Book Chat: Mariana Mazzucato – Mission Economy

by Ingrid Robeyns on July 24, 2021

As announced a few weeks ago, here is the first of a series of book chats – starting with Mariana Mazzucato’s Mission Economy. The idea is that this post opens up a space for anyone to talk about any aspect of the book they want to discuss (under the general rules that apply to discussion on this blog), as well as raise questions of clarification that we could put to eachother.

Mission Economy is about rethinking capitalism and rethinking government. Perhaps it is even more about rethinking government than about rethinking capitalism. Both need to be rethought in order to redirect the economy into what Mazzucato calls ‘a mission economy’, which will allow us to tackle problems facing humans and the planet that are currently not properly addressed: climate change, insufficient high-risk long-term investments in the real economy, real wage growth that is much lower than productivity growth, and so forth.

Mazzucato argues that right now we (that is, our governments) ask “how much money is there and what can we do with it?” but instead we should be asking “what needs doing and how can we restructure budgets and design innovation and collaborations between the government, industry, academia and other groups so as to meet those goals?”

She starts from the view that at present both capitalism and governments are dysfunctional. In Chapter 2 she identifies the four sources of the problems of capitalism as (1) the short-termism of the financial sector (including the deeply problematic issue that, given the role of financial institutions, its profits are privatized but its losses are socialized, as we saw in the 2008 financial crisis); (2) the financialization of business; (3) climate emergency and (4) slow or absent governments. In Chapter 3, Mazzucato points at New Public Management theory as the culprit for the widespread myth that failures of the public sector are more serious than failures of the private sector, which has been used to justify the massive increase in privatizations and outsourcing. And this, Mazzucato argues, has led to a reduction of the capabilities in the public sector, which in turn makes it harder to change weak or bad policies. The main problem with the government right now is not its size, but rather that its capacities, skills and expertise have been diminished, which has also demoralized public servants.

What we need instead, is ‘Moonshot thinking’, which entails that governments should have an ambition that is so inspiring and concrete, that it motivates all to contribute to reaching that goal; this is what Mazzucato calls ‘a public purpose’ – the most essential thing a government should have, and which will motivate its partnership with business. Innovation and commercial success will happen along the way.

Chapter 4 describes the Apollo program in the 1960s as an example of what governments can accomplish if they have a clear mission that all are contributing to. At that time, the mission was “bring a man to the moon and safely back to earth” – in the historical context of the Cold War (not an unimportant detail, perhaps!). The Apollo program was driven by mission-oriented innovation, full with great risks and many failures from which lessons were learnt. At the early stages, poor communication within NASA seemed its weakest point; apparently this problem was addressed so successfully that the dynamic communications set-up within NASA was later copied by businesses. There were many other problems with the Apollo program, and Mazzucato argues that solutions were found by organizations and people willing to experiment, rather than picking supposedly good solutions in advance. Talented and hardworking people, risk taking and adapting, are key aspects of a succesful mission.

Chapter 5 explains how mission-oriented thinking looks like by applying it to several missions for our times: the Sustainable Development Goals, the American and European Green New Deals, accessible health, and narrowing the digital divide. In all of these missions, the aim is to catalyze collaboration between many different sectors, and to change our view of the government as regulating and correcting markets and being a lender of last resort to being the creator and shaper of markets, and an investor of first resort willing to take the high risks that are needed for long-term thinking, and who aims to crowd in private funding and collaborations.

Chapter 6 sketches how the political economy of this capitalism-with-a-public-purpose would look like. Mazzucato writes that there are 7 pillars that a political economy that can guide a mission-oriented approach should have: (1) a new approach to value; (2) markets as being co-created and shaped by the government; (3) organizations that have the capabilities to co-create for the public purpose, including taking risks, experimenting and learning; (4) an approach to finance that does not start by asking what the budget is, but by “what needs to be done” and as a derivative question asks how to pay for it; (5) fighting inequality not only be redistribution but first of all by predistribution; (6) reimagine the relation between government and businesses as a partnership around a common goal; and, finally, (7) new forms of participation, debate, discussion and consensus-building.

