Mariana Mazzucato convincingly presents her argument in favour of government. Actually all over the world, the governments are playing a very vital role as catalyst of innovation. A wonderful talk. Highly recommended.

TED is good for the brain.

And you can thank another government programme for being able to share that thought on the world wide web.

Governments innovate all the time in ways many people never consider or take for granted because it's mostly providing the infrastructure and the rules by which the infrastructure is used & maintained. Many in the business sector, especially libertarians, think that government control of the infrastructure is not necessary and that it's maintenance can be left to ad hoc free markets. In order for welfare states to function democratically, as intended, a balance between the public and private sectors is necessary. The government manages the collective interest and the private sector is where individual interests are pursued. As she mentions, the private sector is not really positioned to concern itself with projects that require investment over time with little economic return. Only government is positioned to do this because it exists in perpetuity. Mazzucato's thesis is that the US society is more innovative than others because our particular public-private dynamic yields demonstrable results that are the most competitive. The myth she means to dispel is that it isn't simply the private sector that innovates in society, yet she doesn't really explain why our particular public-private partnership is more successful or how it differs from other competing societies. Toward the end of the lecture she asserts that the public sector is not sufficiently the benefactor of its own investment in successful R&D efforts. To me, this is the key issue. What is the relationship between the public-private sector? Innovation is obviously important but questions of morality and equity needn't be the price we pay for it. Investigate these public-private partnerships. Crony capitalism? In other words, it comes back to politics.

It's difficult to think that the government takes any actual risks when it's got a almost infinite revenue stream.

Like every single lecturer at ucl. No one ever tells you about the success of laissez faire, swept under the rug.

Interesring, but I think It only could works on developed countries where politics are not corrupts as latin anerican politics. Try to apply this ideas in Argentina, Venezuela, Ecuador or recently in Chile , for example, I am sure the economics resoursers would be use to financing “politics innovation”

Two water companies can collude to fix prices WITHOUT regulation, it's called an oligopoly. The basic premise is that private provision of a good or service where a natural monopoly occurs requires regulation to ensure competition. Did these companies in San Jose serve the same districts or neigbourhoods using their own respective pipeline networks? I.e., did you have duplicate pipeline networks under your house?

The problem is there will never be a way to get "smarter spending." That is the nature of government. Richard Feynman himself said it best; "But nobody has ever figured out the cause of government stupidity-and until they do (and find the cure), all ideal plans will fall into quicksand."

Que disertaciòn màs atinada. Thaks you Mariana.

Best TED! Mariana=genius. I would love to see her dream come true, Mariana+Elon+full government backing

At the beginning I disregarded what she was talking about and the way she was talking about...but found later she is making sense and It really need to be debated the value created by Government vs. Private sector.

El gobierno también financió monsanto, creo que vivimos todavía en una época en la que la asociación publico-privada carece de ética, es una gran herramienta pero a la vez es un arma potencialmente peligrosa.

Finally understand your contention/misunderstanding. The fact that the government did not give us the internet in its present form, implies to you that it slowed down its development. I'm glad the private sector improved the internet and made it what it is today, which is the proper role of the private sector (Google algorithm was funded by NSF btw). But that does not mean internet would have existed anyway without government role, and that's why I say you're SPECULATING.

Dios! No lo puedo creer. Si Petro trae a esta fenómeno como asesora económica a su gobierno seria el acto de fe mas grande visto en la historia de la humanidad. Seria genial tenerla en Colombia creando políticas publicas. Increíble charla.

Thanks for your recommendation.

It is a fundamental economic principle that people tend to spend their money on what they value the most. Therefore, when money is spent on what people would not normally spend that money on, it is being spent on less valued things. If the government is funding risky ventures that wouldn't otherwise be funded, it is because the risk is seen as being too high and not worth the resources. Thus, resources are not spent in their most valued use and one is able to ask, "what might we have instead?"

One of the key structures through which the state funding is transferred is Intellectual Property Rights. They play a very negative role here: rather than allowing many economic actors to commercialize the proceeds of state-funded investment, IPRs cause for exclusive rights to be transferred to only one player. This causes a lot of disincentive to the private sector to invest in further R&D, since they get a monopoly. Either open licensing (cf open source) or abolishing IP are the answers.

