The economist Mariana Mazzucato has many fans because she misunderstands the role of the entrepreneur. Robert Habeck is also a supporter of her ideas. However, both of them are overlooking important facts.
Robert Habeck is a big fan of Mariana Mazzucato and named her as one of the “seven women who changed my life”. Mazzucato himself told the “Frankfurter Allgemeine Zeitung”: “I know that he reads my books and was influenced by them before he became a minister.” Mazzuacato has already spoken in the German Bundestag and the “Spiegel” published a cover story about her.
I first encountered the Italian economist’s theory a few years ago, when the “taz” journalist Ulrike Herrmann countered in a discussion that it was not Steve Jobs but the state that invented the iPhone – and that it is actually similar with all great inventions. Ulrike Herrmann is also one of Mazzucato’s fans.
Since I know the history of the iPhone’s creation quite well, it was immediately clear to me that she had not understood what the job of an entrepreneur is. Entrepreneurs are not necessarily inventors and usually not scientific researchers. They are more like artists whose creativity lies in turning something already into something completely new, namely products that offer benefits to customers.
It would be ridiculous to accuse Picasso of merely recombining existing colours or to accuse Karl Marx of merely remixing the theories of Hegel, Adam Smith and David Ricardo.
Dr. Rainer Zitelmann holds a doctorate in history and sociology. He has written and edited 29 books, including “Hitler: Self-understanding of a revolutionary”, “Capitalism is not the problem, but the solution”, “The 10 errors of the anti-capitalists” and his new book: “World tour of a capitalist”
All successful business people, whether Sam Walton of Wal-Mart or Bill Gates of Microsoft, did not develop the key ideas themselves, but rather took them from others. Most inventors, whether of Coca-Cola or of the operating system later known as MS-DOS, did not get rich from it. Those who became rich were those who knew how to develop a real business model from such ideas and satisfy customer needs.
The Coca-Cola recipe, for example, was invented by the pharmacist John Styth Pemberton. He had a laboratory in Atlanta where he produced medicines. One of these medicines was a “tonic” to which he added coca leaves and kola nuts. The medicine was supposed to help against headaches, tiredness, impotence, weakness and many other ailments.
The “tonicum” that he first offered in 1886 and which was initially just called “Cola” was a thick syrup. It was soon discovered that it tasted good mixed with water. However, Pemberton himself did not recognize the enormous potential that his invention had and so sold the company shares and the secret formula for Coca-Cola to several people, including Asa Griggs Candler, who founded The Coca-Cola Company in 1892 together with his brother and two other investors. Candler had only paid $500 for it. Entrepreneurs and inventors are not the same thing.
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The American economist Deirdre Nansen McCloskey and the Italian political scientist Alberto Mingardi have taken a critical look at Mazzucato in their book “The Myth of the Entrepreneurial State”. Their main criticism: Mazzucato cites individual examples where the state promoted great innovations and leaves out the far more numerous counterexamples where so-called industrial policy was completely wrong.
Of course, there are examples where the government has promoted great innovations. The two scientists write: “The problem with this cherry-picking, however, is that, given the gigantic increase in public spending since 1900, it would indeed be strange if none of these dollars were used to finance anything technologically relevant.”
Apart from the fact that listing individual examples where the state plays a positive role cannot be considered proof of the basic thesis, Mazzucato also presents some inventions, such as the Internet, as the direct result of state action, which they were not – as the authors show in the chapter “The Internet, for example, was not invented by the State”.
If politicians and civil servants were as brilliant as Mazzucato believes, they would have been filthy rich long ago, because they would be making all the brilliant inventions and innovations in the private sector and earning a lot of money doing so. As Ronald Reagan once said: “The best minds don’t work for the government. If there were any, the business world would poach them.”
Mazzucato and her numerous followers criticize private entrepreneurs who focus on short-term results and cling to an idealized image of politicians: According to this, politicians are people who only have the long-term, best interests of their country in mind. And they are so omniscient that they can judge better than entrepreneurs which innovations have a future and which do not. But we all know that real politicians are mostly worried about how they will perform in the next election and are significantly influenced in their decisions by thousands of lobbyists.
The number of projects promoted by “industrial policy” that later failed spectacularly is legendary. The illusion that politicians and civil servants are smarter than millions of entrepreneurs and consumers is childish. Of course, it is not only state projects that fail, but also most new products launched by private companies.
The difference: If an entrepreneur fails, he is punished by the market, and in the worst case scenario, he goes bankrupt. If a politician fails with an industrial policy measure, he will put even more taxpayers’ money into the project so that his mistake does not become obvious.