Mariana Mazzucato is the author of The Entrepreneurial State: Debunking Public vs. Private Sector Myths.
From her interview with Fareed Zakaria:
ZAKARIA: [Y]ou're turning on its head everything that people think about government, which is that government can't pick winners and losers, gets it all wrong.--Marshal Zeringue
ZAKARIA: And yet you're saying the historical record shows that the government actually has picked lots of winners.
MAZZUCATO: Yes, absolutely. So, again, all those technologies were picked, the biotechnology sector itself was picked. The National Institutes of Health, since the 1930s have spent something like $900 billion on, you know, the technology that basically formed that industry. And again, private companies, of course, were important, but they basically surfed that wave and we've got plenty of surfers out there, we just don't have that wave, for example, today, in the green tech industry.
ZAKARIA: But what about Solyndra? People are thinking --
MAZZUCATO: Absolutely. So, first of all, and any venture capitalist will tell you this, for every success you have about eight or nine failures. That's fine. But what the private venture capital industry has had, which the public investors have not is an ability to actually reap something from the upside to cover the downside, so Tesla, Tesla S Car actually received a very similar amount of moneys a Solyndra did. So, $465 million guaranteed loan. So, had Tesla not been the success that we know it is, that money would have been bailed out by the taxpayer. As they have to bail out Solyndra. But, you know, the population just doesn't realize that this is what happened and they only see that Solyndra lost. They only hear that story, but also we haven't been wise in terms of actually treating this like a portfolio...[read on]