A Moonshot Mission that misses its target Mariana Mazzucato recommends pouring money into problems that can't be solved

What makes the achievements of the Apollo programme all the more remarkable is that it only started in 1961. Men were walking on the moon by 1969. By way of contrast, the first phase of the HS2 high-speed railway began in 2009 — if we’re lucky it’ll be finished by 2029. So eight years to get to moon; 20 years to get to Birmingham. An unfair comparison, perhaps; but I can’t help feeling that we’ve lowered our ambitions. 

Mariana Mazzucato wants us to raise them again. In her new book, Mission Economy: A Moonshot Guide to Changing Capitalism, she argues that the state must lead the way. Certainly, she doesn’t have much faith in the willingness of the private sector to reach for the stars — not in its current state.

Even before Covid, things were bad: a decade of anaemic growth, poor productivity, wage stagnation and faltering innovation despite record low interest rates. Capitalism is stuck, she thinks — it needs is a metaphorical rocket. The economy must be re-energised by highly ambitious government-led projects. The state must become an active partner of industry — using its clout to shape and create markets that serve the public good.

She’s certainly picked her moment. Right now, our fates depend on a quest to vaccinate the world against Covid-19, and remarkable progress has been made. Not one, but several, vaccines have been developed in record time — and in most developed countries, vaccination programmes are underway (Britain has just passed 10% of the population while Israel is coming up to 50%). Though the vaccines were developed by private companies, they acted as part of a global effort in which political leadership and public investment made all the difference.

Given this triumph, why not embark upon more missions? Further technological breakthroughs would turbo-charge the recovery and provide the fuel for long-term growth.

The conventional objection is that if the state attempts too many “moonshots” it will distort the priorities of the market, “crowding out” private investment. Mazzucato’s riposte is that big business is already bent out of shape by its own bad habits. She shows that most private investment now consists of financiers financing other financial activities. For instance, “in the UK, 10 per cent of all UK bank lending helps non-financial firms; the rest supports real estate and financial assets.”

This is not capitalism, it is onanism — a sterile process of self-abuse in which the economy is deprived of the real investment on which sustainable growth depends. The system desperately needs a reboot — and, for Mazzucato, this is what a mission economy would achieve, not least by pulling capital into productive activities.

What, then, is stopping us from unleashing the transformative power of an ambitious, entrepreneurial state? Perhaps we’ve been conditioned by decades of neoliberal ideology? Mazzucato certainly thinks so. In particular, she points the finger at “market failure theory” (the state should only step in where the market fails), “public choice theory” (civil servants can’t be trusted) and “New Public Management theory” (the state should be made to work like the market). Then there are the policies that were inspired by those theories — privatisation, outsourcing, the Private Finance Initiative (PFI).

Like all ideologies, neoliberalism leaves a lot to be desired in practice. Mazzucato is particularly good on the dubious benefits of outsourcing government functions to management consultants and other carpetbaggers. However, the crisis in “state capacity” can’t be blamed on these flawed ideas alone.

The anti-tax campaigner Grover Norquist once said that he wanted to “reduce [government] to the size where I can drag it into the bathroom and drown it in the bathtub”. Well, he — and his fellow anti-statists — failed. Across the western world, government remains much bigger than a bathtub. Indeed, it accounts for at least a third of GDP in most countries — and often more like half. Furthermore, it dominates entire sectors like healthcare and education.

There are hundreds of thousands of civil servants in the UK alone and they control budgets worth hundred of billions of pounds. If our senior civil servants — hardly known for their libertarian tendencies — were minded to build-up the entrepreneurial, innovative capacities of the state, then they have ample scope to do so. It is they, not here-today-gone-tomorrow ministers, who determine the culture of the civil service.

Having experienced that culture at first hand, I can say that it is not one that encourages a spirit of enterprise. In fact, it’s the most creatively stifling environment I’ve ever worked in. There are exceptions to the rule, of course: individuals, teams and units who do things differently. But that’s just the point — they stand outside the civil service mainstream. Or, at least, they do until their distinctiveness is smothered by the system. If Mazzucato believes this is due to the lingering influence of Thatcherism, then I have a privatised bridge to sell her.

The ambitions set out in Mission Economy will not be fulfilled unless some parts of the state are allowed to be different from the rest of the state. Indeed, the best bit of the book is devoted to the ultimate example: the Apollo programme.

