What is economic value, and who creates it? | Mariana Mazzucato

Where does wealth come from, who creates it and what destroys it? In this deep dive into global economics, Mariana Mazzucato explains how we lost sight of what value means and why we need to rethink our current financial systems -- so capitalism can be steered toward a bold, innovative and sustainable future that works for all of us.

[troypresley]

This is so spot on!
The financial sector does provide value through making investment liquid, which absolutely increases the amount of investment that the private sector is willing to risk on future production. BUT creating the conditions for liquid investments should never be confused with creating actual output.
The financial sector should be viewed as the lubrication system that allows the economic engine to function more efficiently, but to count “gains” in that sector in GDP is to double count the actual output created by the investment it facilitated, AND (maybe worse) overly reward the shifting of production profits away from workers.

[MetallicAddict]

I studied economics at Uni, and I kid you not, they had us learn about the Laffer curve as if it were empirical reality. Meanwhile, Laffer first came up with it by scribbling it on a napkin to argue against tax increases during a meeting with government officials, and the idea has never been borne out by the evidence. All this to say: our understanding of economics is a lot less science-based than people like to think, and it's high time we rethink the way we organize our economies across the world.

[dannypeixoto]

Wow seriously taken by surprise here. What a fantastic presentation of a much needed idea!
Truly impressed by her clarity and preparation. Her point is well explained and benefits from forgoing personal anecdotes and opinions. Historical context really grounds the idea and keeps the presentation from slipping into the hypothetical or idealistic.
Conclusions and applications are left for the audience to reflect on.

I often wonder how we as a society could possibly change the global economic direction in order to give more value to practices that have social capital, and incentivize global well being rather than just profit.
Fascinating, succinct and thought provoking.
Bravo. Thank you.

[tomasford]

My MBA professor told me to watch a TED talk about value creation. He 1000% didn't mean this one but thank everything I tripped over it. Perfectly elocutes so many things I haven't had words for. Thanks!

[freesk]

Over the long term, value was destroyed, not created, when the taxpayers were forced to bail out Goldman Sachs.

[ryana]

That was an epic takedown of how modern economics has been used to serve the interests of the sterile leisure class. Vague doesn't just mean price. So good.

[gkforeveryone]

This 18 minutes have more knowledge than 18 books on economy
Economics without people is soul less.
" Value and prices are not the same thing, they never will"

[danielalimacerqueiraarchil]

This is a mission oriented public policy that had its climax in the 50s and 60s - the man on the moon. Mariana Mazzucato is a high level scholar. She is many things, a mother, a chef de cuisine, married to a Italian filmmaker. But also a innovation economist, schumpeterian, evolutionary, Keynesian with a perspective on social history of technology and economics. So, the Entrepreneurial State is relevant for spurring innovation

[fgindia]

One of the best TED Talks I have listened to in a long time.

[sanketmarutiraosonawane]

I really liked the way she explained value creation and price.
Thank you for posting such nice content.
Regards,
Sanket.

[invox]

Should I be shocked?... Cuz I ain't.
This talk should have come 20 years ago.

[leffakis]

I find these talks encouraging and epic.

[piotrsauerbronn]

In reference to the comments made about pharmaceuticals and prices at @14:40. The same can be said to when a medication/"product" is no longer profitable and then is abruptly discontinued and the population is left without said medication/"product". This is currently taking place in several countries. This to me clearly highlights the end of the tall tale that unregulated free markets will meet depends. There must be governmental requirements that meet the needs of the people before the profits of corporations.

[HelloThere-xsss]

It's hilarious hearing people who push paper tell other people that they are more productive. I hear it every day

[jedics]

"We have a moral imperative to charge what the market will bare' says it all about the soulless corporate creeps we have slithering around making money at the expense of everyone and everything else.

[chrisweaver]

Interesting that this talk was done on the cusp of a pandemic that forced us all to reconsider the labor value of essential workers such as food producers, health care workers, teachers, etc.

[sarahcollins]

This is my biggest frustration about economics. They have absolutely no idea what value, wealth and money represent.

All of these things in one way or another represent work, the work put into something (value) the potential work that can be done with something (wealth) or the ability to direct work (money).

Ask a physicist what work is and they will tell you work is the result you get when you use energy to make something change (something you absolutely must do to provide any service or build any product) and energy is governed by the laws of thermodynamics.

Thus value, wealth and money are representations of energy.

The problem is this. The laws of thermodynamics means that every time energy is used a vast majority degrades, most energy is lost as heat (the ability to get more work out of the energy put in is efficiency or productivity as an economist would say) Only a small amount is embodied in the product (or person providing a service) such that more useful energy can be further extracted.

The problem is the energy degrades but money does not. So you end up with mountains of money accumulating in the hands of a few who are looking for productive ways to direct energy.

But out economies have been stagnating for years because the mass of people that want money and can direct it to producing things of value (i.e. need work or energy embodied in them) don't have the money. So the money just sloshes around in the FIRE sector not actually directing energy at all but instead accumulating.

Watch out if that accumulated money ever actually makes it out into the productive economy where it is used to direct energy because you will see massive hyperinflation as the money to available energy (think KJs) ratio will be completely screwed.

If we are to ever get the world economy back on track we need to eliminate the money sloshing around in the FIRE sector and realign value, wealth and money with energy and build in a mechanism that makes money degrade in the same way energy does every time it is used.

Economics sufferes as a science because it thinks it is divorced from the laws of nature. And the laws of thermodynamics govern everything in the universe, the human economic system is no exception.

You cannot blame the classical economists as the laws of thermodynamics were only just being discovered in their time. Modern economists have no excuse.

[dennipurbasari]

How can you speak with such speed and depth and still without losing your breadth and stop even for a second? Thumbs up.

[sirahmedia]

Its one of my reason to still watch ted x, thanks for everything

[seanjohnnn]

Great arguments delivered way too frenetically for me to comfortably engage with