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Blink 3 of 8 - The 5 AM Club
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The Value of Everything summary
Mariana Mazzucato
Making and Taking in the Global Economy
25 mins
Brief summary
The Value of Everything by Mariana Mazzucato explores how economic value is created and distributed in modern society and argues for a rethinking of the role of government and the private sector.
Table of Contents
The Value of Everything
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Key idea 1 of 8
For early economists, value was created by workers, and extracted by landlords.
Is all work productive, or is some unproductive?
This simple-sounding question has been debated since the seventeenth century.
The “father of economics,” François Quesnay, believed that all value came from the land. So, he argued, only work like agriculture and mining was productive. All other work was just moving that product around in exchange for money.
Quesnay theorized that money and goods circulated between three classes: workers on the land; artisans, who make things with the raw materials; and what he called the “sterile class” – nobility and landlords. This final class simply extracts value from the economy as rent, because they own the land. In other words, they’re unproductive.
The key message here is: For early economists, value was created by workers, and extracted by landlords.
Economic theories evolved during the eighteenth and nineteenth centuries, but Quesnay’s view that landlords were unproductive prevailed for a long time. The classical economists Adam Smith, David Ricardo, and Karl Marx all agreed with him. In fact, Smith’s famous ideal of a free market originally meant “free from rent.”
According to Smith, you could earn money in three ways: as wages, profits, or rent. At the heart of Smith’s economy were manufacturers. The truly productive force, they generated a surplus large enough that the unproductive landlords and aristocrats could live off it as well.
Smith didn’t object to wealth per se. But he believed that money should be reinvested into productive industries – that way, workers could produce even more, and the wealth of everyone could grow. But when wealthy people, like landlords, hoarded money or spent it unwisely, that was bad for the economy – all it did was take money out of circulation.
David Ricardo built on Smith’s work in the early nineteenth century. He defined rent as profit gained from a monopoly of something scarce. And he observed the particular way in which rent worked: if a landlord owned good land, then farmers would compete with each other to rent it – meaning that rental prices would keep on rising.
Still used today, Ricardo’s theory doesn’t just apply to the bill you pay your landlord. The same principle works for any industry in monopoly control – think of the rising prices of patented drugs, and even the price of gas, strongly influenced by the members of OPEC – the oil producing nations. It’s all a form of rent – or, to put it another way, value extraction.
But what actually is value? The meaning of the term has changed a lot since the eras of Smith and Ricardo. And that’s what we’ll talk about in the next blink.
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What is The Value of Everything about?
The Value of Everything (2018) presents an argument for redefining value in the economy so that we can better understand who really creates value, and who extracts it.
The Value of Everything Review
The Value of Everything (2018) by Mariana Mazzucato reveals the myths surrounding economic value and highlights the need for more accurate assessments of how value is created in society. Here's why this book is worth reading:
- By challenging commonly held beliefs, Mazzucato forces us to rethink our understanding of value and its impact on our lives.
- The book explores the concept of value in different sectors, from tech to finance, uncovering the hidden dynamics that shape our economy.
- Mazzucato's research-backed arguments and real-world examples make this book an engaging and eye-opening read, debunking misconceptions about value with clarity and precision.
Who should read The Value of Everything?
- Economists eager for new ideas
- Fans of politics in search of change
- Lovers of radical ideas and ambitious visions
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The Value of Everything FAQs
What is the main message of The Value of Everything?
The main message of The Value of Everything is to challenge our understanding of value and explore the flaws in our current economic models.
How long does it take to read The Value of Everything?
The reading time for The Value of Everything varies depending on the reader's speed. However, the Blinkist summary can be read in just 15 minutes.
Is The Value of Everything a good book? Is it worth reading?
The Value of Everything is worth reading for its insightful critique of our current economic system and its call for a more inclusive and sustainable approach to value creation.
Who is the author of The Value of Everything?
The author of The Value of Everything is Mariana Mazzucato.
What to read after The Value of Everything?
If you're wondering what to read next after The Value of Everything, here are some recommendations we suggest:
- Mission Economy by Mariana Mazzucato
- Economics for the Common Good by Jean Tirole
- Good Economics for Hard Times by Abhijit V. Banerjee and Esther Duflo
- The Interpretation of Dreams by Sigmund Freud
- The Diary of a CEO by Steven Bartlett
- Doughnut Economics by Kate Raworth
- Capitalism and Freedom by Milton Friedman
- Thinking, Fast and Slow by Daniel Kahneman
- The Intelligent Investor by Benjamin Graham and comments by Jason Zweig
- The Zero Marginal Cost Society by Jeremy Rifkin