards?

My own meagre experience in municipal, provincial, and federal govt leads me to believe there is a lot of pruning to be done. School board trustees don’t set curriculum, Provinces do. School board trustees don’t set working conditions for teachers. Unions and Provinces do in Canada.

Public participation in rule-setting is a good idea, but an extra layer of administration in this age of automation is of questionable use.

America has tied itself in a knot over public health priorities during a pandemic. Must I wear a mask? Should my kids go to school? Can I go to the gym safely? You don’t need four levels of government to tell you what the right thing to do is. You need a cooperative mentality in the electorate.

As I’ve said above, in America paranoia is a big motivator. Common sense and cooperation not so much in the ascent.

Striking forward on international priorities such as climate change, international crime and tax havens, the rise of artificial intelligence, the discoveries of biotech, the concentration of wealth, and the decline of our oceans will take less sovereignty and more sobriety. ( )

The general public is kept quiet by a couple of very simple tactics: firstly, we are not educated in the ways that the world is run and secondly, we are directed at minorities to blame for all our ills (these terrible boat people are why we are not as wealthy as we like to think that we should be... DON'T look at the super rich coining it in hand over fist).

This book is a superb antidote to the first of these problems. Mariana Mazzucato shines a light into the darkest recesses of Modern Monetary Theory and our value theory, or rather lack of a value theory. In an eminently readable style, she gives a history as to how we got here and why we should not treat the current system as inevitable and the final goal of economic journey. One doesn't have to agree with every word to see that change is desperately needed and that it is possible. All that is needed is for the average person to be helped to an understanding of the system. ( )

An excellent history of how we (and the field of economics) has come to value things. What are we talking about when we discuss value, value creation, and value extraction. She emphasizes that capitalism is not a system that functions outside of a government structure and that we must concern ourselves not only with the scale of the economy but the direction of the economy as well. More creation less extraction of value is society’s (through its government) responsibility: “After all, if we cannot dream of a better future and try to make it happen, there is no real reason why we should care about value. “ p280

Interesting exploration of the hidden choices that make neoliberal economics seem inevitable. Is changing a diaper productive? Only if a paid worker does it—but that’s a choice, and so is treating government as merely an expense and not a source of productivity. Mazzucato explains in detail how mainstream economics as a discipline socializes risk and cost, attributing them to government, while privatizing gain, attributing it to corporations. ( )

This book starts with a potted revision of greats like Adam Smith, Ricardo, Marx, Walras, Jevons, Marshall, Pareto, and many more in between, with some original comments and insights of the author; always welcome, given how complex the concepts and principles of economics are and how many different (and contradictory) opinions abound. The central idea in the book is that the public or government sector is not as inefficient and backward as has been made out in recent times, and that the private sector successes are often built on the foundation of capabilities and innovations that were laid in the public institutions. The author stresses the need to differentiate between value production and value extraction in judging the efficiency and performance of private companies. While the body of the book brings together valuable information and presents ideas in a helpful and scholarly manner, the concluding part (where one would expect signposts for the future) falls oddly flat, as it appears to fizzle out in some vague generalisations. The end notes and bibliography provide a valuable resource, however, for the more diligent reader. ( )