Generous long-term funding was of course crucial to getting a man on the moon — as was the political backing of the Kennedy, Johnson and Nixon administrations. But as important as the money and the power was the programme’s operational independence. NASA’s awe-inspiring feat of technological engineering was enabled by a feat of organisational engineering that is of direct relevance to us today.

Bringing together the many different technologies required for Apollo’s success would not have happened without seamless communication up-and-down the chain of command and also across the different departments working on each component. In this regard, NASA (specifically, the Office of Manned Spaceflight) was free to mould itself precisely to its mission instead of conforming to some pre-existing bureaucratic model. Furthermore, it was in proper control of its budget, its contractural relationships with key suppliers and, perhaps most importantly, its hiring policy.

It should be said that commercial contractors were also crucial to the mission’s success — NASA did not do everything in-house. However, as Mazzucato shows, in-house government expertise is a prerequisite for a fruitful partnership with the private sector, not something that can be replaced by it.

The lessons of the Apollo programme can be applied to the missions of our own time. Above all, if we want the state to make extraordinary things happen — then those parts of the state that we entrust with these missions must also be extraordinary. They can’t look like “normal” government, which is about maintaining the status quo not going boldly where no one has gone before.

But instead of going into these lessons, Mazzucato focuses on what today’s missions should be — and it’s here that she makes a mistake of astronomical proportions. Rightly, she argues that missions should be stretching, and also tightly defined. “Get a man to the moon and bring him back home again”, while enormously ambitious, was also specific. It is only because of this clear purpose and the obvious definition of success, that US government was able to grant an agency the funds, authority and independence to get on with the job.

However, the modern day missions that Mazzucato is most interested in are exemplified by the 17 Sustainable Development Goals of the United Nations. These are worthy goals, but they’re so broad in scope that it’s impossible to imagine a NASA-like agency being allowed to take charge of any one of them. Consider Goal 8, for instance, which is to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”. That’s not a “mission” — it’s a basic duty for the whole of every government in the world.

The sprawling challenges that Mazzucato wants the mission economy to tackle are what social scientists call “wicked” problems (as she herself acknowledges). The term was first coined by the design theorists Horst Rittel and Melvin Webber to describe the sort of problem that, among other nasty features, has no definitive formulation and no ultimate test of a solution. Government would not trust an agency — however capable — with the money and power required to complete such a mission.

Indeed, by definition, wicked problems are never truly solved. With no neat answers and multiple conflicts of interest, the best we can hope for is to muddle through. Muddling through is what the messy business of everyday democratic politics is about — not what we should surrender to the focused, expert endeavour of a state-led mission.

In the jargon, the opposite of a “wicked” problem is a “tame” problem — but that sounds rather unambitious. In deciding where the state should embark upon missions we’d do better to use EF Schumacher’s distinction between “convergent” and “divergent” problems. A convergent problem is one in which ongoing attempts to solve it eventually arrive at a single agreed answer (or at least a range of mutually compatible answers). The Apollo programme was therefore a convergent problem. So is the development of the Covid-19 vaccines. The same can be said for the climate policies that have incentivised dramatic reductions in the cost of clean technology.

If we choose wisely, such game-changers can indirectly contribute to solving wicked problems by making them tamer. For instance, the horrible trade-offs involved in the Covid lockdowns are more bearable now that a vaccination programme is underway. As for tackling climate change, there are fewer obstacles now that low carbon solutions are cost competitive with fossil fuels.

If, however, we choose to do things the hard way — taking on wicked problems without convergent solutions — then the mission economy is doomed to failure. As such, it doesn’t just need rescuing from the dried-up ideology of the free market Right, but also from the flaky politics of the progressive Left.

It’s telling that Mariana Mazzucato concludes her book with a grab-bag of fashionable, but badly thought-through, Left-ish ideas. They’re all in there — Citizen Assemblies, Modern Monetary Theory and Alexandria Ocasio-Cortez’s bonkers Green New Deal. There’s also room for some old favourites like “stakeholder capitalism” and “pre-distribution”. But the idea of a mission economy is too important to waste on magical thinking. It’s all very well-meant, but this sort of stuff wouldn’t have got Neil Armstrong out of bed, let alone to another world.

 

 

---