Book review: The Entrepreneurial State by Mariana Mazzucato

The Entrepreneurial State: Debunking Public vs. Private Sector MythsThe Entrepreneurial State: Debunking Public vs. Private Sector Myths by Mariana Mazzucato

My rating: 5 of 5 stars

Government: We invented this.
Private company: Can we have it?
G: Sure. Just remember to pay you taxes.
P: Lol, our what?

The Entrepreneurial State is Mariana Mazzucato’s detailed effort to debunk some of the often claimed myths about government’s role in innovation. Her argument is that it is the public sector, not the private sector, that is often the innovators, risk-takers, and entrepreneurs in the economy. And because ideology has pushed for the state/government’s role to be smaller, we run the risk of not having the next generation of innovations/technologies.

I recently read Mariana’s The Value of Everything and wanted to read this earlier work. Similar to her arguments about how we measure the economy, Mariana’s arguments about innovation are well made, have plenty of references, piles of evidence, some great examples, and leave you with the head-scratching amazement that we need this book.

I’m sure that anyone who has worked in the public or private sector would read some of the examples in this book and be immediately reminded of some from their own field. Whether it be the government contract their company was gifted, or the publicly funded research that is commercialised, or the public infrastructure support given for that new project, we can probably all think of examples where entire industries or technologies wouldn’t have happened without governments taking the first step.

So how is it that myths (listed below) about the economy and who the entrepreneurs are persist?

Myths about Drivers of Innovation and Ineffective Innovation Policy
Myth 1: Innovation is about (private) R&D
Myth 2: Small (government) is beautiful
Myth 3: Venture capital is risk-loving
Myth 4: We live in a knowledge economy—just look at all the patents!
Myth 5: Europe’s problem is all about commercialization
Myth 6: Business investment requires ‘less tax and red tape’

There is only so much ideology that can stand in the way of reality. Unfortunately, I suspect that there is plenty of ideology floating around like an iceberg during a maiden voyage.*

An excellent book that is well worth reading.

We live in an era in which the State is being cut back. Public services are being outsourced, State budgets are being slashed and fear rather than courage is determining many national strategies. Much of this change is being done in the name of rendering markets more competitive, more dynamic. This book is an open call to change the way we talk about the State, its role in the economy and the images and ideas we use to describe that role. Only then can we begin to build the kind of society we want to live in, and want our children to live in, in a manner that pushes aside false myths about the State and recognizes how it can, when mission-driven and organized in a dynamic way, solve problems as complex as putting a man on the moon and solving climate change. And we need the courage to insist—through both vision and specific policy instruments—that the growth that ensues from the underlying investments be not only ‘smart’, but also ‘inclusive’.

* You only have to read some of the 1-star reviews for this book to find evidence of this ideology in action.

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Book review: The Conquest of Bread by Peter Kropotkin

The Conquest of BreadThe Conquest of Bread by Pyotr Kropotkin

My rating: 4 of 5 stars

“All things are for all.” Not sure if that is an Amazon store tagline or an anarchist catchphrase.

Pyotr Kropotkin’s The Conquest of Bread is an outline of the failings of capitalistic systems, a critique of the failings of communist systems, and a proposal for a system free from hierarchies and poverty. Regarded as a classic text of political anarchism, particularly as the criticisms of communism were seen to come true in the twentieth century, Kropotkin is probably more relevant today than when he was writing.

The Conquest of Bread was an interesting read that I couldn’t help but feel was politically current, whilst being socially historical. The overall political message and much of the details Kropotkin goes into are insightful and you can see why the Occupy Movement and Breadtube were inspired by this book. With the rise of higher levels of mechanisation, and with the coming automation of huge parts of the economy, there is much to be said for a rethink of how our society is run based on these ideas.

