Fixing a Broken Economic System with Mariana Mazzucato (Live from Kilkenomics)

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1:10To understand the economy, you have to understand human nature. This podcast is powered by Acast. Hey there, John here, and welcome to the podcast. As you probably already know, last weekend was Kilkenomics Festival, its 15th year, believe it or not. And as always, it was packed with the great and the good, economists, comedians, political commentators, thinkers, and whatever you have on yourself. And this episode, recorded at the festival, is a bit of a treat. It's an absorbing conversation Mac had with Mariana Mazzucato about her latest book, The Common Good Economy, A New Compass. As an award-winning author, professor of the economics of innovation and public value at University College London, and advisor to leaders all around the world, Marianna had a lot to say about the current state of economics, the left, the right, capitalism and politics.

2:11And she had a thing or two to say about Ireland. But it's a refreshing take and a fascinating listen, where she invites us to take a new look at our global and local economic and financial system, and how it could be redesigned for the greater good into the future. So, as the topic du jour, Matt kicks off by asking her what she makes of the midterm elections in the US. I think the chickens have come home to roost, as Malcolm X once said. And of course, it's not just the U.S. I was just in Spain for the launch of the Spanish version, el bien común. And people are in the streets protesting that private equity companies have basically bought social housing as a commodity to be bought and sold.

2:56And that is the Anglo-Saxon U.S. form of capitalism. And that is also what Americans all across the U.S., finally, not just in the so-called red states, are up in arms about. And it's really interesting where there's these bipartisan issues, like on the data centers. And I think what was good about the midterms is that the Democrats, especially the DSA, the Democratic Socialists of America, really honed in on very specific things that ultimately are about capitalism, the structures. It doesn't have to be that way. So instead of just talking about redistribution in terms of, you know, just talking about income inequalities, really honing in on what it is, for example, about shareholder value, where you have about seven trillion dollars.

3:47That's a lot. That's 12 zero seven plus 12 zeros. That's been used by the largest corporates just to buy back their shares, to boost stock prices, stock options and executive pay. and this increasing inequality, there's nothing natural about it. It's not even just about technology and globalization. It's very much about decisions we have made within companies, within the state that's very, very reactive, that has not solved the problems that people have on housing, on energy, on health. Health is a huge problem in the United States, one of the richest country in the world where people die, not because they're sick, but because they don't have the money to pay for the drugs that most of the time their own taxpayer dollars funded.

4:29Anyway, what I think was really interesting about this election was these bipartisan issues that actually really brought people together. And the data centers are a good kind of microcosm of that. So, I mean, do you think you wrote the common good at a time when there wasn't much common good and there wasn't much talk about it? Do you think we're now at a sort of a tipping point going from one regime to another worldwide. Do you think we're close to that? I would disagree. I mean, the reason I wrote The Common Good is we talk too much about The Common Good. We talk about, you know, climate change and equality, health, housing issues, again, all these things that people are on the streets because we talked about it but haven't acted.

5:10So the problem is not that we haven't talked about it, it's that we haven't walked the talk. And the book ultimately is about holding accountable those who talk about it. And what's interesting is that in economics, there actually is no concept of a common good with principles. We talk about the public good, which sounds good, two words, one is good, but it's really just correcting for something that the private sector doesn't do. And I won't bore you with the kind of economic theory behind it, but it's why we end up talking about for these big global problems about financial gaps, right? So the private sector might not be investing in clean water, on health, on vaccines and so on.

5:45So there's a gap and we end up thinking there's a hole to go throw money into. And we often are supposed to rely on the public sector to do that. Most public institutions and countries don't have states that do do that. So there is that gap. But the problem is, if you see a hole to throw money into, then you completely miss the trick that the way that we actually structure finance, the way we structure public-private partnerships, the way we structure the very remit of the state matters. You can't just see it as a hole to throw money into. So this public good is just a correction, whereas the common good in places like this has always been an objective where then the how we all relate to each other matters as much as what we're doing.

6:29Philosophers don't bullshit about the common good. They have the principles and in its objective, we're the how. So telos for Aristotle and the polis. We don't have anything like that. That's exactly where I wanted to start because the opening chapter of the book, If you're an economist and you're reading this, the opening chapters are about philosophy, about sociology, about the history of political thought. We go all the way back to the Greeks. Just before we get into the economist worldview, which I think you and I share that idea that it's far too narrow, Explain to me why you started the book with philosophy before you got into the main points.

