Mariana Mazzucato: Government -- investor, risk-taker, innovator
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- Опубликовано: 27 окт 2013
- Why doesn't the government just get out of the way and let the private sector -- the "real revolutionaries" -- innovate? It's rhetoric you hear everywhere, and Mariana Mazzucato wants to dispel it. In an energetic talk, she shows how the state -- which many see as a slow, hunkering behemoth -- is really one of our most exciting risk-takers and market-shapers.
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Mariana Mazzucato convincingly presents her argument in favour of government. Actually all over the world, the governments are playing a very vital role as catalyst of innovation. A wonderful talk. Highly recommended.
and where does government funding come from?
And you can thank another government programme for being able to share that thought on the world wide web.
Governments innovate all the time in ways many people never consider or take for granted because it's mostly providing the infrastructure and the rules by which the infrastructure is used & maintained. Many in the business sector, especially libertarians, think that government control of the infrastructure is not necessary and that it's maintenance can be left to ad hoc free markets.
In order for welfare states to function democratically, as intended, a balance between the public and private sectors is necessary. The government manages the collective interest and the private sector is where individual interests are pursued. As she mentions, the private sector is not really positioned to concern itself with projects that require investment over time with little economic return. Only government is positioned to do this because it exists in perpetuity.
Mazzucato's thesis is that the US society is more innovative than others because our particular public-private dynamic yields demonstrable results that are the most competitive. The myth she means to dispel is that it isn't simply the private sector that innovates in society, yet she doesn't really explain why our particular public-private partnership is more successful or how it differs from other competing societies.
Toward the end of the lecture she asserts that the public sector is not sufficiently the benefactor of its own investment in successful R&D efforts. To me, this is the key issue. What is the relationship between the public-private sector? Innovation is obviously important but questions of morality and equity needn't be the price we pay for it. Investigate these public-private partnerships. Crony capitalism? In other words, it comes back to politics.
+canteluna Great summary! I think the conclusion is that the patents from these inventions should be sold or a portion kept by the public for a profit to fund more research, education, etc. Alaska pays a dividend to its citizens for profits from oil.
Shouldn't we all benefit from the inventions paid for by our tax dollars? I'm so glad these questions are arising. Good reason not to let the economy slide like it has or the masses will start to want answers. ;o)
Kellie Nicholson Yes, I agree with you. Thanks for your intelligent comment.
Great comment!
Also government is democratically elected therefore, more government power coukd lead to a more democratic state.
@@Loanshark753 "Power" used on behalf of the people, yes. But not for its own sake to be used against the people.
TED is good for the brain.
Two water companies can collude to fix prices WITHOUT regulation, it's called an oligopoly. The basic premise is that private provision of a good or service where a natural monopoly occurs requires regulation to ensure competition. Did these companies in San Jose serve the same districts or neigbourhoods using their own respective pipeline networks? I.e., did you have duplicate pipeline networks under your house?
Interesring, but I think It only could works on developed countries where politics are not corrupts as latin anerican politics. Try to apply this ideas in Argentina, Venezuela, Ecuador or recently in Chile , for example, I am sure the economics resoursers would be use to financing “politics innovation”
The problem is there will never be a way to get "smarter spending." That is the nature of government.
Richard Feynman himself said it best; "But nobody has ever figured out the cause of government stupidity-and until they do (and find the cure), all ideal plans will fall into quicksand."
I am wondering how the public sector keeps an eye on the public interest if it takes equity from what it funds. Would it not be a problem if the focus on innovation funding was all about generating returns on investment for government -- the orphan drug or orphan crop phenomenon. Sure, government could use its ROI to invest in addressing issues of need rather than return, but the incentive structure would be towards ROI,
Like every single lecturer at ucl. No one ever tells you about the success of laissez faire, swept under the rug.
Because it causes untenable suffering, unbridled greed, imperialism, wars, and ecocide.
Other than that it's great.
Study the economics of the 19th century for God's sake
@@oceanecastelnau9821 So the problem of the 19th century was a lack of government?
It's difficult to think that the government takes any actual risks when it's got a almost infinite revenue stream.
El gobierno también financió monsanto, creo que vivimos todavía en una época en la que la asociación publico-privada carece de ética, es una gran herramienta pero a la vez es un arma potencialmente peligrosa.
Thanks for your recommendation.
One of the key structures through which the state funding is transferred is Intellectual Property Rights. They play a very negative role here: rather than allowing many economic actors to commercialize the proceeds of state-funded investment, IPRs cause for exclusive rights to be transferred to only one player. This causes a lot of disincentive to the private sector to invest in further R&D, since they get a monopoly.
Either open licensing (cf open source) or abolishing IP are the answers.