Socially, however, many of the points are a little dated and/or naive. After reading chapter 9 (The Need for Luxury) I commented that this was definitely written a hundred years ago. While I don’t think he is incorrect, removing status and consumerist ideals does change our wants, it was a statement that did exist in a time when cars didn’t exist. This changed landscape necessitates a slightly different idea of what people want, need, and what will be “normal”.*

There were a couple of points that I disagreed with. Kropotkin was a little simplistic in dismissing “middlemen” as doing nothing. While Bullshit Jobs apply, there is still the need for things like distribution and organisation by middlemen. This is probably because Kropotkin is imagining a system that is much more localised than our current global system. Which leads to my next point on specialisation. While there is something to be said for his ideas around everyone pitching in and learning something of what others do and contribute, Kropotkin doesn’t really appreciate the idea of specialisation and having high levels of skill vs the average person who can do it but sucks at it. His example, which is a critique of Adam Smith’s pin maker, is true to an extent. But our modern technology operates at a much higher level now. There is no way an office worker could go out to the farm and be a farmer for a few days. They could do menial labour on the farm, sure, but farming is highly complex now, and not something you can just do for a few days a year, as he suggests.

I could go further into the problems with his understanding of agriculture, which is… antiquated. But those quibbles don’t detract from the idea of being able to provide food for all. In fact, removing the profit motive from agriculture might alleviate a lot of problems.

A very interesting read that I’d highly recommend.

* It was notable that while “men” were the focus, there were some particularly progressive ideas about women in society. If he had been writing after the advent of the pill, I’d bet the comments would have been downright modern.

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Book review: The Value of Everything by Mariana Mazzucato

The Value of Everything: Making and Taking in the Global EconomyThe Value of Everything: Making and Taking in the Global Economy by Mariana Mazzucato

My rating: 4 of 5 stars

What if I told you that we don’t measure most of the things we value in our economy?

Mariana Mazzucato sets out to show that when we talk about the economy we are only talking about certain parts of it (and of our society). She shows how the parts that are included is determined primarily by the history of economic thinking, ideology, and what’s currently making people rich. Mariana then argues that this is flawed and fails to account for several very important aspects of the economy to our current and future detriment.

I’ve read several economics books over the past year that have addressed the failures of the neo-liberal economic ideology. The solid argumentation, countless references, piles of evidence, and rather obviousness of the problems leave me scratching my head as to why these books need to exist. Why isn’t this obvious to the various “experts” who are running our economy?

The Value of Everything is a very solid argument for rethinking the way we diminish the role of government in our economy. The current “get out of the way while we’re making money, but bail us out when we mess up”* approach is clearly wrong. I’ve heard the very charismatic arguments from the likes of Friedman on why free markets are the way to go, and I thought Mariana’s rebuttals to those arguments were good if a bit too charitable.** But it is clear that governments have a long history of being the innovators, investing early, creating the value that business then exploits, and without that, we’re going to see things fall in a heap.

Well worth a read so we can all start to take off our neo-liberal ideological goggles.

* Privatise profits, socialise losses.
** Worth reading this piece on the Virginian School, a more extreme version of Friedman’s Chicago School for some context as to how the “Free Market” is a con to turn the masses into slaves.

See also:
Curing Affluenza – this has a similar upbeat “fixing” approach to our current system.
Utopia for Realists – takes a different approach and suggests a different system may be needed.
Austerity: History of a dangerous idea – similarly documents some of the failures of neo-liberalism and how it is ideologically driven.

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Book review: Game of Mates by Cameron Murray and Paul Frijters

Game of Mates: How Favours Bleed the NationGame of Mates: How Favours Bleed the Nation by Cameron Murray

My rating: 3 of 5 stars

I don’t want to see the final season of Game of Mates, I’ve heard the entire thing falls flat.

Cameron Murray and Professor Paul Frijters set out to expose the inner workings of the Australian economy in Game of Mates. Through a series of case studies, they outline how a few (the Jameses) take from the many (the Bruces) by blurring the line between business and the regulators. Then, knowing that their readers will be suitably gobsmacked and annoyed, call for the masses (Bruces) to make a change.

As with any book about real-life grifting in the halls of power, this book made me annoyed and disillusioned. There is nothing more galling than to have someone show you how the grift is endemic and then realise you kinda knew. We kinda all know. There is no surprise here. And that means there is no “justice”. Cue scene of me staring out the window as rain drips down it.

Murray and Frijters conclude with some ways to stop the grift:

1) Reclaim the value of grey gifts for the public.
Essentially, when the grifters rig the system they gift themselves advantage/money/power. We have to tear that down. One example was Public-Private Partnerships on infrastructure developments, which essentially end up being a gift of public assets to private businesses with a guaranteed profit underwritten by the public.

