Different Economics

YouTube

This video shows a talk by Professor Mariana Mazzucato, who sets out the case for a new economics in the lght of the failure of neoliberal economics, as demonstrated in the theoretically impossible 2008 collapse of the global financial system. Her arguments and (largely American) examples should be of great interest to anyone who is not so deeply entrenched as to be immune to alternative thinking.

The neoliberal notion of public policy and the public sector (whatever that may mean) as simply tools with which to fix otherwise perfect markets is nonsensical because it envisages markets as something objective and out of reach - out there - like say the water in which fish swim - when in reality the market is an output of the political process. We create markets, we shape and reshape them, we change them. It cannot be otherwise.

The public sector as a mere fixing mechanism to repair market failures is insipid. It implies that all of the creative energy and drive lies out in the land of entrepreneurial private capital. The reality is demonstrably very different. It is not that entrepreneurs do not play a vital, indispensible role, but that they are enabled to do so in the context of a web of connections that cut across public and private. Many of the most profound market transformations and technological innovations hav e been born in the public sector and could never have been born under the conditions of venture capitalism. Indeed, the neoliberal project of handing over resources to the venture capitalists from the public domain has been pretty uniformly disastrous in its impacts. For example, the slashing of capital gains taxes since the Seventies not only in the USA, but in Brown's Britian (for example) has not boosted investment, it has boosted cash hoarding and profit taking, including buy back of shares as an utterly unproductive way for companies to use up their idle cash hoards.

Public investment, far from pushing out private enterprise, facilitates it and complements it. The countries that collapsed after 2008 were not the ones with greatest public debt, but the ones with least public investment.

If we want to see an economy that is inclusive and sustainable, then neoliberalism is a disaster and has to be replaced with a more intelligent and democratically directed approach to making and delivering economic polichy.

But there is far more to this talk and I may even have captured it poorly. See for yourselves - those with open minds.

Originally posted by finnegan
https://www.youtube.com/watch?v=DZ7A1aIPxqM

This video shows a talk by Professor Mariana Mazzucato, who sets out the case for a new economics in the lght of the failure of neoliberal economics, as demonstrated in the theoretically impossible 2008 collapse of the global financial system. Her arguments and (largely American) examples should be of great i ...[text shortened]... o this talk and I may even have captured it poorly. See for yourselves - those with open minds.

Jesus Finegan. get a girlfriend or find a hobby of some sort.

Originally posted by FishHead111
Jesus Finegan. get a girlfriend or find a hobby of some sort.

I don't think you were his target audience Sam.

Originally posted by finnegan
https://www.youtube.com/watch?v=DZ7A1aIPxqM

This video shows a talk by Professor Mariana Mazzucato, who sets out the case for a new economics in the lght of the failure of neoliberal economics, as demonstrated in the theoretically impossible 2008 collapse of the global financial system. Her arguments and (largely American) examples should be of great i ...[text shortened]... o this talk and I may even have captured it poorly. See for yourselves - those with open minds.

A good example of the concept is what happened after Sputnik flew overhead, culminating in one giant leap for mankind and lots of technological advances resulting in the creation of Silicon Valley, with government funded work at Stanford’s Applied Electronics Lab, Lockheed and Hewlett-Packard.

Well, to de-Americanize it a little and recognize its forerunner, we have to look at German rocket technology coming out of WWII.

Originally posted by JS357
A good example of the concept is what happened after Sputnik flew overhead, culminating in one giant leap for mankind and lots of technological advances resulting in the creation of Silicon Valley, with government funded work at Stanford’s Applied Electronics Lab, Lockheed and Hewlett-Packard.

Well, to de-Americanize it a little and recognize its forerunner, we have to look at German rocket technology coming out of WWII.

I tend to see it as not so much technological advancements, but as endless money pits. Since sputnik, few advances that could not have been made without space exploration have been made. I understand that miniaturization, smaller lighter electronic devices migrated into consumer electronics, but as I see it, they probably would have made it there sooner if that was the focus.

Originally posted by normbenign
I tend to see it as not so much technological advancements, but as endless money pits. Since sputnik, few advances that could not have been made without space exploration have been made. I understand that miniaturization, smaller lighter electronic devices migrated into consumer electronics, but as I see it, they probably would have made it there sooner if that was the focus.

Counterfactual history is whatever we want it to be.

As I said, the video would interest someone open to different thinking in economics. Obviously a debate based on not watching it has nowhere to go. Bye.

Originally posted by normbenign
I tend to see it as not so much technological advancements, but as endless money pits. Since sputnik, few advances that could not have been made without space exploration have been made. I understand that miniaturization, smaller lighter electronic devices migrated into consumer electronics, but as I see it, they probably would have made it there sooner if that was the focus.

