Mariana Mazzacuto’s new book, The value of everything, seems to have caught the imagination of the liberal wing of mainstream economics. It has even won the accolade of a review in the UK’s Financial Times by top mainstream Keynesian economic journalist, Martin Wolf and was launched at an event at the London School of Economics.
Mazzacuto previously wrote an important book, The Entrepreneurial State, that ‘debunked’ the myth that only the capitalist sector contributes to innovation while the state sector is a burden and cost to growth.…
Since then, Mazzacuto’s powerful arguments in favour of government investment and the role of the state have led to her becoming an adviser to the UK’s Corbyn Labour leadership and also joint winner of the Leontief prize for advancing the frontiers of economic thought, with inequality expert Branco Milanovic, formerly chief economist at the World Bank.
Now in her new book, she takes on a bigger task: trying to define who (what) creates value in our economies, a subject that has been debated by the greatest economists of capitalism from Adam Smith onwards. “Who really creates wealth in our world? And how do we decide the value of what they do?”
Her main line in this new book is that 1) government is not recognised in national accounts as adding to value through its contribution to investment and innovation; 2) finance has sneaked into accounts as productive and value-creating when in reality it ‘extracts’ value for productive sectors and breeds speculation and short-termism etc.; and 3) there has been the growth of a monopoly sector in modern capitalism that is ‘rent-seeking’ rather than ‘value-creating’....Relevant to comparing countries like the US and China based on GDP rather than PPP or some other metric that better represents actual production — stuff rather than paper — and also distribution, which GDP per capita avoids.
Michael Roberts Blog
The value (price and profit) of everything
Michael Roberts
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