Writing on Substack, economist Mariana Mazzucato argues that replacing a leader is not enough. Labour needs a much clearer and more ambitious economic vision.
Mazzucato is well known for her influence on progressive economic thinking, and Australian Treasurer Jim Chalmers has spoken admiringly of her work. She has also worked on a transport plan with Andy Burnham, reflecting her practical engagement with policy design at the regional level. It will be interesting to see what if any role she plays in working with a Burnham government.
Her central argument is that governments should stop seeing themselves as passive referees fixing “market failures” and instead become active shapers of markets and economic direction.
She argues that economic growth is not just about the rate of growth but also its direction. Growth should be driven by long-term investment in areas that serve the common good: clean energy, public transport, housing, education, research, health and new technologies.
According to Mazzucato, decades of neoliberalism have left governments too focused on being “business-friendly” rather than working with business to solve major national challenges. Public support for private firms—whether through subsidies, loans, procurement contracts or public ownership—should come with conditions attached: innovation, decarbonisation, better jobs and fair sharing of the rewards.
She is particularly critical of austerity economics. Public investment, she argues, should be viewed not as a cost but as a way of expanding future economic capacity. The real fiscal danger is often not investing.
Her vision is built around “missions”—large collective goals such as achieving net zero emissions, creating sustainable transport systems, improving public health, or ensuring every child has access to healthy food. These missions should cut across government departments and involve collaboration between government, business, researchers and citizens.
Mazzucato also argues that public institutions should share in the upside when public money helps create private wealth. If taxpayers fund innovation, taxpayers should receive some of the returns.
She is concerned about the growing financialisation of the economy, where too much capital circulates through finance and property rather than productive investment. She argues that companies should focus less on share buybacks and more on long-term investment, innovation and sharing productivity gains with workers.
On technology and artificial intelligence, she warns against allowing a handful of corporations to monopolise data and capture all the benefits of publicly funded research. Governments should play an active role in shaping technological development in the public interest.
Perhaps most importantly, she argues that citizens must be involved in designing economic missions rather than simply being consulted after decisions are made. Economic policy should be something people help shape, not something done to them.
The overall message is that changing leaders without changing economic thinking will simply produce the same outcomes. What is needed, she argues, is a “Common Good Economy”—one in which government, business and citizens work together to pursue shared goals, distribute risks and rewards more fairly, and create growth that is both sustainable and inclusive.
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