Mariana Mazzucato and the Case for an Economy Oriented Toward the Common Good

Mariana Mazzucato, professor in the economics of innovation and public value at University College London, has become a prominent figure in economic thought, advising governments, chairing international commissions, and authoring multiple books. Her latest work, "The Common Good Economy: A New Compass," proposes a fundamental restructuring of economic theory and government practice to address global inequality and the climate crisis. Mazzucato contends that current economic models have not adequately served societies or the planet, urging a return to the idea of the common good as a shared objective that balances social wellbeing with environmental stewardship.

Mazzucato’s influence has extended to political leaders, including former UK Prime Minister Keir Starmer, who drew upon her thinking to develop his administration’s five key "missions." However, she has been critical of the directionlessness she perceives in Starmer’s government, emphasizing the need for clear vision and strategic planning rather than rhetorical criticism or half-formed policies. "You’ve got five years, so what’s your plan? What’s the positive narrative?" she stated, highlighting the importance of a government that articulates its goals and the rationale behind them.

Central to Mazzucato’s analysis is the role of government as an active economic agent. She challenges the prevailing neoliberal consensus, which casts governments as passive actors and markets as the primary engines of growth. Instead, she argues that governments are capable of shaping markets and setting economic priorities. "If there’s no purpose or direction, then what the hell are we doing? And who sets that purpose? It has to be co-created through real participation, not tokenistic," Mazzucato said. She advocates for an "objective-oriented economy" where the quality of relationships and collaboration is as significant as the outputs themselves.

On the matter of funding public investment, Mazzucato asserts that sufficient resources exist but are often misallocated. She attributes part of the problem to governmental practices, suggesting that strategic investment, rather than adherence to rigid fiscal rules, is essential. Citing the example of the UK under Liz Truss, she argues that bond markets have not penalized governments for "smart strategic investment," but rather for what she characterizes as flawed tax policies.

Mazzucato’s approach draws on a broad range of disciplines, including biology and Indigenous knowledge, to reconceptualize economic value. She critiques the dominant economic framing of environmental issues, which often treats climate change as a matter of balancing environmental "externalities"—costs or benefits not reflected in market prices—through mechanisms such as carbon taxes. This, she suggests, treats social and ecological wellbeing as afterthoughts or corrections, rather than central objectives.

She distinguishes her concept of the common good from the traditional economic notion of public goods—services that are non-excludable and non-rivalrous. According to Mazzucato, public goods are typically seen as market corrections, whereas the common good is a proactive, shared societal goal. She further recommends "pre-distribution" policies, which ensure citizens benefit from public investment at the outset, over traditional redistribution through taxation and benefits.

Mazzucato’s critique extends to the evolution of political and economic language since the 1980s. She observes that the shift under Reagan and Thatcher reframed citizens as consumers and governments as administrators, emphasizing efficiency and cost-cutting over civic wellbeing. This, in her view, has diminished the public sphere and undermined community structures.

In previous works, such as "The Entrepreneurial State" (2013), Mazzucato documented the role of government in innovation, noting that foundational technologies like the internet originated through public investment. In "The Big Con" (2023), co-authored with Rosie Collington, she analyzed the impact of governments’ reliance on private consultancy, arguing that it weakens both public administration and the broader economy.

While some economists advocate for "degrowth" or "post-growth" approaches—reducing production and consumption on a finite planet—Mazzucato maintains that the issue is not growth itself but the nature and direction of growth. She asserts that transformational reforms within capitalist systems are necessary and possible within the timeframes required for climate action.

Mazzucato emphasizes the importance of a compelling, ambitious narrative to mobilize public support—comparable to the Artemis lunar program—arguing that such missions can inspire collective action and participation, particularly among young people. She describes this as essential to building an economy oriented toward the common good.

Community engagement is presented as a practical embodiment of her theory. Citing examples from Camden, north London, she highlights initiatives such as transforming food banks into food cooperatives, enabling residents to pool resources and improve wellbeing. She interprets the positive social dynamics observed in these settings as evidence that community involvement is integral to the common good.

Mazzucato also references the role of shared spaces and services, such as football pitches and public libraries, in fostering community and reducing long-term societal costs. Drawing from personal experience with Arsenal FC’s youth programs, she suggests that investment in such amenities could yield benefits in public health and safety while strengthening social cohesion.

She posits that right-leaning governments, by prioritizing cost-cutting and privatization, have eroded community infrastructure and thereby diminished opportunities for collective participation. According to Mazzucato, investment in collective structures and shared spaces is central to advancing the common good.

Overall, Mazzucato’s vision is rooted in the idea that human flourishing, creativity, and joy are essential policy objectives. She stresses the need for governments to engage citizens as participants in shaping economic purpose and to invest in the structures that support community and wellbeing. Her proposals seek to redefine the role of the state, the meaning of economic growth, and the metrics by which societies measure success, arguing for an approach that integrates social, economic, and environmental objectives through collective action.