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1 April 2021

Mariana Mazzucato: “It would be a pity if the UK splits up”

The Scottish government economic adviser on the dangers of independence and her new book on the “mission economy”.

By George Eaton

Mariana Mazzucato has become one of the world’s most garlanded and influential economists. The 52-year-old Italian-American has been cited by Pope Francis, Bill Gates and Alexandria Ocasio-Cortez and holds advisory posts at a dizzying number of institutions, including the United Nations, the South African government, the OECD and the World Health Organisation.

Of all her roles, the most politically intriguing is her membership of the Scottish government’s Council of Economic Advisers (which she joined in 2015). An hour before we spoke on 26 March, Alex Salmond announced the launch of his new Alba Party with the stated aim of achieving a “supermajority” for independence at the Scottish election.

Does Mazzucato believe that a second referendum should be held? “Oh god, I don’t know, that’s not my area. I’m an adviser for Nicola Sturgeon on her council but we don’t ever talk about any of that. We do the underlying nitty-gritty stuff: inclusive growth, mission-oriented, Scottish National Investment Bank, I helped set that up.”

This, however, did not deter Mazzucato from warning of the risks of independence. “It would be a pity if the UK splits up,” she told me, adding that “if you look at where growth would come from in Scotland on its own, it’s not clear whether it would be in a better or worse position”.

[See also: UK economic recovery tracker: the effects of Brexit and Covid-19 on jobs, house prices, trade and spending]

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Why does she believe it would be a pity if the UK breaks up? “Already it’s a pity that they [the UK] got out of Europe in terms of being any sort of mighty force. Even more so if you then split up the little that’s left.”

Mazzucato, who is the founding director of UCL’s Institute for Innovation and Public Purpose, added: “The economies of scale and scope are stronger with the United Kingdom. But if they have different strategies – if, for example, you have a Scotland, and I’m just saying theoretically, that really does believe in strengthening the welfare state, that does believe in inclusive growth, that does believe in public banks and England doesn’t – then, actually, maybe together it becomes more of a headache because it’s a constant battle.”

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In her new book, Mission Economy: A Moonshot Guide to Changing Capitalism, Mazzucato argues that governments must emulate the ambition that put a man on the moon in order to address the defining economic and social ills of this century. Rather than merely fixing markets, she has long emphasised, governments need to actively create and shape them (the theme of her first book, The Entrepreneurial State).

“Getting to the moon and back in one generation required lots of different sectors to innovate,” Mazzucato said. “Hundreds of companies took part but what was so interesting – and we don’t have this today – is that they [the US government] designed the partnership to prevent exactly the kind of partnerships we have today, like PFI schemes or the healthcare sector in general, which I would call parasitic partnerships where you have huge amounts of public money going in and the private sector not only free-riding on that but also basically then running the show.”

[See also: “This crisis has been the polar opposite of the last crisis”: UK Finance’s chair on post-Covid economics]

In this regard, the UK’s Covid-19 vaccine roll-out has appeared a model of public-private innovation and state entrepreneurship. “It’s so ridiculous for Boris Johnson to say that it’s due to greed,” Mazzucato said. “It’s actually a perfect example of a strong industrial-science policy. What I have been impressed by, because we all know that medicine comes from these ecosystems of public and private actors, is that the roll-out through the NHS and through community-based GP practices was incredibly successful compared to the complete disaster of the outsourced Test and Trace roll-out.”

Mazzucato was born in Rome in 1968 and moved to the US at the age of five when her father, Ernesto, a nuclear fusion physicist, was recruited by Princeton University in New Jersey. Her mother, Alessandra, taught Italian literature and cooking; one of the guests at her gatherings was John Nash, the Nobel Prize-winning game theorist depicted in the 2001 film A Beautiful Mind.

From 2017-19, Mazzucato was a special adviser to the EU commissioner for Research, Science and Innovation. What does she believe led to Europe’s vaccine debacle? “It [the roll-out] was too slow. If you get the timing wrong, whether you’re fighting a war or a pandemic, you’re going to be screwed.”

In a self-critical moment, French President Emmanuel Macron recently lamented that Europe “didn’t shoot for the stars… We were wrong to lack ambition, to lack the madness”. But Mazzucato said the problem was simpler: “It’s not so much ambition, it’s just ‘get your fucking act together’. Get smart people in who know what to do with procurement.”

She is quick, however, to rebuke those who suggest that the UK and Europe’s relative vaccine performances have vindicated Brexit. “It’s really unfortunate with the Brexit timing because it ends up looking, wrongly, as if the lesson is ‘oh it was the right thing to get out of Europe because it’s a big, bad bureaucratic machine’.”

[See also: How much has Brexit cost the UK?]

Mazzucato added: “Brexit massively reduced [businesses’] expectations of future growth opportunities in the UK, this is tragic. Why? Because business investment as a proportion of GDP is already below the OECD average, this country continues to grow through consumption-led growth and that consumption is mainly fuelled by private debt.”

Does she believe, like some, that the pandemic marks the end of globalisation or at least a phase of it? “If anything it’s the opposite: we’re only as healthy as our neighbours,” Mazzucato replied. “We all know that, right? So had this pandemic began in Africa, where health systems are much weaker than China, we would all be worse off. So hopefully on that level it’s a massive internationalisation agenda that comes out of that.

“In terms of the nationalistic tendencies which we’ve seen before – EU versus Britain versus US versus Africa – I really hope that’s a blip. It’s such a problem, that kind of vaccine apartheid. I just can’t imagine if that continues, it would be a massive human rights scandal, a crime.”

Mariana Mazzucato’s new book Mission Economy: A Moonshot Guide to Changing Capitalism (Allen Lane) is out now