This week, PS talks with Mariana Mazzucato, Professor in the Economics of Innovation and Public Value at University College London, Founding Director of the UCL Institute for Innovation and Public Purpose, and the author of Mission Economy: A Moonshot Guide to Changing Capitalism.
Project Syndicate: In June 2020, you and Robert Skidelsky lamented that, despite the deployment of massive amounts of emergency financing during the pandemic, there was “little evidence” of any new fiscal thinking, as the spending was not “structured.” Does recent spending legislation in the United States, the CHIPS and Science Act and the Inflation Reduction Act, reflect progress in “rethinking the role and purpose of fiscal policy”?
Mariana Mazzucato: According to RMI Analytics, US President Joe Biden’s three big laws – the two you mention, and the Infrastructure Investment and Jobs Act – will more than triple the federal government’s average annual spending on climate and clean energy this decade, compared to the 2010s. They thus represent a critical opportunity to promote a just green transformation.
But such forecasts rest on the assumption that green investment trends remain on their current trajectory. And as the recent surge in coal and natural-gas investments – a response to the energy crisis triggered by the war in Ukraine – shows, investment trends can be fickle. If the potential of recent US legislation is to be realized, government must therefore set bold policy goals that include ensuring that the returns on the relevant investments are shared equitably.