2) Disrupt (James’) the grifters’ coordination.
This is fairly obvious, stop the revolving door between public and private interests, put in oversight, make sure the oversight isn’t part of the problem, etc.

3) Bust the myths (James) the grifters use.
This isn’t just about addressing the claims cherry-picked “experts” will make, such as promoting projects that aren’t needed (examples are given, there are plenty). This is also about reclaiming the narrative from these grifters. In Australia, this is particularly difficult as many of the media outlets are either owned or have close links to the same people grifting.

4) Fight back.
Disillusion can lead to apathy. That’s what keeps us on the losing end.

Speaking of the losing end, the costs of this game are:

  • New Housing – 70% of the gains from rezoning;
  • Transportation infrastructure – 68% of the investment;
  • Superannuation – 27% gobbled up;
  • Mining – 48% of the profits;
  • Banking – 60% more expensive for the masses;
  • Taxes – 23% extra taxation borne by the masses (I’ve seen a figure suggesting this is a global issue and sees the average person taxed proportionally more);
  • Pharmacies, medicines, and health – 10% more expensive;
  • Higher education – 100% more expensive…

Okay, so clearly this book hit the mark and is enlightening. Why only three stars, I hear someone say? Well, while I appreciate your question, I’m wondering what you’re doing in my house.

I think the problem I had with this book was the polemic style to it. We are told. I listed the figures above, and whilst those numbers are backed up, they are big claims that require fairly solid evidence. I felt the evidence was a bit flimsy. Not wrong, but maybe selective, or misrepresentative.

Another example was around how to stop the revolving door which amounted to banning people from getting a different job in the same industry. That’s probably not as well thought out as it needs to be.

Game of Mates is worth reading but it felt underdone.

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Book review: Bullshit Jobs – A Theory by David Graeber

Bullshit Jobs: A TheoryBullshit Jobs: A Theory by David Graeber

My rating: 5 of 5 stars

Bullshit is, of course, the technical term.

Bullshit Jobs builds upon David Graeber’s 2013 essay titled On the Phenomenon of Bullshit Jobs. He posits that many of us are working in jobs that we know don’t need to be done, that we could stop doing them and no one would notice. And he suggests that these jobs are bad for us as individuals and society. If you’re nodding at this point, my condolences.

When David’s essay was released in 2013 it was something of a viral hit. It resonated with people.* For evidence supporting his proposed phenomenon, you need look no further than that response. Since then, some studies and a lot of discussions have taken place, which led David to more fully explain his ideas and evidence them with this book. He tries to distinguish between bullshit jobs, shit jobs, and bad jobs, and why they come about.

It is this discussion of the larger system that brings about bullshit jobs that is the most interesting aspect of the book. While the idea of bullshit jobs is still hazy – the definition is subjective when all said and done – the changes to our society, economy, and personhood are well documented and discussed. The combination of this discussion with the theory lends weight to another idea presented within: that the role of jobs in society needs to change.

Currently, we place a large amount of prestige and identity on what we do for work.** Our exchange of labour for money is how we afford to live and often how we understand our contribution to society. But is that all we have to offer? Will we be remembered by our job titles? Does that mean that unpaid work doesn’t have value, either in the identity or contribution sense? The answer to these questions is clearly no, making this discussion a highlight of the book.

This was a very interesting book and tied in well with Rutger Bregman’s Utopia for Realists.

* Nope, I’m not going to comment one way or the other about it resonating with me. That would give away how I feel about my day job slowly killing me.
** One of the first questions you will be asked is, ‘What do you do for a living?’

Update: this review at Current Affairs is also worth a read.

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Book review: Curing Affluenza by Richard Denniss

Curing Affluenza: How to buy less stuff and save the worldCuring Affluenza: How to buy less stuff and save the world by Richard Denniss

My rating: 4 of 5 stars

“Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.”*

Richard Denniss’ Curing Affluenza seeks to define the problems our current consumerist society has and how to address it. He posits that we need to abandon consumerism and opt instead for materialism if we have any chance of changing the shape of our economy, which will, in turn, allow us to address issues like climate change and environmental degradation.

For many years now I’ve been a fan of Richard and The Australia Institute’s work. He and they manage to talk economics without making it feel like you’ve been hit with a brick made of buzzwords.** As such, this book has been on my TBR pile since its release. It has not disappointed.

