Book Review- Mission Economy: A Moonshot Guide to Changing Capitalism

by Mariana Mazzucato

We spend a lot of time, at least in America, debating whether free-market capitalism is better than socialism. It’s an argument than never ends, and everyone brings their baggage – and politics – to the table. 

It’s looking more and more, especially as we attempt to extricate ourselves from a global pandemic, like this ever-lasting debate presents us with a false choice. 

I spent a large chunk of my corporate career working in the healthcare industry. Most of that time I wanted to believe that private sector innovation could fix a broken healthcare system in the United States. Yet, despite a massive amount of private investment into healthcare, thirty years later the U.S. system still spends more than twice as much money per capita on healthcare as any other advanced economy and is well down the list on most important outcomes measures (such as life expectancy). It’s hard to argue that a free market approach to healthcare will solve these problems.

Then again, where would we be right now on Covid-19 vaccines without the mRNA technology from Pfizer and Moderna? Much, much worse off to be sure. 

It’s occurred to me for a while that we need to respect the role of government in innovation and rid ourselves of the common (and incorrect) assumption that government doesn’t have a role to play in innovation. 

Since the primary innovation driving the tech industry over the last twenty years – the internet – was originally invented by the US Department of Defense Research Agency (DARPA), I should be able to rest my case right there.

Then I recently read The Mission Economy: A Moonshot Guide to Changing Capitalism by Mariana Mazzucato. Mazzucato makes the strongest case I’ve ever seen for a productive collaboration between government and private industry as the best way to organize our economies, which she summarizes towards the end of the book:

“This book has applied what I believe is the immensely powerful idea of a mission to solving the wicked problems we face today. In it, I have argued that tackling grand challenges will only happen if we reimagine government as a prerequisite for restructuring capitalism in a way that is inclusive, sustainable, and driven by innovation.”

Mazzucato steers clear of the false choice described above. Her main point is that the whole idea that government should leave the free market to itself, and then react to market failures, is deeply flawed. Instead, she argues (persuasively) for a purpose-driven government, focused on what actually matters to the people that the government is supposed to serve.

This may all be anathema to those who grew up reading Milton Friedman books in the 1970s. Mazzucato is an economist, but a much different kind of economist than Friedman. She grew up in Italy, lives in London, and clearly doesn’t think democratic socialism is a toxic phrase. 

Those who grew up in later generations- in the midst of the Iraq War, the Great Recession of 2008, and the political polarization of today have a different and more ambivalent view of democracy. According to a 2020 Pew Research poll 59% of Americans are not satisfied with how democracy is working and 66% believe that their children will be worse off than them when they grow up. 

Mazzucato believes that when governments focus on and fund purpose-driven missions great innovations happen, even unexpected ones. Her primary case study that forms the core of the book is the NASA Apollo space mission of the 1960s. It’s well-trodden ground, but she makes the most of it. The list of spin-off innovations from the Apollo program is indeed impressive- among them camera phones, CAT scans, better smoke detectors, wireless headsets, and even artificial limbs. 

The latter half of The Mission Economy is all about aiming higher. The moonshots she envisions (and maps out) include climate change, clean oceans, population health, and bridging the digital divide. It’s a timely book, given that in the United States Biden seems to be aiming for a transformative rather than incremental presidency. It’s increasingly hard to argue that the status quo is acceptable.

Mazzucato’s conviction that government’s need to be market shapers – not just react to market failures- and her belief in public/private sector collaboration shine through the book. Her tone is one of optimism and hope, while still recognizing the depth of the challenges that we collectively face. She concludes, “Government can build the cathedrals of mission-oriented innovation in the twenty-first century if it is recast with courage, dynamic competency, leadership, resilience and creativity.”

If you want to think differently about government and economics, I can think of no better book to read.