the value of everything

Gabriela Pinilla, The olive branch that did not germinate. Mural painting, 100 square meters, 2019, Bogotá, Colombia

By Eleutério FS Prado*

Commentary on the recently published book by Mariana Mazzucato

Here is, at first, a very enigmatic sentence: “this book turns to a modern myth: the creation of value in the economy”. Which book? Its about The value of everything: production and appropriation in the global economy, by Mariana Mazzucato. There, this author wants to critically discuss the narratives – this is the term she uses – about the creation and appropriation of value in contemporary society. The theme was central in the past, but in the course of the end of the last century and the beginning of the present century, according to her, it has been somewhat absent from economic theory. In any case, she thinks what is now required is “a radically different kind of narrative about who created wealth in the first place – and who subsequently extracted it”.

Why does value creation seem like a myth to you? Now, it is itself that provides the explanation. By using this word, he makes reference to a recommendation of Plato in the republic, according to which it is necessary to “watch the creators of fables”. Therefore, this author – and this should be clear right from the start – does not address the issue of economic value in the field of modern science, but from the perspective of a discourse that makes itself from itself, without being a prisoner of reality. and to the underlying real by official duty. Hence the remembrance of mythology and its vocation for transmitting moral lessons. She is not afraid to go back to ancient Greece, to a time when values ​​were supposedly disseminated by storytellers. That is, she takes Plato's teaching from a postmodern perspective since, according to her thoughts and as it should have already been clear, everything is resolved as a matter of narratives.

But why return to the question of value in such an emphatic way? Mazzucato – as well as many other economists in the system – seems to be disconsolate with the current course of capitalism. If this had promised much for two centuries, albeit very turbulent and punctuated by minor and major crises, now it disappoints as little productive, appropriating and only concerned with the pain of the rich – and not with the pain of the world. She would therefore like to see you changed and reinvigorated as a creator of wealth for many. And, for that, she believes that it is necessary, first of all, to reconsider the question of economic value, in order to clearly distinguish who produces it and who appropriates it.

It intends, therefore, to renew “the debate about value that used to be – and should be – at the heart of economic thinking”. Its objective, as is clear from the title of the book – is to make a distinction between activities that produce value and those that only appropriate it, with the aim of denouncing rentism as a disease that currently weakens the soul – but also , consequently, the very body – of the economic system. That system which Adam Smith had seen so incredibly born and flourished in the last third of the eighteenth century now seems to walk slowly and totteringly like a tired old man; thus, it has not been more capable of producing widespread prosperity even in the center of the globalized system. There, what you see, as he points out, is that “inequality increases while investment in the real economy decreases”. In other words, we are facing an income concentrating stagnation.

The distinction between productive and unproductive activities, between creation and extraction, and even destruction, of value seems crucial to him because he wants to make, from it, a critique of contemporary capitalism. More than that, because it wants to reorient it so that it serves the common good and not the enrichment of a few.

But, after all, what is value in your understanding? According to her, “value (...) in essence, is the production of new goods and services”. As services are goods consumed at the very moment they are produced, in short, value for her is the same as good. It is thus less than a definition, a mere tautology. But that's not all: as the term “good” is synonymous with the term “use value”, this successful author identifies economic value with use value.

However, how is it determined what is use value for human beings at a given historical moment? Everything that is accepted as such becomes a use value, everything that satisfies or seems to satisfy needs, whether they come, as Marx says, from the stomach or from fantasy. It is, therefore, the effective, material, concrete social practice that makes things become use values ​​– and not merely stories or narratives.

Mazzucato, moreover, also departs from the tradition of political economy in another way. He contradicts Adam Smith, since this author differentiates between “good” and “merchandise”, because merchandise is an economic good produced for the market – and not for own consumption. That is why he says of the commodity that it is use value and exchange value and proceeds to investigate what determines the exchange value of commodities in general – something that happens in markets, but which follows an occult law that he seeks to discover. through a theory of value. Smith, therefore, is situated in the field of scientific knowledge when dealing with the issue of economic value. He investigates social objectivity without just looking at how it appears.

In any case, this author does want to return to the issue of value in political economy. For her, it is not only problematic, but immoral to confuse the production of value with the extraction of value. “Its purpose” – he asserts – “is to change the state of things”, starting right away – as you can see – by stating that it is necessary to make a great revolution in the understanding of a word. For, “the way in which the word 'value' is used in modern economics has made it increasingly easy for value extraction activities to masquerade as value creation activities”.