There are many things to like about this book – at least, for those of us very worried about the ecological crises, enduring human suffering, and staggering inequalities (I doubt that conservatives and right-wing libertarians will share that appreciation, though). One great strength is the questioning of implicit assumptions and reversal of the logic held by most people trained in mainstream economics; this paradigm has been so deeply influenced by public choice thinking and its twin-sibling New Public Management, that its students are often not even aware of other approaches. Another strength is that reading this book gives one very concrete tools to analyze, understand, and criticize the (lack of) climate action in one’s country. How that plays out will differ from country to country; in the context I’m working in, some arguments from the Dutch government (who is doing too little and too slow) is “this will cost too much” and “we must be able to keep on living good lives” – showing an utter lack of vision, which is precisely what should be central in an economy. It’s been a repeated critique on neoliberal governments that they have no longer any grand vision of public purpose. This books makes the argument, in a way that economists and anyone under the spell of neoliberal thinking should understand, that there are very good reasons why such a public purpose would allow us to address problems that currently remain not solved – and that capitalism, as we know it, will not be able to solve.

One thing I was wondering, is whether what Mazzucato proposes could still rightly be called a form of capitalism (as she does). If the government is no longer in the backseat, only trying to fix market failures, but instead sits at the driver’s seat and uses a public purpose as a guiding rod in its decision making, can we then still see this as capitalism? Around 1990-1991, in my first year of studying economics, I learnt that there were three economic systems: capitalism, a planned economy, and “the mixed economy” in which both businesses as well as the government played an important role. Is the purpose-driven economy that Mazzucato argues for still a form of capitalism, as her book suggests? Of course, one might think this is merely a semantic question and not of much importance. But it might have consequences for how easy it could become to make people sign up for this view: if there are only two options (capitalism and socialism, as people in some countries seem to believe) then clearly this is capitalism, since private ownership of the means of production is not abolished. But if there would also be massive public/governmental ownership of the means of production, as I read the view that Mazzucato proposes, then ‘mixed economy’ might after all be a better term.

One substantive worry I have is that what Mazzucato argues for doesn’t go far enough. There must be some sort of consensus around a mission before the government can adopt it. But a lot of problems in the world are in essence the result of massive power inequalities, and I do not see how those can be tackled by coming together around a mission. The Appolo program is in that respect an easy case, since no-one really had to lose by trying to put a man on the moon. But take the case of climate change, which Mazzucato (rightly so) sees as the most urgent and important problem now to address. So much happening around the lack of adequate action on climate is really dirty, with vested fossil intersts doing all they can to sell all their fossil assets before the governments role out their climate plans. There are clear conflicts of interests that will make the idea of ‘a public purpose’ too weak to get done what must be done. Moreover, what if governments are captured by those forces that are massively benefitting from the current status-quo? So my worry is that aiming for the good and just society will require more struggle and resistance than mission-oriented thinking in itself can deliver.



Ingrid Robeyns 07.24.21 at 5:05 pm

Next book chat will be on Hilary Cottam’s ‘Radical Help’, probably sometime around August 12-15; the third book will be Roman Krznaric ‘The Good Ancestor’, which I’ll discuss by the end of August. So get a copy if you want to join the discussion!