Richard makes his arguments simply and clearly, in a way that make sense. Even if you disagree with him politically, you would have to agree with his points about economics and politics being about choosing a shape for the economy – the shape being what we choose to spend money on and value. You may argue that we need more spending on tanks and less on healthcare, which has a different shape than an economy where I want fewer tanks and more healthcare. This also applies to our purchases; so if I’m buying tickets to see bands play live rather than upgrading my phone every 6 months, the economy changes shape.

On the Affluenza front, Richard suggests 7 principles for tackling it:
1) First, do no harm.
Think of this as consumer boycotts and active decisions about consumer/lifestyle choices.

2) Some change is better than no change.
Baby steps. It isn’t possible to stick 100% to #1, and larger changes may take longer.

3) It’s not about sacrifice and denial; it’s about saving money and having a better life.
We’re trying to change the shape of the economy, not become monks.

4) Services are good for you.
New status symbol phone or see a live music act? Stuff doesn’t make you happy but experiences do, and they help change the economy’s shape.

5) When you are full, stop consuming.
Because there is such a thing as too many books… Wait, what?

6) Get yourself and your country into better shape.
Our saving and spending, especially when organised with others, can reshape the economy.

7) Flatter is fairer.
Equality of resources and opportunity for all. I.e. redistribution.

Whilst this was a very good book, I did have two problems with it. The first issue was that the middle chapters labour the point, so much so that it felt like needless padding. This was frustrating because as someone who has read various articles and essays from Richard before, I know he can be very concise. It also didn’t help that I was already familiar with what he was trying to argue and the examples used. Though, this may be from that familiarity, so others may appreciate these chapters more.

The second issue was that Richard was largely dismissive of options that didn’t involve capitalism. There was a big assumption that we still need/want capitalism and thus should be reforming/tinkering with it. This assumption was never examined nor justified adequately. It would have been nice to see some discussion addressing those other options, especially in a pros and cons manner.***

A very interesting read and one that ties into several other books I have read recently.
Utopia for Realists
Austerity: History of a bad idea
Winners Take All

* Quote is obviously from Fight Club and not this book. I’m almost certain that Richard is not advocating young men beat each other up and try to destroy capitalism.
** Richard appropriately calls the indecipherable economics talk Econobabble.

*** Richard responded to this point on Twitter. He felt it was outside of the scope of the book and would have muddied the message. I think that is a fair point.

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Book review: Austerity – The History of a Dangerous Idea by Mark Blyth

Austerity: The History of a Dangerous IdeaAusterity: The History of a Dangerous Idea by Mark Blyth

My rating: 4 of 5 stars

You have to live within your means unless you are a bank, then you get someone else to pick up the tab.

Austerity: The History of a Dangerous Idea is pretty much as the title implies. Mark Blyth lays out the history of austerity economics, the arguments for its use, and then counters those arguments. Job done: let’s have cake.

In general, the deployment of austerity as economic policy has been as effective in bringing us peace, prosperity, and crucially, a sustained reduction of debt, as the Mongol Golden Horde was in furthering the development of Olympic dressage.

I first became aware of Mark Blyth as one of a handful of experts who were explaining the European sovereign debt crisis and why countries like Greece were mad at the austerity measures. He and others were the only ones who managed to accurately cut through the econobabble and victim-blaming. Before then, various people involved in causing the Global Financial Crisis seemed intent on pointing fingers at out-of-control government spending, or nation-states who were riddled with debt and no major industry. This was, of course, a distraction.

As an Aussie, I clearly remember during the Global Financial Crisis our treasurer dusting off his copy of Keynes and stopping us from being on the list of victims of the banks. As much as I quibble with some of the details of that economic stimulus, it worked. So it has puzzled me why so many financial experts seem to want to beat the economy to death in order to save it.

This book offered the explanation. It was eye-opening and expanded upon tackling the concept of austerity for sovereign nations who were forcibly saddled with the debt of multinational banks. For such a highly supported and enacted policy you would have thought there would be some very solid economics underpinning it… Yeah, not so much. As Mark outlines, pretty much every case of its use is purely ideologically driven and has rarely worked. In fact, quite often it has been a disaster.

Well worth a read. Or you could just watch a 5-minute version of the book:

Or a 1-hour version:

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