Putting Collective Value Creation at the Heart of Economic Thinking and Practice

Contributor(s): Professor Mariana Mazzucato | Where does value come from? What is the difference between value creation and value extraction? And what is the role of the state in directing and co-shaping economies that are innovative, inclusive and sustainable? Mariana Mazzucato will explain how we lost sight of what value means and why we need to rethink the economic theory and practice that is shaping our economies. The contemporary concept of value - as interchangeable with price - has trapped policymakers in a debate about public “spending” rather than public “investment.” This has enormous implications for how economies are structured, and has impacted how leaders across the political spectrum frame economic policy and industrial strategy. Notably, as industrial policy is being revived, there is an opportunity to embed dynamic conditionalities in state funding to steer growth that is sustainable and inclusive – tackling wealth creation and inequality on a pre-distributive basis. Changing the status quo requires a different understanding of public value and public purpose, and the design of policy as not just market fixing but market shaping. Key to this is also the revival of stakeholder value through a new social contract between public and private actors, ensuring that partnerships between the state, private sector, and labour create shared value. In this way, governments can impact not only the rate of growth, but it’s direction.