Now, the displacement of this issue from the hard ground of social objectivity to the fluid field of moral philosophy, but still within the socially shared imaginary, has profound consequences. For, as we know, the latter is not freed from the appearance of things either – on the contrary, it labors subjectively. In any case, this is how she can distinguish “incomes” from “profits” through moral judgments: incomes, for her, are unearned income and profits are earned income. It is clear that this distinction – even in its perspective – cannot be based only on an arbitrary cut, but, in addition, it must be based on an understanding of value that is independent of mere opinion and that has some foundation in capitalism itself.

In any case, from his way of thinking, one must conclude that gains received by industrial capitalists are legitimate gains, but certain gains received by finance capitalists are not. Now, what content must a conception of value have in order to support this statement? Just saying that the former produce value, but the latter do not, does not seem to be enough – even if it seems to point to something relevant. There are, in addition, other dimensions of this problem that it wants to face, which must be made explicit before clarifying better how it seeks to solve it.

Behold, Mazzucato considers the State as the main inducer and even the great producer of technological innovations in capitalist nations. As they are sources of progress in the production of goods, the State must participate in its understanding of the world as a producer of value. As a result, against the unrepentant defenders of the market, central power figures in his study as a guide to markets, a compensator of inequalities and a guardian of progress. As the issue of value was posed by her within the discourse that is generated in society – and not in the field of scientific investigation into a historically posited reality –, she will conclude, explicitly against classical economists and Marx who discover value only in production of goods, that “the State can contribute to the idea of ​​value”.

But there is also for her the problem of producing social harm – what in English is called “bads”. What about, for example, the generation of pollution that often occurs along with the production of goods? For classical economists, pollution is a social burden that is generated because, by preying on nature, capitalism saves socially necessary labor for the production of commodities. It is an advantage that is obtained for free by the capitalists and that allows them to keep the value and current exchange value of commodities lower. Behold, its primary objective is the profit that comes from private ownership of the means of production and not the well-being of society.

For neoclassical economists, as pollution is not apprehended as such in the computation of the private cost of production, it does not seem to directly affect the market value of goods and services. This, according to her, is determined through the interaction between supply and demand. However, for them, this is a social damage that can indirectly affect prices. It is treated, therefore, as an externality – an unpriced encumbrance, but one that distorts private costs and affects the social costs of production, if not in the short term, at least in the long term. In any case, Mazzucato criticizes and disqualifies this theory: “instead of being a theory of value that determines price, there is a theory of price that determines value”.

But, for Mazzucato, these two ways of thinking about prices are deficient. Economic evaluation takes place within the scope of the world of life and must have as an essential attribute being morally fair. As a result, his judgment of social accounting currently done in capitalist countries is more severe.

Here is what he writes: “a new factory that is valuable from an economic point of view, but polluting, may be seen as not valuable”. That is, even if the valuation system extracted from the functioning system itself through markets treats this factory as valuable, a decent valuation norm should affirm it as not valuable. Everything happens as if it were, thus, pointing out a deficit of rationality in the way of evaluation that respects what the markets themselves present. Behold, they take prices as mere mirrors of the value of things, when, in fact, they themselves should reflect a fairer assessment.

It is beyond doubt that this author does not want to think through the concept, through the exposition of the concrete thought. Another, then, is her way. Note, however, the following: if reality is already always symbolic as you seem to think, it was posited through a material praxis and, therefore, contains within itself not only its objective truth but also its own ideology. And it is this reality, with its essence and appearance, that must be investigated and exposed with the utmost conceptual rigor. Well, she doesn't think so. It refuses positive thinking to fall into a supposed constructivist autonomy of language.

After presenting the objective value theories of classical political economy and the subjective value theories of the economic sciences in some detail, Mazzucato needs and wants to take up the question in another way. But it also draws on the old distinction between productive and unproductive activities of value. Having said that, it needs to face the problem of saying what to put in the first and what to put in the second. An evaluation process has to be created, since those provided by classical and neoclassical economic theories, even if they intend to be based on reality, seem insufficient.

The critique of political economy also failed, according to her, because it considered state activities as valueless. In her conception, value cannot be thought of as something that is created within the scope of the private company, but as a result of a collective process that involves multiple actors in the public and private sectors.

Roughly speaking, this is all that the main part of the book is about; it is preceded by a summary presentation of “value creation stories”. In the first two chapters, it exposes the two great currents of the theory of value mentioned. In the third, she critically discusses how the national accounting system defines productive economic activities. In chapters four, five and six, he examines the phenomenon of financialization, which presupposes a solution to the problem of separating productive and unproductive activities. In chapter seven, she deals with the value supposedly created by the generation of innovations. In chapter eight, she asks “why the public sector is always described as slow, dull, bureaucratic and unproductive”. Finally, in the ninth chapter, she deals with the “economy of hope”, in which she “calls the economy to a mission”, which is to build “a better future for all”.

