Ideology and Reality in the Industrial Policy
Sottotitolo:The “entrepreneurial role” of the State in Mariana Mazzucato’s new book, and the regrettable case of Italy.
A new mythology has dominated the political culture of Western democracies over the last thirty years. In short, the inefficiency of the State in promoting economic development and the greater market efficiency.
Italy came late, but in the early 90s began a run that made the process of disengagement of the state and mass privatization much faster and deeper than that implemented by Margaret Thatcher. The mastermind was Mario Draghi, then Director General of the Treasury. The process went on during all the 90s sponsored by several governments, including the centre-left ones headed by Romano Prodi and Massimo D' Alema. Now, the process of de-industrialization is headed to the end with the dismantling of what remains of the largest manufacturing and services industry.
Over the years, Industrial policy has re-emerged silently from the shadows. The Western States practice it more and more, even though often proclaiming the contrary. Barack Obama did not have doubts about the rescue of General Motors and Chrysler with a government commitment of $ 25 billion, aimed to save the industry along with employment. To give some examples, it is worth remembering that Germany saved Volkswagen in the mid-90s, today at the top of the world auto-industry. As well as that, at the beginning of the current decade Nicolas Sarkozy, then finance minister of France, despite the accusation of protectionism and attempts to stop the intervention of the state by the European Commission, decided to rescue Alstom, a company famous, beyond the energy sector, for the construction of high-speed trains worldwide, from Europe to China.
Mazzucato highlights as the American research institutes, together with university scientific departments have enjoyed immense resources to develop basic and applied researches on the basis of plans drawn up by public institutions. Contrary to current opinion, which claims the role of the State as only apt to stimulate private initiative and to regulate markets, the state took an actual "entrepreneurial” role in the fields where innovation was more subject to uncertainty and risk.
Steve Jobs has indeed achieved a huge success for Apple products, applying his talents to product innovation. But this successful outcome - writes Mazzucato - would not have been obtained without the possibility of developing and interning the technological innovations due to the “prior collective and cumulative efforts driven by the State”. Similarly, the algorithm devised by Google was enabled by federal sponsored research programme.
Likewise, the progress in the field of biotechnology is the result of research networks of the National Institutes of Health, which drives US medical research. It is a matter of fact that without the development and implementation of challenging public programs, the new frontiers of biotechnology could hardly have seen the light.
The examples can be extended from nanotechnology as well as to renewable energy, where, beyond the hardware, it is critical the role of government in order to develop new markets, alternative to traditional energy sources - a field where not accidentally, Germany and China excel, on the basis of their substantive commitment to industrial policy.
The conclusion of Mazzucato’s analysis is that the State does not just encourage private initiative and regulate markets, once they exist, neither it limits its task to fund basic research. This is a "hypocritical” view, writes the author. The reality is that of a true industrial policy that unlike in the past, it is today an “hidden” industrial policy, not to come into conflict with the rhetoric of the withdraw of the State, in compliance with the dogma of efficiency and self-regulation of markets.
The ideology of the end of the economic role of the State is part of the neo-liberal rhetoric. But behind the rhetoric of the retreat of the State and of the market efficiency, governments have been obliged to maintain their programmatic and financial commitment in order to ensure the development of scientific research and new technologies in the field of “traditional” industry as well as of the new services. But – and unfortunately, as we have seen this is the case of Italy, - the rhetoric of the retreat has become the reference model of public action. The neo-conservative rhetoric has taken the place of strategy.
• Mariana Mazzucato, The Entrepreneural State – Debunking Public vs. Private Sector Myths, Demos, 2013.
Editor of Insight and President of CISS - Center for International Social Studies (Roma). He was National Secretary of CGIL; Member of ILO Governing Body, Member of the OECD's Trade Union Advisory Council and Advisor of Labor Minister for European Affairs.(firstname.lastname@example.org)- http://antoniolettieriinsight.blogspot.it/