Matt 07.24.21 at 9:58 pm

Without having read the book at all (or even having heard of it until today) I’m not sure if this is a fair criticism or not, but it seems that one big difference between the Apollo program and the “green new deal” or other such things is that the first is, as described above, a fairly discrete problem with a clear goal and defined success, while the later is a much broader thing, with lots and lots of possible choices and a less clear standard of success, or at least success is less clearly tied to the goals. This doesn’t mean the green new deal is a bad idea or policy, of course. I think the opposite! But, it suggests it’s not a clear parallel with the race to the moon. It would be more like telling scientists to “go do a lot of cool and important space stuff”. That might have been a good idea, but if that was what was done, it’s plausible that it would have taken a lot longer to get to the moon, if that was ever even achieved. I’m not sure this means that we should take a more “moon shot” focused approach to climate change. (My guess would be no.) The “original” New Deal, after all, involved a very large number of programs, not all well-coordinated and sometimes not even obviously compatible, many of which turned out to be not very helpful and some even harmful for the over-all goal. But it does make me wonder if the Apollo program is a good analogy or model for what’s needed. Of course, it’s possible this is all addressed in the book.


Ingrid Robeyns 07.25.21 at 6:40 am

Matt – It’s a interesting question whether the GND would be much broader than Apollo and hence the comparison doesn’t work. I was surprised to learn how much had to be done “to get a man to the moon”, and how many people were involved. There were also many failures and subprograms that failed (just like you describe it with the “original” new deal). Still, perhaps the original New Deal was a better exacmple of ‘a mission’…?
Mazzucato does acknowledge that there is a difference between a mission that is merely ‘technological’ and one that is also social, and that the latter will be much more difficult; but I think she underestimates that it might not just be “more difficult” but that this raises the question whether seeing this merely as ‘a mission’ will do (cfr. my second question at the end of the OP).


Tim Worstall 07.25.21 at 9:01 am

Three’s an excellent critique of the basic idea, that politics can and should guide the economy in any detail here:

The biggest problem being the first one, what actually is the societal utility function that we’re trying to optimise/maximise? We do need to know this, in detail, before we can plan it.

I’m also continually amused by the Green New Deal. As JQ has insisted here the efficient solution to climate change is a carbon tax and the social cost of carbon. Great, let’s do that then.

My amusement comes from the manner in which so many agree with the Stern Review, use it as proof that something must be done. But then entirely skip over the same Stern Review insistence that what is done must be efficient. Because we humans do less of more expensive things, therefore if we use inefficient methods of dealing with climate change then we’ll do less dealing with climate change.

The Stern Review then going on to point out that the carbon tax – or cap and trade perhaps – is efficient, trying to plan things in detail is not. But it’s this very Stern Review wihch is then used as the proof that we must have the Green New Deal, that inefficient manner of dealing with climate change that we are warned against using.

An example might be how plans and politics gave us first generation biofuels, something which made the problem worse, not better.


John Quiggin 07.25.21 at 9:02 am

I’m currently writing a piece about pandemic policy in Australia. In essence, the Commonwealth (national government) has abandoned the field to the states because ‘the Commonwealth doesn’t do things’. I’ve been arguing that this is a development dating back to the 1990s and due to New Public Management. So, it’s striking to see Mazzucato identify Oz as one of the key victims of NPM.


Ingrid Robeyns 07.25.21 at 7:11 pm

I don’t think Mazzucato argues that politics should guide the economy in all of its details, but that some problems are of such a nature that the government should do more than ‘fix markets’. If it concerns protecting the preconditions of secure and good living on this planet, I think we’ve given “the market” enough time to show that it could solve it, and it didn’t; If what Mazzucato writes on Tesla is correct, that the success of such a company that has been essential to the green transition apparently depended on significant government support whereby the government took risks but didn’t get its share in the succes. I think there are many reasons to be sceptical that “the best available markets” can fix climate change but I especially think it is not helpful to see ‘markets’ or ‘a USSR-style economy’ as the only two options. Also, there are plenty of governance/political science scholars working on climate change who disagree with seeing a realistically-available carbon tax as the magic solution to climate change. So I think it’s good that alternatives are put on the table (but, I agree/admit, then those alterntives must also be described in a ‘realistic’ form and not some ideal-theory, and that’s a worry here).


Peter Dorman 07.26.21 at 4:26 am

I’m a book or two behind in my reading of Mazzucato, but this summary sounds like the sort of thing she would say. I broadly agree with her but think we have to go further in order to go even that far.

