The Value of Everything: Making and Taking in the Global Economy

by Mariana Mazzucato

As Robert Solow showed, most of the gains in productivity of the first half of the twentieth century can be attributed not to labour and capital but to technical change. And this is due not only to improved education and infrastructure, but also, as discussed in the previous chapter, to the collective efforts behind some of the most radical technical changes where the public sector has historically taken a lead role–‘the entrepreneurial state’.72 But the socialization of risks has not been accompanied by socialization of rewards. The issue, then, is how the state can reap some return from its successful investments (the ‘upside’) to cover the inevitable losses (the ‘downside’)–not least, to finance the next round of investments. This can be done in various ways, as discussed in Chapter 7, whether through equity-holding, conditions on reinvestment, caps on prices, or the need to keep patents as narrow as possible.