7:13Because, again, it's so refreshing as an economist to read a little bit about philosophy. Basically, because there has been a debate, a very deep debate in philosophy since Aristotle, probably even before, about this idea of the good life. What is it? Fast forward today, you have John Rawls talking about a theory of justice, but then Michael Sandel critiquing him. He's a communitarian philosopher saying, you can't talk about a theory of justice if we don't even value each other along the way. So the communitarian philosopher is very much actually built on the history of thought that also came from Aristotle, where again, it was the telos, the good life, but also the polis, the community and democratic for and participation, participatory forms of democracy, of course, in the times of the ancient Greeks, only some were considered allowed to participate.

8:09So obviously, it's not about glorifying that period, but there was a deep debate about what the common good is and how you reach it and that the way you reach it is actually determining whether you even have almost the right to talk about the common good. But I also talk about biologists, right? Because biology, it's interesting because economics, some people criticize it for being too mathematical. And I often say, don't critique it for being too mathematical because then it just sounds like you don't know the math. Right. And then, you know, the economists are all happy because they can sound super smart.

8:39You should criticize what kind of math they're using. And the math that's been used in neoclassical mainstream economics comes from Newtonian physics. And it came from that because they wanted to prove equilibria, wanted to prove that you had unique equilibria, that markets form this kind of perfect world that sometimes fails and we have to go in and fix it. And kind of the calculus of Newtonian physics with optimization, so maximization, minimization, help them prove what they already wanted to prove. Whereas there's all sorts of other mathematics, for example, from biology, which is much, much richer for looking at society.

9:18My own thesis actually used distance from mean dynamics from biology. So it's not the average agent that matters as economists are always talking about the average, the representative agent, the unique equilibria, replicator dynamics and biology. Look at the distance from mean dynamics. So the way you talk about change is how different a particular agent is from the average. And then you basically can use like evolutionary biology to study that. And so it's interesting with biologies that even how they've looked at, for example, what in economics we would call public-private partnerships. So in biology, when they look at ecosystems, they don't give it like a neutral sense.

9:59They will define whether an ecosystem is parasitic, whether it's predator prey, whether it's symbiotic, whether it's mutualistic. And they have mathematical models that look at that. So, you know, biology is also really useful, not just political philosophy, not just communitarian philosophy to branch out. Again, just to remember, there's all sorts of different tools that we could be using to actually study how the world works and how mainstream economics basically evolved with this very unscientific method. Instead of saying, oh, the world is really complex. How are we going to study it? Here's all sorts of different tools that we can use.

10:35They said, this is what we want to prove. Capitalism is the best of all possible systems. The market is the way that it's best to organize it. What is the mathematics that will help us prove that? And so they took a very narrow type of mathematics. And I just think that's really important because so many young people who are impatient with how the world is evolving are rightly critiquing the standard economic framework, but sometimes forgetting to really go deep into these kind of underlying assumptions as opposed to critiquing sometimes what's at the surface, which presents itself as a bunch of mathematical models.

11:12And it's really important to remember that the market itself is an outcome. Sometimes when people use words like the state versus the market, that's just, I think, historically incorrect. The market is an outcome of how we organize businesses, literally their governance, if they're just maximizing shares or something broader like stakeholder value, how we govern public institutions, are they just fixing markets or can they shape an economy to deliver for people and planet? And then again, how they relate one to another. Is that relationship parasitic, credit or prey, or symbiotic and mutualistic?

11:46And if we really put a lot of attention on the intra-organizational governance, how we design public institutions, private institutions, third sector institutions, and put a lot of attention on the relationships, that will determine the kind of market we end up with. Because, I mean, it's fascinating for me reading this book. It's kind of a full frontal attack, but gentle, on assumptions, perceptions, biases. And what it's basically saying is that economics, macroeconomics, policymaking has lost its way for a variety of reasons. And what's nice about the book is you're not pointing fingers and saying, this is why.