There is no consensus on what the key problems are to solve. The first aspect of this is that we have entered a new era in which propaganda, broadly defined, is far more pervasive than in the past, reaching into the nooks and crannies of our day to day lives. The second is that, after a decades-long dismantling of post-WWII social democracy, the political dominance of capital is utterly stifling. At the very least, we’ll need a vibrant social movement component to MM’s mission-setting project.
Decentralization of production systems (modularization, supply chains), combined with greater interconnectivity and complexity, requires a more “distributed” state capacity than before. I know this goes against a main theme in Mazzucato, but I don’t see this as pro vs anti state entrepreneurship. Rather, we need a more decentralized form of industrial policy that corresponds to the competences and coordination channels we will require. A starting point is German coordination between firms, public and cooperative financial institutions, unions. academic research and technology transfer entities, and the state. They have made great strides in Energiewende this way (with qualifications, see “Energiewende Paradox”). But for the kinds of things MM is talking about we need a much, much more democratic version. (This is point #1 more or less.)
The climate problem is rather different from the way it’s framed in the summary above. I won’t get into specifics here, because it would take us away from the main topic. A book will come out in a few months with a full explanation…..


John Quiggin 07.26.21 at 8:40 am

Thanks for suggesting this, Ingrid. I’ve been meaning to read Mazzucato for ages, and now I have a good reason


MisterMr 07.26.21 at 9:17 am

@Ingrid Robeyns

In the OP you say: “If the government is no longer in the backseat, only trying to fix market failures, but instead sits at the driver’s seat and uses a public purpose as a guiding rod in its decision making, can we then still see this as capitalism?”

But it seems to me that the concept of “mission economy” is very much that of fixing market failure, Mazzuccato doesn’t want the government to choose how many green t-shirts ant how many blue t-shirts are produced, she is ok with “the market” determining this, she only wants the government to fix a specific set of problems, that, for various reasons, the market don’t fix.

So on the one hand Tim Worstall @6 is correct that, if the government was to run the whole economy as a mission economy, this would incur in the same problems of the soviet economies, but on the other hand Mazzuccato doesn’t really want the government to run all the economy but only some specific sets of it, so it’s still very much a neoliberal position (though a soft neoliberal one).
It’s like saying that nobody is going to build dams and roads so the government has to do it: but this is something that happens in all capitalist economies.

Of the 4 problems of capitalism nominated in the OP, for example, I think that 1 and 2 are a consequence of economic inequality (with high income people trying to save more than the real economy wants to invest) rather than a cause of inequality, and as such they are not really a form of market failure, but Mazzuccato place them on the same level of the climate crisis (that is a problem of externalities and so a market failure in the strict sense).

So on the whole it seems to me, from your description of the book, that while Mazzuccato wants to make a very bold claim about pro-active governments, but in reality it’s bold only inside of the relatively small overton window of left neoliberalism, unless one has to take the concept of “mission economy” to the extreme at which point it becomes very similar to a soviet-style economy, but this is clearly not what Mazzuccato is thinking about.


Peter T 07.26.21 at 11:08 am

The core concept, as outlined above, should be uncontroversial. The real issue is empirical: are the challenges facing us of a sort that modern polities can unite politically to meet? Consider some examples: C18/early C19 Britain (more specifically England and Scotland) was built around defending its Protestant character against France, and was prepared not only to tax and invest in the navy and naval infrastructure, but also direct resources through tariffs and other measures to capturing the world’s more lucrative trades (eg to replace Indian textiles with its own cotton manufactures) – efforts that took a century or so to pay off. Likewise, from 1950 to 1990 the US was prepared to tax and spend, even to enact civil rights, to meet the communist challenge: a defence of its self-conception. The Soviet Union in the 20s and 30s, and China in the 50s, did not see mass revolts despite wrenching changes because there was broad elite and enough mass support for measures seen as essential to preventing a recurrence of past catastrophes (defeat and civil war in once case, foreign dominance in the other).

