This spring, we will read The Value of Everything, a scathing indictment of our current global financial system. Mariana Mazzucato rigorously scrutinizes the way in which economic value has been accounted and reveals how economic theory has failed to clearly delineate the difference between value creation and value extraction. She argues that the increasingly blurry distinction between the two categories has allowed certain actors in the economy to portray themselves as value creators, while, in reality, they are just moving around existing value or even worse, destroying it.
The book uses case studies from Silicon Valley, the financial sector, and big pharma to show how the foggy notions of value create confusion between rents and profits, reward extractors and creators, and distort the measurements of growth and GDP. In the process, innovation suffers, and inequality rises.
The lesson here is urgent and sobering: to rescue our economy from the next inevitable crisis and to foster long-term economic growth, we will need to rethink capitalism, rethink the role of public policy and the importance of the public sector, and redefine how we measure value in our society.