At the beginning I disregarded what she was talking about and the way she was talking about...but found later she is making sense and It really need to be debated the value created by Government vs. Private sector.
"I don't regard business and government as adversaries"
Big business and big govt go hand in hand. Big business buys and staffs govt regulatory agencies to crush competition and entrench vested interests. Big govt depends on big business for campaign contributions and other bribes, and big salaries after the politicians are ejected from office.
Big business would not be so big without govt protecting them from competition.
corporatism
This new comment system is horrible for keeping track of conversations.
First of all, thanks for all you have done via NASA. I am a major fan (if there be such) of that branch of the Government.
The outperformance I would showcase is their doing it for less money than what NASA required. And yes, since they are piggybacking, they are not having to re-invent the entire wheel, just pieces of it. But that is the way of any innovation.
Yea I saw a couple from Tom Woods. I will watch some of them when I get the chance as they go for a while,
Best TED! Mariana=genius. I would love to see her dream come true, Mariana+Elon+full government backing
One more point if I may: When the National Science Foundation decided to release the "Internet" to commercial use, people thought the Feds would still have to run the routing tables, because hardware at the time could not do it. 20 years of public-sector work, and hardware still could not keep up.
PRIVATE innovation accelerated development and within 1 year the NSF route servers were entirely obsolete. Two years later, the Cisco 7513 was handling traffic the NSF never dreamed of.
I just finished reading Antifragile by Nassim Taleb. In this book (page 231) he says that:
NIH found that out of 46 drugs on the market with significant sales, about 3 had anything to do with federal funding.
It would be cool if Nassim Taleb could debate Mazzucato.
Que disertaciòn màs atinada. Thaks you Mariana.
We live in a country where good sense and smart inclusivity seem REVOLUTIONARY, when they are simply hallmarks of a society's good character . Perhaps, greed is our greatest enemy.
Great Talk by Mariana. Wish it was a little longer. Ha Joon Chang has a lot of good things to say on similar Topics.
I would love to see this be come policy - problem being, is those that pass the laws benefit from not sharing the proceeds
So, you've decided to ignore the fact that the foundation of nearly all major innovations throughout history were laid by governments.
The word you are looking for is "jingoistic".
Her points on defense research were accurate in my opinion.
Que fala maravilhosa!
There are so many technologies that she didn't mention that are spinoffs of the space program. The government is able to fund so much more than private capital is able to, but it is all to often seen as unnecessary discretionary spending. If we want to build jobs, we honestly need to increase taxes on those earning 6 or 7 figures annually and invest in these kinds of technologies. Innovation will bring about job creation. And innovation can, and indeed has, come from the government.
which is public private partnership. Exactly what she has been talking about the whole time. A lot of projects like building the Olympic arenas and condos, are simply not possible without the public taking on the risk for the private corporations.
It is not about private vs public.
In my opinion the state may be indeed very effective in the market buonly if it plays the game according market rules (innovation, meritocracy, flexibility).
Actually it is even in a privileged position given its easier funding access by unilateral taxation (while for any other to funding by taxation :( while for any other company money is always a scarce resource.
Except that, when someone else gives you their money they make you sign a contract that ensures they get their part of the profit if and when the venture succeeds. It's really not that hard to envision such an arrangement.
they are wonderful. they just need better regulation on personal information usage.
The point is that to be really creative, you need to be free from constraints to a greater extent than which is allowed by narrow financial considerations. In this regard being extremely efficient is counterproductive and why the private sector has only really joined in the space race (low orbit tourism) 50 years after the government developed the technology, which I'm sure was considered a waste of money and time by some back then.
watch the full talk man
While it is true that some things funded by government may end up having commercial value for the private sector, that doesn’t mean it is efficient or effective at doing it compared to the private sector....how many things get funded by government that never see the light of day?
simply incredible
Finally understand your contention/misunderstanding. The fact that the government did not give us the internet in its present form, implies to you that it slowed down its development. I'm glad the private sector improved the internet and made it what it is today, which is the proper role of the private sector (Google algorithm was funded by NSF btw). But that does not mean internet would have existed anyway without government role, and that's why I say you're SPECULATING.
Odd how the government can just increase the "price of society" whenever it wants.
It is a fundamental economic principle that people tend to spend their money on what they value the most. Therefore, when money is spent on what people would not normally spend that money on, it is being spent on less valued things.
If the government is funding risky ventures that wouldn't otherwise be funded, it is because the risk is seen as being too high and not worth the resources. Thus, resources are not spent in their most valued use and one is able to ask, "what might we have instead?"
Good point. In other words, government is only motivated to be innovative when it is trying to win a war. Business, on the other hand, it innovative when it is trying to make money. Money will never be an effective motivator for government because it can always tax and borrow for that, which takes a lot less time and energy.
