on climate and health, the need for “a new proactive approach”

How to rethink capitalism by drawing lessons from the pandemic and the crises it has engendered? This is the reflection led by the Italian-American economist Mariana Mazzucato. In an interview with RFI, the president of the WHO Council on the Economy of Health for All advocates a new approach to government action and public-private relations, as the opening opens this Sunday in Berlin , the World Health Summit.

RFI: In your last book Mission Economy, a moonshot guide to changing capitalism, you insist on how governments must rethink their role in market economies. Why ?

Mariana Mazzucato : I think this approach is relevant in the situation we are currently experiencing with the Covid-19. But it is also more general for economic and societal issues, such as climate change or the digital divide. In fact, we have governments on the one hand, and businesses on the other, each having a problem with how it works. In the case of governments, which is the subject that interests me, they only intervene when the market economy has failed, so they wait until there is a failure to come and solve the problem or they wait until there is a failure. have even a worry about a possible failure.

So if you want to intervene on the issue of climate change or on access to health for all, on the issue of vaccine accessibility, you need a new, proactive, proactive approach. It is about shaping and creating these market economies, in collaboration with businesses. Not just repairing, because if you’re still into the idea of ​​repairing, you’ll always be running behind schedule.

In the case of Covid vaccines, not only do we need public investment, but we also need to regulate innovation and production, to be sure that this will benefit the greatest number. So the issue of patents is really crucial. And if governments do not have an active part in the production of its patents, we will have a system where innovation benefits from this public money without compensation and where behavior will be focused on the search for profit and profitability at home. large groups such as Pfizer.

Do you think governments are not taking enough risks in economic matters? ?

In fact, there are different kinds of issues, because even in the United States, where the government takes risks all the time and invests $ 40 billion every year in the healthcare innovation sector, there is no is no real regulation to ensure that it will benefit what I call the “common good”. If you put money into the system, whether it’s a bailout for businesses or renovating a health system or climate action, if you don’t take it. active participation, you will not make the economy more sustainable and inclusive, and there will be no positive impact for the people who took part in this process.

Thus, problems that affect the social in general are not treated as emergencies. Our public policies are not considered and we do not reflect on their interaction with the private sector. All this lacks complementarity and effectiveness. And it has nothing to do with being a big or a small country.

In my last book Mission Economy, I studied the space program to the moon in the 1960s in the United States. This has benefited from both public and private money. And NASA set its conditions from the start. She knew how she was going to write her contracts with the private sector, there was even a clause that specified: no excessive profits! So of course you can make a profit because you don’t go to the Moon out of philanthropy but you have to share both the risk taking and the successes, and you don’t have to make a giant poker game out of it, which happened I think in most of our industries and our lines of business.

Some governments – including the French government have spent a lot to help the private sector get through this pandemic, while on the other hand the health sectors in these countries are still suffering. Does this have to do with the value we place on care in general and the investment we are willing to put into it? ?

Yes, this pandemic turned out to be much worse than it should have been, because overall we have not strengthened our health systems enough. All too often they are associated with the notion of “cost” rather than that of an investment that could make our economy and our society stronger. This has two consequences: of course we must learn from this pandemic and invest more heavily in our health systems. If the Covid-19 had appeared in Africa and not in China, it would have been much worse, because African countries often have a much too weak health system … This is also the case in other developing countries.

The other lesson from the pandemic is that these bailouts for the private sector should come with strings attached for businesses. I think the French Minister of Finance [Bruno Le Maire] should be applauded for imposing counterparties on groups such as Renault or Air France, who had to commit to reducing their carbon footprints in exchange for this aid. While in other parts of the world, governments have distributed this aid unconditionally. Suddenly, money flowed from public to private encouraging profit, without this money being redirected into investments that make our economy better.

We must learn to specify in contracts with companies certain conditions such as that of building together a more inclusive, more sustainable economy, certainly driven by investment and innovation, but in the direction of a greener and more resilient economy.

More than 100 countries have recently agreed to impose a minimum tax of 15% on companies that make a lot of profit. Do you think this is going in the right direction? ?

Yes it is really the minimum that we can do! It’s even crazy that we have to make it a topic of discussion. Moreover, a taxation of only 15%, it remains very low… During the mission to the Moon, the tax rate under Eisenhower, who was a Republican president, could go up to more than 90%! There is a myth that too much corporate taxes will prevent investment and innovation, which is totally wrong. What matters is which innovation system and which governance mechanism prevails in the structures which innovate, but also at the level of public finances. So yes, this global tax is going in the right direction, but it can be circumvented: most of the income of these companies is harvested through stock options, so the main change we need is to be able to tax the companies. capital income and dividends. This would have a huge impact and allow governments to reap their due!

It should be understood that everything in our smartphones has been financed by public money! Internet, GPS, Siri, touch screens… So of course, it’s important that companies like Apple – which has a sense of design and skills – can use these technologies and produce objects such as the iPhone or the phone. ‘Ipad. But to continue to believe that the state played no role in the creation of these products is to allow these companies to continue to advocate for paying less taxes. The moment you admit that these companies benefit from a colossal sum of money from public and state money, corporate taxation becomes unstoppable.

Finally, let’s come back to the issue of climate. The ecological transition we are currently experiencing is completely changing our economies. Do you think that governments must also change their relationship with the market and with businesses so that this transition goes as well as possible?

Climate issues have been a concern since the 1970s, but there is little change. We talk a lot but we do little. What we need, both on the supply and demand side, are much more aligned policies. For example in the purchasing policy of governments. Whether it is for meals in schools, the construction of a bridge or for beds in hospitals, the choice must be conditioned by the ecological impact of the offer of each provider. Public markets are a very big part of every state’s budget, so if you want to get the most out of every penny, euro or dollar you invest, even better! And that goes for all the expenses of the nation. Not only for the Ministry of the Environment but also in the fields of health, education and defense. If we want to see them under a more ecological spectrum, that would cause a great transformation.

And it is the same for companies, where it is a question of sustainable development but it often remains on the periphery, in the way in which they create value. And this has no impact on the way of producing, distributing and even consuming because we do not put this question at the center of the value creation mechanism. So I think that the central question of the COP26 but also of the G20 is that if we want to go quickly, and the last report of the IPCC [le Groupe d’experts intergouvernemental sur l’évolution du climat, ndlr] tells us that we only have seven to eight years to act, we need to put this issue at the center of how we generate economic growth. It is not a question of degrowth, it is a question of complete transformation of the economy. How we structure our production systems, whether at government level but also of course at the level of our companies.


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