Another thing about Mariana Mazzucato

That we disagree with near everything Mariana Mazzucato puts forward is not exactly a surprise to anyone. Her basic idea that government could and should direct the economy if only government were better at directing the economy fails, to us, on the grounds of how is government going to be better at directing the economy? Nowhere has really given us, nowhen, evidence that it can be after all.

But in more detail:

She is particularly critical of overseas takeovers that 'often come from foreign public institutions'. She regards this as 'hypocritical' in that 'we hear all this talk in the UK of needing more private sector and less state, then we sell if off to foreign states.'

We’d not want to make entirely too much of this point but it’s not as silly as she makes it sound.

When government runs something in the territory it is the government of it is subject to political as well as economic pressures. When government runs something in the territory of some other government it is subject only to those economic pressures.

For example, back when the British government did run the British electricity supply system what the workers were going to get paid was something decided - often enough - at Cabinet level. For union pressure, political pressure, made it so. Wages were politically decided. Or, another example, the nationalised steel industry. Famously, Callaghan was finally convinced that Steel plants needed to be of a certain size - economies of scale. So, the industry would and should be consolidated. At which point the political decision to award half of the one consolidated plant each to Scotland and Wales was taken. Meaning two sub-economic plants for political reasons.

When the French government - just as a speculative example - runs British power stations that domestic, British, political pressure doesn’t apply to the government decisions. No Briton does vote for the French government after all. So, decisions are taken on a more hard-headed economic basis.

Of course, part of the distaste for privatisation itself, let alone to foreign state actors, is that politics is taken out of the decisions making process. Even as we applaud that taking out, others insist that it should remain - that’s part of the base difference of opinion.

But foreign state economic actors are going to be, at the very least, freer of those contradictory domestic political pressures. Which is what makes for the greater economic efficiency of them. Precisely, that is, that foreign state actors think of shareholder, rather than stakeholder, primacy is what makes them desirable.