GPS.

Originally posted by JS357
Counterfactual history is whatever we want it to be.

Sure I understand that what ifs will always be less convincing than what actually happened, but overall nobody predicted the progress of the last century.

Originally posted by DeepThought
GPS.

I think that would be covered by my original disclaimer, smaller, lighter electronics. Besides, Sputnik and most satellites up today are not truly in outer space, but in near earth orbits. We might have gleaned the same from high altitude planes, or even weather balloons.

Originally posted by normbenign
Sure I understand that what ifs will always be less convincing than what actually happened, but overall nobody predicted the progress of the last century.

I think the (or one) point of this thread is summed up in "The public sector as a mere fixing mechanism to repair market failures is insipid. It implies that all of the creative energy and drive lies out in the land of entrepreneurial private capital. The reality is demonstrably very different."

I suppose we are separated by having different intuitions or views of the speed and variety of the technologies that came about due to the government-funded cold war programs, mainly in electronic warfare and signals intelligence, and the space race, would have come about without it. But Finnegan has a point, in that creative energy and drive was demonstrably alive and well in a government-funded environment. The genius of those in government and in the emerging private sector of venture capitalism was to see that as the government's political objectives were met, they it was time to transition from public to private sector funding. After some basic advances were funded by corporate investment, venture capitalism became the way to go.

Maybe nobody predicted it because nobody believed one or both of the following:

- That a government-funded enterprise of that magnitude could be so technologically successful and fruitful.

- That the private sector would develop (or adapt) venture capitalism as a financing instrument (there is more venture capital investment activity in the Silicon Valley than anywhere else in the world.)

I suggest

http://steveblank.com/secret-history/

which I am just getting into.

Its chapters are:

The Secret History of Silicon Valley – Backstory

Part 1: The Vietnam War
Part 2: B-52’s and the Soviet Air Defense System
Part 3: Bill Perry/ESL and the Cold War
Part 4: Undisclosed Locations
Part 5: Silicon Valley, the 2nd 100 years
Part 6a: The Endless Frontier: U.S. Science and National Industrial Policy
Part 6b: Stanford, Terman and WWII
Part 7: Stanford, Terman and the Cold War
Part 8: Stanford and the rise of Cold War Entrepreneurship
Part 9: Stanford and Electronic Intelligence
Part 10: Stanford and Weapons Systems
Part 11: The Rise of Venture Capital
Part 12: The First Valley IPO’s
Part 13: Startups with Nuclear Missiles
Part 14: Spy Satellites in Silicon Valley
Part 15: Lockheed – Silicon Valley largest employer
Part 16: Balloon Wars

The chapter on venture capital is interesting.

Originally posted by JS357
I think the (or one) point of this thread is summed up in "The public sector as a mere fixing mechanism to repair market failures is insipid. It implies that all of the creative energy and drive lies out in the land of entrepreneurial private capital. The reality is demonstrably very different."

I suppose we are separated by having different intuitions or v ...[text shortened]... ey largest employer
Part 16: Balloon Wars

The chapter on venture capital is interesting.

Venture capital is not going to touch what is in the government domain. It is a loser, without the approval of government, so it is understandable that their money and effort will go elsewhere. What is the fastest growing, least regulated sector? IT.

Originally posted by normbenign
Venture capital is not going to touch what is in the government domain. It is a loser, without the approval of government, so it is understandable that their money and effort will go elsewhere. What is the fastest growing, least regulated sector? IT.

Silicon Valley venture capital became the way to fund and commercialize technological developments that the government had funded and used in the cold war and space race. But you are right that it was turned over, it did not remain in the government domain.

The private sector influences government programs through lobbying and other means, where the distribution of favors to congress (junkets, contributions to campaigns and even jobs for retired congress members) by such as the Koch brothers gaining support for pipelines and subsidies and such. The US economy is a sometimes rocky marriage of public and private.

Originally posted by JS357
Silicon Valley venture capital became the way to fund and commercialize technological developments that the government had funded and used in the cold war and space race. But you are right that it was turned over, it did not remain in the government domain.

The private sector influences government programs through lobbying and other means, where the distrib ...[text shortened]... ines and subsidies and such. The US economy is a sometimes rocky marriage of public and private.

sometimes a rocky marriage's best end is divorce.

Originally posted by finnegan
as demonstrated in the theoretically impossible 2008 collapse of the global financial system.

Where did you get that piece of propaganda from? No rational person ever thought it was 'theoretically impossible'.