One more point if I may: When the National Science Foundation decided to release the "Internet" to commercial use, people thought the Feds would still have to run the routing tables, because hardware at the time could not do it. 20 years of public-sector work, and hardware still could not keep up. PRIVATE innovation accelerated development and within 1 year the NSF route servers were entirely obsolete. Two years later, the Cisco 7513 was handling traffic the NSF never dreamed of.

I am wondering how the public sector keeps an eye on the public interest if it takes equity from what it funds. Would it not be a problem if the focus on innovation funding was all about generating returns on investment for government -- the orphan drug or orphan crop phenomenon. Sure, government could use its ROI to invest in addressing issues of need rather than return, but the incentive structure would be towards ROI,

The point is that to be really creative, you need to be free from constraints to a greater extent than which is allowed by narrow financial considerations. In this regard being extremely efficient is counterproductive and why the private sector has only really joined in the space race (low orbit tourism) 50 years after the government developed the technology, which I'm sure was considered a waste of money and time by some back then.

Yea I saw a couple from Tom Woods. I will watch some of them when I get the chance as they go for a while,

"I don't regard business and government as adversaries" Big business and big govt go hand in hand. Big business buys and staffs govt regulatory agencies to crush competition and entrench vested interests. Big govt depends on big business for campaign contributions and other bribes, and big salaries after the politicians are ejected from office. Big business would not be so big without govt protecting them from competition.

The perception is that in the 'equilibrium' between Public and Private, some US leaning governments lean to far towards the Private. In effect the Private are encouraged by taking a disproportionate amount of finance that would normally have gone to the Public sector. Repeat ad nauseum and the fabric of society fails, but the few become very rich. Government need to rectify the balance, to make sure the Private also profits the Public, contracts must enable fewer Private returns by requiring a larger slice back to the Government.

simply incredible

First of all, thanks for all you have done via NASA. I am a major fan (if there be such) of that branch of the Government. The outperformance I would showcase is their doing it for less money than what NASA required. And yes, since they are piggybacking, they are not having to re-invent the entire wheel, just pieces of it. But that is the way of any innovation.

Good point. In other words, government is only motivated to be innovative when it is trying to win a war. Business, on the other hand, it innovative when it is trying to make money. Money will never be an effective motivator for government because it can always tax and borrow for that, which takes a lot less time and energy.

why so many dislikes?! what the hell?! Video was very informative if not rhetorically beautiful, but that's what makes economists so beautiful: their logic. "Kafkian bureaucrat" Ha!

This new comment system is horrible for keeping track of conversations.

Que fala maravilhosa!

I would love to see this be come policy - problem being, is those that pass the laws benefit from not sharing the proceeds

we live in times of tremendous malinvestment... the US government is over 30 trillion in debt... with all the money it takes in from taxes it still can't balance the budget... if we, as individuals, spent money the way the government does we would all be living in the streets under a bridge... the government has to borrow or have the Federal Reserve print the money and government intervention in the economy to "fix" a problem ends up creating, at least, two new problems... we have a system that punishes savers and rewards spending... this is not sound economic thinking... inflating the money supply leads to price inflation that hurts those on fixed incomes the most... the primary role of government is to protect people's rights... unfortunately it has been on overdrive to take them away... government/corporate partnerships have crony capitalism, waste, fraud and abuse written all over it.... a sound economy relies on a sound monetary system. Ron Paul, a 12 term Congressman from Texas has advocated for an audit of the Federal Reserve, a sound monetary system, an understanding of the proper role of government, a foreign policy of trading among nations rather than one of bombs and bribes ... Dr Paul influences millions since the seventies and continues to do so through the Ron Paul Liberty Report (Monday - Friday on Rumble)... a sound monetary system benefits everyone and is one of the main goals we should be working toward for Peace & Prosperity in our lifetime.

