The Value of Everything: Making & Taking in the Global Economy

"Mariana Mazzucato is an economist at University College of London, and she’s not a renegade. She’s very well respected in her profession and is a consultant to numerous governments. She’s an advocate of growth, but she makes an argument in The Value of Everything that I think is critical. She says that in neoclassical economics, for the past 150 years, the idea of value has been tied solely to price. What people will pay became the sole determinant of value. Mazzucato goes on to say that for the first 300 years of economics as a science, certainly in the time of Adam Smith, people contested the idea of value. They saw value as related to the usefulness of a product, and argued about that value, for and against. What does a product provide society as a whole? What benefit? We’ve lost that discussion. She also argues that much of the innovation that comes about, which businesses use to create their products, was developed by governments. Space exploration—the moonshot—is an example. A lot of technical innovations created by the Defense Advanced Research Project Agency (DARPA) went into tech businesses and were used in products for those companies. Mazzucato also argues that there’s no difference, in economics , between value creation and value extraction. For calculating gross domestic product ( GDP ), if someone marries the babysitter, you’re hurting GDP because you’re removing the economic benefit of paying the babysitter. But if you pollute, you’re benefiting the economy because the cost of cleaning up the pollution gets rolled up into GDP. The way we define the success of the economy is contributing to the problems we have. I think if I were going to tie these books together, I would say they’re all looking at business as a unit within society, along with government and civil society, and that in this time, businesses have an obligation to make things and offer services that are useful and also address our problems. That’s the beauty of what Bhantnagar and Anastas are advocating for radical innovation. And when Kate Raworth gets going with the idea of doughnut economics, you see connections to the possibilities in circularity, where one company’s waste becomes another company’s feedstock. That creates enormous opportunities to reduce environmental harm as well as create social benefit. I think anything that awakens the imaginations of the people who are making things and offering services, rather than just trying to make everything 2 percent more efficient or less costly, is a good thing. All these books point us in the right direction. The Future of the Responsible Company is a massive rewrite of a book we did ten years ago. In light of what’s happened over the past decade, we feel strongly that business has a responsibility, as much as any other sector, to devote its energies to solving the problems we have and providing useful things at the same time. Our original book, The Responsible Company, was based largely on the experience of our first 40 years in business. One of its arguments was that a successful business has to be successful for its stakeholders. That includes the bottom line, but also the welfare of employees, customers, the communities we operate in, and also nature. I think we were one of the first to argue that nature is a stakeholder in itself for business. What makes a business responsible hasn’t changed. What has changed is the acceleration of the environmental crisis, and the social crisis attendant to that, the rising inequality and disruption that climate change has caused in many parts of the world. We felt the need to talk about the special responsibility of business to address the problems, and to talk about the ways and the places in which people can look to the future for meaningful and effective work to do the right thing. One thing we mention is the model of one company’s waste becoming another’s feedstock, and circularity of businesses that work together. They may be in very different markets, but their processes may complement each other. For instance, in Halifax, you’ve got a municipal solid waste plant that can recycle 95 percent of what comes in—including sandwich wrap, which nobody else can do. The spent brewery grains and wet garbage processed by the waste plant become free feedstock for a local business that raises soldier flies, whose waste provides feed for another local business, an organic on-land salmon farm. We wrote the new book to redefine the possibility of what a responsible company can do. For people who are interested in working for responsible businesses, what does the future look like?"