is economist mariana mazzucato. her faith in the transformational power of the proactive state has made her the go—to adviser to a host of governments. does her moonshot economics ignore some earthly realities? mariana mazzucato, welcome to hardtalk. it's great to be here. it's great to have you here. your latest book is called mission economy. you are all about mission economics — how we human beings can sort of rethink our economic policies to better meet the challenges that we, as a species, face. well, we have to. we have to. and right now, over the last couple of years, covid has been the number one challenge. how would you assess the ability of our economies to meet the covid challenge? well, i think we were caught completely unprepared, as we have been with the climate crisis. you know, we have all these different interlocking crises. the financial crisis, the climate crisis, now this health pandemic. and in each case, we've been unprepared. and my view is that if policy is there just to, what economists call, "fix market failures", you will literally always be too little, too late cos you will always be in fixing—the—gap mode, reacting. so the question that i pose in the book, and it's super relevant right now because this won't be the last virus that comes our way, is how do we actually have a proactive government that works proactively, but also with conditionalities, with the proper social contract, with business, but also with the third sector, philanthropies and so on. and what's so interesting is that, you know, we would have never, ever gotten to the moon had governmentjust tried to kind of de—risk or enable the business sector. you've brought us to the moon and the lessons to be learned, and i'm going to get to that, but let mejust stick with covid for a second, because the message of a lot of your economic work over years has been that the systems we have are failing us, and yet it seems to me in some ways, particularly if we focus on the vaccine roll—out, that the systems we have in place actually work pretty darned well. the private sector was activated very quickly, pump—primed with some state money in the united states and in countries like the uk, and with extraordinary speed and skill, the private sector came up with solutions. came up with effective vaccines. well, ok, so first of all, we were unprepared on different levels. you know, test and trace failed miserably in the beginning. in fact, in the uk, we had to outsource it to deloitte, that didn't do too well. so the kind of local productive capacity and governance capacity of many different countries wasn't actually there for that early lockdown. you're absolutely right that with the vaccine, it was, you know, quick, great, we should celebrate that... and, if i may say so, private—sector led. no, it wasn't private—sector led, there was both public and private. there's six different vaccines. the mrna, a technology of thejohnson &johnson vaccine, for example, was all early stage darpa—funded, but that's not really the point. of course there was private—sector investment, there was also public—sector investment. in the us, the national institutes of health spend, every year, $40 billion on health innovation. many of these vaccines, the technology behind them, actually started decades ago, so it's always public and private, itruly believe, in partnership. the problem is, if you look at the vaccine, the mission, if we want to use that word, is not the vaccine, the mission is to vaccinate everybody globally and to make the vaccine accessible. on that front, we have failed miserably. and dr tedros at the world health organization, who i work with quite closely, calls it "vaccine apartheid", where you have 80% of the vaccines being hoarded by a very small group of countries. many african countries haven't had access to their firstjab, let alone the second and the third, as we have. so to organise that, to globally vaccinate everybody, you need a different approach. also, to intellectual property rights, right — patents behind the vaccines? it's quite striking how many of these companies haven't been willing to sign up to the patent pool, which is about sharing knowledge on both the vaccines, but also, the diagnostics and the drugs around covid—i9. and i believe that that is not only wrong, it's also stupid, if i can use that word, of the state, when it's financing and co—financing, not actually to put conditions attached to areas like intellectual property rights. but this is a pre—covid—i9 problem. your message is notjust about the proactive power of the state, but it's also about the importance of international cooperation. i'm wondering, therefore, why you place so much emphasis on the lessons that we should all learn from history, and in particular, from the moonshot, the massive effort made to get men on the moon in the late 1960s. because it seems to me the driving force behind that was in no way about global cooperation, it was about nationalism, it was about the united states seeing the space race as an elemental part of the cold war with the soviet union. right. so first of all, my notion of missions isn't either international or national or local. it has to be for all of those because problems have those different dimensions. we have city—level problems, regional problems, national problems and huge global problems. like, our ocean is filled of plastic, so no one country can solve a plastic—free ocean mission, but surely, you can have cities, for example, that really strive for, you know, carbon neutrality. in