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A Review of The Common Good Economy by Mariana Mazzucato (Allen Lane, 2026, 352 pp.)

By Tilak Doshi

Mariana Mazzucato has made a career out of telling governments what they already want to hear — that they are not merely the fixers of last resort but the architects of prosperity itself. With The Common Good Economy, her latest offering from Allen Lane, the UCL economist and policy entrepreneur has taken this flattering message to its logical terminus.

If her previous work, The Entrepreneurial State (2013) and Mission Economy (2021), argued that the state deserves more credit for innovation and more latitude in directing investment, The Common Good Economy goes further. It argues that the very purpose of economic life must be reoriented around a collective moral vision, curated and administered by enlightened institutions operating according to principles of “directionality,” “co-creation,” “participation,” and “reciprocity.” The book is long, earnest, and rich with the vocabulary of progressive policy circles. It is also, at its philosophical core, a work of considerable intellectual presumption.

The book’s central conceit — stated with disarming confidence on page 3 — is that modern economics has been trapped in a narrow, individualistic framework ever since Adam Smith published The Wealth of Nations in 1776 and that this framework “lacks a coherent theory of the common good”. This framing, Mazzucato asserts, is not just incomplete but morally deficient — a catastrophic narrowing that has robbed economic governance of purpose, direction, and solidarity.

The implication, barely concealed throughout, is that the classical liberal tradition from Smith to Hayek and Friedman is in essence a prolonged evasion of humanity’s deepest social obligations. It takes a Professor Mazzucato — drawing on a potted tour of Aristotle, Cicero, Aquinas, “indigenous knowledge” traditions and the biology of ecosystems — to finally see what they could not.

This is, to put it plainly, a remarkable claim. And it deserves a sustained examination.

Smith Knew About the Common Good

Let us begin with the treatment of Adam Smith which is symptomatic of the book’s deeper problem. Mazzucato acknowledges, to her credit, that Smith was not simply the apostle of laissez-faire atomism that critics often caricature. She notes (p. 35) that Smith also wrote The Theory of Moral Sentiments (1759) which gives a rich account of human nature rooted in empathy and the desire for approbation of an impartial spectator that functions as an internal moral compass. This ethical framework explains why self-interested actors in commercial society can be trusted to uphold contracts, cultivate reputation, and restrain predation: their conduct is shaped by social norms, justice, and the innate human drive to be worthy of esteem, not mere utility-maximization.

So far, so good. But then Prof. Mazzucato proceeds to construct an argument that implies Smith’s framework was nonetheless fatally narrow, ultimately producing a tradition incapable of grasping the ‘common good’ in any robust sense. The neoclassical school is, in this telling, Smith’s unfortunate heir — a tradition that reduced his rich moral philosophy to the aggregation of self-interested maximisers and market-failure corrections.

What Mazzucato conspicuously fails to engage with is the question of whether Smith — and Hayek and Friedman after him — actually understood the common good perfectly well and reached different conclusions about the best institutional means of achieving it. Smith’s invisible hand is not an assertion that self-interest is morally admirable; it is an empirical claim about how, under conditions of voluntary exchange and competitive markets, the pursuit of individual advantage tends to serve the general welfare more reliably than the best intentions of planners and ministers. Smith spent much of Book IV of The Wealth of Nations excoriating the mercantile system — the crony capitalism of his day — precisely because it corrupted public policy in the interests of particular factions.

Hayek’s Road, Friedman’s Rule, and the Knowledge Problem Mazzucato Ignores

The absence of a serious engagement with Hayek and Friedman is perhaps the book’s most telling intellectual gap. Neither thinker appears as a meaningful interlocutor anywhere in the tome’s 352 pages. Hayek’s entire project – from The Road to Serfdom (1944) through The Constitution of Liberty (1960) to his Nobel lecture “The Pretence of Knowledge“ (1974) – was animated by precisely the question that Mazzucato claims to be answering.

Hayek’s answer was that the common good cannot be coherently defined and administered by a central authority, because the knowledge required to do so — knowledge of local conditions, individual preferences, and the dynamic consequences of interventions — is dispersed across millions of actors and cannot be aggregated by any planning body, however expert and well-intentioned. The price system, in Hayek’s account, is not a device for satisfying individual greed; it is a communications network that transmits and coordinates information across the entire economy in a way that no bureaucratic process can replicate. The market is a discovery procedure — a mechanism for creating knowledge that no one possesses in advance.

