Economics - Innovation - Inclusive Growth

Rethinking the State is a video project coordinated by Prof. Mariana Mazzucato and Caetano Penna (SPRU/University of Sussex) that links two research grants (Ford Foundation’s Entrepreneurial State and INET’s Financing Innovation).

Launched in 2013, it features video interviews with leading international economists on topics such as the role of the State in the economy and in the innovation process, the global financial system, the current economic crisis, economic and social inequality, the side-effects of austerity measures, and alternative growth and innovation policies.

Series 1: Financial crisis, economic development and alternative public policies

The first series of interviews was recorded in Rio de Janeiro during a workshop on innovation and development policy at the Brazilian national development bank (BNDES). Featuring economists such as Jan Kregel, Robert Wade and Govanni Dosi, the interviews focus on consequences from the global economic and financial crisis of 2008, the challenges of achieving economic development and growth, and the roles that the State plays to promote growth both in times of economic boom and crisis.

Jan Kregel (Levy Institute and Tallinn University of Technology), leading Post-Keynesian economist, talks about the causes and consequences of the Greek crisis, and the ineffectiveness and side-effects of austerity. Watch it on YouTube

Manuel Heitor (IN+ Center for Innovation, Technology and Policy Research, Portugal) discusses the ‘brain drain’ in Portugal and Europe, resulting from austerity and low levels of investment.
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Rainer Kattel (Ragnar Nurkse School of Innovation and Governance, Estonia) discusses the distinctive ethos of the State and why it is fundamentally wrong to expect the State to perform just like the private sector. Watch it on YouTube

Benjamin Coriat (Paris XIII) discusses austerity measures in France, the ‘fiscal compact’ signed by President Hollande, and the movement of France’s “Appalled Economists” (Les Économistes Atterrés). Watch it on YouTube

Robert Wade (London School of Economics, UK) discusses the challenges of development for emerging countries, and the neglected side of East Asian industrial development.
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Gary Dymski (University of Leeds, UK) argues that State Investment Banks are an important alternative to the private banking system in providing ‘patient’ finance to promote growth. Watch it on YouTube

Giovanni Dosi (Sant’Anna School of Advanced Studies, Italy) discusses the relationship between innovation, the financial crisis and austerity.

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Andrew Fischer (International Institute of Social Studies, The Netherlands) discusses the relationship between international financial flows and patterns of economic development.
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João Carlos Ferraz (Brazilian Development Bank-BNDES) is interviewed by Mariana Mazzucato on the role BNDES plays in funding projects from which private finance shies away.
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Series 2: Market failures vs. market shaping: markets, organizations and the State

Rethinking the State – Series 2 was recorded in Brighton (UK) and Rio de Janeiro. In the interviews, Mariana Mazzucato, Richard Nelson, Ha-Joon Chang, Leonardo Burlamaqui, and Bill Lazonick problematized the mainstream notion that the State’s role in the economy is to ‘fix market failures’, promoting alternative views of what governments could and should do in order to stimulate economic development.

Mariana Mazzucato (SPRU, University of Sussex) opens the series arguing that market failure theory cannot account for mission-oriented innovation policies in the development of radical innovations. Watch it on YouTube

Leonardo Burlamaqui (Ford Foundation) problematizes the standard view that markets ‘work’ and are self-regulating by default, and that the State should only promote perfect competition and correct market failures. Watch it on YouTube

Richard Nelson (Earth Institute, Columbia University) claims that market failure theory as a rationale for the existence of the State is one of the most pernicious bodies of economic thought and analysis. Watch it on YouTube

William Lazonick (theAIRnet & University of Massachusetts) argues that the source of the wealth of nations is not ‘the market’ but business enterprises, governments and households.
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Ha-Joon Chang (Faculty of Economics, Cambridge University) argues that economics and politics are inextricably linked and that there’s no fixed boundary between the State and the market.
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Series 3. Inequality, inclusive growth and State policies

Our third series was recorded in Brighton, Rio de Janeiro, and Annandale-on-Hudson, NY (USA). The interviews featured Richard Wilkinson, Mariana Mazzucato, Luc Soete, Dan Braznitz, and Pavlina Tcherneva, who discussed the trend of rising inequality in many countries and how public policy can promote economic growth that is not only smart, but also inclusive.

