Shifting the conversation

This article from WIRED is a useful introduction to the work of Mariana Mazzucato, a London-based American economist who is trying to emphasize the role of public sector institutions in fostering technological change.  She has already influenced some of the leading "progressive" Democrats in the US Congress (such as AOC), and has made some important contributions to the Green New Deal. 

As the article relates,  Mazzucato started thinking in depth about this issue while listening to UK PM David Cameron defending his disastrous austerity program after the financial crisis.  Cameron was in effect seeking to get the public sector "out of the way" of private business so as to foster innovation.  The supposed model was Silicon Valley, but Mazzucato recognized that describing the US tech sector as a bastion of unfettered capitalism was entirely false.

The first example she used to illustrate this was the iPhone, where Apple's work mainly consisted of bringing together innovations that had been made elsewhere with the support of public funds.  There are, of course, many other possible examples, ranging from the trivial -- the discovery of Teflon as a by-product of the US space program -- to the profound -- the rapid advance in aviation technology thanks to government support, either direct (as in Europe) or indirect (through US military spending).

The problem as Mazzucato sees it is that while the state (read: taxpayers) is taking much of the risk associated with innovation, private companies are reaping most of the profits.  Moreover, in recent years those companies have been spending those profits not on further research, but on share buybacks, which means of course that further technological progress continues to depend on the willingness and ability of the public to foot the bill.

Mazzucato's work seems to mesh well with that of Thomas Piketty in offering an alternative to the currently dominant free market narrative.  Sadly, after making a huge splash a couple of years ago, Piketty has faded from public view, although he has recently come forth with a colossal new book.  Whether these two original thinkers can make themselves heard in a world where economic conversations are dominated by trade wars and Brexit remains to be seen.