Economist explains why Britain's economy is set up to fail | Mariana Mazzucato interview 

The NHS is probably the greatest example of an organisation suffering from tampering by politicians advised by business consultants. From the Salmon report to Lansley's obsession with outsourcing, resulting in longer waiting lists and a top-heavy management structure. [Politicians + business consultants = a fatal combination.]

People who pointed this out thirty years ago, were called communists, publicly attacked, cut out of the political process etc. Today we have witnessed the spoiled fruits of this bad policy, but we still have to deal with political opposition from the feeders.

Fantastic interview, and a really important book. Also, I really appreciate her genuine shout out to her Phd student who coauthored her book.

It doesn't take a lot to dismantle conservative economics as completely idiotic and self serving

Mariana Mazzucato is amazing. I could listen to her for hours! Thanks

The public sector was decimated was it? False. Public expenditure as a % of UK GDP in 1999/2000 was 34.9%. This ballooned to 44.6% in 2021/22. I fail to see the decimation

If the conditions of support have little to do with the survival of the business, aren’t they just creating the circumstances for the next bail out? Why have private companies at all? If a company fails for actual market reasons, bad management, or corruption, then those are the things that need to see change or just don’t give them funding. Our companies are all already overburdened with government mandates. Ideally, companies should pay employees wages and nothing else. Then, they should be providing goods and be responsible for harms they are causing. It seems to me, most the rest is best handled by people in government or other private actors. I’m afraid we now make the people who should be efficiently providing goods and services to also be experts in too many other things. Companies should NEVER be providing day care for instance, or unemployment insurance. Layering more and more of that on a company is just going to create more stagnation and failures leading to more bail outs and then more failures.

This goes back to the misconception of privatisation and developing a lean public sector. Come look at the aid and development industry (it is an industry) where the first law of a bureaucracy is to perpetuate itself thrives on poverty - the marketing of misery. Not fixed anything; in fact the demands for humanitarian intervention are growing at awful rates as climate change multiples poor governance (which then requires more consultancy because cannot trust government / governance)

The public sector management generally has grown into an absolute monster living off the backs of the private sector. They are effectively in charge of their own pay and conditions and don’t flinch at holding the public to ransom to improve their often cushy lifestyles.

This talk is excellent. Thanks for sharing it with us.

Her and Richard Murphy have the answers. There is all the money needed

She looks like Dean Ween. She speaks a lot of sense, by the sound of it. I'm glad she's written the book. The consultancy con has gone on for too long.

To many people make money but nothing of value… yet we blame the poor Technology made humans redundant in many ways but we’re still working on procurement for the basics, canny make it up hahaha

Is there evidence that Kier Starmers Labour party is , in fact , following this professors ideas, anyone know? I would find it a great relief if they were doing so to their core, I'm very worried about the future of the NHS in their hands .

Amazing interview, very inspiring guest

Quoting Che Guevara... Amazing

I wonder what Marianna's views are on the co-operative sector.

Problem:the "best" universities measure their success by how many grads get into constancy and finance.

To work like Mariana says we should would involve a wholesale reeducation of the government. Also can we change Consultancy with just outsourcing. When you realise how much of the UK industry relies upon government handouts of contracts etc. You realise how gutted the government is and how stripped of expertise they are. It would involve government about facing and taking responsibility for public services. Won’t happen under a Tory government, probably not with a no-spend Labour government either. So it’s a nice idea.

She favours more power to MAB - media academic bureaucratic complex. More central planning - been there, done that. No more thank you.

Many young people lack common sense and don’t have work experience , how the how can they offer decent advice ?

I used to discuss economics and politics in the pub with a guy who was a consultant, who lived by me. After much discussion, I eventually got him to admit that his main objective was to get more business from companies by telling them what they wanted to hear. If he should happen to tell them that their management systems and strategy were the cause of the company's woes, he wouldn't hear from them again, which he had experienced.

My younger brother worked as a consultant fresh out of university in a field totally unrelated to his education. There's no way he had any expertise to offer, he was hired because of class basically.

It's so interesting to see someone as intelligent and academically minded as Professor Mazzucato also be so engaging and charismatic. It's not that often that someone can combine those two aspects, which is so important because she can reach people with these important discussions who would otherwise not stay for dry discourse from the normal academic-type.