12:24And then on the positive side, it doesn't have to be like this. So the first critique, if I'm right, is that we only call in the state when the market fails. And the state's job is to, as you would say, put a sticking plaster over something that's failed and then we move on. Can you give us an example of that or explain that to us in a way? Because that's the world we're living in. Sure. So first, I mean, just in terms of the context, in terms of how badly markets fail and our capitalist system is failing, Just the numbers are very striking. So 2 billion people in the world currently don't have access to safe drinking water.

13:04Apparently, by the end of the century, there's going to be about 83 million deaths, excess deaths due to climate change. 4.5 billion people don't have access to health services. So these are like huge numbers. And since 2015, we've been trying to go after those things. There are these sustainable development goals, which if you read them, they're actually kind of obvious, right? Housing for all, climate action, no hunger, no poverty, gender parity. So again, there's no lack of talking about goals. And every country signed up to those sustainable development goals in 2015. But then we have this economic theory that absolutely doesn't deliver on those goals because they never went to the center.

13:45And market failure theory, the question that you just asked, is that we should just assume that everyone is just maximizing for consumers their utilities, So their preferences, firms are maximizing their profits. Even workers are seen as maximizing their preferences for leisure versus work. We then design these supply and demand curves that cross. We get these equilibrium prices. And if in the end, with market equilibria, we don't have enough of something, enough basic research, enough clean water, enough health for the poor, we expect the state to come in and fix that gap, to fix the market failure.

14:22And that's why you'll have heard of words like externalities, right? So these negative externalities or on the other side, positive externalities. The negative externalities are when the private sector, because it's profit maximizing, doesn't invest enough in areas that are characterized by non-excludable and non-rival characteristics. So they're not going to invest in it because they can't appropriate the profits. So again, the state's supposed to come in and fill that gap to make sure that we have enough clean water. Even defense, right? So defense systems, which now defense budgets are going up.

14:56But the reason why we have always relied on state actors to fund defense is because it's going to sort of, in theory, benefit everyone in the country. So there's little incentive for the private sector to do that. Basic research for an area like nuclear fusion has always been funded by, again, state actors. is classic positive externality, which is the opposite of a negative externality, when these positive attributes are so wide that, again, you don't get the private sector to invest. So there's no debate about that. So if that's the case, is it surprising that we end up not solving the world's biggest problems?

15:31If you have a state that by design, not by coincidence, is seen as fixing, as de-risking the private sector, as facilitating the private sector, as enabling the private sector. So the private sector is glorified. It is behind the so-called market system, maximizing its profits. When things then don't happen, the public sector comes in with bandages. So if you think about that, even just the narrative, one is taking risks, one is de-risking. One is kind of playing the game of doing cool things that has to be creative and thinking out of the box. The other one has to facilitate and enable it. Is it surprising that we also get really bad relationships.

16:10Imagine if you were in a relationship and one was like the risk taker, one was the de-risker, or if your partner is just facilitating you, that is not going to be a sexy relationship. One is going to be having much more fun than the other. So it is, it's, you know, the contracts literally at the contract level, the procurement contracts, the subsidies, the tax incentives, the water rights, the property rights are all built on this assumption that one creates value and one redistributes, fixes markets, enables, de-risk. So it's just set up to fail. And it's also set up to fail from a capacity sense.

16:46You know, what capabilities do you need within government if that's all you're doing? And so the reason that I wrote The Common Good is that even though I really believe that we should be mission-oriented, tackling all those really difficult problems out there that are really basically what the SDGs said we should be doing, they were never taken seriously they never turned into missions but especially they never forced us to change how we think about good in the economy so the treasuries and the ministries of the economy globally never really changed their economic models and if we don't do that it's just too easy to talk about these goals even the missions when we actually have them but then the relationships along the way go wrong because we don't put the goal at the center of you know how we actually structure those contracts from the start.

17:34So tell me, you call the book, in France, the new or a new compass. So let's focus now on the objectives of the common good, the aims, the targets, and in effect, what you say is a compass. It's a way of looking at the world, kind of holistic way. Explain that to me and to the audience. Sure. So the book is not about saying what the common good is precisely because we kind of already know that, right? I keep coming back to the fact that we have lots of cities, regions, countries, global organizations, multilateral development banks, mayors, governors, presidents, prime ministers that I think often do talk about the right goals, you know, health for all, housing for all, climate action.

