Fighting Fatalism

Hayek was bad enough – with his belief that markets would solve any problem. But the complexity theorists seem to have driven the last nail into the coffin of Free Will. John Urry was a much-lamented UK sociologist with a superb article here describing and analysing complexity theory about which he also wrote a book (“Global Complexity” 2005) 

My generation believed three things which kept its sanity –

-       Governments had effective machinery and tools at its disposal to deal with most problems

-       Political parties reflected public feelings and had some influence over governments formed from its leading members

-       Enough fuss and pressure from society – whether media, public opinion, voluntary organisations or trade unions – would get results

We no longer believe any of these things – indeed anyone who offers such judgements is seen as old-fashioned if not eccentric…..

A combination of globalisation, privatisation and neoliberalism has sucked the lifeblood not only from governments but from political parties – leaving social movements to perform as a colourful, pantomime distraction.

Fortunately, however, there are still a few voices left – bravely articulating detailed messages which point to a better way. People like Yanis Varoufakis and George Monbiot and, for those prepared to do some really serious reading, authors such as Mariana Mazzucato  - with her latest “Mission Economy – a moonshot guide to changing capitalism” to which the great blog Crooked Timber is devoting a discussion series from which I’ve taken an extract - 

She starts from the view that at present both capitalism and governments are dysfunctional. In Chapter 2 she identifies the four sources of the problems of capitalism as (1) the short-termism of the financial sector (including the deeply problematic issue that, given the role of financial institutions, its profits are privatized but its losses are socialized, as we saw in the 2008 financial crisis); (2) the financialization of business; (3) climate emergency and (4) slow or absent governments. 

In Chapter 3, Mazzucato points at New Public Management theory as the culprit for the widespread myth that failures of the public sector are more serious than failures of the private sector, which has been used to justify the massive increase in privatizations and outsourcing. And this, Mazzucato argues, has led to a reduction of the capabilities in the public sector, which in turn makes it harder to change weak or bad policies. The main problem with the government right now is not its size, but rather that its capacities, skills and expertise have been diminished, which has also demoralized public servants.

What we need instead, is ‘Moonshot thinking’, which entails that governments should have an ambition that is so inspiring and concrete, that it motivates all to contribute to reaching that goal; this is what Mazzucato calls ‘a public purpose’ – the most essential thing a government should have, and which will motivate its partnership with business. Innovation and commercial success will happen along the way. 

Chapter 4 describes the Apollo program in the 1960s as an example of what governments can accomplish if they have a clear mission that all are contributing to. At that time, the mission was “bring a man to the moon and safely back to earth” – in the historical context of the Cold War (not an unimportant detail, perhaps!). The Apollo program was driven by mission-oriented innovation, full with great risks and many failures from which lessons were learnt. At the early stages, poor communication within NASA seemed its weakest point; apparently this problem was addressed so successfully that the dynamic communications set-up within NASA was later copied by businesses. There were many other problems with the Apollo program, and Mazzucato argues that solutions were found by organizations and people willing to experiment, rather than picking supposedly good solutions in advance. Talented and hardworking people, risk taking and adapting, are key aspects of a successful mission. 

Chapter 5 explains how mission-oriented thinking looks like by applying it to several missions for our times: the Sustainable Development Goals, the American and European Green New Deals, accessible health, and narrowing the digital divide. In all of these missions, the aim is to catalyze collaboration between many different sectors, and to change our view of the government as regulating and correcting markets and being a lender of last resort to being the creator and shaper of markets, and an investor of first resort willing to take the high risks that are needed for long-term thinking, and who aims to crowd in private funding and collaborations. 

Chapter 6 sketches how the political economy of this capitalism-with-a-public-purpose would look like. Mazzucato writes that there are 7 pillars that a political economy that can guide a mission-oriented approach should have:

(1) a new approach to value;

(2) markets as being co-created and shaped by the government;

(3) organizations that have the capabilities to co-create for the public purpose, including taking risks, experimenting and learning;

(4) an approach to finance that does not start by asking what the budget is, but by “what needs to be done” and as a derivative question asks how to pay for it;

(5) fighting inequality not only be redistribution but first of all by predistribution;

(6) reimagine the relation between government and businesses as a partnership around a common goal; and

(7) new forms of participation, debate, discussion and consensus-building.

Three other relevant books are -

- Bill Mitchell’s Reclaiming the State – a progressive vision of sovereignty in a post neo-liberal world (2017) is from a leftist Australian economist. 

- Futures of Socialism – the COVID pandemic and post-Corbyn Era; ed Grace Blakely (2020) is a little book which contains short pieces from those sympathetic to the direction Corbyn was trying to take the Labour party.

- The Return of the State – restructuring Britain for the Common Good Ed P Allen et al (2021)

A book calling for a rethink on globalisation and the place of financial capital – with contributions from people such as Robert Skidelsky, Ann Pettifor and Stewart Lansley – questioning the role of financial capital.

https://newleftreview.org/issues/ii129/articles/javier-moreno-zacares-euphoria-of-the-rentier