I believe a big part of the problem is the way our government views the population. It has a very low opinion of us. It doesn't value us highly, has no ambition for us, and worse destroys any ambition we have in ourselves. We deserve a government that can treat us with respect and warmth

Britain built its economy on the ready availability of cheap raw materials from its oppressed colonial empire. (For instance the Lancashire Cotton industry was built on the back of Slavery and prospered from Indian and Egyptian cotton). Once the colonies regained their long forbidden freedom, Britain was forced to pay fair prices for those raw materials and couldn't compete. Germany's colonial empire was of far shorter duration and Germany never became dependant on it the same way Britain became dependant on its own empire. Britain has drifted from one economic crisis to the next primarily because it has never restructured or come to terms with the reality that the empire is over. One remembers that before the Brexit referendum, EU sceptical journalists and politicians spoke of "reviving" the "Commonwealth". Even if Australia, New Zealand, Canada and (still White dominated) South Africa were willing (and all had long previously made alternative arrangements), Britain was "hoping" the Indians would "consent" to "British aid" (FWIW Indian "consent" was taken for granted and "British Aid" lead to the needless deaths of 100 million Indians in the late nineteenth and early twentieth centuries - while Britain prospered). Indians were expected to fill the expected labour shortages after the xenophobic Brexiteers "removed" the Eastern European immigrants who were then keeping the NHS and other British institutions staffed. Britain's economic woes will never end until they begin to recognise that (a) They are a relatively small island off the coast of Europe (b) They are NOT a World power. (c) They can only get by in the World in cooperation with their neighbours (d) Their neighbours are a very large Economic power, who can thrive very well without Britain. (e) Cooperation depends on humility and arrogance is a huge turn-off. As a descendant of the survivors of British imperial oppression, I must admit to enjoying the crap Britain and Britons are experiencing and can only say, "They've no one to blame but themselves".

Great public intellectual. Her book, The Value of Everything is great and this one sounds pretty wonderful. She is dead right about about consultancy. The dependency relationship is set up not to solve problems per se, but to continue using consultants. Insanity.

The NHS is literally spending their budget on over paid managers, paper pushers and D.I.E staff. Their budget has gone up 50 percent since the tories have been in power and they still can't get you seen in a reasonable time or pay the actual staff with the knowledge a decent wage. On their last budget increase, the government told them not to employ more managers, ect, but to pay the nurses they said no. Now they're encouraging strikes. It is private business being ran at loss but funded by the taxpayer. Theirs nothing socialist about our public heath service apart from the funding. Each gp, hospital region, dentists, care homes are private business already. The government has very little control.

I’ve seen one consultancy in action and it went like this: The Old School in a company who were experts were locked in a kind of war with the Business School Grads who knew very little, except HRM theory. The two sides could no longer talk to each other. So the Consultants passed on the Grads’ ideas to the Old School and the Old Schoolers’ ideas to the Grads. As there was some merit in both sides, the ‘Consultants’ Advice was very sound and the company did fabulously well. The Consultants earned a mint out of the company and no damage was done. They got credited with the company’s success. But had no ideas of their own at all. That was probably fortunate.

Civil Servants with the actual expertise of working in an area over many years being shoved aside for consultants with no domain knowledge who cost double their pay, yet CS can't get a pay rise that keeps up with inflation 🙃

She rocks, 5mins and I’m captivated👌

Really enjoyed this conversation, great insights and thought provoking words, great job everyone x

Enjoyed this about as much as I did last night when I watched it on Novara Media 😉

"Socialize the risk, privatize the rewards." Don't think I've ever heard Capitalism explained so clearly.

The sound mixing seems pretty poor in this video :(

Keir Starmer should reach out to this woman, she would be a real asset.

Nice to see some actual sense from an economist on the channel again. I know it's not your fault but Martin Wolf from the FT was fairly woeful. He got taken to the cleaners this morning by Kate Raworth and Bernie Sanders on BBC Start the Week. Worth a listen. I heard Mariana on Novara and now I'm listening to her audiobook :)

Everything's working very well for the super rich - broadly speaking the owners of the wealth that accrued from the $6 trillion share buybacks. Why should they allow these new perspectives and approaches to take root? Why would they allow the political class to let them take root?

