I've long been a fan of Branko Milanovic's careful and detailed work on global inequality. I've written several posts based on his work (most recently my review of his 2016 book Global Inequality, in 2023). So, I was interested to see his take on capitalism, as expressed in his 2019 book, Capitalism, Alone.
The title references that, after the fall of communism in the early 1990s, capitalism remained the only game in town. To support this claim though, Milanovic makes the case that China, Russia, Vietnam, and other countries with similar political systems are really capitalist. Milanovic draws on the political philosophy of Max Weber in defining 'political capitalism' as the state-led authoritarian capitalism exemplified by China, distinguishing it from the Western tradition of 'liberal meritocratic capitalism' exemplified by the US and western Europe.
The book starts by drawing the distinction between political capitalism and liberal meritocratic capitalism, illustrating the development of both with data on incomes and inequality, as you would expect given Milanovic's pedigree. I really enjoyed this section, especially where Milanovic outlines how both a liberal view of history and a Marxist view of history fail to explain key events. The liberal view expects capitalism to converge of liberal-democratic norms and peaceful growth, but that view fails to adequately explain World War I. On the other hand, the Marxist view that communism would replace capitalism was contradicted by the reversion of former communist countries in the Russian sphere to political capitalism. As Milanovic concludes:
We thus reach the conclusion that two of the most important events in the global history of the twentieth century, World War I and the fall of communism, cannot both be consistently explained within the liberal or Marxist paradigms. The liberal paradigm has problems with 1914, the Marxist paradigm with 1989.
The first few chapters are backward looking, and set a solid foundation. Milanovic then turns his attention to the interaction between capitalism and globalisation, as a segue into thinking about the future of capitalism. I found these latter chapters of the book to be somewhat uneven. Some parts are well thought out and interesting, such as the discussion on the free movement of factors of production, particularly migration (although I think more could have been made of a particular model that Milanovic uses, and I may follow up on that in a future post).
Other parts of the last two chapters seem to be a collection of anecdotes, musings, and speculation, lacking much in the way of theoretical or empirical grounding. This part of the book does provide a broad synthesis, but really lacks the depth of the earlier chapters, or of Milanovic's earlier writings. As just one example, in the section on migration and the welfare state, Milanovic discusses the political consequences of close links between the welfare state and citizenship. There is a related literature from on the work of Elinor Ostrom on the challenges of common governance when a group is made up of heterogeneous sub-groups (migrants and the native born) that Milanovic could have drawn on to give more depth to this section. Again, a missed opportunity.
Overall, I did enjoy reading the book. It is thought-provoking and even the latter sections were a nice read, despite their relative shallowness. However, reading the concluding chapter gives one a feeling that all is not well with capitalism, now and in the future. Milanovic tries to present a vision of 'the people's capitalism', but what I took away from that discussion was just how far things would need to move to make that vision a reality. And sadly, since the writing of this book we have gotten no closer to Milanovic's ideal, and in many respects we are farther from it than we have been in a long time. Capitalism may now be alone, but its victory is no assurance of a future worth celebrating.
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