Is it time for a capitalism reset? Mariana Mazzucato thinks so — and we agree

Mariana Mazzucato is a renowned economist, thought leader, and professor who is making waves with her beguiling vision to save the economy. A leading voice in a world that is often cluttered, she plays a crucial role in framing how we think about the world and has a new story about capitalism that we all need to listen to, writes Andrew Ihsaan Gasnolar.

Doing capitalism differently

Mazzucato is one of the world's most influential economists, and closer to home in South Africa, President Matamela Cyril Ramaphosa in 2019 appointed her to his Economic Advisory Council. Mazzucato has been regarded — particularly by more traditional and conservative economists and opinionmakers, as "the world's scariest economist." However,

we regard Mazzucato as a critical voice in a world that is in desperate need of reform, restructuring, and rebuilding.

One of the world's greatest economists, Mariana Mazzucato. Image: Matt Holyoak.

Capitalistic structures extend across the globe, with the assumption always being that it is the best solution. Yet here in South Africa, and across the continent, and in the United States, capitalism is in turmoil, struggling to meet the expectations of a generation clamoring for change and justice. This turmoil was not caused by the impact of COVID-19, but rather turbo-charged and starkly highlighted to reflect a world that is unfair, unjust, and oftentimes, cruel.

Representation is often neglected not only in the framing of public policy solutions but also in economic policy and dialogue. Mazzucato has pushed the envelope with a focus of in fact saving capitalism from itself, suggesting that "innovation is an outcome of a massive collective effort – not just from a narrow group of young white men in California. If we want to solve the world's biggest problems, we better understand that."

We have a unique opportunity to reflect on how we develop ecosystems and in particular ecosystems of excellence and opportunity. We cannot believe that innovation and ideation are the home of elite pockets of an educated few. Incubators and ecosystems that incentivise ideation and innovation are important policy interventions, but what is crucial at this moment is to consider how we extend access. We must be intentional about making the circle bigger – the kraal must be extended, replicated, and focused on modelling diversity in all its forms, and the digital tools available should be enablers rather than inhibitors.

Image: Max Böhme.

COVID-19 has impacted the globe in profound ways, traversing our borders, and forever shifting how we think about the economy — particularly the political economy of our nation-states, our healthcare systems, and corporate headquarters. Unfortunately, the impact of this health crisis has also highlighted — and in some cases starkly accelerated or deepened poverty, joblessness, and inequality. South Africa, like many other nation-states, continues to struggle under the stark consequences of this global pandemic that has exacerbated our socio-economic circumstances but also further frayed and eroded our social cohesion.

The only way — as Mazzucato reflects, advocates, and conceptualises, is for us to reshape and restructure our economic frameworks, which no doubt must be a complete reconsideration of our existing system of economic tools and values. COVID-19 has indeed highlighted the entrenched positions within the economic frameworks and structures across the globe, and how this complete "reconsideration" will be resisted, and in fact, fought against.

Collectively, society would be served, as would our nation-states, by reconsidering the fundamentals of what we have taken for granted and challenging and confronting damaging stereotypes and assumptions. We all have a role to play in businesses, organisations, and governments to push beyond monopolistic systems of both thinking and structure. Crucial tools in a world that have not only been shaped but also forever shifted by COVID-19. Now is the time to lean into the conversation, and to consider how this crisis can be fully leveraged to create a world — and economic reality — that is better, more equitable, and far more integrated.

"Never let a good crisis go to waste" goes a popular policymaking maxim, and a maxim that has been utilised as an effective public policy tool before. We merely need to look to the 2008 financial crisis in which governments across the world adopted a public policy (and indeed monetary mechanism) tool of injecting over $3 trillion into the financial system. Recently, Governments across Europe, the Americas, Asia, and Africa have adopted similar tools in an attempt to manage the impact of COVID-19. The efficacy of these recent measures has not always been as effective as the tools utilised during the 2008 financial crisis, which were largely caused by fractured public policy approaches and interventions.

Image: Reaction Life.

Like inequality, fragmentation has been turbocharged by the erosion of social cohesion and recently by the ongoing pressure that COVID-19 is placing on public policy, as well as private and public sector interventions. Fragmentation has highlighted that there is indeed something amiss about our capitalistic systems, but the polarisation of our society, and thinking, has meant that positions championed by policymakers, leaders, and indeed economists like Mazzucato have often simply been written off by those who are unwilling to hear the clarion message that has been emphasised in a world completely disrupted by a global health crisis.

Mazzucato has long championed that tropes and structuring around binary concepts must be avoided. The long-accepted binary that the private sector is agile and able whilst the public sector is inefficient and unwieldy has turned on its head. Working from home has become a far more accepted means to enable production, and those technological platforms and innovations have by and large been supported, propped up, and enabled by the role of the public sector. The various global financial crises that have surfaced, including the most recent one due to COVID-19, were not only confronted by ordinary citizens and the private sector but rather the public sector has played an essential role, and its place in enabling progress has been reaffirmed.

Public policy has a crucial role to play in shifting our economic framing and structuring and may prove to be the only effective means to save capitalism from itself. We can rely on the unique example of how large tech companies and innovation have been funded and enabled by both public money but also sound public policy. We must push beyond binaries, polarisation, and trope-thinking — and the only way to do so is to begin modelling alternatives. Alternatives that can lift generations into opportunity and prosperity. Creating wealth, focusing on redistribution and more equitable access and representation within the existing economy, but also looking at creating new economies. We can do both. We must do both! Binaries must be rejected, especially following arguably the worst pandemic in a century — COVID-19.

- Andrew Ihsaan Gasnolar