london, we could have a knife—crime mission, zero knife crime amongst teenagers. so the real idea behind the mission�*s framework is to learn from the apollo programme on just how targeted it was, how it really required a complete change in how government was structured. it required a design of the tools, for example, procurement policy, to really crowd in bottom—up solutions across multiple different sectors. because it wasn'tjust aerospace, it was also nutrition, electronics, material software. so the problems we have today, which are much harder, you're absolutely right, we have wicked problems, they're social, societal, they also, though, require government to change its structure. they require a different form of public—private partnership, and they especially need cross—sectoral innovation and investment. indeed, and all of that is much more complicated. so i'm wondering if there truly is very much we can learn, take away, from the moon—landing experience. because as i said already, it was akin to a sort of war mission. it was presented byjfk and others to the us public as something that mattered to the very future and security of the united states of america. easy for people to understand. some of the stuff you've just outlined about the challenges facing us as a species today are not so easy for people to understand. but, you know, beating the russians wasn't easy either. so my point is not, because that would be foolish, to copy and paste the apollo mission on our social problems. the point is, if we begin with our challenges today, which i believe are the sustainable development goals, because every country in the world has signed up to them, these are the 17 sustainable development goals with 169 targets beneath them that the un led on, but actually, they came about through huge stakeholder engagement globally, these are the challenges, but if we just stop there, nothing will happen. just like if kennedy had just said, "beat the russians", nothing would have happened. what was required was to transform "beat the russians" into a mission, going to the moon and back in one generation. a clear target. so my point is that if we just stop at these big global goals and don't transform them into moonshots that are inspirational, bold, but also design economic policy that really fosters and also creates conditionality, so instead of giving out a lot of bailouts and recovery funds and loans and so on, subsidies, guarantees, to different sectors to do what nasa did, which was to carefully design its public—private partnerships with multiple businesses. you are, sort of ideologically, a progressive who believes that for years, perhaps, as a result of the legacies of ronald reagan, margaret thatcher and others, the power, the positive, proactive power of the state has been underplayed. when you look at recent history, you pick the elements which work best for your argument. you take the tech revolution, inspired by, you, say, money as an investment made by big government, specifically the us department of defence in the 1950s and 1960s, which led to the invention of the internet. but you can read the tech revolution in different ways. there are other ways of reading it which say yes, again, the initial impulse, the state was important, but the way it's played out is absolutely a reflection of the dynamism of the private sector, not the big state. so i just don't talk that way. for me, it's never about the state or the private sector. they are both required. and i'm italian, i know the problems with the state. i know there are problems with, you know, bureaucracy and slowness, and inertia. and i know a lot of problems inside the private sector, where, over the last ten years, $4 trillion have been spent by the fortune 500 companiesjust in buying back their shares to boost stock prices, stock options and executive pay. so that financialization of the private sector and a public sector that is often too bureaucratic, inertial, not flexible and agile, they're both, you know, equally... problematic. ..important problems. huge problems. we have just seen a minister in the uk resign because... we talked covid, in the covid response... yeah. ..he says billions of pounds was wasted because the government couldn't cope with the number of fraudulent claims made by businesses seeking relief. and money was given away. yeah, and the best quote — or i like this quote because it really goes to the centre of the problem — lord agnew, a tory lord, in the middle of the pandemic, i think it was a year ago, said that the uk state, the british state, was weak. why? because it had become infantilized due to all this over—outsourcing that it's done to, for example, consulting companies, to the big four, but also to the circas and the gas—s. what he meant was not to blame those consulting companies, but when the state no longer invests within its own brain, it doesn't do too well. and the nasa folks knew that. i mean, this is why i look at apollo, cos there's so many... yeah, but... ..interesting parallels. there was the head of procurement, ernest brackett. let me just tell this story cos i find it fascinating. he said, "we won't know how to work with the private sector. we will get captured by bro sherman's ship," they didn't have powerpoints at the time, "if we stop investing in our own capabilities." i take your point that with you, it's not binary, it's not either the state or the private sector, there has to be a sort of symbiosis of the two. but in the end, you do take a view as to who's providing the lead here. you talk about — i mean, it's a word i don't like, but you do use it, "directionality". and you say government needs to provide this sense of direction. you say that happened with the early days of the internet... it's also happened with this. i mean, what makes our iphone smart and not stupid? the internet, gps, touch—screen display and siri. yes, but... this would be a stupid phone. many people would say it was only in the hands of stevejobs and elon musk, and the other incredible private innovators that you've ended up with that thing in your hand there. it's not a result of decision—making in the pentagon or any other us government department. so let me just backtrack a bit, because i keep saying it's not about the state versus the private sector. there's a whole chapter elaborating the private sector investment that got us to the moon. my point is, how do we actually work together in a symbiotic, mutualistic way with actually a common purpose in mind? that's what is often missing. so the fact that it actually existed with the moon landing, it's not about government having done everything, they worked with multiple different types of companies in many different sectors, but they cared to design that collaboration so it didn't become a gambling casino. i think what's happening in space is a gambling casino. in the health sector is a gambling casino. look at the billions pfizer is making off the back of a vaccine, where, in that case, as well, there was not only public money, but it shouldn't be the goal during a pandemic just to make a lot of profits from the vaccine. it should, at least, because it's a pandemic, it's a global pandemic, we must have a mission and work together to, as i mentioned before, vaccinate everybody. and if we don't have the local capacity in africa also to deliver the vaccine once we have it, we need to backtrack and ask ourselves why. right — now, everything you're outlining about the missions that face us today and what must be done in terms of a response by government and the private sector working together to meet them, i get it all, but you're an economist, and you do seem to be abandoning some, what i would have regarded as fairly fundamental economic principles. you seem to be saying, "it doesn't matter how much money the state throws at these problems, it should just throw everything at these problems." what matters, you say, is the outcome, not how you get there. and if you — i'm paraphrasing — but if you build up mountains of sovereign debt, that doesn't seem to concern you. so first of all, it does concern me, and it's precisely because it does that i wrote the book. because the problem is, if the state sees its role as just fixing market failures and every now and then, during the pandemic or during a war, just throws a lot of money into the system, right, without actually structuring the organisation of the state in such a way that we have what i call mission—oriented institutions, then actually, interestingly, that's what causes inflation. you don't get inflation, for example, with public investment as long as you're expanding the productive capacity of the system. if instead, you're just kind of putting helicopter money into the system, as we did, by the way, after the financial crisis, where trillions were poured in, most of that finance just ended up back in the financial sector. so it was undirected. the same response after the initial panic over covid, the federal reserve poured money into the us economy. exactly, so the point is, we have to stop just pouring money in last minute when we have huge problems. we need to be thinking, in this mission—oriented way, where public money, taxpayer money, is going after big problems, working alongside the private sector, and in so doing, expanding our productive capacity. but if i may say so... much of the book is looking at the structures on the ground. it's notjust about money. you're explaining it's not just about money, but i am very well aware that you work with governments not just in the industrialised western world, but you work with governments in south africa and argentina. how do you think argentines are going to respond to you saying, "you know what, as long as you've got a coherent, mission—based strategic view of how you're spending the money, you can spend, print, frankly, as much money as you like, because what matters is the outcome, not how you get there." but the irony is... argentina's history tells us something very different. but that's. .. i mean, i would argue that it's precisely when you have governments that think their role is simply to kind of inject money into the system and that don't actually have a design of economic policy that is purpose—oriented, that ends up with huge problems like we had with argentinean inflation, but also, in south africa, for example, where i'm also advising the government right now, they have a problem where it's the economic structure. so, for example, when you have a large, state—owned enterprise like eskom, what should the relationship be between the state and this public actor? because it's notjust about public, private. in many developing parts of the world, the problem is also with the public institutions themselves. or in italy, our public bank was part of the problem just giving out hand—outs, subsidies, guarantees... right. ..with no purpose in mind. so what i'm interested in in these kinds of countries is to say, if you do have, for example, a public bank, a public fund, which many developing countries have, we need to build conditionality within those public funds so you don'tjust give out money, it's conditional on, for example, a green, sustainable growth path. and what happens if even in the most sort of proactive and strategic governments, civil servants, officials make the wrong call, get things wrong? i mean, you know, for example, just a couple off the top of my head. you could argue that the us government, under nixon, spent billions in a war on cancer, which they completely failed to win. it was misguided. yeah. right now, i believe you've offered advice to the german government, at least through your eu connections, you've been involved a little bit with their so—called energy transition, in which they've abandoned nuclear and poured vast resources into renewables in a way which many germans today say has been damaging and was fundamentally misguided. what if your missions are the wrong missions? well, it's a great point. and in fact, you know, what we need to avoid is that these missions just become pet projects that continue to move along even when they're not working. so again, the reason i look at the apollo programme is that the agility and flexibility that nasa also had to impose on itself, it transformed itself after the apollo 0ne fire. one of the astronauts, gus grissom, yelled out, "how the hell are we going to get to the moon if we can't even talk between 2—3 buildings?" so they actually underwent an intraorganizational transformation, much more horizontal communication with these project managers that were supposed to be constantly talking to each other. that kind of flexible, agile system we often don't have in government. and so, coming back to germany, what i have found interesting is that because they had a strategy, they also put conditions on the steel sector, for example. in many parts of the world, including here and the us, steeljust gets massive loans and bailouts. in germany, it has been conditional on steel lowering its material content, which they have done through repurpose, re—use, recycle. you've worked on various different missions, but i note you've worked on missions and governments in the western democratic world, mostly, where you, it seems to me, unless you correct me, you've never worked, is china. and isn't china today's great example of mission economics? over the last, what, a0 years, they have completely single—mindedly devoted their economic strategy to eliminating poverty, massive urbanisation, industrialisation and geopolitical reach through belt and road. that is deeply strategic, it is a mission. and it also is not encumbered by democracy. so, what should we learn from that? well, you know, you're absolutely right. i mean, i actually think china, in many ways, is leading on some of the green missions. for some years now, they've been investing much more than the west because of their urgent pollution problem, right? i mean, often, its problems themselves that make one feel forced to think about what's the goal? how do we have a concrete target to face that problem? so they had, already, some years ago, their five—year plan had $1.7 trillion worth being invested in greening their entire economy. and it wasn'tjust about renewable energy... and that very phrase... it was about energy—friendly technologies. that phrase, five—year plan, is very important, isn't it? what you don't write much about in your book is policy, cos you're an economist, not a politician. but isn't the reality that the short—termism of democratic politicians, the degree to which they have to think about the problems of people today rather than next year, or in a decade's time, it undermines much of your mission—based economics. that's why in the book, i spend a lot of time looking at what kind of organisations can we build that are public, but not politicised, right? so darpa, for example, which i mentioned invested in the internet, darpa's quite famous for actually having a longer cycle than, say, the electoral one. so the people who come in to lead it, they come in for 4—5 years. it's not necessarily with the electoral cycle, timed to those four years, and they literally are there to take kind of big bets, take risks, but on big public problems. the way that they've actually organised their own institution is by welcoming risk—taking and experimentation, which you talked about, because civil servants make mistakes. but it's interesting how we reward risk—taking in the private sector. we allow the venture capitalists to brag about it, but as soon as a civil servant makes a mistake, front page of the newspaper. so the question you're asking is not one just about long—termism in the public sector, but also, what is the human—resource strategy that we actually need within the civil service that allows both long—termism, but also the welcoming of that kind of experimentation and trial and error and error and error, cos you won't learn how to ride a bike without falling off. if we don't allow those kinds ofjob structures and culture of experimentation inside the state, none of these missions will work. right, and to return to the little phrase i used at the beginning about earthly reality perhaps clashing with some of your more idealistic visions, earthly reality today is that across the world, in democracies and maybe in the not—so—democratic countries, what we see are rising, alarming levels of mistrust in government, in officialdom, in the people who rule over our lives. there is deep scepticism. covid perhaps has brought that out once again. trust and faith are central to your notion of how a mission economy