Mariana Mazzucato

The twin problems I see in modern-day capitalism are the fact that the financial sector is financing itself and industry itself has become financialized, obsessed with short-term quarterly returns. To change that system, you need to debunk the pillars on which those behaviors are based. The problem with the maximization of shareholder value approach is that it has dismissed the role of other actors in the economy, whether state actors or workers. We need a more rigorous understanding of how to maximize stakeholder value and, relatedly, a policy framework that captures the true collective creation of value.

That framework has three aspects. First, you need to identify the different value creators in a system. Second, you need to establish what is actually being created. The direction of change is just as important as the rate. So it’s not just what contributes to GDP growth rates; it’s about the forces that you can identify that are determining whether an economy is becoming more financialized or not. Is it becoming greener, more sustainable, more inclusive, or not? Third, you need to understand how the rewards from value creation are distributed. Are they distributed as collectively as the value itself is created? Or are some getting much more than they actually put in?

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