Reality is, people in this country never had a voice, the industrial age came and living standards dropped so low people fought for change, late 1800’s men got the right to vote, early 1900’s women got the right. The Industrial Revolution started in Manchester, when all the manufacturing left the country, huge amounts of the economy were lost, because we had no industries, our government turned to privatisation, it brought initial capital back into the country but that wasn’t a sustainable solution to economic stimulus, with even less industry now and no solutions, we’ve voted to leave the EU. A lot of the Brexit vote came from post industrial areas that have never seen development since… our countries still reliant on the interest and infrastructure created from our industrial boom, now we have no industry, no national assets and now disadvantaged trade opportunities, if we start there as a basic understanding about where we’ve come from we can have better conversations about how to get out of it

If the problem is that companies have sought to maximise shareholder value since the 80s, what do you think they did before the 80s?

Great woman who speaks the truth and listening to her is a pleasure

"... socialising the risk and privatising the reward..." that's the mess of many modern economic models.

I have shared/posted and spread this one around a bit - very important content - I have been an NHS employee present during the use of consultants on more than one occasion. They NEVER make anything better. They burn a lot of money and they 'prove' the things we'd already told them. Mariana, thank you for at least telling our story.

How is this new concept of 'mission' different from 'aim' or 'objective' or 'target' or 'priority' or 'aspiration' or 'goal'? Surely they all mean the same? And what government does not want to pursue such things regardless of what they call them?

in a word: LOOTING of the public purse.

A consultant is someone who borrows your watch to tell you the time. An academic is someone who seeks truth through testing accumulated knowledge. A politician? A power hungry con artist pretending to serve the electorate? The process of consulting is distinctly different from employing a consultant. (Opinion only from someone who previously worked as a consultant.)

A lot of talk from the lady, but after her self promotion and a few sketches there appeared to be little of substance. So fragmented. Not the interviewers fault. Disappointing.

Consultants are just there to be kicked out when the job is done. No business/institution should be so dumb to think that outsiders can do it better. The sales manager makes a pitch full of enough buzz words (or lies or whatever) with the help of a senior (not nessesary an expert). Then when they get the contract they staff it with juniors, probably straight from university. For every junior you can basically flip a coin if he is smart enough to fit on the job or at best not stand in the way. The buzzword for this is cost optimization. Not value maximization. But when the project starts nobody wants to back down. So you get something, maybe it fits, maybe it goes directly into trash, maybe it was way more expensive. But to truely rethink you need obvious catastrophic failure, that sadly (luckily?) does not happen often.

If everyone becomes careerist then there is no incentive to do good for society or economic. Only career. In many meetings, be selfish is the message given out of non performant. More or more govt across the world taking defensive position and hence endorsement from big consulting firms. Govt are pushed to sidelines exactly as consulting firm put some employees on the sidelines for strange ideas or manners. In old days developing countries has no knowledge hence consulting companies had upper hand. No this companies are making western govt illeterate

The major problem behind all of this is that the money paid to consultants, advisors, private sector suppliers just disappears and there is never any traceability, follow up, adjustment, exposure and in fact the same agencies win contracts again and again. Pork barrel. Sickening.

I agree with this. I have worked for employers where I have advised them on issues and courses of action and have been ignored. They have paid consultants who have given the same advice and the company has acted.

All this was warned against 30 years ago but no-one took it seriously. Now Management Consultants are killing this country.

When I worked as a teacher we used to have consultants with power points talk to us about unicorns and fairies to help us teach. I can say they were as much use as a glass hammer.

There are many times over the past 5 or 10 years when i've asked myself, where are the people who really understand the modern economic problems? where are the experts and what are the actual solutions to the issues we face? It just turns out that the media doesn't spend any time promoting academics and current thinkers who understand modern issues at all, and for this reason i find myself enjoying this channel more and more, since it isn't confined by the ancient TV media rules. Oli always seems to ask pointed questions and gives interviewees a great space to discuss their views. Great job to everyone involved.

You have been getting some top interviewees recently. Excellent.