18:24The book says it's impossible to reach those without a compass. And coming back to this idea of principles, elements, I talk about five key elements that define, I think, what a serious approach is towards actually trying to reach the common good, again, to hold accountable those that very easily use those words, public interest, public value, common good, public good. And the five elements of the compass, and I call it a compass because we have to navigate this extremely difficult kind of, today, I would call it dark times. The first element is being very clear in the system. What are you actually trying to do?

19:01Because otherwise it's just blah, blah, blah, blah, blah, kind of bullshitting our way through talking about the common good. So that idea of really clear purpose and directionality. And that's where I kind of go back to some of these ideas about missions. Can't just talk about, you know, climate action, normalize it and be very clear. For example, some of the missions that I've been working on in Brazil recently, we're making sure that every child in a country has access to healthy, tasty, sustainable lunch. You can then actually hold accountable that leader, because it's not just about government.

19:33It's often, you know, partnerships and business goes to Davos and talks about purpose and the common good. Did you achieve it or not? With the space race, if they just said beat the Russians, you know, or the space race, that would have been very generic. Going to the moon and back in a short amount of time, you can hold them accountable. Did you do it or not? Some people said never happen conspiracy. The second element is co-creation. Who decides what those missions are? How can we make sure that, again, what we're saying is good, the so-called common good that we're going after, is defined at that local level?

20:07In Brazil, a very interesting project around this co-creation participation for the common good, that second element is a project we're doing with the Consejo Nacional de Siringueros. These are the rubber workers in the Amazon forest. You might Remember Chico Mendes, who was killed in 1988. He was the founder of CNS. And what they say is, you know, all this climate stuff, you know, the tropical forest facility, the Amazon Fund, the COP conferences, it's about to happen a couple of weeks this year in Turkey. Like we know so much about keeping the forest alive, about the socio and biodiversity. We've been protecting the forest, live in symbiosis with the water cycle.

20:47And yet we have no say whatsoever in the design of these policies. The third element is sharing knowledge. So in a world where all we talk about is collective intelligence, open innovation, you know, AI and the word intelligence is everywhere. The truth is that we've been privatizing ever more knowledge in modern day capitalism. So there is no open innovation. There is no real collective intelligence. We increasingly have patents that are upstream in the innovation process. So we're privatizing the tools for research. They're very wide, like dogs and cats that pee just to stake out their territory.

21:23These are strategic patents just to keep out competitors. And they're very strong, so hard to license. So an example of sharing knowledge would be in COVID. You'll remember there was like eight vaccines, only one of them, which was people called it the AstraZeneca vaccine, but it was actually VaxRevia. It was a partnership between Oxford University taxpayer funded researchers and AstraZeneca and the researchers who said the mission is not the vaccine. The mission is global vaccination. so it's available everywhere. They said, we will only work with you if you commit to sharing knowledge with other countries and join a patent pool.

22:03Otherwise, we're not interested in the collaboration. So that's an example of sharing knowledge from the start, not exporting expired vaccines through philanthropies as we did in COVID, but working together ex ante in that pre-distributive way, not redistributive way in how you design the innovation collaboration. Fourth is sharing rewards. So instead of the Silicon Valley model where we socialize the risks and privatize the rewards, everything in your smartphones was publicly financed. Internet, GPS, touchscreen, Siri. That was the first book I wrote called The Entrepreneurial State. And then we allowed all the money to go private.

22:40How do we actually think about sharing rewards in, again, the contracts from the beginning? An example would be during Biden's administration, I helped design the CHIPS Act, which was as massive subsidy as is happening everywhere in the world now, also with the AI, quantum computing, nanotech. As soon as a country wants to show it's really going to be innovative, there's huge subsidies given to particular types of technological areas. And we said this time with the CHIPS Act, which was for the U.S. to become more sovereign, less dependent on Asia for CHIPS, let's make sure those companies that are benefiting with the massive subsidy was about 400 billion commit to reinvesting their profits, not using share buybacks, improving working conditions, increasing worker pay and using energy efficient supply chains.

