Thus, rather than relying on the false dream that ‘markets’ will run the world
optimally for us ‘if only we just leave them alone’, policy-makers must better learn
how to use efficiently the tools and means to shape and create markets, making
things happen that otherwise would not, and making sure those things are things
we need. Increasingly, this requires growth to be not only ‘smart’ but also ‘inclusive’
and ‘sustainable’.
It is, of course, important not to romanticize the State’s capacity. The State can
leverage a massive national social network of knowledge and business acumen, but
we must make sure its power is controlled and directed through a variety of accountability measures and diverse democratic processes. However, when organized
effectively, the State’s visible hand is firm but not heavy, providing the vision and
the dynamic push (as well as some ‘nudges’) to make things happen that otherwise
would not have. Such actions are meant to increase the courage of private business.
This requires understanding the State as neither a ‘meddler’ nor a simple ‘facilitator’
of economic growth. It is a key partner of the private sector – and often a more
daring one, willing to take the risks that business won’t. The State cannot and
should not bow down easily to interest groups who approach it to seek handouts,
rents and unnecessary privileges like tax cuts. It should seek instead for those interest
groups to work dynamically with it in its search for green growth and technological
change.
Notes
1 ‘Development banks’ and ‘State investment banks’ are used as synonyms throughout this
chapter.
2 In a Pareto equilibrium, no person can be become better off without another person
being made worse off.
3 Data on development bank investment in clean energy for 2013 was not available as of
the time of writing this chapter (May 2014), but they ‘are likely to have increased their
investment in clean energy in 2013’ (FS-UNEP/BNEF, 2014), despite a 14 per cent
decrease in the overall clean energy investments (i.e. including all sources of funding)
between 2012 and 2013.
4 Some green energy subsectors, such as on-shore wind power, are more technologically
mature than others, such as offshore wind power.
5 Online interview, available at: www.youtube.com/watch?v=x54bVuduggU. Accessed
24 June 2014.
6 The 2009 ‘Cash for Clunkers’ scheme – officially the Car Allowance Rebate System
(CARS) – was a US$3 billion car-scrappage programme that offered consumers a credit
of US$3500–US$4500 towards the purchase of a new, more fuel-efficient vehicles.
Throughout the programme, 700,000 cars had been traded in, with Toyota being the
biggest ‘winner’, as it accounted for 19.4 per cent of all trade-in sales (USDOT, 2009).
152 Mariana Mazzucato
optimally for us ‘if only we just leave them alone’, policy-makers must better learn
how to use efficiently the tools and means to shape and create markets, making
things happen that otherwise would not, and making sure those things are things
we need. Increasingly, this requires growth to be not only ‘smart’ but also ‘inclusive’
and ‘sustainable’.
It is, of course, important not to romanticize the State’s capacity. The State can
leverage a massive national social network of knowledge and business acumen, but
we must make sure its power is controlled and directed through a variety of accountability measures and diverse democratic processes. However, when organized
effectively, the State’s visible hand is firm but not heavy, providing the vision and
the dynamic push (as well as some ‘nudges’) to make things happen that otherwise
would not have. Such actions are meant to increase the courage of private business.
This requires understanding the State as neither a ‘meddler’ nor a simple ‘facilitator’
of economic growth. It is a key partner of the private sector – and often a more
daring one, willing to take the risks that business won’t. The State cannot and
should not bow down easily to interest groups who approach it to seek handouts,
rents and unnecessary privileges like tax cuts. It should seek instead for those interest
groups to work dynamically with it in its search for green growth and technological
change.
Notes
1 ‘Development banks’ and ‘State investment banks’ are used as synonyms throughout this
chapter.
2 In a Pareto equilibrium, no person can be become better off without another person
being made worse off.
3 Data on development bank investment in clean energy for 2013 was not available as of
the time of writing this chapter (May 2014), but they ‘are likely to have increased their
investment in clean energy in 2013’ (FS-UNEP/BNEF, 2014), despite a 14 per cent
decrease in the overall clean energy investments (i.e. including all sources of funding)
between 2012 and 2013.
4 Some green energy subsectors, such as on-shore wind power, are more technologically
mature than others, such as offshore wind power.
5 Online interview, available at: www.youtube.com/watch?v=x54bVuduggU. Accessed
24 June 2014.
6 The 2009 ‘Cash for Clunkers’ scheme – officially the Car Allowance Rebate System
(CARS) – was a US$3 billion car-scrappage programme that offered consumers a credit
of US$3500–US$4500 towards the purchase of a new, more fuel-efficient vehicles.
Throughout the programme, 700,000 cars had been traded in, with Toyota being the
biggest ‘winner’, as it accounted for 19.4 per cent of all trade-in sales (USDOT, 2009).
152 Mariana Mazzucato