Mariana Mazzucato

As soon as you take innovation seriously, you start having to throw up in the air so many of the things we learn in mainstream economics: unique equilibria, representative agents, perfect competition. Indeed, the mathematics that we’re taught in mainstream economics departments mainly comes from Newtonian physics. It allows nice, smooth curves to be drawn where there is a maximum point (important if firms are maximizing profits) and a minimum point (minimizing costs). The idea that there will be unique points of equilibria is central to that framework. But if you have a system driven by innovation, there is constant disequilibria, or potentially multiple equilibria and constant differentiation between companies with no representative firm.

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