Richard Wilkinson (The Equality Trust) explains that income differences are strongly correlated to all sorts of social malaises, with more unequal countries presenting higher levels of social problems.
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Dan Breznitz (Georgia Institute of Technology) talks about the changing strategic role of the State in promoting economic development in light of the globalization of supply chains.
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Mariana Mazzucato (SPRU, University of Sussex) argues that there’s a lack of understanding as to why recent periods of growth were ‘smart’ but not ‘inclusive’.

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Pavlina Tcherneva (Levy Institute) discusses the implications of the Great Financial Crisis of 2007 for employment and fiscal policy.

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Luc Soete (Maastricht University) claims that the youth unemployment crisis is the most pressing and urgent issue confronting European countries today.
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Series 4. Financialization, reforming finance and the capital development of the economy

Series 4 was shot in Annandale-on-Hudson, NY (USA), Rio de Janeiro, and London. Randall Wray, Damon Silvers, Riccardo Bellofiore, and Bill Janeway discussed the relationship between the State and money, the financialization of the economy, and the need to reform the financial system to promote the capital development of the economy.

Randall Wray (Levy Institute) argues that rethinking the State requires rethinking the relationship between the State and currency.


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Bill Janeway, (Warburg Pincus and Cambridge University) offers his insider’s view on the actual role private finance and the State play in funding breakthrough technological innovations.
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Damon Silvers (American Federation of Labor and Congress of Industrial Organizations) discusses the decade-long financialization process in the American economy.
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Riccardo Bellofiore (University of Bergamo) discusses Keynes’ notion of socialization of investments as a means for promoting aggregate demand and employment.
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Rethinking the State – Special Series

In November 2013, Mariana Mazzucato (SPRU/University of Sussex) and Leonardo Burlamaqui (Ford Foundation) organized the workshop on Financial Governance for Innovation and Social Inclusion (visit the workshop’s page at: http://financeinnovationsocialinclusion.com/), which brought together international economists working on issues related to “Reorienting Financial Reform” and “Re-shaping Financial Institutions for Innovation and Development” - under the Reforming Global Financial Governance external-link-icon initiative of the Ford Foundation.

The Rethinking the State – Special Series is a compilation of speeches during the first day of the workshop, which took place in the House of Commons (UK). Chi Onwurah MP, Mariana Mazzucato, Leonardo Burlamaqui, Ngaire Woods, Bill Lazonick, Randall Wray and Jan Kregel spoke about the need to promote growth that is both smart and inclusive, lessons from the financial crisis, and the necessary reforms to make the financial sector fulfil a productive role.

Chi Onwurah MP (Shadow Minister for the Cabinet Office) opened the event with a speech on the need to reform finance so that it nurtures social value creation.

Watch it on YouTube

 

Ngaire Woods (Blavatnik School of Government, University of Oxford) spoke about global institutions’ three issues  since 2008: regulations, ‘global fire fighting’ capacity and the IMF and the importance of the World Bank. Watch it on YouTube

 

Jan Kregel (Levy Institute and Tallinn University of Technology) explained that the problem of economic recovery can only be solved by a recovery in employment.

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Mariana Mazzucato (SPRU, University of Sussex) asked: if rebalancing the economy is needed to promote growth that is both ‘smart’ and inclusive, then what is this rebalancing about? Watch it on YouTube

 

Bill Lazonick (theAIRnet & University of Massachusetts) criticized economists and policy-makers for a failure to distinguish between value creation and extraction in the operation of the economy. Watch it on YouTube 

Leonardo Burlamaqui (Ford Foundation) spoke about the lessons from the global financial crisis and the kind of reforms that are needed in order to recast private finance into a productive sector. Watch it on YouTube

 

L. Randall Wray (University of Missouri-Kansas City and Levy Institute) argued that, to reform the financial system, we must understand its nature and what a financial system ought to do. Watch it on YouTube