Marriana Mazzucato is making waves, and we need to catch them

I will forgive you if you have not heard of Marriana Mazzucato, but I guarantee you will hear much more of her.

She is the lady to whom Sir Keir Starmer said “I want to talk about your books”. As well he might. And for sure – unless it’s all just talk – if he adopts her policies things just might improve.

In essence her belief is that governments and the private sector have to work together in a positive manner – not just reacting to events.

She describes it as Mission Orientation. Her point – common sense really, usually sadly lacking in such discussions – is that it is utterly pointless to inject ever larger amounts of cash if the institution itself is weak and doesn’t work properly.

At the risk of being hung, drawn, and quartered, is this not precisely the problem with the NHS? The question shouldn’t be how much will it cost, and just keep throwing ever more cash at it, but what is the actual problem and what is the outcome desired? Once that is defined, expenditure should be of secondary import.

A very good example of this was JFK saying America will put a man on the moon. He didn’t ask the cost. He perceived that it would be massively expensive with no immediate benefit – but it was what was wanted by the Americans who were fearful the Russians might get there first.

In many ways it mirrored the Manhattan Project. Money was not a consideration. The outcome was what was needed. In the event, of course, there have been massive benefits from both projects – not least in computing. Your second-hand car probably or even your calculator has more computing power now than the moon-landing vehicles. You can argue the goodness or badness of that but you can’t deny it.

The other thing which I applaud in these days of “no one can fail” was NASA’s attitude to the missions that individual companies were given. “Sorry NASA, it only works some of the time.” “Too bad – you don’t get a thin dime until it works all of the time.” It’s a bit like shooting people pour encourager les autres. Works absolute wonders, and you don’t have to do it too often for people to get the message.

What Sir Keir’s favourite economist says is that public interest should trump (if I may use that expression) pure private profit. The outcome is what counts, not the cost.

We Brits have a very bad reputation for big infrastructure projects – late and over budget. They generally get a lot of interference at every stage from thought, to planning to implementation. But just where would we be without some wonderful projects like the Elizabeth Line (so much decried but fantastic in reality and carrying more people than originally envisaged)? And now up for a RIBA architectural prize.

The same goes for HS2. Arguing about the cost is totally the wrong way to go. Properly implemented it will give UK PLC a massive boost. But if you fiddle with it and cut a bit off here and a bit there because you don’t like the cost it will never deliver what it is capable of. I’ll guarantee you once in operation it will be a fantastic success that will add to our GDP figures.

There’s a host of infrastructure that needs built, not least reservoirs - there has been no addition to water holding capacity in the UK for more than 30 years. Arguably, this is because the water industry was privatised and building a reservoir costs money and hits your bottom line – tut tut. But the creation of one or more reservoirs has now reached crisis point, and someone, somehow is going to have to do it.

I compare this to talking to (for example) PR companies. Their first question is always what is your budget? But that is the wrong question. It should be what is the outcome you want, we can do this TO MAKE THAT WORK, and the cost will be £X. That is what Ms Mazzucato is saying and eminently sensible it is too.

Her argument is that the State should say this is what needs doing (The Mission) and the State and business world should then work out how to structure the costs and pay for it.

On its own the private sector will only do what will make it money – and then usually only by the next quarter. Going back to the water companies, the costs to them of doing nothing about their sewage discharges are miniscule compared to actually sorting the problem. So the government will have to say you must do it and this is how between us we are going to pay for it.

America has always been very good at the State saying what needs doing. It tends to be build a bigger gun or bomb, but as we have seen along the way the spinoffs can be very good. What they do is prime the private sector to do it. Just think of the Internet. That was DARPA – Defence Advanced Research Projects Agency.

Whether you agree with Sir Keir’s policies or not, Ms Mazzucato at least offers a way forward.

Update: Sadly, I’m not sure the lady in question is being heeded. Rachel Reeves abandoned a slew of infrastructure projects in favour of paying lots of Government employees lots of extra money. As any economist will tell you, these people don’t pay for themselves. The worst cut was of £78million (million mind you, not billion) for updating some outdated railtrack. I will guarantee you within the next couple of years there will be a train crash because a rail has failed. For want of a nail…

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