Book Review: Capitalism, Alone by Branko Milanovic
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Bibliographic details
- Authors: ZIA QURESHI
- Published: March 1, 2020
Overview and thesis
- Reviewed by Zia Qureshi, senior fellow in the Global Economy and Development program at the Brookings Institution.
- Review appears in F&D Magazine, March 2020.
- Book bibliographic details as presented: Branko Milanovic, Capitalism, Alone: The Future of the System That Rules the World, Harvard University/Belknap Press, Cambridge, MA, 2019, 304 pp., $29.95.
- Central premise of the book: capitalism has beaten all alternatives and for the first time a single economic system rules the world. Quote: “The domination of capitalism as the best, or rather the only, way to organize production and distribution seems absolute.”
- Milanovic’s counterpoint to the “end of history” thesis: the triumph of liberal capitalism has not delivered the 1990s vision and significant internal strains remain.
Internal strains and challenges identified
- Increasing income and wealth inequality within economies.
- Declining intergenerational mobility.
- Mounting economic and social polarization.
- Rising influence of wealth in politics leading to concentration of both economic and political power in the hands of an elite and a weakening of democratic polity.
- Technological change may exacerbate these strains.
- Rising popular revolt across Western capitalist democracies reflects these tensions.
Types of capitalism and comparative analysis
- Two competing forms of capitalism identified:
- “Liberal meritocratic capitalism” — the West, with the United States as the paradigmatic example.
- “Political capitalism” — China presented as the exemplar.
- Characteristics and problems of political capitalism:
- Endemic corruption.
- Weak rule of law.
- Authoritarian control by a political elite whose power depends on delivering continued high economic growth.
- Rising inequality.
- Competition is now between different types of capitalism rather than capitalism versus non-capitalist systems.
Policy recommendations and reforms Milanovic sketches
- Deconcentrate capital and wealth ownership by:
- Tax advantages that give the middle class a bigger stake in financial capital.
- Corresponding increase in the taxation of the rich.
- Higher taxes on inheritance.
- Significant boost in public investment to broaden access to high-quality education and enhance equality of opportunity.
- Strictly limited and exclusively public funding of political campaigns to reduce the ability of the rich to control the political process.
Implementation challenges and scenarios
- Major reforms face heavy odds because wealthy elites wield strong political influence and will resist change.
- Higher taxes on capital and wealth may be difficult in globalized capital markets without significant international coordination.
- Absent reform, liberal capitalism may:
- Lurch further toward plutocracy.
- See technocratic structures overshadow democratic institutions as discontent with elected governments grows.
- Political capitalism faces existential risks from the inevitable slowing of growth as economies mature.
- Conclusion: capitalism cannot be easily replaced in the foreseeable future but can be improved; the evolution of socioeconomic systems has not reached its terminus — “The march of history continues.”
Source: Zia Qureshi, "Book Review: Capitalism, Alone by Branko Milanovic", F&D, March 2020.
Content in this bundle
- أهي نهاية التاريخ؟
- Book Review: Capitalism, Alone by Branko Milanovic – IMF F&D
- Country Report
- Notes de lecture
- 《资本主义制度的未来》 - 书 评 - 金融与发展 - 国际货币基金组织季刊 -2020年3月号·第57卷·第1期