Bronto Milanovic’s most recent book is Capitalism, Alone, It was published in late 2019. This book is about the rather surprising fact that capitalism is now the lone, single economic system that dominates the world. In the last few decades, capitalism has come to be the single dominant system of economic production. All over the world the ideas of money and profit and free markets are universally understood and widely accepted to be the best of all economic systems.
Milanovic is not saying that this is necessarily a good thing. But that this is just the way it is right now.
In the past, capitalism competed with all kinds of other socio-economic systems like hunting, gathering, slavery, serfdom, petty-commodity production, and small scale farming. Milanovic says that even as recently as 100 years ago, when the first globalized capitalism appeared, the world still included all of these modes of production.
After the Russian Revolution, capitalism shared the world with communism. But today, no systems but capitalism remain, except perhaps in very marginal areas with no real influence on global development.
There are now two kinds of capitalism, liberal capitalism in the West and what is usually called state or political capitalism in Asia. China sometimes calls itself a communist country, but in terms of economic production, it is a form of capitalism, not communism.
Two revolutions, the industrial revolution of the 19th century and what is often called the ICT or the information and communication technologies revolution are helpful in understanding the history of capitalism and the relative economic strengths of the west and Asia.
Before the Industrial revolution the West and Asia were mostly economic equals. But the Industrial Revolution changed that and made the West far richer, more powerful and more modern than Asia in many crucial ways. But then the ICT revolution, which began to change the world around 2010, reversed the position of Asia and the west. And this reality is unlikely to change.
As the ICT revolution gained power, it helped deindustrialize the West and at the same time was instrumental in the huge economic growth of Asia. “In 1970, the West produced 56 percent of world output and Asia (including Japan) only 19 percent. Today, those proportions are 37 percent and 43 percent.” Looking at a graph of this data and seeing how the two growth lines cross in about 2015 was, at least for me, pretty stunning.
Today, the West and Asia are once again roughly equal in wealth and knowledge and power.
However, the Asian understanding of what capitalism is and how it works is now redefining the idea of capitalism and along with it what creates prosperity.
Democratic liberalism in the West used to promise, and for the most part deliver, on economic equality and prosperity. But now it seems to have reneged on this promise and the result is the populism we are seeing in the West and the danger that the whole American model may lose its viability.
Most Americans have always thought that Western liberal capitalism has many advantages, like democracy, the rule of law, social mobility and the equality of all. Many Americans have always seen these values as being crucial to their personal well being. And many have also thought these values resulted in faster economic development and better lives for themselves. Americans have always believed that everyone in America had an equal chances of success.
But now it appears to many of the middle class and the working people in the west that their systems have reneged on these long cherished values. It now looks to many that a self-perpetuating upper class is now in control that this is not going to change. It looks to many living in the West that the elites have taken everything leaving little for the rest. And most importantly, this is beginning to look like a threat to the longer-term viability of liberal capitalism itself.
Malanovic says that “This threat is a danger both to the system’s own survival and to the general attractiveness of the model to the rest of the world.”
China and the US now seem to be in competition on many levels from economic to social to cultural.
The question is where is all of this going to end. This is the core concern that Milanovic’s book examines.
Milanovic has, it seems to me, a unique way of thinking about all of this. He is a big picture guy. He is very good at seeing the real clauses under the surface, at figuring out what is actually going on in the world. He ofter sees the fundamental causes of world events that many others never see. This, in my opinion, make his books both enjoyable and exiting to read.
I think he is one of the best and most important writers around. His ideas aren’t always easy, but I think they are important.
More reading on this subject