Getting some intelligent people with consultant skills, an outside perspective, and expertise to help is often helpful. Getting a horde of CHILDREN with zero life or work experience coming in at high cost to improve things ought to be a fireable offense. I’m not usually a fan of simple solutions that start with “Why don’t we just…”, but often that question is illuminating. So, why don’t we just limit the budget for consultants drastically and then figure out how we used to get by without so many of them.

Part of the problem of consulting is that the best way to climb the corporate ladder is often to jump between consultancies and the people they consult. Individuals are then incentified to bring in consultants to their company even if it's harmful because it might be beneficial for their own career prospects.

Can you stop doing that thing where you play a bit from the middle of the video at the start. It's really annoying to have to hear the same things twice.

Bought the book, arrived yesterday and looking forward to reading it! I worked in the automotive vehicle development industry and it resonates with me as I have worked for a consultancy and also as their customer about 5 years ago and I had the same experience mentioned, it's a very refined confidence trick the customer never gains the know-how but gets a tick in the box, young graduates get thrusted into expert roles, con-sultancies get a license to make money and gives something both parties to hide behind each other.

It's extremely easy to pick apart the Tory long term target. To bring colonialism back, but to these shores. There is an ongoing outpouring of undervalued skilled workers to countries that understand their worth and an inpouring of replacements whom English isn't a first language who are so glad to be here they would take almost any pay and conditions to please their 'masters'. Every time they get into power they dismantle something else and they'll continue until we have pockets of polarised people who share no common history or sense of identity to unify and tackle corruption.

Mazzucato is obviously brilliant, and her topic is crucial. On a related, perhaps slightly more general note: her point about using consultants as a rubber stamp on knowingly harmful decisions connects to a broad problem of fuzziness in institutional procedure and official justice, born of situational convenience to institutions and their stakeholders. When a decision is unattractively clinical and based in purely material considerations such as cost saving, blanket it in moral concerns. When a decision is based in ideology or moralism or bigotry, blanket it in procedural imperatives. Watch for this in courts, in accounts of corporate malfeasance and official violence and corruption. It is a shell game, designes in both directions to shield the naked power relations at the heart of inequity and harm.

"After being featured in a Financial Times article about how management consultants lack expertise in the areas they advise in, several prominent venture capital investors commented that such an accusation is akin to "the pot calling the kettle black." Although acknowledging that her accusation may be true, Multiple Capital founder Michael Jackson noted that "a person who has innovated nothing, who has never founded a company, who has never built a business, is in no position to advise governments or the European Union on innovation policy."" -well

I’m 4 mins in and I already have absolutely no idea what this professor is on about. Please can I have a alphabet pizza with this word salad that’s just been served up

Further issue is (lifeboating)the conflict of interest in the revolving door between mandarins and politicians (local and national) eloping (retiring) to positions with consultancies that they have used in office, which then utilise their connections to further consultancies reach.

Thank goodness for this. Someone has addressed this issue, it’s the first time I have felt there is a chance of change in this disjointed society. I wait to see these ideas materialise in to action.

Politicians aren't the sharpest tools in the box, they like binary choices because its easy: leaves them time to concentrate on career advancement and self enrichment. The media like the over simplification too, that leaves them time to promote an agenda without the distraction of too much real journalism. They've both framed the narrative for so long, it is generally accept to be the truth. Mazzucato looks with a fresh eye, no buying into the BS, suggesting possibilities that aren't framed by outdated doctrine, dogma, and embedded self interest.

"Che Guevara, a great smart man". Omg

Do we have “free markets”? No we don’t. In the US, monopoly and oligarchs control most of the economy. When I hear academics talk about markets I get confused. US business is completely dominated by predators. Investment in plant and equipment and R&D has collapsed while executive pay and stock buy backs have compromised our future. Consultants are hired to give advice that is desired by corporations and politicians. They are not free actors and they give opinions in accord with the people that pay them. If we want to reinvigorate our economy, we need to regulate capitalism and make sure that finance is used to direct capital to increasing productivity. The current system where empty finance dominates our economy must be stoped. The purpose of finance is to provide capital for business expansion. The hyper speculation caused by the out of control financial sector is not sustainable. She is right in saying that the public sector is too weak is correct. That said, we need to reward capital invested in sectors that will be vital for the future. We can’t compete with the Chinese and others who are actually helping the industries of the future get established. Dave🐝🐝

Can the production team work on the quality of the titles of these videos? What she has said in this interview is much more valuable and interesting than just the failure of the Conservative party.

