Book Review: Thinking about Inequality

Source details

Title reviewed: Visions of Inequality: From the French Revolution to the End of the Cold War by Branko Milanovic.
Publication details noted in the review: Belknap Press, Cambridge, MA, 2023, 368 pp., $32.95.
Review author: ZIA QURESHI, December 2023. ZIA QURESHI is a senior fellow in the Global Economy and Development program at the Brookings Institution.
Article context: Rising economic inequality in many countries, especially the rich ones, has become a major public policy concern and topic of political debate.

Milanovic chronicles thinking about inequality from the French Revolution to the end of the Cold War, focusing on six influential economists with one chapter devoted to each: François Quesnay, Adam Smith, David Ricardo, Karl Marx, Vilfredo Pareto, and Simon Kuznets.
Key shifts highlighted:
- Early focus: social classes and means of production—landowners, capitalists, workers—and the functional distribution of income (rents, profits, wages).
- Pareto: framed inequality as a social hierarchy of elites versus the rest.
- Kuznets and later neoclassical economists: shifted analysis toward individuals and interpersonal distribution of income, aided by greater availability of individual income data.
Milanovic’s characterization: the second half of the 20th century spanning the Cold War was a “long eclipse of inequality studies,” reflecting:
- Faith of neoclassical economists in markets and market outcomes.
- Moderation of inequality within Western economies due to rising labor demand, stronger postwar economic growth, improvements in education, and introduction of social welfare programs.
- Political dynamics: competition between capitalism and communism pushed economics into the service of ruling ideologies.

Milanovic identifies a combination of factors driving the recent rise in inequality:
- Differential impacts of technological change and globalization across firms and workers.
- Current institutional and policy settings, including a weakened redistributive role of the state as tax progressivity declined and social programs were squeezed by tighter fiscal constraints.
Geographical and country examples where inequality has risen:
- Western economies, especially the United States.
- Post-Soviet Russia.
- Major emerging market economies such as China and India.

Milanovic’s epilogue reviews advances in the study of inequality:
- Thomas Piketty’s work stands out for advancing analysis of the role of wealth and nonlabor income in inequality.
- Broader scope: studies now go beyond a narrow neoclassical market focus to include social and political power structures, and factors such as gender and race.
- Expansion in measurement: inequality examined in broader dimensions than just monetary income and extending to inequality among global citizens—an area where Milanovic is a pioneer.

Divergent trends:
- Within-country inequality has been rising.
- Global inequality (the sum of within-country and between-country inequality) has been falling, as developing economies narrow the income gap with rich countries.
Risks to continued global convergence:
- Weaker world growth outlook, especially for developing economies.
- Geopolitical tensions and risk of geoeconomic fragmentation that could threaten trade and investment between countries.
- Technology-driven changes altering the structure of international comparative advantage.
Historical caution: Walter Scheidel’s work The Great Leveler is cited to underscore that large and persistent increases in inequality can end badly.

The reviewer’s evaluation:
- Visions of Inequality is an important scholarly work and a good read.
- Milanovic mixes methodical examination of the evolution of economic thought with portraits of economists and the societies and polities of their times.
Timeliness: Renewed and deeper attention to inequality is deemed timely given contemporary economic and political dynamics.

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