States as market creators

…and risk takers!

First, a personal note on some book club related ponderings of the recent past. Yes — the question shouldn’t just be “how could pioneering entrepreneurs be better supported financially, especially in the sense of reducing the burden of risk?” … or even, “how could the public sector better support private investors, so that they could take on more risk, sharing the pionoeer’s burden?” But instead,

Imagine — The state as an innovator, investor on behalf of green growth!

So many “thought diamonds” in this article by Mazzucato & Perez! Sharing three: “Governments, like innovative companies, must welcome rather than fear the failures that are inevitable when undertaking uncertain innovations.”

“It is important for innovation policy to be guided more by the need to actively shape and create markets than just to fix market failures”

“Today, as in the 1930s, both economists and politicians are increasingly concerned with the reluctance of finance to fund the real economy. As Keynes (1930:1931) wrote in ‘The Grand Slump of 1930’:

‘… there cannot be a real recovery, in my judgment, until the idea of lenders and the idea of productive borrowers are brought together again… Seldom in modern history has the gap between the two been so wide and so difficult to bridge.’