Joe: The smartphone in your pocket. You probably think of it as a triumph of private-sector genius, right? A sleek product from a visionary in a black turtleneck. Well, almost every core technology that makes it 'smart'—the internet, GPS, touchscreens, even Siri—was funded by the US government. Lewis: Hold on, seriously? GPS I kind of knew was military tech, but the touchscreen? Siri? That completely flips the script on who the real innovator is. It feels like we've been told a story about a lone genius in a garage, but the garage was actually a government lab. Joe: Exactly! And that's the central nerve that Mariana Mazzucato hits in her book, Mission Economy: A Moonshot Guide to Changing Capitalism. She's this incredibly respected economist at University College London, and her whole career has been about challenging this myth that the public sector is just a clumsy, slow-moving beast that gets in the way of dynamic private companies. Lewis: I can see why that would be a controversial take. The default setting for most people, I think, is that government is inefficient and business is innovative. So if the government isn't the problem, what is? Why does it feel like we're stuck in the mud on massive issues like climate change or pandemics? Joe: That is the billion-dollar question, and Mazzucato argues it's because the entire engine of our economy is designed to solve the wrong problems. We're not just dealing with a few glitches; the whole operating system is faulty.

Lewis: A faulty operating system. That sounds… significant. What are the big bugs she’s pointing out? Where is the code broken? Joe: She identifies a few critical breakdowns. The first one is in the world of finance. She has this great line: "Finance is financing FIRE." FIRE stands for Finance, Insurance, and Real Estate. Lewis: Okay, so what does that mean in plain English? It sounds like a bad action movie title. Joe: It basically means the financial sector has stopped funding the creation of new things—new factories, new research, new products—and is instead just funding itself. It's like a casino where all the money is being used to bet on the outcome of other bets, rather than being used to build more tables or invent new games. It creates these huge, speculative bubbles but doesn't build long-term, real-world value. Lewis: I can see that. It feels like the stock market has become disconnected from the actual health of the economy on the ground. People are getting rich from trading complex financial instruments that don't seem to produce anything tangible for society. Joe: Precisely. And that leads to her second point: business itself has become obsessed with the short term. Because finance rewards quick stock price bumps, CEOs are incentivized to do things like stock buybacks—using company profits to buy their own shares to inflate the price—instead of investing that money in long-term research and development or higher wages for their employees. Lewis: Right, the quarterly report is king. You can’t put "five-year investment in risky but potentially world-changing technology" on a report that has to please Wall Street next Tuesday. It punishes long-term vision. Joe: It absolutely crushes it. And Mazzucato argues these two problems—a self-serving financial sector and corporate short-termism—are the direct cause of our biggest crises. Take climate change. We have the technology to transition to a green economy, but the system is geared to reward extracting value from fossil fuels right now, not investing in a sustainable future that will pay off in twenty years. Lewis: So the engine is basically programmed to drive us off a cliff because the short-term view from the driver's seat looks profitable. But you mentioned a fourth failure, about government. Joe: Yes, and this is the heart of her argument. She says governments are "tinkering, not leading." For the last forty years, they've been told their only legitimate role is to get out of the way and, at best, step in to "fix market failures." Lewis: What does that even mean, a "market failure"? It sounds like economic jargon. Joe: It's when the free market, left to its own devices, produces a bad outcome. Pollution is the classic example. A factory can pollute for free, so the government steps in with a tax or a regulation to fix that failure. But Mazzucato says this is a terribly limiting and passive role. It reduces government to being a janitor, just cleaning up messes made by the private sector. Lewis: Okay, but a lot of people would say that’s exactly what government should do. Stay in its lane. The idea of government trying to do more, like "picking winners," sounds… risky. For every successful government project, don't you get a dozen expensive failures? The Solyndra story always comes up. Joe: And that is the most powerful myth she wants to bust. The "government shouldn't pick winners" line. She argues that this fear of failure has paralyzed us. Her counter-argument is that government has always picked winners, but it does it best when it's not picking a specific company, but a specific mission. Lewis: A mission? What's the difference? That feels like a subtle distinction. Joe: It's a huge distinction. Picking a company is saying, "We bet Solyndra will succeed." Picking a mission is saying, "We will land a human on the Moon and return him safely to the Earth by the end of this decade." That was Kennedy's goal. He didn't name a company. He named a destination. That single, ambitious mission forced the creation of entirely new industries and required collaboration between NASA and over 400,000 people across hundreds of private companies. Lewis: Wow. So the goal wasn't to make one company rich; it was to solve an audacious problem. The private sector then competed and collaborated to be part of the solution. Joe: Exactly. The government created the market by setting the mission. It didn't just fix a failure; it shaped a new reality. And the fear of failure was reframed. As Elon Musk, whose SpaceX was saved by a massive NASA contract, famously said, "Failure is an option here. If things are not failing, you are not innovating enough." Mazzucato argues that we need to bring that mindset back to government.

