Capitalism has come under attack in recent years, notably because of growing economic inequalities not only between the global North and South but also the increasing economic polarisation within Western countries. Some critics even cast doubt on its legitimacy and ability to create and preserve a just and equitable society. In the latest episode of our podcast Democracy in Question?, hosted by Shalini Randeria, the economist Branko Milanovic helps us understand how economic inequalities systematically corrode democratic processes.
Professor Milanovic, one of the world’s leading scholar on income inequality, begins by explaining why the term “crisis of capitalism” might be problematic. Among other things, he points out that dissatisfaction with capitalism exists mostly in the West. Indeed, while the West is losing the privileged position it had for centuries, other regions have tended to benefit from globalization and capitalism. Further, he notes that a clear alternative blueprint to capitalism does not yet exist.
How have huge inequalities of wealth in the West come about? Professor Milanovic reviews factors such as globalization and the outsourcing of jobs; technological change; and policies relating to deregulation and the weakening of organized labour. All three, he argues, have led to increasing economic polarisation between the rich and the poor within, for example, the United States.
Polarization has become even harder to overcome, Professor Milanovic adds, due to the emergence of an upper class which, for the first time, not only earns high dividends on capital but is also hardworking, earns high salaries, and possesses high levels of social and cultural capital. Exclusive private schools, he argues, allow for the reproduction of this new elite. As Shalini Randeria reminds us, “This closes off yet another avenue of social mobility. In the social democratic vision, education was the great equalizer that would allow social mobility”.
LISTEN TO THE EPISODE
Download the podcast's transcript HERE
Shalini Randeria is the Director of the Albert Hirschman Centre on Democracy at the Graduate Institute in Geneva, Rector of the Institute of Human Sciences (IWM) in Vienna and Excellence Chair, University of Bremen (Research Group: Soft Authoritarianism).
Branko Milanovic is a visiting presidential professor at The Graduate Center, CUNY, and a senior scholar at the Stone Center on Socio-economic Inequality. Milanovic’s main area of work is income inequality, in individual countries and globally, including in preindustrial societies. His new book Capitalism, Alone was published in September 2019.
WATCH the lecture given by Professor Milanovic during his visit to the Albert Hirschman Centre on Democracy on “Globalization, inequality and the powerlessness of policy”: