Mariana Mazzucato has spent the past decade becoming one of the most influential economists in the world, advising governments from Washington to Brasília, working with Pope Francis on the principles of the common good, and shaping the language of missions and the entrepreneurial state that both the Biden administration and the Starmer government borrowed for their own policy programmes. On Novara Media’s Downstream, hosted by Ash Sarkar in front of a live audience at Hackney’s EartH Theatre, she gave the most detailed public account yet of where Labour went wrong, what her new book argues, and what she believes Andy Burnham needs to do differently.
The conversation took place on the day Starmer resigned, a coincidence Sarkar opened with, quoting Oscar Wilde: “To lose one prime minister is a tragedy. To lose two is carelessness. To lose six is what the hell is going on with your political system?”
Where Starmer and Reeves went wrong
Mazzucato’s diagnosis was structural rather than simply political. “After saying the truth, which they did, which is that we had 14 years of misery, there was no need for austerity, even the World Bank and the IMF have said that was not a good idea, once they explained that this hole had been created by a very problematic economy, what should have happened next was a strategy, a vision, an upbeat view of what needs to be done. And that didn’t come.”
Instead, she said, the first things voters heard were losses: the disability allowance taken away, the winter fuel payment taken away. “There are no economic pressures and market forces coming from Mars. It depends on what you do with the economy.” Her argument is that the Starmer government treated public finances as the constraint when the real problem was the private sector’s failure to invest.
“If you don’t actually have a private sector that invests, if you have a private sector of the Thames Water kind, of the Carillion kind, and many other private companies of that kind, when they do have profits they don’t reinvest those profits. Then the economy doesn’t grow. It’s not just about fixing the hole with some public money and then saying ‘oh, but there’s not enough money, so we’ll do it a bit less.’ It’s about how you get the private sector to do their job, to invest and to innovate and to work with the government around problems.”
This builds on two pieces this site has covered: “They began exhausted”: Mazzucato on what Labour got wrong and “It is a crime”: Mazzucato’s viral Brexit verdict and £500bn underinvestment. The Novara conversation adds significant texture to both, situating them within the full theory behind her new book.
What ‘good’ actually means
Sarkar pushed Mazzucato directly on a tension in her work: who decides what “good” means in an economy theoretically organised around it? Mazzucato drew on Aristotle’s concept of the telos, the goal of the polis. “How do we actually build community? How do we value each other for real, not just talking about that? How do we embed that relational value in a predistributive way, so we don’t have to overly rely on redistribution? When you really mess up markets as much as we do, you have to over-rely on redistribution, and that takes so much time, energy and money.”
When Sarkar invoked the philosopher Alasdair MacIntyre’s critique that talking about “the good” is inherently a moral claim, Mazzucato conceded the point but reframed her project. “It’s not original in the book that I look at housing as a fundamental human right which we’ve turned into a commodity to be bought and sold, to the point that in this country 80% of our finance goes back to finance, insurance and real estate.” Her originality, she argued, lies not in defining the good in the abstract but in insisting that the how, the relational structure of contracts, ownership and accountability, matters as much as the what.
The state is smart at war, stupid at everything else
One of the most striking exchanges concerned why governments mobilise effectively during wartime and poorly during peacetime crises. GPS, the internet, touchscreens and Siri all originated from military research problems, Mazzucato noted. “If we know how to do it for military problems, it’s then a choice. It’s a choice that we decide not to do it for health issues, for environmental issues, for reducing inequality. Government is smart with war. It’s stupid. It chooses to be stupid.”
Sarkar pushed back with a sharper formulation: that this isn’t accidental stupidity but the design of capitalism itself, since private interests know that in wartime the state becomes backer of last resort. Mazzucato’s response split the difference. “Yes and no.” She pointed to COVID as proof wartime tools can be repurposed quickly when there’s political will, since the US used the Korean War-era Defense Production Act to procure vaccines and PPE. “It’s not that we don’t then do it for other things. But we have to wait for a health pandemic, when all these excess deaths are happening, for government to wake up.”
Wartime mobilisation comes with clear objectives and tight deadlines, she argued. Nobody talks about winning a war by 2030. Germany’s green steel sector exists, in her telling, only because its public bank made decarbonisation a binding condition of its loans, rather than simply bailing the sector out as Britain has repeatedly done.
The five-element compass
The structural heart of the new book is what Mazzucato calls a compass of five elements that must all be present simultaneously for any claim to be pursuing the common good to be more than rhetoric. Picking and choosing among them, she said repeatedly, produces what she calls common good washing, a slogan without substance.
The first is purpose and directionality, building on her earlier work on missions. The second is co-creation and participation, ensuring policy is designed with the people it affects, not for them. She gave two examples: working with care workers in Camden under former council leader Georgia Gould to redesign adult social care procurement around lived experience, and working with the Secretary for Traditional Peoples in Brazil, Edel Morais, on an Amazon fund governed by the indigenous communities who actually live in the forest, rather than by NGOs and intermediaries.
The third element is sharing knowledge and learning, a critique of how aggressively patent regimes have been allowed to privatise early-stage research. She cited COVID vaccine development: Pfizer extracted enormous profit from publicly funded research and refused to share knowledge, while AstraZeneca’s vaccine, publicly funded primarily through Oxford researchers, was produced under a condition that the company join a patent pool, allowing production in Africa. “That’s an exception. That is not the rule.”
The fourth element is sharing rewards, ensuring public investment captures some of the upside it de-risks rather than socialising risk while privatising reward. She referenced ongoing research into carnival economics in Notting Hill, Salvador and Rio, where almost none of the value generated by beverages, food and tourism gets reinvested into the communities that create it.
The fifth element is transparency and accountability, without which none of the rest can be properly assessed.
Building coalitions on the right
A surprising thread concerned Mazzucato’s engagement with conservative audiences in the US. She described presenting The Entrepreneurial State in Washington DC in 2013 to a room full of Republicans and national security hawks who responded enthusiastically. In 2019, Marco Rubio’s team invited her to discuss industrial strategy directly, producing papers arguing the US needed to learn from China’s state-driven model.
She connected this to the CHIPS Act, which she worked on with the Biden administration and which passed with support from both progressive Democrats and China hawks like Rubio. She was careful to note that Trump’s current practice of taking equity stakes in companies like Intel, something she has long advocated as a way of socialising the rewards of public investment, is being done “kind of randomly,” without the broader framework of conditionality that makes the policy coherent.
Is China already doing all of this?
Sarkar’s sharpest line of questioning concerned whether Mazzucato’s vision was simply describing what Beijing already does, minus democracy. Mazzucato praised China’s mission-oriented decarbonisation spending, driven less by abstract concern for the planet than by catastrophic air pollution over Beijing, and noted China has made more serious progress on some UN Sustainable Development Goals than any other major economy.
But she drew a clear line on participation. China’s institutions are large, centralised and inflexible, she argued. “This book is not meant to be for dictatorships. It’s meant to be for democracies which talk so much about doing things for people and then not only don’t do it for people but definitely don’t do it with people.”
Should we fix capitalism, or replace it?
The sharpest moment of the evening came during audience Q&A, when someone challenged Mazzucato directly: given capitalism is fundamentally oriented around capital accumulation, is adjusting the market sufficient?
Her answer was candid. “If I just go in saying forget capitalism, communism is better, you ain’t gonna get very far.” She argued her chosen terrain, working directly with governments on concrete mechanisms like procurement contracts, which she noted is “literally where so much of the corruption actually happens” in countries like Italy, is itself a radical act. “I personally, and I might be wrong, think that the most radical thing we can do is actually spend time on the very concrete, everyday tools that every day are wasted, that every day are often the scene of corruption. This stuff is life or death.”
She invoked Marx directly, not the short communist manifesto but the deep institutional analysis in Capital, and argued the clearest examples of better capitalism share one structural feature: labour having a genuine voice in corporate governance. She cited Mondragon, the 37,000-worker manufacturing cooperative in Spain, alongside the John Lewis Partnership in the UK, as concrete, scalable examples her compass tries to draw lessons from.
The reaction
The YouTube comment section beneath the interview was sharply divided. Critics argued the entire premise, that capitalism can be “done right,” is a category error. Others praised the practical, mechanism-level focus as exactly the kind of unglamorous work the left has historically neglected in favour of slogans. Several commenters noted Andy Burnham was reportedly in the audience taking notes, whether that translates into policy once he is in Downing Street is the only thing that will determine whether any of this is more than common good washing.
Her new book, The Common Good Economy: A New Compass, is out now.
One response to “Mazzucato tells Ash Sarkar where Starmer went wrong – and lays out the new compass she wants Burnham to follow”
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several points within this article that are similar to points in Andy Burnhams book. Builing community by the devolution of power and involving local people in decision making. Getting back to the principle of building houses that are homes rather than investments. I actually really excited to see how he converts his vision into reality. I feel it has taken us over 40 years to get to where we are, the pendulum needs to swing back or I worry for the future.
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