Now it is necessary to examine something that she herself says at the beginning of the work and that seems astonishing at first: “this book does not seek to defend a correct theory of value”. Well, if you don't present a theory of value, how can you criticize contemporary capitalism, saying that it currently privileges activities that do not produce value? But that has an explanation and it was already outlined at the beginning of this review, which is not exempt from being critical. See, first, what she says in sequence: “instead, [the book] seeks to make [the issue of value] once again an area of ​​intense debate, relevant to the times of economic turbulence in which we live. we found. Value is not something determined, unequivocally inside or outside the frontier of production: it is something shaped and created”.

“Created and shaped”? Yes, implicitly, it means that value is created and shaped in a social practice that was previously structured through institutions. And only after it has been created can it be distributed and appropriated through the mechanisms of the economic system. Relying on Karl Polanyi, Mazzucato writes, then, that “markets are entities deeply rooted in social and political institutions”.

Markets are, for her, socially complex processes, which arise from the interaction of many actors, among which the government itself is included. But what lies behind the creation of institutions? A lifeworld that is continuously formed and reformed through linguistic interactions, which people produce and share through their subjectivity. Therefore, if one wants to change the economic world, according to her, one must start by changing the understanding of value.

For her, therefore, it is necessary to rethink this issue. He judges, then, that value is neither objective, that is, created in the material practice of human beings in productive activity, nor subjective, that is, something that occurs in the psychological head of individuals as such. It happens as a creation of the linguistic practice in which all humans are enmeshed from an early age, when they learn to speak, when they enter the symbolic order. Consequently, value, for her, is what is posited in the world of social life as value.

Consequently, he attaches enormous importance to the “performativity” of the value discourse. It is necessary to see that “the way we talk about things affects behaviors and, consequently, the way we theorize”. To change the world, because – it follows logically – it is only necessary to change how people talk about it, it is enough to make a revolution in the world of meanings, in such a way that this revolution becomes a “self-fulfilling prophecy”. Out of respect for democracy – meritorious, but mistaken – it simply wants to place the question of economic value in the field of discussion and communication between people. Because, for her, this is how the world changes.

Here is what she says: “once the narrative about value creation is corrected, changes can come…”. For, “in this new discourse (…), both public and private sectors, and all intermediary institutions, nourish and reinforce each other in pursuit of the common goal of creating economic value”. She says, but it is necessary to doubt: is this really how the world changes?

At this point, it is necessary to see that use values ​​– that is, values, for her – cannot be use values ​​in general, that is, for all those who live in a given society. By their very nature, use values ​​cannot be universal; on the contrary, they always depend on the evaluation of the usefulness of things, which is always private and individual. Thus, what is effective use-value for some will certainly not be use-value for others. Therefore, it is not logically possible to find what she is looking for, not only in a highly divided society like capitalism, but in any other society as well. What counts as a value in this sense will forever remain a controversial issue exempt from any criteria of demarcation.

Furthermore, a mere separation between what is valuable and what is harmful does not go very far. Value and damage, in this perspective, arrange the economic world under the criteria of good and evil, judge what produces well-being and what generates discomfort. It may allow the expression of dissatisfaction, exaltations and condemnations, but it does not produce a radical critique of the existing mode of production. To speak as a Lacanian, the concept of value that she deems necessary to change society should be of the symbolic order, but the concept of value that she uses – and which she identifies with that of use value – is of the imaginary order, even if it is not individualistic. Her project, therefore, is a dead end.

As can be seen, we are facing a theorization that does not want to be a science of the social as it exists and has been historically posited. Therefore, it does not deserve, therefore, great attention from the critics of capitalism, despite being guided by a humanism that cannot be dispensed with in the last analysis. “The value of everything”, that is, Mazzucato's book – in the thesis outlined here – is worth almost nothing as a contribution to understanding or criticizing capitalism. However, it is not yet another protest against austerity and financialization.

It lacks a scientific perspective that can deal with this complex object, that favors a critical praxis that not only reproduces what exists, but truly transforms it. Without an explicit, internally consistent theory of value that goes back to really existing capitalism – even if it may be wrong in principle like any scientific theory – one cannot distinguish between unproductive and productive activities and, thus, production from mere appropriation, one cannot criticize contemporary capitalism. And not even being able to transform it.

* Eleutério FS Prado is a full and senior professor at the Department of Economics at USP. Author, among other books, of Complexity and praxis (Pleiad)

Originally published on the website Other words.


Mariana Mazzucato. The value of everything: production and appropriation in the global economy. Translation: Camilo Adorno and Odorico Leal. São Paulo, Peguin Portfolio, 2020, 416 pages.


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