Saturday Morning Links

This and that for your weekend reading.

- Kate Aronoff interviews Mariana Mazzucato about The Value of Everything, including some important discussion about the relationship between governments and markets:

Aronoff: You talk a lot about the power of the state in shaping markets. What does the idea that the government should only intervene to tweak markets get wrong?

Mazzucato: How we talk about governments and markets is very problematic. In traditional economic theory, governments are just fixing market failures. And I talk about governments—if they’re actually well organized—as different types of public institutions in society. I see them as co-creators of wealth. They co-create and co-shape markets, not just fix them. Regulation is even a problematic phrase, because it sounds like the market is just there and created by others, and the government is just there to regulate it and make it a bit more stable. Redefining markets is central to what I believe we should be doing, and that leads to very different types of policy.

Aronoff: Are there any places where you think the private sector simply shouldn’t play a role? What’s the balance?

Mazzucato: There are two issues. Whether it’s public or private ownership, a key problem is how public and private meet, right? So in the UK—take the railways. Forget for a minute whether they should be public or privately owned. If you are going to privatize them, you better get the contract right. In exchange for what he got in the contract to buy the public railway system, [Virgin CEO] Richard Branson—who bought the rails—should have been forced to promise that he would invest in the rail system and make it more efficient and more green. Whether it’s water or energy, companies should be made to invest profits in, for example, renewable energy, but also in methods that will improve the product itself and the value to the consumer. In the drive for outsourcing and privatization, these contracts have been written problematically.

Then the question is, should some areas be fully public? Well sure, those areas which are absolutely fundamental. I believe medicine is one of them. Essential medicine like vaccines are a human right. It’s very hard to apply the profit model there. Instead of companies just trying to charge a lot of money in order to recoup their cost, you could have the government set a prize for any company that wants to come in and produce this drug that will solve a certain disease, and lay out the metrics for evaluating whether that drug is what we’re looking for.

- Don Lenihan writes that climate change represents the ultimate example of an issue where obvious long-term needs are being ignored due to short-term political motivations on the part of voters and politicians alike.

- Chuka Ejeckam highlights how British Columbia's electoral reform referendum could be a first step toward change across Canada, while Andrew Coyne notes that London, ON's municipal election will offer a first example of ranked ballots in action. And Seth Klein offers his take on the three more proportional systems on the ballot.

- And finally, Martin Regg Cohn's criticism of Doug Ford's patronage highlights one of the main problems with first-past-the-post: when elections are seen primarily as a means of saying "no" to incumbents, it's all too easy to get stuck with an even worse alternative.