I just finished reading Antifragile by Nassim Taleb. In this book (page 231) he says that: NIH found that out of 46 drugs on the market with significant sales, about 3 had anything to do with federal funding. It would be cool if Nassim Taleb could debate Mazzucato.

Great Talk by Mariana. Wish it was a little longer. Ha Joon Chang has a lot of good things to say on similar Topics.

So, you've decided to ignore the fact that the foundation of nearly all major innovations throughout history were laid by governments.

We live in a country where good sense and smart inclusivity seem REVOLUTIONARY, when they are simply hallmarks of a society's good character . Perhaps, greed is our greatest enemy.

Nice talk. BTW since you have a TED Talk, try to get in contact with some of the specialists in body language and spend some time evaluating your behavior and your audience behavior during your speech with Petro.

But it has since been an extremely innovative resource for people everywhere. And it might not have happened without the government need and funding.

The word you are looking for is "jingoistic". Her points on defense research were accurate in my opinion.

The translation to portuguese is quite good but i have one suggestion for improvement The word "Equity" is literally translated as "Equidade" but in Brazil the best word should be "Patrimonio Líquido".

which is public private partnership. Exactly what she has been talking about the whole time. A lot of projects like building the Olympic arenas and condos, are simply not possible without the public taking on the risk for the private corporations.

they are wonderful. they just need better regulation on personal information usage.

it's very good

Excelente!😄

There are so many technologies that she didn't mention that are spinoffs of the space program. The government is able to fund so much more than private capital is able to, but it is all to often seen as unnecessary discretionary spending. If we want to build jobs, we honestly need to increase taxes on those earning 6 or 7 figures annually and invest in these kinds of technologies. Innovation will bring about job creation. And innovation can, and indeed has, come from the government.

Remarkable

Yes, because I'm sure you have a PhD in economics, Mr. Anonymous KZfaq Commenter.

watch the full talk man

While it is true that some things funded by government may end up having commercial value for the private sector, that doesn’t mean it is efficient or effective at doing it compared to the private sector....how many things get funded by government that never see the light of day?

You don't have to be an innovator in order to chronicle the history of innovation. In fact, someone who is an innovator may know f**k all about the history of innovation. She can recommend policies based on her thorough study and deep knowledge of the history of innovation WITHOUT telling the scientists and engineers working in government/private enterprise how to do the technical part of their jobs. It really isn't that hard to understand.

A natural monopoly requires govt regulation to maintain it. This is because a monopoly charges monopoly prices. Those profits signal entrepreneurs that there is money to be made by entering that market and providing better service or lower costs. The only way to prevent competition is govt regulation. Even where competition does not occur, the threat of competition because of a lack of regulation requires vested interests to innovate to prevent competitors from entering the market.

Except that, when someone else gives you their money they make you sign a contract that ensures they get their part of the profit if and when the venture succeeds. It's really not that hard to envision such an arrangement.

And we can go on and on. The fact is; not only does the government everything for the wrong reasons (oppression instead of liberation, war & violence instead of peace & prosperity), but because the government chooses one single path to "invest" in (with money that was stolen either from the current tax payer or the future tax payer by borrowing) and use that to claim the 'first to market advantage', it makes it that much harder for the market to explore different paths.

Yes, but it's impossible to know what we would've developed by now without the government funding. We probably would've developed these things faster and more efficiently

It is not about private vs public. In my opinion the state may be indeed very effective in the market buonly if it plays the game according market rules (innovation, meritocracy, flexibility). Actually it is even in a privileged position given its easier funding access by unilateral taxation (while for any other to funding by taxation :( while for any other company money is always a scarce resource.

I don't think you need to call someone an idiot but I do agree that more taxation is not the answer. I think that less taxation and smarter spending by the government would do much more good.

I know.

I'm having a problem seeing government AS the innovator if only for the extra hoops they must jump through to accomplish anything. But I can see government as playing a crucial role with R+D, where many who innovate for the sake of innovation (AKA the Nikola Teslas) have a hard time getting funding.

