Mazzucato's new book calls for an economy built on the common good
Economist Mariana Mazzucato argues in a new book that governments must abandon decades of market-pleasing orthodoxy and actively direct investment toward climate and social goals.
Mariana Mazzucato, a University College London economics professor, has published a new book, The Common Good Economy: A New Compass. In it, she calls for a fundamental remaking of economic theory and government practice to tackle inequality and the climate crisis. She argues that current economic models have failed.
Her thesis represents a direct rejection of the neoliberal consensus that took hold in the early 1980s under Reagan-Thatcherism. Mazzucato argues this paradigm reduced citizens to consumers and forced governments to act as passive administrators rather than active market shapers. She wants governments to "get back their mojo" and stop cringing in the face of bond markets.
For policymakers hesitant to increase public spending, her message is unambiguous: strategic state investment does not spook investors. “I don’t know any government in the global north that has ever been penalised by the bond markets through a smart strategic investment strategy,” she says. She points to the UK’s Liz Truss, noting she was penalised for “having the most idiotic tax policy ever, it had nothing to do with investment.”
Mazzucato also rejects the traditional economic approach to climate change, which treats environmental harm as an "externality" to be fixed with carbon taxes. “In the old economics, doing good is a correction,” she writes. “In an economics of the common good, it is an objective we design and work on together.”
Unlike proponents of "degrowth" who want to scrap capitalist expansion entirely, Mazzucato keeps her ideas under a capitalist umbrella. “The problem is not growth, but that we’ve been growing in the wrong way,” she argues, warning that abandoning capitalism altogether would take too long to avert catastrophic heating.
The book arrives as a cautionary tale for politicians. Mazzucato was the thinker who inspired UK Prime Minister Keir Starmer’s five key "missions," now largely forgotten. Her judgment on his government’s lack of direction is withering. “Fine, come in, say the Tories were shit, but once you’ve said it, move on!” she says. “You’ve got five years, so what’s your plan? What’s the positive narrative? It was always half baked … [now] it’s half assed.”
To build this economy, she advocates for "pre-distribution"—ensuring citizens get a fair share of state investments upfront—rather than relying on later tax redistribution. She insists there is ample capital available. “There’s plenty of money, it’s just not directed towards anything, and government’s part of the problem,” she says. The goal, she adds, should be ambitious enough to make people dream.
