On December 10, 2019, Branko Milanovic, visiting presidential professor and senior scholar at the Stone Center for Socio-Economic Inequality at The Graduate Center, discussed his new book, Capitalism, Alone: The Future of the System That Rules the World, which explores the prospects for creating a fairer society in a world dominated by capitalism. Joining Professor Milanovic were James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the LBJ School of Public Affairs, and professor of government, at the University of Texas at Austin, and Marshall Steinbaum, assistant professor of economics at the University of Utah and co-editor of After Piketty: The Agenda for Economics and Inequality. Janet Gornick, professor of political science and sociology and director of the Stone Center, moderated.

 

Professor Milanovic gave a quick overview of the argument of his book, Capitalism, Alone, which posits that capitalism has emerged as the sole, globally dominant system for organizing the means of production, and its dominance has unleashed forces that are driving toward greater political and economic inequality, both in “liberal/meritocratic” capitalist systems, such as the U.S., and in political capitalist systems, like China. While both systems may tend to converge, each capitalist system is trending toward highly unequal societies in which political and economic power merge, capital income and labor income concentrate in the same few hands and corruption becomes an integral feature of the society.

Responding to Professor Milanovic’s presentation, Professor Galbraith argued that capitalism has been dominant for centuries, China’s economy is still a highly planned, non-capitalist economy, and US capitalism can easily be described as a political capitalist system, where wealth and power are highly correlated. Professor Steinbaum argued that Professor Milanovic’s criticisms of progressive taxation as a tool against inequality are misplaced, and that such policies can have enormous impacts to reduce inequality. He and Professor Galbraith also pushed back on Professor Milanovic’s reliance on bestowing endowments, including free education, on the capital poor may not be as effective as Professor Milanovic posits in capitalist societies where the state owns a relatively small share of capital assets. Likewise, education cannot substitute for redistributive policies, which provide economic security sufficient to permit pursuit of education and job skills.

There are three important implications for the future of democracy: Milanovic posits granting basic rights to migrants, at least in terms of employment protections. The implication is lower inequality, and thereby an increase in the political power of labor. But, during the conversation it was assumed (not argued) that inequality is eroding democracy as the rich have powerful means and ways of influencing the political process. The implications, if the trend to inequality continues to increase, is a further erosion of democratic institutions.

You will find the video here. Please join the conversation via #capitalismalone