Mazzucato’s vision of the common good economy rests on governments “shaping markets” rather than merely “fixing” them — setting the direction of innovation and investment. She wants government to shift from a reactive corrector to a proactive mission-setter, guiding business, finance, and labour toward collectively determined outcomes. Her vision of purposeful economic governance claims to possess exactly the kind of comprehensive knowledge that Hayek argued was impossible to possess. The book never confronts this problem. The word “Hayek” does not appear in the index.

Milton Friedman, too, is conspicuous by his absence. Friedman’s arguments for economic freedom to protect individuals from the arbitrary power of bureaucrats find no space in her book. One may disagree with Friedman’s conclusions, as many serious economists do. But the intellectual tradition he represented deserves to be engaged, not ignored. Mazzucato’s implicit suggestion throughout the book — that the liberal and market-oriented tradition of the past two centuries has been a sustained failure to think about collective welfare — is not an argument. It is a rhetorical presumption masquerading as a finding. A cursory examination of data on human welfare – the sustained lifting of millions of people from poverty and deprivation by market-oriented economies – seems to escape Mazzucato’s attention.

The Compass That Cannot Navigate

At the heart of the book’s second section is what Mazzucato calls the “common good compass” — a framework built around five principles: purpose and directionality, co-creation and participation, collective learning and knowledge sharing, access for all and reward sharing, and transparency and accountability. These are presented as the organising principles of a reformed economy in which governments shape markets to serve human flourishing rather than simply correcting their failures.

The principles sound admirable, as such principles generally do. But the further one reads, the more one is struck by the distance between the framework’s aspirational vocabulary and its practical specificity. What precisely does it mean for government to “shape markets”? Mazzucato’s main example is mission-oriented innovation policy — the model of the US Defense Advanced Research Projects Agency (DARPA) or the early-stage public investments that preceded the internet and GPS. These are real examples, and they lend support to the proposition that public investment has sometimes created the technological preconditions for private innovation. But from this observation — that government has occasionally and successfully taken long-horizon risks that private capital would not — Mazzucato draws the extraordinary conclusion that government should now systematically direct investment across the entire economy toward politically defined “missions” in health, climate, and artificial intelligence.

The empirical record of this kind of directional ambition is, to say the least, mixed. For each DARPA achievement, there is the far more typical Solyndra which constituted a case study in cronyism and the failure of industrial policy. The book attributes the failure of previous industrial policies to their lack of Mazzucato’s “common good compass”.

Perhaps. But Mazzucato offers no theory of political economy that would explain why democratic governments, subject to lobbying by organised special interests and bureaucratic over-reach, would reliably implement the “common good” however defined. This is not a pedantic objection. It is the central question of public choice — a field developed precisely to understand why well-intentioned government programmes usually produce outcomes contrary to their stated aims. That tradition is missing from this book.

Mazzucato seeks to distinguish between value creation and value extraction. The problem is that the argument requires a theory of value that can objectively determine what constitutes genuine economic contribution and what constitutes extraction. In The Common Good Economy, this difficulty reappears in a new form. The book repeatedly invokes the distinction between value creation and rent extraction as though it were self-evident, applying it to finance (which mostly extracts), to tech billionaires (whose fortunes eclipse entire nations — p. 3), and to fossil fuel subsidies (supposedly amounting to US$7 trillion globally in 2022 — p. 83). The reader who pauses to ask who decides where the line between value and rent lies — and by what procedure that decision is made — will find the question left unanswered. In Mazzucato’s framework, it is apparently the mission-setting government, guided by the common good compass, that makes this determination. The sheer circularity of her claim is revealing.

A Technocracy in Philosopher’s Clothing

In reading The Common Good Economy, one is struck by a persistent tension that the author never quite resolves. The book wants to be both a work of philosophical ambition — drawing on Aristotle’s polis, Cicero’s salus populi, Aquinas’s Christian conception of flourishing, “indigenous knowledge” traditions, and the “wisdom of biological ecosystems” — and a practical policy manual for reorganising finance, taxation, business governance, public procurement, and international institutions toward collectively determined ends. The policy sections are, for the most part, a compendium of progressive orthodoxies espoused by WEF forums or UCL Institute for Innovation and Public Purpose working papers.

