Mariana Mazzucato argues that fiscal redistribution happens after value has been created and distributed, and that it comes too late. She proposes partnerships in which access to public resources is conditional on a measurable contribution to the common good. The book examines how to implement this principle.
The Essentials
- Mazzucato argues that fiscal redistribution intervenes too late: value is already captured by the private sector before the state can tax it.
- She proposes conditioning access to public resources on specific common-good commitments.
- Germany and France have public frameworks for energy transition that include mechanisms for planning, support, and coordination.
- The conditionality thus defined raises the question of its sustainability in democratic societies marked by institutional distrust.
An economist who advises governments and contradicts them
Mariana Mazzucato directs the Institute for Innovation and Public Purpose (IIPP) at University College London. Trained as an economist, she built her reputation on The Entrepreneurial State (2013), which documented how the foundational technologies of the iPhone—GPS, touchscreen, the internet—had all been funded by American public funds before Apple assembled them. That first book dealt with the creation of value; The Common Good Economy addresses the sharing of that value through means other than taxation.
Mazzucato advises the WHO, the European Commission, and Brazil’s G20 presidency in 2024. She does not write from an ivory tower: her proposals have been tested, sometimes adopted, often watered down. This book is both a review of those experiences and a manifesto to go further.
The thesis: redistribution as an admission of failure
Mazzucato’s central proposition rests on an image. The current state resembles a gardener who lets weeds grow, then tries to uproot them once they have overrun the garden. According to Mazzucato, traditional fiscal instruments intervene after value has been created and partially distributed. They correct the consequences of a system without changing its logic.
Mazzucato proposes going upstream. Access to public resources—public contracts, patents from public research, sovereign data, innovation subsidies—would be conditional on binding commitments: maintaining employment in the territory, reinvesting a share of profits into R&D, capping stock buybacks, and participating in national climate objectives. She calls this “co-creation of value”: the state no longer subsidizes in hopes of recovering through taxation; it negotiates a share of the fruits before sowing.
The argument rests on a factual observation. In the United States, according to data from William Lazonick (University of Massachusetts Lowell) covering S&P 500 companies between 2004 and 2013, firms distributed a significant share of their profits through stock buybacks and dividends. Some pharmaceutical companies cited by Lazonick benefited from public research and public support, as well as public contracts. Fiscal redistribution recovered only a portion of these gains. Mazzucato draws a direct conclusion: the distribution problem begins before taxation, in the structure of contracts between state and business.
The proposed instruments: from principle to practice
The book does not remain at the diagnostic level. Mazzucato details four main instruments.
The first is public-procurement conditionality. Public spending represents roughly 14% of GDP in OECD economies. Rather than award them to the lowest bidder, states could reserve them for companies that meet common-good criteria: wages above sectoral floors, measurable declining carbon footprint, supply-chain transparency. Denmark has partially implemented this logic in its tender procedures for thermal renovation of public buildings.
The second is directionality: rules on pricing and intellectual property are tied to the objective of equitable access. When patents arise from research co-financed by public funds, Mazzucato proposes mechanisms allowing the state to exercise rights over their exploitation. These rights would enable either regulated pricing for medicines or technologies arising from that research, or collection of royalties reinvested in new programs. She cites the example of the Moderna vaccine against Covid-19: developed with federal support combining R&D and advance purchase commitments (roughly $1 billion for R&D and up to $1.5 billion for supply), whose access by lower- and middle-income countries was also limited by supply, logistics, and distribution inequality.
The third instrument is the public development bank with a mission. Germany’s Public Development Bank (KfW) and Bpifrance are the reference models. Mazzucato goes further: these institutions should condition their loans on verifiable common-good objectives, with mechanisms for financial returns when aided companies outperform.
The fourth is common-good accounting, a overhaul of the metrics by which companies measure and report their value. Mazzucato draws here on Diane Coyle’s work on GDP’s limitations to argue for metrics that capture social and environmental value, not only financial flows.
Lessons from European cases
Germany provides the most documented test of this approach. The Energiewende took shape from the 2000s onward around laws supporting renewables, federal objectives, and coordination between the federal government and the Länder. Result: in 2024, renewables accounted for 54.4% of Germany’s gross electricity consumption, according to the Federal Network Agency, with production of roughly 284 TWh. The German ministry counted more than 406,000 gross jobs in renewable energy in 2023; these figures measure total employment, not net job creation across the entire energy sector.
