The Common Good Economy

by Mariana Mazzucato

The crises that face us in the twenty-first century are global and amongst many others, climate change exacerbates the water crisis, which in turn impacts health. Yet, as Mariana Mazzucato argues, we have failed to treat these as collective goals with shared agendas. This, she argues, is not by coincidence, but by design.

In this ambitious and urgent new book, Mazzucato presents a systematic and scalable vision of successful government that creates value, addresses inequalities, and serves collective ends. Emphasizing a need to shift from reactively putting bandages on market failures to proactively shaping economies that actually work, she proposes a new economic theory of the common good. The book outlines five pillars of progressive government and demonstrates how they can help us tackle the most pressing challenges of our time.

In critiquing the patchy version of the ‘public good’ and the ‘commons’ in economic theory—used by governments, civil society organizations and businesses worldwide, Mazzucato aims to radically change how ‘good’ is achieved. Building on her ‘mission-oriented’ approach and her influential rethinking of the role and nature of the ‘entrepreneurial state’, The Common Good Economy is a timely analysis and a manifesto for ensuring the welfare of both people and the planet.

Genres: Economics, Nonfiction, Politics, Audiobook

Hardcover

About the author

Mariana Mazzucato (PhD) is Professor in the Economics of Innovation and Public Value at University College London, where she directs the Institute for Innovation and Public Purpose. Her best selling books include The Entrepreneurial State, The Value of Everything and Mission Economy. Her many prizes include the 2020 John von Neumann Award and the 2018 Leontief Prize for Advancing the Frontiers of Economic Thought. She is Chair of the World Health Organization’s Council on the Economics of Health for All and a member of the UN High Level Advisory Board for Economic and Social Affairs.

Reviews

[Richard Marney · Rating 5 out of 5]

This book is an ambitious attempt to redefine the purpose of the economy around the pursuit of the common good rather than narrow measures of efficiency or shareholder value. The central argument—that governments should shape markets rather than merely correct market failures—is both timely and intellectually coherent. Her treatment of mission-oriented policy, innovation and industrial strategy is persuasive and supported by a wide range of historical examples. The book is strongest in explaining why markets require direction and why public institutions can be engines of value creation. Where it is less convincing is on implementation. It underestimates the realities of politics, weak institutions and vested interests that frequently derail well-designed policies. The risks of government failure receive considerably less attention than the failures of markets. For investors and policymakers, the framework is therefore more useful as a strategic compass than as an operational manual. The key question is not whether governments should pursue the common good, but whether they possess the capability and discipline to do so effectively. An important, thought-provoking book that will shape debates on industrial policy, even if its practical roadmap remains incomplete.

An outstanding book. Thus far in 2026, my “book of the year”!!!

[ThinkReadReflect · Rating 5 out of 5]

This book is an essential read. It shows the reader that a common good economy is indeed achievable. That states do not have to be passive and simply correct mistakes and fight inefficiently against wealth extraction. Full of strength, optimism and fortifying examples.

[Nils · Rating 5 out of 5]

The natural culmination of a longer body of work. Over four previous books — The Entrepreneurial State (2013), The Value of Everything (2018), Mission Economy (2021), and The Big Con (2023) — Mazzucato has been constructing an overarching intellectual scaffold: the state as active risk-taker, not passive market-fixer; value-creation as distinct from extraction; mission-oriented governance as a practical framework; and consulting capture as the pathology undermining state capacity. This new book draws those threads together and discusses the wider set of principles that must be in place for any of that work to deliver genuine economic transformation for people and planet.

For too long, Mazzucato argues, economics has treated "the good" (public goods or the commons) as merely correcting for what the private sector fails to do, filling a financial gap without attention to the form of finance or the relationships embedded in it. This framing has trapped policy-making in an endless reactive cycle, patching problems rather than proactively building the economy that is actually needed. The "commons" framing, meanwhile, treats the problem as a government failure, placing an unrealistic burden on citizens to fill the gap left by dysfunctional states. Neither framing is sufficient.

Common good economics moves away from corrections and toward objectives, where how organizations interact matters as much as what they are trying to accomplish together. That means embedding the good into all contracts, whether water rights, property rights, procurement contracts, or bailout terms from the state, from the beginning, rather than cleaning up the mess afterward.

The book's conceptual heart is what she calls the "common good compass", a five-element framework that Mazzucato developed from an earlier academic article published in 2023 in the Journal of Economic Policy Reform. The five elements are: (1) Purpose and Directionality: setting a clear direction and proactively aligning economic activity toward collective goals; (2) Co-creation and Participation: ensuring all stakeholders are genuinely at the table, creating real interfaces between public, private, and civil society actors; (3) Collective Learning and Knowledge-Sharing: embedding shared learning in governance structures, from IP rights to open-access platforms; (4) Access for All and Reward-Sharing: using both redistribution and pre-distribution to equitably share risks and rewards; and (5) Transparency and Accountability: the enforcing element, without which the other four cannot hold.