The deeper tension is this: if the common good is genuinely a matter of shared democratic deliberation — as the author repeatedly insists — then its content cannot be decided in advance by economists who have studied indigenous knowledge in the Amazon and walked through Barrio Siloé in Cali. It can only be discovered through genuine participatory processes — as in Hayek’s liberal market economy which coordinates people’s actions in the context of tacit and dispersed knowledge — then the entire “compass” framework, with its five principles and its tables distinguishing “dynamic public value” from mere “static market analysis”. It is not a discovery of the common good but an imposition of a particular UCL professor’s preferred vision of it.

Hayek saw this danger with characteristic clarity. The conceit of comprehensive rationalism — the belief that society’s goals can be articulated, ranked, and pursued by a directing intelligence — was not, in his analysis, a recipe for the common good. It is the road toward serfdom: the concentration of power in the hands of those who claim to know what the common good requires and who are willing to override voluntary arrangements in its name. Whether one fully accepts Hayek’s warning or not, it deserves to be taken seriously by anyone proposing to reshape the entire architecture of economic governance around a mission-oriented common good compass administered by state actors. That Professor Mazzucato does not engage with it at all is an intellectual failing that no number of Rockefeller Foundation writing residencies can excuse.

So how goes the London Borough of Camden?

Mariana Mazzucato’s homepage lands you on the quote by Quartz in bolded large font: “One of the world’s most influential economists… on a mission to save capitalism from itself.” One of her favourite self-congratulatory anecdotes in The Common Good Economy—repeated in her acknowledgements, Substack posts, and joint papers with Georgia Gould—is her co-chairing of Camden Council’s Renewal Commission (2020–2022) and the subsequent rollout of four grand “missions” in 2022. These were sold as a model of citizen-engaged, mission-oriented local governance: by 2030, leadership as diverse as the community; every young person with economic opportunity for safety and security (target 2025); everyone eating well with nutritious, affordable, “sustainable” food; and housing estates that are “healthy, sustainable, and creative”. Mazzucato and Gould hail it as proof that the “common good compass” delivers real change through co-creation, procurement reform, and a £30 million Community Wealth Fund.

The council trumpets “Outstanding” ratings from Ofsted and others for children’s services, adult social care, and youth justice—the only English authority with all three. Yet these are service delivery grades for expensive bureaucracies funded by one of the highest council tax burdens in London (another 4.99% rise in 2025/26). Mazzucato’s much-vaunted “collective learning,” “participation,” and “pre-distribution via conditionalities” have yielded more reports, more partnerships, and more taxpayer-funded pilots—while the borough’s core pathologies (poverty traps, crime hotspots, housing shortages exacerbated by planning and welfare incentives) march on unchanged. The council’s “Leader’s Annual Report 2025/2026” explicitly states on page 1: “Too many residents still feel disconnected from the opportunities around them, and with 42% of residents living in poverty and child poverty rates close to 40%.”

This is not a success story worthy of global acclaim or a “new compass” for the common good. It is performative governance that substitutes slogans, citizen assemblies, and procurement checklists for the deregulation, opportunity and accountability that actually lifts people out of poverty. Gould departed the council in 2024 for Parliament (and a ministerial post); Mazzucato has moved on to bigger stages, gaining praise from UK prime minister Keir Starmer and his energy czar Ed Miliband. Camden’s residents, meanwhile, still live with the same high taxes, high crime, and high poverty that predated the missions. If this is Mazzucato’s showcase for “shaping markets” and “collective value creation,” it exposes the emptiness of the entire project. The invisible hand, not five-point compasses, remains the better bet.

The Common Good Economy founding presumption — that two and a half centuries of classical political economy and its neoclassical progeny, from Adam Smith and David Ricardo through J. S. Mill and Alfred Marshall to Friedrich von Hayek and Milton Friedman, constituted a sustained failure to think adequately about the common good — is not a demonstrated finding. It is an assertion made in hubris, systematically misreading or ignoring the insights provided by eminent contributors to the history of economic thought.

The last word is best reserved for the inimitable Charlotte Gill: “Meet Professor Mazzucato, who can’t get enough of the word ‘mission’” whose “mission-led mission [is] to use the word mission as much as mission possible”. The good professor’s mission is not only impossible but rather conceited in its premise.

A version of this article was first published in the Daily Sceptic https://dailysceptic.org/2026/06/08/mariana-mazzucatos-latest-plea-for-do-gooders-and-busybodies-to-have-even-more-influence-over-the-economy-is-predictably-unpersuasive-unless-youre-ed-miliband/

Dr Tilak K. Doshi is the Daily Sceptic‘s Energy Editor. He is an economist, a member of the CO₂ Coalition and a former contributor to Forbes. Follow him on Substack and X.