23:28So having, again, that idea of a contract, which is symbiotic and not parasitic from the start in the design of other collaboration, a subsidy or anything. And lastly, the fifth element is transparency and accountability. So, you know, the previous four assume that we even know what's going on. And if you have algorithms, for example, that do what Shoshana Zuboff in her great book, Surveillance Capitalism, says they do. She says, when you search Google, you think you're searching it for free. Well, Google's actually searching you for free. And so if these algorithms and the lack of disclosures of how the algorithms work continue, it brings a level of lack of accountability and lack of transparency that it makes it extremely hard to govern the system.

24:15But another form of lack of transparency relates to my last book, which was called The Big Con, which is all these different actors in the system that no one even really knows who they are or how they got into the room. So think of these large consulting companies, 1.5 million a day to Deloitte to do test and trace. They completely failed, just like G4S failed completely with the security for the Olympics. And then the military had to come in. So these kind of very shady contracts that often are hiding the fact that the government precisely because it's been told to just de-risk the system also ends up being very fearful of the risk itself because it's not supposed to do anything ambitious.

24:56and that kind of huge risk averseness and preference just to have a rubber stamp of Deloitte or McKinsey, that consultification or infantilization, that was the subtitle of the book, of our governments, is one of the worst forms of kind of lack of transparency. And so these five ideas of purpose, co-creation, sharing knowledge, sharing rewards, and transparency, I think ultimately have to hold any system to account that even dares to talk about these good, really important goals like health for all and housing for all. And again, what I like about the book as well is you don't shy away from the pragmatic.

25:35It's OK. Well, this is for me a world where we should be moving towards. Now, how is that possible? How is it executed? How are you even nudging towards it in the present system that we have? First of all, always reminding ourselves that the current system we have that you just mentioned was designed. We can undesign it. We can design things differently. The statistic I mentioned before of$7 trillion in share buybacks, that used to be illegal, that was lobbied into existence, or capital gains tax. Because it's interesting, if you look at Thomas Piketty's curve of inequality, I sometimes go decade by decade, and I look at which taxes exactly change, and how were they lobbied for that change?

26:20What was the narrative? What was the story that was told to governments, or sometimes to very large agencies, including the UN, by the way. And so in the case of the US, for example, one of the very large rises in inequality resulted from the National Venture Capital Association and more broadly the private equity industry lobbying government to reduce capital gains tax by basically 40 % in just four years with this narrative that that would bring about this great knowledge economy when actually what brought that knowledge economy was these huge investments from the public sector itself that got us those innovations I mentioned, but also, you know,$40 billion a year in the National Institutes of Health that basically produced 75 % of blockbuster drugs actually traced back their research to that public money.

27:10And yet the narrative was just reduce the tax and that will stimulate innovation. And so unless we have a different, not just theory, but narrative, the story of where value actually comes from, collective value creation, like those people in the forest and the Amazon talk about their own role, you know, like the pharmaceutical companies will always have the upper hand if the narrative is they're the innovators. And as soon as you dare to touch the intellectual property rights system or taxation system, they're going to go somewhere else. and unless you have governments that are willing to negotiate and remember that ultimately at the heart of any relationship is a negotiation.

27:51If you're not proud and have confidence of your own role, it's very hard, even when you have the capacity, if you don't have the kind of guts. That is literally what NASA did. NASA to go to the moon. If you read the contracts, and that's why I got so interested in it, they literally would put in not only that the contracts had to solve problems. It wasn't just a subsidy. Here's some money and the goal's commercialization. The goal was solving very specific problems. But they also put in no excess profits, not no profits. I'm not big on philanthropy. I think we're literally going back to the Middle Ages in terms of how much we're relying on philanthropy.

28:27So I believe in profits. I believe in business working. Fine, pursue your profits, but not in excess of what you've done. The real problem Today's the rents in the system. So the energy companies, the food companies, the pharmaceutical companies are earning absurd amounts of profits in excess of what they've actually done. The AI companies, the trillions, not billions, the trillion now earned by Elon Musk. That's on the back of not only publicly funded research, which is, you know, the history of AI all basically came out of either universities or DARPA type institutions. institutions, tax evasion, massive tax evasion.

29:07You guys in Ireland are the masters at this, the worst. You were listening, you were listening to the litany of sins. When you see a country like Ireland, which has either been very clever, or has played, I'll give you the word, like a schliefing, right? And the schliefing is a sort of behind the wall What do we do? When you talk to governments all the time, you're talking to the big NGOs, you're talking to the big institutions, all those institutions that have been created over 40 or 50, actually over 60 or 70 years. Is Ireland regarded as an outlier? In some way, a country that's playing both sides of the game?

