Branco Milanovic

Milanovic Inequality
Milanovic Capitalism


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updates articles etc  24/2/2021     Degrowth:  Solving the Impasse by Magical Thinking  23/2/2021   Branko Milanovic outlines the ideological divides and rhetorical tactics distinguishing degrowers and growers.



“… The final chapter in this book concentrates on the future of global capitalism … and [his] points are put forth with considerable logic and verve but the same, unfortunately, cannot be said about Milanovic’s quixotic discussion of three other issues.

First, he says that the biological notion of a “carrying capacity” is a “lump fallacy” (p. 200) and that we “like to scare ourselves with thoughts of the exhaustion of natural resources, limits to growth, and replacement of people by robots” (p. 201). Present-day environmental issues and hence concerns about such issues are not like horror movies that one can choose to watch or not watch. … On the contrary, these issues need to be addressed with purpose and not with insouciance. Second, the author notes that capitalism has previously given rise to wars and that “there is a more than negligible chance that similar internal mechanisms might lead to another such conflict” (p. 206). Although this is certainly possible, the climate change problem, which is already upon us, is likely to be as or more damaging to our civilization than most wars, with the possible exception of nuclear wars. Finally, with regard to political capitalism, we are told that “in order to prove its superiority and ward off a liberal challenge…political capitalism needs to constantly deliver high rates of growth”. (p209) This may or may not be true. … Let me conclude this review by stating clearly that Capitalism, Alone is in general a fine piece of work … I recommend [it]. …”

read all of A A Batabyal’s review here

Boris Frankel

“I agree with leading analyst of inequality, Branko Milanovic, that one cannot understand inequality within nation-states in isolation from understanding changes in global inequality. My reservations and disagreement with Milanovic relate to his application of the Kuznets Curve to explain inequality as well as his solutions to inequality. …

[But] Milanovic’s work is still the most detailed study of global inequality to date and should be read by all proponents of post-capitalist democracy, especially by the advocates of universal basic income (UBI) schemes. … No future post-carbon democracy or post-growth society will successfully combat inequality and environmental crises unless it moves beyond conventional policies that consistently over-emphasise income at the expense of a raft of other solutions.”

scroll down to read all of Boris Frankel’s chapter on Milanovic

Duncan Green

“Full disclosure, I am a huge fan of Branko Milanovic, both because of his brilliant analysis of inequality (think Elephant Graph), but also because of his style … I rave reviewed his last book, Global Inequality (2016) and so got very excited when picking up his latest, Capitalism Alone.  Did it live up to expectations? Yes and no. …

These first three chapters are brilliant, original and make for gripping reading. But then the book seems to go off the boil a bit, with a very economistic, and slightly disjointed chapter on ‘the interaction of capitalism and globalization’, which highlighted what for me are two significant gaps in Milanovic’s thinking.

His first gap is on the environment. There is a jarringly dated discussion on whether natural resources are running out, rehearsing the argument of the Simon-Ehrlich wager. But that was 40 years ago, and the debate has moved on … [There is] a deep underlying pessimism about the state of the species. He sees human nature as irredeemably corrupted by the creeping commodification of the private sphere and paints a dystopian future where all family functions are outsourced to the UberKid providers of the gig economy. He is strikingly negative and dismissive of the alternatives being mooted by the Left (check out his fascinating  exchange with Kate Raworth).

Which brings me to a second gap – Milanovic seems much more confident and powerful in the descriptive mode, brilliantly summarizing historical events. But he is noticeably more tentative when it comes to prescription …  A ‘how to fix it’ section is brief and pretty thin: He advocates redistributive taxation, big investments in public schools, limited and temporary migration and limited and exclusively public funding for political campaigns. That hardly lives up to the epic scale of the events and challenges he describes earlier in the book.”

read all of Duncan Green’s review here

“Inequality and the future of Capitalism”: Duncan Green in conversation with Branko Milanovic

Mathew D. Rose

“The central hypothesis of  [“Capitalism -Alone”] is straightforward, defining two epochal changes. First, for the first time the world is dominated by a single socio-economic system: capitalism. Second, there is a rebalancing of economic power between the Western industrialised nations and Asia. But unlike Francis Fukuyama before him, Milanović does not see this as a teleological “End of history” but, astutely, as the source of new conflict and crisis.  …

This is without a doubt an intriguing book. What I have always most valued about Branko Milanović is his willingness to follow his intuition to open up new aspects of the political discussion. I may not agree with him on some issues, but I always come away greatly enriched by the experience. “Capitalism, Alone” was another such moment.”

read all of M D Rose’s review here

Martin Wolf

Branko Milanovic has written an outstanding book. Global Inequality: A New Approach for the Age of Globalization is informative, wide-ranging, scholarly, imaginative and commend­ably brief. As you would expect from one of the world’s leading experts on this topic, Milanovic has added significantly to important recent works by Thomas Piketty, Anthony Atkinson and François Bourguignon. Compared with Piketty in Capital in the Twenty-First Century (2014), Milanovic focuses more on global than on national inequality, and also more on income than on wealth. His canvas is broader than that of Atkinson in In­equality: What Can Be Done? (2015), which concentrates on the UK and goes deeper into policy. The book closest to Global Inequality is Bourguignon’s The Globalisation of Inequality (2015) — unsurprisingly, perhaps, given that the two authors were colleagues at the World Bank. Yet Milanovic’s approach is both more historical and more political.