Excelente!😄
According to the video , in what ways are governments doing more than just fixing market failures ? Can someone help me ?
+Muratcan Kılıç government own laboratories and hire researchers so that they can do fundamental research without being distracted by free markets' profit requirements.
Ouah. She made me look at the American government with brand new eyes, for real. Thanks Mariana.
Do you love Trump now? Good.
it's very good
I'm having a problem seeing government AS the innovator if only for the extra hoops they must jump through to accomplish anything. But I can see government as playing a crucial role with R+D, where many who innovate for the sake of innovation (AKA the Nikola Teslas) have a hard time getting funding.
Inflation is taxation!!
But it has since been an extremely innovative resource for people everywhere. And it might not have happened without the government need and funding.
A natural monopoly requires govt regulation to maintain it.
This is because a monopoly charges monopoly prices. Those profits signal entrepreneurs that there is money to be made by entering that market and providing better service or lower costs.
The only way to prevent competition is govt regulation.
Even where competition does not occur, the threat of competition because of a lack of regulation requires vested interests to innovate to prevent competitors from entering the market.
Remarkable
Yes, but it's impossible to know what we would've developed by now without the government funding. We probably would've developed these things faster and more efficiently
Your first sentence logically negates your second. Making your comment null and void.
@@ridinist he said "probably".
I know.
Dios! No lo puedo creer. Si Petro trae a esta fenómeno como asesora económica a su gobierno seria el acto de fe mas grande visto en la historia de la humanidad. Seria genial tenerla en Colombia creando políticas publicas. Increíble charla.
Tu nombre se lo pondra Petro para Colombia en el 2022
No. The driving force for the internet was the construction of a network to interconnect high speed computers. Packet switching, developed separately for mil;itary applications, was integrated into ARPANET.
Long term planning....
we live in times of tremendous malinvestment... the US government is over 30 trillion in debt... with all the money it takes in from taxes it still can't balance the budget... if we, as individuals, spent money the way the government does we would all be living in the streets under a bridge... the government has to borrow or have the Federal Reserve print the money and government intervention in the economy to "fix" a problem ends up creating, at least, two new problems... we have a system that punishes savers and rewards spending... this is not sound economic thinking... inflating the money supply leads to price inflation that hurts those on fixed incomes the most... the primary role of government is to protect people's rights... unfortunately it has been on overdrive to take them away... government/corporate partnerships have crony capitalism, waste, fraud and abuse written all over it.... a sound economy relies on a sound monetary system. Ron Paul, a 12 term Congressman from Texas has advocated for an audit of the Federal Reserve, a sound monetary system, an understanding of the proper role of government, a foreign policy of trading among nations rather than one of bombs and bribes ... Dr Paul influences millions since the seventies and continues to do so through the Ron Paul Liberty Report (Monday - Friday on Rumble)... a sound monetary system benefits everyone and is one of the main goals we should be working toward for Peace & Prosperity in our lifetime.
There will always be some form of government Shaun. At some level any group of people who choose to live in a community will eventually need a way to govern that community. Even if the rules and values are fairly informal a system will eventually evolve. That is all government is. I don't agree with the reach and scope of the U.S. federal government as it stands today but I also recognize it as an important part of the republic.
Lol. Tell me more about the state of the Swedish economy as of now. What is their unemployment rate again?
I live in Canada and I wonder that about America, too. If a homeless gets hit by a car, does he get treated or even sent to the hospital or just left for dead?
while i agree with your contentions, i dont see how they arent completely irrelevant to the topic.
In an energetic talk
You don't have to be an innovator in order to chronicle the history of innovation. In fact, someone who is an innovator may know f**k all about the history of innovation. She can recommend policies based on her thorough study and deep knowledge of the history of innovation WITHOUT telling the scientists and engineers working in government/private enterprise how to do the technical part of their jobs. It really isn't that hard to understand.
Yes, because I'm sure you have a PhD in economics, Mr. Anonymous RUclips Commenter.
Carrie Mathison of Economics.
"developing monopoly is what businesses do and controlling monopoly by law..."
Again, law is the use of violence. This is why there is no example of a truly free market. Because there are those who seek to impose themselves through violence. This has almost always been government and there are those who seek to aim the guns of government in order to enrich themselves.
She could have saved a whole lot of time by simply saying the obvious. Government is the only source that can afford to fail, because they are only spending money that isn't theirs in the first place. They need no reward. But risk takers? Innovators? No. What risk?
This talk is basically a representation of the first chapter from "The Entrepreneurial State" (Mazzucato, 2011) plus some charts from later on. I'm reading it in German and still have a couple pages to go, so I can't explain it to you at this point, but go ahead and read it yourself. It's written in a concise manner and is quite the eyeopener, as someone else has stated.