France offers an instructive counterpoint. In 2024, French public spending represented 57.0% of GDP, the second-highest level in the European Union behind Finland at 57.8%. French policy combines aid, taxation, regulation, planning, and, in certain schemes, company commitments paired with public support. The tax burden falls on work while AI empties the revenue base: this is precisely the type of distortion that upstream conditionality aims to correct. The PPE3, adopted on February 12, 2026, and entering into force on February 14, contains seeds of this logic in offshore wind.
Mechanisms for financial returns in case of windfall profits are not generalized.
This Franco-German contrast is revealing. The state can spend heavily without co-creating. Real conditionality requires a negotiating capacity that French administrations have not yet fully developed.
The book’s blind spots
The Common Good Economy is persuasive in its diagnosis. It is less so in its response to two serious objections.
The first is the question of administrative capacity. Negotiating complex conditional contracts with large firms, tracking common-good indicators, and arbitrating disputes over measurement: all this assumes a competent, well-equipped administration independent of the interests it regulates. Mazzucato alludes to this, but without frontally addressing the problem of regulatory capture. Where liberal economists like Jean Tirole have spent years modeling how regulators end up serving the regulated, Mazzucato assumes a public administration solid enough to resist these pressures. It is a wager, not a proof.
The second objection concerns democracy. Conditioning access to public resources on behaviors defined by the state raises the question of power conferred on the executive over economic actors. In countries where trust in institutions is declining—and France ranks among countries where confidence in institutions has declined according to CEVIPOF barometers—that power is potentially misused, arbitrarily applied, or politically diverted. Mazzucato responds that criteria must be transparent and negotiated democratically. But she does not say who negotiates, with whom, and according to which control mechanisms.
This silence is the book’s greatest blind spot.
A third limitation deserves mention: feasibility among small and medium-sized enterprises. The conditionality model described by Mazzucato is conceived for large firms that benefit from substantial public contracts and significant R&D financing. SMEs, which represent the bulk of employment in European economies, are largely absent. France pays twice for imposed part-time work: this type of structural cost weighs first on employers who have neither the leverage nor the teams to navigate complex conditional contracts.
The AI question: the test ahead
The book anticipates, without naming it explicitly, the problem posed by large digital platforms and artificial-intelligence models, whose business models do not systematically pass through traditional public procurement or direct subsidies. The conditionality as Mazzucato conceives it assumes an entry point: a public contract, a co-financed patent, a state aid. If value capture operates entirely outside these entry points, the model loses its lever.
This is the question AI poses acutely. 172 billion to host Gulf AI, not to invent it illustrates how value flows in this sector escape traditional categories of industrial policy. Mazzucato is aware of this; her work at the IIPP on AI governance demonstrates it, but The Common Good Economy has not yet drawn all the theoretical consequences. That will likely be the subject of the next book.
Reasons to read this book
The Common Good Economy addresses three types of readers. Policymakers first: the book offers a concrete toolkit, with examples sufficiently documented to be adapted. Economists next: Mazzucato pushes the frontier of value theory in directions that neither neoclassical economics nor standard Keynesianism explored. Engaged citizens finally: the book clearly poses the question of who benefits from technological progress and under what conditions that might change.
The tone is less polemical than The Entrepreneurial State. Mazzucato has aged with her ideas and it shows: she argues more, asserts less. This is a book of construction, not demolition.
The tension it leaves open is this: a state that co-creates value presupposes strong democratic legitimacy to exercise this power of conditionality. Yet it is precisely this legitimacy that is contested in several advanced democracies. Mazzucato proposes the instruments without resolving the question of the institutional ground on which they must rest. It is an essential book on the economics of shared progress, and an honestly incomplete book on the politics that would make this progress possible.
Title: The Common Good Economy: A New Compass Author: Mariana Mazzucato Publisher: Penguin Allen Lane Publication Date: June 4, 2026 ISBN: 9780241722244
Sources
- Mariana Mazzucato, The Common Good Economy: A New Compass, Penguin Allen Lane, 2025, https://marianamazzucato.com/books/the-common-good-economy/
- Official page of the work at Penguin, https://www.penguin.co.uk/books/464576/the-common-good-economy-by-mazzucato-mariana/9780241722244
- William Lazonick, work on stock buybacks and profit distribution in large American firms, University of Massachusetts Lowell (Institute for New Economic Thinking)
- German Federal Network Agency (Bundesnetzagentur), data on the share of renewables in electricity production, 2024
- CEVIPOF, Barometer of Political Trust, annual waves 2005–2025, Sciences Po Paris
- Diane Coyle, work on measuring economic progress beyond GDP, Bennett Institute for Public Policy, University of Cambridge