Read all of Martin Wolf’s review here

Boris Frankel   Fictions of Sustainability   (pages 90-95)

“I agree with leading analyst of inequality, Branko Milanovic, that one cannot understand inequality within nation-states in isolation from understanding changes in global inequality. My reservations and disagreement with Milanovic relate to his application of the Kuznets Curve to explain inequality as well as his solutions to inequality.

It will be recalled that it was Simon Kuznets who began arguing in the 1950s that as countries industrialised and agrarian populations urbanised during the nineteenth and early twentieth centuries, these developments produced an inverted Curve of rising inequality.  The Curve supposedly began to decline once developed economies saw better jobs flow from mass education and the benefits of technology and greater social protection. However, this reduction in inequality ceased a few decades ago. Thomas Piketty, for example, argued against the Kuznets Curve by showing that the decline in inequality, especially in the three decades after 1945, was an anomaly and that inequality has continued to rise since the 1980s as the owners of capital continue to take a greater share of income.44 It is political struggles that determine levels of inequality, a basic fact frequently omitted from economic analyses.

We know, for example, that during the twentieth century military coups in various Latin American countries reversed earlier social gains made by workers. Milanovic agrees with Piketty and most other critics who argue that the application of neo-liberal policies since the late 1970s has not only halted the decline of inequality, but significantly increased inequality.

The difference is that Milanovic adheres to Kuznet’s theory and claims that since the 1980s, a new or second Kuznets wave of inequality has emerged in the US, UK and other OECD countries. He attributes this modified or second curve of inequality not to industrialisation but rather to its opposite, namely, neo-liberal deindustrialisation and globalisation. Today, he argues, China, India and other industrialising developing countries are experiencing a rise in inequality between urban and rural populations as they go up the original Kuznets Curve, while developed capitalist countries are also in a phase of rising inequality due to the second Kuznets Curve or wave.

According to Milanovic, this renewed increase in inequality shows no sign of having reached its peak for the following reasons: there has been a distinct increase in both the concentration of capital and also the share of capital and income going to the top 1% to 10%; higher educated and high-income individuals tend to inter-marry; and the rich also maintain inequality by determining political outcomes, especially in the US where money buys elections and policies, in short, plutocracy.

Milanovic also documents the impact of place and class. Despite a world full of mass migration and refugees, only about 3% of the world’s population live in countries where they were not born. For 97% of the world’s population, half of a person’s income is pre-determined as soon as they are born … The notion that the US has high inequality but high social mobility is a myth, Milanovic and Roy van der Weide argue, as figures reveal low mobility for low-income people.

… The main beneficiaries of globalisation in the past thirty years, argues Milanovic, have been the top 1% in developed capitalist countries and urban workers and middle-class people in China and other East Asian countries. The main losers have been low and middle-income people in developed capitalist countries as well as the poorest people in less developed countries and a mixture of rural and urban social classes in stagnant middle-income countries largely by-passed by foreign capital.

However, if Milanovic’s so-called second Kuznets Curve confirms rising inequality in OECD countries since the 1980s, he tells us little about how global inequality can be overcome for the numerous poor country ‘losers’ in this scenario. Just as the Kuznets Curve is an inadequate theory to explain the causes of inequality, so too, is the application of the ‘Environmental Kuznets Curve’ by economists. The thesis that environmental degradation initially increases with economic growth but then declines as per capita income increases, has been strongly criticised as lacking consistency or causal relations between levels of income and different types of environmental pollutants. Interestingly, Milanovic believes ‘place’ will cease to be the main determinant of global inequality because he optimistically assumes the gap between countries will close in coming years.

As this occurs, internal country divisions along class lines will become much more important. Tellingly, Milanovic does not explain how major environmental constraints as well as market barriers on any new national entrants to industrialisation can be overcome. Rapid industrialisation (or a repetition of the China model) is a highly unlikely possibility for countless less developed countries. In fact, during the past thirty years many developing countries, especially in Latin America and Sub-Saharan Africa have experienced the opposite, or what Dani Rodrik calls ‘premature deindustrialisation’.49 Having built up modest manufacturing sectors and employment behind protectionist walls, these countries have witnessed declines in manufacturing due to ‘free trade’ policies and the shift of manufacturing to China and East Asia since the 1980s.

What Milanovic fails to explain is why the enormous gap between the economic and geopolitical power of the top G20 countries and the rest of the world would close, if existing patterns of trade and investment continue.

