The value of everything : making and taking in the global economy /

Enhanced descriptions from Syndetics:

Modern economies reward activities that extract value rather than create it. This must change to ensure a capitalism that works for us all.

Shortlisted for the FT & McKinsey Business Book of the Year Award

A scathing indictment of our current global financial system, The Value of Everything rigorously scrutinizes the way in which economic value has been accounted and reveals how economic theory has failed to clearly delineate the difference between value creation and value extraction. Mariana Mazzucato argues that the increasingly blurry distinction between the two categories has allowed certain actors in the economy to portray themselves as value creators, while in reality they are just moving around existing value or, even worse, destroying it.

The book uses case studies-from Silicon Valley to the financial sector to big pharma-to show how the foggy notions of value create confusion between rents and profits, reward extractors and creators, and distort the measurements of growth and GDP. In the process, innovation suffers and inequality rises.

The lesson here is urgent and sobering: to rescue our economy from the next inevitable crisis and to foster long-term economic growth, we will need to rethink capitalism, rethink the role of public policy and the importance of the public sector, and redefine how we measure value in our society.

Table of contents provided by Syndetics

• Acknowledgements (p. xi)
• Prefacet Stories About Wealth Creation (p. xiii)
• Introduction: Making versus Taking (p. 1)
• Common Critiques of Value Extraction (p. 4)
• What is Value? (p. 6)
• Meet the Production Boundary (p. 8)
• Why Value Theory Matters (p. 11)
• The Structure of the Book (p. 15)
• 1 A Brief History of Value (p. 21)
• The Mercantilists: Trade and Treasure (p. 22)
• The Physiocrats: The Answer Lies in the Soil (p. 28)
• Classical Economics: Value in Labour (p. 33)
• 2 Value in the Eye of the Beholder: The Rise of the Marginalists (p. 57)
• New Times, New Theory (p. 58)
• The Eclipse of the Classicals (p. 59)
• From Objective to Subjective: A New Theory of Value Based on Preferences (p. 60)
• The Rise of the 'Neoclassicals' (p. 62)
• The Disappearance of Rent and Why it Matters (p. 71)
• 3 Measuring the Wealth of Nations (p. 75)
• GDP: A Social Convention (p. 76)
• The System of National Accounts Comes into Being (p. 83)
• Measuring Government Value Added in GDP (p. 85)
• Something Odd about the National Accounts: GDP Facit Saltus! (p. 90)
• Patching Up the National Accounts isn't Enough (p. 98)
• 4 Finance: A Colossus is Born (p. 101)
• Banks and Financial Markets Become Allies (p. 103)
• The Banking Problem (p. 104)
• Deregulation and the Seeds of the Crash (p. 110)
• The Lords of (Money) Creation (p. 115)
• Finance and the 'Real' Economy (p. 117)
• From Claims on Profit to Claims on Claims (p. 122)
• A Debt in the Family (p. 127)
• 5 The Rise of Casino Capitalism (p. 135)
• Prometheus (with a Pilot's Licence) Unbound (p. 137)
• New Actors in the Economy (p. 142)
• How Finance Extracts Value (p. 146)
• 6 Financialization of the Real Economy (p. 161)
• The Buy-back Blowback (p. 162)
• Maximizing Shareholder Value (p. 165)
• The Retreat of'Patient'Capital (p. 171)
• Short-Term ism and Unproductive Investment (p. 174)
• Financialization and Inequality (p. 177)
• From Maximizing Shareholder Value to Stakeholder Value (p. 183)
• 7 Extracting Value through the Innovation Economy (p. 189)
• Stories about Value Creation (p. 189)
• Where Does Innovation Come From? (p. 191)
• Financing Innovation (p. 195)
• Patented Value Extraction (p. 202)
• Unproductive Entrepreneurship (p. 206)
• Pricing Pharmaceuticals (p. 207)
• Network Effects and First-mover Advantages (p. 213)
• Creating and Extracting Digital Value (p. 219)
• Sharing Risks and Rewards (p. 222)
• 8 Undervaluing the Public Sector (p. 229)
• The Myths of Austerity (p. 233)
• Government Value in the History of Economic Thought (p. 239)
• Keynes and Counter-cyclical Government (p. 241)
• Government in the National Accounts (p. 245)
• Public Choice Theory: Rationalizing Privatization and Outsourcing (p. 249)
• Regaining Confidence and Setting Missions (p. 259)
• Public and Private Just Deserts (p. 263)
• From Public Goods to Public Value (p. 264)
• 9 The Economics of Hope (p. 270)
• Markets as Outcomes (p. 274)
• Take the Economy on a Mission (p. 277)
• A Better Future for All (p. 279)
• Bibliography (p. 281)
• Notes (p. 297)
• Index (p. 331)