29:53Because this list, we are possibly the antithesis of this list. I mean, you tell me, like, why? I mean, is there a big debate here about that? Because it's actually enough for at least young people who are in the streets all over the world over, think of Fridays for the Future for Climate, Palestine action. In Ireland, are they on the streets around these things? Because it's a political issue. It's deeply unjust, everything you just said. And by the way, the four things I was going to say that the AI companies have benefited from, public research, tax evasion, massive labor exploitation. Not only the companies themselves and their basic business model, think of Amazon, that injustice, but then also the financialized model.

30:40So the fact that lots of these companies actually weren't producing much in the beginning, but how the stock market then interacts with them creates this massive bubble, but also this overfinancing. So a lot of the trillions that are being earned is also how that particular sector, but it's happened before in other sectors, interact with the stock market. And then what happens? The bubble happens. So everyone today is talking about the AI bubble. They should actually be talking about the financial bubble, the way that the financial sector has either just interacted with itself. So, you know, 80 percent of finance in the UK goes back to finance, finance, insurance and real estate.

31:15and you guys were at the center of the large financial bubble back in 2008, 2009. We did that very well. That's a huge financialization issue of the financial sector. So the finance not going into the real economy, let alone then the real economy, the corporate governance itself, which is financialized through that kind of share buyback thing. But then you have these technological eras or how do you say technological change, Like today, we're experiencing AI, where the financial sector does go into the real economy, but it creates a bubble around it, and then it bursts. And in other sectors, like biotechnology, it really hurt the science.

31:53Because, you know, for example, I mentioned venture capital. Venture capital is often presented as very risk-taking. First of all, they often come in later, after the public funds did the hard thing. But also, they just want to exit, and they want to exit through an IPO or a buyout. So they rush the science. And so what we had in biotech was this massive wave of clipos, productless IPOs. So this question of how Ireland itself as a country has not only been at the center of global tax avoidance, but also in how the banks interact with it. So that kind of financialized model of capitalism, labor exploitation.

32:31I mean, in the end, you know, these AI companies are using today labor in Kenya, for example. And so these these are global companies that are putting their profits here that continue to have this very hybrid model of things that look super modern, but are actually still using slave labor in Africa. And so, you know, any country that is benefiting from or it and it's not a thorn in the side of that system is definitely part of the problem. And that's where I think leadership really, really matters. So Sanchez, for example, Pedro Sanchez, the president of Spain, I think recently has really been showing lots of leadership, both in terms of what he said about the Middle East.

33:14also what he says about public services, his own country now, his young people are rebelling, but he has taken a stand and said, we have to be actually investing in public services. We have to stop dismantling our welfare states. It's very difficult after 50 years of that dismantling. The point is, there's very few leaders.

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35:39Now, the book is passionate. The ideas are logical. They are not in any way some sort of unachievable nirvana as far as I was, because what you're saying is it's about design, designing the system of incentives and structures that we have to put targets at the center, which seems completely logical, and then to be much more holistic and much more inclusive. when you're looking at now at the world are you confident because this the book is urgent but it's not written on the base that this is far away it's written that we're not that far from here so i think there's two things with that one is the because because you were mentioning also you know burnham and then sanchez and you know think of lula so there is a like i think we're progressives So the center left has failed.

36:31It's easy to talk about redistribution. It's much harder to create value from the start that embeds those values in those principles. And you might say it's feasible, but that, again, requires a lot of not only the courage that I mentioned and the design, but also new tools that don't just go back to, you know, either renationalized water or privatized water. So it's interesting how Burnham talks about public control, right? So what does it mean to control, to have a very clear direction, and then have kind of bottom-up experimentation for actually achieving what he talks about, whether it's on health or water?

37:09That actually requires currently a different economics, a different partnership, a different practice and learning in the world. Where has it worked? So I just want to say that one of the things that I argue for, it's not like, oh, design this better. It actually also means going beyond not only the right wing ideology, what he calls the 40 years of neoliberalism, but also the ideology that's been kind of just easy answers, nationalized, privatized. And then the actual form of the PPPs that, say, we got with Tony Blair just embedded in this very simplistic and very problematic way, that division of public-private as opposed to very clear on what is the outcome we're actually trying to achieve in the health service and what does it mean then to design that public-private partnership to achieve that goal.