The compass adds something The Entrepreneurial State and Mission Economy lacked: an ethical architecture. It aims to ensure that economic priorities are determined collectively and directed toward socially desirable outcomes. Mazzucato is candid about the failure mode this is designed to address: neglecting any one of the five elements leaves the framework open to capture, producing what she calls "common good washing," where public and private actors claim to serve a shared purpose while their actual policies and programs do nothing of the kind.

Part I of the book develops the theoretical foundations, drawing on political philosophy — from Aristotle on telos and polis to the neo-communitarianism of Michael Sandel — to argue that wellbeing and community-building are inseparable goals. Part II applies each element to real economic relationships: co-creating missions, sharing knowledge in vaccine production, reinvesting public funds in communities, and building data commons that enable transparency and accountability.

Mazzucato's body of work marks the return of industrial strategy from a four-decade exile: the US Inflation Reduction Act, the CHIPS Act, Germany's €500b infrastructure fund, Brazil's New Industrial Policy, and the UK's nascent Industrial Strategy all signal that market-shaping, not just market-fixing, is back inside the Overton Window. Simultaneously, the language of "missions" has spread rapidly — to the European Commission's Horizon program, to governments across Latin America and Europe, to private firms — but adoption has outrun application, generating the "mission-washing" dynamic the compass is designed to counter.

Mazzucato's core premise is that we cannot create good without a clear theory of what the good looks like. The compass is a practical instrument for holding governments, businesses, and international institutions accountable not just for what goals they announce, but for how they govern the pursuit of them.

[Venky · Rating 3 out of 5]

Prominent economist Mariana Mazzucato, in her latest book, proposes a set of five principles – terming them taken together as a ‘compass’ – which, according to her should characterise an economy. These principles are purpose and directionality, co-creation by citizens, collective learning, reward sharing, and accountability. Subsequent to the identification of the principles, the book dissects the merits and worth of each principle.

The book begins with a historical journey tracing the philosophical origins of the common good. The works of Aristotle, Plato, Cicero, Thomas Hobbes etc. are alluded to before providing alternative challenges in the form of the communitarian visions of philosophers such as Micheal Sandel. This cascade of theories dealing with the collective good is an unintentional strain on the reader as the chapters seem to possess a strong drag value.

The author calls for a defining shift in terms of market shaping, ecosystems and collective value creations that will usher in a rethink on the roles of key actors and stakeholders. For example, in exhorting for a move from public interest or social value to dynamic public value, Mazzucato proposes a transformation from static market analysis to dynamic market analysis, change of focus from what will be delivered to will be tasked with the delivery, and technocratic approach to a more political and participatory one.

Urging the business to transform from bestowing attention to shareholder value to concentrating on “collective value creation,” Mazzucato dwells on the proposals made by Nobel Laureate Oliver Hart and professor of business administration, R. Edward Freeman (amongst others), in the realms of corporate governance and stakeholder value maximisation.

The book is replete with arresting and unique real-life examples that bolster the clarion call for introducing the “compass” into an economy. For example, while discussing the principle of co-creation, Mazzucato brings her readers’ attention to the European Union initiative, Horizon Europe. A mission on Climate-Neutral and Smart Cities, the mission has led to a fruitful and voluntary integration of local residents, local businesses, and community groups in designing transition road maps. Similarly, community led governance on natural resources has resulted in the creation of water co-operatives with a view to enhancing the conservation and preservation measures.

Alluding to a need to foster robust tax redistribution policies with a view to address income and wealth inequalities, Mazzucato vehemently advocates a “tax-the-rich” policy. Traversing in the footsteps of economists Gabriel Zucman, Thomas Piketty, and Emmanuel Saez, Mazzucato, argues in favour of imposition of wealth taxes and financial transaction taxes. Not stopping at the mere institution of redistribution measures, the author also strongly backs pre-distribution strategies such as imposition of conditionalities by the Governments into its contracts. Such conditionalities will function as pre-distribution tools that ensure that societal benefits are baked in from the very beginning. An example being the prohibiting conditions in the Creating Helpful Incentives to Produce Semiconductors (“CHIPS”) Act, that bar government funds from being employed for stock buybacks and payout of dividends.

The Common Good Economy – part optimistic part Utopian.

The Common Good Economy: A New Compass by Mariana Mazzucato is published by Allen Lane.

Thank You Net Galley for the Advance Reviewer Copy!