I like this video of Mariana Mazzucato. So true and has been for the last 40+ years. I had an economist friend at university who looked at who generates wealth and who benefits. She pointed out the 97%/3% split of wealth, 97% of people sell their labor and 3% benefit from the other 97%... The wealth of the 3% is a drag on the world economy, the false view of trickle-down. Touted by the rich (and their Tory allies).

Says the economist who decries the dominance of markets. But it isn’t markets that imprison us, it is economics, and that is deterministic. Deviation from business as usual, for any goal other than reducing costs or improving efficiency is preempted, and if it gets further, promptly disciplined. Economics is an inescapable doom loop, and we’re in it.

People knock the NHS but it is incredibly underfunded. Easy to look at the metrics of spend per population/GDP for Europe. But some reform is needed for drain on resources to avoid time wasters - 1 pound access fee should do it.

"They're obviously not stupid, they're incredibly well educated people", says he. Well, that's a terribly flawed assumption which turned this interview into instant anticlimax. I'll give you a counter-example in point. Many moons ago a team of three software engineers from the Krakow polytechnic school, supposedly the cream of the best in their country, designed and developed a sizeable application which, once completed, required six months to initialize before going live... on a computer which had to be stopped every three months or so for important maintenance, specifically disk failures requiring replacement. In other words they had developed a "cathedral cover" - as we call this in the trade, i.e. a totally useless piece of software which couldn't be sold to prospective customers. Incredibly well educated people indeed... but so stupid.

I have not read her book but having watched this interview. I broadly agree with her stance but think that she is less aware of the reality of the entire industry and so I have some comments: 1. There may be a difference between Advisory and Consulting but there are definitely people with expertise/experience of government in these industries. Around 8.14 she conflates two contradictory ideas - a) the consultants don't have expertise and b) the civil servants are not developing the skillsets - someone must be developing these skills and logically it must be the consultants if they are doing the work 2. Civil service pay drives people into consulting/advsiory and outsourcing - there are quite a lot of ex civil service working in these areas, and these companies provide options and therefore bargaining power for civil servants. The government (and voters) shaft civil servants on pay, so it isnt difficult to offer them more money. A manager in the civil service is paid less than the grade below in a second tier consulting company... 3. The structure of the civil service provides little variety and a painful and arcane progression system - just another push factor for talented individuals 4. Outsourcing provides a whipping boy - in the event that something goes wrong you can blame the outsourcing company - if it goes wrong and it was the civil service the media crucifies them 5. This has meant that in some roles the civil service is becoming more and more focused on procurement rather than delivery 6. The covid test and trace system was new and no one had expertise and knowledge of it. Consultants are used all over government and are successful. The government has failed at large projects too - the NHS IT project being a famous example 7. Consultants are not con artists and governments are not stupid - people are making rational decisions based on the choices they face. The structure and pay of the civil service, the cover provided by consultants and the expertise that has fled to consultancies all drive their usage. Yes we can move away from using consultants but it would require reform of civil service organisation and employment structures and it would require pay increases and a better form of civil service pay bargaining going forwards. I dont see these things happening any time soon.

Being German I admire the UK for having had fought against the Nazis. For me the main reason of the economy in the UK is missing perfect education. We copied the French initiative where any education from kindergarten to the professor at the university is cost free. This includes the spirit to compete and use the intuition for invention with the aid of two scientific institutions, the Max Planck and Fraunhofer Institute. For me this is the tragedy why we see that the best of UK car industry is now in German hands. Once the British started the railway industry. How is it today ? Lastly we have the wrong mentality in the UK, the empire mentality which was the hidden cause of the great Brexit. In history all empires vanished because of their super arrogant mentality. Today the backbone of the UK economy are the Indians. Just think what would happen if all Indians in the UK would leave. So there are many levels which form the UK society and economy and the future does not look as we hope. Will writing books be able to change this tragedy?