Reviews provided by Syndetics

Booklist Review

British economist Mazzucato (Rethinking Capitalism, 2016) offers a fresh look at the meaning of value to the economy. She says value should be the center of all economic thinking. To her, this means value is defined by price set by supply and demand and as long as the activity accrues a price legally, it creates value. Since the economic crisis in 2008, Mazzucato notes that the rise of entrepreneurship, along with the past deregulation of financial industries, is fueling the fire of economic inequality and an economy without value. This skewed view, she notes, creates scenarios such as stagnant or falling wages for the majority of Americans, although the GDP has increased significantly since the 1970s, driving up wealth for only the elite. She also presents case studies, from Silicon Valley to Big Pharma, which drive home the disparity between value and perception of value. The book includes discussions on the wealth of nations, investments, inequality, government roles, privatization and more. This organized and easy-to-read book will appeal to curious readers as well as those interested in economics, investing, and public policy.--Jennifer Adams Copyright 2018 Booklist

Kirkus Book Review

A British economics professor is debunking again; this time, her target is the conventional wisdom that so-called wealth creators deserve to accumulate massive riches.In the consequential battle of perception between the makers and the takers, Mazzucato (Economics of Innovation and Public Value/Univ. Coll. London; The Entrepreneurial State: Debunking Public vs. Private Sector Myths, 2015) sides with the actual makers, those who struggle in an economy tilted in favor of the ultrawealthy. The author mixes easily accessible lay language with technical jargon as she constructs her case that investment bankers, multinational pharmaceutical companies, and other billion-dollar enterprisesas well as small tech startupsactually create little of societal value but reap outsized benefits. Meanwhile, laborers continue to be shortchanged. The result is widespread income inequality. As Mazzucato builds her argument, she expresses specific incredulity about the banking sector's self-serving statements about wealth creation. As recently as the 1970s, the author maintains, economists viewed financial institutions as merely transferring existing wealth rather than creating new wealth. The shift in emphasis caught on quickly, and suddenly, bankers were perceived as wealth creators. "If we cannot differentiate value creation from value extraction," writes the author, "it becomes nearly impossible to reward the former over the latter." She wants to convince those in power that so-called value-creating entities should be viewed as value-extracting entities and thus regulated accordingly. When Mazzucato cites specific corporations and individuals feeding at the trough of income inequality, readers will be able to see through the abstractions and grasp the theories dividing economists. She is especially eloquent when commenting on arrogant tech-giant billionaires such as Peter Thiel, who claims that his wealth accumulation occurred in spite of, rather than because of, government presence. Mazzucato characterizes the statements of Thiel and his ilk as "entrepreneurs good, government bad." Actually, the author argues, national, state, and local government agencies offer countless incentives to corporate employers.An accessible academic treatise worth understanding. Copyright Kirkus Reviews, used with permission.

Author notes provided by Syndetics

Mariana Mazzucato is professor in the Economics of Innovation and Public Value at University College London (UCL), where she directs the Institute for Innovation and Public Purpose. She is the winner of the 2014 New Statesman SPERI Prize for Political Economy, the 2015 Hans-Matthö-Preis, and the 2018 Leontief Prize for Advancing the Frontiers of Economic Thought. She was named as one of the "three most important thinkers about innovation" by the New Republic .

She advises global policy makers on innovation-driven inclusive growth and is Special Advisor to the EU commissioner for research, science and innovation. She is a coeditor of Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth and the author of the award-winning The Entrepreneurial State: Debunking Public vs. Private Sector Myths .