By Ibrahima Drame

Mariana Mazzucato’s work sheds much needed light on how taxpayer-funded research drives innovation in modern economies. In her latest book, The Value of Everything – Making and Taking in the Global Economy (2018), a title that reminds us of Oscar Wilde’s famous characterization of the cynic as the “man who knows the price of everything and the value of nothing”, she debunks the theory that private entrepreneurs are the sole risk-takers and creators of value in society and therefore the only ones entitled to reap the rewards of innovation.

According to Mazzucato, this theory has offered the rational justification for value-based pricing, a technique for setting the price of a product or service based on the economic value it offers to customers. This strategy allows companies to capture the maximum amount that a customer is willing to pay in order to significantly improve company profits.

Mazzucato’ s argument is not intended to berate the role of entrepreneurs, nor does it seek to exaggerate state intervention in the economic sphere. However, she stresses the need for a theory of value that acknowledges the role of government in funding innovation, not just that of the private sector and its celebrated entrepreneurs…