37:55The other thing is that I think that one of the things that's fueling this populism in terms of looking at why people are voting for a fascist government in Italy or Trump in the U.S. and even one in red states where Biden's policies through the IRA, the Inflation Reduction Act, were actually working. Right. So if it was what Clinton said, it's the economy stupid, then you would have expected that voters in those red states where the Biden policies were working would have voted Biden. They didn't. Why? And I think that's a huge wake up call in terms of if you are a person living in a society like the U.S.

38:35where people really have been left behind in terms of those basic rights to earn a proper living wage, to not spend such a high percentage of your income on health, which really should just be a human right in the 21st century. and if in the process you've also been made to feel kind of humiliated, you know, with very little dignity, not valued, so that at best the system is working for you and the left and the elites are telling you, no, no, it'll be fine. Here's some great policies, but you just feel kind of bad about yourself. I think that issue of how to bring people back dignity, especially those who truly have been left behind, whether it's for deindustrialization or something else, that requires a lot more attention than just economics.

39:19And that's why in the book, I'd say the thing that I focus the most on that I haven't written about in previous books is that idea of true participatory, true co-creation. But also the third part of the book is on the places where we learn to respect each other again. Just before we go, Marianna, what you're talking about is a really thoroughgoing change in the way in which we do the business of life, the business of economics, the business of politics. Now, let's say over the last 100-odd years, those sort of massive changes have tended to come after huge events, really dislocating events. So your New Deal emerges during the Great Depression after the severe 1929 crash.

40:06You're sort of, after the Second World War, you get this entirely new financial architecture, which is really new. This is revolutionary thinking to a degree, you can say after the Berlin Wall falls, these are big moments where the world kind of tilts on its axis. It goes like this and then sort of recalibrates. Do you think just before we go that we need that type of cathartic global moment to say, okay, this thing's broken and it has to come after a big event and it might not necessarily ever come progressively? I'd say yes, but the danger then also in not looking at what actually happened in the history is I think with the New Deal and with the Work Projects Administration, a very important part of that was reimagining completely what kind of society we want.

41:02And that meant literally bringing artists, designers, poets, theater folks into the WPA. That's literally why we ended up with the national parks system in the U.S., kind of reimagining the public. So the danger is anytime you also have these deep, whether it's an economic recession or financial crash or, you know, the Occupy Wall Street movement, which kind of approaches also what we've seen in the streets recently, is that we then just kind of recover or even like in COVID, we talked about building back better. And then, of course, we didn't. We just clapped for all the healthcare workers on Thursdays and then continued to underpay them and not fund those essential workers, not value them after COVID, not value that whole infrastructure, but that need to really reimagine.

41:48So I think part of the answer is yes, I do think that there is a moment right now where there is potentially a huge change happening in terms of also people's being extremely angry with how the system hasn't worked, but whether we can then actually use that to design a much better system has to go beyond, you know, the usual way that we think about recovering and building back better or even, you know, building forwards better and without making it a cultural movement. You know, if you think about the common good, there should also be joy behind that, right? Bien vivir, alegría. It's interesting that Burnham began actually by talking about living well.

42:26So I think that has to be at the center of this movement. What does it actually mean to live well and to put, you know, again, energy, housing, health, public spaces at the center of how we actually think about our economy and also be joyous along the way. So we should also always be aware, and this is again the point of the book, to call out not just the bullshit, but those who very easily talk about joy and alegría and we're all in it together, that unless we have principles, where is the value being created? How is it being distributed? Is it being reinvested? Who are we valuing? And I think it's interesting to really put the good life, which again, Burnham has talked about, at the center of what you're calling a potential revolution.

43:08Otherwise, we're just creating the next kind of structures that are just another set of problems, but with sexier words. Sexier words, what a way to end. Mariana Mazzucato, ladies and gentlemen. Thank you. By the way, if you want to get this podcast early and with no ads, join us on Patreon. That's patreon.com forward slash David McWilliams and join the gang.

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