Lewis: That's a powerful reframe. Moving from a janitor who's afraid to spill a bucket of water to an explorer who knows some ships will sink on the way to discovering a new continent. So how do we do that? How do we build this "Mission Economy" today? Joe: Well, Mazzucato uses the Apollo program as a direct blueprint. She breaks down what made it work and how we can apply those lessons to today's grand challenges, whether it's climate change, Alzheimer's disease, or the digital divide. Lewis: Okay, so what are the key ingredients from the Apollo mission? What's in the secret sauce? Joe: There are a few, but the first and most important is a clear, ambitious, and inspiring vision. Kennedy's goal was simple enough for anyone to understand but audacious enough to inspire a generation. It wasn't vague like "improve space travel." It was specific: a man, on the moon, in this decade. A mission to "solve climate change" is too broad. A mission to, say, "create the first carbon-neutral city of over a million people by 2035" is specific and measurable. Lewis: That makes sense. It gives everyone a concrete target to aim for. It’s a destination on a map, not just a general direction. What else? Joe: The second is a willingness to embrace risk and uncertainty. NASA knew they would have failures. They had rockets explode on the launchpad. But each failure was a source of learning. Today, a single government project that fails is often used as a political weapon to argue that government should never try anything ambitious again. Mazzucato says we need to build organizations that can learn from failure, not just punish it. Lewis: That's a massive cultural shift. It requires treating public investment like venture capital, where you expect a certain number of failures on the path to a huge success. Joe: Exactly. And the third key is dynamic public-private partnership. This wasn't government versus business. This was government leading and collaborating. NASA developed new capabilities in-house, but it also set the standards and provided the funding for companies like IBM, Motorola, and General Electric to invent the technologies needed to get to the moon. Lewis: So the government was the conductor of a massive orchestra, not trying to play every instrument itself. Joe: A perfect analogy. And the results were staggering. The mission didn't just get us to the moon. The need for a small, lightweight, powerful computer for the Apollo capsule essentially kickstarted the entire microchip industry. That led directly to the personal computer. The mission also gave us everything from CAT scans and cordless power tools to freeze-dried food and memory foam mattresses. These weren't the goals, they were the spillovers. Lewis: That’s incredible. The mission paid for itself many times over in unexpected ways. But I have to ask the skeptical question again. That was the 1960s, a very different political and social era. Could that model really work today for something as messy and politically charged as creating a plastic-free ocean or ending homelessness? Joe: Mazzucato argues it's the only thing that can work. She outlines seven new principles for a new political economy to make it happen today. It involves things like "outcomes-based budgeting," where you fund projects based on their success in achieving parts of the mission, not just for existing. Lewis: So you get paid for results, not just for showing up. Joe: Right. And another huge one is participation and co-creation. A modern mission can't just be handed down from on high by a president. It needs to be developed with citizens, with communities, with activists. For a mission to have a plastic-free ocean, you'd need to involve not just tech companies and governments, but also fishing communities, environmental groups, and coastal cities. The mission itself has to be a collective project. Lewis: That sounds incredibly complex, but also more democratic. It’s not just a top-down command; it’s building a shared purpose from the ground up. It feels like the book is really a call to restore a sense of collective ambition. Joe: That's the core of it. She's saying we've been so beaten down by the narrative of government incompetence and the worship of the free market that we've forgotten how to dream big, together. We've forgotten that our greatest achievements, from the moon landing to the internet, came from public vision, not just private profit.

Lewis: So when you put it all together, the book isn't really an anti-capitalist rant. It's more of a… pro-ambition manifesto. It's saying that capitalism is a powerful engine, but for decades, we've had it idling in a parking lot, just revving and making noise. Mazzucato wants to give it a destination and a map. Joe: That's a fantastic way to put it. The problem isn't the engine itself, but the timid, myth-driven, and purposeless way we've been using it. The solution is to reclaim a sense of public purpose and ambition, to steer the engine toward solving the grand challenges we all face. It's about changing the story we tell ourselves about what is possible. Lewis: It feels like the most practical takeaway isn't some complex policy, but a shift in mindset. Joe: Absolutely. Mazzucato argues the first step isn't a new law, but a new narrative. So the one concrete thing to take away is to start questioning that myth of the bumbling, inefficient government versus the heroic, innovative private sector whenever you see it. Remember the iPhone in your pocket. The innovation story is almost always a partnership, with public investment taking the biggest early risks. Lewis: And maybe to start asking a different kind of question in our own lives and communities. Instead of just asking "how do we fix this problem?", we could ask, "what is our moonshot?" What is the big, audacious, inspiring goal that we're not even daring to name right now? Joe: That's the question that could change everything. It's not about finding the perfect plan. It's about finding a worthy mission. Lewis: A worthy mission. I like the sound of that. It feels more hopeful. Joe: This is Aibrary, signing off.