A Moonshot Guide to Changing Capitalism: Redefining the State's Role in Global Challenges

The discussion centers on Mariana Mazzucato's "mission economy" concept, advocating for a reimagined role of the state in addressing complex global challenges like pandemics, climate change, and social inequality. Drawing parallels to the Apollo moon landing, Mazzucato argues that governments should move beyond merely "fixing market failures" to actively "co-creating and co-shaping markets" through a bold, purpose-driven approach. The pandemic, while tragic, is presented as a potential catalyst for this shift, highlighting the interconnectedness of global health and the need for collective action and stronger public systems. A key distinction made is between simply flooding the system with liquidity, as seen in the 2008 financial crisis, and the current, more structured recovery packages, particularly in Europe, which tie funding to investments in climate change and digitalization. Mazzucato emphasizes that effective governance and strategic policy design are crucial, citing examples of developing countries like Vietnam and Kerala that outperformed wealthier nations due to historical investments in public administration. She critiques the "infantilization of government" through excessive outsourcing and the erosion of public sector capabilities, arguing that a capable state is essential for effective public-private partnerships. Mazzucato challenges several prevailing economic myths: that talking about a strategic state implies a "bigger state" rather than smarter collaboration; that business is the sole "prime wealth creator"; and that the state's role is merely "de-risking" private enterprise. Instead, she posits that value is collectively created by business, government, and non-profits, and that the state is a crucial "risk-taker" whose mistakes (like Solyndra) should be viewed through a portfolio approach, similar to venture capital, rather than as outright failures. This necessitates a shift from "picking winners" to "picking the willing" and focusing on problem-solving to foster intersectoral innovation. The practical implications involve redesigning policy tools like procurement, grants, and patents to ensure public value and prevent the "socialization of risk and privatization of rewards." Mazzucato advocates for a national debate on the "directionality of growth," moving beyond merely the rate of growth. She stresses the importance of investing in the "dynamic capabilities of the public sector" to avoid government capture and ensure the state can be an intelligent, expert partner in collaborations. Ultimately, the book aims to revitalize belief in the state's capacity to lead transformative change, tackling "wicked problems" with the same urgency and collaborative spirit as the moon landing.

if we went to the moon and back 50 years ago directed by the state and fostering an immense amount of partnership with business what would it look like if we did that with the sustainable development goals these social problems that are much more wicked and difficult in some ways than going to the moon but that require that equal amount of urgency of seriousness of collaboration of catalyzing you know bottom-up innovation

this time what's really interesting globally is we have recovery packages that are not only very large but they are increasingly structured so in europe where I'm sitting I'm sitting well I'm in the UK brexit but yes we're still in europe the EU recovery fund is actually conditional on governments that receive the funding to invest and to innovate around two big challenges that we have globally which is climate change and digitalization

this um realization that actually what we really need are stronger global health systems could potentially this is the opportunity I'm not saying it's a reality wake us up to the fact that we need to revitalize and reimagine really a global welfare state

the fact that really concrete ability to govern such an immense crisis has had differing you know performance achievements if you want depending on what actually happened how we govern relationships between the state academia business civil society organizations there's so many lessons there that we can learn from

this idea of putting you know on the front end of policymakers minds what are the problems you're trying to solve and how can you then use a problem-based a purpose-driven what I call a mission-driven approach to get as many different sectors in your economy to innovate to collaborate to invest and literally put that into the design of procurement grants loans and industrial strategy to crowd in kind of that bottom-up experimentation

the problem is not big government small government the problem is the type of government and what it does and how it should set off a catalytic reaction in society what I guess I'm saying is we got to get over those stale myths

if you don't admit that you're also a value creator you don't even ask those questions so I think that's the biggest myth that you know well two I guess I just unpacked two myths one is that as soon as you talk about the need for a smarter strategic and my words mission-oriented state you're all just about the state as opposed to you know what is actually at the core of the point which is that we need that in order actually to work together with other actors better

it's not enough to say we need more purpose-driven policy we need to look at the tools right you know what does it actually mean to have a portfolio approach so you're not picking winners again another myth that it's all about picking winners you're not picking winners but picking the willing

you know this is precisely what uh this lord um in the UK government lord Agnew called the infantilization of government which is when you're overly consultifying your your your structures and this is what NASA in the story that I tell about the moon landing was actually very aware of