Mariana Mazzucato
For decades, many U.S policymakers have talked like Thomas Jefferson while acting like Alexander Hamilton. Jefferson, the United States’ first secretary of state and third president, championed limited government; Hamilton, its first treasury secretary, argued for active state support of emerging industries. The political rhetoric in Washington, extolling free markets and minimal state intervention, has been Jefferson’s. The reality has been Hamilton’s: the government invested in projects that drove U.S. competitiveness and innovation. Examples abound. Beginning in 1958, the Department of Defense funded the research that led to the Internet, and other public agencies were the source of all the technology now found in smartphones, including GPS, touchscreens, and Apple’s Siri. Investments by the National Institutes of Health (NIH), totaling hundreds of billions of dollars over many years, created entire pharmaceutical industries.
This dynamic is what I documented in my 2013 book, The Entrepreneurial State, and later in a 2015 Foreign Affairs article, “The Innovative State.” The federal government was willing to take risks that private capital would not and was patient enough to fund decades-long research. It was far-sighted enough to build markets at the forefront of innovation. The government understood that only patient, long-term public capital could absorb the uncertainty of transformational research; private investors, beholden to quarterly returns, systematically underinvest in precisely the breakthroughs that drive sustained growth.
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