Actually they quote was "THEY are too big to fail".
I'm thinking that the returns will come in a form that has not yet been invented.
Oh, thank you. That was a wonderful laugh. A nice way to start the day.
lady, you overlooked one big sort of profit return, not only cash, gold, bitcoin counts now as assets but the big data, so the giant companies mentioned probably had been paying back their debts, in certain way, just not the conventional way.
Sandra Bullock?
Internet came from DARPA net. Originally some of the ideas were from GM and other private companies who tried to find ways to get disparate things to talk to each other ... but the government standardized it and made it work.
Oh My god, lol the Internet was not. Created at CERN lol, the research & Development was done at MIT university.
The translation to portuguese is quite good but i have one suggestion for improvement The word "Equity" is literally translated as "Equidade" but in Brazil the best word should be "Patrimonio Líquido".
so does corporations!
Nice talk. BTW since you have a TED Talk, try to get in contact with some of the specialists in body language and spend some time evaluating your behavior and your audience behavior during your speech with Petro.
I would argue that cow farts are extremely important !
good point
I agree but having been involved in some of that development personally, your stomach would turn if you knew how much funding was wasted literally to get minor progress; and usually very little gain. The failure is generally in the oversight provided by the government due to lack of expertise and/or lack of effort. Also, NASA and many others will claim credit for every possible breakthrough even if they weren't central to it...gets them more funding...vicious cycle.
Oh right. Yea well in that case you are correct.
Problem is Sowell never really understood it was the capitalists and too big to fail bankers that we was talking about.
You are more than welcome. I especially like the videos by Jeffrey Tucker, Tom Woods, and Tom DiLorenzo.
Robert Higgs pulls no punches, which can be a bit shocking.
Leave the Hanse Hermann Hoppe for later, his accent makes him somewhat hard to understand sometimes.
The perception is that in the 'equilibrium' between Public and Private, some US leaning governments lean to far towards the Private. In effect the Private are encouraged by taking a disproportionate amount of finance that would normally have gone to the Public sector. Repeat ad nauseum and the fabric of society fails, but the few become very rich. Government need to rectify the balance, to make sure the Private also profits the Public, contracts must enable fewer Private returns by requiring a larger slice back to the Government.
why so many dislikes?! what the hell?! Video was very informative if not rhetorically beautiful, but that's what makes economists so beautiful: their logic. "Kafkian bureaucrat" Ha!
if those are the traits of an investor that gives new innovation, is that such a bad thing?
Has a mises forum linked to this, lol.
think of it like this, if someone in Americas get ill like to the point of dying and can't afford healthcare what happens to him/her? can you tell me?
Then there is transistor and integrated circuit technology, personal computers, fiber optics, software technologies such as IOS, Windows, Unix - all developed privately. But perhaps Kevin sees these as being unimportant.
"Why didn't the private sector there come up with the internet?"
In economics it's called "crowding out". Look it up.
Curt Howland quick answer is the private sector had little need of the internet until everyone had a pc of some sort and communication technology was capable of providing high speed and bandwidth
"Universities are essentially branches of government"
The various State universities, yes. But there are a lot of private colleges and universities, including the first two, Harvard and William and Mary, and the lion's share of the work is done by students using the research opportunities to get their degrees.
While the dollar value of Federal research grants may seem big, it's minuscule compared to private research.
I agree, but that doesn't nullify my point.
Probably not. The Swedish economy is dominated by a relatively small group of corporations. There have been few successful new corporations in Sweden - Ikea being just about the only exception.
the results matter
How did Fannie Mae and Freddie Mac turn out as government run entrepreneurships? I think regular business does a much better job with out the inefficiencies of using other people's money in a careless way. Maybe a 5 year research program for some basic technology dumped into the public domain is about the most efficient thing the government can do.
The establishment hates Thomas Sowell.
SKF: founded 1907
Volvo: 1927
electrolux: 1910
ericsson: 1876
The social democratic era started in 1932 (or 1936) with Per Albin Hansson. I know, facts can hurt.
and?
so just to summary: the US government funding Apple, and Chinese goverment funding US government, so you find out who is the real funder....right? ;D
Ever heard about natural monopolies, like the sewer system under your town, or train tracks? Or do you want the ground beneath your feet to be like Swiss cheese so ten different companies can all build their own sewer system to avoid one having a monoploy on the only existing one?
I am referring to the value of IP, in general - not just patents or copyrights. Copying of a proven piece of IP, being software, a patent or some trade secret, takes value of that IP from the original owner and distributes it to N other exploiters, adding net value. However, this microeconomic model does not concern itself as to how the IP got there in the first place.
More money for either is a waste. We already outspend everybody else in both areas (unless you are a general or a professor).