Milanovic is illuminating in regard to mapping the ‘winners and losers’ from globalisation since the 1980s, but his Kuznets waves are more descriptive rather than analytical tools. They fail to explain why some classes within particular nation states have lost less or won more than other similar classes within comparable nations. Like Kondratieff Long waves, the problem with relying on Kutznets Curves (or waves) is that they are too economistic and assume almost predictable outcomes from large developmental processes such as industrialisation or globalisation.

Milanovic says little on how the varying strength or weakness of particular political forces and trade unions in capitalist countries determine the rate and scale of inequality. In other words, Milanovic’s use of the Kuznets curve implies that politics is either irrelevant or at best secondary in explaining particular levels of inequality.

For instance, in recent decades, what role did the presence of weak or strong parliamentary democracy as opposed to authoritarian one-party command policies or de facto military regimes with parliamentary veneers play in levels of inequality in developing and developed capitalist countries? While globalisation remains a contested term, what does it actually mean in this context? Is the level of industrialisation and rising in equality in developing countries due mainly to the internal economic response to ‘external’ developments? Or, given that most Asian countries are heavily dependent on the export of manufactured goods (over 70% of their trade50), would industrial development in China and other Asian countries have either been severely delayed or much less rapid and intensive without the external decision of multinational corporations and finance capital to shift production and capital flows to developing countries? Furthermore, was ‘offshoring’ (or industrialisation in developing countries) only made possible by the political allies of business in most developed OECD countries first defeating labour movements and dismantling high levels of protectionism, as well as removing tight regulations on capital flows between countries?

Neither the Kuznets Curve nor Milanovic’s use of Kuznets adequately answers these and other important questions. Not only are Kuznets curves inadequate and vague in apportioning causality to politics, wars and regional struggles, but also Milanovic arrives at feeble solutions to inequality. He is a progressive liberal social democrat who favours higher taxation on the rich and a utopian ‘egalitarian capitalism’ based on ‘shareholder democracy’. Crucially, Milanovic favours even more capitalist globalisation in order to bring poor countries into what he calls the ‘international capitalist division of labour’ (or industrialisation).

Milanovic devotes little or no space to crucial environmental issues and also avoids the highly negative consequences of financialisation in both exacerbating and perpetuating inequality. Instead, he is resigned to major inequality being with us in the future despite favouring social reforms. Fearful of Right-wing nationalism and anti-globalising  localism’, it is the second Kuznets Curve that Milanovic sees as contributing to Donald Trump’s victory and the rise of populists in Europe.

What he fails to explain is why and how the former parties of social protection … introduced and presided over policies that increased inequality for over thirty years and laid the conditions for Right-wing populists. The lesson from various studies of inequality is that without a theory of what political, socio-economic and environmental factors encourage or impede capitalist growth – nationally and internationally – then we are left with little else other than nice curves and waves. After all, where would those countries on the second or first Kuznets Curve be today if the Great Financial Crisis of 2007-8 had developed into a Great Depression …? We still do not know if political leaders will be able to overcome quasi-stagnation within most OECD countries and at what cost to the environment or to workers and all other segments of societies interconnected by the global ‘geography’ and class structure of inequality.

Most snapshots of global inequality compare levels of per capita income and so forth. They tell us little about the significant social inequalities based on race and gender, or the multiple disadvantages experienced by families and individuals still experiencing the traumas of colonial uprooting from traditional lands or other forms of traumas caused by war or ethnic and religious persecution. No statistical comparison of household income can capture the global levels of discrimination experienced by women who suffer from extensive forms of disadvantage well beyond mere income inequality. Similarly, non-white people may acquire similar incomes to white working-class people or middle-class professionals in Western countries but they are constantly reminded of their unequal status due to pervasive levels of racism.

The glaring gap between statistical facts about per-capita and household income on the one hand, and the reality of quite different lived lives in crowded households (with poor support services and non-existent infrastructure) in many parts of the developing world, and the much more advantaged life of households in developed countries is never really captured in many official reports. Fewer snapshots of inequality are needed and instead more dynamic cultural and political economic analyses of both its causes and proposed solutions.

This being said, Milanovic’s work is still the most detailed study of global inequality to date and should be read by all proponents of post-capitalist democracy, especially by the advocates of universal basic income (UBI) schemes. As we shall see, UBI schemes are unable to produce major reductions in inequality or prevent more inequality. This is because inequality is not related to income alone. Even the late Tony Atkinson, who devoted a lifetime to social democratic reforms to alleviate poverty, recognised that full employment and more progressive taxes were insufficient on their own to eliminate inequality.  No future post-carbon democracy or post-growth society will successfully combat inequality and environmental crises unless it moves beyond conventional policies that consistently over-emphasise income at the expense of a raft of other solutions. “

Milanovic review of Raworth’s Doughnut Economics, her reply and debate at