Mariana Mazzucato was a blast on Monday night. A powerhouse of intellectual energy and conviction, this economist who advises governments and a long list or global institutions, had no problem holding captive a full house at University of Technology Sydney’s Great Hall.
Her big message, flashed up on screen early, was that storytellers rule the world.
If you think of how little impact the scientists have had in the climate battle, you’d agree. These innocent souls thought their facts, data and logic would sway the world. Nope. The story that won was the loud hailer of self-interest, mistruths and worse.
She started the two hour session with the much lauded Inflation Reduction Act (IRA) in the US as an example of the complexity that needs to be understood behind even great ideas.
The IRA is a big glossy prize, but the flip side is … it’s a big glossy prize. Global investment funds are flooding to the US to enjoy the subsidies – our own included – but also from places such as Africa that can afford that flight of capital even less than we can.
Climate change is a global problem, it can’t be solved with nationalistic solutions, she said.
“It’s not going to be solved with nationalistic policy. So this idea that we’re just going from crisis to crisis to crisis, for me, really, this is what this talk is about, and what I think any progressive government, social, democratic and progressive government should be thinking about – how do we confront these crises head on in a proactive and not in a reactive way?”
As the economist who has influenced Treasurer Jim Chalmers in his now famed 6000 word essay for The Monthly (republished on Treasury’s website here) Mazzucato comes with rock star status for people who believe that to solve the intractable problems of our time we need a different mix of economics and politics than “business as usual”. And, let’s be honest, BAU is a polite way to reference the extractive, exploitative system that makes it brutally hard to carve out even modest change.
Chalmers said in the essay there’s another way. We need to build a “more inclusive and resilient economy”. And we need a new “values-based capitalism”.
Mazzucato was in town this week to meet with Chalmers, NSW Treasurer Daniel Mookhey, Victorian Treasurer Tim Pallas, Industry Minister Ed Husic, chief scientist Cathy Foley and chair of the National Reconstruction Fund Corp, Martijn Wilder.
As founding director of University College London’s Institute for Innovation and Public Purpose, a long list of advisory roles to governments and global organisations, and author of several books including The Big Con and the most recent, the Mission Economy her voice is a powerful one.
She brims with ideas that spark that special excitement you get when you discover solutions that are pure simplicity and common sense. The “story”, again.
As an Italian born American sporting an American accent, who’s lived in the UK since 1998, and now advises governments around the world, she’s a global citizen who speaks Italian (with excellent pronunciation, we note) and seems at home with other languages.
But the language of her four teenage kids is to mimic the “blah blah blah” of those who purport to save the planet but do nothing to act.
The Moonshot program worked
To tackle climate change we can learn from US President Jack Kennedy’s Moonshot program, she says.
Key was a single simple idea (story): to beat the Russians.
The outcomes were many. Time was critical, so it had to be fast. It also involved many different sectors – around 400,000 people from a range of industries.
“The first thing that government did was actually change how they did procurement – moving from cost plus to fixed price… and lots of private sector activity that ended up getting us camera phones, foil blankets, baby formula – all these homework problems that had to be solved along the way.
“Otherwise, you get captured by one or two or three sectors that tell you they’re the best.”
The program involved clear direction, intersectoral collaboration and a redesign of loans, grants, guarantees, subsidies and bailouts that “fuel that bottom up innovation along the way”.
It was the public and private investment that solved those “homework problems” she says.
What drives productivity is reinvestment
“That’s what ultimately also drives productivity, right? Often countries that have low productivity, like Australia for the last 15 or so years, are also low investment economies, they’re economies where you can make profits without investing. In Europe and financialised economies, the profits that are being made are just kind of handed out to shareholders and so on and are not reinvested back into the system.”
In today’s world we need to learn from those experiences today and remember to socialise not just the risks but the rewards, she says.
“Nothing in your iPhone would be smart without those public investments.”
“What would Google be without the algorithm that was funded by the National Science Foundation?”
The US government also backed the early Tesla S car.
So “Tesla did well, oh, it’s because Elon is a genius. Well, no.”
But Barack Obama failed to ensure that the public investment would be rewarded.
To beat climate change we need to unpack the lessons from the Moonshot era and learn from the failures of our more recent past.
Mission led economies
We need to make decisions mission led, Mazzucato says. Gather government, business and civil society and decide on an outcome that’s desired with a governance framework that shares the risks and the rewards.
Stop picking winners such as life sciences, automobiles, aerospace, finance, the creative sector – even innovation, as the UK did.
“Why just those?” she asked the government there. “Did they just lobby their way to the top? Have you been captured by those particular agendas?”
Why not think instead about the challenges such as “clean growth, aging, future mobility, and within those how to think and negotiate missions”?
And at the very start of any mission, consider the people who are at the centre of the problems, pointing to Australia’s referendum to embed the Indigenous Voice to Parliament as a big fail.
Without equity at the heart you can create as many green environmentally excellent neighbourhoods as you like, for example, but find you’ve excluded great swathes of people who feel it’s got nothing to do with them and continue to live miserable lives.
“It’s not about helicopter money. It’s not about ideology. It’s not about left or right, even though I kept mentioning progressive, social democratic…this really should be something we all care about. It’s catalysing that system like goal oriented growth.”
Any sort of climate strategy is going to require not just renewable energy, but “changes in how we move, what we eat, how we build, and so on”.
So, we think, it’s seizing what’s essentially the new means of production – storytelling – and finding the words that give this existential battle the power it needs to win.