Capitalism, Alone: The Future of the System That Rules the World

In his most recent book, Branko Milanovic, delves into the study of different forms of capitalism present today, as he puts forward the notion that capitalism is pretty much the system that rules the world. He does not however, say this is the end of history. Very nicely done as he goes beyond income inequality.Liberal Meritocratic Capitalism (LMC) is represented by the U.S. (Chapter 2) while Political Capitalism (PC) is, par excellence, represented by China (Chapter 3).In chapter 2, the point is made that LMC is the current form of western capitalism stemming from Classical Capitalism (CC) represented by the United Kingdom before 1914 and Social Democratic Capitalism (SDC) represented by Western Europe & U.S. 1946 - 1980. There is of course a discussion regarding inequality. This includes high concentration of capital ownership, higher rates of return on the assets of the rich, and more marriages between people with the same income level.Four pillars helped reduce inequality during SDC. These are 1) trade unions, 2) mass education, 3) high taxes and government transfers. Globalization makes it harder to use taxes and transfers to reduce inequality in the West and trade unions, for similar reasons have less power. Education is interesting to look at since the point is made that it is not just the number of years but the perceived or real quality of the education that matters.In Chapter 3 PC is discussed. The point is made that in the third world, communist or quasi-communist regimes post colonialism helped pave the way to Political Capitalism. This is because, unlike in Eastern Europe, third world countries were underdeveloped and still feudal. China and Vietnam are the prime examples. It is interesting to note that Malaysia and Singapore are also included in a table of countries under political capitalism but of course the author does not claim that they had a communist regime but rather one party in power for a long time.A characteristic of PC that is discussed is the systemic corruption. An interesting point is that globalization itself has made corruption more likely under PC as there are more opportunities for corruption's wealth to be kept overseas. But corruption is a tough nut to crack and has been around at least since Rome. According to Salluts, Jugurtha famously described Rome as "urbem venalem et mature perituram, si emptorem invenerit" ("a city for sale and doomed to quick destruction, if it should find a buyer," However, while he Republic would be lost, Imperial Rome would continue for quite a long time. The author delves into this at the end of chapter 4 as well.At any rate, the question is will other countries seek to emulate China's Political Capitalism? How many countries can achieve the level of economic growth if they try to do so?Chapter 4 looks at the interaction between capitalism and globalization. The author puts forth a proposal regarding immigration given the current prevailing mood against migration in the west. Essentially, the proposal would allow for migrants to come and work and pay taxes, but not to become citizens, vote, and stay permanently. The U.S. green card system is this already, but implied is that this would not lead to citizenship as it currently can. Historically, metics in Athens were foreign residents who did not have citizen rights but did share in the burden. The point is that this would allow migrants to earn money and would lessen the fear citizens have that migrants will have the same citizenship rights that they currently do. This reduce opposition to this type of limited immigration and reduce global inequality. While it might seem controversial, the proposal must be seen from the vantage point of what is possible and not what is some perfect truth.In chapter 5, the author looks at the future of global capitalism. Most interesting is the likely convergence of incomes between Europe, North America, and Asia and what role China might play in Africa going forward.What I enjoyed most was the author going beyond inequality in this book. An excellent book that builds on the author's previous works. I hope future books will continue to do so as well. Personally, I would enjoy more on Pareto and Schumpeter.

This rather technical analysis of capitalism is, above all, pretty objective. It critiques and shows the virtues of the two main forms of capitalism that exist today. In projecting possible future scenarios the author fails to consider the potential disruption to liberal capitalism that could occur by societal collapses in Western countries, mainly in the U.S., due to the exacerbation of the identity wars and polarization.

One of the best books on Economics and History I have ever read. With a clear list of 4 actions in the last chapter. The book was written based on the authors leading work in Inequality and is an especially good read in this period of elections in the US since he gives clear facts and well reasoned arguments of what is to be done with capitalism (a good system for organizing production) to get it to serve all peoples needs and diminish inequality in individual countries and across nations.

