Dan Banik speaks with Branko Milanovic on the future of capitalism and income inequality between nations as well as within nations.
Income inequality has received considerable attention in recent years. Very few would have predicted that a very thick academic book on wealth and income inequality in Europe and the United States since the 18th century would go on to become an international bestseller. I am of course referring to Capital in the Twenty-First Century– the book published by the French economist Thomas Piketty in 2013.Â
Income inequality was rising in many countries before the pandemic, and recent reports suggest that the Covid crisis is widening inequalities globally. Indeed, the global economy, according to the International Monetary Fund, is expected to contract 4.4 percent cent in 2020. This is bad news for the world’s poor, whose numbers are expected to sharply increase. But Covid has also made the world’s richest even richer. A recent analysis by UBS concludes that the world’s billionaires have grown wealthier in 2020 compared with 2019. And this is not just in the United States or Germany but also in Brazil and China. Thus, the pandemic will most likely deepen inequalities of various kinds.
To discuss how global income inequality looks like today, I am joined by Branko Milanovic, one of the world’s most well-known scholars on inequality. He is a visiting presidential professor at The Graduate Center at the City University of New York, and a senior scholar at the University’s Stone Center on Socio-economic Inequality.Â
Professor Milanovic has published extensively on income inequality, in individual countries and globally, including in preindustrial societies. For almost two decades, he served as the lead economist in the World Bank’s Research Department.
We discussed income inequality within specific countries and whether the gains of the emerging global middle class in Asia are responsible for the losses of the lower middle class of the rich world. We also spoke about Branko’s latest book, Capitalism Alone: The Future of the System That Rules the World (2019), in which he argues that for the first time in human history, the globe is dominated by one economic system – capitalism. So, what are the prospects for a fairer world now that capitalism is the only game in town?