Academics are not that trust worthy either… They need to fight hard to finance their research and they can’t displease those who pay for it… Also if you oppose the main stream ideas, you might find yourself out of a job…

The conflict of interest particularly in private firms doing what is best rather than acting in a self serving manner is why all the public sectors seem to be short changing the tax payer on the services they provide. You can see this whenever there is a big publicly funded project and the eye watering costs.

So, how do you select a coalition of the willing, selecting for expertise, when you yourself are not an expert? How do you test for expertise in an arbitrary area? Does it not boil down to prestige? Isn't this an argument to have an in-house expert for partner selection?

Economic investigator Frank G Melbourne Australia is still watching this very informative content cheers Frank ❤

Mazzucato pushes a narrative that the government knows best and there is greater wealth production from government than the private sector. It arises out of poorly observations that based on lack of a wide vision of the economy. This idea is blatantly false and proven so by the fact that government is a monopoly which taxes people in order to be operate. Those taxes are mandatory and enforced ultimately by the threat of bankruptcy and incarceration. It does not happen the other way around and private enterprise is not a monopoly and does not tax government and enforce it with bankruptcy and incarceration.

Missing the big point that "consultants" are not the problem, but the contracts they are offered are. The lack of appropriate SLA's to deliver the outcome the client needs is the issue. The fact this is not policed or held to account is not only the consultants fault. The simple cause is a client only knows it has a problem if it has the indicators designed to alert it to the problem which trigger actions to control the issue. Employing consultants can only supply the information requested and hope the client can understand it and act on it. If the client is acting on behalf of a third party such as government, then they need to be aware of the same SLA policing issue. Ironically life long academics are appointed to be academics by academics, so little new knowledge slips into their mindsets. She sounds well meaning, but would benefit from stepping outside of the "academic shroud" into more selfreflection.

Great interview. Many thought provoking remarks. I'm glad that a well known academic like Mariana publishes a book which points at the absurdity of the consultancy model.

I hate when people say young people gives you hope. Young people have no f.power at all and will not have any power until they're around 60 and controlling government and the economy

share buybacks are a decision, sure - in somuchas not deciding to do it would lower profit margins

I know the sound man should look and the camera man should listen... but FFS. The sound man needs to listen as well.

Fantastic interview, so interesting. Maybe get a new Sound recordist !

You can tell she's a feminist from how often she uses the word "problematic"

The state is a source of money, now that ordinary people have been cleaned out

Imagine an NHS, or any other public treasure, that was sequestered from ideological meddling at the hands of politicians and avarice-riddled one-percenters, an entity that could no longer be a political football.

Shame her microphone is consistently distorted! You guys need to get a new sound technician

Loved the Dominic Cummings comment. Reading something doesn't mean understanding it!

The answer to our failure of funding public services is Enthalpy rather than a simple two dimensional ratio of so called 'efficiency' Enthalpy is essentially the necessary energy for a chemical reaction to take pace. It is a waste of money to under-fund.

Money, personal profit as backhanders and corruption probably explains a lot in relation to non expert been given positions . Possibly

public and private should be symbiotic not parasitic.

My stupid ass thinking she was talking about The Weeknd being sent down from heaven 🤦🏽‍♂️

She is a lobbyist!! Reading up about her "institute(lobby group)" and their directors argue the State need to act as venture capital firm and co-invest in things her institute (and the companies who fund it) should be investing in. MO: don't give them money, give me the money

Your microphones keep clipping in these long-form interviews. Such a shame because it seems to be quite a good and informative interview.

Interesting that Mariana goes for "maximising shareholder value" in one of her first paragraphs; the inventor of the term, Neutron Jack Welsh ("Neutron" as at GE he got rid of all the people but left the buildings standing) apparently made a death-bed confession along the lines of "..when you think about it, maximising shareholder value is a pretty dumb idea". Of course he was retired and had stashed 100s of millions by then. Incidentally, always interesting how these things come out once the people involved in the policies are no longer in a position to change things! Thatcher's cabinet members Nick Ridley (UK housing shortage) and Nigel "Blubba the Gut" Lawson (UK industrial scale tax-dodging) spring to mind as two examples.....

When you mean England say it & not British, Scotland is different

16:00 Make government an investor of first resort instead of ...A lender of Last Resort. Taking risks instead of de-risking others.