EMPHASIZING HOW INDUSTRIAL POLICY CAN BOOST economic growth, Mariana Mazzucato and her colleagues serve our economic policy debate well. More and more scholars, advocates, and top elected officials—led by President Joe Biden—support activist government economic policies. They want to mobilize economic forces against challenges such as climate change and in the process create jobs, innovation, and growth. But today’s discourse around industrial policy largely leaves out labor.
Mazzucato’s work—including her breakthrough book, The Entrepreneurial State: Debunking Public vs. Private Sector Myths—links public funding and activist policies to technological breakthroughs, in the process revealing that the private sector has received too much credit for what the government has actually done. But she and other progressive industrial policy advocates focus mainly on the supply side. On the demand side, we need sustained higher household income, driven by increased worker power.