An ‘Electrifying’ Economist’s Guide to the Recovery

Author: Alisha Haridasani Gupta
Source: The New York Times
Date: Nov. 19, 2020

Mariana Mazzucato, a professor who has the ears of world leaders and chief executives, envisions a post-pandemic world that redefines what is valued.
“Today’s capitalism is incompatible with feminism.”
— Mariana Mazzucato, a professor and economist at the University College London
Over the years, Mariana Mazzucato, an economist and professor at the University College London, has achieved the kind of celebrity status that is uncommon for academics.
In February, British GQ named her one of the 50 most influential people in Britain, alongside David Beckham and Phoebe Waller-Bridge. The Financial Times described one of her panel discussions as “electrifying.” She’s got the ears of politicians and chief executives around the world, from Representative Alexandria Ocasio-Cortez in the U.S. and President Cyril Ramaphosa of South Africa, to Microsoft founder Bill Gates and Pope Francis, who all turn to her for advice or lean on her work for ideas.
Ostensibly, her mission is to reimagine capitalism and boost the state-backed public sector, but her work has nonetheless resonated not just with leftist thinkers but also in fiscally conservative, free market circles where even the slightest whiff of socialism would usually set off alarms. The fiercely pro-free-market Financial Times, for example, noted that the argument laid out in one of Dr. Mazzucato’s books, “The Entrepreneurial State: Debunking Public vs Private Sector Myths,” is “basically right.”
The core tenets of her life’s work, which she lays out in several books, are (1) the ways we currently define economic growth are far too narrow and (2) that many of the world’s greatest achievements — the moon landing or the invention of the internet, for example — stem from government investment, not the private sector, as is widely assumed.
“Indeed, every technology that makes the iPhone smart and not stupid owes its funding to both basic and applied research funded by the State,” she writes in “The Entrepreneurial State.”
She doesn’t mean to suggest that Steve Jobs wasn’t critical to Apple’s success, but “ignoring the 'public’ side of that story will prevent future Apples from being born.”
This month, nearly a year into a pandemic that has made crystal clear the many weaknesses of the global economy, she was named chair of a new council at the World Health Organization that puts public health at the center of how we think about value creation and economic growth.
In Her Words caught up with Dr. Mazzucato over email to explore how global leaders can redefine value going forward, and the forgotten women behind much of the world’s greatest innovations.

The conversation has been edited for length and clarity.
The pandemic has made clear how much of the economy relies on unpaid labor — mostly shouldered by women — as well as the undervalued jobs in female-dominated industries. How can governments now start to elevate these jobs and weave them into broader economic growth policies?
Covid-19 has very much sharpened our focus on what is of value in an economy — which equates to what we can put a price on, and what we can exchange. It turns out that the areas we thought of as “high-value” — finance and real estate, for example — are not the components of society we rely on as “foundational.” Covid-19 led to government definitions of “key” or “essential” work: Our most valuable, irreplaceable citizens are those who work in health and social care, education, public transport, supermarkets and delivery services. These jobs are disproportionately occupied by women, as well as by people of color, in Europe, the U.K. and the U.S. Suffering is not inevitable for these groups any more so than others — it is a policy choice like any other.
Is it a moonshot to think that unpaid labor within households could be counted in G.D.P. measurements? How would that actually work?
Well first off, we shouldn’t be trying to adapt and adjust everything to fit into G.D.P. As a measurement, G.D.P. is inherently flawed, as within it, economic value is only determined on the basis of market transactions — only goods and services sold in markets are counted. G.D.P. is used to justify excessive inequalities of income and wealth while trying to turn value extraction into value creation.
There are evaluation components and metrics that are far more dynamic than G.D.P.
In Wales, planned public sector projects are evaluated and appraised by the Future Generations Commissioner, who is mandated to make recommendations based on impacts on the not-yet-born.
In New Zealand, the government launched the first “well-being budget” in 2019. The Genuine Progress Indicator attempts to separate environmental and social costs from benefits, to value household and volunteer work, and to adjust for inequality.
If a mixture of these kinds of evaluative approaches was emboldened and embraced, then we would possibly have a better indication of the real direct and indirect implications to society of something like labor within a household.

Because of Covid, we are now far more keenly aware of the value of both formal and informal child care services. Covid has forced women to drop out of the labor market at much higher rates than men, with women being the default manager of household and family activities. Household labor, cleaning, caring and child-minding has tremendous spillover effects, but we have not done a sufficient job in mapping that, articulating and valuing these activities.
Given the increasing economic inequality around the world, is it fair to assume that capitalism is fundamentally incompatible with feminism?
Today’s capitalism is incompatible with feminism. Private companies are driven by shareholder mandates that do not inherently align with feminist and intersectional priorities — and it is these companies which are viewed as the most innovative, and the most valuable.
But history tells us that innovation is an outcome of a massive collective effort — not just from a narrow group of young white men in California. If we want to solve the world’s biggest problems, we need to understand and challenge this.
Movements to resituate and recognize women in innovation are growing — and we can see this in films like “Hidden Figures,” which recognizes the Black women at the heart of the space race, and campaigns like Jess Wade’s Women in STEM Wikipedia movement.
There is much more to do to understand and recognize the impact of innovation coming out of the Global South — I am fascinated by the successes of states like Kerala in the Covid crisis, where long-term state investment in health was supported by a rapid lockdown, aggressive contact tracing and extensive mental health services, which have reached over 11.5 million people. And all this coordinated by an impressive female leader — K. K. Shailaja, the minister of health and social welfare.
A statement last year from a group of almost 200 chief executives of the world’s biggest companies focused on investing in employees and customers, not just shareholders. Is that bold enough?

I often say that it is time for companies to “walk the walk” as well as talking the talk. Last year, the mantra at Davos was “stakeholder, not shareholder capitalism” — what has happened to this sense of solidarity during the Covid crisis? The world’s largest companies have become larger — especially in the tech sector, which sees itself as a beacon of innovation, but does not honor its social compact with the society in which it is situated by, for example, paying fair wages, treating workers fairly or declaring taxes.
Of course, companies could be doing more. But markets infrequently find this direction on their own.
In a recent article for Time magazine, you imagined the world in 2023. Tell us more.
I imagine a 2023 where we have not only beaten Covid, but used the recovery process as an inflection point toward a new world which is greener, more inclusive and more sustainable, fueled by smart innovation-led economic growth. This starts with public movements driving government bailouts to be conditional on maintaining payroll, securing minimum wage, halting stock buybacks, and ensuring worker representation on boards — aligning company goals with worker goals. This dream extends to health care, which is notoriously inequitable. In my vision, bold conditions were placed on the governance of intellectual property, pricing and manufacturing of Covid-19 treatments and vaccines to ensure the therapies were both affordable and universally accessible.
In Her Words is written by Alisha Haridasani Gupta and edited by Francesca Donner. Our art director is Catherine Gilmore-Barnes, and our photo editor is Sandra Stevenson.
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Alisha Haridasani Gupta is a gender reporter covering politics, business, technology, health and culture through the gender lens. She writes the In Her Words newsletter. @alisha__g