would work. and i would put it to you there is a desperate lack of trust and faith in governance. absolutely, but that's why the book doesn't stop at the notion of moonshot submissions, it then looks at the metrics. like, what's the accountability that should be in place to make sure our governments and different types of public institutions are actually working for people? so look at the bbc, where we're sitting today. inside the bbc is a metric and a concept of public value, which is really, really interesting. it actually guides the bbc in what it does. we don't have equivalent metrics of public value or public purpose in many public organisations. so the bigger question, and this is why i've set up a whole institute at university college about this, if public purpose is the goal, if we have missions that are societal in nature, you know, around the sustainable development goals, what are the metrics we need that go beyond cost—benefit analysis, net—present value, that actually capture these dynamic spill—overs across the economy that the moon landing had...? but how does the state itself — like, we need to hold it accountable, and if you don't do that, you get weak states, which then, in their work with the private sector, can become easily captured because itjust becomes about being business—friendly. we're almost out of time. i want to end by asking you, do you think we are heading in the right direction? not long ago, i had john kerry sitting in that chair, the special us representative on climate change. he said, "things are extraordinarily difficult, but fundamentally, i'm optimistic we can still get there with governments working together". do you believe that? because it's the ultimate mission right now, isn't it? i definitely believe that, and that's why i wrote the book. i don't think there's anything deterministic in the system that makes it that we have to have overly—financialised businesses, overly—bureaucratic governments. i believe that all these things are fruits of choices that have been made. we need now very different choices in intraorganizational governance, both in business and the public sector, but especially, how do we build a relationship between the two that is truly dynamic, symbiotic and mutualistic? focus on the goals that every single country has actually signed up to since 2015. mariana mazzucato, we have to end there. thank you very much for being on hardtalk. thank you so much. thank you. hello there. we've certainly seen some windy weather across more northern parts of the uk into the night. the winds will continue to ease down during the day on thursday. it will still be breezy, mind you, and there should be more sunshine more widely. the strongest winds have been near that area of low pressure that's moving away from the northern isles. this weather front is continuing southwards — it's continuing to weaken, which means the rain and drizzle on it is becoming very light and patchy. this is the picture towards the end of the night. further north across the uk, clearer skies are continuing to follow with some more of those showers, mainly in the north of scotland. but it should be a frost free start to thursday. we start quite cloudy across much of wales, the midlands, and southern england. some light and patchy rain and drizzle mainly in the west — that'll move southwards, soon cheering up in wales in the midlands. the cloud takes all morning to move away from southern england, heading out into the channel. then sunshine follows widely, a few more of these showers continuing mainly across northern and western scotland, but not a cold day despite the northwesterly wind, temperatures double figures for most. it will feel quite cooler than of late, though, in northern parts of scotland. the winds ease down during the evening, some clear skies will turn it chilly for a while overnight. and then, if we look out to the west, a stream of weather fronts will bring some wet weather mainly toward scotland on friday — but at the same time, we are drawing and some very mild south—westerly winds. a head of it, though, across england and wales, a chilly start, some sunshine, 1—2 early mist and fog patches. does tend to cloud over more and more from the west during the day, hanging onto some sunshine towards southeastern parts of england, most of the rain coming eastwards from scotland. and for many, those temperatures will be reaching io—ii celsius — it is turning milder and windier through the day, and most of the rain will continue to affect scotland overnight, that weather front tapping up the rain over western parts of scotland. then that weather front move southwards on saturday — so again, it'll weaken and the rain becomes light and patchy. moving away from scotland and northern ireland, there won't be much rain heading down across england and wales. then we get a northwesterly wind once again, a few showers across northern parts of scotland. double figure temperatures for most of the day, very mild in the southeast of england at 14 celsius. a windy day on saturday — the winds won't be as strong, though, on sunday, it will be a bit cooler. northern areas turn wet and windy later on. welcome to newsday, reporting live from singapore, i'm karishma vaswani. the headlines: britain's prince andrew demands a trial byjury as he rejects the allegations of sexual assault made by virginia giuffre. the us formally responds to russia's concerns over ukraine saying they've offered moscow a serious diplomatic path forward. 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