Edited by Mark Jacobs & Maria Mazzucato
- The Value Of Everything; Makers and Takers in the Global Economy (2018)
- Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth (2016)
Western capitalism is in crisis. For decades investment has been falling, living standards have stagnated or declined, and inequality has risen dramatically. Economic policy has neither reformed the financial system nor restored stable growth. Climate change meanwhile poses increasing risks to future prosperity.
In Rethinking Capitalism some of the world’s leading economists propose new ways of thinking about capitalism. The contributors include Nobel Prize winning economist Joseph Stiglitz, Chief Economist of the Bank of England Andy Haldane, Professor William Lazonick, Professor Carlota Perez, Mazzucato and many others.
In clear and compelling prose, each chapter shows how today’s deep economic problems reflect the inadequacies of orthodox economic theory and the failure of policies informed by it. The chapters examine a range of contemporary economic issues, including fiscal and monetary policy, financial markets and business behaviour, inequality and privatisation, and innovation and environmental change.
The authors set out alternative economic approaches which better explain how capitalism works, why it often doesn’t, and how it can be made more innovative, inclusive and sustainable. Outlining a series of far-reaching policy reforms, Rethinking Capitalism offers a powerful challenge to mainstream economic debate, and new ideas to transform it.
Avraham Baranes on Journal of Economic Issues wrote:
"the book attempts to provide, as explained in its introduction, 'a much better understanding of how modern capitalism works—and why in key ways it now doesn’t.' Together, the essays provide a compelling argument that we need more coherent and deliberate strategic planning in tackling our economic problems, especially in finding more effective ways to reduce greenhouse-gas emissions. In particular, Mazzucato, who also co-edited the book and co-wrote an introduction with Michael Jacobs, wants to counter the view that free markets inevitably lead to desirable outcomes and that freer markets are always better: the faith that 'the ‘invisible hand’ of the market knows best.' In fact, she argues, we should admit that markets are created and shaped by government policies, including government support of innovation. There is nothing too contentious in that statement, but she extends the argument in a way that is controversial."
Fernando de la Cruz Prego on Forum for Development Studies wrote:
"Michael Jacobs and Mariana Mazzucato have gathered a wonderful collection of essays that offers both lessons to be learned from the Great Recession and potential paths for policy reforms to ensure that similar crises may be avoided. Written by academics, policymakers, and institutional researchers, each chapter brings a unique perspective to the problems facing the modern economy, and to ways such problems may be solved. [...] On the whole, this is a policy book. Those interested in teaching policy and in the application of theory to policy will find this book invaluable due to its broad scope and accessibly written content. To fight back against the proto-fascist policies of Donald Trump, those on the left need a policy platform that focuses on structuring institutions to counter the economic inequality and instability of neo-liberalism. While some may criticize the book as not being radical enough, the authors have developed a well-defined set of policies that would allow us to rethink capitalism in a way that makes it good."
Martin Myant on Transfer: European Review of Labour and Research wrote:
"The central assumption of the book questions the neoclassical approach to the economic efficiency of markets in free and competitive environments (where the State plays a residual role that is restricted to intervention when market failure occurs) versus the heterodox approach, which sets the idea of the markets as social and political constructions (in which the State plays a central role as the leader of this construction). This reinterpretation of the relationship between markets and States will have, as its ultimate consequence, the necessity for a higher and deeper degree of public intervention. [...] In conclusion, the work of Mazzucato and Jacobs is an interesting contribution, which adds to the new wave of heterodox economists who are aiming to rethink the set of economic analyses and their prescriptions of economic policy. In particular, its contribution focuses on the need to relaunch Western capitalist economies through a decisive and comprehensive public intervention in different areas of economic
policy. However, although they make an accurate diagnosis of the main bottlenecks of these economies and of the limitations and contradictions of the economic fundamentals that sustain them, it is necessary to make a greater effort to develop a solid theoretical framework and the methodological instruments necessary to confront the current domain of the neoclassical proposals with an approach that is based on rigorous, quantitative and empirical evidence."
Ten chapters [...] all provide evidence for the inadequacies of orthodox economic theory, backed up with evidence on the failings of capitalism as it exists in western Europe and the USA, albeit generally focusing on one or two countries only. The individual chapters are less unified in the required extent or nature of necessary changes to that theory. Some seem content with a revival and development of Keynesian thinking, while others do not go beyond pointing to the inadequacies of existing orthodoxies. The more ambitious point to the need for an evolutionary-institutionalist alternative and argue for quite substantial changes in the state’s role in the economy."
Interview with Mazzucato on the Book
A 13-minute video:
- "Why Economic Recovery Requires Rethinking Capitalism" - article by Mazzucato at the Institute for New Economic Thinking, 15 November 2016
- "The Brexit-Trump Syndrome: it’s the economics, stupid" - article by Jacobs and Mazzucato on the blog of the London School of Economics, 21 November 2016
- "Capitalism in the Time of Trump?" - interview with Mazzucato at the Institute for New Economic Thinking, 6 December 2016
- "The industrial strategy acknowledges a fundamental truth about growth" - article by Jacobs on the NewStateman, 27 January 2017
- "Breaking with Capitalist Orthodoxy" - article by Jacobs and Mazzucato on Dissent, 4 April 2017
Table of Contents of Rethinking Capitalism
- Rethinking Capitalism: An Introduction (Michael Jacobs and Mariana Mazzucato)
- The Failure of Austerity: Rethinking Fiscal Policy (Stephanie Kelton)
- Understanding Money and Macroeconomic Policy (L. Randall Wray and Yeva Nersisyan)
- The Costs of Short-termism (Andrew Haldane)
- Innovative Enterprise and the Theory of the Firm (William Lazonick)
- Innovation, the State and Patient Capital (Mariana Mazzucato)
- Investment-led Growth: A Solution to the European Crisis (Stephany Griffith-Jones and Giovanni Cozzi)
- Inequality and Economic Growth (Joseph Stiglitz)
- The Paradoxes of Privatisation and Public Service Outsourcing (Colin Crouch)
- Decarbonisation: Innovation and the Economics of Climate Change (Dimitri Zenghelis)
- Capitalism, Technology and a Green Global Golden Age: The Role of History in Helping to Shape the Future (Carlota Perez)
About Michael Jacobs & Maria Mazzucato
Michael Jacobs is Visiting Professor in the School of Public Policy and Department of Political Science at University College London. An environmental economist and political theorist, his work has focused on the political economy of environmental change. His books include The Green Economy: Environment, Sustainable Development and the Politics of the Future (Pluto Press, 1991), Greening the Millennium? The New Politics of the Environment (ed, Blackwell, 1997), The Politics of the Real World (Earthscan 1996) and Paying for Progress: A New Politics of Tax for Public Spending (Fabian Society 2000).
Mariana Mazzucato (PhD) holds the Chair in the Economics of Innovation and Public Value at University College London (UCL), and is Founder and Director of the UCL Institute for Innovation & Public Purpose (IIPP). She is winner of the 2014 New Statesman SPERI Prize in Political Economy, the 2015 Hans-Matthöfer-Preis, and the 2018 Leontief Prize for Advancing the Frontiers of Economic Thought. She was named as one of the ‘3 most important thinkers about innovation‘ by the New Republic.