The author attempts an ambitious goal - to predict the future of the Free-Market "capitalist" system. Of course, the whole world is capitalist, including China, but he defines two different kinds; Political Capitalism and Liberal Western Capitalism. If you are interested in the challenges presented by China to the Western economic order, then you should read this book.Predictions, especially about the future, are famously very difficult, and tend to be overtaken by events. COVID-19 is just one perturbation that may render some of Mr. Milanovic's conjectures moot, but you can decide for yourself!

This is a very thought provoking book. Easy to read. One that I will reread.

Liked the flow of the chapters. The author’s conclusions were very thoughtful.

One of the best primers for understanding populist discontent

The author firmly believes that capitalism as a socioeconomic system is the only game in town, simply because it works for the benefits of mankind. In this regard, communism which is the direct reaction against the excesses of classic capitalism, is surprisingly understood by the author as ‘a social system that enabled backward and colonized societies to abolish feudalism, regain economic and political independence, and build indigenous capitalism. …… Communism is the functional equivalent of the rise of the bourgeoisie in the West.’ (P.75)According to the author, there are two types of capitalism in practice today: the liberal meritocratic capitalism that has developed incrementally in the West over the past two hundred years, and the state-led political, or authoritarian, capitalism that is exemplified by China but also exists in other parts of Asia and parts of Europe and Africa.The advantage of liberal capitalism resides in its political system of democracy, its system of checks and balances under the rule of law and the protection of private property, liberties and rights. On the other hand, ‘So while liberal capitalism’s advantages are “natural”, or put it differently, are built into the setup of the system, the advantages of political capitalism are instrumental: they have to be constantly demonstrated. ….. It needs to prove its superiority empirically.’ (P.209) Furthermore, it faces the difficulty of changing course if a wrong direction has been chosen because of the absence of built-in democratic checks. Thus, political capitalism has a greater tendency to generate bad policies and bad social outcomes that cannot be reversed because those in power do not have an incentive to change. Also, due to the absence of the rule of law, the system of political capitalism has an inherent tendency toward systemic corruption which may engender popular dissatisfaction. However, there are people in the globe who are always willing to trade parts of democratic decision-making, liberties and rights for greater income and economic growth. It is on such grounds that political capitalism asserts its superiority.After all, the ultimate domination of capitalism as the best, or rather the only, way to organize production and distribution seems absolute. No challenger appear in sight. The once formidable alternative, the system of communism is viewed by the author as something instrumental in giving birth to the system of capitalism in underdeveloped world. In essence, ‘Capitalism gained this position thanks to its ability, through the appeal to self-interest and desire to own property, to organize people so that they managed, in a decentralized fashion, to create wealth and increase the standard of living of an average human being on the planet by many times – something that only a century ago was considered almost utopian.’ (P.196)The book is well-researched, offering impartial and down-to-earth treatments for different types of capitalism found in contemporary world.

The book does not focus on what benefits capitalism brings to human society, instead it talks more about the most common issue capitalism born with, the inequality. At the same time, the book also explains what are the nuances of inequality from different stages of capitalism. That is an important mindset we need to have when we talk about social changes as society always changes even it is categorized under capitalism.What's more eye-opening is how the author explains the transition from communism to capitalism, the citizenship rent and the benefits of globalization brought to the developing countries. And those are not the traditional views you heard from your neighbour or demonstrations.All in all, this book is for those who already obtain some basic concept of sociology and would like to know more.It is worthy for the time I spent on.

Fantastic book, challenging and very well written.

Excelente libro para entender la distinción entre el capitalismo político (China) y el capitalismo liberal meritocratico (eua), así como la visión que el futuro depara en términos de desigualdad económica.

Books about politics, society and economics do not make for easy reading. This book, however, is very readable without commititng the sin of being superfical and ideological. It provides a useful framework of ideas with which to think about the world we live in.

Perfect. Buy it