Dropping control is different from putting money into research. Governmental entities have put forth the bulk of money to research brand new concepts, and then companies can take that where they please, but companies dont put money into blind research that might or might not net products or profit. Also, AT&T was never a governmental organization, but they used a ton of governmental money to spread, and the government broke it up when it did what private companies do, and bought out competition.

government invests in nothing. it is the taxpayer.

The establishment hates Thomas Sowell.

Problem is Sowell never really understood it was the capitalists and too big to fail bankers that we was talking about.

lady, you overlooked one big sort of profit return, not only cash, gold, bitcoin counts now as assets but the big data, so the giant companies mentioned probably had been paying back their debts, in certain way, just not the conventional way.

No. The driving force for the internet was the construction of a network to interconnect high speed computers. Packet switching, developed separately for mil;itary applications, was integrated into ARPANET.

Ouah. She made me look at the American government with brand new eyes, for real. Thanks Mariana.

"developing monopoly is what businesses do and controlling monopoly by law..." Again, law is the use of violence. This is why there is no example of a truly free market. Because there are those who seek to impose themselves through violence. This has almost always been government and there are those who seek to aim the guns of government in order to enrich themselves.

In an energetic talk

According to the video , in what ways are governments doing more than just fixing market failures ? Can someone help me ?

I insist, why did it have to "released"? Why didn't the private sector come up with it all on its own in the first place? Nobody was blocking it from pursuing the technology by itself after all.

Es necesario conocer de cerca el Estado, su cultura y naturaleza, sus instituciones, observarlos de cerca en diferentes países del mundo, entender lo que es en realidad como organización, antes de extender este discurso con una mirada parcial, a dirigir su naturaleza hacia el emprendimiento. En todas partes del mundo, el Estado es un mal gestor de organizaciones, lo que hace en general es tomar recursos de todos nosotros e invertirlos en contratistas con objetivos concretos o generar incentivos específicos sobre el sector privado, son ellos los que en realidad, han logrado los avances de los que habla la expositora. Durante décadas pasadas los Estados fueron empresarios y lo hicieron claramente mal, dados los incentivos organizacionales perversos generados por el sistema democrático en el que se desarrolla la labor empresarial, por lo tanto, los diferentes países tomaron la decisión de centrar su actividad en la provisión de bienes y servicios públicos, la gestión de recursos comunes y el mantenimiento de la armonia social. Devolvernos en estos avances sin entender profundamente todos los contras es una locura llena de tozudez e ignorancia.

economic model is quite relevant to the new vision introduced by Klaus Schwab almost 50 years ago, is exact from 2019 is exactly what this Harvard is citing its motivation a refreshment of the Davos Manifesto in 2020: all its stakeholders in shared and sustained value creation Value is defined in a very special way. not material, commodity, value money wealth, this abstruse notion of value or wealth that includes leisure time, relationship quality, beauty of nature and all other kind of abstract that come in under well-being economies and ecological accounting ( you own nothing but you are happy) The Corruption of Stakeholder Capitalism.

Just because they exist does not mean that that's where the bulk of new things and ideas come from. When you don't have to ever consider the profit margin of your idea, you can simply focus on getting it to work as your goal. If you look at most businesses in America today, they've been profiting off ideas that were proven in government funded labs and universities and were then used to turn a profit. Between NASA, NSA/CIA, NSF, and DARPA, most of our modern tech was born of gov. funded ideas.

Internet came from DARPA net. Originally some of the ideas were from GM and other private companies who tried to find ways to get disparate things to talk to each other ... but the government standardized it and made it work.

You are more than welcome. I especially like the videos by Jeffrey Tucker, Tom Woods, and Tom DiLorenzo. Robert Higgs pulls no punches, which can be a bit shocking. Leave the Hanse Hermann Hoppe for later, his accent makes him somewhat hard to understand sometimes.

you asked why. isn't it crystal clear. it shows. i take it personal.

Wow, you guys are such weird people to thumbs down this video. It's a decent argument, not very innovative, but it had to be reminded to the billionaires and innovators in that audience - the government is not your enemy.

