**Summary [(from CATO JOURNAL)](https://www.cato.org/cato-journal/fall-2019/value-everything#:~:text=As Mazzucato explains in the,of growth of the economy.)**

Mariana Mazzucato’s The Value of Everything is premised upon her previous research into debunking myths about lone entrepreneurs and startups and ignoring a key actor of “first resort” — the state. Because of this “glaring omission,” she believes that our economic theory of value creation is flawed, and this conceptual flaw is a major reason for the growing problem of wealth inequality in Western nations. Her question? Are we sure that much of what is passing for “value creation” is not just “value extraction” in disguise? She argues that this blurring of two different economic concepts is precisely what has occurred in post‐World War II industrial economies.

She defines value extraction as “the appropriation of gains vastly out of proportion to economic contribution” (2), whereas value production is the creation of “new” goods or services, as opposed to extraction, which rather moves existing goods and services around (6-8). Mazzucato believes that in order to steer growth in advanced economies, one needs to return to conceptualising value creation and value extraction and demarcate between productive and unproductive (extractive) economic activities. (From this journal)

Chapters 1 and 2

Mazzucato explains in the early part of her book (Chapters 1 and 2), the boundary (“production frontier”) between the “makers” and “takers” has not been fixed but has shifted due to social, political, and economic forces. These forces have influenced the development of government measures of growth of the economy. More important, Mazzucato argues that the production boundary began to blur in the latter half of the 19th century so that almost anything that could attract a price in the marketplace could successfully claim value, including financial services (but, interestingly, not government).

The concept of value in economics:

Mazzucato argues that the valuation of economic goods and services is inherently social and political, challenging the perspective of neoclassical economists who treat it as a purely individual and market-based phenomenon.

1. Repoliticizing Value: Mazzucato emphasizes the need to bring back the social and political aspects of economic value into the discussion. She argues that modern economists influenced by neoclassicism tend to overlook the social and political nature of value.
2. Historical Narrative: The author traces the historical evolution of economic thought, highlighting how classical economists like Adam Smith, David Ricardo, and Karl Marx viewed value as a social relation, considering its distribution in wages, profits, and rents. They understood economic value in the context of society.
3. Neoclassical Departure: Neoclassical economics, represented by figures like Leon Walras, William Stanley Jevons, and Vilfredo Pareto, introduced a radical shift. They defined value as a subjective relationship between individuals and their preferences, with market prices determined by individual choices. This subjective perspective marked a departure from the classical tradition.
4. Value-Free Science: Mazzucato also notes that neoclassical economics aimed to become a "value-free" science, detached from political economy. However, she highlights the tension within neoclassical theory: it attempts to eliminate value judgments while subscribing to a particular theory of value without explicitly acknowledging it as a value commitment.

In summary, Mazzucato challenges the neoclassical view of value by emphasising its social and political dimensions and how this shift in perspective also transformed the understanding of economics as a field of study.