All of these involve an enemy seen as inimical to core part(s) of the national identity. Climate change and other environmental issues are not of this character. Can they be re-cast as this sort of challenge? Where national identity is interwoven with the current landscape – I have the impression this is the case in parts of Europe, maybe. Elsewhere? Maybe Biden is smart to cast the Green New Deal as a response to the rise of China.


Ebenezer Scrooge 07.26.21 at 3:10 pm

Based solely on Ingrid’s description, it sounds like Mazzucato is committing one of the most ancient economists’ sins: postulating a can opener. (A chemist, an engineer, and an economist are stranded in three separate desert islands, each with a copious supply of canned food.…)

The postulated can opener, in this case, is a democratic polity that can tolerate a “mission economy,” where the holders of power most are of the “I’ve gone mine, Jack” persuasion, and many of the disempowered take their resentments out on those who are even weaker. Wars can generate the necessary solidarity to transcend this, but not much else. As Ingrid herself pointed out, one of her poster children–the Apollo project–took place in a Cold War environment. Religion used to have this power (cathedrals!), but the only powerful religions these days are those fed by resentment, rather than fear of damnation.

I guess that this is an argument for the Chinese model. Ugh.


Tim Worstall 07.27.21 at 10:24 am


“It’s like saying that nobody is going to build dams and roads so the government has to do it”

” she only wants the government to fix a specific set of problems, that, for various reasons, the market don’t fix.”

Within that overton window of neoliberalism – just to use the same language and be consistent – the argument really is about which are the problems which both must be solved and only government can solve. That there are some which meet the dual test is agreed upon by all. Well, except perhaps the objectivists. The further “left” one goes the more things are argued to, or assumed to, meet it. There’s then the secondary test of once we’ve agreed that this specific issue meets both requirements then what’s the best manner of doing this?

Climate change is a true market failure in that technical sense. It requires action and government’s going to have to be at least part of it. Great, so, what method do we now use? A carbon tax has its supporters. Minimal detailed intervention by correcting market prices. Others argue for a much more detailed planning of who is allowed to do what how. Biofuels mandates, the banning of fracking, the 2030 ban on new ICE cars, the ban on the installation of gas boilers – all things happening in the UK right now.

Opinions, as they say, differ.

You’re right that Mazzucato is at one end of the spectrum here. There are lots of things that must be done by government and that when they are they should be more directly rather than through just changing market incentives.

On which opinions differ.


Seekonk 07.27.21 at 2:03 pm

Conservatives are always scolding us about leaving debt for our grandchildren, but they don’t seem concerned about saving any oil and gas for them. ‘Drill, baby, drill!’


Ingrid Robeyns 07.28.21 at 8:07 pm

Can I ask the economists reading this thread: how common is the term ‘mixed economy’ in the place you studied/are teaching/do your work? Mazzucato’s ‘Mission Economy” would be one variety of “mixed economy”, though I can’t recall having come across the term in her book (and I read this book on paper, so can’t do a CNTRL+F to search for the term).


John Quiggin 07.28.21 at 10:47 pm

The term “mixed economy” was commonly used in the social democratic period, out of use almost entirely after that since the assumption was the remaining public enterprises would be privatised out of existence. That’s now in reverse, but I haven’t seen a resurgence of the term. Here’s something I wrote about 20 years ago


Tim Worstall 07.29.21 at 11:23 am

I’m not an economist but I am at a think tank which aided in devising privatisation. “Mixed economy” is rhetoric more than anything else.

Both the US and Singapore health care systems are mixed economies. They’re wildly different but both contain some mixture of public and private direct provision and also some mixture of public and private financing.

There never is going to be an economy that doesn’t have some government provision of at least some goods and or services. Attempts to have government provide them all have tended to not work out well. Thus the “mixed economy” is what all are going to be.

