Summary We Need To Question The Economic Stories We've Been Told — Mariana Mazzucato at Long Now - YouTube (Youtube) www.youtube.com
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Speaker 0 So what I did in my book, the value of everything was to kind of bring it down to first principles. And ask could it be that also we've just kind of lost our way and stop really debating something that actually in the course of the last kind of 200 years of thinking about the economy was really central. This question of, what is value? What is value creation, what is value extraction and what happens when we either by mistake or in purpose, end up rewarding value extraction more than value creation. Do we get something called value destruction.
Speaker 0 But, you know, I just keep using that word value there, but what is value? And notice by the way that the subtitle is not makers versus takers, because that's really static that would lead to the rest of my 40 minutes here are kind of making a list of big bad finance, hedge funds, credit default swaps bad and then kind of saying that something else is good. That's not what I'm gonna do. Making and taking the reason I chose that kind of verb is that we can change things. We can.
Speaker 0 And I hope perhaps we can talk about it also in the Q and A. We can fundamentally reform how finance is operating, and how certain business practices have kind of gone astra and how government has just become a bit too lame. But what's really interesting is that this kind of concept of making and taking kind of often comes back after every financial crisis. So I pulled out this quote here, which is very nice 1 by Big Bill, Hay. The first industrial trade union in the Us.
Speaker 0 Writing at the time of the great crash in 19 29, And it's it's really interesting because you just replace the word gold barron by financial sector, and it kind of rings what a lot of people and communities around the world we're saying. So the Barbara gold bar, they didn't find the gold. They didn't mind the gold. They didn't melt the gold, but by some weird magic, a me all the gold belong. For them.
Speaker 0 And so this is the kind of making and taking and, this is kind of the accusation. But so what does this mean? What does it mean to actually think about the economy in terms of certain areas being kind of productive, certain being... On unproductive and really thinking about how to make sure we're steering activities inside what I call in the book, the production boundary. And unfortunately, what happens when we no longer talk about value and just kind of assume you know, silicon valley is full of wealth creators.
Speaker 0 We end up allowing stories, literally just stories, and narratives and discourse about value and wealth creation to take over. What I'm going to basically argue is that when that happens, we allow value extraction to be disguised as value creation. And you know, it's not that the landlords in the 17 hundreds and I'll get to them in a minute weren't extracting value, but they didn't pretend to be innovative. They didn't it pretend to be value creators. They just say give me your damn money and people gave them the money, adam Smith called landlords feat.
Speaker 0 There was no mas. And again, I'm not gonna don't worry. I'm not sure there's many tech people here in the room. I'm not going to start making accusations of again, whether it's tech or finance or government officials, as value extractor, but this kind of mas exercise is a problem. And you, there's I was really struck how 1 year, just 1 year after the crisis, the head of Goldman Sachs, Lloyd Blanc.
Speaker 0 Said with a completely straight face. It was not an after dinner speech or he's trying to make people laugh. Yeah, Completely serious. Look it up, just Google it and the F feet put this quote, that Goldman Sachs workers were the most productive in the world. I mean, this is a period where they had just been bailed out 10000000000 dollars by the Us government because of what happened with the financial crisis.
Speaker 0 There was plenty of evidence that it was in fact to a large extent not only the activities of the large investment banks that at least partially led to the financial crisis and yet this bold statement of we are the most productive in the world. And so this whole concept of how do we measure productivity? Do teachers, say, we are the most productive in the world. And if not, could it be that how we're actually accounting for value in the system, creates actually a self fulfilling prophecy that it allows some actors in the economy to be very bold and arrogant. And to be able to claim, even just logically in terms of how we do the counting that they are so productive.
Speaker 0 But then again, I mentioned stories. So this idea that again wealth creators in Silicon Valley or in the case of Brexit. When Brexit. I'm still hoping it doesn't happen. But happened you know, this idea that we have to at least protect those really valuable sectors, which we're producing value for the U Uk economy.
Speaker 0 So financial services. And I'll mention also later the way that the word value is used in sectors the pharmaceutical industry to justify very high increases in prices. So recently a price of an antibiotic went up by 400 percent overnight and the idea that value based pricing could somehow be used to justify that as quite extraordinary. And on the opposite spectrum, I've already mentioned, teachers, you don't hear teachers calling themselves. We are so productive, but also the state itself, how we talk about the state.
Speaker 0 We don't talk about it really as creating value at best. We talk about it as red distributing value or enabling or d risking the value creator. So these are really just words and narratives and disk courses which are kinda just... I don't say bullshit, but just kind of stories. Right?
Speaker 0