I am referring to the value of IP, in general - not just patents or copyrights. Copying of a proven piece of IP, being software, a patent or some trade secret, takes value of that IP from the original owner and distributes it to N other exploiters, adding net value. However, this microeconomic model does not concern itself as to how the IP got there in the first place.

She could have saved a whole lot of time by simply saying the obvious. Government is the only source that can afford to fail, because they are only spending money that isn't theirs in the first place. They need no reward. But risk takers? Innovators? No. What risk?

Carrie Mathison of Economics.

Nice argument. What was a little disappointing is that she didn't really give an answer to the initial question of why these successful innovative companies all start in the USA. She built an expectation that she had something affirmative to say about it, but she stopped at "the common caricature is wrong".

We need someone like you to run a country

"I hardly believe that because she has so spectacularly failed to remember the broken window fallacy" She's a court intellectual. Her influence comes from telling those in power what they want to hear.

funding it and creating are very different, I would think she would present this a little more clearly on that point. Beside's it EASY to invest when its NOT YOUR MONEY. No wonder they are RISK TAKERS its not their money to lose it mine, my neighbors, friends, etc. If the study fail they say ahh well it was worth a shot right? Or just throw a bunch of money out there and something will stick. This is why we spend money on dumb things too like studies on ketchup, cow farts, etc.

Everybody who dislikes this video hasn't watched past the first five minutes. Read the description people! If you're too stupid to read past the title, don't subscribe to channels above your station.

There is 1 single reason why these companies come out of California /Silicon Valley: The Absense -the Ban- of Non-Compete Laws in California. This is the only way hot Companies can SCALE

The state is coercion. The market is cooperation. Therefore, the state cannot be an outgrowth of the market.

I don't understand the down votes .. did you guys listen until the end? Cause she actually makes a good point.

Odd how the government can just increase the "price of society" whenever it wants.

Technically, steam was not invented in Scotland. Still, James Watt patented a much better version of the steam engine. This from someone who was mostly home schooled and had no formal education in physics or engineering. Yet through his hard work and experimentation, he developed this idea which would eventually make him wealthy. I don't see any government involvement there. Most progress occurs regardless of government. Maxwell's equations, Relativity, QED, etc.

Inflation is taxation!!

There will always be some form of government Shaun. At some level any group of people who choose to live in a community will eventually need a way to govern that community. Even if the rules and values are fairly informal a system will eventually evolve. That is all government is. I don't agree with the reach and scope of the U.S. federal government as it stands today but I also recognize it as an important part of the republic.

For the first time in history, the President of Colombia will have the most advanced technological tool, the Digital Twin, to combat corruption and efficiently administer the country.

...and corporations can only not take your money at gunpoint because there's a government to enforce the law.

Ever heard about natural monopolies, like the sewer system under your town, or train tracks? Or do you want the ground beneath your feet to be like Swiss cheese so ten different companies can all build their own sewer system to avoid one having a monoploy on the only existing one?

Also, a question to ask is which markets, which companies get their R&D costs subsidized by the government for them at their gain and everybody else's expense? If the government allowed for such technology, then why aren't these companies paying back the public proportional more back from their gains or why are they allowed to patent such things that have a main use of such technology. Socialized cost and privatized gains is pretty much like fascism, if it isn't entirely fascist.

Easy for her to talk, she's never been hit by poverty.

You have to have innovation to copy it. The technological world I am intimately familiar with is driven by innovation, and its rewards, IP is a critical feature of that world. It is very expensive to develop and very valuable to the owner. The investment world I am intimately familiar with places a high value on the barriers to entry for any venture it considers for investment. IP is a significant contributor to those barriers. Exclusivity is a promoter of innovation, not a disincentive.

I recognize that free market is a matter of degree. I don't think there is an ideally free market anywhere on this planet and I am not convinced that a free market is the optimum market.

"Universities are essentially branches of government" The various State universities, yes. But there are a lot of private colleges and universities, including the first two, Harvard and William and Mary, and the lion's share of the work is done by students using the research opportunities to get their degrees. While the dollar value of Federal research grants may seem big, it's minuscule compared to private research.

Oh, thank you. That was a wonderful laugh. A nice way to start the day.