The, umm, mixture of the mixture is going to be up for debate – as with JQ’s paper. “More mixed” might well mean more government. I don’t think it would be a good idea to get back to the British point of having all buses, trains, car making, steel, coal, electricity, water and on and on being on the government side of mixed. But that would still be a “mixed economy”. As is the current situation where none of those listed are on that government side but health care, much education and so on still is.


John Quiggin 07.30.21 at 4:09 am

“There never is going to be an economy that doesn’t have some government provision of at least some goods and or services. Attempts to have government provide them all have tended to not work out well. Thus the “mixed economy” is what all are going to be.”

Agreed. But at the time the term was in common use, plenty of people still believed that the government could do (just about) everything. And for the last 20 years of C20, lots believed that markets or quasi-markets could replace all or nearly all government functions. “Markets in everything” is still a thing on the Internet.

So, the point of “mixed economy” is precisely to say that the mix of government and market provision must and will change over time and that we should look at what characteristics should determine that mix.


Tim Worstall 07.30.21 at 7:24 am

“So, the point of “mixed economy” is precisely to say that the mix of government and market provision must and will change over time and that we should look at what characteristics should determine that mix.”

Indeed so. One useful characteristic could be whether either actually works at solving the problem being addressed. Take climate change for example. A carbon tax to produce the correct signal for markets – to internalise the externality – generally models better, as in your own work, than more direct intervention by government. Drax (for those who don’t know, an old coal plant in England) burning American wood chips to the point that some modelling claims the emissions are higher than just having continued with local coal is a result of people trying to be clever with government direct action. So too first generation biofuels which, again according to at least some models, raised emissions. Even, the planned roll out of tens of thousands of electric vehicle charging stations – along with the necessary bolstering of the grid – when we’re still not quite sure whether green hydrogen and fuel cells might not be a better answer. Or even, if green hydrogen really does work, then synthetic hydrocarbons from that source and the current refuelling network.

“Does it work?” might be a useful question therefore.

The think tank I’m at – the ASI – are probably the High Priests of that privatisation process. Yet even we agree with the mixed economy idea. Electricity privatisation for example. The Grid is a natural monopoly, generation and retailing are not. The latter two can be – should be perhaps – opened to vicious market competition, the first is going to have to be treated differently. A regulated natural monopoly.

It’s entirely fair and reasonable to disagree with the resultant system although we of course think it entirely perfect. But the overall logic entirely and wholly meets that test. We’re going to have a mixed economy come what may so the interesting thing is which bits belong where? And why?

As to why my own preference for that market side it’s because I’ve worked in politics. Written chunks of a manifesto, had a parliamentary pass, even had a specific policy enacted (the tripling of the personal allowance for income tax is between me and the CPS, another UK think tank). The idea that those who go into politics are going to come up with useful solutions to complex problems astonishes me. Having, you know, met so many of those who go into politics.

That I’ve had that influence on UK income tax is rather proof of the contention perhaps.

And as to policy in my area of actual technical expertise, rare earths. I’ve been watching gape mouthed as the entire system runs off in entirely the wrong direction at great expense. Mining rare earths just isn’t a problem and yet that’s where vast subsidies have gone (I recall one American program to extract from coal. But absolutely not from coal fly ash, which is what we’ve got tens of millions of tonnes of just lying around.). There has been near no – nothing of any size that I know of perhaps – attention paid to the actual rare earths problem, which is separating them each from the other. Which is where government might usefully prod and subsidise research, looking for a new method to do this. There are candidates too.

That is, in this area – a corollary of the Gell Mann Amnesia hypothesis perhaps – government hasn’t even noted the problem, let alone delivered a solution.

Which, hopefully, explains why the basic logical point stands, I agree. It’s going to be a mixed economy, which belongs where will change over time (an analogy to Coase and why firms exist perhaps, which belongs to the market, which to government, changes depending) and the big question is which should be where?

Does it work being a useful test.

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